What is Success?
Success [suh k-ses] the attainment of wealth, position, honors, or the like – Dictionary.com
A few months ago, my girlfriend’s sister brought her eldest son to DC to look at colleges as he’s getting ready to take the SATs and decide where he’s going to apply. Like any good mother, she’s trying to help her son make a good decision (and worried that he’d make a mistake), but after having met the kid only the one time I knew she didn’t have much to worry about. Whatever college he ended up at, he’d be fine – honestly, he’d probably end up a success even if he chose not to go to college and instead ran off to join the peace corps.
I’ve had the good fortune to meet some very successful people in my life, as well as the good fortune to be acquainted with plenty of not so successful people. The former all seem to be very secure and sure of themselves, while the latter were all just a bit listless, chasing some short term goal and never really achieving any kind of focus. I’ve tried to learn something from each one of them, although I’m confident that I’ve missed out on plenty of other lessons they could have taught me.
If there was one defining characteristic the successful people had that the unsuccessful ones didn’t, it was that they were extremely passionate about something and pursued that passion relentlessly. Now, I’m not saying that they were necessarily rich people – success isn’t a measure of money (although they were all wealthy in their own way). The definition from dictionary.com is practically a joke, because if you need a gold star to feel like you’re a success then you probably never will be. I personally define success as someone who has figured out what it is they love, and then done something to make it better. Usually, this requires throwing caution to the wind and sacrificing something else that you might otherwise cherish. Sometimes this success and sacrifice is institutionalized as it is in the field of medicine (I’ve never met a doctor who didn’t sacrifice something to get to where they were, although I’ve met a few who weren’t successes because they didn’t love it). And sometimes, it’s more a journey of personal discovery.
So, back to my girlfriend’s nephew – how did I know his mother didn’t have much to worry about? Because he was obviously good at math, and one of the stories his mom told about him was how he and his friends played math games.
You don’t play math games if you’re good at math, you play math games if you love math.
At that point, I figured that he’d be fine, and spent the rest of the weekend trying to impart to him that college is a time to discover your passions and then learn a lot about them. He said he didn’t know what he wanted to major in, and that’s okay. But I would be willing to bet right now it will end up being some sort of math specialty or an applied math degree like engineering or physics. And I’m pretty sure he’ll be successful in it too.
What is Saving?
Saving [sey-ving] - sums of money saved by economy and laid away – Dictionary.com
Saving is a funny thing. Some people do a lot of it, to the point of becoming a hoarder. Some people do little (or none) of it, and are constantly afraid of the ups and downs of life. And then there’s a third camp that save enough to not be worried, but are willing to spend money for their enjoyment as well.
I’m big into time-saving tips – I read Lifehacker every day and am constantly trying out things to make my routines run more smoothly (the best lifehacker tips save you both time and money). I’ve spent hours tweaking computer processes to save me 10 minutes a day, because over the long haul the investment is worth it. Since I consider money and time as the same thing, I see these activities as an investment in my future, or at least my present. And I find that I actually enjoy doing this stuff, much like a lot of the personal finance bloggers I read enjoy participating in their favorite frugality tips (like making their own detergent).
I will also mercilessly shop around for the best deal on just about anything, and have no qualms about then asking for a further discount. I find this activity exciting, and you’d be surprised how often you’ll pay less than the listed price for something, but that’s a different post.
When I think about saving in a more abstract way, be it money, time, or things (think collectors), I think of it as an example of my self respect (and possibly my respect for others, although I’ll admit to being late to just about anything that’s scheduled first thing in the morning). If you respect yourself, you will find a good balance between spending and saving, and everyone should be doing some of the latter. So, the question is, what are you saving, and is it enough?
What is your price?
About two and a half years ago, I spent about six months out in St. Louis chasing a salary (bad idea, I’ll discuss the why at another time). One of the few people who I met that actually made an impact on my worldview (usually the sign of someone worth spending some time with) was a guy by the name of Matt Homann. Matt runs his own legal consulting/retreat company and is very big into redefining what it means to be a lawyer (or a programmer, or a doctor, or really anyone who has what they think is a well defined profession).
Recently (well, last month), he was talking about how you should let your client determine the price they pay you. Now, you’d think this concept would fly in the face of my “value yourself infinitely” concept, but I think this dovetails in nicely. Matt is a very confident guy, and he has a lot to share not only with other lawyers but really any professional. He clearly places a high value on his time. If you think about it, this concept is a lot like making whatever employer wants to hire you give a dollar value first.
From Matt’s blog:
YOU DECIDE: Your absolute satisfaction with LexThink isn’t just our goal, it’s the measure of our worth — and the determination of our fee. The rules are simple: you pay us what you feel we were worth to you. You decide, no questions asked. The only rule? We want to know why you paid what you did, and how we could have done better.
What do you think would happen if you took this approach with your future (or even your current) employer? You go into your performance review (or salary discussion, or however your company handles that – remember, your employer is really just your customer) and tell them they can give you whatever raise they feel is justified, but they have to explain why, and what you can do to make yourself more valuable next time around. You let them know that you are having this discussion because you value your time very highly and want to be appropriately compensated, but that you also want to provide a good value to them in return (the classic win-win). What do you think would happen?
Personally, I think you’d get a big raise, and I intend to try that tactic next time I have to opportunity. What about you?
What is interest?
Interest [in-ter-ist, -trist] – a sum paid or charged for the use of money or for borrowing money – Dictionary.com
Previously, I’ve discussed how money = time, and how flipping the concept of time equaling money on it’s heels has noticeably shifted my perceptions about how the world works. If all of that is true, then paying interest (i.e. taking out a loan) is valuing current time more than future time. I think that is a huge mistake almost all of the time. And yes, that is coming from a guy who just a few years ago used a mortgage to buy a home (boy, do I regret that decision).
Why? Because the one non-renewable resource that we have is our time, and as we get older we have less of it. That’s why old people get paid more than young people. Not because they are more valuable (although a lot of times they are), but because the older you are the more you intrinsically value your time. I believe that if you could live your life backwards, you would never take out a loan (or pay interest on any money) in your entire life, unless you were sure it was going to be returned to you ten-fold.
The more I think about paying interest, I think it really equates to self respect. Do I respect myself enough to not spend time that I haven’t even had the opportunity to experience yet? Do I value myself (and my time) enough to say that I don’t want to sign away future time when it’s more valuable?
Think of it this way – if I save up money (time) for a while to buy something, because of inflation that time from the past is worth less than my time in the future. Past time is ‘worth less’ than future time because as you move into your personal future, there is more past time and less future time, making the times to come more valuable. Do you really want to sign that away?
Next time you’re tempted to buy something on credit, do yourself a favor. First, figure out how long you are willing to spend paying off the balance. Second, calculate how much money you are actually going to end up paying for whatever it is you’re buying (it’s probably more than you think). Third, calculate your true hourly wage – I like Trent’s take on this, even though I have a few tweaks I’d like to add. Then divide your total cost by your true hourly wage to determine how much time you will actually end up spending on whatever this thing is you are buying. Is it worth it? I’ll give you that this doesn’t exactly account for increases in your true hourly wage, but since you’re valuing now more than later, that doesn’t really matter, does it?
Ok, if you want to get fancy, you can use the following equation (this assumes that you will get a 4.5% raise every year to account for monetary inflation and a bit of additional self respect, and also assumes monthly payments) to determine what your average true hourly wage will be over your payment period:
athw = thw * [1.045*(n/12)]
athw = Average True Hourly Wage
thw = Current True Hourly Wage
n = Number of payments
So if your current thw is $25/hr, and it will take you 5 years to pay off your new $20000 car (which at 6.25% interest will actually end up costing you $24045.60) using monthly payments, your athw over that period will be $30.625/hr. By my calculations, that means that new car will cost you about 785 hours of your life. Worth it? Probably not.
What is money?
Money [muhn-ee] – any article or substance used as a medium of exchange, measure of wealth, or means of payment, as checks on demand deposit or cowrie – Dictionary.com
Money is a topic I’ve always gotten a real kick out of – not because I want a lot of it (ok, so maybe I do want a lot of it, but that’s not why I find it interesting), but because conceptually it’s slightly ridiculous and absolutely brilliant. I mean, people kill one another over little pieces of paper (or slivers of metal, if you’re talking about coins) – why?
The value (or lack thereof) of these little chits didn’t quite register with me until I was in college and I was sitting in some intro to economics class. I don’t remember the topic of the day, or how this came up, but the professor said something that has stuck with me since. “Money is an exchange rate for time. Tons of people will tell you that time is money, and they’re right, but the more correct thing to say is that money is time.” I’m sure I’m misquoting a bit there (it was several years ago), but you get the idea. I’m not sure why turning the concept on it’s head made it such a strong statement to me personally, but that day I decided something about myself, and it has colored my financial perception ever since. That day I decided that my time was infinitely valuable, at least when you compared it to green pieces of paper (or shiny bits of metal).
That day is the reason why I will shamelessly lobby for a raise at every opportunity, but on the flip side won’t even consider how much ’something costs’ if I want it bad enough or if I think it will bring me enough joy. I’m even OK getting nothing personally for my time other than knowing that someone enjoyed the fruits of my labor. However, I refuse to spend my time doing something I am not passionate about, because otherwise I’m just throwing that time away for useless pieces of paper. That idea has dramatically affected how I’ve directed my personal and professional life, because I want to actually live my life, not just have a lot of crap when it’s done.
For some of you, maybe that doesn’t ring true. If you want to work the numbers, think about it this way – I don’t know how much the last person to have an particular amount of money values their time, so me basing my ‘value’ on any number set by someone else (say, my salary) is completely arbitrary. And since my time is the most valuable thing I have (and I have a finite amount of it), I might as well consider it as precious as it really is to me.
What gets worse is that money, as a rule, is that time in the past is less valuable than time in the future (at least, that’s the perception), so you either have to constantly exchange it for other people’s money (time) via investment or allow inflation to eat away at it’s value. I’m not of the ’spend it now’ mind set by any means, but I also know I can’t take it with me, so if it’s going to last longer than I will it damn well better continue to work towards my goals long after I’m gone. Or something like that…
What is your dream?
Dream [dreem] – an aspiration; goal; aim – Dictionary.com
I’ve been spending a lot of time thinking about this recently, because quite frankly I haven’t a clue what it is that keeps me going some days. I was reading a blog post over on erica.biz about why people don’t save for retirement. She (Erica, I presume) spent some time talking about why people put off saving for the future, because to them the now is something that is tangible, while tomorrow isn’t something people can’t always seem to grasp. Or, at least that’s the lesson I took from the post, even if she was getting at something else.
It got me thinking about two things, really. The first thing is that people need to figure out exactly what is getting them up in the morning – what is their dream? I’m not talking about goals, I’m talking about that big vision for the future. Unfortunately, I don’t have a good idea in my mind of what that is for me personally – one of my personal goals for writing this blog is to figure that out. I have this sinking suspicion that determining what that dream is will be a big part of the “get happy” I was thinking about when I named this site. I’m sure I will be devoting a good deal of my time here on that subject in the future. What I do know is that retirement isn’t it.
The other thing it got me thinking about is perhaps a bit more shocking. I think people need to stop saving for retirement.
Now, before you go jumping down my throat about this, let me be clear. I’m not talking about not contributing to your 401k, stopping your IRA contributions, or anything crazy like that. I’m just saying retirement isn’t my dream, and honestly, I doubt it is yours either, so don’t bother saving for it. Instead, use those same vehicles (and probably the same, if not greater contributions) to save for your dream, whatever that may be. Of course, if it turns out your dream is something so radically different that those ‘retirement’ tools can’t be massaged to help you get where you want to be, then figure out some other way to get there.
Ok, so back to Erica’s blog post. Honestly, visualizing my retirement isn’t something that is really all that useful to me, but I hope that if I refocus it on my dream I will be able to figure out what exactly it is. Of course, maybe I’m over-reaching, and I should be focusing more on my near-term goals (mini-dreams, maybe? I think of goals as things that are easier to obtain than dreams…). What do you think?
What is wealth?
Wealth [welth] – an abundance or profusion of anything; plentiful amount - Dictionary.com
Honestly, I’m not a big fan of any of the dictionary definitions of wealth, but the one above was as good a one as I could find easily. For me, personally, wealth is the ability to do what you want, for whom you want, when you want. Really, wealth = freedom. Nothing more, nothing less. Notice I didn’t equate money to freedom – I think that’s a load of b.s., personally. It is certainly not about being ‘rich’, although I’ll admit being rich can definitely help you reach be wealthy.
I like to think about it like this – a retired guy who’s got a ton of cash but is bored with his life and everything in it isn’t wealthy at all. I’m sorry, but most retired people I’ve met fall into this category of affluent but miserable. On the other hand, a young guy making $5.15 an hour living with 6 of his friends making music in the garage on his off hours most certainly is wealthy. Why? Because the old guy has somehow gotten himself trapped in a situation where he doesn’t want to be, while the young guy is where he is because he wants to be there, and is happy about it.
The point I’m trying to hammer home here is that you can be happy without money, but you can’t be wealthy if you aren’t happy. So, rather than making it your life’s goal to collect as much money (or stuff, or whatever) as you can, maybe we should be making it our life’s goal to collect as much happiness as we can. Corny? Maybe, but I would rather be happy and broke (and still wealthy by my estimation) than be rich and miserable.
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So, you want to know what's up with the brackets in the name? "Curly brackets (also called braces, or "squiggly brackets") are sometimes used in prose to indicate a series of equal choices" and "Square brackets are mainly used to enclose explanatory or missing material usually added by someone other than the original author, especially in quoted text." So basically, if you really want to be wealthy in life, you have to figure out how to get happy. Since that whole spiel would make a crappy name for a blog, I decided to do something a bit creative with some brackets.
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