A reader commented on yesterday’s Necker Island post, “Well you can still cash out MR at 1.33c, so would you pay $16K for Necker?” That was actually a GREAT QUESTION. So why am I doing it? Well let’s start with a few counter arguments to that question.
- Why would I pay $54K for a Tesla when a $10K Honda would be just fine?
- Would I pay $500 a ticket to go see Hamilton?
- Why don’t I cash out 140K Alaska miles for say $1,400 in cash and book a coach ticket to Japan instead for $700?
- Why would I eat at a Michelin star restaurant when McDonald’s would fill me up just the same.
Is it because I like the finer things in life? Eh, sometimes. Is it because I have more discretionary money at this point in my life? If I was a 22 year old out of college, then I’d be crazy to pay the $16K for Necker; I’d take that cash all day every day. If I was really serious about the whole FIRE thing, then I’d be crazy to pay for Necker too. However, like I said in the earlier post, this is a once in a lifetime experience (three if you’re a guy named Shane,) and sometimes you just have to splurge. Isn’t that why we collect all our miles and points? So that we can fly international F or J? By the reader’s argument, we should all cash out the points and fly coach like 99.9% of people. But we don’t; we use our miles and points to fly first class because it’s better than coach. Necker island is just a better… Hawaii? I mean, the reader could have asked that too right – why even go to Necker? Cash out the $16K and spend $1.6K to fly to Hawaii – will Necker be 10X better than Hawaii? Probably not.
I know a guy at my gym who is around 60 years old and is looking to retire in the next year or so. I once asked him what his net worth was (similar to asking a lady her age right?) He wouldn’t tell me, but he said “comfortable.” I asked, “around 5M?” And he kind of smirked. So that’s what I’m going to guess he has. He’s been seeing my travel photos for the past year, and he told me that he had JUST gone on his first cruise last year. He has NEVER been to Japan (and he’s Japanese!) I don’t think he’s traveled much at all. I kid with him and tell him he needs to go next year “while he still can” (sort of implying before he’s too old to travel.) His rebuttal is, “…when I retire…” While I do hope he does travel the world when he retires [and hopefully within a year or so,] he’s the typical (well atypical since he has $5M) American who has worked hard all his life and saved and saved and saved and rarely traveled. I think we can all agree that traveling is our favorite hobby right? The point of the story is that I don’t want to be like him; I want to travel while I’m still young. Sure, my FIRE will be a bit more pushed out than his, but I’m okay with “frontloading” my travel and experiences in life. I’ve worked for way too many years and the last thing I want to do when I’m old is regret not going to Necker just because I wanted to retire a couple of months earlier.
I know a lot of readers dabble in FIRE and realistically, this is as anti-FIRE as it gets (similar to the Tesla Y I ordered,) but once in a while, you have to just YOLO. I’m not saying go burn all your investments and go on a crazy shopping spree, but if you have extra discretionary income, TREAT YO’ SELF! And one of the great things about this game is that sometimes it’s “funny money” – meaning I’d never pay $16K cold hard cash for Necker, but I had no qualms spending 1.2M of “funny money” for it. Psychologically it makes no sense, and I don’t even want to think about the opportunity cost of this trip. I just want to lay by the pool drinking a mai tai eating passion fruit, not thinking how long it took me to earn 1.2M MR or how long it’ll take me to earn it back. Just have to YOLO.