The Wisdom of Frugality

JC Project Freedom Wisdom of Frugality

Recently, I read the book The Wisdom of Frugality by Emrys Westacott. It states the more frugally you live, the less money you will need and the more you will save. This relates to what we are advocating to increase your savings rate and invest the money. This further reduces your need to work, increasing your leisure time which will increase your happiness.

Leisure

A leisure life is a freedom from work, especially that one depends on it to make a living. We draw a contrast between leisure and work even when a person has sufficient means to live without working or when the work is precisely what he or she would choose to do. It is important to have a slight balance to have leisure time. I feel that it is unhealthy to work more than 50 hours a week. We need time to spend on rest and play to recharge ourselves. We need time to do things that we enjoy doing such as having our own hobbies.

Increase in Income

An increase in income does not raise everyone to a similar extent in terms of satisfaction in life. A 50 percent increase in income has the same effect on the life evaluation of someone making $100,000 as someone making $50,000. There is the idea that people place great store on relative social standing, so even if everyone is better off in objective or absolute terms, this doesn’t lead them to feel more satisfied with their lives if their position in the social hierarchy has not changed.

When everyone cannot afford a condo, being without one does not make people unhappy. Once most of your friends stay in a condo, and being unable to stay in one will create dissatisfaction in life. People will be happier living in 1,500 square foot houses (HDB) surrounded by houses of similar size than in a 2,000 square foot (condo) surrounded by huge semi-detached houses.

Increasing our income and being able to buy more stuff does not make us happier if around us are experiencing the same thing since social standing remains the same. The things that matter most to us do not require significant wealth. Once we are freed from the stresses of poverty, our happiness is determined primarily by such things as the quality of our relationships and whether we are engaged in satisfying work.

There is a diminishing margin of returns beyond a certain level of income, and the importance of relative rather than absolute social standing. People’s desire for ever-increasing wealth and things they can buy. We are concerned for improved relative status, hardwired into us by evolution, engulfed by the capitalist system, bombarded by incessant advertisement, we desire more than we have and more than we really need.

Why do we work so hard?

Most people are driven by an insatiable desire for more. The main problem is that individuals are slaves to the system. Many would prefer to work less than they do, but for various reasons, they don’t feel that they have much choice. Firstly, your employer will not allow you to work less, it is in the employer’s interest to have the least number of employees working the longest hours rather than spreading the work over a large workforce. For simple reasons, business is always cutting costs (SG&A), increase in productivity which means increase output per employee, or revenue per employee.

Even if working fewer hours is technically an option, many employees are reluctant to work less for fear that doing so will send the signal that they are unmotivated or committed to work. Many jobs pay poorly, people work overtime or take on more than one job. More are motivated to pay the bills.

Let’s pause for a while and talk about my work, since April I was working day and night, starting from 8 am and ending at times around midnight during the weekday, the weekend is spent on administration work. This is due to taking on 2 projects at the same time, working across KL and UK time zone. I hate it when I need to conduct meeting with guys on the Houston timing. This means having meetings from 9 – 11 pm. Only in early August, I orchestrated a plan to slowly hand over the 2nd project (UK time zone) to other team members.

Most employees who feel that they still need the job will not want to do this, for fear of repercussions. If I have taken on more debt to buy a condo, I may need to suck it up and continue this endless tolling. It goes back to the point that due to my high savings rate, I have amassed a certain sum through relentless investing in stocks or businesses to provide a comfortable simple living through various sources of income, I do not need to kowtow to anyone. With financial resilience, I am more confident at work as well because I know that I do not depend on a work income and just focus on doing my work well without the need to cater to politics, tell management how much I have accomplished, or the need to suck up to anyone.

There are a lot who are insecure, the world is constantly changing and there is a fair chance of losing one’s job or find that their particular expertise is no longer in demand. There are many kinds of life that may be fulfilling, life has much to recommend it for the values it expresses and responsibilities it accepts. It remains one of the surest paths to contentment and good reasons to associate it with wisdom.

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