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!
I came across this story about Tokugawa Ieyasu from the "Tokugawa jikki." For context, remember the era and how hierarchy was treated at the time - this was actually recorded by a scribe 400 years ago.
Remember the societal roles of the era, which will seem out of place compared to 2011. That's not the point of sharing it - it's the views on money, austerity, and what to prioritize that are worth learning from -
Once, Okaji-no-tsubone ordered her women to wash a white kosode [of Ieyasu] that had become smudged. The women hurt their fingers, and blood flowed from the wounds; she thought it a very cruel task. Since he did have so many clothes, she asked whether it would be all right that they would not wash them anymore, and that he would wear only new clothes. Ieyasu answered: "This is not something that you, foolish women, have to understand, but I will explain it to you, nevertheless. Come and listen."
He called a great number of the women together, and said: "The thing about which I have been most careful all my life, is not to offend the Way of Heaven. What the Way of Heaven hates most, is extravagance. Having seen all the treasure I have amassed here, in Sunpu, you no doubt think that it is much?" All of them agreed. "This is not my only treasure house," Ieyasu resumed, "I also have them in the capital, in Osaka and in Edo, all filled with gold, silver, cloth, and silk. So even if I would wear new clothes every day, what shortage could there ever arise? However, the reason why I have amassed [all this wealth] is, to dispense it at times to the people of the empire, or, by accumulating it for the future generations of my descendants, to prevent the state from ever being short of funds. Therefore, we should not waste even one robe." Although they were women, they were all [impressed by] the wisdom of his holy teaching and did obeisance to him as one does to a Buddha or a god, with the palms of the hands joined together.
This is my first SETT post form another blog of mine, I'm in the Process of making this my main Blog
One of the biggest mistakes I see young people making is spending their money capriciously and not saving. If your bank account or investment portfolios aren't growing, or you are not expecting them to grow something is awfully wrong. S&P 500 has been shown to go up around 10% every year in the long run. There are treasury bonds and other investment vehicles as well which can ensure that your money is at the very least keeping up with inflation.
When I started earning some money last year I ended up investing or saving up 4/5 of it, and kept spending my money frugally and only splurged once or twice. Being frugal, saving up, and thinking about the future is crucial, especially at a young age because you have so much time for compound intrest to take hold