Life Lessons

When less is more. My 2c on.... Money!

It's a sensitive topic to debate. You often hear from "wise" people that money doesn't lead to happiness. But often, we end up in situations where we have to pick between two choices - "less money & doing things you love" and "more money & doing things you don't quite love". And more often than not, we end up picking the latter. We then make good money but end up unhappy (doing things we don't quite love) and telling a few others how money did not lead to happiness. Ah, such a vicious comeback it is.

We are the choices we make. - Patrick Ness

We need money to be happy, don't we? How else will we get rid of the misery of not being able to buy that dream car, or having a luxury home, or just settling in and paying off student loans, or supporting our family with their dreams, etc?

Here's my 2c -

1: Separate money from passions: The sooner you realize that this is important, the better off you are. It almost seems impossible at first, but you've got to figure out a way to do it. The easiest way to do this is to get to passive income sources as soon as possible. It could be stock trading, rental income, or investing in anything that can generate another cashflow besides your salary. Do not overthink this - there are simple ways to achieve this and it is an extremely important step to allow you to take up jobs that you are passionate about. In fact, taking up a job you love but that pays less, gives you the energy and reason to work on passive income and will make you financially independent sooner. I know. I know. It's not easy as it sounds, but who said success comes easy!

Consider this -

Option 1: Income -> Expense (very less chance of achieving financial independence). Income increases, expenses increase, and savings are exhausted periodically.

Option 2: Income ->Investment ->Passive Income -> Expense (better chances of achieving financial independence). Income increases, more investments, more passive income, primary income and investments as a fallback for emergencies.

2: Are the "wise" people right?: Not quite. More money does lead to happiness. It's just the way you spend it that matters. I call it the utilization factor. We have to keep it as high as we can to avoid being unhappy.

Imagine this: You have a bungalow with two people in it, a gym at home that you don't exercise on, a swimming pool that you never use, a barbeque that is collecting dust, a bedroom that's now a storeroom, and a minivan that you only use once in a year. That is really a sad situation to be in.

Unfortunately, as we grow in our careers, there's little time to enjoy all the things that we want to; something that we don't quite think of when we are buying stuff out of social/peer pressure or even out of liking for them. Also, banks make things complicated by offering you more money than you were intending to spend.

The best way to keep the utilization factor high is by living a minimalistic lifestyle, and spending on things only when we are sure we can spend the time to enjoy them. This is quite different from a frugal lifestyle though. To understand the philosophy, think Steve Jobs and how he embraced a minimalism in his lifestyle, yet was building a yacht during his retirement.

Thanks for reading! Let me know what you think.