In this video, I explain why Financial Minimalism is becoming so Popular in today's society! Check out my Instagram (Investing Engineered): Before we can begin to understand financial minimalism, it's best to look at some of the history behind minimalism itself. The term arose in the early 1960's, where minimalism began as an abstract art movement. Over the following decades leading to present day, this quickly changed into a societal movement, whereby the concept of "less is more" became a lifestyle to live by. More recently, the ever increasing awareness of personal finance, investing, and other financial topics on the internet, alongside the growing ease of investing at extremely low costs (low fee ETF investing) has sprouted another movement - that being financial minimalism.
The financial minimalism movement has been adopted by people of the Financial Independence Retire Early (FIRE) community, as well as by millennials - who are saving more money than ever before! But why has financial minimalism become this popular?
Here are the reasons I believe that financial minimalism is gaining popularity:
1. Financial Minimalism Combats Materialism
- Now I personally believe that one of the huge reasons why “financial minimalism” has become so popular among today’s generation is for the simple reason that it allows you to prosper financially, while not being materialistic
- The word “materialistic” really has a lot of negative connotations attached to it – and for that reason, many people don’t want to be associated with being materialistic
- Financial minimalism dampens the materialistic mindset and shifts the focus to saving money instead, while enjoying the other more important areas of life, like experiences and relationships
- There’s this one quote by Dave Ramsey that goes “don’t spend money on things you can’t afford, with money you don’t have, to impress people you don’t like” – and there probably couldn’t be a more accurate way of describing the majority of society today
2. Financial Minimalism Keeps You Out of Debt
- Financial minimalists find themselves saving a lot more money than spending, which helps keep them out of debt
- Debt is burdensome, and it cripples many families across America
- For that reason, people would rather live a healthier financial lifestyle, which will save them unnecessary stress from financial struggle and potentially bankruptcy
3. Financial Minimalism Can Make You Rich
- Finally, financial minimalism is popular because it can easily make you rich with some years of discipline and practice
- Spending less on things will allow you to save much more money, which will free up much more cashflow each month
- This additional cash flow can be invested in the stock market or real estate to produce returns of up to 7-10% per year
- Eventually, this will lead to the possibility of an early retirement if enough money is saved and invested
I am personally a financial minimalist, and I wouldn't live any other way! This will allow me to reach financial freedom through being able to save more money each month and invest it into passive income sources and other investments. It's not an easy lifestyle to live, but it's well worth it for the long run.
Anyways, thank you for watching! If you did enjoy, please hit the like button to support my channel - I would really appreciate it. Also, be sure to subscribe for more weekly content on personal finance, business, and investing!
Please note that I am not a financial advisor. I create these videos for educational and entertainment purposes only. Before investing, make sure you perform your own research and understand all of the risks involved!
Music by Joakim Karud - check out his channel:
Cheers,
Investing Engineered
Nick Peitsch, E.I.T.
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