3 Things You Should Do Instead Of Buying Fancy Things With Your Money
Here’s a question for you: How do you look at money?
If you have a car, think about what maintains its longevity. You keep the tires filled, the fluids intact, and you utilize it in an appropriate, well-thought out way by following the signal lights, by staying in your lane, by using the turn signals. You do all these things so that your car can have a long-lasting contribution to your life.
Money should be treated the same way if you want it to make a long-lasting contribution to your happiness.
We seem to have a better grip on controlling the things money buys than money itself. (Share this on Twitter)
The concept we ought to have about money, in my view, isn’t about hoarding cash and becoming a penny-pinching frugal-ite. It’s about awareness and inquiry about whether your allocation of money into things like businesses, cars, houses, clothes and jewelry actually contributes to your overall well-being.
Unfortunately, for most of these things, learning by experience may be the best route. It’s still miles ahead of people who continue down the rabbit hole of splurging on things without such inquiry.
And it doesn’t end there.
How many times in life have you joyously downgraded?
As in, when have you joyously gone from a 4 bedroom house to a 3 bedroom one? Joyously gone from a BMW to a Toyota Corolla?
You see, our pleasures in things have the incredible ability to re-define what we will find pleasureable next.
In other words, our pleasure thresholds go up.
So the next thing has to be shinier, bigger, more powerful or tech-heavy. It’s a spiral into dependency which will demand that your money keeps up. This is how you become enslaved to money.
Here’s how to avoid this…
Spend most of your early professional years laser-focused on i) self-development ii) being ‘creatively-frugal’ about satisfying urges for things and iii) letting your money create more money.
Let’s discuss these deeper.
First, why am I asking you for this time?
Because our biggest culprit to bad decision-making isn’t lack of information; it’s our faltered sense of what we think is right for our future. (Share this on Twitter)
I’m asking you for this time because along the way, you will discover where your truest perspective on money lies, with observation, with learning, with experimentation. And then you can decide to splurge on things or you can be happy that you have a ton of it to do something else with it.
1. Invest in Your Self-Development
Most of my money has come from exercising my talents and skills.
I cannot tell you how easy it is today to skill up at absolutely anything. There are so many digital tools available for you to learn from the best of the best: YouTube, Coursera, LinkedIn Learning. There are books collecting dust at your local library. There are people all around you with successful stories whom you can learn from with a simple coffee over Zoom!
If you fall in love with constantly learning, you are guaranteed to thrive.
And if motivation is your problem, you can read my article on one way to do that here.
2. Be ‘Creatively-Frugal’ About Satisfying Urges For Things
Ownership is not necessary to have fun. Want to enjoy a luxury sports car? Rent one over a vacation. Want to live in fancy houses? Band together with some friends and rent one on Airbnb. Want to wear expensive clothes? Rent those too with a subscription program.
The outcome I expect here is that by renting things and experiencing them over short periods of time, you’ll satisfy your urges enough to realize that ownership is not what you truly want.
I am banking on our inherent inability to predict what pleasure a future outcome will give us to save you from wasting your hard-earned money.
3. Let Your Money Create More Money
I want you to save money but saving it as it is would be giving it away.
How? Inflation.
Cash loses value every day.
It is purposefully that way so that people keep the economy booming by buying things today that they anticipate will cost more tomorrow so that they can sell it at a higher price. This is healthy inflation. The bad shit crazy type is even worse for your hard-earned cash. Just look at Argentina or Venezuela.
So, don’t hoard cash.
Keep some aside for a rainy day (8 months of your living expenses worth) and then put it in a “moderate” risk index fund to gain at least 5–7% return on your investments per year at minimum. Globalize the spread. Keep adding money to it and never, ever take anything out, even when the markets crash.
The goal should be to invest in a future, long-term, where the global productivity is always going to grow, which it always has and always will. Just don’t put it all on Tesla or any other individual stock. The risks there are too high.
Money is a powerful tool, like a hammer; you can use it to hang beautiful photos on a wall, or you can use it to tear the wall down. (Share this on Twitter)
You know which one to pick if you want it to have a lasting contribution to your happiness.
Take care. See you next time.
Ankur
