A sound of metal giving out... weight off my shoulders, and an unpleasant ker-thump!-crash!
I'm confused. Thieves? Bag snatching? What's going on?
I glance around, kind of kneel down and secure my things, and figure out that...
...the metal on my computer bag finally gave in to wear and tear and snapped.
I gather up a few pieces of the metal, grab my bag by the handle instead of strap, and check it out in the cafe I'm heading to. All works, no damage. Good.
This gets me to thinking.
I don't like spending money for consumption. Actually, I really dislike it.
Spending money to increase production, to invest, to learn, to train, to grow, to serve - okay, cool.
To consume? Oh, I don't like that at all.
Most of the time you live austere, you wind up looking like you're "good with money." I don't know that I'm good with money. I try to get some, and then not spend it. That gives lots of flexibility.
But it's pretty plain to see that if I'd been on the back of a motorcycle or crossing the street or in the Beijing Subway, my things maybe get broken there.
It seems to me that delaying purchases, delaying gratification, and investing in learning/skill-development/investing... these mean gradually moving up in the world and being able to do more. More freedom, more options, more choice. And if you were to live on 10% of your income and invest 90%, how long until your 10% of income is higher than the person who spent 100% from the start?
But I think you can get in trouble when you refuse to spend in a way that breaks your ability to produce and keep growing and do what you want to do. Even when I've been broke, I've tried to do right by people who do right by me... even if you can't afford to buy someone lunch who did you a really nice thing, I think you really can't afford not to.
Finding the timing is tricky, though. You could rationalize anything you want to buy as saying it would help you produce and do more and achieve more if you wanted to... and I guess some mindless consumption is okay, but really, there's so much free consumption that's as good as racking up expenses. There's so many wonderful parks and beaches and museums and temples and places to sit and reflect and architecture to walk around and look at and books that are out of copyright and websites with great content on them and, and, and...
But my views shifted more recently when I was reading a couple books by Donald Trump. He put forward a point that's obvious - austerity doesn't motivate and inspire. Flash and spectacle and style and presentation can all lead to much more things happening.
Here's the basic tradeoffs, I think:
1. If you invest a larger amount towards investing/producing/learning than consuming, you'll reasonably quickly be able to consume more on a fraction of what you've got.
2. But you can destroy your ability to produce by being too austere... if your gear breaks at inopportune times, if you eat too low quality food for extended periods, if you've got a work environment where you're constantly distracted and can't get things done.
3. And, austerity doesn't really inspire people. The vast, vast majority of people are much more impressed by things happening now than the prospect of gradual, compounding growth over the next few years.
4. Regardless where you fall on the austerity scale, taking good care of people who take care of you seems like it's always a worthwhile way to spend money.
I haven't figured out where a balance is to be struck. Books and learning seem like they're always worth it, as does getting good tools to work with, a good work environment, and taking care of people. But then there's lots of borderline calculations to make... figuring out where to go austere and where to go a little more extravagant is a tricky thing. It's probably largely dependent on preferences and style, but figuring out the right balance is tricky. I love the freedom and growth, but it's not good when your things break for being replaced a little too late.
The happiness researchers find that income correlates with happiness up to the high five figures and then happiness flattens out, more money doesn't really help. So I tend to put most of the first 100k of a year toward today and anything more than that toward tomorrow; seems like a more flexible and balanced response than a fixed percentage. Some years that means all my income goes to today, some years that means most of my income goes to tomorrow.
Donald has a point, of course we perform much better when the environment is more suitable for good work. If I can see good things and hear good things, then naturally I want to do good things too. Everyone needs encouragement. Things just flow better then. Our senses affect us more than we want to admit. People who work with ads and commercials already understands this, because they also understand human psychology and what lies in our subconscious(things we are not aware of but affect us in many ways). As humans we are primitive and such act like an animal in many ways and that makes us weak. We need to love and be loved constantly. But in our age where many people are alone in the western countries, advertisers take advantage of this and make business of it. So it is really Business As Usual, BAU!
Edit: I gave up on financial goals in late 2011 after some huge financial and artistic wins... money shouldn't be taken too seriously. For the record, they were all basically on track, some were being massively exceeded, others were a bit behind schedule, but were all happening.
I set my next 10 years of financial goals on June 28th. That was exactly a month ago.
1 year - Critical Thinking [my first book] out. Blog income trickling. Some info products. Some freelancing. Something else, some X-Factor thing bringing in cash. Net monthly income positive. Health insurance. $50,000 in the bank. Expenses = income per month minimum.
3 years - 3 to 5 books out, many products out, blog income robust, some working on big exciting deals. $10,000 per month total, $5000 passive at least. First property owned. $300,000 in the bank.
5 years - 7-10 books out, many many products out, many passive income internet properties, working on big exciting things, $50,000 per month total, $40,000 passive at least. $1,000,000 in the bank.
I love having a long term, strategically minded brain. Most of the things that I have learned over the past 5 years have been things that I have looked at as strategically significant if they were applied over a lifetime. For me these things have included learning about investing, finance, and money; emotional intelligence, dating and relationships; and health, fitness, and vitamins. By figuring these out at a young age, I will have the rest of my life for them to pay dividends.
I believe it is the exact same idea with personal development. Learning investing and dating at a young age only took me a few years each. I now have years for the investment to pay itself back.
For investing, I have been at it for around 4 years. At first it was a very expensive process. I was buying $300 or $400 worth of books every few weeks, in order to really immerse myself in the topic. I figured out that the two investment vehicles that had the most potential in my mind were precious metals and rental properties in Alberta. For the last 4 years I have been invested in precious metals, and having nothing to show for it. The price of silver is back where it was 4 years ago.