5 Questions with Adam Baker
A couple of weeks ago, I shared a video of Adam Baker giving a presentation at Tedx-Asheville. I was impressed by the presentation and wanted to reach out to Adam for some additional information. If you haven’t watched the video yet, I would encourage you to do so. You can find it here.
In case you are not familiar with Adam, he is the creator of the popular Man vs Debt blog and recently started a business called You vs Debt that helps people sell their crap, eliminate their debt, and live the life of their dreams. The mission of You vs Debt is the subject of Adam’s presentation.
Although Adam is crazy busy, he was good enough to take a few minutes to answer some of my questions via email. Adam’s responses to my questions helped to clarify for me exactly what Adam’s philosophy is and how it has impacted his life. I hope it does the same for you.
Lou: I understand the “sell you crap, payoff your debt, do what you love” philosophy, but what about the philosophy that says, “live for the day because you don’t know what tomorrow might bring?” Isn’t there something to be said for this “live for the moment” mentality that would encourage people to use their credit cards today to do something (explore Europe, go whitewater rafting, sail the Caribbean, etc) even if they don’t have the cash to pay for it now?
Adam: Well, yes – there is some credibility to that belief. But there’s two reasons why we don’t subscribe to that thinking.
First, you can “live for today” for a few days… or a few weeks… or a few years… before you have to “live shitty” for a much longer time as you pay for choices you made.
In other words, you can’t just continue to live for today (in your example) over and over when it’s unsustainable.
Instead, I think sacrificing a bit now – so that you can live for today SUSTAINABLY will allow you to create a life where it is possible to do fantastic things on a regular basis. So we choose to fight for the sustainable future, rather than throw everything at the short-term.
That said, I don’t think you should get too crazy with the sacrificing. There IS a balance – and exploring that fine line is a journey we each are very lucky to be able to have as living, breathing humans.
The second reason is that when you get in a relationship – or certainly when you have kids – the stakes change. “Living for today” can then mean passing on financial stress, troubles, and unsustainable habits to a future generation.
Even without kids, ridiculously unsustainable habits can poison relationships, family members, and even jobs.
Bottom line: You can “live for the moment” AND take control of your financial life at the same time. It’s not one or the other.
Lou: I have known people who have sacrificed during their younger years so they could enjoy a comfortable retirement. Problem is, some of these people have died before reaching retirement age or have fallen into such bad health that they couldn’t do the things they wanted to do in retirement. Is your “sell your crap” philosophy just another “sacrifice now so you can enjoy tomorrow” scheme or is there more to it than that?
Adam: So this is what happens when you “sacrifice” too much – or you don’t take time out along the journey to enjoy the ride.
I might challenge you though. Did your people REALLY sacrifice along the way to reach retirement? I’m convinced that many people THINK they are sacrificing while living in McMansions and enjoying a suburban life that only .025% of the population of the world could only imagine. Obviously that’s not everyone – and may not be the people you are referencing – however in general we’ve got pretty stuck up about what we think we deserve (at least I struggle with this!)
On the flip side, what item do you want to hold onto as you die?
On that deathbed, what gadget are you going to regret never getting to buy?
The “sell your crap” philosophy is about prioritizing experiences over “things” in your life. And it’s also about trading in our addiction to stuff in order to get more flexibility in our lives. Flexibility to do those things we WILL actually regret on our deathbeds.
Sure you can spend just as much on experiences than things. But given the choice. I’ll always choose people and experience over another item! (Well not always, I’m not perfect – but I try!)
Lou: Is a home an investment or an expense? Does it ever make sense to buy a home?
Adam: I don’t think your primary home that you live in is an “investment”. I wouldn’t buy one as an “investment”.
Simply put, it’s too emotional! If you plan on being in one community – for whatever reason – for 5-10 years, then I’m o.k. with buying a home.
In general, I believe people are too quick to purchase. Renting is awesome and we love it right now.
I also believe your TOTAL housing expenses should be well under 25% of your income if you buy. And that you should be debt-free in the rest of your life.
Right now we are fine with renting because we have no plans to pick one place for 5+ years yet, we wouldn’t have our mortgage and expenses be under 25% of our income right now, and we need to finish our remaining student loans (and continue to invest in our business).
Once we pick an area we enjoy, finish our student loans, grow the business to the point we want – I *welcome* owning a home. It won’t be an investment, but a fun, emotional experience for my family.
Lou: What do you think your life would be like now if you hadn’t asked yourself “What does freedom mean to me” several years ago?
Adam: Yuck. I don’t know.
I’d probably still be living paycheck-to-paycheck in the Real Estate industry. Trying to make a commission to pay the bills that were late. Courtney would likely be teaching, we’d likely have a huge mortgage, still be in debt, and still wondering if there was “more” to life.
Maybe we’d be happy, maybe not. It was only 3-4 years ago, but I’ve changed so much – in mindset and in other areas – that it’s really hard for me to even brainstorm what it might be like!
Lou: Do you consider your current work to be your life’s work? Are there other big plans down the road for Adam Baker?
Adam: I’m not sure about my “life’s work”. I feel like over the last few years I’ve found any amazing way I can help a LARGE amount of people improve their lives.
So that’s powerful, amazing, and something I’m grateful for.
Eventually, I’d like to push the envelope more. Explore other creative means for helping people “wake up” and tinkering with other areas outside of finance as I grow and experience those myself.
I want to thank Adam for graciously consenting to answer my questions. Be sure to check out Adam on his blog and at his online business, You vs. Debt.
