Consider the following areas:
There can only be so many pillars that hold up the contents of one’s life. After all, we are each constrained by finite bandwidth. Whether it is time, attention, or energy, we all have limits to the resources we can put towards these areas. They are each distinct, but also heavily intertwined.
For example, the places we invest our attention (or wish we had invested our attention upon retrospect), are usually into one of our pillars. Attention itself can be thought of as the base of each of the pillars because it is so critical.
If left unchecked, it has a nasty little habit of flowing down the path of least resistance and eroding the foundation of the entire structure.
Watching Disney+ while I could be out hiking. Endlessly scrolling through Instagram or YouTube while I could be putting in more effort at my job or side hustle. Writing an article about relationships when I could be actively engaged in some activity with my partner (ahem, ahem)….
Similarly, family is a core pillar for many. Family may mean the group of people who raised you, your own children and spouse, or even just your girlfriend and pets. But the amount of time you can spend with your family is in direct competition with the amount of time you spend working, watching sports, or researching investments.
I’ve even listed the “self” as a pillar because if I’m honest, I spend far more time on myself than I’d care to admit. Getting haircuts, buying things, exercising, practicing hobbies, thinking about fears, regrets, and hopes for my future self. Perhaps you can relate.
This is a constant game of tug-of-war with our finances, our relationships, and our time available each day.
The extent we spend developing (or ignoring) deficiencies in our self, particularly those related to less materialistic pursuits such as our personality, communication habits, or overall compassion, will affect the quality of our friendships, family ties and romantic partnerships.
The quality of the outputs will rise and fall accordingly with the quality of the inputs.
In fact, as social creatures, all of our interactions we will ever have will be determined by the inputs of time, energy, and attention that both sides of the interaction add to the equation of themselves before, during, and after any given moment.
This set of constraints on our resources is juxtaposed next to the simple fact that we cannot live every day as if it were our last. From a practical standpoint, very important things will still fall by the wayside from day to day, no matter how intentionally you live. This is why it’s good to have rules.
We can be more balanced by keeping those bigger pursuits and pillars top of mind. For me, that means admitting to myself that I break my own rules and values and re-calibrating when needed:
Rule # 1 That I Break
Buy and Hold
Despite knowing that Tesla is a good long-term investment (money), I let my fear and delusions of being able to time the market (self) get the better of me and I sold my shares in early August (greed).
The subsequent gains Tesla made reminded me of a core principle I need to remember, “Time in the market is better than timing the market.” I had to buy back in at a higher price AND pay capital gains taxes on my sale.
However, this momentary lapse of judgement and subsequent disappointment forced me to remember this rule for the OTHER 95% of my portfolio.
Rule # 2 That I Break
Meditate Every Damn Day
I started a daily meditation practice last year and I did it for at least 10 minutes every single day in 2020, until one day that I completely forgot about it and had to mark it down as incomplete on my habit tracking app.
That really stung for a second because I had over 200 days in a row tracked, but then I realized that the true point of meditation is to live my life being more aware of and in tune with thoughts, emotions, and above all else, the present moment.
Insights from meditation can help you become a more calculated investor, especially in the face of market uncertainty. (4 min read)
What better way to test my progress than to use this as a moment to demonstrate the very reason I meditate, which is to become a more patient, compassionate, and less reactionary person?
The point of my meditation isn’t to check off a box on my daily to-do list, it’s to be truly present to feelings as they arise, linger, and then dissipate from my body and mind. It was a nice reminder that I don’t have to control anything, I can simply observe it.
Rule # 3 That I Break
Despite knowing that a balanced and well-diversified portfolio is the true key to financial success, I haven’t reviewed my current holdings in terms of asset class, geography, and sector since about 6 months ago. I may be completely overweight in tech or completely underweight in financials.
This leaves me vulnerable to a market crash or boom in a specific sector potentially hurting my returns in the coming years.
Knowing that I should do this gave me the willpower to spend an hour doing a quick analysis of my portfolio instead of watching another episode of The Office on Netflix. The difference between following a rule occasionally, and not having a rule at all is remarkable.
I posted my recent allocations on my Instagram: @TheSensibleMerchant
Rule # 4 That I Break
Playing video games more than I should
I like video games. A lot. The sweet dopamine hits that come from leveling up, killing a boss, or looting a new weapon are always satisfying… in the short-term. This is how we evolved – to seek dopamine.
Whether it was from finding a fruit tree in the desert, having sex and propagating our own species, or killing a dragon in Skyrim… that reward loop is powerful.
But every minute that I spend slaying pixel monsters is another minute that I’ll never get back. The opportunity cost of playing Assassin’s Creed doesn’t seem like much in the moment, but after 5 years, those lost minutes really add up.
This is why when I forego a self-improvement activity like reading or writing to play an extra match in Hearthstone, I have to remind myself of the bigger picture.
There’s also my human connections such as spending time with my girlfriend outside that compete directly with the time I play video games.
So I set alarms and limits to my video games, and try to use them as a way to reward myself AFTER I’ve committed sufficient energy towards a more “productive” goal. (I actually think video games can be highly productive given the right context, but more on that in a different article.)
Rule # 5 that I Break
Speculating vs. investing
This last rule is somewhat of a sore subject for me. I haven’t written about the risks of speculating vs. investing yet, mostly because the pain of my mistake is too recent.
I recently invested more than I should have in a stock that then proceeded to drop 70% overnight. I haven’t sold my position, so I haven’t “lost” any money yet, but that pain is real.
This sock to the gut reminded me to never invest more than I can comfortably stand to lose. It also helped me to define what that number really is.
The amount of pain that a loss of money inflicts is about 2.5x greater than the amount of happiness that a similar sized increase in money will give you.
So if you lost 100 dollars, your emotions would oscillate just as much as they would if you won 250 dollars. Basically, it hurts more to lose money than gaining money makes you happy.
Tread carefully when you think you know how it feels to lose a large sum of money. Until you are in the ring, you have no idea how bad the punch hurts.
The gentle (or sometimes harsh) reminders that I’ve broken a rule or failed to live up to a value cements the very need for the rule or value and urges me to double down on it going forward.
By being conscious of where I am breaking my own rules, values, and intentions, I can calibrate myself back to center where I can tend to the pillar again.
I break my own rules all the time; the least I can do is be aware of it.
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To answer that question, allow me to give you a glimpse into my completely unnecessary and painstaking over-analysis of every financial decision I make. (5 min read)
You might be naturally good at math and bad at reading. You might live in a sparsely populated area and only have 1 or 2 friends. You might be named Kevin and have narcissistic tendencies and frivolous spending habits. These things are going to constrain you… for awhile.
(4 min read)
Although housing prices have risen quickly over the past couple years, and are now out of reach for many first-time home buyers, to call it a bubble would be to call it unsustainable, irrational, and driven by euphoria or greed.
No one asked, but that didn’t stop me from giving my housing market predictions. (6 min read)