Investing - FI

FI vs Global Warming

Global warming is a multi-generational issue that affects everyone. I wanted to do a quick assessment of (aspiring) financially independent people compared to the typical consumer of our society. This idea comes from my morning walk/bike thoughts to work.

Solar Energy

Typical Consumerism

Anything we own has to be created from scratch. Extracted from the ground, processed, delivered, sold, maintained, repaired, and so on. This process uses resources and emits gas and other pollutants into the atmosphere. I bet you aren’t learning anything new at this point. The creation of a cell phone requires a lot of material and transportation to get into your hand. Multiply all the previous steps by anything around you and anything you own and you will get a crazy big bunch of pollution.

What If People Needed Less?

The really probable outcome of a slow down in the global consumption and the questioning of the real necessity of an item would be to greatly reduce the amount of junk produced. This junk ending up at the dollar store or at Walmart would simply never be produced or we would need to create less of it. Compared to the average Joe, the FI person watches his or her finances carefully to reach the point where expenses are lower than investment income. That means a big impact on the environment as well.

How Financial Independence Makes You Consume Less

Less Stuff…

Since, in most cases, simplicity is pursued, we tend to have less stuff and therefore, want less stuff in our lives. I roughly consume 50 % less than what I used to when I was not on my way to FI. If we reduce our consumption, we reduce the pollution. We might not end up with the latest toy but just keeping our cell phone 4 years instead of 2 would be favorable for our budget and our planet.

When trying to save money, it’s normal to ask ourselves twice before buying a new keyboard for example. Is it really going to bring enough to be worth the money? Because that amount could be invested instead and provide for a quicker “retirement”. Some say to wait 30 days before buying to make sure the need is still there, I find that it’s good advice.

Moral of the story, we need to question every buying decision to make sure we’re not spending money for the sake of it. The consequence will be a reduction in pollutants needed to produce the goods. It’s true that it might seem like restraining myself a lot, but downsizing is like up-sizing, you get used to it and don’t miss what you don’t have anymore.

Less garbage

Less stuff means less garbage for people pursuing financial independence. Since optimization is the key to attain FI, optimizing waste is also part of the plan. Recycling and trying to avoid trashing stuff by composting instead. I think it’s just shameful that not every cities have composting facilities in developed countries. In fact, as developed countries we should be leading the pack in that field. For people wondering why composting is different than throwing things away in the garbage bin, compost is not created at the landfill because it needs a composting agent to activate the process. For example, dry leaves. Therefore it needs special facilities but in the end, it creates fertile soil.

Coming to the same conclusion: the less we consume, the less garbage is produced. Recycling is good, but it’s better to produce no trash at all by not buying and composting.

More Biking and Walking and a Smaller Car

Trying to save money often comes with trying to save on gas by taking the bike instead of the car. Bikes are very low cost and last a long time. They also require physical energy and make you fit. Same thing for walking! FI people try to use their bikes and to walk as much as possible to save on gas and car. Both activities are also pretty much 0 waste!

How to Get By With Cars

Cars are a bit contradictory environment wise because, unless you really maintain them, newer cars tend to emit less CO2. Buying a more efficient car can be a good idea instead of buying a van or a big pickup truck even if you think you absolutely need a truck. In counterpart, it’s still better to maintain your old car because the creation process for a new one creates way more pollution than what you could save. In the end, cars are simply a losers game, you want the least possible of them.

If you don’t plan on having more than 3 kids, I kind of remember that most cars have 3 seats at the back, you don’t need a van or a truck. Since the average number of kids in Canada is less than 2, I shouldn’t see many vans on the road… Don’t worry, some cars have a lot of cargo space without naming anyone other than the Mazda CX3, Toyota Prius, Subaru Impreza Hatchback, Hyundai Elantra, Mazda 3 hatchback, Toyota Corolla IM. I indeed have a preference for Asian brands by the way but you can find equivalent domestic brands. The point is that the number of time you are likely to be using your truck/van for what it’s worth doesn’t justify paying extra for the vehicle, maintenance and gas.

That is, how often do you have to move large cargo from one place to another? Once a year at the most? Then you can just rent a truck when you have to do so, it will be a lot less expensive. Let’s say you buy a sedan which will have fairly the same consumption and a bigger trunk, you absolutely should be good with 2 kids without buying a truck or a minivan. You want to save more money on cars? Stop revving for nothing, keep your tires inflated, maintain your car and be easier on the gas pedal especially when starting from 0.

Subaru BRZ

Fun fact, I own a Subaru BRZ and can fit 6 full grocery bags or a garbage bin or even a big vacuum cleaner box, and that without taking down the rear seats. That’s 99 % of the usage I make of it, for those 1 % I can rent or ask a friend and return the favor in some other way.

More Services!

What is a compact disk used for if we can take less space and own less physical stuff by buying online. It’s true that data centers aren’t completely clean, but centralized computers can be more efficient than owning a physical one. The reason is that it’s possible to put many people on a single machine. If we take Steam for example, imagine the number of cases and boxes that would be necessary to supply the millions of games sold every year. It’s another way aspiring FI people can use to save space and sometimes even money.

Don’t Need to Travel? Don’t Travel Then!

It’s better to stay in place than to use the plane or the car if we don’t have to. This also means combining trips to do the least possible. Probably one of the few areas where being lazy pays off! I can’t say that FI people are better or not at that, but sometimes they will stick for longer in a single spot since they don’t need to come back because they don’t need to work. If a non-FI person needs to work to survive and has very limited vacation time, then a round trip to Cuba for two weeks then another one later in the year doubles the amount of pollution compared to one four weeks trip.

The freedom to create your own schedule belongs to FI people in general and can add another point to being more efficient.

Some of my Tricks

I work this way if it might help you:

  • 1 grocery per week maximum, 1 per two weeks is better. I can do grocery when I come back from work on foot if I don’t need too much stuff;
  • I don’t use the car when it’s possible;
  • Whenever possible, I try not to use the car in traffic jams;
  • A good idea is to use highways because it’s better on gas and quicker even if the trip is longer in kilometers;
  • One trip for everything and planning accordingly;
  • I try to use the most energy efficient vehicle I have at my disposal and try not to floor it at every red light, fun is good with moderation;
  • I live somewhere close to the places I visit the more often (work, grocery store, park) and close to a highway;
  • Maintaining my stuff in good shape to make sure it lasts as long as possible.

I Don’t Buy What I Don’t Need

I assess the need for buying something three times instead of two, plus, I wait for a week at least to make sure I still want it. Once in a lifetime sale prices don’t exists, sales come back if you’re just a little patient. The sticker price is now the real price, even if it’s written 932178932% off. Don’t fall for that 13 000 $ off Dodge Ram and keep your cool to make sure you don’t buy something because the salesman says so.

  • I try to be an informed customer, and always do my research on the products I want to buy. Internet is great for that. That way I have the clear information and will not be influenced by the salesman.
  • I make sure to match my needs with what I want to buy so I don’t create new needs on the spot, this is a classic sales tactic to get you to buy something you don’t need. Just look at infomercials.
  • I ask myself if the gain is big enough to replace this existing thing I already use. I can’t say I’m perfect but I try as much as possible.

The Outcome?

FI people want to optimize their living, this leads to consuming less and living a more efficient life. That means less produced goods from less extraction and transformation. It also means fewer factories, and craps that end up at the landfill. Life is so much easier with less responsibilities but it’s like we’re constantly aiming at acquiring more stuff that we don’t need. Most of our problems come from the fact that we build barriers (I can’t say I am better at not building them) around us to fit in the society and how it works.

We need two cars because it’s impossible to have kids without two cars. We don’t want to compost because it’s sooo much trouble. It’s actually easier than throwing stuff in the trash because you almost replace your trash bin by a compost bin, especially in cities that collect it. We need the latest cell phone because ours is now slow but if we would just clean it up a bit from all the bloatware and games it would instantly become faster. But that is so much trouble to go through. Better spend another 1000 $ on 24 months on a new cell phone and trash our fully functional one. Let’s buy a new car while ours is only 5 years old. This is financial suicide in action…

Aiming at FI creates the by product of saving the environment by looking at other alternatives while trying to save money and simplify as much as possible. It’s getting efficient that naturally helps to lower the carbon footprint.

Let’s become financially free and save the environment at the same time!

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