Is Your Spending Symmetric?
How Rationally Do We Use Our Money?
Happy Monday from Henderson, Nevada ☀️
I hope you had a great holiday. Here’s a short clip from my weekend.
This week, I wrote a short piece discussing Money Symmetry, an idea I had while recording a podcast a few days ago.
Enjoy 💥
A FIRE Idea
What Is FIRE and How Does It Work
FIRE stands for Financial Independence, Retire Early.
The movement aims to educate families about personal finance and inspire them to make better choices about their money. The goal is to earn, save, spend, and invest in a manner that shortens the time it takes to be financially stable enough to retire.
This driving goal demands conscientious decision-making about where each dollar goes.
Earlier this week, I spoke with Scott Rieckens, a thought-leader from the movement and the filmmaker behind the Playing With FIRE book and documentary.
During our podcast together, he explained many of the tools and frameworks he teaches people to successfully adhere to the movement without falling victim to common errors.
Among the list, one stuck out to me as especially useful and rational.
But First… A Quick Defense of FIRE
Some people dismiss FIRE as a self-denying movement about saving as much as possible and never having fun. I choose not to see it this way.
While there are FIRE “purists” who are adamant about used cars, home haircuts, biking 24/7, and only eating rice and beans, you don’t have to do any of that.
FIRE is a set of tools. Using these tools can help you shorten the time to retirement based on your preferences.
If you disagree with a prescription, you 👏 don’t 👏 have 👏 to 👏 follow 👏 it.
Choose your own adventure.
Now To The Idea 💡
🪞 Money Symmetry🪞
FIRE helps people decrease spending without decreasing happiness. To walk through this, Scott recommended writing two lists.
First, jot down the top 10-20 things in your life that bring you the most happiness, joy, and fulfillment. Order is mildly important.
Once you’ve finished that list, write down your largest regular financial expenditures. Again, pay some attention to the ordering.
From writing their lists, Scott’s family could clearly see how misaligned their spending and happiness were. One of their largest expenses was paying for proximity to the beach, but neither Scott nor his wife included any beach-related activities in their top ten.
FIRE advocates like Scott would argue that this is irrational.
Why are the things at the top of your expenses list at the bottom of your happiness list? (or not even on it at all)
The point of this exercise is to examine your discretionary spending. If you have an expensive health condition, the medication isn’t a source of “joy”, but you certainly don’t want to stop taking it.
For something like living near the water, however, Scott would suggest deeply questioning if it’s worth it. Again, if watersports are your source of life, he would not suggest moving.
The Opposite Also Applies
What are some things that you aren’t spending much on that really increase your happiness?
For me, this is higher-end coffee beans, beef liver, random $10-20 amazon purchases like sleep tape & toe spacers, and esoteric books.
FIRE members would suggest spending generously on these little things that bring a ton of pleasure.
The Point
Most self-help advice isn’t complicated. It’s asking simple questions and dedicating a bit of time to reflect on and implement your answers.
Consider how symmetric your money list and your happy list are.
Do what you can to make them match.
Learn More About FIRE
Scott has assembled really amazing resources here on his website. They have “start here” guides, calculators, widgets, recommended software, and much more for further reading. You can also expect our podcast to be released in the next few weeks.
Thank You For Reading!
Feedback, topic suggestions, and interesting banter are always welcome.
Enjoy the week,
Louis
The Hyperlinks
Podcast Updates 🎧
LK #74 with Rita Lewison Singer: Stories From A Motivational Speaker, Actress & Entrepreneur
LK #73 with Cole Schafer: Romance poetry and lucrative copywriting adventures
LK #72 with Dr. Richard Schatz: An Invention That Saved 100+ Million Lives
LK Content Coming Soon 📅
David Bailey and Brandon Green from Bitcoin Magazine and BTC 2021
Peter McCormack, Host of What Bitcoin Did & Nassim Taleb heckler
Scott Rieckens, Financial Independence, Retire Early filmmaker
Joel Runyon from Impossible HQ
Two Quick Clicks
(1)📚 One of My Favorite Books 📚: The Magic of Thinking Big by David Schwartz
I listened to this audiobook twice in a row back in March. Now, I’m rereading it on Kindle. It is old-school motivation, and I love it.
(2)🚢🏠 Creative Shipping Container Homes 🚢🏠 : Alternative Living Spaces
If you’ve never seen container homes/ gyms/ offices before, prepare for a mind-blower. This company makes beautiful living spaces out of repurposed shipping containers.
Photo of the week — I Love These Things
I saw Dave Chappelle perform over the weekend. Fortunately, so did everyone else in the crowd.
Why? He locked away our phones for the entire show!
This was my first time using up a YONDR pouch, a magnetically sealed phone sleeve. You are pretty much powerless until the end of the show when someone with the magic key opens it.
This way, nobody is filming the comedians, and nobody is lost in their own world of distraction. I hope these become more mainstream! Expect YONDR pouches at my next family game night 😛.