Thursday, 25 April 2013

And then I think about money

Lately I've been thinking a lot about money. Ok, I think a lot about money on a regular basis; it's just been waaaay more recently. I subscribe to the school of thought that money is important in this life, but it is not that important. Other things that are more important than money include health, friendships and relationships. Health can be in the form of physical health, mental health, emotional health - which overlaps with friendships and relationships. You get the idea. 

I think when discussing money, one of the things that people would never admit openly is the fact that they regard money as the most important thing in their lives. This is because, well, mostly, they just don't realise it. Or maybe because we've been so ingrained within a particular mindset that it is difficult to divorce ourselves from such views. These views often have been passed down from generation to generation, or perhaps even, eventuate out of hardships. It is not about being right or being wrong. It is just a point of view. 

I notice a trend that eventually, most people realise that money is not everything, that there are things that are more important than money in this life, and those things are so precious that even money can't buy them. I am thinking along the lines of peace of mind, an ability to fall asleep without gulping any medicine, time to spend with people who matter the most. 

Passion vs Money
The luckiest people in this planet are able to marry their passion with money; and these people are not necessarily those who work with money. These are the people who are able to generate money (an income) from their passions. For these people, being away from their work is annoying because it stops them from doing something that they love. There is no work-life balance, because work is life. For the rest of the population, work is not life, and we need work-life balance. We are also faced with the option of passion vs money. Do we pursue our passion OR do we put money first? 

We only have limited amount of time in the day. Let's say, we sleep for 7 hours a day. That leaves 17 hours of awake time, 8 hours or so we spend working, about 1 hour commuting, 1 hour of grooming, 2 hours of eating/cooking, 1 hour of rest, so if we are lucky, we have 4 hours to do whatever we want to do - i.e. pursuing a hobby or spending time with people we love, subject to their availability. Most people do not even have these 4 hours in their days - because they take longer to commute or to groom or spend more time eating/cooking/cleaning. 

What this really means is that the 8 hours or so that we spend working, for a lot of people, becomes the critical time whereby they feel like they should do something meaningful. This is only natural given that it is the largest block of time spend doing something during waking hours. So we are faced with this passion v money dilemma - most of us are. We learn to make a decision and be at peace with it, at least for the time being. We learn to adopt a more long term horizon. We basically learn to make peace with our choices. 

It does not mean that what we choose right now is what we are stuck with for the rest of our lives. We can change this any time we want to. Of course this change is difficult, it takes effort and in some cases, it takes sacrifices. But it is necessary to sustain who we are, who we really are. If we don't fight for this, then I am not sure if life is worth living for. (Ok, that's rather dramatic, but you get the point. There is no point of you living someone else's life. You gotta make your own decisions in your life and be happy with yourself.)

Money does not solve all problems  
A lot of the time we fall under this illusion that having money means we've got it all. This is a pretty common illusion to have, and this illusion is certainly one of the reasons that people put money over passion. Money does solve problems, just not all of them, and definitely not all at once.

Granted that we need a roof over our heads and nourishing meals and preferably well-fitting clothes to sustain us, but this is only the beginning. There are other things that we can utilise to enhance our lives, you know, things such as education and intellectual pursuits in general, or some creative pursuits, both of which require resources, in the form of most certainly time and money.

Being debt free has been described as an end-goal for a lot of people. There is something so bloody appealing about financial freedom that it is hard to find someone who doesn't want it (then again, who doesn't want freedom in general? Remember being a teenager and wishing that you grow up and have all the freedom in the world?). I think this is because attaining financial freedom means you free up your time to pursue your passion - or anything else that you deem meaningful for your life. Isn't nice to wake up in the morning and not worry about money - at the very minimal, it is one less thing to worry about.

That said, life does go on and with one less thing to worry about, there are bound to be other issues that arise and some of these issues you can't quite solve with money. This is somewhat rather ironic but it is also very true. When we have a problem, our first instinct is to throw more resources (i.e. money) into the problem in the hope that it will solve it. But more often than not, throwing more money into something, without proper planning, ends up exacerbating the problem. Or even worse, it creates more problems.

Having money creates new problems
Having more money is a challenge that everyone welcomes (come on, who doesn't want more money) but not everyone can successfully tackle (i.e. spend utilise wisely). I personally believe that being able to have more money means a more responsibility to spend it appropriately. Look at Bill Gates and Warren Buffett that pledge their wealth to social causes. These are the kinds of responsibility that I am referring to.

The thing about having more money (or just having money) means that we get comfortable - or sometimes, too comfortable. And when we get too comfortable, we forget to grow. Or maybe we still grow, but we may forget to grow in more innovative ways because nothing is really pushing us to our limits. When we are pushed to our limits, we discover new things about us that we previously never thought about before. We grow in ways that we could not previously imagine.

One of the challenges of having money is to ensure that they get utilised in a way that's most rewarding. One of the challenges of not having money is to ensure that what you've got is being utilised in a way that's more rewarding. The latter is easier than the former because in the latter scenario, you only get to focus on your top priorities, and probably have to make do without for the rest of things of your list. With the former, you get to satisfy your top priorities and then you have decisions to make as to what to do with the rest.

My favourite reading on money is this piece by the Financial Samurai: no point making money if you don't spend it. And with that, I am going to end this post.

Happy Anzac Day! 

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