There’s an old saying that nothing’s worse than getting what you want but not what you need. That sums up so many people’s relationship with money and success. If you’re lucky enough to get what you want (money), you might still realize it’s not what you need (family, friends, health, being part of something bigger than yourself).
“What do you consider to be more or less basic factors making for happiness in the human mind?” Jung listed them off:
- Good physical and mental health.
- Good personal and intimate relationships, such as those of marriage, the family, and friendships.
- The faculty for perceiving beauty in art and nature.
- Reasonable standards of living and satisfactory work.
- A philosophic or religious point of view capable of coping successfully with the vicissitudes of life.
A big, nice house might make you happier, but mostly because it makes it easier to have friends and family over, and the friends and family are actually what are making you happy.
Enduring happiness is found in contentment, so those happiest with money tend to be those who have found a way to stop thinking about it. You can value it, appreciate it, even marvel at it. But if money never leaves your mind, it’s likely you’ve found yourself with an obsession, where it controls you. The best use of money is as a tool to leverage who you are, but never to define who you are.
Dawson wrote that the ideal life was a simple life. A simple life might still be extravagant, with fancy homes and luxuries and toys galore. But it’s simple in the sense that money serves you, not the other way around. The kind of lifestyle you choose to live almost doesn’t matter-what matters is that you actually choose it, rather than being addicted to the mere appeal of it.
But there’s a saying inside the foster care system: All behavior makes sense with enough information.
Once you understand what some of these kids have dealt with at home the uncertainty, the lack of security, love, and attention-their behavior begins to make sense. They’re in constant survival mode and never learned some of the basic social skills other kids take for granted.
The more you were snubbed while poor, the more you enjoy displaying your wealth.
A lawyer who works one hundred hours a week and hates their job may have an urge to spend frivolously in an attempt to compensate for the misery of how their paycheck was earned. Never have I seen money burn a hole in someone’s pocket faster than an investment banker receiving their annual bonus. After twelve months of Excel modeling until 3 a.m., you have an urge to prove to yourself that it was worth it, offsetting what you sacrificed.
A well-heeled student at an elite university can experiment with cocaine and will probably be just fine. A kid from a dysfunctional home with absentee parents is more likely to ride that first hit of meth to self-destruction. This may explain why a 2019 survey conducted by the Cato Institute found that more than 60 percent of Americans with at least a bachelor’s degree were in favor of legalizing drugs, while less than half of Americans without a college degree thought it was a good idea. Drugs may be a recreational pastime for the rich, but for the poor they are often a gateway to further pain.
Personal finance is more personal than it is finance.
You think you want nice stuff, but what you really want is respect, admiration, and attention.
Write down what you want your obituary to say, then figure out how to live up to it. It’s the cleanest, simplest way to plot out what you want in life and what truly matters.
The reason few material things would make their way into your ideal obituary is because you inherently know those things don’t actually matter.
In his book Status Anxiety, Alain de Botton writes that “the predominant impulse behind our desire to rise in the social hierarchy may be rooted not so much in the material goods we can accrue or the power we can wield as in the amount of love we stand to receive as a consequence of high status.”
We view nice stuff as the ticket to what we actually desire: attention.
To what purpose is all the toil and bustle of this world? What is the end of avarice and ambition, of the pursuit of wealth, of power and pre-eminence? Is it to supply the necessities of nature?
What drives them, Smith wrote, was that “to be observed, to be attended to, to be taken notice of with sympathy, complacency, and approbation, are all the advantages which we can propose to derive from it. It is the vanity, not the ease, or the pleasure, which interests us.”
It’s an astonishing statement: We value the attention money brings us more than we value the comfort and convenience of stuff that money can buy.
Maybe there’s no problem, but let me make a more nuanced point: There are cases when people’s desire to show off fancy stuff is because it’s their last remaining or even only way to gain respect and admiration. If you struggle to gain respect and admiration through your intelligence, humor, empathy, or capacity for love, you might default to the only remaining— and least effective lever: your stuff. Look at my car, beep beep, vroom vroom.
How durable is it? If I’m impressed with your car today, I might give you a little attention. But tomorrow the shock wears off a little. A month from now I yawn when I see your car. A year from now I couldn’t care less.
So spending money is probably the fastest way to get attention, but it’s not durable attention, and it’s probably the least effective toward the people whose respect and admiration you actually desire. It’s like junk food: very tempting, immediately satisfying, but long-term damaging.
Pride can be felt two ways: intrinsically, when you’re authentically proud of yourself; and extrinsically, when another’s opinions tell you how you should feel, what psychologists call hubristic pride.
The desire to show off can be so natural. I’ve noticed that the people who most aspire to own fancy sports cars tend to be young people, especially young men. Perhaps when you’re young without much life experience, your ability to gain respect through your wisdom, intelligence, and love is lower than it will be later in life, so you naturally gravitate to your last remaining option: material possessions.
Ben Franklin used to say that one of the tricks in life is realizing that people will admire you more if they aren’t jealous of you. It can be hard to tell when the transition between admiration and jealousy takes place, and it’s common for a flashy person to think they are being admired when they are actually envied.
This is especially true when what made you rich was some form of advertising your success in a way that made others want to help and support you. When admiration turns to envy, that support dwindles, and people’s tolerance for your errors shrinks.
Keep that in mind if you race up the social ladder, seeking attention along the way. Are you, in the process, making others envious of you? And is that a liability you are overlooking in your blind quest for more?
The appetite for applause counts amongst the lowest of human character traits.
Resume virtues are things like salary, job title, net worth, and how fancy your possessions are.
Eulogy virtues can be boiled down to how much people actually respect and admire you.
When you get to my age, you’ll really measure your success in life by how many of the people you want to have love you actually do love you.
That’s the ultimate test of how you have lived your life. The trouble with love is that you can’t buy it. You can buy sex. You can buy testimonial dinners. You can buy pamphlets that say how wonderful you are. But the only way to get love is to be lovable. It’s very irritating if you have a lot of money. You’d like to think you could write a check: I’ll buy a million dollars’ worth of love. But it doesn’t work that way.
True happiness is when you stop asking what else you need to be happy. When you think of it like that, you become eager to spend less time asking what’s missing and more time enjoying what you already have-regardless of how much or how little that might be. You realize that the key to happiness is being content with what you have, and its antidote is focusing on what you don’t.
The key is realizing that happiness is the state when nothing is missing, regardless of the lifestyle you’re living.
The more you say to yourself, “I would be happier if I had this new car;” the more you’re just focusing on the fact that you’re not happy right now. Desire is a hidden form of debt that must be repaid before you get to feel any happiness.
By and large, your brain doesn’t want nice cars or big homes. It wants dopamine.
Dopamine is the chemical of desire that always asks for more-more stuff, more stimulation, and more surprises.
In pursuit of these things, it is undeterred by emotion, fear, or morality.
From dopamine’s point of view, it’s not the having that matters; it’s getting something anything-that’s new.
Your brain doesn’t want stuff. It doesn’t even want new stuff. It wants to engage in the process and anticipation of getting new stuff.
And it helps answer the question of “What do you want out of money?” Do you want a new car? A new house? Better clothes? For most people, no, you don’t actually want any of those things. At least not directly. You want everything you can’t have.
Once you get them—if you do the goalpost moves, the dopamine takes over, and you immediately begin to ask: What’s next?
If you heard the funniest joke you’ve ever heard, you might laugh for sixty seconds. If I told you that joke again, you might giggle a little. If I told you over and over again, you’d quickly get tired of it and ask, “Do you have any new jokes?”
Happiness is so similar. It’s a wonderful feeling, but it’s always fleeting. To paraphrase Don Draper: “Happiness is that feeling you get right before you need more happiness.”
The problem with chasing happiness is that since it feels great but it’s short-lived, you can quickly enter something that looks like an addiction cycle.
When you’re content, you’re no longer chasing-which is a prerequisite to being in the moment. You only get to live in the moment-enjoying what you have right now rather than dwelling on the past or dreaming about the future when you have a complete absence of expectations that things would have or could have been better than they are now. Then you get to enjoy what you have, what you’re doing, what you’ve created, and who you’re with.
You recognize that the dopamine game can never be won—there’s always a next level you’re striving for—and so the only way to win is to stop playing. To be content.
And let me tell you: There are few greater monetary joys than realizing that you have everything you need, right now, to be as satisfied even as happy—as you can be.
The best measure of wealth is what you have minus what you want.
So much of everyone’s life is invisible. Especially the difficult, depressing, and miserable parts that people try to hide. An interesting thing about money-acquiring it, having it, spending it—is that when you imagine having more of it, you focus almost exclusively on the parts of your life that might become better.
What’s easy to ignore are all the hidden parts that probably won’t.
Will Smith wrote in his biography that when he was poor and depressed, he could dream about a future when he had more money, and that money making his problems go away. Once he was rich, that optimism was gone. He had all the money he could ever need and he was still depressed, his life was still filled with problems.
It’s hard to get really depressed until your dreams come true. Once your dreams come true and you realize you feel the same way you did before, then you get a feeling of hopelessness.
Of course, you can be poor and miserable or rich and happy. But only those who have gained significant wealth are aware of how tenuous that relationship can be. Gaining money probably didn’t fix your marriage, it didn’t make you more attractive, it didn’t make your friends like you more, it didn’t make you more fulfilled —at least as much as you assumed. So what used to be comforting optimism about what money could do for you is replaced by the stark reality of what it can’t. Sometimes the dream is what feels good, and once you’ve hit it the dream is gone and you actually become depressed.
Everyone is jealous of what you’ve got, no one is jealous of how you got it.
So much of a good life is about what didn’t happen.
It’s the fights you didn’t have, the illnesses you avoided, and the unhealthy desires you didn’t feed. It’s the unaffordable lifestyle you didn’t choose to live, the mistakes you didn’t make, and the regrets you don’t have.
I resolved a long time ago to not be one of those entrepreneurs on their 7th startup and their 7th wife. In fact, the thing I’m most proud of in my life is not the companies I started, it’s the fact that I was able to start them while staying married to the same woman; having my kids grow up knowing me and (best as I can tell) liking me, and being able to spend time pursuing the other passions in my life.
The most valuable financial asset is not needing to impress anyone.
The ability to not need to prove yourself to strangers is priceless.
What’s the point? So much of the reason you do the right thing is because it makes occasionally doing the wrong thing (responsibly) feel so much better.
Christmas morning, the Fourth of July, birthdays, and the last day of school feel great because they happen just once a year. The same joy can be had when the luxury items in your life become occasional treats rather than constant needs.
Rather than using money to build a life, their life was built around money; rather than an asset, their inheritance functioned as an insurmountable lifestyle debt, passed to the next generation until there was mercifully nothing left.
But he said nothing about the memories it would enhance or the pleasure it would bring-just “Because I can.” That, to me, smells like someone whose money has complete control over their personality. (Back to the tool: If someone asked why you’re using a screwdriver, you would not say, “Because I can.” You would say, “Because it helps me hang pictures on the wall and put furniture together.”)
Why is it that a man, just as soon as he gets enough money, builds a house much bigger than he needs?
The value of anything is its ability to help you live the life you want. Nothing more.
Thinking status is worthless isn’t the point. That can actually be disastrous—if you don’t care what anyone thinks of you, there’s a decent chance that no one thinks about you. You’ll find yourself cut off from the social world that can be the most important element of happiness in your life.
As a writer, I’ve always believed in what I call “selfish writing.” I write for an audience of one-me. I write stories I find interesting about topics I find useful, without wondering it readers feel the same. Not only is it more enjoyable, but I think it produces better work: The common writing phrase “know your audience” can quickly turn into “shamelessly pander to your audience” in a way that ruins a lot of writing
Give it a shot, and you’ll probably find that you’re extremely talented at being yourself, but a poor actor of what you assume other people want you to be.
One of the biggest conflicts when managing money is finding the delicate balance between the two most powerful forces in the world:
- Compound interest, which turns patience today into fortunestomorrow.
- The fact that you are one day closer to death than you were yesterday, so make the most of your short time here and enjoy every day you’re lucky enough to be alive.
The struggle is knowing how much you should invest for the future versus spend today.
It’s not an easy problem to solve. And it’s a deeply personal one-not the kind of thing you can fit in a one-size-fits-all formula.
The world is split evenly between those who don’t know how to start spending money and those who don’t know when to stop.
Imagine if, by the time you died, you had done everything you were told to do: you worked hard, saved your money, and looked forward to financial freedom when you retired. The only thing you wasted along the way was… your life.
Taking too little risk is like smoking cigarettes, taking too much risk is like doing heroin. Both will harm you, the only difference is how quickly.
It’s grim to think about, but no information in the world would be more powerful than knowing exactly how much time you have left to live. It’s so powerful that a lot of people say they wouldn’t want to know even if they could. It would be too scary, and would take the mystery out of life.
Good memories are the closest thing to living for today while compounding for tomorrow.
The purpose of life is to experience things for which you will later experience nostalgia.
I can’t be alone in realizing that as I get older, memories of things that took place ten, twenty, thirty years ago are some of my most cherished assets. They aren’t financial assets but, boy, they are very real assets nonetheless.
The amazing thing about memories is how they can compound over time, just like a stock. When I was ten years old, memories of what I did at age nine were boring. Today, those same memories are astounding and hilarious to recall as I can put them into the greater context of my life. In fifty years, they will be my most cherished possessions.
The degree of financial independence I have that’s come from saving my entire life is among my most valuable, useful, and enjoyable assets today. I don’t feel like I’m just saving for the future. Savings has given me independence that allows me a degree of doing what I want, when I want, with whom I want, that makes today—right now-better than it would have been if I had saved less in the past.
Jealousy is such a powerful thing. It’s difficult to appreciate what you have and what you’ve accomplished, because beyond a basic level of necessities, what you often want is to place yourself in a higher ring of the social hierarchy. So everything you’ve accomplished is relative to other people, and you often crave most whatever someone else has but you don’t.
That’s important for spending money, because for so many people the question of whether you’re buying nice things is actually “Are these things nicer than other people’s things?” The question of whether your home is big enough is actually “Is my home bigger than my neighbor’s?”
It’s understandable and unavoidable. A lot of life is a competition for resources-for money, time, mates, attention, friends, land-where what matters is not how good you are, but how good you are relative to other people.
So much of life is like that: a constant struggle of viewing other people as having something we want, and then once you have that thing, you spot yet another person who has something new that you want, and around and around you go, ever disappointed.
Part of the reason these products spread to the masses is that they got cheaper. But the reason they got cheaper is because there was so much demand from the masses-hungered by their aspirations-that pushed companies to innovate new ways of mass production. And it shows why you can’t permanently win the status game: What makes something high status is the fact that others don’t have it. Once they eventually get their hands on that thing, it’s no longer high status.
The Yale students didn’t care about the play as much as they cared that they could watch something others couldn’t. Hamilton was cool when it was exclusive to their social ring; much less so when anyone could watch it.
Being jealous of what others have is outsourcing your critical thinking to strangers.
Envy is inversely correlated with self-examination. The less you know yourself, the more you look to others to get an idea of your worth. But the more you delve into who you are, the less you seek from others, and the dissolution of envy begins.
Telling someone they are jealous is always an extreme insult, because no one wants to admit that they are chasing what others have. They want to think they’re independent, because deep down-independence is the goal. Envy is admitting to inferiority.
If you can’t afford rent or food, the desire for more money is existential, and has a very clear objective and finish line. But if you’re already financially comfortable, the desire for more money is mostly about status, which has no upper limit and is insatiable.
Money you haven’t spent buys something intangible but valuable: freedom, independence, and being able to spend time in your own way.
The people I look up to the most are not necessarily the richest or most successful. Almost always, they’re the freest. The most in control of their own lives.
A related perspective I hold —one that many either disagree with or find counterintuitive—is that there’s no such thing as unspent money. You spend every single cent you’ve ever earned. You spend every dollar in your bank account, whether you know it or not.
I’ve always been a big saver. But I’ve never viewed my savings as idle money. I’ve never even viewed it as saving up for a purchase in the future.
I view every cent of savings as a ticket toward a greater degree of financial independence, which is my true goal.
If I move $500 into my savings account, I view that as having purchased $500 of independence. It has almost no different meaning to me than if I had purchased a $500 television-the money is “spent” in either scenario, just spent on different things that offer different value.
For me, independence has the highest ROI, more than anything else I’ve spent money on.
What matters isn’t what a person has or doesn’t have; it is what he or she is afraid of losing. The more you have to lose, the more fragile you are.
Level 14: Your independence lets you do and say what you please, unconcerned with other people disagreeing with you, since you don’t rely on the financial support or opportunities they could offer you. One note here: The concept of fk-you money-having so much money that you can tell people to fk off without fear of repercussion-is great. But so is kindness and civility.
So I aspire to “no thank you, I’m not interested in that, respectfully disagree and I’m free to ignore you” money. One is rationalizing being a jerk, the other is intellectual independence.
Level 15: You wake up every morning realizing that you can spend your time doing what you want, with whom you want, for as long as you want. Bosses don’t control your day. Social debt doesn’t influence your decisions. Actual debt doesn’t control your options. You beat the game. And you realize that while this doesn’t guarantee happiness and there are still plenty of opportunities for you to screw up your life, you have unlocked a lifestyle boost that 99.99 percent of humans who have ever lived have not experienced. The only risk is that you forget how grateful you should be to be in this situation.
The more you want people’s attention, and the more you try to focus that attention on how smart, rich, and successful you are, the higher the odds that you’re trying to fill some sort of emotional hole.
When I see people clearly bragging about how much money they make or spend, I try not to judge. I’d rather ask: Who are you trying to impress, what do they actually think of your boasts, and is your bragging unintentionally doing more harm than good?
Social debt is what happens when how you spend your money influences what people think of you in unwanted ways. It’s often a hidden form of debt, which makes it especially dangerous.
Sometimes it’s people being envious of you.
Sometimes it’s you suddenly feeling superior to people whose company you used to enjoy.
It can even be your own higher expectations that come from inflating your lifestyle.
There are some purchases for which every dollar you spend changes how the rest of the world thinks of you, and what you think of yourself, in ways you might come to regret.
It sounds crazy, but I think there’s an “ideal” net worth for everyone, when money not only stops bringing pleasure but becomes a social liability.
One player mentioned something I found so insightful. He said most people think athletes go broke because they frivolously blow their money on jewelry and cars. Sometimes that’s true, but the most common cause of athletes going broke is social debt.
“When you grow up in poverty and then you’re making $10 million when you’re twenty-two, that’s not your money,” he said. “That’s Mom’s money, Dad’s money, Grandma’s money, cousins’ money, friends’ money. You can’t just tell them ‘I got mine, good luck to you all.’”
Maybe you didn’t mind when your old car was dirty or dinged-but now that you bought a nicer car, you can’t stand it when it gets muddy, and you lose your mind when someone scratches it in the parking lot. That angst is a social debt, and some people who own nice things are nearly bankrupt with it.
Remember that it’s impossible to win the social-comparison game because there’s always someone getting richer faster than you. Once you stop playing the game, your attention instantly shifts internally, to what makes you and your family happy and fulfilled. It makes it so much easier to enjoy your money, regardless of how you choose to spend it.
There is only one success-to be able to spend your life in your own way.
Money is like gasoline during a road trip. You don’t want to run out of gas on your trip, but you’re not doing a tour of gas stations.
I think what many people really want from money is the ability to stop thinking about money. To save enough money that they can stop thinking about it and focus on other stuff.
It’s so similar with money. Once you get ingrained with one smart behavior—a good saving regimen, or a way of spending money that you enjoy, or even an investing strategy—you run the risk of becoming blind to when it might be reasonable to do something different, and you’ve set yourself up for eventual trouble. Anytime you’ve formed a money identity—I am a saver, I am a rich person, I am a poor person, I always buy this, I always buy that-you’ve formed a roadblock to eventually switching gears, changing your mind, or trying something new.
It’s common in investing, where people take on labels like “value investor,” “trader,” and “tech investor.” The labels seem harmless, but once you label yourself you’ve formed an identity that can prevent you from seeing the big picture, finding other opportunities, or changing your mind when you need to.
Value the ability to change your mind, change your lifestyle, alter your spending, and try something new.
I love the concept of mental liquidity. It’s the ability to quickly abandon previous beliefs and strategies when the world changes, you change, or when you come across new information.
It sounds trivial: Find what works and just do that. Ignore the rest. Thanks, Einstein.
Every smart person I know is a voracious reader who also says, “Every smart person I know is a voracious reader.”
The filter should be ruthless, taking no prisoners and offering no mercy. Similar to dating, a book you’re not into after ten minutes of attention has little chance of a happy ending. You should feel no shame, no guilt, for failing to finish a book, even if you quit after the first few pages. There are so many good books out there. Go find a new one.
What I learned: It’s impossible to know what you’re going to like until you try it, so you have to try everything. But the only way to try a million new things is to have a strong filter that immediately rejects what isn’t for you.
And, boy, that is also so true for spending money.
People who say money doesn’t buy happiness haven’t yet found their thing. They should keep trying. Wider funnel.
And that doesn’t have to be about material possessions. Your thing can be giving money away, or using it as a form of independence.
Monotony makes time speed up, variety makes it slow.
So it is with spending money. New experiences and new products that you’ve never tried before add a level of excitement that’s hard to replicate any other way. Even when the new purchase didn’t work for you, the memory and knowledge you gain by trying something new can be more thrilling than the monotony of the same experiences repeated day after day, year after year.
“In the best families, the ones I know have solid relationships,” he said, “the kids say the same thing every time.”
“Thank you for believing in me.”
Charlie Munger was once asked by one of his rich friends if leaving his kids a bunch of money would ruin their drive and ambition.
“Of course it will,” Charlie said. “But you still have to do it.”
“Why?” the friend asked.
“Because if you don’t give them the money they’ll hate you,” Charlie said.
Warren Buffett once said that he often hears rich people talk about how dangerous a welfare society is, creating a generation of moochers reliant on food stamps and unemployment benefits. But “these same people are leaving their kids a lifetime supply of food stamps and beyond,” he said. “Instead of having a welfare officer, they have a trust fund officer. And instead of having food stamps, they have stocks and bonds that pay dividends.”
One nuance here is that it’s dangerous for you, as a parent, to live one lifestyle while you demand your kids live a different, more modest one.
As a parent you may have good intentions for wanting to make your kids live a comparatively humble existence: to teach them virtue, hard work, and respect. But you risk teaching them something completely different, which is resentment.
Every family finds their own way. But everything I’ve seen tells me that when kids are young and living with their parents, the parents and the kids have to live the same material lifestyle. So you, the parent, need to pick that lifestyle carefully. “You haven’t earned what I have” can be a less effective message than “Let me teach you the value of hard work by doing it together.” Lead by example, not by humiliation.
The parent-child bond is the most important relationship for a child’s mental health. When a child cannot meet a parent’s high expectations, that bond becomes jeopardized.
I tell my kids that true success is when the people who you want to love you do love you. And that love comes overwhelmingly from how you treat people, rather than what you spend or a level of net worth. The most important financial advice I can give to my kids is that money alone won’t provide the thing that they and almost everyone want most in life. No amount of money can compensate for a lack of character, honesty, and genuine empathy toward others.
What I think is remarkable about those numbers is that most parents don’t sit their kids down to intentionally explain why one political party is better than the other. There’s almost never a detailed, explicit lecture of pros and cons, counters and rebuttals. But the kids still inherit the views because they’re always paying attention. They notice the offhand comments, the winces while watching the news, how the parent responds to this election or that neighbor’s opinion. Over time, through the accumulation of thousands of subtle clues—few of which the parent meant to be explicit—the child builds up what become firm political beliefs.
Spreadsheets don’t care about your feelings. But sometimes those feelings are the most important part of a big financial decision.
“I have no emotional attachment to the house; I never liked it physically,” Mom told us. “But everything important that ever happened in our life as a family is here, and I can’t just leave all that behind.”
But since money looks like a math-based field, too many people trip over themselves viewing financial problems solely through the lens of what’s rational, what’s efficient, and what’s methodical.
Louis Armstrong, the greatest jazz musician of all time, was once asked what makes good music. “If it sounds good, you don’t worry what it is,” he said. “Just go and enjoy it. Anything you can tap your foot to is good music.”
Price is easy to calculate. It’s just whatever you paid initially and sold for eventually. Cost is harder to figure out, because it tends to be a slow drip over time, which is easy to ignore but adds up quickly. Same for cars, boats, and hobbies. You can even say the cost of smoking cigarettes is the price of a pack plus the long-term cost of medical care associated with the habit. One is easy to calculate, the other is very difficult.
“The amount of attention a problem gets is the inverse of its importance.”
Parkinson described a fictional finance committee with three tasks: approval of a $10 million nuclear reactor, $400 for an employee bike shed, and $20 for employee refreshments in the break room.
The committee approves the $10 million nuclear reactor immediately, because the number is too big to contextualize, alternatives are too daunting to consider, and no one on the committee is an expert in nuclear power.
The bike shed gets considerably more debate. Committee members argue whether a bike rack would suffice and whether a shed should be wood or aluminum, because they have some experience working with those materials at home.
Employee refreshments take up two thirds of the debate, because everyone has a strong opinion on what’s the best coffee, the best cookies, the best chips, etc.
Some she at once crushes beneath her cruel feet; others she condemns to a fate like that of galley slaves; a few she favors and fondles, riding them high on the bubbles of fortune; then with a sudden breath she blows the bubbles out and laughs mockingly as she watches them fall.
Spending money often requires optimism; saving often requires pessimism. At one level, both of those emotions are not only OK, they are necessary and useful. At another level, they backfire and turn into dangerous liabilities. You often only know when you’ve crossed the line when it’s too late. So much of success in life is finding the delicate balance of when optimism turns into greed and pessimism turns into fear.
And greed and fear are sneaky. People with the best intentions and ethics get sucked into their trap. While you might think of them as opposites, they share a common origin. There is a natural cycle that causes innocent optimism to evolve into greed, which turns into denial, then confusion, then, eventually, fear. It often drops you off where you began, with the lesson you think you learned from experiencing fear setting up your next rendezvous with greed.
All greed begins with the most innocent idea: that you deserve to be right.
The decisions you’ve made in the past. The decisions you’ll make in the future. The worldview you hold today. It’s hard to wake up in the morning and look in the mirror without telling yourself that you’ve made good decisions in the past and you will continue making them in the future. Nothing would get done if people doubted themselves all day. This is especially true if you’ve had past success in education and work.
And you deserve to be right because you’ve put so much effort into developing your views and decisions.
Maybe you went to school for years. You passed hard tests. You dealt with bullies. You did hard thinking and put in long hours. No one wants to hear they went through that grind and still don’t deserve to be right.
And deserving to be right means you should be rewarded for being right.
The conviction that whatever you believe is right, and you deserve to be right because you’ve put in so much effort to form those beliefs, and correct beliefs will be rewarded by the world, is such a common and innocent idea.
And it’s where things start to get messy.
When you are rewarded for being right, a door opens inside your head that invites delusion to step inside.
It tempts you to do the same thing as before, but with twice the appetite.
Maybe you have the same job, but you demand more pay. You have the same investments, but now with leverage. Or you got some attention for the new car and, eager for more, you now want the new watch, clothes, jewelry, and house.
This may be fine to do if your actions directly influence outcomes. If doing this causes that.
But if your previous actions aren’t sustainable, or if you underestimate how much of your previous outcomes were caused by actions that weren’t in your control, then doubling down on what worked in the past increases the odds that doing more isn’t going to end well.
Greed happens when you double down on actions that at one time worked but aren’t sustainable, or that cause you to overestimate how influential your actions were on outcomes.
Maybe you underestimate how much of your past success was luck, randomness, or being in the right place at the right time.
Maybe the people who in the past rewarded you with attention are no longer around.
Maybe people who were excited for your past success are now exhausted from hearing about you.
Perhaps your boss who was happy to reward you for your past contributions is now tired of you demanding yet another raise.
People who used to give you attention now snicker at you.
Whatever the cause, sometimes the world views your actions as a taunt, and reality creeps in to remind you that things are more complicated than you assumed.
What worked in the past suddenly doesn’t work anymore. But since your whole strategy has been to believe that you’re right, deserve to be rewarded for being right, and are doubling down on what used to work, now you’re in trouble.
Peak greed is expecting to get back more than you deserve given what you put in. Which is exactly what happens when you overestimate your ability to do things that will directly lead to rewards.
This is when people start saying things like “We’ve learned a lot in the last year” and “This has been a growth experience.”
Sometimes these statements are honest and correct. But often they are just a bare-bones way of signaling to others you have not completely lost touch with reality. Deep down, your core views and faith in your ability are still mostly intact.
There comes a point where it’s obvious, even to you, that you are wrong. Privately, to yourself, you wonder whether you were wrong. On occasion you admit to others that, yes, you were.
To deal with the pain you often employ denial. When friends ask you how things are going, you change the subject, nearly to the point of denying you were ever involved with the thing you once went all in on. “It was never that important to me,” or “It was always a small part of what I enjoy.”
Reality rushes in when your mistakes force lifestyle changes. When you’re forced to sell your house or your car, or cancel a vacation, or move into a smaller office, the consequences of your wrongness are now undeniable to anyone watching you.
Now you’re embarrassed.
And once you’re embarrassed, your ability to look at a problem with a cool, rational mind becomes as clouded as it was when you were in the peak of greed.
A little doubt that you were wrong now cascades into panic.
You avoid people you’d normally talk to about your skill, which walls you off even more from the ability to take feedback and gain context on your situation. You’re now stuck in your own mind, which becomes a doom loop of fear and doubt.
Your mindset shifts from growth to damage control. You stop thinking about opportunity and gain. Your definition of success is now when you stop falling behind
Anything that prevents further loss now looks like an appealing gain.
So you sell what you have left. Leave your career. Sell your car. Abandon your company. It feels like capitulation.
When you were greedy you believed that 100 percent of what you did influenced the gains you received. Now you think there’s nothing you can do that’s in your control that will deliver upside.
The hard thing is, you’re as wrong now as you were back then. But you’re equally blind to that reality.
You begin looking around at everyone else. The people you once looked down upon now sit so much higher than you. What happened? Why aren’t they suffering like you? Do they know something you don’t?
That’s a new fear to worry about.
When you were successful, people watched what you were doing and tried to copy it. They wondered what you knew that they didn’t. They didn’t want to miss the rewards you were getting.
Now the process goes in the other direction. You start looking at other people who have done better than you and wonder what else they know that you don’t.
But since you’re now gripped with fear, you’re not looking for upside opportunities. You wonder what other landmines exist that smarter people have avoided but you might still be oblivious to.
Fear does the most damage when your biggest fear is wondering what else you should be fearful about.
You become as blind to what positive things might happen as you were to what negative things might happen when you were greedy.
The irony is that chaos is often the most fertile ground for opportunity and a chance to go in a different direction. But opportunity is the last thing you’re now thinking about. You’re focused on not falling down any further.
At some point you find stabilization. People begin to forgive you. Fear gives way to acceptance. You find a new groove. You lost a lot of what you once had, but now you can think with a clearer head.
The first thing you vow is to never make the same mistake again.
You feel confident about this new view. You deserve to be smarter now. Going through something as hard as you’ve been through and not coming away smarter seems unfair. You were wrong before, but now you’re right. No one wants to hear they went through that painful grind and still don’t deserve to be right.
And deserving to be right means you should be rewarded for being right. Effort equals reward. That’s how the world works, isn’t it?
An important fact of life is that it’s often difficult to know what will make you happy, but quite easy to identify what will make you miserable.
When faced with a difficult problem—and how to spend money in a way that will improve your life certainly is—it can help to work backward, reducing and excluding what doesn’t work until what’s left over is a decent approximation of favorable traits. Evolution works in similar ways, so thoroughly destroying what doesn’t work that what’s left over tends to work quite
The luckier you are, the nicer you should be.
There are two reasons to be kind to everyone. One is moral, the other is selfish. Morally, you should do it because you’re empathetic. Selfishly, you should do it because it’s easy to underestimate how many people you may eventually rely on to help you, and you’ll only gain their cooperation if you remain in their good graces.