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!
Just got a question about getting good looking business cards and a website before opening a consulting business.
It just so happens I recently made some biz cards. There's two general schools of thought on good biz cards:
1. Do something traditional, but make it excellent quality. 2. Do something weird.
The latter is actually good when done right - something like giving away a guitar pick instead of a card, or something made of hard plastic, or metal, or something weird. I thought of just making a card that says "Sebastian Marshall - Strategist" on it, and nothing else. (I'd have to be really vigilant with my Google results if I did that!) But anyway, the weird approach is very case by case, and probably not what you're looking for.
The #1 case is much easier. You write down all your contact info you want on the card, you put your logo on a zip drive if you have a logo, and then you go to a high end print shop and tell them to make your card on the nicest paper, and let their designers do it for you. It'll cost you between $20 and $100 depending on if there's design fees or not. That's probably the fastest way to get nice cards made - just go to a good printshop and let them have at it.
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
One of the clearest ways to picture this was an example given in the book the slightest edge, whereby two young post-graduates at the age of 24 agree decide that they want to retire millionaires and will invest 2,000 a year into an 12% account every year until they can make it a reality.5 years later they meet each other and ask how its been going. One of them has followed the investing religiously, while the other hasn't. The one who hasn't asks the other how close he is to his investment goal and the the other friend says "I'm done". It turns out that with just 6 years of investing, the compounding interest will be sufficient enough to get him to 1 million at retirement. The other friend decides he has to get to it, but when he does the math, he realizes he has to invest 2,000 a year for the next 33 years!
This story underscores two things. One the cost of waiting, how waiting to long to do something keeps you from taking advantage on the magic of compounding interest. and second how important investing and not overspending is.
The biggest reason by far not to overspend though, is so you can increase your freedom. I'm not saying money always equals freedoms, but having a good amount of money in the bank significantly opens your options and lowers your anxiety levels. Living paycheck by paycheck, or not having a clear long term financial goal can lead to distress and insecurity.