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How to Live Prosperously Without the Paycheque (A Personal Experiment)

It’s been exactly two years since I quit my job to start on my own. A lot of people I meet now think I am lucky to be living a life of my own choice – following my passion…doing what I love doing.

But it hasn’t been hunky dory all the way. Living without an “almost certain” paycheque has been a difficult transition for me. But then, it’s a choice that I made, and thus have no regrets.

In fact, I find myself blessed and very lucky to be able to see this day, when I am writing to you about how I have been living happily, prosperously, and without a paycheque.

Nah, it’s no secret! It’s just the way I have started to define prosperity.

Just a few years back, I saw material wealth (money and stuff it can buy) as a symbol of being prosperous. A salary hike here and a bonus there were what made me feel prosperous. And given the way they pay you in the stock research industry (for producing nothing but predictions), I felt more prosperous year after year.

I equated growth with prosperity – growth in my career, my bank balance, and the number of stuff I could buy.

Of course, I was always saving money…but the feeling of prosperity always seemed a factor of my topline (income) and not bottomline (savings).

This is when I came across this wonderful book written by an eminent biographer, Robert Skidelsky (who wrote the biography of John Maynard Keynes).

The title of the book read “How Much is Enough?” and this is what I set out to answer myself after reading through the book.

How Much Is Enough? argues that the modern world is characterised by insatiability, an inability to say enough is enough, and the desire for more and more money.

The book starts with an apt quote from Greek philosopher Epicurus – “Nothing is enough for the man to whom enough is too little.”

It goes on to argue that progress and prosperity should be measured not by the traditional yardsticks of growth or per capita incomes but by the seven elements of good life…

  1. Health
  2. Security
  3. Respect
  4. Personality
  5. Harmony with nature
  6. Friendship
  7. Leisure

Now, after I read this book, and looked at my life, the overall picture was not encouraging. Despite the fact that my salary had multiplied almost eight times in the previous five years, I possessed no more of these seven elements of good life.

In fact, I realized that I possessed less of them as compared to when I had started my career.

Especially when it came to my financial life, one key take away from the book was that prosperity did not mean just an increase in my income levels. More importantly, it meant the security I could attain by creating a “surplus”.

Then, I realized a good way to create surplus – in good times and bad – was by being frugal.

This is also true of companies. A company creates a sustainable moat not just by the way it grows it sales (pricing power etc.) but also through a constant control on costs, in good times or bad.

As I see myself now, I think I’m a fairly frugal person. It has taken me years of simplifying, minimizing, and cutting back on little things, one at a time.

While there are definitely many more things I can save on, I’m proud of how far I’ve come already.

How to save extra Rs 12,000 every month
I had mentioned in a recent post that, as compared to two years back, I now “work” 70% lesser, earn 30% lesser, spend 50% lesser, and live 500% more.

A few tribesmen had asked me the question pertaining to the point on “spending 50% lesser”.

The answer is – I have become even more frugal over the years.

And how have I been able to do it? Well, here are just a few of the ways…

1. Travel cheap. I love travelling and make it a point to go out on a 7-10 days holiday once in six months. Now, while I love to live a 5-star life while travelling, I try to live it at 2-star prices. How? I travel during off seasons. Working from home gives me the flexibility of holidaying during off season. And I take full advantage of this flexibility. So I get cheap prices for hotels, sightseeing and travel. Then, when you see me bargaining, you will fall off the chair. 🙂 Annual savings: Rs 40,000.

2. Don’t use the gym. When on the job, I used to be a member of a gym. I didn’t use it much, and still paid for a full year. Now, with two kids on my head 24×7, I get a lot of exercise at home. I also jog and cycle. Annual savings: Rs 12,000.

3. Rarely go to the movies. Two years back, I was living my life on weekends, and weekends often meant movies that usually cost Rs 1,000 – including tickets and food. Now I don’t even go once a quarter. Now we take the kids to the park or out to do something more fun and creative. Even when we go for movie, it’s the morning show (that costs Rs 70 per person) and when our daughter is off to school (so we save for one person). Annual savings: Rs 15,000.

4. Rarely go shopping. This is one activity where we have gone really frugal. Till two years back, you would find me at malls on most weekends. It was cool and convenient, plus there were a lot of things that I could buy to feel prosperous. Also, there was a food court, just a glance of which made me feel hungry.

Now we rarely go to the mall, and if at all, it is on weekdays. When malls are empty, there is no peer pressure to purchase stuff. Annual savings: Rs 12,000.

5. Try to stay healthy. While I was working, I rarely exercised (even when I had time). Plus, there were chronic bouts of backaches, headaches, and flu. Ever since I’ve quit my job, I’ve started exercising a lot. And exercise for me means walking, jogging, or cycling, which are all free. I don’t drink or smoke. Overall, now there are far fewer occasions when I need to see the doctor. Annual savings: Rs 5,000.

6. Drive a small car. I own an Alto and have driven it just around 18,000 km in the last 5.5 years! My mechanic questions me as to why I own the vehicle in the first place! But when you are married and have kids, there is a need for safe and regular travel – dance practice, school functions, tennis classes, and much more. Anyways, I am now looking to buy a scooter for such short trips and thus aim to save even more fuel. My fuel cost now is anyways lower by around 2,000 per month as compared to when I was working and thus driving a lot on the weekends. Annual savings: Rs 25,000.

7. No junk subscriptions. Well, that’s for magazines and newspapers! I used to have two papers delivered at my home that I read during my travel to work. Now I read stuff online, and only when I am in need of some laughter. 🙂 I used to subscribe to three magazines. Not anymore. Annual savings: Rs 5,000.

8. No more cappuccinos. When on my job, I used to buy coffee almost once a week every day, at a cost of around Rs 70 a cup. Now I make sure that tribesmen who come to meet me pay for that :-). Annual savings: Rs 3,000.

There are other ways that I’ve learned to save, like renting out books from a nearby library than buying all of them, eating mostly at home, and owing low-cost insurance.

In all, my estimated “extra” savings annually is around Rs 140,000…which comes to almost Rs 12,000 per month.

People often think that because I’m frugal, I don’t really enjoy life. In fact, it’s just the opposite. Because I don’t need to spend a lot of money to enjoy life, I don’t need to spend a lot of time getting a lot of money.

Anyways, what am I doing with this extra Rs 12,000? Of course, all is not added to savings as my kids’ expenses have risen. But I am still able to save an “extra” Rs 8,000 monthly, which I know if compounded for 20 years at 12% annual returns will give me almost Rs 80 lac!

Still in pursuit of prosperity
Looking back two years, I believe quitting my job was a great career move for me.

I am still in pursuit of prosperity, but it is the one defined in the book How Much is Enough? as mentioned above, and also the one defined by Wayne W. Dyer…

When you are able to shift your inner awareness to how you can serve others, and when you make this the central focus of your life, you will then be in a position to know true miracles in your progress toward prosperity.

I hope you will stay with me in my progress towards this prosperity. I am always with you.

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.

Comments

  1. Quite inspirational, Vishal…:) It was a wonderful read…:)

  2. Wonderful read. Great share and a great eye opener on saving the spendings 🙂

  3. shankar s says:

    Wonderful, we have a lot in common, working from home, not having regular paycheck ( been 6 years on my own as a financial advisor now!!), taking off season holidays etc..but i see that i can save much more thanks to your post.

  4. Hi Vishal,
    This is very good. But seeing one of your tweets that your are joining a firm again in June makes this post itself ironic. Atleast to me.
    Regards

  5. Vivekananthan Sivashanmugam says:

    Wonderful post Vishal. Really an eye opener 🙂

    Great post.

    Thanks,
    Vivek

  6. Ok Sir. I get it. April fool’s prank 🙂 Whoopsie

  7. I can understand no movies, no malls, no big car….but no papers and magazines? 🙂 I guess I’m the only one who hates reading stuff online 🙂

  8. Very inspirational post. Thanks

    I am sure you have become very prosperous in terms of “Respect” in the last two years. Whenever I get tempted to spend and pamper myself or get into the market, I re-read some of your articles to bring me on track. Your regular updates on facebook are also helpful to serve as reminders. The principles to save and invest are easy, but difficult to follow from behavioral perspective.

    The holiday I am taking this month has gone above the budget I had set. I have decided not to take any more holiday this year to compensate that.

    I believe the best way to live frugal and have fun is to appreciate the great blessings in life which cannot be measured in monetary terms (children, health, leisure time etc). Your life is a living testimony to that belief.

  9. Pradeep says:

    Great Vishal ! –> Inspirational and gives a good perspective of life which we forget in
    day-2-day grind. BTW, happy second anniversary 🙂

  10. Very nice writeup…First hand experience on savings to learn from.

    Vikas Kukreja

  11. You should thank your wife and children for all this

  12. Jagat Yagnik says:

    Hi Vishal,

    I liked your thoughts.

    Regards

    Jagat

  13. Reni George says:

    Dear Vishal
    Good Afternoon to you
    Read the post in the morning,but was with sanjeev on chat so could not comment on it,so right now taking the opportunity. I would like to start with a story.

    “There was a king,he worked very hard.One day while on a inspection of his kingdom,he reached a hillock,there he say a young man in his Mid-Thirties….laying on the grass and enjoying the tiny droplets that were falling from the sky.The King was angered by this scene,the king who was also in his Mid-Thirties was thinking…here Me and all the people of the kingdom were working hard each day and this guy is leisurely enjoying his life….he told his guards to bring that guy in front of him.Then the King scolded the young man…Each and every person including me are working very hard from the morning light to the night…so that they could earn more and spend and have all the necessities and can live their life fruitfully.The young man said,Dear King can i ask you some questions,the king said carry on…each individual in my kingdom has that right.The young man asked ..sir what is your goal of life.The king replied,”I want to collect lot of wealth,as i need to expand my kingdom,i want every citizen of my kingdom to work hard,so that they can earn lot of money…they will pay more taxes and then i will use those money to expand my kingdom through mergers or war,then i will big wide roads,good schools and medical centers and everything basic thing that my citizen would need to leave peacefully.The young man asked,then sir?,the king replied then i will build a small palace on a hillock and then with my son,we will lay on the grass and enjoy the rain droplets from the sky and live peacefully.

    The young man replied,”Dear king,what you are going to do many years from now,I am doing it right now,enjoying my Life.”

    So ultimately the aim of every life is live peacefully and enjoy the forces of nature….but somewhere down the line….things have got blurred….we having started counting lots of money has a synonym for lots of happiness. But for that what are the sacrifices that we are putting up.

    We are not there,for our child in his growing stages,we are not there to see him trying to stand up on his feet,we are not there to teach him to balance on the cycle,we are no their to enjoy the evening tea with out wife and have a laughter of a time.we are not their for our friends,when they are in need of us,we are not there for our parents…to hold their hand during the sunset of their lives,so that we could spread some sunshine into their life.we are not their to read bedtime stories for our child.we are not there to experiment in making various delicacies,that out family can enjoy.

    we are just going on working from the morning bell to the darkness of night to collect money,through which we can buy bigger cars,bigger homes,bigger shopping schedules…nothing else…Happiness lies not in these things ,but in the smile of child,our parents and our friends.

    As said in Zindagi Na Milegi Dobara,”Kush hone ka waqt abhi hai,kal nahi,kal tum raho na raho”.

    Would like to thank vishal to living the life to the fullest.

    I would love to end this post with a couple of Poems with the Translation that have picked up from the above mentioned film,
    “Pighlay neelam sa behta hua yeh samaan,Neeli neeli si khamoshiyaan,Na kahin hai zameen
    Na kahin aasmaan,Sarsaraati huyi tehniyaan, pattiyaan,Keh rahi hain ki bas ek tum ho yahaan,
    Sirf main hoon meri saansein hain aur meri dhadkanein,Aisi gehraiyaan,Aisi tanhaiyaan
    Aur main sirf main,Apne honay pe mujhko yaqeen aa gaya”
    “The moment flows by like molten sapphire,Deep Blue silences,No Earth below,No Sky above
    The rustling branches and leaves,Saying that only you are here,Only me,My breath,My heartbeat
    Such Depth like this,Such Loneliness like this,And me only me,I now believe I exist”

    “Dilon mein tum apni Betaabiyan leke chal rahe ho Toh zinda ho tum,
    Nazar mein khwabon ki Bijliyan leke chal rahe ho Toh zinda ho tum,
    Hawa ke jhokon ke jaise,Aazad rehno sikho,Tum ek dariya ke jaise
    Lehron mein behna sikho,Har ek lamhe se tum milo,Khole apni bhaayein
    Har ek pal ek naya samha,Dekhen yeh nigahaein,Jo apni aankhon mein
    Hairaniyan leke chal rahe ho,Toh zinda ho tum
    Dilon mein tum apni,Betaabiyan leke chal rahe ho,Toh zinda ho tum”
    “If you carry impatience in your heart then you are alive
    If you carry dreams in your eyes then you are alive
    Learn to live like the free waves of wind
    Learn to flow like the sea does as waves
    Receive every moment in life with open arms
    Every moment is a new beginning seeing with your eyes
    If you carry surprise in your eyes then you are alive
    If you carry impatience in your heart then you are alive”

    Thanks and Regards

    Happy Investing

    Reni George

  14. Anil Kumar Tulsiram says:

    Simply love this sentence “Because I don’t need to spend a lot of money to enjoy life, I don’t need to spend a lot of time getting a lot of money.” Out of personal experience [out of job for last 1.5 years and working independently now] I can vouch for most of the stuff you have mentioned. I too exercise more now and spend less. Thanks a lot for sharing this.

  15. That was a well written article. Simplicity should be the way of life. When i read your articles and see so many endorsing your way s and thoughts it brings in a sense of hope that world around us can change for the better.I only hope our children too learn to enjoy life more with less and not get carried away with peer pressure

  16. Nrupesh says:

    Nice article agin… i have lot of cousins half of them still studying and half has recently started work,
    your articles can be a real good inspiration and new dimention to their life.

    thanks
    Nrupesh

  17. very encouraging n inspirational. thank you for sharing

  18. Vinod Krishnan says:

    Very Inspiring and Touching. It takes courage in this period of materialism to settled down quietly with your family. I will disagree with the word frugal used. It is not frugal it is how much content you are with what is around you, makes the difference. Yes Content is the key. I think the message you want to spread is to move from speed which is nothing but keeping oneself busy to slow but progress on the important elements of life such as Health, Time with your family, pursuing hobbies and inner peace that you do something you like or you enjoy. Great.

  19. Very nice article! You inspire me!

  20. Excellent post, Vishal, and many congrats again. This and a recent “happening” at work is an eye opener for me…end of 2011 was when I learnt how value investing is good for life…and now I’m learning how value living is essential for life…it’s awesome 🙂

    A big thanks to you, and all the best 🙂

  21. Wonderful post sir….good to know that you can really save so much…I guess your family’s support is there in all these initiatives..

  22. Vignesh Baskar says:

    Wonderful post!!!

    I will read the book!!!

    Thanks for the sugggestion. I will take some points from your post and try to implement that in life

    You are living like a Yogi life.(If i say in Hindu terms).

    Regards
    Vignesh

  23. vishal… as usual an inspirational one… Seems iam also following some of the steps us have mentioned…
    And as usual iam being mocked by people for being miserly..

  24. good read in todays rush life

  25. Saurav Jalan says:

    Thanks Vishal for sharing your wisdom with us. There is one thing which I would like to add is that buying wholesale can save one a lot of money. There are a lot of products of daily use which are sold by wholesalers and retailers in the same city. If one can build a good networking with wholesalers then he/she can save a lot of money.
    My parents taught me this thing early on and now when I am mature enough I can actually analyze the benefits of buying wholesale.

  26. Thank you for not just sharing an idea from time to time but actually showing how you did it.
    But in such matters “to each his own”. A sadhu who begs for food could be much happier than the person who provides him such food.
    Plus not everybody can adjust to an ideal to which someone has.
    So great that you are doing it and enjoying. So am I basis what I am doing now and may do later.
    Such decisions are of an individual and it has a lot to do with your state of mind, your circumstances and your family and immediate social circle.
    As always, an excellent post.

  27. rare visitor says:

    Sir,
    One more idea, which I use, for reading, seach on net , you might find a “.pdf” version ,FREE.

    Add saving of book rental, credit to my happyness.

    Cheers,
    ilyas

  28. Kumar Abhishek says:

    Great and Inspirational post Sir,
    Sir, I have a question :
    How I know that the spending XYZ Rs. on something is ESSENTIAL / WASTAGE OF MONEY and if not spending is MISERY ? I mean that how I can separate these THREE situations so that money can be used properly ? If possible give example.

    • Dear Abhishek, it entirely depends on what you call as “need” and what you call as “want”. Take a 30 days test before buying something. Before buying, wait for 30 days. In this time, you will find 10 reasons for not spending money.

      It has worked well for me. I wanted to buy an iPad 2 years back and almost bought it. But I moved out of the shop to give this 30 day test a try. And I still haven’t bought the iPad. 🙂 Regards.

  29. Prashanth says:

    Vishal,
    The top worries if there is no regular pay check would be
    1. Inflation
    2. Unexpected Health expenditure
    3. Children’s education expenses
    How do you take care and plan for the future for these?

    • Dear Prashanth,

      No regular paycheque does not mean you stop working and stop earning. 🙂

      So, while I am not on a job, I earn my living working as a freelance writer. This gives me a great amount of flexibility and time to work on things I am passionate about .

      Also, as I mentioned in this article, it is more about creating a surplus from whatever you are earning. So I am saving and investing with a view to inflation. I also have a medical insurance to cover healthcare costs. Plus, there is an emergency fund in place to take care of emergency costs.

      As for children’s higher education expenses, well I am saving to meet a part of it. Regards.

      • Prashanth says:

        Dear Vishal,
        That’s good to know.

        In an Indian context, what is the ideal draw down from a corpus if you plan to stop working for money completely. May be you can dwell on that in a future article.

        Given our rampant inflation and lack of social security, it would be a challenge.

        Regards

        • It’s a very personal question to answer, Prashanth. It entirely depends on your conviction level. For me, the financial checklist for quitting was…

          1. No liability/loan on my head
          2. Adequate life and medical cover
          3. Adequate emergency fund
          4. Adequate savings to see me through if things don’t turn out well
          5. A saleable skill that can help me earn money
          6. No real plan-B

          Hope this helps. Regards.

  30. hello Vishal ji,
    really very good article and a very practical approach of living rich and meaningful life.
    If you recall our old indian tradition & values also teaches the same, to live within our mean.
    the present morden day lifestyle is what we have sensely copied for the western world….
    where they want more of everything…..but our old sanskrit manu script say….” AATI SARVADA VARJAYATE”- mean…anything is in excess will perish sooner or later.

    Even recent lecture i heard of our world renowned indian Telecom man – SAM PITRODA,
    he also mentioned the same thing…he said,”sensely copy of US won’t help india, as two countries have a lot many dis-similarities……..”

    to add something to you minimalism list….i have some idea, which are used in india since ages,
    one is stop plastic cups for tea or any beverages, instead use glass / ceramic cups.
    don’t use disposal dishes……made from pp or hdpe…instead use stainless steel utensils….
    don’t store….water in plastic bottles…instead store in glass or steel bottles in the freeze.

    there are many….but i’ll pen them down later on.
    regards.
    Kishor.

  31. vishal – kudos to you. what you are doing requires strength of conviction and listening to your heart. It is difficult for most people as their identity is wrapped in the titles they hold in office.
    I am reminded of the keynote speech by steve jobs at stanford – if you wake in the morning and ask yourself : if today was my last day, will i be doing what i am going to do today and if the answer is no for several days in a row, then you need a big change in life

    rgds
    rohit

    • Thanks for your kind words, Rohit!

      Indeed, Steve Jobs’ speech has had a tremendous impact on my life ever since I heard it. This part really shook me…

      “Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”

      Anyways, feels great to hear from you. Regards.

  32. R.K.Chandrashekar says:

    Dear Vishal
    I winded up my placement services business a year and half ago. Some friends/relatives are curious to know what i do for a living! No salary,pension or gratuity, etc. It is hard to believe that i am supporting my family on dividend and interest income and for major expenses, like holidays- systematically selling equity and also moving part of it to debt.
    The 30 day test before buying is a good way to inculcate the habit with our children as well-not to get them immediately whatever they want. Good way to prepare them for disappointments in life.

  33. Dear Vishal,
    Thanks a lot Vishal and friends, for posting your thoughts. I learned a lot from reading your posts. Very inspirational. This reminds me of the saying ” Whoever says money doesn’t give happiness, isn’t spending it right!”. Geetha, Quran, Bible teach us how to earn and spend money. But this is missing in our modern day teachings at our schools/home. In schools/home we are taught to get more marks, good jobs and good money. That is where the seeds to competition are placed and that starts ruling our lives. But reads like this can bring change in ones lives.
    Just my thoughts and Please keep inspiring us :)…

    warm regards,
    kk

  34. Dear Vishal

    I was hoping that after reading this smart habit, you will surely receive lot of comments. And it happened. And why shouldn’t it?

    You have boldly disclosed important facts of your life which one can consider as INSPIRATIONAL LIVE EXAMPLE.
    You are truly wealthier now in 7 elements of quality life.

    Look at those “poors” showing off in luxury cars. Most of them still miss 7 elements. Glad to see someone like you who explores these magical elements.

    Kunal Asodaria

  35. Excellent post. While what one does to earn money is secondary, the important thing is to realise that more stuff isnt the end purpose. Health, family, societal relationships and commitment to good values (and being commercially productive in line with those values) matters over all else. Sometimes we realise these things too late.

  36. Dr Vikram Rajan says:

    Dear Vishal

    Hi

    Thanks for the wonderful job you are doing. One cannot express his gratitude to
    you for keeping small investors so well informed. My question to you is related to
    the excel program that you so graciously allowed us to use.

    1. Where does a small investor get 10 years of data in details as even most
    company websites do not allow access to more than 5 years of annual reports and
    neither do most financial websites. Even the 5 year data is not so detailed to
    allow us to fill in the excel format.

    2. can we not have a 5 year data program instead if the former is not possible

    3. can we develop a site which has 10 year + data for all the 3 financial
    statements and allow access to all small investors either for a reasonable price
    or get it sponsored.

    with warm regards

    Vikram rajan

  37. Dear Vishal
    if I have a corpus of 70 lakhs as my life savings & I need a monthly income from it to live my life with family, what would be the safest yet best instrument(s) to park my money in? kindly give me a detailed guide as to how should I go abt it.
    thanks a lot for your valuable advise.
    Nishanth

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