Twelve (mostly) Truths on Money

As mentioned in my Tsundoku for December, I went deep into a financial rabbit hole. When I came back out, I hadn't found any rabbits, but I came packing a few money truths. I share them below. They are in no particular order.

But before, a note on why I even read (past tense, I hate that word) these books:

I know the theory, especially the big stuff. The stuff your grandparents keep spitting at you. The stuff like "live below your means", "save x per cent of your income and invest it", "don't buy things you don't need".

Nothing new here. But... I'm human, and I'm anything but rationale (no one is, see below). I resemble my dog more than I want to admit: Whenever I see a shiny new thing, my brain goes into squirrel mode and shouts, "Oh, want! Must have! Now! My survival depends on this! Where's my credit card?".

I guess this is what it means to be human? So, these rules are not there to show you how well I can read. Or how intelligent I am – quite the opposite, actually. I am stupid, and I need to remind myself not to be a financial idiot by looking at them regularly.

And now, back to your regular programming. The actual rules:

  • Money doesn't buy happiness, but it surely helps to have enough (what can be considered "enough" is strictly personal).
  • People often mistake what they want. They think they want to buy possessions when they want to buy freedom.
  • Money is a tool, and it's neither good nor bad. Wanting to have more money is also neither good nor bad.
  • The pie is growing/infinite. Someone else doesn't have to lose for you to win.
  • Time is the single most powerful force in investing.
  • Humans can't be rational (no, you aren't either). We should at least be reasonable.
  • It doesn't matter how wealthy you are. Everyone should always live below their means. (This is the truth numero uno.)
  • Investing (into bonds/ETFs, etc.) is a sure way to grow money, but a slow one.
  • There is such a thing as getting rich quickly (quickly still taking a few years), but there is no such thing as getting rich easily.
  • Most debt is bad, but not all debt is bad. Credit card debt is bad. Financing a car, you could buy cash because you want to deduct it from your taxes could be considered "good" debt.
  • Becoming rich is a process, not an event. (And you have to go through the process. This is why lottery winners lose their money as fast as they win it.)
  • Everyone has different needs. Write yours down, and don't play someone else's game. (Don't mistake their game for yours.)

These are nowhere close to all the things I learned during my reading. But it's what remained with me the most. They might not all make sense taken out of context, as here in this blog post.

Why I plan to look at some of these truths in more detail in the future.

Sources (Click this)

In case you care, here are the books I got these truths from:
The Millionaire Fastlane by MJ DeMarco
Die With Zero by Bill Perkins
The Psychology of Money by Morgan Housel
Happy Money by Ken Honda