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July 05, 2011


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I haven't had the success with my career that you've had, but I definitely agree about living life while you are young. I don't know of many 80 year olds that want to go skiing in Aspen or Vermont.

My savings delta isn't high enough to go too crazy with spending, but I'm working on creating a balance or some sort...

Life goes quicky! My kids have made me realize this, they are getting too big too quickly.

I definitely agree with these. Especially #1...I sometimes feel that my dreams and goals are too focused on earning (and especially on being able to "retire" and live off of non-wage income). However, all of my life dreams and goals would be facilitated greatly by the freedom not to be bound to a job and the income to be able to give and spend more freely. The thing I struggle with most is definitely #6 - I can't let the passage of time be the catalyst to achieving my goals. I need to act now, and I need to savor this stage of my life just as I intend to savor my future.

All good lessons. I do have to say that #1 on their list was totally obvious to me, at least with my way of thinking. Can't imagine anybody truly believing that NOT having money is better than having it. It would be a distorted rationalization to support that opposite view. Clearly, having money is a good thing!

Of the remaining ones, what jumped out at me are #2 and #3. For #2, it's key to realize that money doesn't totally equal quality of life or happiness. Sure, it's important but is it a means to an end or the end goal itself? I think with the latter view, if making money is all that matters, there's no balance and no life. What's the point? Better to have balance, where you're efficent with making money but then take the time to enjoy the rest of your time.

As for #3, I totally agree. The most enjoyment I've gotten, over the years, has been quality time with people who I care a lot about. This is much more meaningful to me than any material goods. When you look back when much older, I think most of us will value that time and experience more than the material stuff.

On #7, which in reality ought to be #1 because there is only randomness:

Whether you call it luck, God's Blessings, Divine Providence or have some other name for it, so much boils down to randomness. Randomness is the overwhelming decider of our financial fate. So much is out of our control that we shouldn't kid ourselves (or pat ourselves on the back too much) about the percentage of our success that is of our own making. Most of us among the readership of FMF already won the genetic, geographic and socio-economic lotteries long before we uttered our first words and took our first steps.

I was a science major in college. At higher and higher levels, the lab assignments were increasingly vague. Upon hearing the complaint from students that we weren't sure what the experiment was intended to prove, our Chemistry professor exclaimed "What would you learn if we merely gave you a recipe filled cookbook? Those are for amateurs."

We humans (even the smart ones who read FMF) are drawn to cookbooks, or articles such as the Washington Post's, that promise a failproof recipe or some hint, tip or technique we can follow. This is what made The Secret and The Millionaire Next Door such top sellers.

Better reads are Innumeracy by John Allen Paulos and Fooled by Randomness: The Hidden Role of Chance in the Markets and Life, by Nassim Nicholas Taleb.

Money doesn't buy happiness, by itself....

"It helps to be incredibly lucky" - Firecalc gives what I think is a simple example of this. Using their default index portfolio for a 30 year retirement, a 6% withdraw rate would succeed half the time. A 3.8% withdraw rate would have occasionally failed in past years and a 10% withdraw rate would have occasionally succeeded.

I don't know that I would say "it helps to be incredibly lucky". I would say "it helps to not be materially unlucky". Because I think it is possible to get wealthy without good luck. However, I think that just about anyone's wealth can be destroyed with a significant amount of bad luck. Regardless, it is always good to give thanks to God for whatever you have.

On "living in the here and now", this is a tricky one, but I think as you become more and more wealthy, it gets easier. When I was in school and on my bottom dollar, I felt guilty about any small luxury that I purchased - I couldn't enjoy eating out even once per month because of the cost and how poor we were. Now that I have some level of financial comfort and a solid plan in place, I feel better about enjoying what luxuries I can afford. But it's a struggle, a balance needs to be struck IMHO between "living in the here and now" and planning and preparing for your future. When you are very young, this can be a difficult balance, because future planning and getting into the right habits to set yourself up for future success are so critical, but yet in your youth it is natural to want to enjoy as much as you can as quickly as you can. As you age and mature, I think this becomes easier - the future runway that you have in life gets shorter and shorter, so future planning becomes less critical and enjoying what you are blessed with becomes more critical.

excellent write up - i do disagree with luck in that luck is generated by those that work the hardest and smartest to put themselves in a position to capitalize on opportunities. now if i found out i inherited $100M overnight, i might change my opinion ;)

Is any of this surprising? No.

Ditto to you and the article.

I'd don't mind doing point 2 occasionally for a specific reward. My DH is in grad school and I am trying to get. I will have no time but it will help me get a career I can be happy with and do for quite some time.

Luck (good or bad) is random occuring stuff like winning the lottery, getting hit by lightning, learning the lump in your armpit isn't cancerous, learning the lump in your armpit is cancerous. I can live my entire life quite nicely without the good luck of winning a lottery, the bad luck of a massive stroke would change my life dramatically.

I believe it is better not to be unlucky than it is to be lucky.

I agree that #7 is understated but a major factor. My thoughts on luck:

It is important to realize that we need to be grateful for our temporary time that we are alive. If we are healthy then we need to be grateful that we are not sick. If we are sick, we need to be grateful that we are still alive.

What we experience throughout our life is a continuous stream of living in the present moment- our lifetime is a collection of our memories, the relationships we've cultivated, and the material possessions we've accumulated.

Becoming rich means limiting your choices and delaying gratification so that you may have more choices later. However you are still bound by the physical fact that you must live in the present moment. Everyone has good and bad luck in their life, however there will be comparative differences from person to person.

So each person has to do the best they can with the life they have and remember to be grateful for the many positive things they have in their life. Gratitude transcends religion and the belief in God, and belief in a higher power can be a source of tremendous strength when facing the unknown so I'd argue it is better to have faith.



I think most of the lessons are sound.

What I think is missing is taking care of your health. This means taking time to exercise, and monitoring your diet. All the money in the world doesn't matter if you don't have the ability to enjoy it.

I don't believe in "luck". I don't believe that luck is random. I believe that what is called luck is just you attracting events, events that improve your life, recognizing those events as positive for you and taking advantage of them. You attract what you need, and that is determined by the way you think. The process is mostly unconscious. Luck does not happen in a vacuum - before there was luck, there was a mind that was walking on a specific chosen path. Luck is nor just those big events like winning the lottery for example, luck is all those small decisions that lift your life over time. And, even many of those "bad luck" events may seem at first bad, but in fact may be your best event in the long run because they pushed you out of your comfort zone and you reacted.

I believe that the real difference between people is not if they had luck or not, it is if they had a mind, a vision of what they wanted their life to be, even if the thought or vision has yet to be consciously articulated.

>Living in the here and now is difficult for me, but something I'm working on. >We can't spend out whole lives sacrificing only to find ourselves old, rich, >and no physical ability to do anything -- what a waste. But it's often >difficult in the daily grind of activity to stop and smell the roses.

What I've found useful is to let my goals determine savings amounts.
I automate savings so that I don't have to think about it and the savings reliably happens.

After paying fixed monthly expenses the money that is left should be spent without any guilt- that remainder is for spending on the here and now. The tough part is how much of that remainder is spent on the kids, my wife, or me!

-Rick Francis

I don't know how we want to define 'luck' but certainly I didn't choose or mindfully decide to be born to upper middle class parents in the United States of America in the 20th century, but the vast majority of the wealth I will accumulate over my lifetime comes from this foundation. It is philosophically dangerous to assume that Americans have 'a vision' of life that leaves them many times richer than the average Indian or Chinese person instead of just acknowledging that randomness is a force in the universe.

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