(or) The Bad Part about Being Rich is That It’s Expensive
Carolyn Burnham: This is a $4,000 sofa, upholstered in Italian silk. It is not just a couch.
Lester Burnham: [shouts] It’s just a couch. This isn’t life, it’s just stuff. And it’s become more important to you than living.
I detailed in my last column how I made $1100 by going to Thailand on vacation. The real hero in this story is stuff–my lack of attachment to it as well as the choices I make to maximize pleasure and flexibility.
Now that most airlines charge for luggage, we have a clearer view of the price on baggage. Travel heavy and you pay for it. Value your stuff too much and you pay for it as well. If I were about my TV getting stolen or my couch getting stained, I may not sublet. Yes, I enjoy my couch and TV but I know they’re easily replaceable and thus don’t fret about them.
Before I jump on my anti-stuff soapbox, I can see the value of it. It can make your house feel like a home. It provides comfort and memories. My guitar, bike, blender, pictures, bed sheets, savings account, and computer all make my life better. That’s why with stuff, like most things in life, it’s more about balance than elimination.
My friend Selah moved four times in the three years she lived in New York City. After the fourth move, she went through her closet and made a pile of all the clothes she hadn’t worn once in those three years. And guess what she discovered? A whole new wardrobe of nice clothes she didn’t even know she had buried amongst the stuff she didn’t need. In boxes, movers, and back pain, she paid for all those unwanted clothes. And when she gave them to charity, she gained a tax write-off, an organized closet, a new wardrobe, and the goodwill of helping others.
Let’s pretend you strike it rich and buy a $2 million house in California and a Maserati Quattroporte for $120,000. You’re looking at $25,000 a year in property taxes and $5,000 a year in car insurance. For a house like that, tack on a security system, a gardener, a cleaning service, and homeowner’s insurance. And for a car like that, you’ll want to get it detailed frequently not to mention the premium fuel (12 mpg) and over-priced upkeep. We’re talking 50 grand a year just to maintain your stuff (if you finance the car or pay for any of this with credit card debt, you get crushed even more).
Lest you think I’ve transformed into Dougy Downer and Matty Miser all in one, there’s a beautiful synergy in all this. Freedom is limiting fixed costs and pleasure is doing something different than the norm. Hedonic adaptation means we get used to things (for more on this, check out Dan Gilbert’s fantastic book, Stumbling on Happiness). After a few weeks, that new Maserati loses its luster and simply becomes your car. Same thing with your deluxe new kitchen. When you go easy on stuff, you not only gain freedom and feel less burdened by overhead, but perhaps as important, you get an extra dose of pleasure when you break from the norm and rent the luxury car and stay in the 5-star hotel.
You hear all the time about athletes (like Antoine Walker) and celebrities with earnings north of $100 million who are flat bloke. It’s no surprise when you see how expensive it is to be rich! So even if you make a bundle, think about limiting your overhead. Buying a little less house and having more money for an over-the-top vacation and/or frequent stay-cations will likely increase your pleasure and your financial flexibility. When I won my mini-lottery at the World Series of Poker, I didn’t buy anything. Tangible that is. What I bought was freedom and flexibility, and when I did splurge on a hotel, a restaurant, or a massage, it felt special because I was living in the same apartment and maintaining the same daily lifestyle.
That Maserati may be worth it to you. Just be sure to consider the cost to own as well as the cost to buy—not to mention if it will give you as much pleasure in a year as it gives you in the first week. Stuff has its perks, but the Peace Pilgrim had a good point: “Anything you don’t need is a burden.”