When it comes to the way you live your life and how you manage your finances, are you a hunter or its grazing prey?
We all learned to handle money by looking for cues in our environment. The lucky ones among us had parents who chose to discuss the family’s finances, but unfortunately, these examples are few and far between. What we had at our disposal was our powers of observation and questions such as:
- How do others handle money?
- What do successful people do?
- What about the not-so-successful people?
- What does society tell us about saving and spending? About debt?
Unfortunately, perception is reality and, chances are, we didn’t learn the essential. Our understanding of financial success has been warped and we need to unlearn it.
We’re All Taught to Graze
Our upbringing likely turned us into grazers by default. What's are grazers? Grazers are those of us who pay for items over the long term, paying off their purchases one bite at a time. Grazers spread daily/weekly/month earnings over many obligations, with much of their paychecks already spoken for when it’s direct deposited into their account. Money comes in and quickly vanishes, sucked up left and right by creditors and monthly subscription services.
We have a tendency to behave this way because we’ve learned these five implicit lessons:
- Having the “right stuff” matters.
- Life has to be perfect.
- Patience is overrated.
- Debt is normal…everybody has some.
- We're dependent on work...for decades.
1. Having the “Right Stuff” Matters
We’re taught from an early age that trends matter and that our personal worth is highly tied to what we own because what we own sends a message to others about our social status. If you don’t believe me, let me ask you whether or not you ever asked your parents for a popular toy, gadget, clothing item or…car? What about attending a specific school? What about having a certain style/size of wedding? Rare among us are those who never envied others; coveted the seemingly unattainable; craved the newest, most popular trend.
2. Life Has to be Perfect
We’re taught that in order to be happy, we need to acquire the "perfect life". We need the perfect education, the perfect job, the perfect lodging, the perfect car, the perfect family, the perfect vacations, the perfect landscaping, the perfect Christmas, the perfect “look”… Chasing perfection means we want to buy new and we want to get the best we can “afford”. It’s a hefty responsibility to be perfect. It takes effort and planning and it causes us significant stress and anxiety.
3. Patience is Overrated
We’re taught not to wait. We can have what we want now. We can buy our education with student loans, a home with a low-interest 30-year mortgage, a car with a 0% car loan or a lease, furnishings with “do not pay for 18 months” offers, vacations and other impulse buys on our 0% for 6 months credit cards, and as soon as we have equity in our home, the bank will even allow us to take out a home equity line of credit—what a deal!
Be believe that waiting offers no payoff because we have nothing to show for the effort. All we have is time spent not enjoying that next “thing”, that next status symbol we so desperately “need”. Why should we live in deprivation?
4. Debt is Normal…Everybody Has Some
We’re brought up to believe that nobody has an issue with debt. It’s a normal state of being. Having a home and a car loan is a given. And, affordability is based on whether we can manage another monthly payment. The small price we pay in the form of interest is practically inconsequential when we consider that it lets us have the life we want now. It’s even expected that we may have debt as we enter retirement, because paying a mortgage is just like paying rent, right? And if we live in the US, the interest is tax deductible. How can we lose?
5. We're Dependent on Work...for Decades
We’re taught that we need to find and build a career. We need something that is solid, steady and that will help us make a lot of money. We’re taught to look for something that offers us steady income because the steady income helps us determine what lifestyle we can create and maintain. How else are you supposed to know what payments you can “afford”?
We also believe that a career lasts for decades and that our minimum pay deductions for our pension and/or savings will be sufficient to allow us to retire at 65 and that we need to expect that our paycheques will continue to increase over time. Ever-increasing income equates to success because larger paycheques enable us to keep making life more perfect, one pay raise at a time. Further, any activities that don’t lead to the bigger paycheque, such as volunteering and/or pursuing a personal passion, should be avoided because they’re a waste of time and effort. Time is money after all.
These lessons are entrenched in our psyche. We practically need to rewire our brains in order to see the world differently. And that’s precisely what we should do.
We Need to Learn to Hunt
Society likes grazers, not hunters because hunters don’t follow the herd, they stalk it. Hunters are mostly idle and only take down prey when they’re hungry. They eat huge meals that last them for days, lounge around to rest and digest, study nearby herds to plan their next attack and start the cycle over again once hunger becons.
Hunters are rebels who live by different rules:
- Don’t kill what you can’t stomach.
- Good things come to those who wait.
- Be opportunistic.
- Sit back and enjoy your kill for a while.
- Think for yourself.
1. Don’t Kill What You Can’t Stomach
To be successful, affordability cannot be defined as whether or not we can afford the payments. Affordability must be defined as whether or not we can stomach having yet another entity tell us what we can do on a regular basis. The typical Western worker has a number of people to answer to:
- Their boss
- The lender on their student loan(s)
- Their mortgage company
- The car dealership that owns their car loan or lease
- Their credit card company(ies)
- …and anyone else they owe money to.
If you can’t stomach having other people dictate how you allocate your money on a monthly basis, don’t sign up for the payment.
Personally, the idea of taking on credit is nauseating. I’d rather bide my time than given any other individual dominion over my financial freedom. I’m much happier being queen of the jungle and acquiring big items free and clear.
2. Good Things Come to Those Who Wait
That’s where patience comes in. When a big cat is getting ready to make another kill, it observes its prey and the pride plans its coordinated attack. Striking prematurely nearly always leads to a failed hunt and that could mean going hungry to falling undesirable prey. Not acceptable.
Its the same thing when it comes to making any kind of purchase. Patience offers a number of benefits. We can:
- Save up for a purchase and avoid the associated financing fees and interest. Indeed, waiting lets our money work for us as opposed to the other way around.
- Have the opportunity to sit back and really consider our needs vs wants. We might even forego the purchase altogether—talk about savings!
- We can negotiate more favourable terms because we’re not in a rush and we can afford to walk away. (Life quickly gets expensive when we don’t feel we have time on our side.)
- We can evaluate substitutes that we wouldn't have otherwise considered.
3. Be Opportunistic
By not spending money as it comes in, aka “grazing”, we can sit on a tidy sum and take advantage of unbelievable deals when they come along. This could be for a trip we’ve wanted to take, an appliance, a car, a rental property, or any other large purchase that’s been on our list for a while. It also allows us to buy in bulk when we find an item we regularly use listed at a very low price.*
4. Sit Back and Enjoy Your Kill for a While
When we make large purchases for cash, they feel different. The buzz of the buy lasts longer because its ours. Come hell or high water, no one can take it away. We feel like fat cats. Because we are.
That feeling is the feeling of plenty. It increases our ability to save for the next big purchase, even if this next one is even larger. Once we feel like fat cats, it's hard to even consider grazing.
5. Think for Yourself
Another distinction between predator and prey groups is characterized by how we think. Grazers respond to the movement of the herd. There’s safety in numbers because a large number of eyes and ears help us feel safe. We’re no different as a society. We look to others to help us determine the best way to live. That’s why the issue around “keeping up with the joneses” is so well known.
The problem with this constant comparison is that it can often lead us in the wrong direction, make us run when we should stay put and vice versa. We start deferring to the herd and stop thinking whether the messages we respond to are really leading us to take the actions that will help us feel happy and fulfilled.
The predator looks to internal as well as external cues. Every lioness in the pride is responsible for her actions during a hunt. The success of the hunt depends on each member using her judgement, from how to stalk, to when to engage and how to help take down the chosen prey. The group effort depends on the strengths of each of its members. It makes the work more intrinsically rewarding and a variety of strengths makes the pride more likely to be successful.
Which one are you?
*Buying on small volume at regular price because we don’t have the money to buy the value size is insanely expensive. It’s like an additional sales tax on those of us who are strapped for cash.
Note: If you enjoyed these pictures, taken on safari, you might enjoy this post.