Can You Ever Have Enough Money?

This is a guest article by Outlaw, who lives and works in New York’s financial district and writes on the blog Credit Card Outlaw.

When I first became fascinated with personal finance strategy, I was in serious credit card debt. I couldn’t find full-time work. I felt like an idiot.

Every month, a new credit card statement. Every month, deeper in debt. No rich parents to fall back on, no income, and yet I still had to buy food and pay my rent. Even thinking about money made me sick to my stomach.

I was too smart for this. That’s what I kept telling myself.

Fed up, I began reading everything I could get my hands on. Every blog, including Consumerism Commentary, and every book in the personal finance aisle. I landed a full-time job and started a small business. I drastically slashed my living expenses. Within about three months, something miraculous happened: I was able to pay off the last of my credit cards. I wrote about this experience and how it felt on my blog, and about how getting out of debt shifted my goals.

My goal went from $0.00 (debt free) to around $50,000. I wanted to have $50,000 because I felt that seeing an amount like that in my bank account would give me a tangible level of comfort.

It doesn’t. Sorry to burst your bubble. When you hit $50,000, you simply associate with new people. Or maybe when you hit $100,000. But it’s pretty much a universal law that as you become a bigger fish, you find yourself in a bigger pond — with much bigger fish. If anything, I was happier when I was worth nothing at all.

But building wealth isn’t about happiness. It’s about overcoming the odds. It’s about attaining a level of accomplishment that no person or thing can ever take away from you, save for the grim reaper. Beyond covering your basic needs (food, water, shelter), money has very little correlation to happiness. Not what you wanted to hear, but completely true nonetheless.

Asking about the relationship between money and happiness is like asking whether winning a chess game leads to long-term happiness. You don’t play chess to become happy. You play chess to play chess.

It is a fool’s argument to suggest otherwise. Wealth building is just a game. Once you eliminate the years of negative beliefs about money that others have forced upon you (shame, guilt, fear, envy — our culture does an impressively crap job of preparing us for wealth acquisition), you can start the game in earnest.

Lose all attachment. Look only at the returns, the profit or loss, the overhead. Nothing else matters. Forget vanity projects, forget becoming rich overnight, and forget impressing others. I love personal finance because everything is spelled out. You are either in the black or in the red, wealthy or debtor. There is no ambiguity.

And please, forget about building wealth for your distant future. Until recently, I had been contributing the maximum amount to my 401k at work. What a waste!

Now I contribute nothing.

I’m in great shape, but I have bad genetics: the odds are excellent I will die young from diabetes or heart disease. When you get good with your money, you become good at understanding statistics. And that means looking at things exactly as they are, not as you want them to be or as you wish they were.

For this reason, saving up for some magical fantasy time in my sixties when I can play golf and suck on Werther’s Originals… that doesn’t make sense to me. And what if, against all genetic odds, I survive into my sixties or seventies? I don’t want to be wealthy, with a Life Alert hanging around my neck and a spare pair of dentures in my back pocket. I want to enjoy my prosperity now, while I’m alive and healthy. I would rather be poor at seventy than poor at thirty. That’s just me.

Plus, I don’t like any of the options my employer’s 401k plan offers. I chose the most “aggressive” fund at first, because I’m relatively young and fearless, but then I did my research. I don’t like, don’t understand, or simply don’t trust many of the companies held in the most aggressive fund. Some of them are sloppy organizations, others are in debt, and the rest are just boring dinosaurs with zero growth potential. There is a difference between aggressive and stupid.

So I switched my money into my plan’s most “conservative” fund, which is based primarily on corporate bond offerings. I don’t like how insanely low the returns are, and again, I don’t trust some of the underlying companies: they are debt-ridden dinosaurs. I don’t like the high expense ratio. I don’t like the almost certain possibility that taxes will be higher in the future than they are now — Uncle Sam needs to pay off its debts in some way, eventually.

I would rather take all of my money, less applicable taxes, and put it toward self-improvement, enjoyment, and my small business. Those all yield better proven returns than some obscure aggressive growth fund or fixed-income investment managed by people in skyscrapers whom I have never met or shook hands with. Also, I should not be charged money for the “privilege” of investing in your fund. Sorry, that’s just not how it works.

Those who defend 401k plans say that if you don’t contribute now, you are robbing your future self. Maybe I am. But I would prefer that to the alternative: robbing my present self for a future self that very well may not exist.

You’re alive today. Enjoy your wealth, and invest it yourself, or in yourself. Nobody cares more about your portfolio than you do.

Stop worrying and start playing the game. Wealth won’t buy you a good relationship or better friends. It won’t buy you happiness. But it can buy you more money. And more money buys more money.

Whoever first coined the term “the first million is always the hardest” was a genius. Invest your money now, while it is still worth something, before inflation eats it up or your health deteriorates. Don’t give it to a 401k plan to do with as they please.

And don’t share your plans with other people, unless they are on the same path. Some of my friends resent me when I talk about my wealth building goals, or my small successes so far. So I don’t talk to them about it any more. Let people live in ignorance. There are enough smart people online and in personal finance forums; you don’t need to be getting any financial advice from your friends or family members.

If you diversify, invest in what you know, spend less than you earn, enjoy the present and lose all emotional attachment to money you will succeed. There is no other option.

The rest is just small talk.