BP#42 - Freedom - The World's Most Valuable Asset

Read Time: 4 min  

Welcome to The Weekend Investor, a weekly newsletter where I provide actionable ideas to help you build a  wealthier, healthier, and happier life even if your time is limited.

Today at a glance: 

• The wealthiest people on this earth are those who wake up and can say, "I can do whatever I want, with whomever I want, wherever I want, and for as long as I want."

• Most people want to become wealthier because they think it will make them happier. Happiness is subjective, however, because everyone is different. But if there is one thing that everyone has in common it is that they want to control their lives. 

• Lessons from 1000 elderly Americans. No one said that you should work as hard as you can to make money and buy the things you want. 

The True Driver of Happiness

Angus Campbell was a psychologist at the University of Michigan and his work was focused mainly on disorders that brought people down - things like depression, anxiety, and schizophrenia. 

He wanted to know what made people happy. In his 1981 book, The Sense of Wellbeing in America, he points out that people were more content than most psychologists assumed.

But there were some who stood out as better than others. However, you couldn't group them by geography, income, or education since so many in each category were unhappy. 

The most powerful common denominator of happiness among all people was one thing in general - He said: 

Having a strong sense of controlling one's life is a more dependable predictor of positive feelings of well-being than any other objective conditions of life that we have considered. 

More than your salary, the size of your house, or the prestige of your job. Control over doing what you want, with whom you want, and when you want is the broadest predictor of happiness for everyone. 

Therefore, money's greatest value to a human being is its ability to give you control over your time. 

What Wealth Can Do for You

Derek Sivers, a successful entrepreneur once wrote about a friend who asked him to tell a story about how he got rich: 

I had a job in downtown Manhattan paying $20K per year - minimum wage at the time. I never ate out, and never took a taxi. My cost of living was $1000/mo and I made $1800/mo. I did this for two years and saved $12K. I was 22 years old. 

Once I had $12K, I could quit my job and become a full-time musician. I quit my job a month later and never had a job again. 

When asked by his friend to to keep going he said, "No, that was it. " His friend asked, "What about the time your sold your company?" Derek said, "That didn't make much difference in my life, that was just money. The difference came when I was 22." 

It is a bit cliche to say that if you do what you love, then you will never work a day in your life. But why then can doing what you love also feel like work? 

If cliches are often cliches because they are truths that stand the test of time, then what is the difference between work you love and work you hate?

In one word it's "control" and that is what wealth can bring you. 

A small amount of wealth means taking a few days off when you are sick. 

A little bit more means that if you get laid off that you can wait for the job you want rather than taking the first thing that comes around. 

Six months of expenses saved up means that you won't be financially ruined if you decide to quit your job because of burnout. 

Lessons from 1000 Elderly Americans

People are no more happier now than they were in the 1950s despite wealth and income being much higher today - even when adjusted for inflation. 

Median family income adjusted for inflation was $29,000 in 1955. In 2019 it was $62,000. The median square foot of a home in 1950 was 983 square feet and today it is nearly 2500 square feet. Each of us hold a miniature computer in our hand, our cars are faster and more efficient, and our dinning out expenses rival our grocery bills. 

In the 1950's the majority of jobs were in manufacturing while today the majority of jobs are professional or managerial. This means that more and more people are getting paid for their thinking and decision making rather than what they do with their hands. This also means that more people take their jobs home with them than ever before. 

If your job is to create a sales plan, then your tool is your head and you take that everywhere with you. While you may work fewer hours than in the 1950s, it feels like you're on the clock 24/7. 

The difference is that we used our greater wealth to buy more stuff and in return gave up more control over our time. 

In his book, 30 Lessons for Living, gerontologist Karl Pillemer interviewed 1000 elderly people. He wanted to understand the most lessons people leaned from their life experiences. He wrote: 

No one - said to be happy that you must work as much as you can so you can make money and buy the things you want. 

No one - said that it's important to be at least as wealthy as the people around you, and if you are more wealth it's better. 

No one - not a single person our of 1000 - said that you should choose your work based on your desired future earnings capacity. 

What happened this week?

Thank you to those who participated in my quick questionnaire about my upcoming course. Your responses were extremely helpful.

This week I refined my course offering so that it removes all the potential barriers to success in beating the market in your 401K or IRA. 

Never lose money in your 401K or IRA to a market correction again! How anyone can manage their own 401K or IRA portfolio and beat the market without taking on unnecessary risks.

Pre-register for the course today to reserve your spot and secure your early registration 10% discount when the course comes available for purchase this month to the first cohort of 15-20 people.  

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