On Monday I posted the story of my friend Alex and her rather unexceptional wealth building journey. She spent less than she made, invested the difference and was a millionaire before she turned 40.
As with most of my posts, the comments were overwhelmingly positive. But there were a few along the lines of “well she wasted her 20s and 30s so was it worth it?” or “what’s the point of being rich if you never have fun?”
Those kind of comments honestly confound me. Because at no point in telling Alex’s story did I say or even imply that she didn’t have fun or wasn’t happy. The way my brain is wired, how much of your money you spend and your happiness are two uncorrelated metrics. But I realize that I may not be typical in this regard.
But let’s think about it. Let’s say you make $60,000/year and you spend $45,000/year? Are you less happy than someone who makes $50,000 and spends every penny they make? If you spend every penny of your $60K do you become more happy?
Hopefully the above sounds kind of absurd. Of course a person’s happiness doesn’t scale with every dollar they spend. Sometimes you feel a small endorphin boost when you buy something new. But it’s short lived, and when it wears off your baselines happiness goes back to where it started but your bank account is lower.
Think about the happiest times in your own life. Where did you live? What were you doing? For me, they’re all memories of people and experiences. Most of my happiest times correlate to some of my most modest spending and accommodations.
I think true happiness comes from having freedom, good relationships, time to do what you want, and the ability to help people. I would argue all of those things are correlated with less spending and more saving/investing.
So get out of the mindset that more spending equals more happiness. It’s likely to leave you broke and less happy. Get happy about the people and experiences in your life. And that fat brokerage account.
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Jeremy
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