I’ve written more than 1,000 articles and a best-selling book over the years, with most of this content focusing on how one goes about saving and investing their way to financial freedom in real-time.
Over the last six years, I’ve covered dividend growth investing as a strategy, frugality, and individual stock analyses with gusto. And much of the focus was on money because, let’s face it, we need money to pay our bills. Well, if we’re not working for that money, we need to come up with the income in some other way.
Enter passive income.
Learning about and creating passive income became a huge passion and pursuit of mine, and I’ve been all too happy to share what I’ve learned and done with the world.
However, you’ll also notice that I’m writing a lot less about stocks and money in general these days, focusing far more on happiness and purpose.
In fact, I spend very little time at all on a daily basis thinking or reading about stocks, money, or even passive income. Most of the time I spend reading, writing, or thinking about stocks and money is related to my freelance writing activity. I certainly enjoy this aspect of my life, but it’s just not the end-all and be-all for me. I don’t wake up every day, immediately thinking about stocks and money.
Passive Income Is Just A Means To An End
This might sound sacrilegious to a number of investors/entrepreneurs out there who view the accumulation of more money as an all-encompassing lifestyle choice that’s automatic – like it’s in their DNA to accumulate, even if they have more than enough.
But passive income, and money in general, is just a means to an end for me. Money is most certainly not the end itself.
For me, the passive income my Full-Time Fund generates simply allows me to live life on my terms. It frees me from most normal day-to-day worries. I no longer have a concern in the world about rent being paid or food ending up in the refrigerator.
So the “end” is freedom. I’m only interested in creating a life that’s customized to my own needs and desires. I’m after the flexibility and freedom that I first need in order to do what I want, when I want, with whom I want. I’m pursuing happiness with every ounce of my being, trying at every turn to become a better version of myself. And through that self-improvement, I put myself in a great position to also make the world a better place.
The money is only the means toward that end. That’s it. Once that end is reached, the money means almost nothing.
In fact, if I could list the passive income I collect as units of time rather than units of money, I’d do that. And that’s kind of what I try to do when I show my passive income against the core personal expenses – I’m basically just showing that my time is freed up from what would otherwise be spent to accumulate the income needed to pay those expenses.
Once you have the money side of life figured out, it’s really time to move on to bigger and better things. And that’s what this site (and life itself) is all about. One should aim to become a better version of themselves… every single day. Every day is an opportunity to grow, learn, and become more.
I think Charlie Munger really summed up my thoughts on this:
If all you succeed in doing in life is getting rich by buying little pieces of paper, it’s a failed life. Life is more than being shrewd in wealth accumulation.
Money Means Almost Nothing Once Your Basic Needs Are Covered
To further the point, we’re going to take a look at Maslow’s hierarchy of needs, which is a theory in psychology proposed by Abraham Maslow. It’s designed to provide a fundamental high-level look at various needs and how they impact psychological well-being.
Taking a look at Maslow’s hierarchy of needs, you can see that the basic needs down at the bottom cover a lot of ground, making up a substantial part of one’s psychological well-being. (I’m using the original five-stage model here.)
The bottom two stages relate to physiological needs and safety needs.
So you have shelter, food, water, and rest at the very bottom. Then security and safety one step up from that.
Without food and water, you’ll die. These are absolutely necessary.
Without security and safety, you’ll also likely die. These are almost as necessary.
By the way, it’s not lost on me that this pyramid is shaped much like a mountain – a mountain not unlike how I view that which has to be climbed to become financially free.
But a lot of what we think of when we think of bills that have to be covered via passive income (in order to become financially free) are pretty much all found in these bottom two stages of the pyramid. We’re talking about rent, food, and transportation for the most part, since these account for most of our expenditures and are necessary to one’s livelihood.
However, the next three stages, love and belonging, esteem, and self-actualization, are only entered into once those basic needs are covered, yet these upper stages don’t really require much money, if any, to experience and transcend.
Well, much like getting past the first leg of a climb is the simplest part, covering your rent and food is also simple. Simple in terms of knowing what you need to do, at least.
Similarly, just like the last 1/3 of a climb is the hardest part, the hard parts of life are figuring out how to love and be loved, set big goals and accomplish them, and realize the full potential of one’s self in all aspects (physical, mental, emotional, etc.).
More importantly, few of these needs, or stages, require much money at all. It doesn’t take money to love and accept love. It doesn’t take money to care about the world around you. It doesn’t take money to read and soak knowledge up. If it takes money to seek out new experiences, it shouldn’t take much.
Personal development and growth really shouldn’t cost much money, yet it all has a significant impact on your happiness from a psychological well-being standpoint.
Moreover, financial freedom is a massive personal achievement that improves one’s esteem, furthering one’s psychological well-being. So financial freedom not only allows you to transcend these initial stages so as to focus on bigger stuff but it’s also in and of itself a major part of one stage.
Life, in my view, is far more about the top three stages than it is the bottom two stages with the amount of abundance and money we have access to in this day and age. It just doesn’t cost much money to put a roof over your head or food in your belly, which is quite different compared to how life used to be 100 years ago. Furthermore, it costs even less to become a better version of yourself through the phases of love and belonging, esteem, and self-actualization.
Thus, money is just a means to an end whereby that end is being in a position where more of your time and energy are spent on pursuing happiness, accomplishments, relationships, and the realization of one’s best. That’s because once you have the basic needs covered, you have far more resources to devote to these endeavors.
This all ties into the marginal utility of money. Going from living on the street to living in a 1,000-square-foot apartment is going to have a dramatic impact on your happiness and survival – and it’s definitely worth the extra $1,000 (or whatever) you’re going to spend per month. But doubling your apartment size to 2,000 square feet and your rent to $2,000 per month won’t have the same positive impact on your psychological well-being.
Although the increase in money spent is the same in both examples (in absolute terms), the increase in happiness isn’t. You can scale the example up as much as you want, but you’ll eventually find that your shelter starts to cause unhappiness. Unfortunately, many people like to spend far too much time, money, and attention in these bottom two stages (bigger home, nicer car, fancier food), when these two stages are simply there to secure your existence and get you set up for what’s yet ahead.
If the pursuit of happiness is an inalienable right in life, it’s in one’s best interest to pursue it in a manner that maximizes the odds of success. Well, I believe most of the value that one will realize in that pursuit is located higher up on Maslow’s hierarchy of needs, which is, coincidentally, where money is not nearly as necessary. (I’m assuming you have electricity and housing if you’re reading this article.)
That means you’ll get the most out of the least. Precisely when you should be experiencing the greatest impact on your happiness is also when you’ll be spending the least money, relative to what’s already been spent to go from $0 to shelter and food.
Keep in mind, though, that Maslow’s hierarchy of needs is not a one-size-fits-all solution. What love, esteem, and self-realization looks like to you may very well be different than what it looks like to me or anyone else. But the great thing about financial freedom is that it allows you to customize your life in a way that maximizes your happiness and psychological well-being.
I personally enjoy reading. So I spend upwards of five hours per day reading about… well, pretty much everything. This improves my mental state.
I enjoy exercising, which improves my physical state.
I also have more time than ever to love and receive love from friends, family, my significant other, and our dogs alike.
And I delight in taking walks, being out in the world, experiencing urbanity, parks, and beaches.
I also spend a great deal of time writing (while listening to music), and it’s an aim of mine to always be a better writer. Meanwhile, the content I produce hopefully inspires others, which improves my psychological state. Inspiring others is also a form of transcendence (part of the eight-stage model created later) – helping others realize self-actualization. And I suspect the last 1/3 of my life will be devoted almost exclusively to philanthropy, which further caters to the need for transcendence.
You’ll notice that none of this costs very much money, but all of it requires time and energy. This is why financial freedom is just one aspect of a holistic lifestyle where every piece complements every other piece.
Of course, I enjoy live music, theater, movies, and visiting the occasional restaurant. So not everything is nearly free. But my everyday life is much of the above – and I’m very, very satisfied. If I weren’t, I would live differently.
What you do, however, to improve your various states is completely up to you. And that’s really part of the fun!
Conclusion
People often focus too much on money. I was guilty of this myself once upon a time.
But I think it’s important to realize that money is nothing more than a tool. If you let money control and consume you, you become the tool.
Money in general (and passive income specifically) simply allows you to focus less on the basic needs in life and more on the higher-level needs that will actually have a meaningful and long-lasting psychological effect on your personal development and overall well-being once you have a roof over your head and food in your belly.
Shawn Achor believes the ancient Greeks best defined happiness thousands of years ago:
Happiness is the joy you feel striving toward your potential.
If that’s what happiness is, we’re surely not going to find it in a thing. It’s instead within us.
But we first must have the tools necessary to strive toward that potential. We must have the time, energy, creativity, and passion.
Well, passive income is a means toward that end but not the end itself. In fact, passive income is really just the beginning!
Do you believe passive income is just a means toward an end, or is money the end itself? Is the true value in terms of psychological happiness and overall well-being to be found in higher phases in Maslow’s hierarchy of needs, where far less money is necessary?
Thanks for reading.
Image courtesy of: Sira Anamwong at FreeDigitalPhotos.net.
Maslow’s hierarchy of needs pyramid: By J. Finkelstein (I created this work using Inkscape.) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0/)], via Wikimedia Commons.
Jason,
Who does not like passive income? I’ll gladly take passive income over active income any day. Although my passive income is not that high, I know today that I will receive over $100 of passive income in my brokerage accounts.
This passive income that I receive helps me sleep better at night.
IP,
Passive income definitely trumps active income. I don’t think there’s anyone in the world who’d argue that.
However, there’s a lot more to life than passive income (or money in general). That’s really what this article is pointing out. Those who just think about money all the time are failing in life and missing out, in my view. Munger’s quote on that is particularly on point.
Unfortunately, I think your comment encapsulates the type of myopic perspective that this article is attempting to transcend.
Take care.
I’m glad that you have your new website up. I’ve been a fan for quite awhile.
I agree with you that as you get closer to and pass FI, motivations change. Look at MMM, JD Roth or Financial Samurai. They all now talk about purpose and the pursuit of happiness, which has less to do with accumulating money.
For me, I’ve been on a journey for the past 14 years to get out of (massive) debt and to accumulate capital to generate passive income. The irony is that after all this effort and technically being FI, I realize that I like the challenges of my (megacorp) work, despite no longer needing my income.
Kyle,
Thanks so much for the kind words. Much appreciated! 🙂
Yeah, I agree that you have that natural evolution there. Or, at least, you should. I guess some people will always be stuck with this repetitive “money, passive income, money, passive income” mantra in their heads, but I can’t help but see that the money is simply a means to a wonderful end.
You’re in a great spot there if you’ve come to appreciate your work after it all. If you’re happy and feel challenged, there’s no real need to move on to anything else. I see myself doing a lot of volunteer work/philanthropy down the road, but liking what you do (whether it’s paid or not) is really where it’s at. My goal all along was to wake up and go about my everyday life as if money didn’t exist. And that’s pretty much how I’m living nowadays.
Thanks for adding that!
Best wishes.
I think for the most part it comes down to options. If you have your basic needs met with income you didn’t have to work for, you’ve got the option to quit your job if you wished.
I remember back in high school a long long time ago, our English teacher asked us to write an essay on what we would like to be when we “grew up”. I always assumed I was going to go to college and do “something” although I wasn’t quite sure what that would be. I remember researching certain professions and the education/skills needed to get there. I remember being disappointed in finding out that I had to report to a supervisor in what ever field that was. I then remembered wanting to be a business proprietor; I loved the creative aspect of it- whatever business that would be, but was completely bummed out when learning all the capital that was needed to start a business and the high failure rate in the first 5 years. It seemed like such a big “gamble” to put everything you had in that business and then flame out in the first five years.
Hence, I took the traditional route in going to college, and working for the man. What I found out was that your job is only good as long as the company needs you. They fired my colleague last week; the details aren’t clear yet, but he’s been with the company for 17 years. He’s the one that hired me, and to my recollection was well liked by all the staff. Now, everyone’s on edge that they could be next.
I think this is where the passive income thing comes in. If I had enough passive income to encounter situations such as the above, I would have the luxury of cutting back on work or quitting work there altogether if the situation proved to be toxic enough. However, if your only source of income is your job; you’re pretty much stuck.
I completely agree that passive income is a means to an end. It gives you options- plain and simple. I’m not quite there yet, but have made great progress within the last year. And leaving a high stress work environment and pursuing another venture including starting your own business (my initial dream since high school), won’t matter so much because you have your basic needs met. You can pursue your choice with gusto and with everything you have to make it come true.
Thanks for the excellent post Jason.
j
j,
Glad you enjoyed the post! 🙂
Passive income definitely allows for a lot of options. Options you may not have even thought about before. I know, for me, I’m thinking of all kinds of opportunities that weren’t top of mind just a few years ago. But I think once you have the money figured out, your entire perspective shifts. You evolve away from thinking a lot about money and getting away from that which stresses you out (like a job you don’t totally enjoy) and toward living a life that’s totally customized to your needs. Those needs, by the way, are going to be far removed from basic shelter and food. And they also don’t necessarily require a lot of money. It’s really a wonderful revelation.
Best of luck getting to that spot!
Cheers.
It is too easy to get caught up in the pursuit of things, taking back now for a better tomorrow. Focusing on a better education now to get a better job tomorrow. Focusing on a better career progression now to have a higher income later, and finally focussing on saving and investing to reach financial independence. As we see from Maslow’s hierarchy, at the top it is all about fulfilling ourself. But rather than just putting out a long chain of stepping stones, why don’t go right to the top right now? If there is something that enables me to feel fulfilled right now, lets do it right now then, why wait for FI, job promotion, graduation, net year, whatever. For me, this is about doing and *creating* new things, which mostly comes with little or no cost attached and with plenty of learning and growing. Life happens right now, and at the same time there is still space to also save, invest and reach FI.
I like the direction your posts are taking!
Thanks
Philipp
Philipp,
Absolutely. Why wait? It’s a great question.
I think the answer is really quite simple: people are too busy playing around in the bottom parts of the hierarchy. Either they’re staying very busy so as to pay for the necessities or they’re seeking ever-nicer necessities. Some people have no choice. It’s not always easy to just cover the basic bills. Others are very fortunate, yet they still don’t really move up the pyramid. Life can be kind of funny like that.
The key is realizing that there’s so much more. And that’s what I was trying to point out here.
Best wishes.
Jason,
Thanks for publishing this article. I especially like the quote from Charlie Munger. I recently read his autobiography and really liked it, and am reading some of the books that he recommended. He is one very intelligent and worldly individual.
I would say that I tend to jump to different levels of Maslow’s hierarchy of needs. On one hand our level of passive income is sufficient but then I’ll think about us having another child and then ignite the fire to keep working to build this up as the uncertainty of future consumption becomes something to think about. My work has been generally satisfying but we just got a new CEO so there is another level of ‘proving yourself’ that becomes tiresome to deal with.
It is great to see you evolve your thinking as you undertake your own journey.
-Mike
Mike,
Gotta love Munger, right? He’s not as folksy as Buffett, but I suppose that means he gets his point across even more directly. He doesn’t mince words. 🙂
I will say that I agree 100% with that quote, though. To think life is just “money, money, money” all the time is crazy. I can’t imagine being happy like that. What an empty soul.
I see what you’re saying there. I suppose one can move up and down the chain if their life changes substantially. For instance, I’ve developed a real passion for urban planning and urbanity in general. So if I were to ever want to move to a large city, basic needs would all of the sudden become a bit more concerning. Of course, I think that’s really overblown, since much of the math is moot. I certainly plan to keep on taking on opportunities, just like you continue to work even well past a point of wealth that most can only dream of. And one is likely to adjust as they go, just like you’d adjust if you had another child. So, in my view, it’s more likely that one is going to continue operating around those higher-level needs, even after most life changes. But that’s really only true for those that are ready for that in the first place. Those that are stuck at those lower levels are unlikely to change their ways, no matter how much money they accumulate. In the end, it’s more of a psychological call than a financial one.
Thanks for adding that!
Best regards.
I think this is a great post about keeping things in perspective. I took this about using passive income as a platform for self-actualization, rather than the end itself, which is so easy to do, especially when it’s such an all-consuming mission for some of us. Thanks for sharing this.
DT,
Right. The passive income isn’t the end. Rather, it’s just a means to put yourself in a position to strive toward your potential as a person. It’s interesting that both Maslow and the ancient Greeks came to the same conclusion about ultimate happiness. I’m inclined to agree. 🙂
Cheers!
Another good one Jason. We need a purpose beyond FI to get up every morning with a spring in our step. Smell the roses everyday kinda deal. For me, it’s two little poor kids I have the privilege to ‘sponsor’.
TFR,
Indeed. If all you think about is money and passive income, you’re surely going to be disappointed with what you find. But if you realize that there’s so much more, your excitement is beyond bounds. 🙂
Enjoy your sponsorship over there. I “sponsor” two little puppies over here. Just part of the fun!
Cheers.
Jason – I have a question for you. You say (and I agree) that once you have enough money, more doesn’t provide much more happiness. You’ve also written that you’re pretty far along on the “freedom spectrum”, in that most (but not all) of your expenses are covered by your passive income. However, not all of your expenses are covered (at least not yet).
So if your investments were suddenly worth 10x and your passive income also increased by 10x, what would you change about your life? At this point you’d obviously be way past the point of covering all your expenses and you’d be free by just about anybody’s definition. Would you still write the same number of articles, both for your website and as a freelancer? Or would you spend even more time doing non-financial related things (working out, spending with with your wife and kid, etc.)?
TMC,
That’s a great question. I have a strong desire to continue answering that question here at the site, which is what the ‘Happiness Is’ series is all about (as well as articles like this one). I also have another series already started, which will further that message.
But I wouldn’t really live a lot differently than I do now. My lifestyle is largely divorced from money concerns altogether, meaning I’m living the life I want to live regardless of money. If I wanted to live differently, I would. There’s nothing preventing me from living another way. Said another way, having 10x the money wouldn’t make much of a difference for me. I don’t know what else I could want or need. I’d probably just end up increasing my philanthropic giving. Beyond that, there’s nothing I really want. If I wanted more, I’d live a lifestyle that allowed me to buy more.
Would I still write as much as I do? I would… for now. I have a passion for it. I enjoy it. I hope to inspire others. And it’s not like blogging pays a lot of money anyway. If I were doing this for money, I’d be absolutely miserable. I’m doing it because I want to, not because I need to. But there’ll probably be a day when I want to do other things more. And that’s when I’ll shift to those things. Again, that decision would be irrespective of money, which I think is a position that one should strive to be in. My life is very balanced right now, though. I spend a little time writing. And I spend just enough time with everything else that I enjoy. I’m really quite content.
Hope that helps! 🙂
Best wishes.
Jason,
I’m so glad to see you back! I’m enjoying your thoughts on pursuit of happiness. You are so right that once financial independence is achieved, it gives you freedom to fully live and enjoy life. My wish is for everyone to get to this point in life.
RocDoc,
Thanks so much. I’m really glad to be back at it. Still have a few ideas left in the tank. This new perspective I have has been a blessing in that regard, which is allowing me to share some of these thoughts. It’s a lot of fun. 🙂
Indeed, financial freedom, for me, ceased to be about money a while ago. I don’t even really think about money any more. I just think about what makes me happy – and then I go do those things.
Thanks for stopping by!
Cheers.
Agree completely with this article. I agreed with it back on your old blog (Dividend Mantra is what got me thinking of money in terms of freedom rather than material purchases) and I still do now.
I can’t stand the saying “Money doesn’t buy happiness”. That’s dumb. Money buys happiness. But we’re just spending it wrong. Not on the wrong items. No, we have in this country–from the wealthiest to the poorest–a psychological, philosophical, and fundamental misunderstanding on the usage and purpose of money.
Without freedom, there is no happiness. And without money, there is no freedom. Ergo, money buys happiness, but only through passive income.
Of course, it’s still on each of us to build happiness from that freedom, so it’s not an automatic thing.
Sincerely,
ARB–Angry Retail Banker
ARB,
Right. Money does indeed buy happiness. But more money does not automatically buy more happiness. It’s not a constant 1:1 ratio. That’s the real disconnect that I think trips up a lot of people. They see that they’re happy when they have their own place, good food in the refrigerator, etc. And then they think more money will buy more of all of this and they’ll just be happier. Of course, they don’t understand marginal utility or anything else, and so they just keep working, spending, working, spending. It’s an easy trap to fall into.
Once you have enough money to escape the bottom tiers of Maslow’s hierarchy, that’s exactly what you should do. It’s just that people too often languish down there, and then they wonder why their happiness is not moving in line with their incomes as they grow older, work harder, get promoted, and make more.
I’m just glad I escaped that trap before I found myself stuck in it for decades of my life.
Thanks for stopping by!
Best wishes.
I’ve always thought that people who aren’t worried about the accumulation of money are those that already have enough! I do agree that once passive income reaches a certain point then it seems to matter less, but of course thats the idea of passive income, right? I also agree that past a certain point the relationship between income and happiness isn’t linear and in fact tails off quite sharply at some point between “a bit” and “enough”.
I don’t think there is anything wrong with focusing on accumulation when you are young, and focusing on it “too much” might be preferable to not focusing on it enough, given the power of compounding. But as people inevitably grow, I think they find their calling or meaning in life, whether its urban planning, sponsoring children or something else (for me, it turned out to be helping guys with depression!). And its an amazing feeling to know that you can pursue that without having to worry about your future.
ADI,
“I’ve always thought that people who aren’t worried about the accumulation of money are those that already have enough!”
And you’d be mostly mistaken. I was just reading a piece about David Tepper, a hedge fund manager, yesterday. In it, it went on about how he left New Jersey for Florida. One major reason was so that his deferred earnings aren’t taxed at such a high rate. The guy’s already worth $10 billion+, yet he’s still worried about new money being taxed. So much so that he changed his residence. This is particularly relevant in our current political climate, with all the talk about wealthy people trying to avoid taxes. There would be no such talk if really wealthy people stopped caring about the accumulation of money. If those who already had a ton of money weren’t worried about accumulating more money, our entire society would operate a lot differently. Warren Buffett has actually talked at length about how one of his most interesting jobs is to convince extremely wealthy people to continue operating his businesses. With the lack of turnover, it seems that the carrot on the stick (money) still works. To think that those who already control a lot of money don’t care about accumulating more is a naive way of looking at the world, in my opinion.
But I do indeed believe that the accumulation of wealth (or passive income) is really important in that it sets you up. It puts you in a great position to chase after those higher-level needs, which have a huge impact on your overall happiness and psychological well-being. But it’s a rare thing to transcend, which is why I wrote the piece. 🙂
Cheers!
Great post Jason!
I agree with you 100%! In fact, I even wrote a post called (Money Is Just A Tool). The link is (http://bit.ly/2ezkgFf) if you’re interested. Like you, there was a time when I had too much of a focus on money. I would let deter me from hanging out with friends all to save an extra dollar. Obviously money is important and cannot be escaped in life, however, it’s important to realize there is much more to life. Money is just a means to achieve the lifestyle you want.
To answer your question, I definitely think passive income is just a means to an end. I mean, I enjoy investing, but I’d much prefer writing, blogging, engaging with others online. Money is just the tool that will provide more time so I can focus on the things I love.
And I do think true value is found in the higher levels of Maslow’s hierarchy of needs. Things like creativity, helping others, and relationships are much more fulfilling.
By the way, I’m really happy to see you back writing on your own site! I use to follow your blog, Dividend Mantra, and read it everyday on my way to work. It partially got me interested in dividend investing and reading it kept me going while I was at the day job.
Thanks for sharing!
Graham,
Indeed. Money is just a means to achieve the lifestyle that you want.
A lot of people get tripped up because the lifestyle they build is based upon accumulating ever-more money. While that’s one problem, it’s further compounded by the issue that this kind of lifestyle (based upon ever-more consumption) doesn’t truly drive happiness. Once you really take a look at life and what makes us happy, you realize it doesn’t take much money beyond what’s necessary to achieve the basic, lower-level needs.
Appreciate the support. It’s great to see some readers from DM find their way over here. It’s a shame that things ended like that, as it wasn’t my intention to just pull a Houdini. But it’s been a blessing in disguise. I’m free to take the writing in a slightly new direction, where I can expound some really fantastic concepts (like this one). Much like I was a bit too focused on money before, so was Dividend Mantra. This new site isn’t as focused on all of that. Life is certainly much, much more than money. 🙂
Best regards!
Jason,
As you might remember, I have a son, he’s now more than 10 months old (time flies) and I might have another baby en route…
So, since I want the best for my kids and since I don’t want them to have to start over from scratch, I’m in the writing of a kind of small training manual about what I want to teach to my kid about money and life. I’m trying to sum up all the knowledge and the reasons why someone should free himself from capitalism by capitalism but also through improving his knowledge and know-how through self-teaching because there’s the education you give to a man and the education a man gives himself which can be a lot wider and more important or not.
It’s a huge task and to be able to teach it to a 5 years old means that one must really understand what he’s talking about. And I’ll also have to create games around that because a kid could easily find all of this very boring…
It’s fun because the very first paragraph of my training manual is kind of a sum up of your article. I didn’t think about including the Maslow pyramid though. It’s a good idea. It’s very visual and I could modify the colors to show that money will only help secure a little part of the pyramid.
I don’t know when exactly to start teaching them about money, freedom and happiness. I guess that as soon as he was born was a good moment and I’ve already start to some extent by buying him used goods in bazars while he was with me, by investing his money with him sitting on my lap (he doesn’t understand but he see’s it), by taking a lot of time of to play with him and read him stories etc…
What you’re teaching here is a very very very important concept.
Thanks
Allan,
That sounds great, man!
I don’t plan on having any children. But if it were in the cards, that’s something I’d be very interested in. Our school system really fails when it comes to teaching the basics of personal finance, so it’d be my place to pick up the slack. Although I wouldn’t necessarily assume that my children would be any more interested in personal finance than the vast majority of human civilization, it’d still be very much on my mind to dish out some lessons here and there. Can’t hurt. 🙂
Best of luck with sharing those lessons. That’ll surely be a lot of fun.
Cheers!
A little late to the party trying to catch up on your articles, but had to say this is a good one and I agree 1000%.
I’m super into reading about people investing in various ways, but it seems many of those people fail to ever think about what’s enough. Almost like they become addicted to investing or their hustle with the goal to simply keep making more, instead of seeing it as the means to the end as you mention.
For me, I just want to cover my expenses and a little spending and I’m punching out to do more fulfilling things higher up Maslow’s pyramid. I also like that you mentioned you don’t really need more money to do those higher up things, but one thing you do need is time, which is what I’m saving for.
Great article and stoked to have you back writing again.
Sundeep,
Thanks so much. I’m really glad you enjoyed it!
Yeah, I agree with you. I see so many people out there that have obviously cracked the code, and they’re making a ton of money, yet they don’t seem to evolve at all. Now, if that’s what they truly, truly enjoy, that’s great. You’re going to do something productive with your spare time, and it’s highly likely that it’ll pay, hence my feelings on the early retirement math being largely moot. But at the same time, my thoughts on just saving and investing for the sake of it hearken back to Munger’s words above.
I do try to eat my own cooking. That’s why you see my writing and lifestyle evolving. If all I wanted was more money, I would have never left my job in the auto industry. However, I learned long ago that the key to happiness is not simply more money, no matter how much others believe that to be.
Best of luck climbing Maslow’s hierarchy! 🙂
Cheers.
Wow 5 hours a day reading, you must read an awful lot of books Jase!
Agree with you that money is simply a means to an end and that while it is important Munger summed it up nicely as well by saying that if it’s all we aspire to then we’ve lost the battle
Jef,
Ha!
Yeah, I read a lot. I enjoy it. If I could have found a job that paid me to just read all day on my time without interruption, I would have taken it. Alas, I had to find a different way to get paid while I do what I like. It’s worked out thus far. 🙂
Munger’s quote there is one of my favorites. It’s reminded me to slow down and enjoy what I’ve worked so hard for, while simultaneously being mindful of all those who haven’t been so fortunate.
Best wishes!