Back to Basics: Understanding the Money Game
Back to Basics Money Series
Jennie and I have been wanting to do a ‘back to basics’ money series for a while. The timing just never seemed right. When you’re knee-deep in the process of self-improvement (financial or otherwise), it’s hard to come away with any useful insights beyond a list of tips and tricks. I think more important than telling people “what to do,” showing them the “why” and the “how” is what really empowers them to look at their own situation in a different light.
When it comes to money, there are very few formulas or “recipes” to follow that work for everyone’s situation.
Our only goal for this series is to encourage people to go out of the norm of what’s “expected” and start thinking for themselves.
How We Got Here:
More Money Means More Freedom
The reason Jennie and I are launching this series today is because two things have happened:
Last month, Jennie and I met our $40,000 RTW trip savings goal after a two year process of budgeting and saving.
In the second quarter of 2018, we met our freelance goal of making at least $2,500 per month in consistent, remote income.
What this means is that our $40,000 RTW travel fund turned out to be unnecessary. Our travel will likely be more than covered by our income on the road.
Like we’ve said before: it was never about the $40k, just as it was never about travel. It was about the process of learning how to keep our heads down and climb the mountain - one step at a time. It was about understanding what our priorities were and what we were willing to sacrifice.
Even if that $40,000 were to vanish tomorrow, the money habits Jennie and I have acquired are ones that we’ll have for the rest of our lives. Something that no one can ever take away.
Because once you understand the game, you’ll never run out of moves to play.
Why Money is Like the Game Jumanji
Money is like the game Jumanji:
It’s inescapable: no matter how long you try to put it off, the game will find you whether you want to play or not. In the meantime, the sense of dread and anxiety grows stronger with each passing day.
It preys on our hopes and fears: Too much hope is greed. Too much fear is panic. As human beings, we all go through these cycles of overconfidence and insecurity. Money is saved and spent, prices rise and fall, and the game serves as the barometer for both the social mood and human nature.
Jungle rules apply: Capitalism, even in its most regulated form, is a system of opportunity and exploitation. In this ecosystem, you’re either the pursuing or the pursued, the hunter or the hunted. In an economic system predicated on “growth,” standing still is moving backwards.
When faced with this game, all of us need to make a decision on whether we want to be proactive or reactive. And it’s not easy. Sometimes, it can feel like you’re being whipped about by forces beyond your control. You might even start to believe that there’s something inherently wrong with you. Being poor and living paycheck to paycheck is just who you are, and there’s nothing you can do to change it.
This feeling is only half true. We don’t often get to pick the hands we’re dealt. Some things happen to us that we just can’t change, and at some point, we’re all going to have to weather some turbulence. And yet, there are always things that you can control.
So you need to make the decision: do you want to be proactive or reactive with your life?
The process of remembering who you are, and what you want, and how you respond to the ups and downs of your life will, over the long run, make all the difference in the world.
/Ivan inhales, begins rant
Life: It’s Not a Race & Nobody Knows Anything
First of all, fuck this noise.
What irritates me about articles like this is that not only is it counterproductive, it was also conceived and published to deliberately provoke a response. Specifically, anxiety and controversy. Why should we give a fuck about what “should” happen by when?
If we want to play the “should” game, I can do it too. For example, I think print media companies “should” be profitable by 2018. But if I were a betting man, I’d take the under on the profitability of MarketWatch and the chances it survives the next decade.**
[** Author’s note: I don’t need to guess. According to public filings, Marketwatch’s parent company News Corp, reported a $1.1B loss last quarter. You want to know how to make this company bleed? Stop giving them clicks].
This segues into my pet topic, which I’ll break down into three statements:
Nobody knows anything.
Everyone is just making it up as they go along.
Everything is negotiable with the right kind of leverage.
“Nobody knows anything” is always my going assumption until someone proves otherwise.
You’ll be shocked how true this is. Some people are just better at pretending than others. Some like to hide behind a veneer of credibility, authority or “success,” but the truth is, they’re often plagued by the same sort of doubts and insecurities as you. Because they’re human. And no human being is deserving of our blind worship. When you actually peer under the hood of how the world works, you’ll be amazed that anything gets done at all.
The more you come to understand this, the less time you’ll waste wondering what’s wrong with you.
Topics We’ll Cover
in this Back To Basics Money Series
Over the next few months before Jennie and I leave for our RTW trip in September, we’ll cover five broad categories in this “back to basics” money series, including but not limited to the example topics we’ve listed below. We’ll try to publish these in chronological order, from the beginning of the process to the end:
1. Fundamentals of Budgeting
Hitting the reset button on your finances (“where is all my money going?”)
Finding your budget sweet spot (“how much money do I need?”)
Handling the emotions of budgeting (“how do I avoid my spending impulses?”)
2. How to Spend Less:
How much (insert item) can I realistically afford?
How to simplify and plan for the long term?
How to factor in fun and luxury purchases?
3. How To Earn More
How to negotiate your salary (Check out Jennie’s underrated post on negotiation)
How to build a side hustle (Here’s another Jennie post)
How to turn a side hustle into a business
3. Money Talk & Relationships:
How to manage financial anxiety
Marriage and finances
How to talk to your family about money
4. Investing in Yourself (Retirement, Education etc):
Investing 101: from account creation to long term indexing
Stay tuned! See you next week.