Not all hobbies are created equal.
We’re all aware of that on some level, but if you crunch the numbers, you can get some very interesting conclusions. I spent most of my career as either an analyst or an investigator, so breaking things down into little pieces and comparing them that way is something I do almost intuitively. I believe that helped me on my path to financial independence, and maybe it can help you too.
There are multiple ways to divide hobbies into different categories: active vs passive (i.e., jogging vs sitting on the couch watching football), free vs one-time expense vs ongoing expense, etc. As an example of the latter, doing body-weight exercises is free and can be done anywhere; buying a drum is a one-time expense; drag racing is an ongoing expense.
I’m not here to judge or ridicule any hobbies or other such decisions: if it makes you happy, go for it. Just make sure you understand the financial impact your hobby would have on your path to early retirement. If going to a concert twice a month postpones your early retirement by, say, three years, would that hobby still be worth it for you? The answer is different for each of us: happiness is subjective, as I learned while composing my favourite e-book, 50 shades of yay: great thinkers on happiness. (Obligatory disclaimer: that’s an affiliate link – Amazon will pay me a small commission that would help run this blog.) Oddly enough, that was the least commercially successful of all my e-books. Ho-hum.
When I moved to Seattle in 2015, I got to experience the fancy HQ life at Amazon for the first time. A lot of my Finance colleagues were roughly the same age, and their entire lifestyle consisted of exorbitant spending (far beyond their means) on bar-hopping, concerts, Uber rides, and even taking random flights to Shanghai and back just so they could get a better frequent flyer status with Delta. (I am not making this up.) They’d run up the tab on their credit cards and pay them off when their twice-yearly stock grants showed up in their bank account. Rinse and repeat, forever. Needless to say, that was a very risky way to go through life – and one that left me completely flabbergasted. That was before I used all my life savings to buy a condo: when my coworkers heard that I actually had a five-figure amount saved up and available in cold, hard cash, they were just as flabbergasted. Talk about a culture shock!
What I just described was an example of ongoing-expense hobbies. In order to maintain them, you must keep paying: if you stop paying, there goes your hobby. It’s not all about bar-hopping, of course: having a dog is also an ongoing expense. (The other day, I read a rather disturbing forum discussion where people discussed cooking and eating their guinea pigs to recoup some of the expense, which just goes to show you that there are weirdos in every community, eh.)
Some hobbies are free, or have such a low entry cost that they’re very nearly free: you can do yoga or body weight exercises with nothing but a cheap yoga matt. One of my sisters is still paying off her student loans, but she went all in on exercise and yoga, and now she’s an award-winning bodybuilder. As you can see, being competitive runs in the family. (That also serves as an encouragement in my own personal lazy quest for a six-pack.) If you’re on Reddit, I highly recommend checking out the r/BrokeHobbies community – those folks are absolutely amazing. I’m particularly in awe of their avocado-pit-carving skills.
And then there’s that middle category that’s the most interesting of all, at least to me. There are hobbies that require a single investment (sometimes small, sometimes large) that does not recur. Once you pay the entry fee, you’re good to go. Here are just a few examples:
- You can tinker with that guitar forever, learning more chords and improving your craft. (To be fair, that’s if you’re self-taught with YouTube. If you get a tutor, that becomes an ongoing-expense hobby, but if you stop, you’ll still hold on to what you learned.)
- Exercise equipment, bicycles, etc. That can be expensive – anywhere from $100 for a set of weights to $1,500 for a great treadmill or bicycle. The big question is: will you actually use it, or try it once and discard it, to resell later for 20% of the cost?
- Professional cameras. Here, I’m talking about Nikon, Canon, and other DSLRs: I’m not talking about an iPhone with a fancy lens that you’ll replace with a different model the next year. As a long-term, standalone purchase, a camera (with a couple of lenses) can help you improve from an amateur to a pro. (There are lots of library books and free tutorials about the craft.) Theoretically, the more pictures you snap and edit, the lower your cost per picture will be. If you spend $1,000 on a camera and accessories and take 10,000 pictures, it’d be 10 cents per picture. If your neighbour buys the same camera but abandons the hobby after just 100 pictures, their cost was $10 per picture. The more you practice this hobby, the cheaper it gets!
- Video games. I’m terribly biased here, but hear me out. Assuming you buy a gaming PC or a console (gaming consoles go out of style too fast, but they’re cheaper), buying games (especially if they’re used or on sale) can get you some of the cheapest sunk-cost entertainment out there. Although some games can be beaten in just a few hours, others have an open world or so many fun options that you can play them for hundreds of hours. For example, Stardew Valley is a remarkably wholesome farming simulator that radicalized millions of young gamers. On the other hand, Skyrim is a massive open-world game where you can run around, slay dragons, explore dungeons, or just become a nerdy alchemist. There are other engaging games out there, games where even 100 hours won’t unlock all the content. As long as you don’t let those games take over your entire life, they make for an amazing investment.
Not all hobbies are created equal, and here’s a quick and (I hope) handy comparison. If you go out to see a movie, that’s about $20. (More if you buy popcorn, etc.) Let’s say the movie is two hours long. In that case, the cost is $10/hour. On the other hand, if you spend $10 on Stardew Valley and play it for 100 hours, your cost will be 10 cents/hour. Ipso facto, video games are 100 times better than movies. You can’t argue with that – that’s just basic math. (And that’s how AMC stock enthusiasts ended up putting a bounty on my head. Heh.)
That said, I’m not a Puritan: I’m looking forward to paying my $20 to see the long-awaited Dune movie that finally came out here in Canada. The logical thing to do would be to wait a year or so until it’s released on Netflix (which is an ongoing-expense hobby) but hey, I never claimed to be perfect. On the other hand, I get almost all of my books for free as e-books from the local library, so it all balances out in the end.
What about you? Are your hobbies free, cost-efficient, indulgent, or some mix thereof? Leave a comment and let me know!