Beautiful yacht we saw docked near Piazza San Marco in Venice…
If you’ve been reading FI-oriented blogs for a while you’ve probably noticed that they all talk about downsizing your possessions. It’s true – if you want to become financially independent in your 30s or 40s you probably need to re-evaluate the spending side of the equation very closely. Keeping in mind the Pareto principle you probably want to start analyzing the Big 3 first (most likely housing, transportation and food) as any changes there will get you most “bang for the buck”. After that it’s time to move on to other categories such as shopping, subscription services, leisure activities and hobbies. Spending money on hobbies is something that I’d like to discuss today.
My definition of a hobby is something that I enjoy doing without expecting any monetary compensation. Without hobbies my life would be pretty dull since most everything else I do is 9-5 work and chores, if you don’t count things like sleeping, eating and spending time with the family all of which I do enjoy very much.
Obviously hobbies are all over the Expense Scale ranging from free to best suited for one-percenters only. If you are not worth millions of dollars it’s much better to develop a taste for free or inexpensive hobbies, especially if you desire to retire early. Instead of becoming a country-club-golf-playing-deep-sea-fishing-wine-connoisseur see if you can get as much pleasure (or “utility”) out of playing (some type of) a ball game with friends, shore fishing and then topping it all off with an inexpensive beverage of your choice.
Speaking of beverages – if you like beer it doesn’t mean you need to substitute a $12 six-pack microbrew with a $3 six-pack of Natty Light. Taste is highly subjective but I think Yuengling tastes excellent for a mass-produced beer and it’s cheap compared to all the “craft” beers that are flooding the market. Or how about trying to make your own? My nephew made his first batch recently and it tasted as good as any microbrew I’ve had before. It’s definitely on my DIY radar of Things To Try.
I think it’s worth making a list of things you like to do and seeing where your hobbies fall on the Expense Scale. Let’s use a simple key system where $ = Free/Inexpensive and $$$$ = Better left to the high-rollers. Here is a list of things I enjoy doing in my spare time:
- Walking – $. A good pair of sneakers is all that’s needed. I usually walk a couple of miles per day during lunch at work and also during family outings on weekends. It’s so ingrained now that I’ve made job decisions based on my very own Lunchtime Walkability Score. If you want me to sit in front of a computer for hours on end, I better have an opportunity to get some walking in on my lunch break untethered from my smart phone. It’s a win-win since it makes me more productive and less likely to take sick days.
- Bicycling – $. Stay away from $3,000 carbon-fiber bikes and this hobby takes very little in terms of capital expenditures. You can pick up a great used bike on Craigslist for cheap and, unlike anything with a motor, there is very little maintenance and ongoing expenses. I just bought a 15-year-old Cannondale mountain bike on Craigslist for $120 to replace my old Cannondale that died prematurely due to a Stupid Mistake. It’s in perfectly rideable condition and will easily last another decade or more. To prevent a repeat of the Stupid Mistake I bought a different bicycle carrier so that I don’t have to worry about the overhead (pun intended).
- Exercising – $. I’ve been lifting weights since my first year in college and the last time I paid gym membership fees was back in the 90’s. A good incline/decline bench and a set of adjustable dumbbells is all that’s needed. Not to brag, but today I’m the same weight and same waist size as I was back in college. To me at least, that’s a good indicator that a simple weekly home-based workout routine is working just fine almost two decades in. My wife concurs which is a nice bonus. Lifting weights for an hour twice a week in combination with walking is keeping my fitness at a level that I’m happy with. I don’t do diets either and pretty much eat whatever I want – within reason of course. After all these years working out is so ingrained that I feel bad skipping a week even if it’s due to something beyond my control. My friends joke about scheduling anything for Tuesday or Thursday nights since those are my regular workout days. I have no problem saying no to an invitation that conflicts with my workout schedule. If I do say yes I’ll find time for a catch up set another day of the same week.
- Fishing – $. Not gonna lie – the few times I’ve fished off a boat I really liked it. However, surf-fishing in the ocean or in our local lake can be just as enjoyable. It can be even more enjoyable because I don’t have to worry about buying, maintaining, insuring, storing and paying property taxes on a boat. There is a reason why they say that the two happiest days of a boat owners life are the day they buy a boat and the day they sell it. Every time I get carried away in a fantasy land of boat ownership I remember the downsides and realize that while I can easily afford a boat I can’t afford all the headaches that come with it. Life is already complicated enough and at this point I’d be inclined to decline a boat even if it was given to me for free. If they insisted, I’d take it and turn around and sell it on Craigslist without much hesitation.
- Skiing – $. This hobby can get expensive in a hurry. Luckily (or not?) we go skiing just a couple of times per year and tend to stay within driving distance from home. The key for us have been owning (vs. renting) the same gear for over a decade now and going together with friends so that we can share accommodation costs. We can get a fancy 3-bedroom condo with a ski-out mountain access and an outdoor jacuzzi and pool at a very reasonable price when split between 3-4 couples. I’ve also gotten pretty good at hunting for discounted lift tickets so the costs are minimized there as well. Overall, it’s a small price to pay for something that we really enjoy doing. One of these days we’d like to ski the West Coast but for now we are happy to just get out and bomb down our local mountains at a fraction of a cross-country trip cost.
- DIYing – $ (or +$). If you’ve read even just a couple of posts here you know that I DIY almost everything and preach about the benefits. While Insource Life has many meanings, Do It Yourself philosophy is one of the core principles. Sure, some DIY projects may seem more like chores but I still consider doing things yourself a hobby. In terms of cost, yes you do need to buy some tools (especially for working on cars) but I consider it an investment with an ROI better than with anything available at your favorite brokerage firm. The amount I spent on tools is negligible compared to thousands upon thousands of dollars I’ve already saved with DIY. DIY is a money printing press that starts up the minute you tackle your first project and continues printing till the day you die. And that’s just the financial rewards… The impact it will have in other areas of your life will be just as, if not more, significant (self-reliance, confidence, pride, time savings and deep satisfaction with a job well done to name a few).
- Travelling – $$. I LOVE to travel. This is definitely a category where the Expense Scale is all over the place. We’ve done everything from pricey European vacations to primitive camping and I like it all. Now that we have a kid we’ve been staying more local so our travel expenses are not that bad. Still, this is one hobby where I tend to open up the wallet – within reason of course. Take air travel for example. To me, it’s not about the flight. Yes, economy class sucks compared to business. I’ve been upgraded to business class while travelling for work and it’s a night and day difference. However, I can never see us paying triple to be more comfortable on a six-hour overseas flight. I wouldn’t even think of spending extra miles instead of money to get an upgrade. After all – miles IS money and I’d rather spend it on another economy ticket later.
Same with hotels – we’ve stayed in hostels and in 1-5 star hotels and while the latter are much more luxurious, I have no issues booking 2-3 star hotels to save money. We come back to our hotel room to sleep spending the rest of the time exploring – after all, isn’t that why we’ve endured that 6 hour flight in economy?
In the last couple of years we started using AirBnB to find accommodations. Besides often being cheaper than a hotel, we feel it’s more interesting and often more convenient to stay in a place owned by a local. It totally changes the dynamics of the trip and so far it’s been for the better! If you haven’t yet, I highly recommend trying AirBnB – here is a $25 discount to save on your first reservation.
- Motorcycling – $$. Or anything with 2 wheels and a motor really. Get me on or around a motorcycle/scooter/moped and I’m a happy camper. This obsession began when I was 15 and got my first moped with a stinky 2-stroke engine and a pair of pedals (the “ped” part”). I received my motorcycle endorsement back in 1999 but it took a decade to get a proper motorcycle. I don’t even have to ride it – give me a beer and I’ll happily spend an afternoon in my garage tinkering with the bike.
There are others but this is a good sample. It’s nice to see that most of my hobbies are simple activities that don’t cost a lot of money. The two that stand out on the Expense Scale are travelling and motorcycling. I’ve already talked about the former and how I try to minimize spending while maximizing the actual travelling. As for the latter – motorcycling is not unlike boating where there’s a real chance that costs will suck all the fun out of a hobby. I plan on talking about some of the lessons learned after being a hobby motorcyclist for several years and sharing a couple of loopholes to drive down costs significantly. And here it is!
Readers – have you examined your own hobbies to see if they are conducive to financial independence? I’m sure there are ways to minimize costs associated with any hobby but do you try to consciously decide to get involved in “cheaper” hobbies rather than those with inherently higher costs (anyone’s into airplanes?)