Loko8765 t1_j5ispqh wrote
Reply to comment by divepilot in LPT: A good financial habit to get into is treating money as hours of work. Ask yourself how many hours of work something would take if you buy it. The awareness of the amount of time you put into purchases helps reduce compulsive spending. by humvee911
Came here to say this. It should be disposable income per hour of work. Does the book mention this?
slbaaron t1_j5jj4g1 wrote
Yup not trying to flex but will come out that way: my spending was horrible because of EXACTLY that mindset of this post when I came out of college and made 6 figures. Everything is cheap in hours, especially for younger me where hours worth little anyways.
Remove taxes, COL then divided by hours made more sense.
Ultimately the best way is to think of any money as capital and have a wholistic view with coherent strategy about the opportunity cost. It’s never a decision about PS5 vs Gaming PC. It’s a decision about PS5 vs investment portfolio that will compound vs self-investment (courses) vs vacation savings vs down payment savings vs etc etc.
LukeMedia t1_j5kdbva wrote
I would add, please don't get into the habit of saving and investing every single extra penny. You will make yourself miserable. It's important to treat yourself to things sometimes, but the key is finding a healthy balance and not overdoing it.
slbaaron t1_j5lppxa wrote
Of course, the point is to make a wholistic decision about how you balance your capital assets, liabilities, and investments (cost & risks vs returns). Those are meaningful terms much beyond monetary definitions, but you have to be able to draw meaningful monetary decisions based on them.
Mental and physical health is one of the most important and valuable asset we have, so it's a no brainer to invest in it, but the how and the what is quite subjective. There's no marketing book that can teach you this, you'd have to come up with your own evaluation system.
For entertainment, I used to rely on value of $ / hr spent entertained as my decision metrics, that's when gaming was by far at the top. I couldn't understand people who paid hundreds if not thousands to go watch some concerts and shit. As I grew older, the equation faltered because time is a currency in itself, and I value unforgettable memories above all. Gaming still has those moments but taking too long is now a problem, not a benefit. I also have much more disposable income. Thus I went from averaging $0 / year in travel to about $30k / year in travel in my very late 20s. Yeah, I practically didn't travel before then outside of family trips I pay $0 for.
Everyone's gotta come up with their systems and continue to evolve too, but it should be a cohesive piece, not a ton of individual decisions that end up resulting in places where they didn't expect financially.
LukeMedia t1_j5m6w5y wrote
Extremely well said, and I absolutely agree. I've seen both ends of the spectrum, and both sides are miserable. A healthy financial life involves a healthy life, as far as I'm concerned. To get there however requires balance, which as you said is different for every individual person.
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