You Only Live Once (YOLO) is a saying that has been floating around for years now. It means living life to the fullest, and because of this, the saying is taken to mean that you should go out and have a great time no matter what. Why not? You only live once, right?
Well, Amon and I have always had a little problem with YOLO. For us, the whole concept of YOLO seems backwards - it results in short-term decisions that have long-term consequences. So, I’m going to try and turn YOLO on its head . . . and I’ll focus on YOLO and financial decisions.
For a lot of people, YOLO involves making immediate financial decisions that have very long-term consequences. This could go from spending most of your paycheck on a night out, to buying a fancy car or house that you can’t really afford.
But again: Should you really care if you only live once? Why not go out for an eight-course meal or sign yourself up for a huge mortgage when you might drop dead in a year . . . or even tomorrow.
The problem here is that most people don’t die tomorrow or a year from now. Yet, we have people everywhere living as if that’s the case. And many of these people are making poor financial decisions that they’ll be living with for years (sometimes even decades!) to come.
Here’s the truth about YOLO: The truth is that YOLO is a lifestyle that requires you to work harder and longer just to pay for the poor financial decisions that are born from the YOLO lifestyle.
If you're someone who follows the Financial Independence and Early Retirement (FIRE) lifestyle, this is the complete opposite of what you should be striving for. You want to have choices. You don’t want to have to work forever, which brings me to . . . a BETTER version of YOLO!
If we only live once, and that one time can last close to a century, why not enjoy that one life by seeking out a life of financial independence and freedom? In other words, accept that you’ll only live once and that you’ll likely live a very long life . . . and that you would be much better off living as much of your life as possible being financially independent.
Having trouble accepting that? Let me break down why the traditional concept of YOLO is such a bad idea.
1. Life Is Long
I don’t want to beat a dead horse, but life is generally very long. The sooner you have financial independence, the sooner and longer you’ll have the freedom to live how you want to. Making sporadic, spur-of-the-moment decisions is going to hamper your efforts. The more you spend without thinking, the longer you have to work to save and to eventually reach financial independence and retire.
2. YOLO Is An Excuse To Be Financially Irresponsible
That’s right. Financial independence is driven by making money, saving money, and investing money. Not only is YOLO not part of this process, it actively works against it.
3. There’s A Bad Hangover
When you’re enjoying a night out, this is the perfect time for YOLO to strike. “Why not?” you might ask yourself. “I only live once, why not have a little fun?” And then you wake up the next morning and take a look at your bank statement. You’ve spent hundreds of dollars you can’t afford to spend, and you often don’t have anything to show for it. Ouch!
4. It Encourages Financial Avoidance
There are a lot of people out there who want to avoid the realities of their financial situation. They avoid opening their credit card statements, talking about retirement, or talking about finances at all.
This could be due to a number of reasons. Maybe they’re insecure, or maybe talking about it makes them depressed because their financial situation isn’t what they’d like it to be. And often, they engage in risky YOLO decision-making as a way of denying their financial reality.
5. YOLO-ers Often Overspend
People who live the YOLO lifestyle tend to overspend on things they don’t actually need. They have a strong “If I’ve got it, I might as well spend it” mentality that has dire repercussions on their financial stability.
6. YOLO Spreads
Have you ever been unsure about a pricey purchase, only for a friend to lean over and say, “Come on man, YOLO!” People who practice YOLO are very good at encouraging others to do the same until that mentality eventually begins to rub off on them.
I’ve experienced this multiple times, and over the years I’ve realized that I just can’t spend my time with people like this. Because whenever I do, I ultimately end up overspending. It isn’t worth it.
If you're serious about FIRE, you need to avoid the people that encourage you to live a YOLO lifestyle.
Here are my final thoughts on YOLO: Simply put, I believe the YOLO mentality in its current form is not at all compatible with the FIRE movement. For me and Amon, financial independence is our idea of YOLO. It gives us the means to live as freely as we want, and to spend more time with Sunoa and Melea while still pursuing our passions.
So, next time you’re considering a YOLO lifestyle (or even a YOLO purchase!), remember that short-term desires have long-term consequences . . . so just say no!!!
Saving for Financial Independence - Even on a Low Income | Here’s How!