I'm concerned that industrial civilization is going to undergo a long, slow process of decline over the next one to five hundred years, with a start date of approximately 2005. The word for this process is "collapse", but a lot of people assume collapse means Overnight Armageddon, so I have to be careful with that word.
In terms of the span of my life (I'll be 75 in 2061), I think that "collapse" will probably look like a lot more people becoming poor, in terms of gdp/capita but also in terms of gross inequality. A significant percentage of people who now occupy the middle class are going to slide down the socioeconomic ladder into whatever is "below" the middle class, if this model for the future is correct.
Whether this scenario is likely, or what to do to slow or stop this process is a separate topic. My life and "retirement" planning assumes that there is some non-zero chance that this is the future I'm going to live through whether I like it or not, and so I ought to plan for it. Rather, I think it would be risky to make plans that will fail catastrophically if this scenario does happen.
Broadly speaking, my strategy to mitigate the downsides of collapse is to collapse now, and avoid the rush. If factors outside of my control are going to conspire to force me to live on very little money, it will be less of a shock to my personal life if I take the next several years figuring out how to live well on very little money. I'd like to collapse on my terms, thank you very much, and not be forced to it.
"But what if the collapse comes after your lifetime, and you miss out? Or even if it comes in 20 years, and you spend all this time being frugal now, missing out?"
Whoa whoa whoa! Who said anything about missing out? I don't intend to miss out on anything! In fact, my life is very much about not missing out on any of the Good Stuff. I'm all about the Good Stuff. Not only do I not plan on letting frugality get in the way of attaining the Good Stuff, I think frugality is the key to the Good Stuff.
The point of being frugal is not to sacrifice and "survive". I am not about "survival". We're all going to die some day, so "survival" as a lifestyle is a stupid game that everyone loses eventually. No. The ultimate aim of frugality, is to live the Good Life.
For example, I've learned that I have an unhealthy relationship with working full time. It is exceptionally easy for me to lose perspective on what I value in life if I expect myself to exchange that many hours of my life per week for a paycheck and interesting projects. The work I do is interesting, important, and I interact with some of the coolest people on the planet. I like the work I do. But 40 hours is simply too much for me - I go in to workaholic martyr mode, and I miss a lot of Good Stuff.
So for me, a component of the Good Life looks like working significantly less than 40 hours a week. Happily, I've worked out a deal and I now work part time, earning less than a fifth of my prior salary. It is my frugality practice that enables me to do this. Frugality, in one fell swoop, opened a huge door to the Good Stuff by freeing up my time and rescuing me from the psychological hazards of full time work.
In fact we can quantify it. My frugality practice at the moment is contributing 32 hours of extra free time per week, 128hrs a month, 1,664 hours a year. Let's say I ride out the rest of my "career" like this, to 65. That's an extra 49,920 hours of free time, that I can do whatever I want with, rather than sit in front of a computer and compromise my health. That's 2,080 days, or 5.7 years.
That's not 5.7 years of life, which includes sleeping and taking out the trash, that's FREE TIME baby. In a way, my frugality practice is giving me an extra 5.7 years of conscious, waking, up-and-at-’em doin’-stuff life, that I otherwise would have spent on the clock in order to be able to afford the mortgage payment or the interest on the boat.
All very well, you might say, but you're still leaving on the table all the experiences and cool things you can get with money, that you won't be able to by living below $10k/year. You're still sacrificing.
No, I still disagree. I'm not sacrificing anything - or rather, I don't have to, if I just apply a little creative thinking and problem solving, which I now have plenty of free time to attend to. Sacrifice is a matter of attitude. If I think that the Good Life comes at the end of a long train of purchases or expensive experiences, then yes, I will see frugality as a sacrifice and will experience some level of suffering.
The trick, which isn't a trick at all, is to realize that
money > the good stuff
is a trap, a line, a shpiel, a sales pitch, that we've been fed our whole lives and that we can choose (with much effort!) to reject.
Things for sale don't give us pleasure, happiness, fulfillment, the Good Life. An alignment with our values gives us pleasure, happiness, fulfillment, the Good Life. If we believe that the only things we value are things for sale, then yes, we need to go get piles of money and give them to other people so we can get the things that we value.
But this belief that things stand between us and value is the sales pitch, the lie. We're told that we want an xbox. We associate happiness with having an xbox. We used our friend's xbox once. We were in flow, we were laughing with our friends, we were completely absorbed in what we were doing, we forgot about time, it was an amazing experience. We establish that feeling with having an xbox. We think:
xbox > pleasure
We think that without an xbox, we won't be able to experience pleasure.
But this is a lie.
The truth is that we don't value an xbox, we value the flow state, the perfect balance of challenge, the execution of skill, the achievement of a mission. What's really going on is this:
xbox > flow state > pleasure.
We don't desire an xbox, we desire the flow state. An xbox is just a tool to deliver the flow state to us. Realizing this, we can ask if there are other ways to achieve the flow state. As it turns out, there are:
trail running
chess
riding bicycles
rock climbing
woodworking
debating intellectual/social/political topics with friends who know how to have civil debate without shouting or crying (another word for these people in the 21st century is "unicorn")
playing music
performing slam poetry
The list goes on. The magic is that the more creative you get, the more you can "stack functions", meaning get multiple values out of a single activity.
When I lived in Oakland, I got at least an hour of the flow state every day riding my bicycle on city streets in to the office. It was a joy. I bought that bicycle for $300 in 2011, and I still have it. It saved me hundreds if not thousands of dollars in bus/train fare, it kept me in good cardiovascular shape, it gave me a better mental model of the urban environment, and it probably prevented some level of health issues due to sitting so much.
The point is, once you decouple "things" from "happiness", and correctly insert the values that those things are bringing in to your life, you can evaluate a whole menu of activities that deliver the same value and greater to you. You realize that an xbox isn't nearly as efficient at delivering the flow state to you as bicycling to work is, because the xbox has negative side effects of myopia, sitting too much, and sleep loss, and bicycling has positive side effects of increased cardiovascular fitness, increased opportunities for social interaction, et cetera.
So perhaps the most important thing to understand about frugality is that it does not entail sacrifice. If you find yourself sacrificing, you are doing frugality wrong. The whole point of deep frugality is to improve your life, in a whole variety of ways - to bring you more of the good stuff, rather than less. Our culture’s extreme focus on buying stuff has crowded out our ability to recognize easy, simple, and inexpensive (or free) ways to get the things we actually value in life.
So I try to spend less, so that I can get more of the Good Stuff.