"Prosperity Paradox"

Well known minimalist Joshua Becker wrote about the crossover between minimalism and financial independence. The first level of this is easy to piece together, spending less on unnecessary crap is a path to financial independence. 

There are also psychological factors at play here too. As some point, people become overwhelmed by their stuff/junk for whatever reason and life becomes more difficult than it needs to be. Woven in there was what Becker referred to as the "prosperity paradox." The more money we have, the more we think we need which creates a tough, emotional treadmill. 

The one story about the prosperity paradox I've shared was a former co-worker when I was at Charles Schwab. I worked on a three person trading desk and one of the other two guys had been with the company going back into the 80's. The third guy and I each started in January 1993. By 1999, Schwab's common stock was getting close to $100 and my colleague had well over $1 million in company stock. 

Part of our compensation was stock and the way it was structured, the only we he could have accessed it would have been to quit/retire once vested. We urged him to do just that and he said, I need $5 million. You know the rest. The internet bubble popped and Schwab stock, which is a client holding, fell 84%. Schwab didn't retake that high until early 2017. I got laid off in Sept 2001 so I don't know how long he stayed at Schwab but if it was a long time, then he obviously accumulated a lot more stock at lower prices. 

An idea from many years ago that we revisit occasionally is figuring out what we really value and then saving or planning toward that correct outcome. Too many people have trouble figuring that out for themselves and they end up saving or planning for what turns out to be the wrong (for them) outcome. 

I've told the story 100 times about not wanting to be a partner at my old firm. Not realizing that many years later, one of the partners would turnout to trade illegally and that the other would let it happen, I disagreed with the complexity they seemed to embrace buying a building and starting a private equity fund among other things. I was reminded of another point in this post from Michael Batnick. I used to say this exact thing all the time. The job of running an advisory is much different than simply being an advisor. 

If someone wants to be an advisor because on some level they enjoy markets, helping people or some combo of both, time spent running the business isn't either of those things. 

Every aspect of life is easier when you know what you actually care about and what you actually want.

And a quick correction from yesterday, the picture of me spraying wet stuff on the hot stuff. I don't think that was me actually. White helmet (usually chief color) and tan pants is me but what little you can see of the glasses is wrong. He must have been part of the task force that showed up later. The other picture of me where I say I look like Vincent from Pulp Fiction, that was me.   

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