Why frugalism may appeal to software engineers

Why frugalism may appeal to software engineers

In this article I am writing about frugalism and the FIRE movement and its relationship to software engineers. FIRE stands for Financial Independence, Retire Early and it’s a topic which gained considerable traction in the past years. Granted, it’s an uncommon topic for a software blog, but my argument is, that it’s not such an uncommon goal for software developers to pursue an early retirement plan. So, please bear with me.

Frugal developers are not a rarity out there

It’s an interesting fact, that many of the most well-known figures of the FIRE movement are working or worked as software engineers. So my theory that frugalism maybe appeals to software developers more than to other groups does not seem that far-fetched.

To give a few examples:

  • Peter Adeney alias Mr. Money Moustache, one of the mentors of the movement, worked as a software engineer.
  • Oliver Noelting, arguably the most well-known German frugalist works as a software developer. He hopes to be able to retire in a few years.
  • Nate Thames alias Mr. Frugalwood retired successfully at 32 and continues to work as a software engineer. Who is puzzled by a person who retired but still works, needn’t be. FIRE promises the freedom to choose what you do, which can well be your previous job.

The list could go on. Frugalism seems to have a certain appeal to software developers (well, at least to some of them).

In the following I am going to use the terms frugalism and FIRE as synonyms unless explicitly stated otherwise. Although living a frugal life can be a goal in itself, all frugalists I am aware of, live frugally in order to achieve financial independence and retire early.

Capitalism vs. frugalism

So what is frugalism all about? Frugalism is a modern story about happiness. It is a counter-proposition to the traditional career-oriented capitalist story which is … well, also about happiness.

The happy capitalist

More, generally translates to better in a capitalist world.

Happiness in a capitalist career-oriented world equates to

  • more, better and more beautiful stuff,
  • longer, fancier vacations,
  • important-sounding job-titles,
  • development of skills and competencies to achieve even more of the former.

Ultimately capitalism is about power, about getting on top and about freedom. Having power, having financial safety, owning things which you can afford not to really care about, translates to a form of freedom.

Not all achieve this freedom and the degree of freedom varies, but let’s suppose you eventually get there. What you have to provide in return is time, effort, passion. You need to work hard to maybe go through college, get a good job where you have to work hard most of the day, for most days of the year, for most of the years of your adult life in order to be able to buy a TV,  to buy a car, maybe buy a second car, and then replace the first car, with a bigger one, buy a house, buy a boat… Well, you get the idea.

The happy frugalist

Frugalism is about freedom and self-determination.

Frugalism on the other hand says that while it might be nice to have lots of stuff, this is mostly unnecessary and definitely not worth the effort if the price is to be caught in a “hamster wheel” for half of your life. Happiness ultimately translates to self-determination. The basic promise is that you’ll be a lot happier if you can pursue your own goals whatever they may be, instead of having a standard 9-to-5 job where you generally do what others tell you to do. If you have enough money due to whatever reason and don’t like working – again due to whatever reason – you can retire as a privatier or a rentier and live happily ever after.

Piggy-bank as a symbol of freedom.

But as I said, frugalism is a modern story and the FIRE movement promises the privatier-like happily-ever-after also to average-earning people. As such, frugalism is both a philosophy and a framework for attaining financial independence. The promise is: live frugally, don’t spend more than really necessary, invest the rest smartly and you will be able to reach financial independence and retire early, which will make you free of any job-related constraints and happy. (For the sake of completeness, I have to mention that some also stress the environmental and health benefits of frugalism.) Smart investment mostly translates to investing in passively managed funds but also in real estate and other assets.

Okay, we know what frugalism is, let’s explore why it could appeal to software engineers.

So, are software engineers predestined for frugalism?

When you put money aside for retiring early it’s all about maximizing the amount of money saved while maintaining or even increasing your happiness level. The larger the portion of money saved the sooner you can retire.

Income is generally higher than expenses

Software developers are seldom required to invest in appearance.

Now, software developers tend to earn a lot of money (compared to the population median) which increases the potential saving rate. Their investment in appearance and image-creation is often low. While a manager normally earns a lot more than a software developer, he is also expected to drive an expensive car, dress elegantly and eat out in fancy restaurants. People don’t really care if a developer drives an old car, wears cheap t-shirts with geeky slogans on them (might be even regarded as a bonus) and eats at the cheap Asian fast food around the corner. This freedom is also not given to real estate agents or bank employees irrespective of their salaries.

Developers like optimizing

Developers generally master visualization and optimization tasks.

Software engineers are often good optimizers. They like to track things down (or at least are used to doing it) and like to solve problems. In software engineering terms you could regard the whole frugalism thing as debugging and analyzing a historically grown system (i.e. your behavior and your consumption choices) with the aim to adapt it in conformance with some new requirements. Or you could regard this process as refactoring your own behavior.

Software developers like math and statistics (at least the simpler parts that they didn’t forget after years of no or limited usage) and most of us just love a beautiful spreadsheet with lots of numbers. Well, at least I do.

Software engineers are not alone with these advantages, people in other engineering professions share them. Most software engineers I’ve known so far also live naturally a relatively frugal life, most of them having very few areas where they invest larger parts of their incomes.

Developers tend to like control

Visualizing expenses on a spreadsheet can generate a rewarding feeling.

Putting your life on a spreadsheet, at least financially speaking, can generate a rewarding feeling which offers the illusion of control. Software developers tend to like the sense of control provided by such mathematical “certainties”. Furthermore, most of the developers I’ve known mostly like what they are doing i.e. developing. So, after a certain point in their career it’s going to be just another technology, another team, another project, slightly more money but things are going to be basically the same until retirement. Most of these people don’t want to climb the career ladder. In fact, a friend of mine has resigned after he was made some sort of team lead against his will. So retiring and doing other stuff might actually be something cool for a developer.

Conclusions

Let’s summarize the above ideas: software engineers are a category of people who might be due to their personalities and the nature of their jobs more prone (or more able) to pursue a FIRE-approach. Their status would generally allow them to get away socially with a “frugal” appearance and optimization lies in their blood.

There are though a few often-encountered traits in developers which make the adoption of a frugal way of life with the aim of retiring early unlikely or maybe not that desirable:

  • Being often introverted, the companies developers work for are sometimes the most important social environment besides their close families. Retiring without a substitute can thus prove dramatic.
  • Furthermore, I’ve met many developers reluctant to change, which is interesting considering how volatile the software business is.

Of course this article is nothing more than just a hypothesis based on some known cases of software engineers who call themselves frugalists and my personal experience. It seems to me though that a strong correlation between the two is possible, if not probable. I would be of course very happy to learn about scientific evidence (sustaining or refuting my hypothesis), so if you happen to know of any studies tackling these topics, don’t hesitate to write about them in the comments section.


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Petre Sora

Petre Soras Interessen sind vielfältig und befinden sich an der Schnittstelle zwischen Mensch und Informationstechnologie. Als studierter Psychologe und Software Engineer war er sechs Jahre als Java-Entwickler in mehreren Unternehmen tätig. Mit der Gründung der Rezensionsplattform nososo hat er sich entschieden eigene Wege zu gehen.

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