Being Frugal Is Cool


I've been reading about Warren Buffett lately at night and in the mornings, I've been reading the essays by Paul Graham, of Y Combinator. The two guys have one thing in common, they are both very successful, wealthy dudes, but aside from that, they really couldn't be more different. Paul Graham bets on extremely high-risk startup tech companies, while Warren Buffet likes to bet on mature, publicly listed, proven businesses that are undervalued. They do have one very interesting thing in common though, they both really believe in frugality, especially when you are getting started in business.

Paul Graham says that being frugal isn't the same as being cheap. When you are cheap things feel crappy. You rent a basement office with no windows and use the ugliest desks money can buy. Everything in your business feels like the "crappy version' of something else. Being frugal on the other hand is cool. Paul says it should feel almost bohemian. Musicians that turn an old door into a desk then paint it all kinds of cool colours are frugal. Buying some crap desk that falls apart just because it's the cheapest one is, well cheap. There's a difference.

Buffett seems to believe the exact same thing. One of his more famous quotes is: "If you buy things you do not need, soon you will have to sell things you need".  He's also lived in the same house for 50 years and driven the same car. He eats at diners when he could eat at any restaurant in the world and he also has a small, old office with just a few employees in it in Omaha. He says he could play at any golf course in the world but chooses to play at the one his lifelong friends like to go to. The biggest evidence of his frugality is his approach to investing. He doesn't believe the market is efficient and that the stock price will always be accurate. He looks for deals, even if it takes years to find them because those deals make him rich. 


I was really taken back by this, because I have a natural inclination toward frugality and I've always felt kind of stupid for it. I think I've tried to fight it because I thought you can't be a "simple dude" who likes "simple stuff" and be successful. I like beer that isn't fancy and I'd prefer a diner to a nice restaurant any day. I also downsized living in a penthouse loft with a private rooftop patio to being in a 1 bedroom by the park and have been WAAAY happier in the small, normal apartment. Sometimes I still feel the pressure as a business owner to show off. I worry that if I don't buy cool stuff to prove I'm doing well, people will think Im failing. How dumb is that?

Here's the thing I guess. In business you are never doing well or not doing well. I don't think there is a day you think you have "won". Sure, if you want to go look at the bank account, you can go and move some numbers around and get some flashier things if you want, but it will only hurt your business because now you'll have less money to put into it. You'll also make your friends think you are a bit of a dweeb. It might impress some people for sure. But I'd wager to guess that those people don't really care about you anyways.

It took me a long time to learn this, so that's why I thought I'd post about it. I figured the fact that two completely unrelated heroes of mine, from completely different industries advocate this so hard that I should take it as a sign that its OK to be frugal. But I'll be honest, half the time I felt like doing that to prove that I was a somebody and that I was kicking ass. Completely stupid. 

I once spent $10,000 on music recording gear when I thought my business was crushing it 
(it wasn't by the way, I was only on an upswing). I also spent $60 on a guitar from the pawn shop when I had no money at all and was basically poor at age 22. Which equipment do you think I used more? Which equipment do you think I loved more? What made me a better musician? The $60 guitar. I love that guitar. I sold a lot of the recording gear.  It didn't do anything for me. The $60 guitar I never want to live without. It's THE guitar I love the most. It's probably a piece of junk, but to me, it plays better than any guitar, ever. 

I know a dude, Jason. He's one of my best friends. He's a very intelligent guy. He told me a long time ago I cared too much what people thought when I was going through my "show I'm doing well" phase. It was when my business first started going well. I think he could see in me that I was getting too into trying to prove to everyone else I was doing it. Now that I'm 32 and OLD AND WISE, I realized that there is no it. My friend and I were talking about someone we know who has a $100 million dollar company. Does the CEO of that company think he's "there" or has "made it"? Hell no.

Next time I think about spending my money to show the world what a rock star I am, I think I'm going to just remember to do what I like for me, not for someone else. It also takes the pressure off. 
Now that I realize that as long as I live near nature, have time to play guitar and have money to grab a coffee with a friend, or a few beers and a game of pool with the boys, I know I will always be happy. That's not an expensive life, but it's definitely fulfilling. 

If you want to go for a coffee, bacon and eggs, or a couple beers at the Comox, I'm your guy. 
I also dig a walk in the park or a guitar jam. It's free 99 and it's the damn best. 

So, I've made my choice on this one. Frugality is the way to go.
What do you think?

Archive