Jeremiah Rogers

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Option Value

What if you took all of your binding decisions and threw them away? What if each decision you made from today forward was designed not to limit you? What’s the life that you would you end up with?

You might end up with a life like mine: working on a big personal project, traveling full time, living cheaply, and trying to experience as many things as possible.

There are a lot of people who don’t want to live my life — a lot of people are happy with the life they have — but I think that the decision framework I use could still be useful for those people.

In my past I’ve found that I’m held in one place by three things: what I own, the people I care about, and how I make money. In the internet age it’s easy to work with two of these online: I can travel with few possessions having confidence that I can buy anything I need as it’s needed. It’s also possible to make (some) money on the internet. Keeping in touch with loved ones is a bit harder but can often be even better as a traveler.1.

Once I cut the things that were holding me back out of me life I found that I wake up every morning much happier. There are no excuses not to do what I want to do. If I think that I want to do something I just do it: if I love it I do more of it, if it sucks I do something else. I’m rapidly iterating into an ideal lifestyle.

One of the tenants of this life is ignoring sunk costs but the other is remaining aware of option value. Option value in a nutshell is the amount I’m willing to pay to keep my options open for the future.

Here are a few of the decisions I’ve made and how they keep my options open:

  • I always buy the smallest and lightest things (and keep them for a long time) or the cheapest things (which can be given or thrown away). I have a small backpack but it’s amazingly well stocked with professional photography equipment, a laptop, and warm and cold weather clothes. These light things are more expensive than bigger alternatives, but the payoff is that I have a laptop which is always with me and can fit into incredibly small spaces – like the under seat storage compartment on a motorcycle.
  • Normally I hold off as long as possible before buying flights or booking hotel rooms. The longest I’ve booked a room for is 5 days — and it was 3 days too long. I consider extra 20-30% I might pay to book a flight last minute as part of the cost of my flexibility — not part of the cost of the flight.
  • I try wherever possible to leave a door open for things to happen. If an opportunity might go away, like a really cheap flight (some flights in Asia are only $20), I’ll book it right now if there’s a decent chance that I’ll want to use it.

What are the results? I’m traveling today with an 18 liter backpack that fits under the seat in front of me on an airplane and that I can wear all day or while riding a motorcycle without discomfort. Depending on my mood and the weather I can move between cities or even countries for the price of a nice dinner in San Francisco. When I get to a new city I can get off the train, walk around the city all day, sit down at a cafe to work on my laptop for a while, and book the nearest cheap room to spend the night.

My housing varies the most. I switch between couch surfing, hostel bunks, and cheap or fancy hotels depending on the cost of an area. In ultra cheap countries like Cambodia and Vietnam I live in a room with a queen sized bed, air conditioning and a pool. In Japan and China I sleep in hostel bunks or crash with friends.

I keep my schedule purposefully open so that if a friend comes to Asia I can pack up and leave my hostel in 15 minutes and hit the road to see them. More than once on this trip I’ve booked a last minute flight from a cafe, walked outside, and gotten in a cab to the airport.

As a result of all of this I feel remarkably free. I can wake up each morning and ask myself “is this what I want to be doing with my life?” and either honestly answer the question “yes” or go do something else.

The life of a traveler is an extreme example of chasing option value but this can be applied to everyday life as well.

  • What if you sold your car and budgeted the money you were spending on car payments, gas, and insurance to taking taxis or using car shares instead? I did this back in San Francisco and found that it cost a lot less overall.
  • What if you paid a bit more to sublet a room in a city for a month to see if you really like it before signing the lease?
  • What if you took pictures of all your sentimental belongings and then gave them away. Would you feel more free to move around or get a smaller apartment?

To factor option value into my life I try to think of these things when making a decision:

  • Could I rent this for about the same cost as buying it? (Normally you can).
  • Should I buy a cheap version of this that will work for a little while and can be given away, or a much smaller and expensive version that I can keep with me forever?
  • Should I wait and see if I want a flight (pay more later) or buy a cheap version of the flight today that I’m willing to not take?

Thanks to my friend Sam Lessin for drilling this idea into my head while I worked at Facebook.


  1. I’ve found that being location independent lets me choose to fly and spend a week with someone I care about instead of seeing them in passing or talking to them on the phone. Another surprising thing is that being abroad has encouraged closer contact with my friends. The emails I get are remarkable: people open up a lot when they know you’re far away and they have to sit down and write for a while. [return]