Financial Independence and Dieting

Last week I read a very interesting article about obesity: “Everything You Know About Obesity Is Wrong” (clearly the writers also thought, hey that Young FI Guy thinks he has big titles on his webpages, hold my beer). The gist of the article is that society and the medical profession have got into a dangerous habit of ‘fat shaming’ and recommending extreme counter-measures to obesity that end up being counterproductive.

It got me thinking though about the link between Financial Independence and dieting. I think there are lots of parallels and lessons we can learn.

Spending and obesity

Most of all, I perceive a strong parallel between spending and obesity.

Looking at spending, many people are spending today at the expense of their future selves. We know that people do not save enough for retirement. We know that having no savings is bad for all manner of reasons. We know that people not saving is very costly to society, with a smaller young working population picking up a growing welfare tab.

Taking obesity, there are many parallels. An increasing number of the population lives an unhealthy lifestyle at the expense of their future well-being. We know many people eat unhealthy food. We know many people do not exercise enough. We know that these lifestyle choices are very costly to society, with a smaller, healthier, young population picking up a growing healthcare tab.

Dieting

The common ‘fix’ for obese people is for them to go on a ‘diet’. The scientific evidence is almost universal (and that’s saying something when it comes to nutritional research!): diets don’t work. People start, it works for a day/week/month/year or two, then it stops working and you end up heavier than before. The more extreme interventions also appear to have the worst outcomes.

Instead, the advice that appears to work best is very simple: eat more fresh foods like fruit and veg, eat fewer processed foods high in artificial ingredients, continue to eat in high-calorie foods if you enjoy them – but in moderation. Don’t expect to watch the pounds fly off: instead, focus on a sustainable long-term diet that you can stick to for life.

That advice is remarkably similar to the best advice on spending:

Dieting Spending
Eat foods that are healthier for you. Focus spending on the things that bring you true joy.
Eat fewer processed foods that are unhealthy for you. Avoid spending money on expensive things that cost a lot but bring little value (flashy cars, expensive clothes etc.).
Still eat high-calorie food you enjoy but in moderation. Continue to spend money on things that make you happy, like your hobbies, but don’t go overboard, find ways to reduce frivolous spending.
Focus on a sustainable life-long diet that will enable you to significantly lose weight over the long-term. Focus on a life-long sustainable budget that allows you to save significant sums of money over the long-term.

Exercise

The other common ‘fix’ is to tell obese people to get exercising, often as much as possible. Sometimes, the recommendations are quite extreme (such as crazy things like ‘fat camps’ or ‘boot camps’). Again, the evidence suggests that the best forms of exercise are often the simplest: walking more, sitting down less and simple exercises that are easy to do. Like with dieting, the best exercise for a person is the one that works but is sustainable. For example, marathon running is an incredible way to get and stay fit. But I couldn’t think of anything worse. I’d rather somebody did something terrible to my nipples.

The advice again is remarkably similar to the best advice on personal finance:

Exercise Personal finance
Exercise regularly. Spend consciously.
Find enjoyable exercises that you can adopt as a life-long habit. Find ways to cut your spending that you can adopt as a life-long habit.
Avoid extreme exercises to the extent that they won’t work for you. Avoid drastic cost-cutting (extreme frugality) unless it’s right for you.
Be wary of quick fixes that will get you ‘beach ready in 5 weeks’. Be wary of finance tips that will promise to make you a financial guru in 5 weeks.

Balance

The overall ‘cure’ for obesity seems to be remarkably simple. Consume fewer calories than you burn off for a long period of time. The overall ‘cure’ for bad finances is remarkably simple. Spend less than you earn for a long period of time.

For obesity, this means going without bad foods today and doing moderately unpleasant exercises such that you avoid a life of very unpleasant healthcare problems in the future. For finances, this means going without expensive items today and moderately unpleasant cost-cutting such that you avoid destitution in retirement.

Financial Independence Retire Early

Perhaps you can see where I’m getting to here. Financial Independence Retire Early (FIRE) is a spectrum of personal finance habits that aim to take control of your finances and improve your long-term financial and overall health. Some of those habits are quite extreme – such as “very early retirement” (whatever that means). Some of those habits are simply common sense – spend less than you earn. They form a spectrum.

For a few people, marathon training, an extreme form of exercise, really works. For a few people, extreme frugality really works. I think it’s important to find the right balance for you. Pull on the Three Levers, earning more, saving more, investing wisely that best suits your personal circumstances.

The pushback against FIRE is that it is unrealistic to the ‘Average Joe’. And I would agree with that. In the sense that advocating extreme financial measures to somebody who isn’t inclined (yet) to that thinking can be dangerous and counter-productive. Just like telling a morbidly obese person to starve themselves and start lifting very heavy weights is dangerous and counter-productive.

But the stuff that works for both combating obesity and a lack of saving: the basic, simple, universal advice is undeniable. It works, incredibly effectively. Those messages are out there. But they are deliberately drowned out. By the major food companies, big pharma and advertisers for tackling the obesity crisis. By the major retailers, big banks and advertisers for tackling our savings crisis.

Tracking

[Thank you to Wephway, for inspiring me to add this section, see in the comments]

An important element in gaining control of your finances is by tracking your spending. And the same applies to dieting – it hard to stick to a diet or healthy lifestyle regime if you don’t know what you’re eating. There are now lots of good apps for tracking your calorie intake (and the calories you burn through exercise). Likewise, there are lots of ways to track your expenditure (including my own expenses spreadsheet). Often you’ll find it’s the little trickle of small things we eat that end up with us putting on weight (the snacks, the odd alcoholic beverage, the treats). And it’s similar with spending – thus the ubiquitous ‘Latte Factor‘.

That said, there’s nothing wrong with these indulgences – as long as they are in moderation. Equally important, we should try to consciously enjoy those indulgences and get joy out of them. When we consume them on autopilot, we lose the value but still count the cost – in pounds and pounds.

Fear

Going back to the article I linked to about obesity, one of the common themes is ‘fear’. A fear of becoming fat. Perhaps many people are afraid of becoming fat. But if that’s the case, it isn’t working. Likewise, the fear of poverty in retirement isn’t scaring people into saving more.

Fat-shaming doesn’t work either. Though bizarrely, when it comes to finances it’s the frugal types that are ‘shamed’ (you need only look at the comments on any mainstream article on FIRE). To that end, we know then that shaming ‘spendy’ types will likely not work either.

Inspiration

So how do we solve such a challenging problem? It’s a question far smarter people than I have wrestled with for years. Education appears to be one answer. But it can’t be the answer alone. Building life-long habits from an early age is another answer. One I can personally testify to. I think the best tool we have is to inspire people. To show them the metaphorical light. I can’t help but feel you’d need a heart of stone not to be inspired by Ken’s at The Humble Penny amazing story. Or any of the other fascinating and inspiring tales amongst the FI Community. For me, it’s those stories that have the most powerful potential to improve the way we as a society live with money.

I’d love to hear your thoughts on how we can we make an improve the way we make, manage and live with money.

All the best,

Young FI Guy

10 thoughts on “Financial Independence and Dieting

  1. At the end of the day, it’s all about hope, I know/have worked with some incredibly (proven) smart people, Phds and/or MBAs with the paperwork to prove it. But they too, like us all, have their achillies heel. We all know what we’re doing wrong, how bad the consequences will be and what to do to change that, but that is our way of coping at the time. So no preaching of sense will do much until the stressors are removed, because that’s what humans are like And refusing to accept this changes nothing, which is why govt. policy worldwide has almost always failed.

    If you look at the most profitable business ventures, or even cults, so basically anything that gets real success in serious numbers committing, the key is just hope; otherwise apathy rules and to be fair, that actually makes sense, why waste energy with no pay-off of improvement?

    Obesity/drug addiction in this country will only improve when the underlying fundamentals do.

  2. Interesting and great analogy. With FIRE being in the mainstream recently, many of the comments from the naysayers were that they couldn’t do it, that it’s impossible.

    Perhaps the way to sell FIRE or just FI is to not start at the 50% or 70%, but to show people the less extreme versions first and then scale up to what you can achieve if you do go extreme. The headliner 50%/70% is of course headline grabbing but also evokes the immediate ‘can’t do it’ reaction in most.

    That Huffington post link was an eye-opener, very different view and evidence from what you normally see in the popular press.

    I think the measurement which is used to define whether someone is obese (usually the BMI measurement, ie weight vs height) is somewhat flawed, hence the fact that some people with high BMI can actually also be healthy. It should just be used as a guide to be considered rather than putting someone in a category.

    Your post has come coincidentally as I’ve just embarked on a ‘diet’ of sorts myself. I’ve been unable to shift the half stone or so which I put on last winter which has resulted in me being my heaviest ever. A pair of shorts which I’ve previously worn on holiday were busting at the seams this summer so I need to do something!

    Unfortunately, the reason for the weight gain is likely to be that age is finally catching up on me, but also perhaps I snack more than I used to, still drink too much alcohol and eat too large food portions. I’ve already cut down on my carbs (just cut back on bread and fries/potatoes) but it’s not enough.

    So, I’m not crash dieting, just trying to control my calories to see how it goes and perhaps up my exercise a bit too. I don’t want to change my routines too much because I’d like to maintain the balance which you mention.

    1. Thanks Weenie. The Huff post article is indeed an eye-opener. It very much challenged the way I think about obesity. It was quite unpleasant reading at times, I could feel a ‘natural urge’ to react in a way the article convincingly pointed out was counter-productive.

      I was thinking about comment yesterday afternoon – perhaps there’s an analogy there too between BMI and savings rates. I’d wager it’s possible to have a ‘healthy’ savings rate of 20% (life-long sustainable) and an ‘unhealthy’ savings rate of 50% (causing the individual to suffer physically and emotionally and not sustainable).

  3. An astute comparison YFG.

    There are certainly elements of the “it might not feel/taste good, but is good for you” argument running strongly through both. So too the binge and regret cycle, the long term toll suffered by short term indulgence.

    At a stretch gastric bypass surgery could even be likened to bankruptcy, the impact of each potentially being life changing and lasting for years.

    1. Hi Ineedably, I was thinking about those drastic interventions for obesity. When reading about them, they are really very substantial – life-altering. Perhaps they are trivialised somewhat in ‘the media’ but I certainly wouldn’t want to get into the situation where that (or bankruptcy!) was your only hope.

  4. I think there are actually some tactics used by the FI community that could be useful for dieters. For example tracking everything you spend. I have built up quite elaborate spreadsheets over the years to track spending and forecast my month ahead. Before I started keeping track it was easy to spend in frivolous ways and then I would get to the end of the month and have nothing left in my bank account. Likewise recently I started tracking everything I eat through an app called MyFitnessPal and it has changed the way I diet. It’s still early days and it’s difficult sometimes but so far it’s gone quite well. As with personal finance, it’s really simple, but that doesn’t mean it’s easy.

    1. Hi Wephway, good to hear from you. An excellent point! Would you be happy for me to add it into the post?

      As we well know, tracking expenses is very important for mastering your finances. I think the same is true for tracking what we eat. Just speaking from experience, from time to time I’ve done similar tracking through an app to what you describe. It’s not easy, though the one I used had a barcode scanner type thing which made it a bit easier. I struggle to use an app permanently. But I pick it up from time to time and can do it for a month or so. What I found was that it’s quite surprising how calorific some foods that are deemed ‘healthy’ are and, despite not being a big eater, serving sizes are often quite questionably small. It certainly reinforced my habit of checking the ingredients of the food I buy in the shop.

  5. Yes for sure, you can add it into the post. My app has a bar code too, and it saves my previous foods and meals. But it is difficult especially when you’re out, most restaurants don’t tell you how many calories there are in their meals. Tracking food is important though, just as with spending, it’s easy to have a glass of wine here, an extra dollop of mayo there, a penguin bar in the afternoon… A bit like the latte factor, it quickly adds up and suddenly you’ve got a calorie surplus without realising it. But there are times when I put the app away, when I was on holiday recently for example, and perhaps that’s the same with spending, you’ve got to allow the odd indulgence now and then. Cheers, W

    1. Tracking food is important though, just as with spending, it’s easy to have a glass of wine here, an extra dollop of mayo there, a penguin bar in the afternoon… A bit like the latte factor

      Yes spot on Wephway!

      It’s difficult tracking with restaurants/holidays/eating out. And I think you are right, nothing wrong with the odd indulgence, especially when you can savour it and enjoy it!

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