Enoughness

money

13 min read

-be—
created: 2024-11-18T17:16:50
modified: 2025-04-08T06:43:47

[1]

People do some crazy things with money. But no one is crazy. […] Everyone has their own unique experience with how the world works. And what you’ve experienced is more compelling than what you learn second-hand. So all of us—you, me, everyone—go through life anchored to a set of views about how money works that vary wildly from person to person. What seems crazy to you might make sense to me. […] We all make decisions based on our own unique experiences that seem to make sense to us in a given moment. 1 2

Tails drive everything — When we pay special attention to a role model’s successes we overlook that their gains came from a small percent of their actions. That makes our own failures, losses, and setbacks feel like we’re doing something wrong. But it’s possible we are wrong, or just sort of right, just as often as the masters are. They may have been more right when they were right, but they could have been wrong just as often as you. 3

“It’s not whether you’re right or wrong that’s important,” George Soros once said, “but how much money you make when you’re right and how much you lose when you’re wrong.” You can be wrong half the time and still make a fortune.

Man in the Car Paradox — It’s a subtle recognition that people generally aspire to be respected and admired by others, and using money to buy fancy things may bring less of it than you imagine. If respect and admiration are your goal, be careful how you seek it. Humility, kindness, and empathy will bring you more respect than horsepower ever will. 4

Reasonable > Rational

Do not aim to be coldly rational when making financial decisions. Aim to just be pretty reasonable. Reasonable is more realistic and you have a better chance of sticking with it for the long run, which is what matters most when managing money.

Academic finance is devoted to finding the mathematically optimal investment strategies. My own theory is that, in the real world, people do not want the mathematically optimal strategy. They want the strategy that maximizes for how well they sleep at night.

I try to keep in mind that there are two ways to use money. One is as a tool to live a better life. The other is as a yardstick of success to measure yourself against other people. The first is quiet and personal, the second is loud and performative. It’s so obvious which leads to a happier life.

Philosophy

  • Money can only solve money problems.

  • Money isn’t nothing, it simply can’t be the only thing.

  • Money doesn’t buy happiness, but freedom.

  • Money doesn’t buy happiness, but it buffers stress.

  • Money can buy happiness, but in an indirect way. It’s not money itself that makes you happier. It’s the thing acquired by money that actually makes you happy.

    “Money absolutely can buy happiness. It’s often though an indirect path… A big fancy house? Maybe. But what really makes you happy is hosting friends and family there. A nice vacation? Sure. But it’s the memories you form with your loved ones that matter. So you can’t say money doesn’t make people happy—it does, just not in the way you might think.” — Morgan Housel

Don’t think all poverty is due to laziness. Don’t think all wealth is through hard work.

Money is the only type of wealth. The Five Types of Wealth

  • 在人生中，你應該要追求財富，而不是追求金錢。
  • Having a lot of money ≠ Rich life

On Making Money

  • It’s not how much money you make. It’s how much you take home.
  • Use money to make more money for you 5
    • “The rich get richer.”
    • “Money begets money.”

On Keeping Money

On Spending Money

“Spend your money on the things money can buy. Spend your time on the things money can’t buy.” — Haruki Murakami

  • Consider spending money as a failure of imagination; a failure to solve problems by smarter means.
  • Your need for money is inversely related to your level of skill. Money buys convenience but more importantly, it compensates for lack of skill.
  • Unspent money buys something intangible but valuable: freedom, independence, autonomy, and control over your time. Every dollar of savings buys a claim check on the future.
  • The concept of the Doughnut, as introduced by economist Kate Raworth, illustrates a balance between meeting essential human needs (the social foundation) and staying within planetary limits (the ecological ceiling). When applied to personal wealth and happiness, the Doughnut highlights a crucial insight: beyond a certain level of income—where basic needs are comfortably met—people enter a more ambiguous space of desire, where knowing what to want becomes far less straightforward than knowing what to need. As Luke Burgis points out ,6 once survival is secured, people shift from necessity-driven decisions to socially influenced desires, often struggling to determine what will truly bring fulfillment.
  • Everything Must Be Paid for Twice
    • There are 2 costs: 1. Cost in money to purchase, 2. Cost in time to use/learn/manage.
    • 第一次支付是用金錢換取你想要的東西，比如一本書、一個 App 或是一輛自行車。
    • 但要真正享用這些東西，還需要進行第二次支付。這次支付的是你的時間和努力，才能從中獲得實際的價值。
    • 第二次支付的成本可能遠高於第一次支付。例如，購買一本書可能只需要 20 元，但真正讀完它可能需要花費 10 小時。只有完成第二次支付，這本書的價值才能真正體現。如果沒有第二次支付，那第一次支付幾乎毫無意義，和把錢丟進垃圾桶差不多。
  • Optimize for life fulfillment/experiences, not for money-in-the-bank.
  • Don’t buy “dumb things” that offer “temporary happiness.” Spend smart on the things that bring you true, long-lasting happiness.
  • Do not attempt to achieve status, respect, or admiration through material purchases.
  • Use the “One in, One out” rule/policy when buy things
    • Eliminate before accumulate
  • Money isn’t made in the BUY or the SELL. It’s made in the WAIT.
  • “Think of money as information — it’s just for resource allocation across time and space” — Elon Musk
    • Money is just a piece of paper.
  • “The reason you’re not making $10m a year is that you don’t know HOW to make $10m a year. Therefore, that lack of knowledge is costing you $10m a year.” — Alex Hormozi
    • The Action Mindset: The longer you’re not taking action, the more money you’re losing. → The best thing you can do to stay poor is to start tomorrow.
  • Making money is an action. Keeping money is behavior/habit. Growing money is knowledge.
  • Skills get you to a million, character/charisma takes you to 100 million, and time brings you to a billion.
  • Stop trading/renting time for money, so money can create more time for you.
    • MONEY and TIME is a balancing act.
  • Millionaires don’t have salaries. They own assets.
  • 真正的財務自由是不需要再被困在「時間/勞力換取金錢」的枷鎖裡 (金錢最大的價值是時間的自由, i.e., 選擇權) → 當「被動收入 (睡後收入)」大於日常開銷，工作就變成一種選項
  • Passive income is actually “less active” income → Difference: “LEVERAGE”
    • We all have 24 hours per day.
    • We all trade/rent out time for money at some levels.
    • We are all being paid per hour rate
  • FIRE = Financial Independence, Retire Early
  • Financial Freedom/Independence = passive income exceeds your cost of living
  • Financial freedom is a feeling, not a reality.
  • Financial Literacy = understand how to manage your money
  • “Retirement is when you find a sustainable way to fully live your life in the present moment, without sacrificing any of that time in exchange for future reward.” — Ali Abdaal
  • “I find that when people earn their freedom from money constraints, they usually don’t stop working. Instead, they start doing their best work.” — Mr. Money Mustache
  • ? The 4% Rule
  • Mental Shift: Consumer(ism) → Producer/Creator/Owner/Investor
    • False Belief: “If I become great at making money, you’ll automatically become wealthy.”
      • Make Money → Spend Money → Make Money → Spend Money
      • Money more in = More money out
        • Lifestyle Inflation/Creep: when your income increases, your expenses increase just as much to upgrade the quality of your life.
  • The only way to make a lot of money is to create a lot of value;7 The only way to make passive income is to provide value in a way that is not directly tied to your time.
  • True wealth is found not in attaining more, but in discovering enough.
  • Wealth = Infinite Game ↔ Status = Finite Game
  • WEALTH = Net Income + Asset Value
  • Wealth is not the same as income.
    • Wealth is hidden. Wealth is the money you don’t spend. Wealth is the nice car you don’t buy. Wealth is the big house you don’t purchase. Wealth is the financial assets that haven’t yet been converted into the stuff you see. Wealth is an option not yet taken to buy something later.
    • Whatever your income, always live below your means.
  • Spending can be a representation of how hard you’ve worked and how much stress went into earning your pay check.
  • Stop thinking about what your money can buy. Start thinking about what your money can earn.
  • Experimental Purchase (O) Impulsive Purchase (X)
    • Material Desires
    • Never buy things based on status. Instead, buy things that make you healthier, wealthier, or provide you free time. It’s called Practical Materialism: Products that make a material difference in the quality of your life.
      • On the one hand, spend extravagantly on things you love (e.g., travel)
      • On the other hand, cut costs mercilessly on things you don’t love (e.g., car)
    • “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people that they don’t like.” ― Will Rogers
    • “If you buy things you do not need, soon you will have to sell things you need.” — Warren Buffett
    • “We buy things we don’t need to impress people we don’t like.”
  • It’s not about how much money you make, but how much money you keep.
  • 要為了「幸福感」賺錢，不要為了「饋乏感」賺錢
  • Mindset shift for keeping money:
    • 沒有拿去投資獲得更高獲利的「罰金」(X)
    • 支付未來幸福生活的「入場費/手續費」(安全邊界 Margin of Safety) (O)
  • “Savings can be created by spending less. You can spend less if you desire less. And you will desire less if you care less about what others think of you.” — Morgan Housel
  • You’ll never achieve financial freedom when you play status games, fall into the consumer trap, and let your ego dictate your spending. Less ego, more wealth.
  • 開源 > 節流
  • The pleasure of anticipation is often greater than the pleasure of acquisition.
  • Spending any amount of money to “save money”
    • Look at the ROI of your expenses, not the price tag.
    • Buying quality is key. If you buy quality the first time, it can last a lifetime.
    • Frugal doesn’t mean cheap. → Cheap is saving money in short term, while frugal is making wise choices to save in the long run.
    • Often, the more expensive item (“Buy It For Life” ) is more frugal than the cheaper item (“Buy Once, Cry Once”), if it is well-made and lasts significantly longer.
  • Marginal Utility: Beyond a certain point, having more money will not lead to more security, freedom, and happiness. In fact, these things do not come from more money. They come from knowing when to stop. See The Parable of the Mexican Fisherman

Footnotes

  1. All human behaviors make sense with enough information. ↩

  2. “Being poor, for example, reduces a person’s cognitive capacity more than going one full night without sleep. It is not that the poor have less bandwidth as individuals. Rather, it is that the experience of poverty reduces anyone’s bandwidth.” — [@mullainathanScarcityWhyHaving2013] ↩

  3. “In 58 years of Berkshire management, most of my capital-allocation decisions have been no better than so-so. […] Our results have been the product of about a dozen truly good decisions.” — Warren Buffett ↩

  4. “When you see someone driving a nice car, you rarely think, “Wow, the guy driving that car is cool.” Instead, you think, “Wow, if I had that car people would think I’m cool.” Subconscious or not, this is how people think.” ↩

  5. In contrast, borrowing money creates debt’s vicious cycle, leading to financial strain and growing interest payments that can be difficult to escape. ↩

  6. “After meeting our basic needs as creatures, we enter into the human universe of desire. And knowing what to want is much harder than knowing what to need.” ↩

  7. No one hands out money. No one is going to pay you just because they like you or think you’re cool. That’s not the way the world works. Money earned is a direct byproduct of value created—and that value is a direct byproduct of your service of others. It’s not talking about the thing, it’s not brainstorming about the thing, it’s not asking about the thing, it’s not thinking about the thing. The only way to create value is by doing the thing. Identify a problem, create a solution, scale the solution. Simple, not easy. ↩

[1]
Housel M. The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness. Petersfield: Harriman House; 2020.

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