Be a Man: Money and Freedom
To introverts, like the ones who read this blog, money isn't merely useful- money is freedom. Having it means that you live on your own terms, according to your rules. Not having it means that you're always at someone else's mercy, and that, for a deep introvert, is simply unacceptable.
Having money in the bank means that if you really want to, you can tell your boss to perform an anatomically impossible act and take off on a trip around the world. You can enrich your mind at will. If you want to buy your woman something nice, you can do so because it makes you feel good, not because it makes her feel good or because society "expects" it of you. It means you don't have to deal with the stupid struggles and difficulties of everyday life beyond a certain point, which means that a major load is taken off your back.
By "hierarchy", I mean, quite simply, the priorities that matter most to you. This will by definition require that you make certain hard choices. Which would you prefer- living on your own and saving 10% of your income, or living with a flatmate and saving 30%? Eating Paleo every day and spending a lot of money on food, or eating conventionally and spending much less? Going to an expensive full-service bells-and-whistles gym like Equinox, which is always packed full of cardio bunnies and fruit smoothies, or going to a bare-bones powerlifter's gym with nothing more than a bunch of squat racks, a lot of free weights, and beefy guys who hate poseurs? Every one of these choices will be informed by your income, your preferences, and your beliefs- all of which you have some control over- as well as exogeneous variables over which you will have no control. What works for me won't work for you, but what is universal is the need to balance out your finances with your comfort level. It makes no sense whatsoever to be saving 80% of your income while being completely miserable because you deny yourself some of the simple pleasures of life.
I will readily admit that this is not easy advice to follow- especially if you have student loans to pay off. I did not, because like most Asian families my parents paid for my education. It is among the many precious gifts that they gave me, and I am deeply grateful to them for it. But there's no question that I had a significant leg up over many of my peers because I had zero debt upon graduation. That said, there have been many temptations thrown my way to take on debt, to finance a fancy lifestyle through credit cards and borrowing. I've turned down every single one, because as tempting as it might be to drive a flashy new car or eat at the nicest restaurants, I refuse to let anyone or anything else own me.
If you have debt right now, start paying it off. Right away. I don't care what kind of debt it is, it needs to go. As long as you are in debt, someone else owns you. The moment you are debt-free, no one has the slightest say in what you can or cannot do with your time, your money, and your life. Being debt-free is freedom. It is power. And it is the basis upon which you can build a financially secure future.
Let me anticipate one potential objection here. Going into debt does make sense in a country that follows an inflationary fiscal and/or monetary policy. This describes literally the entire developed world- every single such nation is either printing money, taxing-and-spending beyond its means, or both. When a nation appears to be sovereign debt default or hyperinflation, it makes sense to load up on debt because that debt will never be paid back in full. So says the theory, and insofar as it assumes that wages keep up with prices, it is correct.
The problem with this idea is that in the current environment of rising inflation and stagnant wages (I myself have not seen a wage increase in real terms in four years), you would be a fool to take on large amounts of debt if your income is not growing to match. On top of this, you have no way of knowing when the inevitable massive default comes- and come it will. Many a clever man has bankrupted himself attempting to time such a collapse. Simply understand that to be debt-free is to be in sovereign control of oneself and one's future.
Get the Basics Down
If you haven't disposed of all of your debt, stop reading right now, get off your computer, and start figuring out how to get rid of it. Your guiding principle must always be that your freedom comes first, and you deserve nothing until and unless you've earned that freedom. This means eliminating debt from your life, and if that means you have to make do and mend, then so be it. Nothing I'm going to write from now onward will be in any way relevant until and unless you get rid of the chains that bind you.
If, on the other hand, you are debt-free or very close to it, then the next thing you need to do is figure out how to live within your means, now and forever. That means that you need to do the following:
- Get a handle on how much you're spending, by category. Budgeting software is available online for free and can help with this, but a spreadsheet will work just fine.
- Set aside some income every month, either before or after tax (preferably before) to invest with. Investing specifics will be covered in another future post.
- Ensure that you've got a "rainy day" fund of some sort, which should consist of enough money stashed away in a bank account somewhere to allow you to live for a minimum of three months should you lose your job.
- Adopt a thrifty mindset wherever possible. Always ask yourself whether you really need to buy whatever flashy new toy is out there right now. This is, I admit, easier for some than others. In my case, I'm a really lazy bastard about a lot of things, especially shopping, so I will always take any excuse I can get away with to avoid spending money.