The blogging world is an interesting one. On one hand, I really enjoy sharing my ideas on this website, hoping that they will make sense to you on the other side of the screen. There are great websites out there, blogs that I love and absolutely follow. On the other hand, the world of SEO and social media bores me a little bit. More often than not I see posts that are simply pictures taken from other websites for “inspiration”.  Posts that have no depth whatsoever and are just about the clicks. Oh, and does anyone else roll their eyes when they see a blogger/ Instagrammer say “sign up for a free [insert here your choice of freebie]”? Or is it just me?

Anyway. Maybe it’s just my tendency to fight off marketing, ads, and any unwanted distraction. This post is not about that. But it is about designing your life (which will probably include fighting off distractions). And I also mention one of my favourite bloggers 🙂

I always say that I enjoy personal finance and investing because I do! But I always felt that personal finance was not quite accurate enough to describe my thinking towards it. And I felt like different topics were missing here on this blog because they were not about “personal finance” in the traditional way of thinking.

If you are new here, you might not know that one of my favourite bloggers of all time is Jacob Lund Fisker from Unfortunately he doesn’t update his blog any more, but it is definitely worth it checking it out if you like the idea of financial independence.

Jacob has also written a book called “Early Retirement Extreme” which I tend to read once a year. It is very dense and textbook-like, but it can really be a life-changing book.

Thinking of personal finance in terms of personal economics is not something new. My ideas are heavily influenced by Jacob’s, who was of course influenced by the insane number of books that he reads every year. Knowledge is always changing and adapting, but it is mostly already there.

Personal economics vs Personal finance?

Personal finance involves how people manage their money. How they earn, spend, save, invest, borrow and protect it. Everyone needs to think about money, most people need to work for it, some are good at managing it, others are not. There is a lot to be discussed within all those categories, and of course topics are not limited to the ones described above.

Personal economics, however, involves a lot more. It involves a wholistic perspective, including how one acquires and uses different types of capitals (life skills, strength, social) and designs their life to be more economically efficient. This include systems thinking.

For example, personal finance might look like this:

A person earns $50,000/ year, lives paycheck to paycheck, does not have any insurance, has a car payment, wants to start investing and buy a house.

Traditional personal finance advice would most likely include:

Reduce discretionary expenses, eat out less and move somewhere smaller if possible. Perhaps sell the car and buy a cheaper one, or bus to work. Save at least 10 – 15%. Invest some money into acquiring skills that will help you increase your income. Don’t buy more house that you can afford. Don’t buy into lifestyle inflation. (Actually not bad advice, except I would suggest increasing the savings rate by a lot more).

Thinking in terms of personal economics, on the other hand, advice for the same person might look like this:

Keep your job and by all means continue to build your skills. But don’t overspecialize. Introduce slack to your system and acquire a number of skills that will allow you to work in different fields. A person that is competent in more than one area has a more resilient lifestyle and is less job dependent. Even if such jobs don’t pay as much.

Get rid of stuff you don’t use. Move somewhere efficient. Don’t have more house than you need – and not than you can afford (after you’ve gotten rid of stuff you don’t need). Sell your car ASAP. Walk or ride a bike as much as possible. This is free exercise. If you absolutely need a car pay cash for it. Build on your strength and physical capability.

Develop creative solutions for your needs. Play the role of the decomposer in your ecology. Acquire things that people are disposing of, but that are in good condition. DIY. Develop life skills such as cooking and house maintenance. Participate in your community, help others and be helped in return.

Understand that there are different types of capital. Create a lifestyle that is efficient, so that you rely less on money and more on other capitals, such as health, skills and social capital. You will need less to live, and will be much safer than someone who solely relies on their income to live a great life. Do all that while investing and becoming more competent in managing your portfolio. Financial independence will quickly follow.

So this encompasses much more of my thoughts towards personal finance. This thinking in terms of personal economics is much more robust than simply chasing the highest ROI’s. And it is much more fun too. Have you thought about your own life in terms of personal economics? Let me know in the comments 🙂

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