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Earlier this week Rachel and I were sitting in the sun on the back deck after work. The weather had taken a dip towards the cool so we were not in the pool. It’s not uncommon during our end-of-day unwind that we listen to a portion of a podcast or I read to her something that I’ve read earlier in the day (over an adult beverage of course). I read to her fairly often; parts of some article or book that I find insightful or interesting. It can be a good conversation starter. We typically unpack what we listen to or read, and try to see how it fits into our lives, if at all. Many times we find that the information can have a much broader impact than perhaps was originally intended.

This particular afternoon I was reading a small portion of The Simple Path to Wealth by JL Collins. I’ll admit to not being very smart about money. I wasn’t raised with any sort of money-awareness. I mean, working hard and paying the bills was the right thing to do, but that’s about as far as it went. No one I knew ever talked (or knew anything about) the stock market. I never heard the terms 401K or return on investment (ROI). Debt was fine as long as you could make the payments. There was not a great sense of driving yourself towards higher goals or being a life learner; I was discouraged from pursuing my dream of being an attorney because they were all “educated idiots.” Mediocrity was perfectly acceptable. My upbringing in that area is probably not unlike some others who are now coming into middle age.

I’ve left most of that behind now; except the part about not (still) knowing much about money and investing. Rachel and I are learning fast, and as we move towards becoming debt free, we want to make smart decisions. We want to be well-informed about all things financial. Once we reach our debt free goal, we should have a very sizeable amount to invest monthly and we want to make sure we’re doing it right. So, after I read an article from an author that I respect that listed Simple Path as one of his foundational readings, I ordered it from Amazon and downloaded it to my phone (so I could read it in the hot tub of course).

I didn’t get very far into the book when I came upon this idea of opportunity costs. I thought I knew what it meant (I didn’t), and the whole concept rocked (is rocking) my world (in more areas than just financial). I’m still fleshing it out.

In chapter 4 of the book (this is what I was reading to Rachel), the author talks about buying a car. Once that car is purchased, the money is spent, and there is an opportunity cost to no longer having that money available to work for me. Financially speaking, opportunity cost is what I give up (lose) when I choose to tie up my resources (money) in one thing (car) over another thing (an investment). The car money (a study in depreciation) won’t be “working” for me in the future. If I had invested the money, it would “work” for me by creating earnings at (maybe) 8-10%, and that money would then make more money, and so on and so on. So in the end the car costs me alot more than the actual price because I both pay interest to the car loan and I don’t earn investment interest. Run that out for 20 years and there’s a huge disparity. I suppose if I had used the car to be the getaway driver for bank robbers, the money might in some way still be “working” for me (if you knew how slow I drove, this would be hilarious and a non-option).

It’s this idea of opportunity cost that really set my head spinning. It’s about alternatives and the way the choices we make run out into the future; both the alternatives we say yes to and the ones that we say no to.

We could have chosen to purchase a bigger Baby House in Mesa. We had that option. But then the extra money that we spent on the higher payments could not be used towards getting out of debt. The money that I chose to spend in obtaining my first Masters degree might have been better invested to create returns. We could have chosen to spend 30K updating the kitchen (the architect had the plans all drawn up), but we chose instead to spend 10k and focus on the real needs. We could have chosen to purchase a newer and more expensive motorcycle, but then we could not have used the extra money towards debt (and I wouldn’t look nearly as cool).

I could have chosen to purchase the Super Duper Double Barrel Master Blaster Wasp Annihilator Spray for the back yard wasps, but there are much less expensive (and less deadly) options and, again, that money can be better used (and the neighbors won’t start dis-inviting me to the barbecues).

The idea of opportunity cost is that options we select create the potential for loss of gain, and it’s a really good idea to consider the options before choosing the path. Is there a better way?

It might sound like I’m advocating for never spending, or spending less, or eating rice and beans until financial independence is achieved (although I kinda like rice and beans). That’s not it at all. Rachel and I have really beautiful things. Truthfully, we could have not bought the Baby House (alternative 1) and used that money to get out of debt even faster (alternative 2). We then could have invested more and sooner (alternative 3), and that money would go on making more money essentially for the rest of our lives. So in the end the opportunity cost of the Baby House will be more than the purchase price, probably alot more. Even with that, we would make that choice again in a New York minute. That opportunity cost is worth every cent and pays every year non-monetarily: helping us escape some of the Idaho winter. It brightens us, gives us hope, and has opened a whole new world of potential.

Not all things are about money. Life is not just a monetary excursion or just about amassing bags of money. Looking back in regret at life can be frustrating, and quite honestly, largely a waste of present life. It only has value if a lesson can be learned and used to make the future better. A lesson can be a very powerful tool. Move on. Do better.

Also, sometimes things just don’t “feel” right. And sometimes things do just feel right. The 30K kitchen didn’t feel right. All of the fifth wheels and monster trucks to pull them so far just have not felt right. Despite the dream, it might be a path we choose not to go down. If we had bought the fifth wheel or truck or more expensive kitchen update, we would not have been able to afford the Baby House. And although I’m also not advocating for sitting cross-legged on the floor and making decisions based on Zen, there is a “gut” that’s valid and should be listened to.

Additionally, Rachel and I are noticing that our age is becoming a significant factor in our consideration of options. As we move into this thing called mid life, we’re understanding that we probably have less time to fix a mistake (even though I’m going to live to be 106). By default, it’s making us more cautious.

What I’m really trying to focus on is understanding that our choices, both financial and non-financial, can earn “interest,” and are both manifested and magnified in life. They create results that last for a lifetime. Like the picture at the top of the post, choosing one path means we can’t choose the other. And down that path will be more alternative paths to choose. We probably can’t ever get back to the other path, and even if we do, we’re changed people.

Every decision creates potential. There are benefits and detriments, advantages and disadvantages. Choosing one means that we negate the other. There is a cost to our decisions, and sometimes the cost is worth it and sometimes not. But it’s always a good idea to work that out and know the cost as best we can.

Opportunity costs are cool to think about. I want to apply the paradigm as we move forward, especially now that middle age is upon us and we’re preparing for our non-working future. While that still might be some years off, I’m finding that even in the daily decisions it can be beneficial. Food choices, activity choices, thought choices, word choices; am I at least trying in some small way to be better than I was yesterday, to factor out the effect of my decisions into the future, to choose better paths? In the long run it could really make a difference.

This middle age journey I’m on is forcing me to deal with some new realities. One of them is that at some point Rachel and I are probably going to sell The Big House and move to The Baby House. We’re working towards becoming debt free, and we know that this current house is bigger (and costs more to upkeep) than we need.

There are still alot of options and the move might not take place for years, but we know at some point we’ll trade ~2,000 sq. ft of living space, 2-car garage, and 10×12 backyard shed for 640 sq. ft. of living space, no garage, no shed, and very limited storage. It will probably be the next big step in our lives.

One of the natural laws of science (and life) is that only so much stuff will fit into a given space (my daughter packing her suitcase notwithstanding). If we want to avoid being featured on one of those A&E TV shows like Buried Alive or Hoarders, it stands to reason that we’re going to need to get rid of stuff. Downsize. Minimize. Reduce excess possessions. De-materialize. Streamline. Un-stuff.

We spent part of this weekend un-stuffing. We did pretty well, but there were a few moments when the realization sunk in that we were choosing to release things from our lives that we once deemed important. Some of it was bitter-sweet; yes we are moving on, and yes there are good memories represented in that stuff. But the truth is, it can be a tough thing to get rid of stuff.

How do we get so much stuff? It seems like it just sneaks up. Stuff is sneaky. Sneaky stuff. We’re living our everyday life, doing our everyday things, and then it’s like a stuff-avalanche. Stuff is everywhere because it can hide in plain site. We have boxes of stuff, and closets of more stuff, and attics of even more stuff, and sheds of even way more stuff. We never see it until it jumps us. We open a closet to get a coat and get stuff-jumped for no reason. There’s a kitchen smudge so we look under the sink for the Smudge-Off and stuff has taken it hostage. Stuff sneaks into our car at night and hides until we give someone a ride. Then it’s a mobile stuff party. Some people who have too much stuff sell their stuff on Saturday mornings to other people who have too much stuff. It just goes back and forth like that. Some people give up or run out of space to hide stuff. Then it’s called clutter and they’re called hoarders.

And stuff can morph. Like a shape-shifter. Or the pods in Invasion of the Body Snatchers or Gremlins. It starts out as something cool and Must Have and then ends up in a box or closet or under the bed as stuff.

There are smart people who know alot about having stuff. Authors have built their entire profession on writing about stuff. There are professional Stuff Managers for hire that will deal with your stuff for you. Apparently U.S. homes have more stuff per house than any society in global history. It’s called Hyper-consumerism. The average home has 300,000 items in it (no way. I started counting). That’s a wicked-lot of stuff. Some people need more space to store stuff and they pay for it. The U.S. has roughly 50,000 storage facilities (5 times more than Starbucks) and there’s 7 1/2 sq. ft. of stuff storage space for every man, woman and child.

I confess: I hate stuff. It’s one of my hot buttons. It makes me insane. I once had a job that required me to go to people’s homes; maybe a thousand a year. Some had so much stuff there was nowhere to sit. I would fantasize about taking a push broom or firehose to the whole place while laughing maniacally and when I was done they would gather round and clap and cheer and thank me for saving them. Stuff makes me grumpy.

I was in the Coast Guard for 20+ years; much of it lived on a ship. There’s not much space for stuff on ships. Maybe that’s where my anti-stuff persuasion comes from. Most of the time stuff is very hard to describe (What’s in that box? I don’t know, just stuff. What kind of stuff. Just stuff stuff).

We save stuff over the years. Most of it is useless, but we save it anyway, because it’s perfectly good. We use words like perfectly good or might come in handy someday to describe things we’ll never use again but feel the overwhelming need to keep. We also use just in case and then describe a ridiculous situation that has never happened and never will (we’ll save it just in case we win the lottery and move to Mexico and can’t find a 2006 iphone case). 13 unused spiral notebooks (just in case we need to write a letter), 31 elastic banded pens that all work (might come in handy for writing all those letters), 7 nail clippers (just in case the other 6 break), every book we’ve ever read (throwing away a book is a sin), old eyeglasses (just in case my eyes ever go back to my prescription 7 years ago), various cables (just in case we need to hook something up); all perfectly good stuff that might come in handy just in case.

Pictures are the worst. The worst. We have boxes and boxes of pictures that we don’t look at until we’re deciding to get rid of them, which we never do (I threw away pictures this time. Rachel is pretty sure I now have it in me to be an ax murderer).

We have to Go Through stuff before we get rid of stuff. That’s the rule. It’s just about the only time in life that we ever Go Through anything, which automatically defines it as stuff. We have to be in the right frame of mind to Go Through stuff. Some people Go Through stuff but that’s as far as they get and it makes them feel like they’ve done enough for today.

Sometimes getting rid of stuff feels like we’re being disrespectful. Or wasteful. Or careless. Or cold. It’s our stuff and it belongs to us. We might not want to display our stuff, or use it, or ever really even see it, but we want to know it’s there. Where it’s safe. Under our control. Getting rid of it is so final. Stuff represents our past and reminds us of our mortality. Maybe that’s part of the reason we have so much stuff. Marie Kondo advises that we hold each item in our hand and thank it for the enjoyment it brought us before getting rid of it. Some people might need to thank a whole dumpster.

Stuff can cause big fights if both people aren’t on the same stuff-page. Some people are stuff keepers. Some are stuff get-rid-of-ers. Some people over-identify with their stuff; it becomes who they are. I tend to be a little reckless on the stuff reduction front and am definitely a get-rid-of-er. It makes me feel good (I hear the Rocky theme in my head). I’ve gotten rid of stuff that I shouldn’t have. I know I shouldn’t have because I got caught (stupid trash man).

I learned a lesson once from my grandfather about stuff. He explained that life is like a garden. We need to tend our Life Garden, and on a regular basis purposely pull out everything that’s not helping us get what we want. Weeds, bugs, last year’s old crop, too many of one thing, harvesting: at some point we need to remove instead of add. This removing process is natural and healthy, and makes us better and more purposed people. The tendency is to want to keep growing and growing, adding and adding, but that’s not how life works (and would make for a really messy and unfruitful garden). Stuff is like that. We add and add and if we don’t regularly remove, it’s going to get really messy and hard to grow.

I mentioned in an earlier post that we’re learning that right and hard can be friends, and just because a thing is hard does not mean it’s not right. Overall, it felt good to downsize and get rid of stuff. We still have a good amount of stuff to Go Through, but so far we’ve emptied the attic, 2 big closets, and most of the garage shelves. Some we donated and some we threw away. We’re doing a little bit each month. There were a few bumps but it’s fun to be taking tangible steps in moving towards our dream.