Recently I’ve been buying used hardcover copies of books that I’ve loved over time. I’ve been re-reading many that I read when I was a teenager, because I probably didn’t read them as critically as I would today. Last week, I re-read the Jurassic Park books, and I came across one of Ian Malcom’s many awesome comments that I felt truly applied to my financial journey:
Most kinds of power require a substantial sacrifice by whoever wants the power. There is an apprenticeship, a discipline lasting many years. Whatever kind of power you want. President of the company. Black belt in karate. Spiritual guru. Whatever it is you seek, you have to put in the time, the practice, the effort. You must give up a lot to get it. It has to be very important to you. And once you have attained it, it’s your power. It can’t be given away: it resides in you. It is literally the result of your discipline.
Now what is interesting about this process is that, by the time someone has acquired the ability to kill with his bare hands, he has also matured to the point where he won’t use it unwisely. So that kind of power has a built-in control. The discipline of getting the power changes you so that that you won’t abuse it.
I didn’t come from money. I actually came from debt. I grew up being fed terrible money advice like “Statistically most people have about ten thousand in credit card debt.” And “Put it all in real estate. Long Island house values never go down.”
Everything that I am today was earned over the last 20 years of making mistakes, making corrections, learning, testing, and careful planning. In a recent conversation with my parents about their next vacation (their third since selling my grandmother’s house), I mentioned that six times a year I receive windfall payments from bonuses and RSUs and it has never once occurred to me to spend any of that money on a vacation. This is, in part, because I have two kids under three, so I can’t really go anywhere without wanting to die, and also because of the discipline I’ve learned over time.
Let’s say I lost my mind and I decided I wanted to take my way-too-young-for-the-experience kids to Disney. And for the sake of argument, lets say that trip was going to cost me $7,000 to take my family of four there for a week (I’m told this isn’t a crazy number for that trip). I could take that money from one of my windfall payments and do that multiple times a year if I chose. However, I’m not wired that way. I see that money come in, and I think that if I just socked $100k of it into my investment account, I could spin off that $7k trip to Disney every year without touching my principal.
I look around me and I see friends and family who receive windfall money that they didn’t earn, usually from parents or a trust, and I watch them piss it away time and time again. There is no discipline on their part because they did nothing to earn the money. Their father gives them a check for $7k and there’s no thought of saving it, there’s Disney trips to be had!
I used to be resentful of these people, but over time I grew to feel bad for them. More often than not, they are the type of people to complain that they’re under paid, but they never seem to be doing much to change that. They go on lots of vacations, always have new cars, everything they wear has a trendy logo, they get wrapped up in the latest hot MLM or workout or diet craze, but they don’t see themselves just running on the hamster wheel. If it weren’t for the injections of cash coming from family, they’d be running backwards on the hamster wheel.
Someday those same people may stand to inherit large sums of money from the parents that support them. They’ll buy more new cars. Some may buy vacation houses. And then they’ll complain to me about how much college costs and how they’ll never be able to retire. I just don’t see them ever learning any discipline.
Freed by 50 