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On Time, Money and Health

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Re: On Time, Money and Health

#21

Post by mythz »

Maybe it's different for others but my best years definitely started from high-school, Uni and backpacking (teens-early 20s) which we had to do on a shoe-string budget which I attribute to hanging out with friends and meeting new people which is much easier to do when you're young.

Strangely after Uni and backpacking my earning potential increased dramatically but my happiness definitely plateaued, so looking back I wouldn't tie happiness to money since I was happiest when getting by without much of it.

Now in my early 40s I rarely worry about money and my main sources of happiness is definitely my kids. I'm at a loss at what I could do to increase my happiness other than focusing on keeping a happy home and spending time watching my kids grow up.

One life observation I'd share was when I was young and earned little I used to think earning more would increase happiness and therefore couldn't wait to finish Uni and start working professionally, but money didn't end up being the main source of happiness, being young and being able to spend lots of time hanging out with friends was when I was happiest. So my advice to my young self would be: cherish your youth and focus on building and maintaining strong relationships.

Re: On Time, Money and Health

#22

Post by TeMPOraL »

toshk wrote: post #20

I agree mostly with the article and that one should focus on freedom in the moment, while at the same time creating stability for the future. But the underlying assumption that having more experiences (outside of work) leads to more happiness I believe to be somewhat false. It of course depends on the person, type of experience and definition of hapiness.

> the underlying assumption that having more experiences (outside of work) leads to more happiness I believe to be somewhat false.

I have this feeling too.

Or, should I say, maybe the concept is right in theory - the brain is better at remembering novelty, and events associated with strong emotions. But "buy experiences, not things" is something that has a meme status today, and I cynically suspect it's not accidental - that there is an ulterior motive to it.

"Buying things" is predominantly realized through buying products. "Buying experiences" is predominantly realized through buying services. You can derive value from a product you own indefinitely (at some point it'll wear down). But a service is a one-time deal, you have to spend again to get more. The mindset of "buying experiences" thus encourages a service economy and creates a recurring revenue stream for service providers.

Re: On Time, Money and Health

#23

Post by john_minsk »

cryptica wrote: post #5

My life is already wasted. I've seen too much and I know too much to ever be completely happy. The best I can do is try to leave behind some kind of positive legacy. Maybe with 20 more years I will achieve something.

I kind of agree. When I was young and could not afford anything - I was dreaming about all luxury things I saw in the movies and travelling the globe.

Now I tried it and don't see the reason to. I mean there is no rush. Regular house/flat will give you 80% of value of multimillion dollar mansion will give. Cars are all +- the same given that you can drive only so fast. Travel when you need to work is too hectic but if you are retired it can be very inexpensive. In order to push past this middle level it is not clear what to do i.e. difference between 1M and 10M is not that big in terms of your lifestyle but ability to accumulate so much is completely different beast.

The true happiness comes from other things: friends, family, free time, the business you love, curiosity etc.

UPD: This is all of course if you were able to get into good career/small business path. If you are stuck with some low-pay job you still have some work to do to jump to another industry.

Re: On Time, Money and Health

#24

Post by baobabKoodaa »

TeMPOraL wrote: post #16

I've been recently thinking a lot along the lines of this article, which is why I was surprised to see this being given, as positive advice: > Make that extra money work for you. Invest into diversified index funds so you can use the power of compound interest, and use that “free money” in the later stage of your life. The earlier you invest, the better it is. It surprised me because what prompted me to think about t…

"Compound interest" is a generic term; it does not refer specifically to low-risk investments. You can invest in a stock index fund and still refer to "compound interest" in that context.

Re: On Time, Money and Health

#26

Post by baobabKoodaa »

pjerem wrote: post #11

Nothing revolutionary in this article but it hit the nail pretty well. As a 30 yo person with health issues (nothing really bad, but not cool either), I totally acknowledge with the idea that staying healthy is the best gift you could do to your kids and I’ll work hard to give that to my son. As on money, I have the feeling that the thing you must solve is finding not only your house, but the house you’ll love, so yo…

> it'll only increase your house value

This is very misleading. Yes, if you spend $1 renovating your house, perhaps your house value has increased by $0.50, but you've also lost $1, so financially speaking, you've made a loss. So in the context of investing, it's misleading to state that renovations increase your house value.

It may be theoretically possible to make a profit with renovations, in some very specific conditions and with extraordinary skill, but the vast majority of renovations are not profitable.

Re: On Time, Money and Health

#27

Post by testermelon »

cryptica wrote: post #9
cryptica wrote: post #5

My life is already wasted. I've seen too much and I know too much to ever be completely happy. The best I can do is try to leave behind some kind of positive legacy. Maybe with 20 more years I will achieve something.

It's unbelievable that someone would downvote this. What kinds of freaks are hanging out here? That's not very nice.

Yes, this is where I feel a downvote is not appropriate.

I can see why one has the urge to downvote this though. It has to do with “ruining the positive atmosphere”. Instead of offering alternative view, heck, even just a simple encouragement, some people just default to knee jerk reaction of disapproval.

Re: On Time, Money and Health

#28

Post by namdnay »

TeMPOraL wrote: post #16

I've been recently thinking a lot along the lines of this article, which is why I was surprised to see this being given, as positive advice: > Make that extra money work for you. Invest into diversified index funds so you can use the power of compound interest, and use that “free money” in the later stage of your life. The earlier you invest, the better it is. It surprised me because what prompted me to think about t…

The average return of the MSCI World index since creation is more than 10% I believe… And for a long term investment the risk is minimal (there has never been a negative period of more than 8 years)

Re: On Time, Money and Health

#29

Post by bluedevil2k »

baobabKoodaa wrote: post #26
pjerem wrote: post #11

Nothing revolutionary in this article but it hit the nail pretty well. As a 30 yo person with health issues (nothing really bad, but not cool either), I totally acknowledge with the idea that staying healthy is the best gift you could do to your kids and I’ll work hard to give that to my son. As on money, I have the feeling that the thing you must solve is finding not only your house, but the house you’ll love, so yo…

> it'll only increase your house value This is very misleading. Yes, if you spend $1 renovating your house, perhaps your house value has increased by $0.50, but you've also lost $1, so financially speaking, you've made a loss. So in the context of investing, it's misleading to state that renovations increase your house value. It may be theoretically possible to make a profit with renovations, in some very specific co…

I blame the HGTV shows for this misconception that a house renovation has a positive investment return. They show things like “a $100,000 kitchen remodel leads to an increase in house value of $80,000, an 80% return!”, when of course the real return is -20%. That’s not even counting time-value, which may lower it to -40% or -50% depending how long you hold the house. When you factor in opportunity cost...even worse. The best home “renovation”, when it comes to investment, is to do nothing.

Re: On Time, Money and Health

#30

Post by WJW »

alexpetralia wrote: post #4

One of my friends opined that if most people (limited to people on this forum, let's say) rationally priced in their future earnings, they'd be in debt more often, for longer and earlier in their life. The naive algorithm of "save as much as possible" might land high-earners with a huge nest egg they end up carrying to their grave. I think I agree with that.

> a huge nest egg they end up carrying to their grave

Oh no! The tragedy of not spending everything you own!

Sarcasm aside though, almost everyone will mispredict how much they are likely to earn in their lifetime and the opinion of your friend falters a bit in the presence of significant randomness. Estimating your future earnings too low is not really a problem, estimating too high can lead to serious problems when faced with unexpected expenses. Since there is only limited downside to being conservative with debt and serious downsides to being too extravagant, I don't think that potential high-earners are being all that irrational by avoiding debt.

Of course, if you are psychologically a "maximizer" then you might want to skate closer to that edge and risk falling off in exchange for potentially squeezing every last dollar out of your life. If your psychological profile is closer to being a "satisficer" then avoiding risk to maintain your current lifestyle is probably better for you. In personal finance, no solution is correct for everyone.

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