I had cut expenses in an area in which I didn’t really spend recklessly to begin with.  I was telling myself a story.  That I was frugal.  That I was not like everyone else.  I had become victim of lifestyle creep.

Two years ago, I was living in New York City working in a fancy six-figure job, spending more than $6,000 a month. It’s almost two years later and my personal expenses have been less than $12,000 for the last six months. 

I’m not sharing my expenses with you to brag.  Instead, I am trying to make sense of how I convinced myself that spending $72,000 a year was a normal thing to do.

This mindset was driven by the myth of a “steady income”

For most of the time I was employed full-time, I assumed that I would work in this manner for the rest of my life.  What this meant is that I bought into the career story – the story that says the whole point of a career is to continue to grow and to keep making more money.  I reflected last year on how I justified my spending:

A steady job meant my income on autopilot. Paychecks showed up in my bank account no matter what. Since I was lucky to have jobs that paid me much more than I needed, it led to a certain recklessness and willingness to pay for convenience because much of my time was spent at said full-time job. $300 for an Acela train to Boston to save 45 minute? Done. $75 dinners? Why not?

New York City is perhaps the most efficient city in terms of extracting wealth from people that want to pursue fun.  Round-trip ride on the subway? $5.50.  A couple drinks with a friend? $30.  A “low-key” dinner? $45 A round of shots for friends? $55 Any income you earn? New York City and the State take an automatic 10% off the top.

New York City is a great place to have a lot of modern pleasure, but it sure as hell doesn’t care about how much you’re spending to do it.

When I Became Self-Employed, This Mindset Flipped

The cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.

Henry David Thoreau, Walden

As soon as I became self-employment I had the most obvious realization in the world.

The more I spend, the more I have to work

You’re thinking “WOW! Thanks Paul! What a knowledge bomb!”

I know, I know.  On its face, its not all that insightful of an observation but if you think about the ways in which we actively ignore this fact, it become a bit more powerful.

There are a few mistakes I made:

First, bought into my own “career narrative” I implicitly assumed I would be working forever and never sat down to write down how much would actually be enough.  Further, I had never in the first ten years of my career sat down to ask myself what kind of life I might want to live and what it might cost.

Second, I mentally framed my earnings and expenses like a company with a fiscal year-end.  Wipe the slate clean and earn from scratch again.  With this mindset, its easy to see how you end up with the fear that if you lose your income, you won’t be able to pay your expenses that month.  Thise was somewhat confirmed to me when a person who I know has over $100k in savings said to me with a straight face “I can’t just quit my job, how would I pay rent?”

Third, since my entire life surrounded around work, I had no conceivable metric to value my money.  I just had the vague sense that I shouldn’t spend too much.  Now, having understood the benefits of leisure, I cringe with pain when I hear of someone spending 75,000 on a wedding.  All I can think of is the fact that that money could easily pay for around the world travel for at least three if not four or five. 

Shifting Behaviors

A month after leaving my job in New York, I moved to Boston.  I realized that my self-employment journey wasn’t going to last long if I didn’t change my money habits.  I also realized that I didn’t want to be constantly worrying about making enough money each month. I wanted to stretch my savings a bit longer. By changing some pretty basic things and calculating my “cost of a good life” (which I turned into a tool here), I was able to lower my monthly cost of living by almost $2,500.

In Boston, I stopped buying new things and started relying on sustainability exchanges like Buy Nothing and Freecycle.  As my cost of living continued to go down and I gave away or sold most of my possessions, I felt a renewed sense of freedom creep back into my life.

In September of 2018, I moved to Taipei and have been living between Taiwan, Thailand and Indonesia for the past seven months.  I’ve lowered my cost of living even further and it hasn’t all come from a difference in location. 

As I started to design my life around working less, I also had a calmness and contentedness re-emerge in my life.  I stopped drinking alcohol, craving expensive meals and opting for the nicer arrangements while traveling.  I no longer “deserved” them after a long work-week.  Nor did I need them.

I’ve come to believe that “financial security” as most people frame it is a myth.  The problem with this idea is that there is never a number that is defined as “enough.”  While some in the financial independent, retire early (FIRE) crowd are are literally defining how much is “enough”, it doesn’t seem to resonate with most people.  Yet this community is often spot in with diagnosing the problem.

We are owned by our jobs and our stuff, not the other way around.

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

The post Recovering from “Lifestyle Creep”: How I cut my cost of living by 75% appeared first on Boundless by Paul Millerd.

Income: $963

I started to see a bit more traction with my new side business continuing to sell some consulting template packs on StrategyU and also starting to sell more enrollments of Think Like A Strategy Consultant. Also, since switching to Substack, I’ve added a few more paying monthly subscribers. I also had a couple generous people offer me gifts as part of some coaching and consulting work I did for them.

• Coaching Gifts: $500
• Patreon/Substack: $91
• Courses & Digital Products: $345
• Udemty/Medium/Amazon Fees: $27

Personal Cost Of Living: $2,668

I moved into a new place in Taipei and spent a bit at IKEA getting situated and also spent $1,000 on a three week intensive Chinese course. After factoring these in and considering my future $333/month rent, my cost of living seems to be easily under $1500 a month.

• Room & Board: $323
• Food, Shopping, Misc.: $966
• Chinese Course: $1000
• Health Insurance: $99
• Travel, Trips & Transport: $280 (including Visa Application fee)

Business Expenses: $772

• Monthly ongoing fees: $193
• Contract Labor: $579 (freelance research support and new podcast cover art)

Self-Employment Taxes: $147*

*I pay these quarterly, but the rate is 15.3% of income. Actual final tax bill will vary because, well who can figure that out?

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

The post March 2019 Self-Employed Financial Statement appeared first on Boundless by Paul Millerd.

Income: $345

This month I started to see a bit of traction on a number of different digital products, including selling my first two consulting template packs after installing them as a product on StrategyU and also starting to sell Think Like A Strategy Consultant again. Also, since switching to Substack, I’ve added a few more paying monthly subscribers.

• Consulting Fees: $0
• Coaching Gifts: $120
• Teaching: $0
• Patreon: $64
• Substack: $16
• Courses: $67
• Digital Products: $68
• Udemty/Medium/Amazon Fees: $20

Personal Cost Of Living: $1,493

I stayed most of the month in Bali again. My housing costs were a bit higher as a deal I had negotiated went up in price. If I were to stay in Bali longer-term, I believe I could probably get housing under $400 a month quite easily.

• Room & Board: $618
• Food, Shopping, Misc.: $710
• Health Insurance: $99
• Travel, Trips & Transport: $66

I also used points to book a flight back to Taipei and pay for a round trip ticket for my partner to visit for two weeks as well!

Business Expenses: $1,192

• Coworking: $33
• Calendly: $8
• Podcast Costs: $0 (I switched to Anchor: read more here)
• Contract Labor: $1000 (a new partner I’m working with for StrategyU.co)
• Quickbooks: $19
• Teachable: $33
• Video (Zoom): $16
• Cell Phone Costs: $25
• Annual LLC Fees (Monthly Cost): $42

Self-Employment Taxes: $53*

*I pay these quarterly, but the rate is 15.3% of income. Actual final tax bill will vary because, well who can figure that out?

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

The post February 2019 Self-Employed Financial Statement appeared first on Boundless by Paul Millerd.

Income: $3,987

I started a tiny consulting project working with two friends in the US and got paid half of the $7,500 fee up front. I also made a small amount of money from other digital activities.

• Consulting Fees: $3,750
• Gifts: $25
• Coaching Gifts: $50
• Teaching: $0
• Patreon: $52
• Courses: $0
• Digital Products: $10
• Udemty/Medium/Amazon Fees: $75

Personal Cost Of Living: $1,429

I moved to Canggu in Bali, Indonesia on January 13th via a flight booked via miles (but still $120 in fees) and am renting a monthly apartment at the Canggu Village Accommodations. It’s a bit nicer than I’d go for, but I’ve joined a couple of friends in the location and got a relatively good deal at a $497 monthly rate as the place had just opened up.

Costs are pretty cheap. Here are some specifics:

• Monthly rental rate: $497
• Monthly motorbike rental: 850k IDR or $61
• Nasi Goreng Meal: about $2
• Fruit Smoothie $2

• Room & Board: $232
• Food, Shopping, Misc.: $753
• Health Insurance: $99
• Travel, Trips & Transport: $345

Business Expenses: $228

• Coworking: $50
• Calendly: $8
• Podcast Costs: $12
• Quickbooks: $19
• Teachable: $33
• Video (Zoom): $16
• Website Costs: $38
• Cell Phone Costs: $25
• Digital Ads: $78 (mostly failed with limited learning)
• Annual LLC Fees (Monthly Cost): $42

Self-Employment Taxes: $606*

*I pay these quarterly, but the rate is 15.3% of income

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

The post January 2019 Self-Employed Financial Statement appeared first on Boundless by Paul Millerd.

Income: $894

I did a little consulting work for a former client and made another sale of my strategy consulting course, which I didn’t put a ton of effort into. I spent three weeks in Thailand with my partner and didn’t really work that muc.

• Consulting Fees: $667
• Gifts: $50
• Coaching Gifts: $0
• Teaching: $0
• Patreon: $43
• Courses: $153
• Digital Products: $5
• Affiliate/Medium Writing: $27

Personal Cost Of Living: $2,036

I was traveling in Thailand for three weeks before spending Christmas week at home for the holidays. I ended up spending about $21 a night in Thailand, which would have been slightly lower, but ended up staying in this beautiful floating house for three nights for about $60 a night

• Room & Board: $446
• Food, Shopping, Misc.: $1,254
• Health Insurance: $99
• Travel, Trips & Transport: $237

Business Expenses: $228

• Coworking: $0
• Calendly: $8
• Podcast Costs: $12
• Quickbooks: $19
• Teachable: $33
• Video (Zoom): $16
• Website Costs: $15
• Cell Phone Costs: $60 (US So expensive!)
• Digital Ads: $83 (mostly failed with limited learning)
• Annual LLC Fees (Monthly Cost): $42

Self-Employment Taxes: $137*

*I pay these quarterly, but the rate is 15.3% of income

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

The post December 2018 Self-Employed Financial Statement appeared first on Boundless by Paul Millerd.

Income: $372

I spent most of the month working on launching the Strategy Toolkit, which was an absolute delight.  I ended up making two sales ($198) and also made some “internet money” from Amazon affiliate links via my Quartz article (accidentally left the link in there! – about $60) and from Medium (about $25).  I also received two generous gifts from an incredible coaching client ($50).

Consulting Fees: $0
Gifts: $50
Coaching Gifts: $0
Teaching: $0
Patreon: $31
Courses: $200
Digital Products: $6
Affiliate/Medium Writing: $86

Personal Cost Of Living: $2,117

On the cost side, I moved around a bit in Taipei so did not get the advantage of a monthly AirBnB rate and a short visa-run to Vietnam which jacked up the living costs a little as well as booking my return trip for ChristmaLet’sLets hope for a return to a lower cost of living next month…

Room & Board: $630
Food, Shopping, Misc.: $873
Health Insurance: $99
Travel, Trips & Transport: $515

Business Expenses: $228

Calendly: $8
Podcast Costs: $12
Quickbooks: $19

Teachable: $33
Video (Zoom): $16
Digital Ads: $99
Annual LLC Fees (Monthly Cost): $42

Self-Employment Taxes: $57*

*I pay these quarterly, but the rate is 15.3% of income

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

[contact-form-7]

The post November 2018 Self-Employed Financial Statement appeared first on Boundless by Paul Millerd.

Income: $960

Consulting Fees: $150
Gifts: $20
Coaching Gifts: $600
Teaching: $0
Patreon: $31
Courses: $0
Digital Products: $160
Affiliate/Medium Writing: $5

Personal Cost Of Living: $1,511

Room & Board: $433
Food, Shopping, Misc.: $679
Health Insurance: $99
Travel & Transport: $300

Business Expenses: $99

Calendly: $8
Podcast Costs: $12
Quickbooks: $19
Video (Zoom): $16
Digital Ads: $3
Annual LLC Fees (Monthly Cost): $42

Self-Employment Taxes: $148*

*I pay these quarterly, but the rate is 15.3% of income

see the full financials for the last year, see here.

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

[contact-form-7]

The post October 2018 Self-Employed Financial Statement appeared first on Boundless by Paul Millerd.