Like a lot of younger folks (I’m under forty, thats still young right?) when I find something I desire I want it right now. But as someone who looked wiser than me pointed out “Those things which you can easily grasp have the most control over you”. It sounded confusing to me at first but I’m sure there’s some wisdom in there. I understand it like this… if you can whip out the credit card whenever you want to buy something, then spending has control over you. Whereas you should control the spending! If you pour yourself a beer every time you even think of having one, then beer has some control over you. You are no longer in control of your drinking. For some of us the things we desire in life have to be put a little out of reach so we can exert control over them. We can put things physically out of reach, separating ourselves with distance. So even if you want a beer there is none in the house. Or we can separate ourselves via time i.e I only drink beers on Fridays and Saturdays and so you wait till the weekend, you put your beer drinking in the future. I’ll fully admit that chocolate in the house has control, I have to eat it. They only way I can resist is to actively remove temptation. I do this by eating all the chocolate in one go……..but usually by not buying any except for rare treat occasions.
I wanted to upgrade my phone about 2 years after I bought it, but it still worked and had all the functions I needed. I delayed the purchase until my current phone no longer supported the apps I wanted, was far too slow and kept crashing. Then I waited even longer till a model came out that suited me. Thankfully new gadgets have no control over me. Do you upgrade every year, are you controlled by technology?
I discovered early on in my life that money does indeed have some power over me. When I look at my bank balance I immediately find ways to spend it. Over the years I developed strategies which involves moving most of my money (money for savings, investments, bills) to separate accounts. Then my checking account only has my spending money left in it. And I’m allowed to spend that however I want. As the years go by I’m getting a lot better at holding on to that money and a positive balance in the account no longer drives me to spend like it once did.
It takes time to learn which things in life have the most power over you and how to push back and regain control.
By investing and saving my money I am putting as much of it as I can into the future. Out of reach and yet still under my control. In a way I have time travelled my wealth to distant future, hopefully a future that involves driverless electric cars and robot butlers. Some of it is going 29 years into the future! (Kiwisaver, can’t touch till I’m 65). A portion of my funds are only going 15 years into the future. I’ll have to patiently wait till I catch up to it. I’m putting my wealth out of reach where it no longer has any power over me and hopefully in the interim years I will be well practised at budgeting and living within my means so when it finally comes time to pull the plug on the job and quit work forever I’ll be able to manage the lump sum in a way that will make it last till the day I die.
I wonder if 2 million dollars dropped in lap right now (apart from the inevitable bruising and crush injuries) would I be able to make it last forever? Have I learned enough yet? Have I practised disciplined budgeting for long enough to keep control over 2 million and not got nuts buying home-brew equipment and extravagant holidays?
I figure that the large amount of time it takes to reach financial independence is a right of passage that educates and tempers us. It’s a chance to make small investing mistakes with small chunks of savings, its time to learn how to build a portfolio or find out who you can trust to build one for you. Learning that just because you have money in the bank does;t mean you can afford to buy whatever you want. I’m only a year into this way of thinking, but I’ve learned a lot about myself by setting off down this path. I’m looking forward to learning even more.