This series came from a conversation with someone, who was taking >50 years core spending off the table.
Where to spend was the final part of the conversation and I didn’t connect as well.
So let’s try again with key concepts.
Money not spent will end up with people who didn’t earn it (and have unintended consequences)
Family spending can become a burden to adult children (high baseline consumption expectation)
Where to spend?
I spend in areas that…
- help create the person I want to share my life alongside
- reduce the risk of divorce
- reduce friction towards the man I want to be
Childcare – detail here
- Reduce, and redirect, resentment raising young kids is tough! We’ve had to “fire” different childcare people… but the marriage endures. Better to “fire” the babysitter, than me!
- Kind, athletic spouse – create space so your spouse can be the person you’d like to build a life alongside. Never let anyone sacrifice their life for the “benefit” of the family/marriage.
- Stay well back from the edge – there were times when I disliked being a father. Create space so you don’t act on negative feelings. ALL feelings are temporary! My marriage, and my family, needs me to not-act on temporary feelings. It is never OK for me to blow my family up.
Create happy memories – I’ve spent the equivalent of a very nice SUV on trips with my wife. Bora Bora, Napali Coast, Paris, London… these are some of the happiest memories of her life.
Over long time horizons, these shared experiences have continued to pay dividends. Much more than I expected.
Lesson: my spouse is likely to connect, and find meaning, in ways I don’t fully understand.
Some nuts & bolts about removing friction…
My body looks better when I eat salad => I spend $2,500 a year on prepared salads – I don’t care if I throw a bit of food out. I want it easily available, always.
Related, a luxury good is the ability to not price check the person doing the shopping. If quality & availability matter then provide an incentive for what you want to have happen.
I’m a better person when I train in the morning => At replacement value, there’s $28,000 worth of fitness equipment located where I live.
Weights and cardio… ZERO friction between me and what I need to do for health.
Many of my best friends, now, have kids => make it very easy for them to visit me, or visit them (with a kid).
Mantra: Spend money and time seeing good people
Who to vist? Simple filter…
- Do they make me laugh?
- Do they help me think better?
- Do they set an example for the type of man I want to be?
Some do all three – recruit them!
Remove as many micro-triggers as possible => Twice a year I write a large check to my wife. From that check all the small stuff comes out of our family. My job is to make sure that check gets funded. Her job is to take the pain of those micro-payments.
Do not micromanage my spouse! Agree the master budget and trust your partner to run their slice-of-the-pie. I get one number a month from my wife, net cash out. That’s all I need.
Drop my worst environment – when I was younger, it was commuting. I paid a premium to live close to work. These days… driving. The goal for my family is to get my driving down to ZERO.
Anyhow, know your worst environment and throw some money at it to reduce your exposure. This is a luxury good with a good payoff… your family gets a better version of you.
Beware… you might be hooked on the drama of suffering through for the “benefit of the family” – I’m calling BS on that. Just like your health, you need to own the outcome. Your family needs the best version of yourself. You need it too!
Human Capital over long time horizons. Supported by:
- Mood management
- Conflict reduction
None of them make me appear rich, all of them contribute towards True Wealth.