tags:
- books
- finance
- personal finance created: 2022-05-16 updated: 2022-05-16 title: “Just Keep Buying” authors:
- Nick Maggiulli
Investment as a Habit
Make it a habit to invest your money like you make it a habit to pay your rent or mortgage. Buy investments like you buy food—do it often. (Location 114)
Making it a habit puts the principle of just-keep-buying into our subconscious routine such that we don’t overthink it and keep it consistent.
Investment VS. Saving
If you don’t have much money invested, then you should focus on increasing your savings (and investing it). However, if you already have a sizable portfolio, then you should spend more time thinking about the details of your investment plan. (Location 172)
The formula to calculate where you are at right now on this investment vs. saving curve:
- How much do you expect to comfortably save in the next year \(S\);
- How much do you expect your investment to grow in the next year \(G\);
- If \(S\) > \(G\), then you should focus on saving money
- If \(S\) < \(G\), you should focus on fine-tuning investment
- Else, you should focus on both of them equally
Saving
- How much to save: save what you can. Not a certain percentage nor a certain mount of dollars;
- Don’t stress over it: stress causes more harm;
Spending
Cutting spending is to saving money as cutting calorie intake is to weight loss. Neither of them can give you long-term benefits.
The other alternative is to increase income. It is shown that increasing income does not incur increase of spending because of 202205202200 Diminishing Marginal Utility. As a result, it is important to grow your income.
How to Spend without Guilt
By applying 202205202159 2x Rule, we make commitment to ourself and the purchase such that we are consciously justifying the purchase with less or no guilt.
What are the Best Things You can Buy
- Experiences
- Treating yourself occasionally
- Extra Time
- Paying upfront (worry-free frictionlessness)
- Spending on others
Happiness VS. Fulfillment
We return to our normal level of happiness even after experiencing some positive events in short term. This is called Hedonic treadmill - Wikipedia.
Then it is clear that chasing after happiness is a wrong quest and instead, we should aim for fulfillment — making impact with our decisions and making it count.
Pursue something so important that even if you fail the world is better off with you having tried.
Income
How To Increase Income
- Sell your time
- Sell your skills
- Sell your products
But above methods can’t scale to some varying degrees. Therefore, you need to have income-producing assets aka. investment.
References:
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