Ramblings of an Extreme Man

Money, Life, Retirement – 2. What to do with Money

1 Comment

“A man is rich in proportion to the number of things he can afford to let alone.” Henry Thoreau


In the previous rambling I argued that the most important definition of money is special paper tokens that you exchange large portions of your life for via employment.

It got a little extreme, it was perhaps a little confronting relating every trivial transaction that you make with your own mortality, I even used hashtags.

But if you shouldn’t fritter away your precious non-renewable life force on expensive skinny soy cappuccinos and designer handbags, what should you spend these special paper tokens on?

To start with I’d like to talk a little about hedonic adaption.

From a genetics point of view, by the very fact that you are here reading this blog at the end of countless generations of sexual reproduction means that you, out of all the possible permutations of your ancestors are likely the best at adapting to your current environment. People are good at adapting to environments and as part of that we are good at adapting to things. You are an adaption machine.

Say for example you have an old 2000 model Toyota Corolla. Probably a pretty reliable car, it doesn’t cause you any discomfort by breaking down, meets all of your transport needs but doesn’t particularly make you feel good when you drive it. A 2000 Toyota Corolla doesn’t make anyone feel sexy or good about themselves. Say one day you decide to part with $25,000 of your hard earned paper life force tokens to buy a brand new Toyota Corolla. Oh what a feeling.  In the first week you’re offering to drive your friends anywhere they want to go, doing unnecessary errands and trips, because you enjoy the feeling of driving this new car. It makes you feel happy.

But the problem is that the happiness you gain from a new thing is temporary. In 2 months’ time all happiness resultant from the new car feeling is gone. Your brand new Toyota Corolla has become just a functional means of transport. Compared to your previous corolla there is no long term net change in how the car makes you feel when you drive it. You’ve become used to it. What has changed though is your bank balance. $25,000 of your paper life tokens gone. Perhaps you manage to save $12,500 per year. What you have done is exchanged two years of forced labour for a brand new car that is perfectly functional but does not increase your happiness one bit in the long term when compared to your last one.

Hedonic adaption is the ability of your brain to become used to anything that once bought you happiness.

Studies have been done on this topic by surveying recent lottery winners and recent paraplegics. What was found that the lottery winners were above their usual happiness level for a time, but over time they adapt and their happiness levels return to normal. Similarly the paraplegics were found to be unhappy after their accident, but then over time their happiness levels basically returned to normal.

What I propose is that rather than spending large amounts of your paper life force tokens on things that you will become used to and won’t increase your happiness any in the long term, that you’re probably better off if you invert and spend your paper life tokens taking things out of your life that make you temporarily unhappy.

For example, say you really dislike doing the dishes. Is the feeling of last nights mashed potato being squeezed between your fingers under the dirty dish water enough to make you spew a little in your mouth? Spend some of your paper life tokens on a dishwasher. Never have to touch underwater mystery food again.

Similarly, if you wake up every weekday morning, labouring through the same morning commute, the same office politics, deadlines and tasks like a real life perverted Groundhog day, only to reach the end of the day to then eat, sleep and prepare to do it all over again. If you think that your precious finite life would be better spent going surfing , bushwalking, or any other activity of your own choosing each morning, perhaps to increase your happiness you should remove this source of displeasure from your life.

I’m sure that a lot of people don’t directly relate full time employment as a source of displeasure. What I think is that people don’t understand the freedom that they have given up by this commitment. By committing to full time employment you’ve limited the time that you are free to be in control of your own life to only 2 days a week. 2 days a week tis but wafer thin monsieur.

Put in a stronger sense, I think anyone that defends their choice to commit to full time employment is suffering from Stockholm Syndrome. You are a captive. Any free will you have is perceived, a shallow attempt to rationalise the dire situation you’ve found yourself in as you think there is no way to escape. You should know that your captor only has their own self-interest at heart.

Only when you’re in the position where you don’t have to work indefinitely is the choice to commit to full time employment valid, up until that point it is not a choice, it is a decision made under compulsion.

So to take this back to the original question, what should you spend these paper life force tokens on? You exchanged large portions of your precious finite life being a captive in exchange for these tokens, hence in my view you should spend them on buying your freedom.

How do you do that?

  1. You work out how many of these paper life force tokens it takes to maintain your life
  2. You work out how many of these paper life force tokens it will take to maintain your life indefinitely
  3. You work out a way to accumulate that many paper life force tokens
  4. You work out how long that will take and track your progress at regular intervals.

To some the dot points above may seem unachievable, but I can assure you, by harnessing the super power of compound interest this is achievable by anyone. Compound interest is a super power.

Keep reading for ramblings, details and tools to assist with the above.

Link to the next post

One thought on “Money, Life, Retirement – 2. What to do with Money

  1. Pingback: Money, Life, Retirement – 3. How much do you need | Ramblings of an Extreme Man

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s