Contributed by Raymond Wee, Financial Advisory Director, Financial Alliance Pte Ltd
(The contributor can be contacted at raymondwee@fapl.sg)
The Minimalist lifestyle has become much talked about lately. Books on Minimalism such as, “The Life-Changing Magic of Tidying Up” by Marie Kondo are flying off the shelf. A search on the word “Minimalist” in Netflix reveals quite a few titles dedicated to this idea. But as early as 2016, Forbes had spotted the trend and ran an article, “Millennials Go Minimal: The Decluttering Lifestyle Trend That Is Taking Over”.
Perhaps this is needed in First World countries as we are buying too many new things and more frequently. In the U.K., 300,000 tonnes [1] of clothing end up in household bins every year.
In the U.S., the self-storage industry, which is where people rent space to store their extra stuff, generates more revenue than Hollywood [2]! In Singapore’s industrial areas, self-storage companies are also sprouting up everywhere.
Minimalism
“Minimalism is owning fewer possessions” says Joshua Becker in his famous blog becomingminimalist.com. Strict minimalists preach giving or throwing away stuff until you own a total of just 100 things or less. They call it decluttering. Another blog, run by 2 men who call themselves “The Minimalists” define it as, “Minimalism is a tool to rid yourself of life’s excess in favour of focusing on what’s important—so you can find happiness, fulfilment, and freedom.”
The benefits of the Minimalist lifestyle are many, but a major benefit relevant to this article – and mentioned by the majority of Minimalist advocates – is that it helps you save money.
Oh, does that mean that, to save money, I have to be a strict Minimalist? Like most people, you probably cannot live with just 100 things, or you cannot resist having a little of “life’s excesses”, like buying more items for your anime collection. But practising a few Minimalist ideas can certainly help us rack up more cash for retirement.
How Much Can I Save?
When expounding on living a life of simplicity [3], Richard Foster says his philosophy is to “refuse to be propagandized by the custodians of modern gadgetry”. He adds, “Propagandists try to convince us that because the newest model of this or that has a new feature, we must sell the old one and buy the new one”. Let us cite the mobile phone as an example. The “custodians of modern gadgetry” suggest that we change our mobiles every 2 years. If you change mobiles every 4 years instead, you spend 50% less. We can say the same for cars, laptops etc.
Regarding clothes, Minimalist advocate Courtney Carver suggests that “you need no more than 33 items in your closet” [4]. Never mind the exact number, but if we take on the one-out-one-in rule, buying one item of clothing for every one given away or discarded, there will be stacks of money saved on clothes we seldom wear.
Let’s say your new Minimalist ideas save you $10,000 per year. If you are 40 years old, and put it into an investment compounded at 5% per year, you will end up with $330,659 by age 60. That is one-third of the oft-touted ideal amount of $1,000,000 needed for retirement. Not bad for just a few tweaks!
Minimalist advocates say it also helps the environment. Perhaps that is an additional perk. When you retire decades down the road with all the cash you have squirrelled away, there will still be clean beaches, ice glaciers and pristine rainforests to take trips to.
References:
1 “MPs urge government to fix ‘throwaway’ fast-fashion trend published 15 Sep 2020 by theguardian.com
2 “Self Storage Market Share 2021 Global Industry Analysis, Size, Development, Revenue, Future Growth, Business Prospects and Forecast to 2024” published 9 April 2021 in marketwatch.com; “2018 Box Office Revenue Soars to Record $11.9B in the U.S., Hits $42B Globally” published 2 January 2019 by hollywoodreporter.com
3 Celebration of Discipline, Special Anniversary Edition by Richard Foster
4 “13 New Rules of Decluttering” published March 2014 in The Oprah Magazine (https://www.oprah.com/home/declutter-tips-organizing-strategies/3)
