A few months ago I self-published a book on Amazon titled Random Roger's Rules: Building Blocks For A Happier Life. It is a list of rules with half the next proceeds going to Walker Fire, please consider buying a copy. One recurring phrase I use in the book is to say that doing such and such will make every other aspect of your life easier. I read a couple of blog posts and a Tweet over the weekend that are themselves great posts but I believe also tie in to making other aspects of your life easier.
Josh Brown wrote Three Reasons You're Never Satisfied where he points to lifestyle creep (spending more as you earn more), wealth being relative (keeping up with the Joneses) and fear of career obsolescence. Setting career obsolescence aside for a moment, you will make every aspect of your life easier if you can avoid these behaviors.
Lifestyle creep is something that we've discussed here before. Josh talks about first class plane tickets and and sitting closer to the court at a basketball game as lifestyle creep. I think more serious types of lifestyle creep relate to taking on increased fixed costs like buying a more expensive house that doubles your mortgage or taking on a car payment that is twice as big after having just paid off your old car. I think this sort of thing is a bigger deal, your fixed monthly expenses increasing because you are making more money. Certainly spending more on travel and entertainment as Josh outlines may be thought of, after the fact, as having squandered money but this spending can be cut right away in the face of an adverse circumstance. If your fixed monthly expenses go from $4000 to $7000 with a new house and cars, it is far more difficult to cut that kind of spending right away.
You will make every aspect of your life easier if you can avoid that lifestyle creep, more simply known as living below your means. We all learn at an early age that you shouldn't get over indebted or spend more than you make but plenty of people make these mistakes. Avoid this at all costs.
I think of wealth being relative, measuring up against others, as being about competitiveness. Josh frames it as follows;
You compare yourself to those who are doing best. It eats at you. It makes no sense. Especially when you realize that even they’re not any more satisfied than you are. It only looks that way from the outside. I’m 41 years old and live in the suburbs of New York City. I’m at the age at which all of my successful friends are trading in the houses they bought in their late twenties for much, much bigger houses. They’re all moving closer to the water. Because they can.
This can be very counter productive. A sort of cliche that you have no doubt heard is that although someone might have a big house and new cars in the driveway, you have no idea what their finances are, it could all be a pile of debt. I actually know someone for whom this was the case. They had an expensive home and new cars all the time. The financial crisis hit and they lost their home and had to "start over at 50."
I have long defined success as being able to pay the bills, put some away for the future with a little left over to have some fun. If you can do that you'll be better off than most folks and make every other aspect of your life easier.
When I was in high school, my girlfriend and I went bowling, she smoked me and I was pissed off about it. How stupid is that? It's ridiculous, I realized it about an hour later and it was a big step for me about where competitiveness is and is not helpful. I am not very competitive at all any more and I would tell you this makes things much easier for me. Getting worked up because someone you know got a $90,000 SUV would be an example of not helpful...says the guy who happily drives a 12 year old Tundra and hopes to get 12 more years out of it. If someone makes more money than me I assume one of four things; they're smarter, they work harder, they're lucky (zero shame in being lucky, I am plenty lucky) or some combination of the three. I think if you can genuinely accept that, then it makes it much easier to avoid measuring yourself against others to the point of counter-productivity which makes every aspect of your life easier.
The point about career obsolescence doesn't really resonate. Not that advisors don't face that issue, but I don't relate it to not feeling satisfied. All I would say is that it is important to update the skills your current field requires and/or find new skills that you could monetize if you had to.
The other blog post to mention is from Vitaliy Katsenelsen called Soul in the Game which is a play on words for skin in the game. It's a very good read and summing it up, every aspect of your life will be easier if you love what you do, if you put the work ahead of the money, the money will take care of itself.
I've mentioned before that my wife have a bit where I will say I think I am going to retire. She will ask what then I would do with my time and I tell her I would spend time studying markets, place a trade if necessary, probably write a blog post and then go to the gym at some point. "Oh, so you're just sick of getting paid to do that same routine?" Vitaliy says essentially the same thing applies to his life, he uses the example of winning the lottery.
Finally a Tweet from Steve Burns;
I am less concerned with the monetary aspect of his list. I like the idea of creating some sort of list for yourself based on what is important to you. As opposed to FU money, if you've built a financial base underneath you that allows you to feel financially independent, I would think of that as being a success. I personally don't know how much I would need to say FU to someone, or for that matter who I would say it to. I would add being happy at home to my list as well as being healthy and fit enough to do what I enjoy and having the opportunity to actively volunteer and I feel very lucky enough to have those three. Hopefully, the things you'd put on your list are already part of your life.