#50: Our most costly money problems are the ones we don't see

Welcome to the Idiot Money newsletter. The newsletter that isn’t above doing a clip show.
This week: becoming wiser with money by understanding that spaced repetition isn’t only for learning languages.
Because spaced repetition is cool (and because apparently I'm not above doing a clip show) for this, the 50th edition of Idiot Money, a recap of some stuff from the early days.
Photo by Freddie Marriage on Unsplash
1. We’re blind to the real role of money in living well
[from Idiot Money #1]
We fail to see the disconnect between knowing we want growth, not stagnation, and our actions being guided by a self-deceptive belief that money’s role is about access to comfort.
There is no correlation between having money and living well. However, when it comes not to what people have, but how they are with what they have, there sure as shit is.
Aligning what we do with what we (deep down, undistracted and undeceived) care about, rather than with what unreal deceptive influences tell us to care about, is what joins up having resources with living a good life.
The slow suicide we don’t see – that hides in the unexamined, unchallenged, wiring of our minds – is far more dangerous than the big money mistakes we do.
2. We’re blind to the primary importance of money mindset over money maths
[From Idiot Money #2]
Everyone acts as if managing their money begins with knowing which investment to hold in which account, and worrying about mindset changes later. This is why everyone fails to make the most of the money in their life.
It's possible to have perfectly organised finances and live a shitty life. The opposite isn't true. Sort your relationship with money – wire your brain so it's not baffled or scared – and you'll organise stuff as a side-effect.
You got stuck, or into a half-arsed – or even totally shitty – mess with money because of your mindset. Paying someone to set a few things up for you doesn’t change this mindset. It enables it.
It wasn't a lack of financial knowledge that meant your financial life was subpar. And it won't be more knowledge that saves it.
3. Paying for complexity is stupid, but blindly paying for simplicity is too
[From Idiot Money #3]
Whenever you hear someone praised for being ‘good at explaining complex ideas in simple terms’ what you are hearing is a piece of crap. Grasping why is fundamental to financial advice.
People seek financial advice because they think – or rather believe – that finance is complex, that the complexity is numbers-based, and that therefore it’s worth paying someone who understands the numbers to make the complexity go away. This is thrice-flawed.
What you do with money is irrelevant unless it’s making your life better. You can get rich and stay deceived, and those riches won’t mean shit. Think about money more clearly, and not only will you use money more meaningfully, but you’ll get richer as a side-effect.
Believing simplicity automatically equals sophisticated is dangerous. It deceives us into perceiving profundity when presented with triviality, and teaches people to ’optimise for solving easy problems in ways that make it harder for them to think about the hard ones’.
4. We’re blind to how to buy happiness
[From Idiot Money #5]
Money can buy happiness, so having more of one should lead to more of the other, but we’re wired for waste, not wisdom.
We say money can’t buy happiness as an excuse to shirk the responsibility of having it, before trying our little hearts out to buy it anyway, blind to the reasons it didn’t work last time being the same reasons behind what we’ll try next time.
Retail therapy is a short-term shelter from psychological storms, but it doesn’t eradicate problems, it incubates them. We level-up the cost of our lives without levelling up the quality, and we bolster the very blindness that got us into trouble in the first place.
Bad news is better in batches, but good stuff should be drip-fed. It’s not the jets, but the little stuff, that shapes us. We act as if we’re capable of feeling a million times better when something costs a million times more. We’re not.
5. We’re blind to how we construct the stories of ourselves and our relationships with money
[From Idiot Money #6]
The growth in the use of ‘relationship with money’ is not matched by an understanding of what it is, and the importance of its implications. It is not a nice-to-have woo-woo supplement to more quantifiable concerns, but the practical hardcore root that determines if you’ll use the money in your life for good, ill, or churning in mediocrity.
Telling someone to improve their relationship with money by cultivating an ‘abundance mindset’ is cute, but when our problems are ones of self-deception, comforting labels are more likely to enable unhelpful behaviours than change them.
Mindset flaws are harder to correct than technical ones. From tribal politics to sports performance to investing, deeply engrained mental patterns aren’t rewired by reading a punchy op-ed.
Rewiring requires work, but because the changes happen slowly and unconsciously, we don’t do it, and because we believe changing our minds is as simple for us as it is impossible for everyone else, we don’t believe we need to. We remain blind to how our money worldviews are passively absorbed rather than actively acquired, and end up with a poor relationship with money as a result.
Our relationship with money is a means of matching the story we tell the world about who we are with the one we tell ourselves. You do not improve this by thinking you can avoid it, either by delegating the decisions that shape it to someone (or something) else, or by denouncing money as evil or irrelevant. You improve it by editing it.
6. We’re blinded by shitty substitutes, especially when they have big price tags
[From Idiot Money #7]
Things that cost a lot are crappy substitutes for things that mean a lot. But as long as we see external prices more clearly than internal benefits, the con will continue to consume resources for no reward.
Nothing you consume is a substitute for anything you connect with. Where the human connection you are ultimately seeking exists, costly consumables are irrelevant to your enjoyment of an experience.
There are people who spend fortunes every year on eating out, without it adding anything to their quality of life. We know this just as we know polo isn’t ‘better’ than pool – and yet most of us forget it the second someone dangles a ‘free’ £100-a-head meal in front of our maladjusted maws.
We blindly rush to meet needs with stuff we’re promised will work, but never does… but because we’re deceiving ourselves, we fail to connect our blindness to our failure to find fulfilment, and so don’t do the work required to bugger it up a bit less next time.
7. If you want money to not have to think about money – if you actively pursue blindness in your financial decisions – you’ll probably use it terribly
[From Idiot Money #8 and #9]
One of the main motivations for making a ton of money is to not have to think about money. This is moronic. Because failing to think about money is a guaranteed way to waste it. To pursue money so you don’t have to think about it is to believe that being able to spend blindly without going broke is a better aim than using your money to improve your life.
To hear ‘because I can afford it’ is to hear somebody choose becoming dumber over becoming wiser. The ability to afford something is not a valid input into a decision-making process. ‘Because I can’t afford it’ can be a valid input. You can consciously conclude that something would add value to your life, but if it put a greater source of value in jeopardy, it’d still be dumb. But simply being able to buy something does not a wise decision make.
Having cash to cover a cost shuts down our decision-making machinery. Lack of thought leads not to transforming our resources into a Good Life, but into wasting them on white sofas and publicising our insecurities.
Going into ‘fuck-it’ mode and buying something because you can is simpler than contemplating the money, time, and energy spent, and the foregone everything else you could’ve spent it on, but ‘fuck-it’ mode is fucking stupid. Because it forgets the only thing that’s important: whether something will add to your life, rather than detract (or distract) from it.
The trouble with being able to do anything is that you’re highly likely to do everything terribly.

#49: Give, give, give, me more, more, more

#51: Align what you care for with what you care about

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Contents

1. We’re blind to the real role of money in living well

2. We’re blind to the primary importance of money mindset over money maths

3. Paying for complexity is stupid, but blindly paying for simplicity is too

4. We’re blind to how to buy happiness

5. We’re blind to how we construct the stories of ourselves and our relationships with money

6. We’re blinded by shitty substitutes, especially when they have big price tags

7. If you want money to not have to think about money – if you actively pursue blindness in your financial decisions – you’ll probably use it terribly