I joined the military when I was 19 for 2 years, being part of the conscription programme of Singapore. I remembered I was quite good with one of the lieutenants then, who had signed on and made the military his career. We were once talking about him playing the famous computer game, World of Warcraft, which he paid 20 USD a month for the subscription. I had exclaimed that it was so expensive, paying $20 every month just to play a game. He explained that it was actually very cheap to pay $20 a month for unlimited entertainment, which I understood immediately. Note that at that time I was 19 years old, coming from a poor family and the military did not pay us well. Conscripted soldiers like us were only paid 450 Singapore Dollars (approximately 315 USD at that time) per month. Career soldiers like the lieutenant I talked to at that time of course were paid much higher.
For me, I always go for free-to-play games, although of course those games always had the cash shop portion. From the very first Runescape to MapleStory to Perfect World, these free-to-play Massive Multi Player Online Role Playing Game (MMORPGs) allowed me to have endless free entertainment. Of course, without ever touching the cash shop, levelling up and getting a good set of equipment is more difficult than others. Although at times it was frustrating to work so hard and raid the dungeons countless times just to get raw materials for a particular equipment I need, then seeing a rich player get it effortlessly because he spent money in the cash shop. What used to be a slow painful grind to level 100 now becomes a 3 day affair with bonus XP (experience) packs. Inside these games I have seen people who had thrown in tens of thousands of real world dollars to buy powerful weapons and armours, to build and maintain their clans and for all sorts of activities in the games. Do you know that in some of these in-game clans, participating actively in clan activities will also earn you a salary paid out by the guildmaster?
Fast forward to the era where games are more readily accessible online, such as via Steam or Epic Games, games have also been more readily available for purchase. While I have spent a little on games, generally I still play free games. I like to play, but at this age it only serves as after work de-stress activity. I am unable to keep at it for 12 hours everyday just like last time.
The above example also applies to other hobbies, be it photography, fishing, cycling etc. Each of these hobbies have a very low cost of entry, but once into it there are of course many tiers for you to spend your money on. Be it levelling up your equipment or going on overseas trip for each of these hobbies, the cap to spending on any of these hobbies is the amount you are able to spend. Like gaming, you can either go for free or very low cost options, or spending tens of thousands on your quest to be a professional. Many of them soon are not contented to be at the lower levels, opting to spend more and more money on their hobbies.
Yet there is also another group of people who go into such hobbies. While many of the people have their own original hobbies that they truly enjoy, there are also many of them who are influenced by their peers, going for a hobby which they originally did not intend to pursue and in the process spending big amounts on them. I will give 2 examples below.
In my workplace, there are some people who has the hobby of having fishes. They would buy large fish tanks, have expensive fishes, do aquascaping and stuffs. It is their hobby. Some of the guys would do nothing but stare at the fishes for extended periods of time. It is a guy thing which women usually do not understand – engaging in brain dead activities is also a form of relaxation (like fishing). They like what they do, and they enjoy doing it. Those in the hobby circle would talk and share their knowledge and experiences. Then there are colleagues who heard about this and got interested in it for a moment. Perhaps they wanted to get in the circle, or perhaps they thought it is fresh new entertainment to have, they also start to get into it. But rather than starting small, they threw big money inside. Fanciful fish tanks, expensive fishes and the like. But because this was not originally what they liked, but only a short-term fresh idea in their head, they quickly lost interests and scrapped the hobby entirely after a while. This not only applies to fish tanks, but I have seen people doing that for Gundam figurines too, among other hobbies too many to list.
Bicycles are another example that are all the trend these days, at least in Singapore. Before the Covid pandemic struck, there are indeed avid cyclists who would cycle everywhere during their free time. They have expensive bicycles costing in the thousands. This is their hobby. But after the pandemic hit and lockdowns were frequent, for some reason there are more and more cyclists around. The bicycle business is booming and people buy more and more expensive gears. Even the lower salaried staff have been spending a significant portions of their salaries buying bicycles, each more high-end than the previous. But is it really a hobby that they like? For a while some of them were active, but some time later the bicycles just collected dust and rusted away at home.
All these could be attributed to peer influence. Everybody is doing it. I want in, I want to fit into the group. I want to have a common topic with the rest of the people. One would think that this only applies to teens being pressured to do drugs or to do stupid things. But no, this applies to adults too. The other guy has a $1000 bicycle, I got to have one which cost at least $1500. Heck, I am buying one for my whole family, and we can ride it all out together for some family time. This is a real thing which I saw it with my own eyes. One guy changed his car, soon after people starting changing theirs too.
It is one thing to find a hobby you truly enjoy, but it is another thing to go into a hobby which is due to an influence from your peers. Although I am all for exploring new things and new hobbies, and there might be a certain small cost in starting and exploring a new entertainment, one should be careful not to put too much money in until he or she is very sure that this is something that they would go for it in the longer term. Yes I may very well like rearing fishes after I have a hand in it, but as of now I do not know. I am just trying it out. Why not buy a smaller fish tank and some cheap fishes first and see how it goes? If you like it, by all means upgrade it. If you do not like it, quitting it would only mean little cost. Take it as the cost for exploring a new thing.
Even if it is something we would want to go for it long term, the capital investment into a particular hobby should be a gradual one. For example, assembling a Gundam figurine comes in many different levels. For a start perhaps one can go for a cheaper and easier build, then slowly upgrade. If I go for an expensive difficult built right at the start, I may not have the skills to assemble it. The difficulty may cause me to lose interest quickly too. I have a colleague who got influenced to buy a Gundam figurine when he saw his other colleagues buying it. They advised him to start from a lower level first, which he refused to listen. He never got round to assembling it, and soon after gave the whole figurine away.
In photography too, when starting out, there is no need to buy all the expensive lenses. In fact the current handphone is able to do a good job. Of course, on a professional level, a DSLR is still recommended. But at the start one probably does not have the skill. Rather than splurging on all the expensive equipment, one could probably grab some lower level equipment. Be it a camera phone which everybody has or an entry level fishing rod, only when one levels up his or her skills would a higher level equipment be truly worth it.
This article does not aim to discourage spending on hobbies but to discourage spending unnecessarily on hobbies. This is especially so when one is exploring a new hobby and does not yet know whether this will be a long term joy that it will bring you. Even if it is, levelling up the equipment in an appropriate pace with your skill is also recommended, if not you might be just wasting your money on an equipment which you do not fully know how to use.
Having a hobby is good for relaxation and for mental well-being, but if we are to aim for financial freedom, then having a balance between spending and using the money to earn more money is a necessary skill and knowledge we need to have. Spending $5000 on a camera set when you have $100,000 can be considered a reward to oneself for achieving a certain goal, but spending $5000 when you only have $10000 savings is considered a very unwise choice in your journey towards financial freedom.