About 5-10 years ago a friend of mine called me out for being “overfocused” on money. I think that’s a reasonable observation for a person to make about me; even a close friend.
But I think I have a reasonable counterargument. Which of the following two hypothetical people is “overfocused” on money?
- A person who deliberately saves and invests at an early age (to fully exploit the benefits of compound interest), steadily making their way to financial independence, the point at which any additional money is essentially irrelevant.
- Or, a person who blows the entirety of each paycheck on triviality, destroying the planet (through consumerism) and their financial future in the process. This person is perpetually worried about when their next paycheck will come, what will happen if they are laid off, and how they are going to pay for the next unexpected car or home repair. This person will work until the age of 90 and die without a penny to their name.
I think it’s reasonable for a bystander to conclude that the diligent planner is “overfocused” on money over the short term; after all, this person geeks out about the lifetime tax savings of investments placed in a Roth IRA in their 20s. But I think the more sophisticated conclusion is that the careless person will spend 10X-1000X more time worrying about money over their lifetime than the diligent planner.
“An ounce of prevention is worth a pound of cure” is a saying that is quite relevant to personal finances. Front-loading the work (financial education, tax planning, expense optimization, etc.) early in life will pave the path for a lifetime of not having to worry about money.
I fully acknowledge that there are diminishing returns to optimization that I probably overreach, but the primary reason I maintain this (tiny) blog is to share lessons learned with internet strangers to amplify the (societal) returns to my invested time. In that sense, it helps to rationalize the relentless optimization that wouldn’t make sense without a sharing mechanism.
The weird truth is that optimization is a fun hobby of mine. Some people crochet. Others play the tuba. Others blow aliens’ heads off with bazookas in computer games. I like to relentlessly optimize; it gives me joy.
Or maybe I’m full of it and need to talk to a shrink….?