In their book The Millionaire Next Door, authors Thomas Stanley and William Danko discuss how millionaires who don’t budget become millionaires. These millionaires become wealthy because “They create an artificial economic environment of scarcity for themselves and the other members of the household.” In other words, they only make available to spend, by themselves and the members of their family, a proportion of the total amount of money earned. The rest is invested.
Cal Newport is a father of three, a professor and successful author who produces peer reviewed articles and books, amongst other work, at a prodigious rate. He also doesn’t work after 5:30pm, which seems an impossible feat given how much he creates. In his book Deep Work Newport outlines what he terms fixed-schedule productivity, in which “I fix the firm goal of not working past a certain time, then work backwards to find productivity strategies that allow me to satisfy this declaration.” It seems counterintuitive, but by limiting the time available for work he is able to focus and produce more.
In Minimalism — A Documentary About the Important Stuff, we see the growing trend of people downsizing to tiny houses. The motivation for living in smaller houses, smaller spaces, seems to be one of affordability, simplicity and sustainability. But regardless of the intent, it’s clear that people choosing to live in tiny houses are limiting the space available in which to live and store their belongings. This in turn makes ‘space’ available in other areas of their lives.
These examples touch upon a behaviour I’ve notice a lot recently, how applying limits in to certain areas of your life, such as time spent working, how much money you spend, or your physical space — in other words artificial environments of scarcity — you can create a greater intensity of focus on what matters, and remove what doesn’t.
The wealthy become so in part by creating an artificial scarcity of money. The productive become so by creating an artificial scarcity of time. And the minimalists of the world choose to create an artificial environment of space in order to have more of what they value over physical possessions.
What happens when you don’t consciously create environments of scarcity in your life? You live paycheck-to-paycheck, dependent on credit, accumulating debt, unable to save toward a future of financial independence. You workday is spent on autopilot, stretching the tasks you’re allocated throughout the entire time you’re allocated to do them, interspersed with internet browsing, coffee breaks and office gossip. Your home becomes cluttered mess, every square inch of floor- and storage-space filled with junk you either don’t need or convince yourself you might need someday, but never do.
Parkinson’s law states “Work expands so as to fill the time available for its consumption.” But I think it applies to more than just work and time. Stuff expands so as to fill the space available for its consumption. Spending expands so as to fill the money available for its consumption.
I’m not drawing any concrete conclusions here, but I see examples of this everywhere. Those who apply the principle seem to have clarity about what is most important to them — time, freedom, wealth, creating. This clarity also illuminates the inverse, or unimportant, so they are able to more effectively drain it from their lives.