Done To Zen

I just wanted to wish everyone a happy July 4th. It probably is the only holiday where we don’t have to spend a lot of money buying gifts and making big dinners.

Don’t forget to watch the fireworks. :-)

Meg, over at The World of Wealth, reminded me of one of the great benefits of financial independence: being able to help your family out if they need it:

[My mom] mentioned my concerns to her father (my grandfather). He began to give her a lecture about how the market goes through cycles and it’s no reason to worry; but then she reminded him that I was planning to sell a chunk of it to buy another property (I had called to discuss the decision with him before officially making it).

“Oh, that!” he apparently exclaimed, recalling my plans. According to my mother, he said not to worry, that we aren’t going to be selling off anything at a market low and that we’d go about it some other way.

[…] My mom continued and told me that he said they would “sell a bond or something” and lend the cash to the account from which I’ll be getting my downpayment. That way when I withdraw funds, I wouldn’t have to sell stock to do so. They would then have to be paid back eventually, of course…

And, just like that, I realized that the 2nd largest benefit of being financially independent (after not having to stress about money) is being able to help your friends and family in their times of need. Feeling helpless is one of the worst feelings of all times, and it is exactly what I would feel if I could not help someone when I want to.

Money Blog Network asks us to look back 10 years to examine what our lives were like back then.

Marriage and kids

I was single then. I’m still single now. No kids.

Career

I was counting ducks in middle school classes then. I’m still counting ducks, but now I do it during the ever-increasing number of meetings I have to go to every week.

Education

Like I said, I was in middle school then. Since then, I finished middle school, high school, college, and am now enrolled in a graduate school (and hating every minute of it, like I always do any time I spend in education institutions).

Finances

Ten years ago, I was 11 years old and had no money to my name. Not even pocket change. Today, I’m 21, earning a little bit (well, maybe a bigger little bit) more than what most people my age are earning, and I have a bit more money to my name. Net worth is nothing to sneeze at.

Credit Cards

I didn’t have any credit cards then (for obvious reasons). I do have one now, and I use it for everything I purchase, but I pay it off every month. But I seem to be spending more every month, so I decided to stop using credit card for a month (at least) starting July.

If I could tell myself anything…

The single biggest thing I regret is letting my fear stop me from investing the past 5 years. I wasn’t making much money, but my life would have been very different if I had pushed through my fear and done what I wanted to do.

On the other hand…

Better late than never, I suppose.

What’s more interesting to me is…

What do I want my answers to be if somebody were to ask me the same questions 10 years from now?

Shannon, over at SavingAdvice, disagrees with the popular notion that you should hire others to do your work for less:

I am not against the idea of hiring someone to do work for me. In fact, I gladly pay people to cook for me the six or seven times a month I go out to eat and would do it much more often if I had a limitless income. I just don’t believe that my salary is the best criterion to use when deciding whether or not to do something myself.

I couldn’t agree more. I love going out to restaurants, and if I had limitless income and limitless health, I would be doing it thrice a day every day. But, alas, I don’t, so lets move on.

Shannon goes on to say:

Taking the argument of “hire someone to work for less than you do” to its logical extreme, if you make $40 an hour and you hire someone to cook for $20 per hour, someone to clean for $10 per hour, and someone to do your shopping for $20 per hour, each person makes less than your hourly rate, but you are already spending more than you earn.

Precisely. There’s nothing wrong with hiring somebody out to do your work for you even if you make only $10 a hour and the other person costs $10 a hour, if you can afford to hire them. On the other hand, just because you’re making $100 a hour doesn’t mean that you can afford to hire somebody at $10/hour. It depends on what the rest of your expenses look like.

You’ll never hear any financial advisor telling you to outsource work for less if you are making $10,000 a month but spending $12,000. But if you’re making $1000 a month and spend only $250 (if you are, contact me, I want to know how), then you can hire somebody who charges $50 a hour. If you want.

Which brings me to…

Do you like it or hate it?

Just because somebody can do it for less doesn’t automatically mean that you should outsource it. What if you don’t hate it? What if — gasp — you actually like it? Could that $25/hour x 10 times a month = $250/month be utilized for something better? No? Maybe you can invest it? $250 a month invested at 10% for 30 years will give you $542,830.27. Even you save only $25 a month, you will get $54,283.03 in 30 years.

Now tell me if you hate something enough to let go of that kind of money. It’s not a trick question. I hate cleaning the bathroom. If somebody asked me whether I would rather spend $250 a month to clean my house even if it will cost me $542,830.27 over the next 30 years, I’ll pick hiring the cleaning lady 10 out of 10 times. I hate cleaning and the joy I get every month that I don’t have to do any cleaning is far more important to me than the cost of losing half a million dollars. On the other hand, if somebody were to ask me to outsource cooking to someone for $250 a hour, I would not do it. It’s not even that I like cooking: I just don’t hate it enough to lose that kind of money.

I ran across an excerpt from an interview with Tal Ben-Shahar, the author of Happier at FiveCentNickel, in which Ben was asked about money, success, and happiness; more accurately, he was asked about how money and success don’t lead to happiness:

Happiness largely depends on our state of mind, not on our status or the state of our bank account…One of the most common barriers to happiness is the false expectation that one thing — a promotion at work, a prize, a revelation — will bring us eternal bliss. As soon as you achieve your goal, the “what’s next” syndrome kicks in, leaving you as unfulfilled as before.”

I don’t know about you, but I constantly commit the flagrant sin of thinking that I’ll be happy as soon as X happens. I’ll be happy once I become thin, I’ll be happy when I finish my MBA, I’ll be happy when my mortgage is paid off, I’ll be happy when my net worth is a million dollars, I’ll be happy when I stop procrastinating, I’ll be happy when I finish my book. Seriously, there’s no end to the list of things I have to do before I’m happy. But the thing is that even if I finish all these things, I still won’t be happy.

Back when I was in college, my list of “I’ll be happy when I do all these things” was quite different. I like to think that I’m happier now than when I was back in college, but I still focus too much on the future and not nearly enough on the present.

Did you watch the Kung Fu Panda (an excellent movie that you really should watch)? In it, the wise turtle Oogway says something that I couldn’t have said better if I had scripted it myself:

The past is history, the future is mystery, and today is a gift. That’s why they call it present.

People who keep regretting the past or regretting the future (yep, it can be done) will stay unhappy no matter how much money, success, fame, health, and power they earn, whereas people who live in the present enjoy life even if they don’t have anything that we traditionally associate with success.