Published on April 17, 2022
Money: On being affluent
It’s no surprising discovery to say that money is life's common denominator but with the backlash society has against the wealthy you might as well buy into the idea that money is the source of all evil or that money can’t buy happiness. If you haven’t yet done so, it’s time to put these old adages to rest and accept that money runs this circus we call life. We are better off learning how to make most out of our money.
Personal finance is a subject most of us are introduced to late in life. Blame our education system. We grow up learning all the maths and grammar you’ll probably never need but only learn a summarized summary of economy. This might have worked in the times of our parents or grand-parents when costs were as low as they will ever be and graduating college assured you a job for life. Times have changes, and life today is really more expensive than it was for the generations before us. And it’s not about inflation, things costs more than they used to. This calls for a different life approach: we humans are prone to living life on auto-pilot but in times when life is expensive and things changing so fast the auto-pilot mode is the worst enemy to your money and life in general.
I started my career in one of the best paying jobs of our times: software engineering. But for the last 4 years I’ve constantly struggled with money, having to live paycheck-to-paycheck for months. This is me thinking out loud and figuring out a better way to live with money.
Surprisingly, simple personal finance strategies that worked thousands of years ago still works today if we could ditch living our financial lives on auto-pilot and be more proactive. The guiding principle is that there is a level of discipline required to live a better life, it’s about getting back to the fundamentals. The ideas here are not a shortcut to a million bucks but they can make those dreams of yours possible.
Before we talk money, let’s talk about life because “what’s the about of having money?”
What to do with your life?
If you are a millennial or Gen Z like I am you’ve heard it, “we are the impatient generation”, we want it all and we want it now. I’m not starting a debate whether our impatience is good or bad but there is something to be said. Life is slow, growth is slow and most things in life take time for either a good or bad reason. One of those things that takes time is building wealth. Ever heard of the saying life starts at 40, one of the reason is because that’s when your are substantially wealthy.
I’ve seen fellow engineers take on 3 or 4 full time jobs and yes some times I’m attracted, earning 4 times my salary in a month is very compelling but is that a way to live? This led to many questions! Is life about crushing them goals and getting all the money you can or maybe life isn’t about arriving or accomplishing all your goals. Maybe life is about the journey or maybe about moderation.
So far the best answer I’ve found comes from Jack Ma:
“When you are 20 to 30 years old, you should follow a good boss [and] join a good company to learn how to do things properly. When you are 30 to 40 years old, if you want to do something yourself, just do it. You still can afford to lose, to fail, When you are 50 to 60 years old, spend time training and developing young people, the next generation, When you are over 60 years old, you better stay with your grandchildren.” __ Jack Ma,
Money wise translates to:
“When you are in your 20s establish habits and disciplines, draw up some goals and build the experience that will help you push your limited earning potential. In your 30s prioritize saving and investing, follow the disciplines you built in your 20s to keep you grounded and shoot for higher income: you have the experience to earn you a lot. In your 40s, keep your expenses checked. Above 50 you can afford to put your money to fruition.”
Let’s stop preaching and get practical:
One of the best personal finance books in existence, which also happens to be one of the simple books you could read, is called The Richest Man in Babylon. Summarized, it lays out simple financial cures for anyone no matter their life situation:
- Control your expenses
- Save
- Invest in sound undertakings
- Own appreciating assets
- Create passive income and/or improve your market value
Easy as 1-2-3, but we know the easiest things to do in life are the easiest things not to do. Be proactive especially when it comes to any thing that involves your finances. Set the goals, know where you want to end up in 5, 10 years. Not having this sort of goals is what creates the confusion and dissatisfaction in life. Make decisions which won’t lead you into debt traps for the rest of your life, keep your life style spending checked.
As humans tough, knowing doesn’t do much. We forget easily and our minds are easily distracted. That’s why through millions of years of evolution we’ve learned to rely on cultures and tools. We are helpless without our tools and it wouldn’t be a lie to say that you are as good as the tools you have.
That’s the missing link, you know the philosophy but you lack the tools to bolster your chances of living a wealth life. One way is to come up with your own tools, another is to remix whatever is out there to your benefit. This is a challenge i’m facing personally, there is no tools available to help me live better with the money I make and it’s a journey I’m embarking on to create tools to help everyone live better with money. Especially those of us who live in places where those tools are non-existant.