This is One of the Hardest Financial Skills to Learn

I was shopping around for Maseratis last week and, in a moment of self-awareness that I felt rushing towards me at blinding speed, I realized how different I’ve become from my former self.

Now, of course, I’ve changed and grown in many ways, not all of them easily classifiable as “good” or “bad.” But the thing is, I distinctly remember wanting nothing more than to be able to drive my parents’ Honda Accord to school one day and have all my classmates see me getting out of it. And yet here I am today, perusing AutoTrader, flying past Accords and Civics and Elantras before I change my search filters to ensure that I don’t step out of anything less than a Maserati GranTurismo.

What happened? Did Honda or Toyota descend into some sort of technological dark age where their cars won’t get me to and from work safely and efficiently? Why do I need 454 horses? Why do I feel…need?

What’s So Difficult About Getting Rich?

The hardest financial skill you can acquire, I believe, is the ability to get the goalpost to stop moving. Hat tip to the Buddha for figuring this out thousands of years before I ever got an Instagram account, but it’s a curious fact about human beings that almost immediately after getting something that we’ve wanted for a long time, we start wanting something else; we start wanting something better, something more.

Now, it’s important to note that I’m not bashing this at all. I’m not about to tell you that wanting a Maserati is “wrong”, or that making money is “evil”, or that you should lower your sights and be “realistic.” Realistic is boring. Realistic spells the defeat of the human spirit, the abandonment of much of what makes humanity great.

If Elon Musk were “realistic,” he never would have picked up a rocketry textbook. Hell, there wouldn’t even be rocketry textbooks if human beings were “realistic.”

So no, that’s not what I’m getting at. In fact, I think that people should try and get really, really rich. Seriously. More people need to get filthy, obscenely, stupidly rich and wealthy so that they can see that it’s not the answer to everything. Poverty is just one of many potential lenses through which you can view the world, and it’s a demonstrable fact that people in the grip of poverty make terrible decisions.

Something else to think about is that if you think that making money is evil, then by definition that puts all the big money in the world in the hands of evil people, doesn’t it? Shouldn’t the “good” people try to get rich too so that that money goes towards good causes?

So no, the world isn’t that simple. But, that being said, listen to this, because this is important: the more stuff you “need,” the weaker you become.

This is especially important to understand in light of the fact that everything worth pursuing has less than a 100% chance of succeeding. Even if you deserve to be rich and famous and celebrated, it still might not happen! Plenty of exceptionally deserving artists and creatives died in poverty and obscurity before we ever found out anything about who they were. All of this is outside of our control, and, as much as possible, we should only ever focus on things over which we have personal agency.

One thing we can control, however, is how much money or wealth that we think of as “enough.” That’s the most foundational financial skill to keep sharp, especially as you become more and more successful and rich. That goalpost keeps moving, man, but you have to stand firm. Plenty of people have financial goals, and this is great, but a distressing few have a specific number in mind that represents “enough.”

So, I ask you: what is “enough” for you? What does that look like? Specifically.

For myself, my “number” is an income of $7,000 a month. That, to me, represents “enough.” I actually went through and listed every single thing that I could think of that I wanted (this includes everything from rent and food to investments and savings contributions), what it would actually cost, and what my life would look like when I got it, and that number turned out to be around $7,000 a month. That’s…so…achievable! I mean, it’s not “nothing,” but I don’t need to be a billionaire. I don’t need a boat. I don’t need more than one house. I feel a bit like Socrates, actually, who was once seen dancing and laughing in the marketplace of Athens exclaiming, “Look at all these things that I don’t need!”

That is freedom! Freedom from worry, from care, from self-loathing, from anxiety, from greed. Freedom to sleep peacefully at night knowing that you’re going to be okay!

Extra Profits or a Good Night’s Sleep?

Warren Buffet has said that “when forced to choose, I would not trade even a night’s sleep for the chance of extra profits.” Easy enough for him to say that, you might think, but he’s onto something here. He knows what his “enough” looks like and he refuses to sacrifice any of his peace of mind in order to go beyond that. That is an impressive financial skill. Stock-picking be damned.

So what can the rest of us actually do to develop that skill?

Work on reducing your desires. Importantly, this should not be construed as sour grapes. You can’t just be like, “oh, well I didn’t want any of that crap anyway,” and then secretly hate your life for not having it. You have to genuinely not want more than you have, or at least, realize that by wanting more than you have, you’re sacrificing your happiness in a way that you have some measure of control over. Naval Ravikant has said that desire is basically an agreement you’ve made with yourself to be unhappy until you get what you want.

It’s possible to train yourself to have fewer desires! I’ve done it, and I know many, many other people who have done it too. It’s hard, it might seem like no one else is doing it (see how often those two things — nobody doing hard things — go together actually?), and it’ll take longer than you might think, but it’s possible.

Settle on a number that represents “enough” to you. You knew this was coming, given all that we’ve talked about so far. But this is extremely important as well. You have to have a real number in your mind so that when you reach it, you can say, “Alright, I know that I can stop now.”

Obviously, peoples’ situations change all the time, and maybe you need more money as your family grows, or as you want to give more money away, or whatever. I know that if I included in my number all the money I wanted to give away to feed and care for starving children, I would need to be a billionaire.

But now, since you have that number, you’re going to realize that your desires are expanding, and you can do what’s necessary in that case. You can consciously decide if that’s what you really want, or if it’s just thoughtless greed running rampant.

Spend extravagantly on the stuff you love, and cut costs mercilessly in areas you care little about. I owe much of my thinking in this area to Ramit Sethi, whose work I can confidently recommend. Having “enough” doesn’t mean living in poverty or renouncing the world. It just means getting intentional about what you want, what you don’t want, and what you’re willing to cast aside.

For me, I probably spend less than $200 a year on clothes; even that is probably stretching it a bit. It might even be less than $100. But I will think nothing of going into Chapters or some indie bookstore and dropping $500 on books in a single afternoon. I have an unlimited budget for books, coffee, and haircuts (don’t laugh), and I don’t care what I spend in those areas. Hell, the last time I left a bookstore I put all my new books on the passenger seat in front and my seatbelt alarm went off; that’s right, I bought so many books that my car thought it was an extra passenger!

But you see what I’m getting at here. I know what I love, I know what I don’t care about, I know the exact monthly income I need to hit in order to cover all my expenses and desires, and I don’t thoughtlessly go beyond that. It’s a financial skill that will only develop with time and practice.

I’ve leave you with a few other ideas that I believe might be helpful:

1) Spending money to show other people how much money you have is actually the fastest way to have less money. Hat tip to the brilliant Morgan Housel for that one.

2) Your savings is the gap between your income and your ego. Morgan Housel again!

3) When you see someone driving a really nice car, odds are you’re not thinking about how cool that person is. You’re thinking about how cool other people would think you are if you had that car! Isn’t it interesting how that works?

Actually, that’s Morgan Housel yet again, so you may as well read his incredible book The Psychology of Money, which is one of the greatest finance books I’ve ever had the pleasure of reading. Seriously, it’s some high-level shit.

4) I used to perfectly happy, even at a time in my life when I was spending over $2,000 a month in servicing my debts. All that money was just going towards paying off debts that I already had, and I wasn’t seeing any of it. I was just paying the price for previous mistakes.

Yet, I didn’t want anything more (well, I did, but I wasn’t suffering because I wanted more, if that makes sense?). I was happy. Content. Working hard at being a writer and a bodybuilder and helping others through my nonprofit. Maybe that’s true for you as well. Maybe you’re happy now but you don’t know it. Maybe you already have enough.

Alright, I’ll leave the discussion there because, well, enough is enough! But I want everyone to see how rich all of us are already. Rich in beauty, rich in opportunities, rich in potential, rich in grandeur, and rich in love and compassion and wonder. We are billionaires, all of us!

For myself, I’m still gonna buy that Maserati…eventually. And I refuse to feel guilty about wanting one. It’s just a really cool car, and, man, that exhaust note! But, that being said, I also refuse to lose a single night’s sleep while I’m working towards it.

All the best,

Matt Karamazov

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