Disclaimer: None of these are financial advice. This is how I think about money.
I’ve been very mindful about spending money. Probably it’s due to my upbringing or because I’ve seen my parents struggle financially.
Over the years, I’ve learned and unlearned many things about money. I can sum up my current money philosophy in the below sentence.
Saving money won’t make me rich, but overspending can break me.
My current focus is to make enough savings and cash flow to not worry about it. Thankfully, I’m in a good place with that. The next phase is to make enough, while not working or doing things that don’t feel like work. That phase is what I call “retirement”.
I want to retire early. And I think retirement is a spectrum, not a binary. For me, it means only doing things that I love. I still do things I love, but that’s only a percentage of my waking time. Retirement is to get it to a percentage above 90.
And I strongly believe it’s hard to retire early by focusing on saving money, I have to earn it.
Say, I want to make a million dollars. The traditional option is to save up over the years, probably sacrificing a bit of my life over those years. There are a couple more options. I can have enough equity in a growing early-stage business. Or I can try to build my own business with enough revenue and sell it. My bet is two or three. It’s hard. But it’s possible.
Now about the second part, while saving can’t make me rich, overspending can steal a lot of joy from life. It will put you in tough spots.
But spending too little will also make you miserable. In the early stages of my career, I saved 50% of my income even when I earned too little. While the core habit has brought good things, I might have made my life a bit harder back then. That’s something I’ve unlearned over time.
Now, I spend mindfully, but I don’t sacrifice any convenience. I also spend a lot on things that make me happy – like travel, cameras, tech gadgets etc. But I find it hard to spend money on stuff I don’t value. For example, a luxury Italian clothing brand. But if that’s what makes you happy, you should go ahead and buy it.
Remember the Chuck Palahniuk quote “We buy things we don’t need with money we don’t have to impress people we don’t like”. Try not to go down that path.
To sum up, be disciplined with money. Know things you really want. Spend on them. Focus on making enough money to reach your definition of retirement.
Thanks to Keerthi Jayadevan for reviewing all my posts
Memos by Sooraj 