I'd save most of my income even if my ROI was -10%, because money is more useful in large quantities, especially when you break certain thresholds like:
*Can take 2-3 years off work when it's a good time to do so
*Can mix cash and and labor when joining a company to get a big equity stake
*Can buy tools and gifts without even looking at the cost if there's a solid benefit"
Cash is more useful/leverageable in large numbers than small for most middle class-ish people. Any gains you make are gravy, saving would be smart even if it cost you money to save.
I took a one night, two day trip to one to the provinces this past weekend. It was all very pleasant, I had a nice time, I got to stop by some local businesses and see how they were making goods to wholesale, and it was nice to be out in the clean and fresh air.
But maybe the most enjoyable part of thing was traveling with just a briefcase.
I'd only done that once before, a few years ago. I forgot about how nice and convenient it is. I wore the same pair of jeans, packed my computer and a couple basics, and bought a new shirt after I arrived. Man, it's nice getting through the airport without any luggage, and the additional mobility from not having any gear to worry about is nice.
Unless I'm under time pressure when I arrive or I already have a place I like to stay in a city that I've been before, I tend to not book anywhere to stay - I just arrive and walk around. Frequently this surprises/amazes people, but I think it works really well.
I walked into a business hotel at around 8PM in the evening after it started getting dark. Their rates were 170 RMB for their cheapest room to 800 RMB for the most expensive. I said, "I want one night. What's the absolutely best price you can do?" The girl at the desk offered me 88 RMB, which I took.
On Hacker News, I started to write a reply to the 11 millionth stupid article about how there's no jobs because the older generation won't retire. I started to write about how there's no finite supply of jobs, it's all about being able to create value that people want in excess of cost, and as long as any human need or desire is unmet, then there's a potentially infinite amount of work and jobs available.
Then I gave up and wrote this instead -
At the end of humanity, when the Sun finally burns out, and Earth drifts into a slow freeze in the final sunset - mankind will still not have grasped economics.
Which is probably true. (And can I attribute that to Tara Ploughman?)
Oh, here's something that I could use some advice on: after I get paid, I'll probably have around 3K USD in a bank account doing pretty much nothing. Should I invest it in a Vanguard index fund or something similar for now? Also, I'm probably going to need to buy a car eventually (my guess is in 2-3 years), which can create a lot of nasty compounded interest. Would I want to use any money that I have saved up to pay a big expense like that off immediately, or would I want to keep some invested?
If you've only got $3k you want to keep most of that liquid as an emergency fund. You probably don't want to buy stocks unless you can go long on the stocks and ignore market movements, and you want to study investing before investing ESPECIALLY investor psychology so you don't panic and act rashly if (when) there's a crash. You probably want to read "The Intelligent Investor" by Ben Graham before buying any equities, which Warren Buffet says is the best book on finance ever written. I agree, btw - I've never found better. Excellent book.
If you did want to deploy some of your cash, here's a couple things:
*It'll cost you around $20 to $100 to develop a credit score, assuming you're American and don't have one. Go to the bank, throw $100 in a CD, and get a secured loan against it that reports on your credit. That'll give you a revolving line of credit on your credit history, which helps. Get a credit card a few months after that, and ALWAYS pay it off in full each month. Good credit will make/save you thousands later, so do it now.
*Buy small gifts for people you admire as a show of respect. Do this for particularly good professors, bosses, teachers, friends of family, acquaintances, etc. Go $20 to $100 per gift to start, $100 is even too high unless someone has been really great to you. Buying 50 gifts at $20 each for people who have treated you REALLY well probably pays for itself. Write a note of gratitude when you do it, just buy chocolate or protein bars or a great DVD or something small. Don't do it all at once, spread it out, but I've never regretted spending money to say thanks for someone who helped me.
Got a great email from a reader about the value of systems for consistency and enabling you to do more. My reply -
Awesome email B, 100% agree.
I've been thinking about this a lot lately. I think you could define three stages towards becoming very very successful -
1. Basic learning/understanding: Figuring out what's worth training in/learning, what's legit, what isn't, starting to read the right books, figure out what to work, confront unpleasant reality when necessary, etc.
2. Start spending your time on what matters: Fitness, building, sales, connecting with people, interpersonal skills, etc, etc.
From time to time, everyone gets so ridiculously busy than they need to make cuts on some of their activities. If these cuts aren't consciously chosen, they'll happen anyways - we've only got 24 hours a day.
Interestingly, I hit a massively busy patch last week. I came onboard as a partner at a new company that's growing fast, but we haven't hired the staff to take over a lot of the mid-level tasks that need done. So we were jamming on everything for a week, plus I have a lot of other things going on.
What shocks me is how poorly the cuts I made at first were. The things that weren't getting done were some of the most valuable. Here's three that I wasn't doing, that I've now reversed even though this week is still busy -
1. Planning/organizing: There's been a bit of an anti-planning backlash the last few years in response to stupid bureaucracy in big companies. But the more experience I get and the more I interact with people performing on a really high level, the more planning and organizing I see.
Think about it - many activities and tasks only get 5-10 minutes of planning, but then take 3-10 hours to do. If you double your planning and make a task only 10% more efficient, you've got a net gain. Yeah, it can feel like "shit, I've got to get to work" when you're super busy, but being frantic leads to waste. Don't stop planning if you have too much going on. Arguably, that's when you should plan more carefully at the start of each day and week.
If you're a reader and audiobook person at all, then this might be the most amazing sale you've ever seen. Audible just announced 200+ titles for $4.95 each. That's nuts. There's some good ones in there, too.
Here's what I bought -
Catch Me If You Can $4.95 War Is a Force that Gives Us Meaning $4.95 Hughes: The Definitive Biography of the First American Billionaire $4.95 Onward: How Starbucks Fought for Its Life Without Losing Its Soul $4.95 Factory Girls: From Village to City in a Changing China $4.95 Waterloo $4.95 The Iliad & The Odyssey $4.95 Havana Nocturne: How the Mob Owned Cuba...and Then Lost It to the Revolution $4.95 The Master Switch: The Rise and Fall of Information Empires $4.95 Hunting Eichmann: Chasing Down the World's Most Notorious Nazi $4.95 Adams vs. Jefferson: The Tumultuous Election of 1800 $4.95 Talent Is Overrated: What Really Separates World-Class Performers from Everybody Else $4.95 How An Economy Grows And Why It Crashes $4.95 Influencer: The Power to Change Anything $4.95 Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets $4.95 The Lessons of History $4.95 Reminiscences of a Stock Operator $4.95 The Law of Success: From the Master Mind to the Golden Rule (in Sixteen Lessons) $4.95 Objectivism: The Philosophy of Ayn Rand $4.95 Empire of the Summer Moon $4.95 Crime and Punishment $4.95 Gilgamesh: A New English Version $4.95 Man's Search for Meaning $4.95 The Dream of Reason: A History of Philosophy from the Greeks to the Renaissance $4.95 The Prince $4.95 China Road: A Journey into the Future of a Rising Power $4.95 Boardwalk Empire: The Birth, High Times, and Corruption of Atlantic City $4.95 The Rise and Fall of Alexandria: Birthplace of the Modern Mind $4.95 The Ultimate Sales Machine $4.95 The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything $4.95 The Road to Serfdom $4.95 Spycraft: The Secret History of the CIA's Spytechs from Communism to Al-Qaeda $4.95 You Paid: $158.40
I actually own several of those already on Kindle or paper, but I got audio copies of the ones I like since it's so cheap and such a good deal.
If you're ever thinking of doing the audio thing, this is the time to get started.
A reader astutely noted that I drink a lot of coffee and asked about it. He said that green tea is probably healthier if I believe in caffeine, and caffeine is a mixed bag anyways isn't it?
Fact is, I have very few vices or addictions, but caffeine is one of them.
I think there's some metabolic benefits and if used correctly, you can better performance out of it. But I don't necessarily recommend it. Indeed, green tea is probably healthier, but I already don't eat carbs, don't eat mammals, don't drink/smoke/do drugs/etc, and otherwise live a pretty intense life. Coffee is a vice that I might quit eventually, but for now it's one of the chief vices I've got. I do enjoy a good tea as well, but coffee moreso.
In any event, I'll seriously crunch the benefits/drawbacks at some point and likely quit coffee. But it's key to not do too much at once and I've already got a lot of health and other goals/projects in process.
Earlier today, I was trying to write some automation processes for someone I'm consulting for. I was stuck while trying to define what the goals are behind any particular action and the evaluation criteria for which process to choose - and I was just useless and dragging.
Yesterday I asked you to think in, "A Brain Teaser With a Right Answer" -
What’s the difference between a person who is genuinely very useful and a person who just does useful things for people all the time because he wants to appear to be very useful?
I got a bunch of good comments and perspectives. A couple people nailed the answer I'd give dead-on, or wrote similar -
"There isn't one."
It's always interesting for me to see how people weight intentions and results.
All over the place, there's a bunch of little good deals.
Mostly I ignored these for years - and I think it's smart to not go chasing little things at the expense of bigger things. If you've got some creative or business skills, there's almost certainly some better use of your time than cutting coupons.
Starting about a year ago, though, I became a much more serious student of marketing. I'd paid plenty of attention to marketing in the past, but 'round about a year ago, I started systematically paying attention to it.
Part of that was just interacting more with the world - including actually checking out the numbers on all sorts of offers, things I'd have normally ignored.
Some of them are pretty bad. A loyalty card where you buy-10-get-1-free isn't a very good deal. It's basically just a 10% discount, but worse because you might not get the discount, could forget or lose the card, means you've got to carry more junk in your wallet or bag, and so on. It can be an okay thing, maybe, if it doesn't change or inconvenience your spending habits - but that's why they create the things, so you do go to the inconvenience of going to their place more often and spending more there.