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…
- Harmony with nature
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.