Simple Living, Effective Altruism and Financial Independence
Simple living, effective altruism and financial independence. Three at first fairly different concepts, but they all share one thing in common. And that is understanding that happiness is what really matters, and only once you know that do you know the true value of money.
First lets have an overview of what each of these concepts means. I call them concepts, but really they are “philosophies”, in the sense that they are how people live their life. Simple living is the philosophy of breaking free of the “work long spend a lot” cycle, by realising that a lot of what money is spent on doesn’t improve overall happiness. Altruism is the concern for others’ well-being and living a selfless rather than selfish life, whilst the effective refers to maximising others’ well-being. Financial independence is having enough money to live the rest of your life without requiring work.
The key thing that they all have in common is that they each spend the same amount per week, which is lower than the average individual in the western world. Someone who follows the simple living philosophy will idealistically work the minimal hours as possible per week to achieve an income equal to their spending. An effective altruist will work a regular working week, but will give away all that extra income to what they deem are the most effective charities. And someone who is looking to achieve financial independence will work the same number of hours as an effective altruist but will instead save the additional income. I should point out that these are all extreme cases — there are very few people who purposely follow any of these three methods.
Now what is the best philosophy? I don’t think there is one answer, they all have strong arguments. Simple living prioritises the present moment, and allows you to choose how your time is spent in a way that allows happiness to be maximised, whether that is through personal hobbies, helping others or whatever else. However, an effective altruist will argue that the additional time they have would not decrease their happiness greatly if it is spent working the same number of hours as most people, and the income that they will generate and then give away would have a much greater effect upon making the world a better place compared to what spending that time personally helping people can do. Finally, someone who is financially independent believes that the only way you can truly find yourself is without financial stress and being in complete control of your time; combining this with an altruistic philosophy then allows you to find the optimal way to contribute to the world.
Lots of food for thought, where do you find yourself in this philosophical triangle?
