Financial independence and early retirement continue to attract mainstream attention. This is a good thing. Check that, this is a great thing. Of course, with this attention there are more naysayers and critics than ever.
One of the main criticisms of the FIRE movement — and of frugality, in general — is that those who seek FIRE are depriving themselves. Or leading lives of deprivation. On the surface, these two arguments may sound like the same thing but they're not. There's a big difference between “deprive” and “deprivation”.
Here are the definitions of these two words:
- Deprive (verb) — Prevent (a person or place) from having or using something.
- Deprivation (noun) — The lack or denial of something considered to be a necessity. The damaging lack of material benefits considered to be basic necessities in a society.
That's all very academic, isn't it? Let's take a deeper dive into the difference between deprivation and depriving yourself — and explore why one is actually a good thing.
The Difference Between Deprivation and Depriving Yourself
Life is full of choices, from the important to the mundane. Whenever you make a choice, you are by definition depriving yourself of the thing you didn't choose. When you choose to purchase a townhouse, you deprive yourself of a single-family home. When you choose to buy vanilla ice cream, you've deprived yourself of chocolate. When you enter one door, you leave another unopened.
Depriving yourself of something isn't necessarily bad. It's something we all do every day in the little choices we make. (As J.D. has noted, opportunity cost is what we give up in order to have the thing we choose.) Deprivation, on the other hand, is a different matter.
Look at the definition of deprivation again: The lack or denial of something considered to be a necessity.
To live in deprivation is to be lacking a need, not a want. Chocolate ice cream is not a need. You can deprive yourself of it, but that doesn't mean you're living in deprivation. (Although I'm sure someone out there who loves it may disagree.)
Clothing, food, and shelter are needs. To go without them is to be in a state of deprivation. But besides those, there aren't that many needs in life. By “needs” I mean needs in the strictest sense — those things we need to survive and continue breathing as human beings.
You might include access to medical care and access to transportation as needs. After that, though, it gets grey very quickly. Even transportation is a bit questionable as a need. You can live in a dense city all your life and walk to get food, clothing, and everything you need. I'm sure many do.
If you've traveled a bit outside of the first world, you quickly see how microwaves, dishwashers, TVs, and computers are just wants. Sure, some of these things might fall closer to needs on a spectrum of wants, but they're still luxury items.
Here's the curious thing (and the whole point of this article): By depriving yourself of things you want, you can protect yourself from a life of deprivation, a life where you lack the things you need. A little self-sacrifice in the short term can lead to prosperity in the long term.
Depriving Yourself to Avoid Deprivation
I love pumpkin pie. I really love it. My idea of eternal bliss is eating a good pumpkin pie 24/7, forever.
I only have pumpkin pie twice a year: on Thanksgiving and Christmas. (And to be honest, maybe a day or two after each of those holidays depending on how much is left over.) That's it. For the rest of the year, I don't have any pumpkin pie. None.
As much as I enjoy pumpkin pie, I make a deliberate choice to deprive myself of it most of the time. But remember the definition of “deprive”. I'm making a decision to not have it. It's not deprivation, though, because pumpkin pie isn't a necessity in life. It's not a need. (Although if I were allowed to redesign the human species from the ground up, I would make it so!)
But what if I had pumpkin pie more often? What if I started cheating? That's when deprivation would start.
Deprivation is a state of being. It's a noun. I choose to deprive myself of pumpkin pie the majority of the time because I don't want to live in deprivation.
Confused? Let me explain.
If I ate pumpkin pie all of the time, the short-term result would be increased happiness because I'm indulging a want. But the long-term result would be that I'd start lacking things I consider to be actual necessities in life, such as my health. (As much as I love it, man cannot live by pumpkin pie alone!) And I'd lack discipline, the very thing that got me to financial independence. These things, to me, are necessities; to be without them would be living in deprivation.
So, I deprive myself of pumpkin pie to assure that I'm not in a state of deprivation with my health. I deprive myself of many shiny “wants” in order to assure I'm not in a state of deprivation with my discipline. I'm okay with that because I gain much more than I give.
Discipline Equals Freedom
By depriving myself of pumpkin pie (and other fleeting wants), I've gained a healthy body and financial independence. I now have the ability to leave my job at any time — forever — and have plenty of money to live on.
I've gained copious free time to pursue my passions in life, reduced stress, more sleep, more happiness, and more fitness. I can race the twenty-somethings every Sunday on my bike and beat most of them. I've gained the awesome semi-retired lifestyle I now enjoy because I've deprived myself of many things. But the main thing I've gained is discipline.
My discipline is far from perfect. But what I do have has served me well in many areas of life, especially with money. The popular podcaster Jocko Willink has a tagline: “Discipline Equals Freedom”. If you're not familiar with Jocko, he's very very passionate about this philosophy (which is actually similar to J.D.'s “money boss” philosophy).
Discipline has indeed helped me reach financial freedom.
I suspect that many of the critics of the modern financial independence movement are probably deprived of the free time they really want, and deprived of the ability to be able to retire.
By not depriving themselves of certain things in life — expensive cars and other shiny wants — they've also deprived themselves of a key necessity in life, a necessity that could give them financial freedom: discipline.
They lead lives of discipline deprivation. As a result, they deprive themselves of freedom.
Consider your choices carefully. Depriving is just choosing one thing over another — it's an opportunity cost — so deprive wisely and deliberately. Deprive yourself of pumpkin pie for good health. Deprive yourself of shiny wants for financial stability. But don't deprive yourself of happiness.
J.D.'s note: I just noticed that yesterday Seth Godin published a great, short piece on opportunity costs and their implications. It makes for good supplementary reading to Dave's article here.
Author: Dave @ Accidental FIRE
Dave is a personal finance blogger, avid outdoor sports junkie, geographer, and teacher. He reached financial independence and semi-retired in his mid-40's through hard work, smart living, and investing. He writes about the links between discipline, fitness, habits, and mindset and how they all affect your finances. He also believes personal finance needs more laughter. Read more from him at Accidental FIRE.