How to Be a Minimalist and Become Wealthy

Find Your Why to Be a Minimalist

You can’t consume your way to happiness

Pete Adeney, (Mr Money Mustache)

That is mine why. 

This is a huge relief since I don’t have anything to chase anymore.

I know that my happiness can’t be bought, traveled to, or attained by doing some shopping.

Happiness for me is training and hanging out with friends and family. Things that are super cheap or even free. 

Minimalism makes room for me to do more of that stuff and less boring maintenance of things I don’t enjoy. 

But that is mine why. 

You need to find yours. 

This is what I hear people say about their why on minimalism: 

  • “I like to live clutter-free”
  • “I want to be financially independent”
  • “I want to be environmental”
  • “I want to worry less”
  • “ I want to have time for the important stuff”

How to Simplify Your Life

Throwing out that broken pencil at the bottom of your messy drawer is a good thing to do. 

But it won’t be the most effective thing we can do if we want to simplify our lives. 

We need to see the big picture.

Five major things will make the whole difference. 

These things are:

  • Your home/Stuff.
  • Transport
  • Food
  • Housing
  • Your thoughts

Minimizing in these areas will make all the difference. 

Forget about the “100 things challenge”. 

Simplifying is a relative thing. Don’t compare yourself to anyone. 

What seems simple for you, might feel like a huge burden for me. 

And vices versa. 

In all of these categories, there is a hierarchy. 

And going down that ladder can be a huge relief for you.

In the following sections, I will show the hierarchy.

The higher numbers are the maximalist way of doing things, and the lower numbers are the more simple way of doing things. 

Going a single step down in every category can be a game-changer in your life. 

The Law of Diminishing Returns

When you read the hierarchies and start to sweat about that you are at the top of every category. 

Then we can define you more as a maximalist. 

You are in for a treat if that is the case. 

Going from being a maximalist to a mindful consumer can have a huge impact on your wellbeing and financials. 

While going from being a minimalist to an extreme minimalist can have benefits, but not as big as you are in the higher end of the minimalist hierarchy. 

Being an extreme minimalist without a bike or furniture can have benefits, but it will start to become more like a spiritual religion rather than making life easier.

And can harm your social life since many of your friends and family won’t understand you. 

Transport

We need to commute. There is no way around it.

Here is the hierarchy of transportation: 

  1. Walking.
  2. Biking.
  3. Public Transportation.
  4. Car with no loan
  5. Car with a loan. 

Walking is in the more extreme way of being a minimalist. It will take a good amount of time compared to biking. But you won’t have to buy and maintain a bike. And we will probably burn the same amount of calories walking compared to cycling since it takes times longer to walk the same distance as biking. You will only save a couple of hundred dollars by walking instead of biking. A second-hand bike cost close to nothing, and maintenance is close to nothing. 

A bike is one of the best inventions made to mankind. Since I’m not owning a car, this is the step that I’m in. I can’t think of any other form of transportation that will give you the same benefits as biking. This is going to be a life long form of transportation for me.

Public transportation is something that I will use if I have more than a 20 km commute. It is still cheap compared to having a car. And I really enjoy riding a train. Biking will still be my main form of transportation, even for +100 km trips. But the train is a perfect luxury of not biking. 

Having a car with no loan can be a go-to for many people. I will go as long as I can without owning a car. Whenever I do need one I will rent from a friend or a service like GoMore. Buying a car with no loan is the best way to go if you want to own one. Finding a 10-year-old car that you can pay for cash is doable. 

Buying a car with a loan is a decision I have never understood. The average American car loan payment is about 550 $/month. That money could compound into 105.000 $ in ten years if you invested that money instead. Going from this step to just having a car with no loan can be 100.000 $ in savings. 

Food

Just like transportation, we need to eat. No discussion about that. 

Eating can be a bit more hybrid than transportation. 

I would hate a life where I couldn’t feast once and a while. 

But we can do it way simpler than we normally would. 

Here is the hierarchy of eating: 

  1. Omad
  2. 16/8
  3. No restriction
  4. No restriction + Dining out
  5. No restriction and only dining out. 

OMAD or “One Meal a Day” is having all of your food in one sitting. OMAD is part of a new trend called intermittent fasting. And many scientific papers show that we can be better off eating less regularly. This form of intermittent fasting is the more extreme one. But can save you tons of time, money, and maybe a couple of kilos on your ribs. 

16/8 is another way of intermittent fasting. 16/8 refers to eating and fasting “windows”. So you will eat for 8 hours and fast for 16. This is the equivalent of only having two meals. It can be lunch and dinner, or breakfast and lunch. I often skip breakfast myself. But if I’m sleeping with my friends or parents and they feel like having breakfast, then I will join along.

No restrictions mean what it says. You eat whatever and whenever you want. Three meals a day, and snacking in between. At this step, you can save a good deal of money since you won’t be eating out. 

No restrictions and dining out a couple of times each week is what most people do. It can save you a ton of money by not eating out for a whole month. And if you do it, let it be a 10 $ pizza. Eating out twice a week can easily cost you 75 $/week. Which is not equivalent to the car payment, but it’s close.

No Restrictions and only dining out is pretty rare. But I do know some people where cooking can be a monthly thing. They will eat the majority of their food at work, and after a long day and a good salary they won’t feel like cooking themselves and that is where they grab some sushi. Eating out every day can easily cost you 150 $/week. 

Housing

Housing is without a doubt the biggest expense we all have to face. It can either serve you or be the biggest pain in the ass. 

There are several ways we can be creative. 

We can either ditch the mortgage by living in a Tiny House/boat or a cheap vacation house. 

Or we can buy an apartment/house that is bigger than our needs and rent out some rooms, or a part of the house and make the house expenses way less or even free. 

If we can live for free we will cut our biggest expense (rent) and we will be able to save and invest that money instead which really can accelerate your financial independence journey. 

Here is the hierarchy of housing:

  1. Living for free (House Hacking)
  2. Living mortgage-free (Tiny house, Boat)
  3. 15-year mortgage
  4. Having 35-50 m2 per person
  5. Having +50 m2 per person

Living for free (or even making money) is not that complicated. You will buy a place where there is enough room for you to rent some out. It is difficult to do in downtown Copenhagen but can be done without too much hassle in the suburbs. The key is to find a place where your mortgage won’t be too high so the rent from your tenants can cover it. It can also be done with Airbnb. 

Living mortgage-free often requires being a bit creative. This can scare many people from doing this. It can be done in a less creative way where you just pay the mortgage as fast as possible. Another way of going mortgage-free is to build a Tiny house, or living in a boat. This will cost the fraction of buying a house or an apartment, but will still cost you some money. Since a Tiny house requires some land, and a boat requires a harbor. They will more than likely cost less than rent in an apartment. 

Having a 15-year mortgage will probably mean that you have bought less than what you could. The main interest of the bank is that you buy the most expensive place that you can afford. Going for a 15-year mortgage instead of a 30 year is a kind of sweet spot between going the more extreme way of paying it in five years or less. It will probably cost the same as the 30-year mortgage, but you won’t have the payments for 30 years which is a big advantage. 

Having 35-50 m2 per person in a household is what many would consider “normal”. If you are a family of four and living in a 200 m2 house you have more than enough space. Pay attention to “enough”. The bigger the house the bigger bills and maintenance you will have. If you are in this category, you should consider downsizing your place. 

Having 50+ m2 per person is to me outrageous. Construction is one of the biggest sinners in our global crisis. Building new concrete homes where we have more than 50 m2 per person is nothing but ridiculous. No one needs that much space. The most environmental buildings we can build are the ones that DON’T build. And if everybody thinks they need more than 50 m2 per person in their house, there won’t be room for all of us. 

Becoming Wealthy is Inevitable as a Minimalist

If thou wilt make a man happy, add not unto his riches but take away from his desires

Epicurus

The moment that you start striving for less you will get ahead. 

It’s a counterintuitive thought. When we keep chasing all of the material desires we have, we will realize that this is a never-ending circle.

When we fulfill a desire, a new one comes up.

And it will never stop until the day we think we have “enough” in our lives.   

If you get a normal full-time salary and start striving for less you will inevitably be wealthier. 

Not just in financial but also psychological.

That has been the biggest reward for me. 

If you are at level five in all of the categories and you go to level four you will save at least 1000 $/month. Which can compound into 205.000 $ in ten years. 

Wouldn’t that be life-changing? 

How to Become Wealthy

To make our money work for us we need to invest. 

Investing has never been easier than it is today.

We can invest in a ton of different things. 

But the easiest will be to invest in a global stock index fund you invest in every single month.

Holding it through thick and thin. 

You can download my step-by-step guide on how I (and many others) do their investing. 

It takes ten minutes to set up, and you can spend as little as 30 minutes a year checking it. 

You will actually be better off if you don’t peak at it all the time (like I do). 

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