A while ago I got deep into triathlon. I’d work out for three or four hours in a day, then finish, eat, and think about triathlon some more.
Because there are limits to how much someone can really exercise in a day – and I hit them – I found myself still wanting to do something with triathlon. I was still thinking about triathlons.
So, what did I do? I read books on triathlon, I browsed blogs about triathlon, and – I say with no small amount of shame, given the forum – I bought stuff associated with triathlon.
Virtually none of this buying, reading, or browsing did much to advance my triathloning much. My abilities were not such that reducing the weight on my bicycle, for example, but 30 grams made a tremendous difference in where I placed in a race. (more working out, though, did a lot)
Why did I keep looking reading, browsing, and buying? Because my energy and interest in triathlon was greater than the amount of time I could productively spend in a day doing triathlon stuff.
So too with personal finance.
Really, what you should do with your money is pretty straightforward. Spend less – ideally a lot less – than you earn, save the rest, invest what you save in non-stupid stuff, then go on about your life.
You can do a few other things that help – make spreadsheets of your expenses or ROI on possible investments (though, generally, I tend to think the fancier you get the less you’re serving the goal of making money and more scratching some other itch (which, to be clear, I think is fine – see my Fourth Goal – but you should be honest about that)).
Or you can read personal finance books and blogs. It’s kind of affirming to see how many people can say basically the same things in different words for different audiences.
They are, in a nutshell, this:
- Know yourself. Think about why you’re spending money. Think about your attitudes and relationships with money.
- Spend a lot less than you otherwise would and save the rest.
- Put what you save someplace not stupid.
- (Bonus Round!) Give a bunch of your money away for social/moral/karmic reasons.
That’s pretty much it. Sure, there are some interesting things in the margins. The details of how to save money can be interesting and important. How to invest is not completely obvious to many people and needs to be explained. And how to think about charitable giving is important.
But the details are so much less important than the broad principles. If you hit the big stuff you’re beating 95% of the world. It’s a point that Ramit Sethi makes in I Will Teach You To Be Rich very well – putting off saving so you can find the most very special and perfect investment is stupid. It’s also a kind of stupid that lawyers are uniquely prone to.
I’m not hating on any of this. Much of the reason I’m doing this blog is because I have more energy and interest in making my money work than there is necessary time to work on my personal finances. Shifting money around because I’m bored is affirmatively counterproductive.
But be clear – browsing the internet is not acting. Read personal finance blogs and books when you’re done taking action.
It’s only action that moves the needle. Otherwise reading personal finance blogs is just another version of thinking how nice it would be to win the lottery.