On… Lifestyle Creep

Early on in my career, a senior geologist told me over breakfast, “If you want to get rich, then you have to maintain your lifestyle”. Lifestyle creep is what he is referring to and everyone is guilty of that. Basically, when you age, you spend more to upgrade your life quality. Isn’t that the definition of success? To earn more so that you can spend more to live better.  

When I was a student, I was contented to share a 2 bed room house with 3 other person . When I started working, I was contented to share a 2 bed room house with 1 other person. After working a couple of years, I had to have the whole 2 bed room house to myself. Pretty soon, 2 rooms isn't even enough for me. The same goes for clothes, food, electronic equipment…etc. You get the idea.

Now I’m not suggesting that there is anything wrong with improving your quality of life, but where or when does it stop? When is enough actually enough? When do we realise that we have exceeded a decent level of comfort/quality and is instead running the hedonic treadmill?    

The saying goes, “Spending money you don’t have on things you don’t need is bad”. However, I would think that spending money you do have on things you don’t need is not that much better to be honest. Ever heard someone say that they’re stressed out at work and have no time to spend with their family? And that same someone on another occasion say, “If we don’t spend, what’s the point of earning so much money?”. This person is obviously pass the tipping point.  

My retirement plan (see previous blogs), does not factor lifestyle creep into its estimation/valuation. That is of course not perfectly accurate as there would be some element of lifestyle creep along the way. We all want to increase our quality of life as we age. But its best to remind ourselves that there is a tipping point and to find where the tipping point is.