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Monday, March 27, 2017

Extremes Make Poor Examples

Posted by Tim Stobbs on November 5, 2015

I have to admit I’m a bit torn by a recent article in CBC about Sean Cooper paying off his mortgage in three years. On the one hand I’ve met Sean before and his a nice guy and I am thrilled he managed to pull off this feat of being mortgage free by age 30.  On the other hand, I think that the media attention is bad for most people’s self confidence on doing better in their own financial life.

I understand that from a reporting perspective that showing off the extremes is good way to get interest in your article and provide an example of how far people can go towards a goal if they put everything towards it.  Hell, I’ve been in some of those articles.  So I do get the idea, but I feel that people that go to the extremes don’t tend to be great models for others.  The reason being is largely the fact the duplicating the results is largely impossible for most people.  In Sean’s cause, working 100 hours a week over three jobs just ain’t possible for someone with kids if you actually want to see them.  Or even in my case, I bought my house at a bargain price of $190,000 (back in 2006) that most people can’t potentially get close to in most of urban Canada today.  So while I think these tales can be inspiring to some it also becomes discounted by many as being impossible for others to achieve anything even close to it.

Yet perhaps I’m odd that way, I want to show people what they can do with their lives and not focus entirely on my particularly odd quirks that helped me along my path.  While yes, Sean did some extreme things to reach his goal he also did several very normal things like taking a lunch to work rather than eating out each day.  Or riding a bike to work.  These are not unrealistic changes, but often get ignored in terms of trying to discount why someone can’t do something to be a bit better at paying off their debt.  I’m not talking about paying off your mortgage in three year (like Sean) or eight years (like me), but can you take your 25 years down to 18?  Likely yes, and without too much effort.

Yet stories like that are common and don’t get much fanfare, so they largely go unnoticed until the person manages to retire 10 years earlier than their co-workers which everyone tends to write off as ‘luck.’  Yet the true of the matter is building a more secure future is the produce of a bunch of minor decisions over the course of decades.  Taking your lunch to work isn’t sexy and doesn’t save a tonne of money in a year, but compounding that over three decades and it starts to add up.  Repeat that in 25 different ways and add in a touch of taking advantage of a good break during your life and suddenly you are that ‘lucky dog’ that every talks about in the office for a few weeks.

The truth is being financial responsible is rather boring on a day to day basis.  Occasionally you do hit those highly emotional milestones which you should celebrate but most of the time it is rather boring and routine.  Taking your lunch most days won’t get you in the evening news, but over the years it can make your life considerably better.  So don’t get upset at the extremes and remember even they do the boring stuff just the sames as you.

Comments

7 Responses to “Extremes Make Poor Examples”
  1. Jay says:

    I think extreme are what’s needed to motivate people. People listen to musicians, go to museums and watch Olympians compete. I believe the extremes inspire the best from us. I don’t need to be the best to appreciate the talent of others, greatness exists to open my mind to alternate paths for my life.

    Alternatively I could play recordings from my school band days, complain about my finances and watch the riders play; not exactly anything to aspire to.

  2. Paul N says:

    I agree.

    I also feel the same way about those who claim they are retired early but have some fallback sources of income supporting them. Like a spouse working and getting healthcare insurance. Or someone claiming they live off their dividends but fail to explain an expense like a home or apartment kind of shared by a girlfriend or wife covering the rent… Or someone might have worked just long enough to receive a really good DB pension down the road so they can cut out early and kind of exaggerate a little on how they can manage to check out early.

    Some forms of early retirement or FI are simply not practical. Also with our new government in place and hearing of all the increases in the costs of our services that are coming over the last few days, it might be a good idea to increase future inflation predictions and save a little more or a little longer…

  3. Gene says:

    Don’t forget this Sean is a financial blogger/writer. So he went out of his way to promote himself. I applaud him for that. I see articles, speaking and other paid gigs in his future.

    Like Sean I lived a very frugal life in my twenties focused on paying off university debt, riding my bike everywhere, not owning a car. In fact, I’m also 45 and still don’t own a car.

    Maybe I should write a blog about saving, frugality, but also just working hard, getting a good job, and saving/investing. My net worth is touching 2.5M and my wife is a stay at home mom and has been for about 10 years. We built our nest egg on a small inheritance for my wife and the rest on my hard work and our partnership on responsible spending.

    We can retire soon… but I like working.

  4. Rick says:

    Great article Tim, I totally concur!

    Turning the phrase ‘death by a thousand paper cuts’ on its head, I also view the many, small ‘non-sexy’ steps as integral to financial security. I suspect that frugal extremes are unappealing for the majority, and there have been plenty of times where we’ve spent extra for enjoyment experiences or high quality products. Having said that, I also pack(ed) lunches and drink coffee made at home, as I find this to be healthier and more convenient in addition to saving cash; a win-win for me. The older I get, the less important ‘stuff’ is, and I really couldn’t care less what people think of my car, my clothes, my phone, or anything else for that matter as I smile inside, knowing that each little decision shaved off time ‘working for the man’.

  5. scott says:

    Hi Tim,
    Appreciate the blog, it would be great if you could add your thoughts in this commentary section more often – you have valuable insight. :)

  6. Gotim says:

    This may be a matter where your perspective is influenced by your environment. In engineering, there appears to be a “middle ground” of reasonably-paying jobs without excessive hours. In my profession, that is not the case. It is easy to earn a substantial amount of money working crazy hours, and it possible to work in non-unionized government positions working crazy hours for much less pay, but there is a dearth of $80k/yr 9-5 positions.

    As someone in such an all-or-nothing environment, I actually find Mr. Cooper’s story quite inspiring for proving that if one can tolerate lots of short-term pain and does not screw up, there is a definitive light at the end of the tunnel, and it comes quite early. The reality is that lots of people in investment banking, law, or consulting are forced to keep these hours despite young kids. This shows them that iron fiscal discipline presents a way out.

    That said, I appreciate the common-sense wisdom of this blog as well, if only because you are the same age and have the same undergrad – it’s like reading the alternate chapters of a “Choose your Own Adventure” novel!

  7. I still work 3 days a week, retirement date set for next June. I couldn’t do it if my wife wasn’t working part time so there’s that.
    This reminds me of the debates surrounding Derek Foster when he proclaimed ‘STOP WORKING’. He wrote books for income, so did he stop working? well not really.
    Maybe it’s just retiring from traditional jobs that’s the subject matter and not just retirement from all work.
    I will always do something to bring in income even in retirement but I’ll still call myself retired. Collecting a pension tells me I’m retired.

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