“Only if I could go back in time, I could make things far better than they are now.” Statements like these are neither reasonable nor helpful.
Just think about it. Will blaming your past self for your current issues make it any better for your future?
No. Instead, it will further trap you in the loop.
So if you want to break free and make things better for your future self, you need to stay five moves ahead of your current situation.
It’s not easy. But it’s worth it. Here’s how I’m doing it.
Shifting My Focus on Scalability
I’ve been saying this practically forever. Money isn’t the most valuable asset you have. It’s your time — your life force. Once spent, you can’t just buy it back.
So selling off your time at a modest hourly rate might not be the best call for your future self.
It might sound like a safer option when you are young, but as you grow old, you will start feeling the slow poison stiffening up your veins. As you grow weaker, you wouldn’t be able to do the all-nighters as often as back when you were in your thirties.
So you are better off working extra hard when you are young, building on something that won’t require your active participation 24*7.
Is it for everyone? No.
Not everyone can or should step out of the alleged safety of their stable income and job benefits. But you have the appetite, there’s no reason why you shouldn’t focus more on scaling your earnings.
Spending Less on My Ego
and more on my Skills.
I have this friend whom I met in college. She lives expensive! She is always posting the nicest pics from her exotic vacations and fancy dinner dates.
About a week ago, she called up and asked me for a loan. She had around $7500 in credit card debt to pay and no savings to pay up.
Now, being the kind and generous person I’m, I had to turn her down. And I was right to do so. Because since then, the frequency of her Instagram posts hasn’t gone down.
I have long abandoned this vain attempt to look cooler and richer than I really am.
Instead, I prioritize fetching newer skills to produce better value for my target market. I’m willing to pay a little premium to learn from the best person for the job. It’s because that’s something I can’t find anywhere else.
And when you know how to do a thing properly, as opposed to figuring things out as you go on, it can save you a great deal of time and hassle.
Keeping Myself Debt Free
The other day, I was listening to this podcast by some famed economist.
According to him, if his thirty-year-old self met his twenty-year-old self, his older self, being a high earner, would willingly offer money to his younger counterpart so he could better explore his opportunities.
So taking some money from your future self, in the form of debts, to fulfill your needs now is no biggie.
Okay. Let me tell you something. Are you here for financial moves to make life easier for your future self? If yes, don’t listen to this golden piece of wisdom.
Even though I am all in for prioritizing skills over money, I find this advice downright dangerous.
Again, being a fifty-something professor, it’s easy to speculate how your thirty-year self should sponsor your twenty-year self. Because once you have already lived through the story, there’s no uncertainty.
But in real life, we don’t have the benefit of hindsight.
Not only don’t you know what you will want from your life down the line, but you are also clueless about what problems you will face about a decade later.
So don’t count on your future self to do all the heavy lifting. Instead, give him enough room and cushioning to carry out his increased responsibilities.
Investing Heavily in My Investing
In case you didn’t know already, there are two types of personal assets:
- Appreciating assets: These assets are the ones whose worth increases in value over time. For example, gold, oil, real estate, bond, or equities are among such appreciating assets.
- Depreciating assets: On the contrary, the economic value of these sorts of assets goes down with time and usage. Cars, gadgets, clothing materials, and computers are among the assets whose value depreciates drastically over time.
So as you spend most of your money on depreciating assets, with time, they lose their value. On the contrary, if you invest in some appreciating value, later on, you will make more money than you had originally invested.
And what if you save your money?
Well, unfortunately, you will still lose money. It’s because, thanks to inflation, our money loses its value each year. However, it’s not nearly as bad as the dropping value of a random depreciating asset.
So the best bet you have is to move a certain portion of your savings to some appreciating asset. And investing it into the stock market is one of the easiest ways to do it.
But again, you don’t do it without studying and understanding it well. It’s not easy money. It requires time, effort, and discipline.
Most people who pretend to be smarter than they are, end up losing money in the market. If you want to don’t want to end up the same, you better start by asking the right questions.
Making It Less About Money
Learning to detach your self-worth from your bank balance is a powerful thing.
Sure, money is essential. It is the fuel that keeps our vehicle running. But think to yourself, is the sole purpose of your car to collect as much gas as you can?
It took me some time to realize that, on my deathbed, I won’t regret not making the extra $500. What I would regret instead, is not spending enough time with my family and loved ones when I had the chance.
So, yes. Even though money is an essential element, it isn’t a substitute for other factors like health, relationship, and peace of mind. That’s why I’ll happily maintain my sleep routine rather than take on another client.
There’s a reason why personal finance has the term personal. It’s because what works for me might not work well for you.
So please don’t take any of it as financial advice. These are only my observations based on my own experiences and research.
I encourage you to do your own research before you decide how to manage your hard-earned money.