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A Polyphasic Christmas

I apologize for the lack of updates over the past week. I went to Boston and Vermont and brought only my tiny laptop (Libretto U105) with me. Besides being busy spending time with my family, the keyboard of the Libretto doesn't lend itself to lengthy updates.

I did a pretty good job sticking to polyphasicsleeping over the vacation, but not perfect. I had a total of 5 nights in Boston, 4 of which I overslept an average of 3 hours per night, and two nights in Vermont. I don't know if you've ever been out in the farming country in Vermont, but there is literally nothing to do. Compound that with the fact that I was staying in a 1000 sqft. house with 10 other people who were very fond of quiet and darkness throughout the night, and it made polyphasic sleeping a serious challenge.

The first night I slept 3 hours extra (seems like the magic number, doesn't it?), and the second night I didn't try - I overslept by almost 6 hours.

Saving more than you spend

On Ideas

One of the biggest mistakes I see young people making is spending their money capriciously and not saving. If your bank account or investment portfolios aren't growing, or you are not expecting them to grow something is awfully wrong. S&P 500 has been shown to go up around 10% every year in the long run. There are treasury bonds and other investment vehicles as well which can ensure that your money is at the very least keeping up with inflation.

When I started earning some money last year I ended up investing or saving up 4/5 of it, and kept spending my money frugally and only splurged once or twice. Being frugal, saving up, and thinking about the future is crucial, especially at a young age because you have so much time for compound intrest to take hold

One of the clearest ways to picture this was an example given in the book the slightest edge, whereby two young post-graduates at the age of 24 agree decide that they want to retire millionaires and will invest 2,000 a year into an 12% account every year until they can make it a reality.5 years later they meet each other and ask how its been going. One of them has followed the investing religiously, while the other hasn't. The one who hasn't asks the other how close he is to his investment goal and the the other friend says "I'm done". It turns out that with just 6 years of investing, the compounding interest will be sufficient enough to get him to 1 million at retirement. The other friend decides he has to get to it, but when he does the math, he realizes he has to invest 2,000 a year for the next 33 years!

This story underscores two things. One the cost of waiting, how waiting to long to do something keeps you from taking advantage on the magic of compounding interest. and second how important investing and not overspending is.

The biggest reason by far not to overspend though, is so you can increase your freedom. I'm not saying money always equals freedoms, but having a good amount of money in the bank significantly opens your options and lowers your anxiety levels. Living paycheck by paycheck, or not having a clear long term financial goal can lead to distress and insecurity.

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