Money, Emotions, and Intention | Letter to a Friend #2

Hey friend,

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Hope you're having a lovely Sunday. I am despite some craziness. I don't know how many of you are involved in crypto, but for those who aren't, the whole market has been a bit of a shit show, down at least 50% from a few months ago with most of the drop happening in the past few days. For those of us with a significant amount of our net worth in the markets, it goes without saying that this has been on our minds!🙂

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This digital chaos has imprinted an important lesson on me: Get really good identifying and then separating what you can and can't control.

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In this case, I can only control what assets I'm holding, I can't control the market. Once I decide that I have the asset allocation I want, there's really nothing more I can do. But I've needed to sit down and write that down for a sense of peace and acceptance to actually come over me.

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The experience reminds me of a book called The Psychology of Money by Morgan Housel. I've read quite a few personal finance books, but I enjoyed this one more than most because he argues that personal finance is not purely rational. Sometimes it makes sense to do the "irrational" thing. Imagine that investing in crypto might get you higher returns, but in exchange you're more stressed in your day-to-day worrying about it. In this case, it's not actually a positive ROI. Same thing with paying off your mortgage. Perhaps you could technically get a higher return by not paying it off and investing the money, but the psychological relief that comes with knowing you own your house outright is certainly worth something. Perhaps more than the financial ROI of not doing so.

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I find finance fascinating for these reasons, in that it's not as rational of a thing most people might believe. Money is deeply tied in with our emotions, and making both financially and emotionally sound decisions requires very high levels of self-awareness and knowledge of what is truly important to you.

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Money is such a huge part of our lives, yet how often do we actually sit down and decide for ourselves how much we want and why? Probably not enough.

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So, in summary, I'd encourage some reflection (as always!). Ask yourself, "How much money do I want?" Then really dig into that. Why do you want it? What emotions are you trying to buy? Is money truly the best/only route to those emotions? Probably not.

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Hope you enjoyed today's lil thought bubble. I made a video earlier this week on "How (and Why) to Diversify Your Personality". If that sounds interesting to you, check it out!

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Take care and see ya next week,

Ryan