Personal Finance Is Not Always About Money
We attribute personal finance to so much about financial planning, but it is really not just about the money. There are various other aspects which don’t feel like they are related to personal finance, but they are. Take for example the quality of life aspect. It is not related to money, but it could be part of personal finance for some. How? Let’s take this example – say I was offered a job with Rs. 20L per year where the work does not involve any travel, and say I have another offer which pays be Rs. 30L per year but with lots of travel. I would choose the former offer. Because the quality of life would be far better without travel. I don’t care for the extra Rs. 10L per year if it is going to take me away from family for prolonged periods.
Now that is just an example that works for me. Some others may say that it is worth the Rs. 10L extra even if it means being away from family. So personal finance means different things to different people. Or may be instead of Rs. 30L in the offer, what if I got a Rs. 100L per year? May be that will change my view? Who knows. For others if could be work from home vs going to office. One may pay higher and other lower, but it may still be worth to go with the lower offer for them. How about working reduced hours? What if you can work only 20 hours per week instead of 40 hours per week for a 50% pay cut? Would you take that over the other?
Then, just the fact that you prefer well being over money gets factored into personal finance. Which means you will have less money, and might have to retire late or forgo that fancy house/car/TV what have you. When you are making financial decisions, do keep track of the emotional aspect of those decisions as well. Happiness or satisfaction or well being in life is not always related to money either. Yes, I agree that you need some amount of money, to at least not worry about living. After that, there is a wide range of amount that you can amass that can give you happiness. For some, the amount could be small, for others they need to have a lot of money to be happy.
In this context, I would like to bring to your attention a nice post on some useful quotes by Naval Ravikanth. I have been a fan of Naval ever since a friend of mine introduced the name to me. One of the quotes is about desire which according to him is “a contract that you make with yourself to be unhappy until you get what you want”. So elegantly put. When you desire something, you are intentionally making yourself unhappy until you get it. Another way of saying it is – Happiness is a state where nothing is missing. But of course, you cannot apply it to everything. For example, without the desire to retire early, you will not do you financial planning :) and work towards it.
Anyway, coming back to the point about personal finance is not always about money, I want to relate my experience with it. I was working at an exceptional company with great benefits, excellent pay and recognition. The work was fine, nothing to complain and nothing to be excited about. But you know what I did? I decided to quit, and work on things that are fun for me for a payment of zero. That is a personal finance decision I made which involved only emotion and well being and nothing in terms of money. If I continued working I can fulfil many desires like finding a better place to live, better car, bigger TV, faster laptop and all other benefits that one gets with more money.
Another interesting aspect I observe after quitting work is that I am in a flow state more than before. At work, the constant meetings used to be interruptions to my flow. Now, I am in a flow state much longer, work continuously, sometimes skipping sleep and meals. Then when I am back from the flow, I can eat anytime and take a nap whenever I feel like. No obligations to attend meeting when I am not in for it :).
Finally I want to leave you with the 2 more quotes from Naval that I loved. One is – People who live far below their means enjoy a freedom that people busy upgrading their lifestyles can’t fathom. That is something very few people I talk to understand.
The other quote is – Retirement is when you stop sacrificing today for an imaginary tomorrow. When today is complete, in and of itself, you’re retired. You retire by saving up enough money, becoming a monk, or by finding work that feels like play to you. Make of it what you will. I did not have anything specific to say in this post. Just wanted to rant I guess and hey it’s my blog. I can do what I like :).