The Katana: Where Experiences Matters More Than Things

$1,780 is what it cost to book two last minute tickets to Lost Island.  I let the web page sit for a while, hesitant to click away a nice chunk of savings.  But what’s the use of money if it’s not spent?  We can save and save and save until we have some magical number we call “enough.”  Or, we can live for experiences that will last until our memories gray.

Why is it that some of us have spending paralysis over good times, but spend so easily on material things?  My fear was due to the impermanence of the experience, and the permanent loss of money.  That was some time ago when I had little savings.  It’s different now.  Memories are always what makes me smile the most.  It’s as if good memories blossom with time.

Readers, what are your thoughts on impulse spending for experiences?  Can spending on experiences be considered less imbecilic than spending on things?  If so, why should there be a difference?

The Samurai Fund: +2.1% YTD vs. -0.53 S&P 500.  I’m making room for a couple new picks to replace a couple existing picks due to inactivity and performance.  Shoot me an e-mail if interested and please read the guidelines first.

Yakezie Alexa Challenge: Stay tuned for a large update this Wed, Feb 24.  We’ll discuss what happens when the rules change on us, how to deal and flourish!  I will introduce a new initiative which should be able to help more members.  Keep on promoting others Yakezies!

HIGHLIGHT POSTS OF THE WEEK

* “Why The 70′s Rock” from Little House in The Valley.  One of the most priceless pictures!

* “Millionaire Lifestyle Secrets” from Money Reasons.  Surprised to see my vacation house used as his picture.

* “Income Tax Refund: Good or Bad?” from One Money Design.  Nobody can eat just one cookie, hence a refund is good.

* “Realistic Expectations For Making Money Through Blogging” from Flexo.  It just takes time.

* “Is Passive Income Real?” from Fiscal Fizzle.  Most definitely!  There’s only one real passive income stream, and that is the interest income earned from your savings in the bank.  Don’t let anybody else tell you otherwise!

Keiju,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

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Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. says

    Can spending on experiences be considered less imbecilic than spending on things?

    Neither one is imbecilic in itself. I reject the idea that there is something “bad” about spending. Spending (whether on things or experiences) enhances the enjoyment of life. Spending is what it is all about.

    The reason why many have come to believe that there is something bad about spending is that many do not see that saving is really just hyped-up spending. Saving also enhances the enjoyment of life. Because saving always leads to future spending of some sort. The root reason to save is the same as the root reason to spend — the difference is that with saving you get to spend more because the money accumulates interest while the translation of the money into positive life experiences is held off.

    The question is not “Is it better to have a positive life experience or to save?” The question is “Are your circumstances such that you are likely to end up with more positive life experiences by spending on an experience today or by saving and thereby permitting yourself more positive life experiences later on?”

    Rob
    .-= Rob Bennett´s last blog ..“It [My Claim That Long-Term Timing Works] Is Consistent with Shiller’s Analysis & Could Be True” =-.

  2. says

    I think the hesitation comes in because we don’t know how our “experience” will turn out. Will it be enjoyable? Which means our “cash” would have been well spent. Or will it be a one regrettable experience you wouldn’t want to happen again. In this case, it would be a double whammy, because you even paid for it to have the “bad” experience. :)

    The good news is…the fear goes away once you dive in. And almost always, what you fear the most is not so bad after all. You still end up cherishing the experience because it’s a welcome substitute to endless boredom. :)
    .-= Allan @ Rich Money Habits´s last blog ..Reader Question: What to do with an extra PhP 50,000? =-.

  3. Ken says

    I think memory making trumps just spending on something on something you’ll sell in a yard sale a year later. Nonetheless, I don’t recommend paying for vacations from your emergency fund. Vacation money should be separate. Go have fun.
    .-= Ken´s last blog ..Weekend Linkage – Olympic Edition =-.

  4. says

    Too often people do save, a little, and then they go a blow it all! Why bother saving unless you are going to get some reward from it, but it has to be in moderation relative to your savings.

    Experiences can come from things as well. For example: If your passion in life is drifting; adding a set of oversized sway bars to your beemer can be as rewarding to you as the opportunity to climb Mt. Fuji to another.

    It sounds as if TM is about to be sold off :’-). Considering how the domestic executives got skewered in congress last year and the fact that Toyoda-san speaks little English the hearing coming up should be a roast.

    If our pick is abandoned, can we find substitutes so we can keep playing?
    .-= LeanLifeCoach´s last blog ..America Saves Week =-.

  5. says

    Thanks for the mention, and letting me take a picture of your house. You might want to have a word or 2 with your pool guy, the water was a few degrees cooler than what I could consider optimal!

    I think impulse money purchases are relative to your financial worth. For someone super rich like Gates and Buffett, a trip to Hawaii would be equivalent to purchasing a 10 cent piece of candy bar while in line at a some store. That’s the beauty of having money, your able to afford to be impulsive!

    Ironically, it’s usually the other way around (with the exception of Paris Hilton and celebs in general :)), it’s those that have the least money saved that make the most impulsive buying decision and practically daily! And usually it’s small things that add up, like cigarettes, beer, ice cream, a DVD, movies, eating out, etc… while really the reason for the initial run to the store was to buy bread or milk. It’s kind of like a purchasing snowball…

    IMHO, I think spending money on vacation/travel experiences is very honorable (taking lots of picture to re-enforce those memories while you are there!). Especially overseas! I would love to take my family to Europe for a few weeks on vacation.

    Perhaps I’d take a picture of Monevator’s house too for a future post ;)

  6. says

    Sam, I think when its a trip it is Ok. Those are the kind of experiences that I would not really consider impulse buying so much. When you think of impulse buying , usually a new TV or something which you must obtain to keep is what people become wrapped up in.

    Is this a need for you to go on this trip? No. Is it an experience that could change your life? Possibly. Could the purchase of a TV change your life? Unlikely. Will This trip bring some happiness when you talk about it 10 years from now? Probably so. Is this trip putting you in a tough financial situation? Not really.

    Hey its Ok to actually reward yourself for saving. I will be covering that topic in a future post on savings myself actually, because some people get into this mode you were talking about. Its almost robotic.

    By the way, from my own personal experience of spending on vacations, it took some friends to push me to go on a cruise about 3 weeks ago, and now I am going on a snowboard trip in 3 days from now. Who would have thought?!!! After this snowboarding trip, its back to buckling down and focus.

  7. says

    @Allan @ Rich Money Habits
    Allan, that is a great point! I don’t like going to my favorite football, basketball, or any sporting event most of the time if they are the underdog. I’d rather stay at home and watch the event for free on TV because of the higher chances they will lose. What’s the fun in paying for the experience, only to see your team lose? Of course, when your team WINS, that is a higher thrill than a simple win. But, all the same, I’m not willing to shell out $100/ticket to watch my team lose and have a bad experience, so I don’t.

    @Ken
    I hear ya. I quit calling any thing an emergency fund a long time ago, b/c there seemed to be too many “emergencies.” It’s just one lump sum. But that’s not entirely true, as you can witness from the carving out of a “Freedom Fund” to the right. $1 mil cash or bust! lol.
    .-= admin´s last blog ..How To Get Your Super Motivated Boyfriend to Marry You =-.

  8. says

    @LeanLifeCoach
    I don’t see you as a guy who knows about drifting! You surprise me! Actually, I wasn’t thinking of selling off your dog TM. However, I’m up for a pitch on whether you think we should find a new substitute, with the same rules of course in The Samurai Fund comments section! I’m looking to get rid of picks where there has been NO involvement by the picker.

    @Money Reasons
    Definitely go ahead and take the family to Europe for a couple weeks! The wife and I were there for 10 days a few years, and it was unbelievable! Pompei btw, is more massive than you can imagine. Barcelona and Paris are beautiful.

    @Mr. Finance
    Oh wow, good stuff on your new vacation initiatives! I love cruises, but I don’t love the extra 1 inch of waistline I gain afterwards! “Robotic” is a good term… kinda like “the living dead.”

    Look forward to your post on the topic! Pls comment here or shoot me an e-mail when you’re finished just in case! Thnx
    .-= admin´s last blog ..How To Get Your Super Motivated Boyfriend to Marry You =-.

  9. says

    Thanks for mentioning my post! I agree that my photo is great and you know what they say, “A picture is worth a thousand words.” Of course I have no clue who “they” are, but I love the saying.

    Some thought provoking questions there at the end, I think spending for an experience is fine as long as you have the money for it. If you aren’t wiping out your savings account for a week on an island, then I say go for it. I find that memories are longer lasting than “things”.
    .-= Little House´s last blog ..More Coupon Savings! =-.

  10. says

    I tend to get spending paralysis during most bigger-ticket purchases (which usually involve something that will provide “good times”), but I chalk it up to being very conservative in most aspects of my life, finances included. I actually have to convince myself of the importance and benefits of the purchase in order to go through with it. For example, I was in dire need of a laptop, but really didn’t want to drop the $600-$700. But I also knew that I require a non-sluggish computer for my side gigs. So it took me a good week to get up the nerve to buy a laptop — and only because I knew the work I’d do with it supplements my income. I get the same way with vacations and “fun” experiences, as I don’t wind up with something tangible after the outlay of all that money. But the memories do last a long time, and sometimes, that’s well worth the price.
    .-= RainyDaySaver´s last blog ..Fix-It Friday: Cat Door =-.

  11. says

    Heh! In my world experiences are forgotten and most are not worth it. The present and the future matters more, again in my world. (I value competence/skill higher than experiences and stuff.)

    Spending paralysis is just a gut feeling that it is not worth it. Impulse spending by definition makes the future uncertain because it does not consider it. Finally, I think a lot of recent (last decade) focus on experiences over things is that move towards decluttering. Excess experiences can conveniently be forgotten. Cleaning excess stuff out is a lot harder.
    .-= Early Retirement Extreme´s last blog ..Choose Life =-.

  12. says

    Impulse spending on experiences. Hmmm.

    I definitely believe that spending on experiences is worthwhile in comparison to spending on things. Impulse? That’s a bit tougher. I believe in thinking things through. However, I can see the upside even to an impulse spend. For example, in December, over the course of a week, I put together a trip to L.A. to meet a woman (from NJ) for the first time. We got a hotel room in Hollywood and hung out for a few days, completely on a whim. It was a good time. Was it the best experience ever? No. Was it worthwhile? Yes, it was!

    Unless you have a horrific memory, experiences will tend to stay with you for a long time, or forever. I’d rather collect them than objects. Objects have to be insured. They have to be stored somewhere. They take up space. They keep you from moving quickly. Sometimes they have to be financed. They wear out and age. Practically speaking, there’s a lot of downside to “things”.

    Experiences can be treasured for a long time. They can bring a smile to your face no matter where you are. (Some of the things I did on my first trip to Trinidad or St. Thomas still elicit such a response, even though I have no relationship with the women who went with me.) Experiences, unlike things, cannot be taken from you. They become a part of who you are. I love that.

    I think the risk factor of a impulse experience buy heightens the experience. As I see it, that risk is what makes life worth living. More than likely, the experience will not kill you, and you will have grown in a completely new and possibly unexpected dimension as a result.

    I believe in responsible spending (and living). Save for it, if you can. That’s what I’m doing for Aruba. However, the question was about impulse experience buying. If you can make it happen in terms of the resources required, and it is something that appeals to you, then do it. The risk/reward, the potential upside of the experience vs. the potential downside, is so heavily weighted toward doing it. And it’s not worth it to die wondering.
    .-= Khyron´s last blog ..Private Equity Roll-Up of Open Source Security Companies =-.

  13. says

    @Sam – This is one of the toughest things for me in the world. It’s deep philosophy really.

    I can almost remember the day when I was in a music concert in my early 20s realizing I couldn’t remember half the concerts I’d been to last year, however hard I tried. When I got home I attempted to make a list, and couldn’t get every one.

    I’m not talking about the entirety of the experience – the prepping, the anticipation, the friends, the drinks, the good/bad performance, the sweat, the high fives, the trip home. I mean the event *at all*.

    Sure I have a poor memory, but I realized then why people do buy big houses and collect things. Because those things are still there the next day.

    I don’t really buy things *or* buy experiences enough. Yes, I should do more of latter, but almost I think because the anticipation has a value.

    Also, it’s very different if you’re doing it with loved family or friends. Then you’re building a connection, rather than just another failing memory.

    But your mileage may differ. Thanks for a thought provoking post, glad the holiday was a good’un!
    .-= Monevator´s last blog ..Playing chicken with house prices =-.

  14. Texas Cowboy says

    Bennett said: “The question is not “Is it better to have a positive life experience or to save?” The question is “Are your circumstances such that you are likely to end up with more positive life experiences by spending on an experience today or by saving and thereby permitting yourself more positive life experiences later on?”

    An excellent perspective.

    Bennett is as competent to speak on savings, which he apparently did a lot of all his life, and has good feel for, as he is incompetent to speak on finance and or investing, which he apparently has done very little of, and with no known success.

    One would think that these interrelated topics would all blend into a single competence level for any given individual, but Bennett (check his blog) is proof that a modicum of lay-insight in one area, i.e. personal saving strategy, does not translate at all to the other dimensions of personal finance.

    The reason for my response here is to urge readers to always not just consider the source, which is good, but to also consider the degree of competency the speaker has exhibited in the area they speak in. History is rife with examples of scientists who were dismal failures at social or public policy, or actors who were terrible singers, etc., generals who were rotten politicians. What is amazing is that the Peter Principle seems to be driven not just by organizational dynamics, but also by some personal inner human urge to fly beyond our areas of actual competency. Some just sate desire this by singing in the shower. Bennett has tried to turn it into a career, again, I offer his website as proof.

  15. says

    @Khyron – Gotta say, that is awesome you met up with that woman on a whim in LA! Call me a fool, but I will do anything just to be with the woman I desire.

    I don’t ever want to die wondering either! Good to hear from a new voice in the community!

    @ERE – Very interesting thoughts! I have a clear longer term view of the future, but the short term is just noise, and I try and take the opportunities when I can. It’s kind of like my attitude towards investing. I try and not sweat the short term so much, as long as the long term is on track. If not, I try and take steps to get on track.

  16. says

    @RainyDaySaver – Your laptop buying story I can relate. I’ve been wanting to spend 1000-1200 on a new Macbook since Sept! Hence, my paralysis has been almost 6 months, yet I can decide in one night to go on a last minute vacation! Weird. But, money speaks, and it just shows I care about experiences more.

    Guess we gotta just take a lot of videos and pictures!

    @Monevator – Maybe the reason why u don’t remember the concerts is because of too much LSD and other illict drugs?? I remember all the concerts, even Jerry Garcia from The Grateful Dead’s last concert back in 1991! Of course, the ones where I had one too many whippets, I have fuzzy brain.

    I feel your sadness in your comment. Donno if I’m off the mark or not. It might be the thing where even a walk in the park, with someone u truly love is good enuf!

  17. says

    I think if you’re going to splurge do it on experiences rather than things. You’ll always have your memories and things break. Right now I have two non-functional GPS’s, two out of three cars need major repairs, a screwed up laptop, and a big messy house among other things. Possessions eat up your time and are often more trouble than they’re worth, but memories tend to get better with time.

    I was glad to see ABM is on the rebound – maybe it will avoid getting the axe. We’re exactly breaking even now (whoohoo!). The Samurai Fund’s actually not doing all that bad.
    .-= David @ MBA briefs´s last blog ..How long are you going to live? =-.

  18. says

    Where the heck is Lost Island? Wait… is it? No?

    Simply putting holiday as “an experience” is too vague and broad. Just because you buy “an experience”, it does not guarantee you to be happy or happier compared if you buy a laptop, for example. In a long term, laptop is probably a better purchase than a 4-day holiday to X island. Who’s to say that laptop can’t give you joyful experience?

    You see, my recent trip to New Zealand has made me realise a few things about purchasing “an experience”. I think we need to clearly define what we expect from a trip and the sort of experience we wish to have. Saying “I want to have an experience” doesn’t mean anything and you will potentially waste your money.

    Anyway, I wanna write further about this on my blog so I’ll shut up now.
    .-= Bytta @151 Days Off´s last blog ..Day 17: Valentine on Vulcan =-.

  19. says

    @David @ MBA briefs
    You got three cars Dave? You must have a big house! The Samurai Fund is doing well… any outperformance by more than 1% of the S&P 500 is considered good… at almost 3%, we are doing excellent!

    @Bytta @151 Days Off
    Sorry you didn’t have a fantastic time in NZ. I had exactly the time I wanted to have on Lost Island, and it was worth it to us.

    I have a laptop, albeit a very slow and old one. I keep telling myself when it is about to die, I’ll replace it, but my iBook G4 doesn’t die, and I got a 2nd hand battery for $10 bucks, so it’s doing OK! Looking forward to your post on experiences.
    .-= admin´s last blog ..How To Get Your Super Motivated Boyfriend to Marry You =-.

  20. says

    @Sam – No, you’re not wrong, I do fund the subject very sad. As I wrote in my post about whether you’d invest differently if you knew the exact day you’d die, there’s a lot of sadness lurking in the corners of what we do and think in the PF domain. After all, this article is really “live now because one day you’ll be dead”, is it not? :) [To stress, I'm not weeping over my keyboard etc though! It's more my long term philosophical pondering]
    .-= Monevator´s last blog ..Playing chicken with house prices =-.

  21. says

    I sometimes fall into impulse spending. I saw myself long time back where I spend my extra income on worthless things. I think I need to avoid this because it can really become habit forming.

    When it comes to lifestyle experiences like traveling, I really plan it. Since I love going places, I don’t feel any guilt.

    This I think is the difference between the two: I don’t think smart during impulse spending. On the other hand, spending on experiences is worth it.
    .-= Menandro Tomas´s last blog ..True Passive Income Opportunities That Makes Automated Income. =-.

  22. ctreit says

    I have spent a bit of money on experiences but I never spent money I did not have available easily. I have also had as many great experiences when I did not have to spend money. In my mind life is a sequence of experiences, not a race to accumulate the most things. I feel like I am doing pretty well so far. As a matter of fact, I would go as far as saying that I have had experienced so many cool episodes so far in my life – both, good and bad – that I don’t really need to add any more. But they are still coming…. :-)

  23. says

    Experiences are great and worth spending money on, but I think we can get carried away sometimes and forget that money is not infinite in abundance.

  24. Red says

    I have spending paralysis when it comes to material things and experiences, unfortunately. Yesterday, D and I drove 30 minutes away for food. (I don’t know why. It was his idea.) Once in Tourist Town, D asked if I wanted to go to the aquarium? Putt-putt? The mountains? “But… You only budgeted for lunch. You can’t spend unplanned money on anything else today.” I said no, and we wound up having a fun time going to a store to look at guns (oh, boy) and get my dad’s birthday present.

    Am I different when it comes to things not bought on impulse? Sure. I can save up for a vacation or for a trip to Tourist Town if I know it’s coming up. But it’s super difficult for me to part with money when it’s unplanned. (I can’t make myself stop thinking of how better it could be spent – paying down my debts!)
    .-= Red´s last blog ..Link love: Saving and the psychology of debt edition =-.

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