As someone who is getting to be “famous on the internets” (or at least notorious), I have to deal with my share of popular dissent (or at least misunderstandings). The greatest misunderstanding obtains from the “extreme” part of my financial meanderings; but also the rest of my lifestyle parts of which can be considered extreme. In statistical terms, extreme typically means at least one sigma removed from normal but often it is 2 or 3 sigmas removed.

However, it is perhaps better explained in other terms. Nobody reads or writes personal finance (pf) blog very long before it is realized that personal finance and personal health or fitness have a lot in common. Many pf bloggers start a health or fitness blog after obtaining some success with their pf blog, because the principles are very similar. Just like people comes in all sizes and shapes, people also comes with all kinds of budgets, assets, and incomes.

I am, therefore, going to try to explain my “extremism” in terms of health and fitness. Let’s survey the landscape.

First, you have the pf blog equivalent of fat camps, where you pay $200 for the instructor to tell you how to cut down on the cola and twinkies and get off the couch walk around a little. There are also instructors, who for $200 will tell you how awesome you are, which is similar in the self-image domain. For the obese, this can lead to quick weight losses of tens of pounds. For the others, it can lead to renewed motivation and self-confidence. These blogs/camps are probably the most helpful and important of all in terms of preventing a serious issue from developing or reversing an already serious issue (but why does it always have to cost $200?). Yet for the average person, fat camps and motivational speeches are useless.

Next, you have pf blog equivalent of 6 meals a day, cardio, and bench press. This is advice that works for the average person, because it normal, uncomplicated, and only requires consistency to work. Here the motivation to consistent action can be supplied either by a personal trainer (personal obligation) or a subscription to a magazine or a blog. Doing the chest press for 3 sets of 10 reps followed by a few miles of cardio on the stationary wearing spandex in a gym filled with shiny machinery followed by a nutritious power drink at the bar is the equivalent of a dollar cost averaging into an index fund followed by a dinner out at the steak house and a fruit salad in front of the 40″ LCD TV. You’re not going to win any athletic competitions but you’ll do okay in the long run. Most importantly, you will be doing the same as everybody else and that can be very reassuring.

Finally, you have a few pf blogs (I’d like to think I belong to this category, but maybe I’m just a wannabe) which is the equivalent of a garage gym filled thick bars, chains, stones, sleds, and kettlebells. People work hard, they grunt, sweat, and bleed. They are lean and mean and they eat champions for breakfast. THEY DO NOT WEAR SPANDEX(*). These gyms are hard to find and sometimes admission is by invitation only, possibly literally, but mostly they are very welcoming if you can find them and you show enough “heart”.

(*) If you search the internet, you can find me wearing some wimpy spandex cycling shorts :-P

I am going to call these groups 1, 2 and 3 and refer to them below. Most will identify with one the above.

I will now deal with the misunderstandings between 2s and 3s as both have a tendency to believe they know the one truth (1s are usually quick to admit they are wrong.)

The greatest difference is the disagreement on what “comfort” means. 2 eats for taste and without some sort of self-constraint, 2 would eventually become 1. 3 eats for function and function and taste are sometimes two entirely different things. 2 can not understand why 3 eats raw eggs because frankly they taste like snot and besides, who else is eating raw eggs, not very reassuring. 3 recognizes that fruit salad tastes better, but taste is of little importance compared to what the food does to 3′s overall fitness. After all, you can no longer taste what you ate yesterday, but you will have the results of what you ate in strength or lack thereof. 2s derive utility from the pleasure of eating well. 3s derives utility from the pleasure of moving well. 2s need to see their doctor to start an exercise program. 3s can run 20 miles tomorrow, actually right now. Similarly, 2s prefer the easy path to quick results. 3s prefer the hard path to superior results. 2s will be doing biceps curls while 3s will be doing dead-lifts. 2s probably think that dead-lifts are bad for your back (they are if your back is weak from doing a majority of your lifting sitting or lying down ;-) ).

In pf terms, 2s take pleasure in simple tangible things like xboxes, bathrooms, and other doodads. 3s take pleasure in the freedom and kinds of opportunities their financial wealth provides.

Most 2s think that people grow weaker with age and that weakness is a natural state. Most 3s know that people grow weaker with lack of use. I was a born 3 or perhaps very early influenced to become a 3 and it took a long time to realize that the reason that 2s and 1s would rather take the bus than walk a measly 4 miles was that walking would hurt them. It was difficult to imagine. It would be highly uncomfortable on their feet, they would probably develop a mild case of shin splints, they would end up sweating and soaking their shirts and be too tired to do anything after they arrived. That was the cost of not exercising and eating like 3.

In pf terms, what is considered a difficult sacrifice by 2s is considered trivial by 3s. What 2s can not do easily with the resources available to them, 3s can. In the example above, 3s can run the distance in the same time 2s would need to wait to take the bus, I know, I did that. What 2s deem a low standard of living as measured in xboxes, bathroms, garden gnomes, 3s deem a high standard of living in terms of shares, bonds, commodities and cash. What is perceived erroneously as a low quality of life by 2s is simply due to a different focus. What 2s see are the raw eggs, the sweat, the blood, the grunting. What they don’t see is the effortless motion, because the 2s are taking the bus, which is probably fine by them. However, just as it is hard for a natural athlete to live in a body that can barely run 5 miles without hurting, it is hard for a free man to live a life of electronic toys and extra bedrooms if he is has to give up his time to gain these.

Analogies only work to a point, but I hope this has at least made it clear that the priorities of someone with a high savings rate and primarily capital income is different from the priorities of someone with a low savings rate and primarily wage income, say. Consider the RV, for instance. If you consider space and separate rooms a priority, or if you need to demonstrate your socioeconomic status through the size of your home rather than the size of your portfolio, it is obviously a poor choice. If you like that you could move to another state and still live in the same place. If you like that you can super-clean your home in less than an hour or that it comes with built in disaster preparations like own water, gas, and electric supplies, it is obviously a great choice. Or consider “appearances”: Which would you rather have, a smartly-dressed flabby body or a lean body covered by an old t-shirt. Which would your spouse rather have? (Answers may differ but I know what I would prefer). The form was paid for, the function was worked for. Anyway …

I used to live as a financial 2 (and also as a health 2) and my quality of life was low (ask my wife). I am much happier, so says my wife, as a 3, and so that is what I do. 3 is only extreme from the perspective of a 2. From my point of view: If you spend 40 or more hours a week working and you desire to show up at 9a every day for the next 40 years in exchange for some electronic toys and a big place to store them, you must be some kind of crazy workaholic with no imagination. Sorry! :-)