Updated December 2020
I’ve spend the better part of my days thinking about both the small and massive role that money and finances have in our lives, from the global economy, to how we organize society and how we navigate our everyday choices.
The following principles I’ve written goes beyond the standard practical information I tend to put together. These are things I find myself regularly thinking about often sharing. They are the things I’ve learned through my work helping people and from my annoying curiosity about where our lives intersect with the financial and economic world.
I hope you’ll gain insight into why I do the work that I do. I hope you’ll feel inspired to examine and construct your own set of principles.
There isn’t a wrong or right way to do anything. As the grotesque saying goes, “there is more than one way to skin a cat” (Sorry, cat lovers). We can each have a goal and both reach them through a different approach. What might work for one person might not work for another. Some people can build wealth slowly through diligent, hard work, methodically rising through the ranks, playing the game of office politics. Other people get there through taking big, flashy risks that result in huge rewards. You can pay off debt by attacking the highest interest rate or the lowest balance. It’s less about what’s right and wrong and more about understanding the reasons why you’d take one approach over the other and how the repercussions of your choices impact your life.
Control what you can and don’t waste energy on what you can’t. Luck and circumstances can have a big role in your financial life. Some people make their luck and some people can change certain circumstances. Not everything is malleable, but some things are. I try not to waste energy on things I can’t change because it feels like wasted energy. I only have so much energy in a day, a week, a month and a year, so I’m particular about how I spend it.
Play the game or don’t play the game, just realize it is a game. The financial world often gets compared to plants and trees because of the metaphors of planting seeds (saving) and growing and harvesting fruits (the results of investing). But it mostly exists in our collective imaginations and on servers in bits and bytes. The laws that are written are the rules. I want to understand the rules so I can effectively play the game. You only opt out of the game if you don’t participate in the economic world. If you think you aren’t playing the game, you might just being playing very terribly.
Protect yourself from yourself. I use systems and processes to build habits or bypass the need to build habits. I don’t rely on my (terrible) willpower because it’s a finite, exhaustible resource. I can’t count on my willpower, but I can count on my habits and systems.
Find ways to connect what doesn’t matter (budgeting) to what matters (the feeling of buying that thing you’re saving for). This has been most useful when I am still working on building a habit and I need find motivation to do things I don’t want to do. I connect the feelings I’d like to feel from the outcome of the thing I don’t want to do. It’s sort of reverse-engineering inspiration before something has become a full-blown habit. I think about the feeling I’ll have when I can afford the thing I’m saving for in order to convince myself to start saving for it.
You will always have problems. Life cannot be without them. When making decisions, I consider weighing the options by the set of problems each option will come with. Choosing the set of problems I'm least annoyed with having is great when the positive outcomes for some choices are the same.
Beware the hidden sacrifice in the promise of the reward. There’s no shortage of hand-written posters telling us what to do. We’re told to hustle. We’re told that we must find meaning in our work. We’re told to follow our passions. But all of the short hand omits the long run. One of the very first things I learned in one of my first economics classes, was the concept that “there is no free lunch.” In other words, everything comes at a cost. As best I can, with all my decisions, I try to fully understand what the cost is, financially and otherwise.
Find out the hard thing you need to do. I find the thing that’s making the biggest negative impact on my financial life - the fire that needs to be put out. At times it can be under earning, overspending or general ignorance. Once I identify the thing, I figure out if I can attack it or avoid it all together. I think it’s important to pinpoint the thing making the biggest negative impact so you can figure out how to stop it before it causes more damage.
I once thought I was going to go to law school. I was profoundly ignorant of the cost of borrowing and paying back money for this crazy idea. One day, after taking the LSAT, I finally ran the numbers and saw that I would likely have a student loan payment of $1,000+/month (doable, but not desirable). So, I avoided law school. I was bummed at the time and it was a really hard thing to face because I was really buying into my new future identity. But that’s why it’s the hard thing.
Identify what is essential in your life. For me it’s my family, shelter, friendships, love, self-expression and belonging. I like to zoom out and think about what is essential when I want the nonsense of modern life to quiet down. A shift in perspective can be like an ice bath or a hot soup. It can shake you out of a bad feeling or comfort you into a good one.
Advice is just information for your choose-your-own adventure life. There are things about ourselves that we try to express, but words can fail. Or we might harbor or deepest dreams inside us without any desire to share them. The person giving you advice can do their best to consider your goals, your life, your past, what you want your future to be and what we expect the future to be. Take advice other people’s advice, especially the advice you didn’t ask for, as nuggets to inform your decision-making.
The work I do here is not giving advice. I want to teach people to have a better framework for how they think about money. I spend a lot of time thinking and being critical of the financial and economic systems we live in. If you benefit from these systems and only care about your progress, maybe you don’t need to considering these things. I want to continue to learn how emotions, environment, neurology and psychology impact our financial lives. And I’m just here to share what I learn along the way.