Most financial advice lives in the comfortable middle… as it should. This week we’re going to the extremes — because both of them have something real to say, yet each miss the point of money, and will [probably] lead to you being deeply unhappy.
Spend It All
This is a conscious rejection of the idea that your best years should be mortgaged against a future that isn’t promised. People who land here have usually watched something that changed them — a parent who retired into illness, a friend that passed long before they should. Money, in this worldview, is a tool for living. Not a scoreboard. Not a number to optimize.
The Pros
The science backs them up, at least partially. Experiences generate more lasting happiness than stuff, and a $6,000 trip at 29 — with a body that can hike, stay up late, and eat everything — is a fundamentally different thing than the same trip at 74. At its best, this is exactly what making life your beach looks like: using your resources, while you have them, to actually live.
The Cons
“Tomorrow isn’t guaranteed” is a philosophy, not a financial plan — and it can rationalize almost anything. Every time you ask yourself “what if I die tomorrow?”, you also have to ask “what if I don’t?” The truth is, you are statistically more likely to live to 95 than you are to die at 45. I don’t know about you, but I would like to eventually not HAVE to work, and I would guess that you might want to eventually be able to flip off your boss and walk away.
Save Every Penny
This philosophy, known more commonly as FIRE (Financial Independence, Retire Early), is based around the idea that spending the majority of your life working for a paycheck is akin to wage slavery, and investing is the way you buy back your freedom. Save aggressively and reach the point where you can afford to flip off your boss. It’s about buying back your time from a system that assumes you’ll sell most of it, forever.
The Pros
One of my favorite quotes by Morgan Housel is- “The highest form of wealth is having the ability to do what you want, when you want, for as long as you want”. Aggressively chasing financial independence allows you to purchase back more of your time, but at the cost of your youth.
The Cons
The sacrifices you have to make to achieve FIRE are substantial, to the point where you are probably missing out on a lot of life. More importantly, though, is the implicit assumption that work itself can’t be meaningful. Granted, most people don’t love the day to day bullshit that comes with their job, but the most common problem in retirement is a lack of purpose and meaning. In fact, every single client I have that retired before 60 actually went back to work because they were bored!
What’s The Answer?
Both. Neither. I like both of these philosophies because they challenge the status quo and force you to think differently. I dislike both of them because they end up producing regrets that you won’t realize until much later in life and won’t be able to fix. Extremes never end up working in real life, but you do have to figure out where you belong on the spectrum, because this is your life, and there is no right answer. Whatever you do, be sure to Make Life Your Beach.
Resources
How To Avoid The Middle Class Tax Bomb
Make Life Your Beach
Memento Mori