Choosing How to Invest Time and Money

Partially because of my previous two posts about managing your finances like a billionaire and because of the obvious impact of of coronavirus on CruiseSheet, I’ve gotten a lot of emails recently around money and finance. I realized that there’s one missing piece that I may not have talked about much before, but which may be valuable to readers.

We all have infinite ways to spend and invest our money, and since it’s a finite resource, it’s important to make sure that it’s managed in a way that will bring maximum benefit (whether to us personally, our families, the world around us, etc).

I think most people do a pretty bad job of this. They have no idea why they’re saving money (and thus usually don’t save much), and they spend money like everyone else spends money, gaining only accidental overlaps with what would benefit them most.

The way I manage and spend my money is based on two fundamental principles (which could change over time as my preferences change, and are not the same as they were 5 years ago)

1. My quality of life is so good right now that it’s way more important to me to maintain it than it is to move up a level or two.
2. I don’t really care about the next X levels of quality of life.

In a rather scrappy way I’ve managed to accumulate an apartment (which is really two apartments mushed together, one bought by my wife) with two tea rooms, a sauna, a gym, and a big office; an island; and vacations houses in Budapest, Hawaii, and Tokyo. I have enough miles and points and travel-hacking skills to fly around as much as I want. I work a lot on most days, but I have full freedom to take off days, weeks, months, or even years. I have an incredible group of friends and family members. I’m in excellent health and feel great all the time.

A huge amount of the thinking behind how I invest and spend money is geared towards not just preserving this lifestyle, but fortifying it. I like looking for ways to make my life even more economical and I like investing money in safe ways that have very limited downsides. I always keep enough money in little-to-no-risk investments to continue to live my life for many years even if my income disappears.

This is also great for mental health and stress levels. CruiseSheet now loses money every month, but I don’t worry about it at all because my income is totally separated from my ability to maintain my life. I can’t wait for it to recover and care a lot about the business, but having it on hiatus doesn’t affect me very much.

To me this is a FAR greater luxury than having more money or buying more things or financing a ton of stuff and having a larger monthly expense. Several people emailed me to tell me that my portfolio is too conservative (and it may very well be for their own goals), but for my goals it isn’t.

The second factor is one that isn’t really talked about often. If I jump to the next “level” or two of wealth, what does it get me? Not much, in my estimation.

Our apartments are small and are in a low-income area of town, but they have a lot of rooms and are a convenient drive to anywhere. I don’t need a slightly fancier house in the suburbs. I have a used Bentley (which I haven’t seen in 3 years due to extremely slow repairs), but our primary cars are a 15 year old minivan and 5-10 year old economy car. Even ignoring the Bentley, I’m really happy with those cars. Other than the new Chrysler Pacifica there aren’t any new cars that I’m interested in. I eat at Chipotle 90% of the time. Even if I had more money I would keep eating Chipotle.

If my income doubled, the only thing in my life that would change is a number in my bank account. That’s not to say that I don’t want that number to go up, just that it’s not important enough to me to risk giving up what I already have.

This isn’t universally true, and was not true for me for a majority of my life. For most of my life I was willing to lose and risk everything, because starting over wasn’t that bad and the next few levels would bring a lot of benefit.

If I really think about it, there are only two things I want: a 75+ foot yacht, probably shared with friends, (and the finances to not have to ever worry about the operating costs of it), and a huge house in Vegas so that I can host my extended family or big groups of friends. I know that these are the things I want because I’ve thought a lot about my priorities and have looked back on when I feel most fulfilled. A huge common thread is providing great experiences to my friends and family, bringing them closer together, and spending quality time with them.

To get those things I will need to jump a few levels up. That’s why I invest some money in things like crypto and friends’ businesses, and why I spend a lot of time working on my businesses. If I can grow CruiseSheet to be big enough to sell, that could possibly get me to that level in one shot.

By spending no resources (including mental effort) on goals that don’t matter to me, I’m able to spend more on those things that do matter to me.

Think about what actually matters to you. Maybe it IS about getting to the next level. Maybe you want a new car and a house in the suburbs. Maybe you only care about maintaining what you have now and don’t need any upgrades. Maybe you just want to earn a ton of money and give it all to charity to feel great about yourself.

An easy way to start figuring all this out is to think about what has been the most fulfilling over the past few years. How do you get more of that? What less important things would you sacrifice for more of that? Are there alternatives that will take 10% of the effort and get you 90% of the way there so that you can move on to the next thing? You don’t have to get it all exactly right, just get some broad strokes and start working towards them.

I’m not trying to turn this into a financial blog, so this will probably conclude our three-week finance run. Something new next week!

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Photo is sunset on Lake Mead last night.

I just made some changes to Sett to support https (which should fix the problems for people for whom the site looked really ugly). Let me know if you see any issues.

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