What is this all for?
Why are you living? Why do you work, save, spend and invest? What is the purpose of it all?
You might glibly say that there is no purpose. But when we do anything, we have a purpose to get or do something, even if the purpose is the mental state of non-achievement of anything. We call these our goals.
But we make a lot of mistakes with our goals and thereby our life suffers. It is just not enough to climb a ladder. You have to climb a ladder that is leaning against the right wall.
I highly doubt you said, ” I want to beat the stock market. I want to have the biggest house in the world. I want my kid to be the most brilliant.” Well, you might have these fantasies from time to time. But what we really want is:
- I want to have enough money to lead a comfortable life that does not border on survival. I want to have enough money so that I need not worry about food, clothing and shelter.
- I want to have a decent place to live in.
- I want my kid to study in a decent school with good values and gain knowledge, character and values that will help him grow to his fullest potential.
We have to realize that money alone will not do this. We have to realize that comparing yourself with what other people do will not do this. It is easy to get caught up with what other people are doing and let it sway your thinking when all it does is it takes you off track with your goals.
So when you have a goal, write it down and see what you are really saying. Are you trying to work towards something tangible that aligns with your values, or are you trying to beat someone or keep up with the Joneses. You might end up beating someone or keep up with the Joneses as you work towards your goals, but that is a byproduct that may or may not happen. It does not matter. What matters is your goal and how you define it in a way that helps your growth and not harm you.
Let me illustrate:
- If you are like 95% of the population, then investing regularly in a low-cost index fund is a very good goal to have. Trying to beat the market is not.
- You want to buy your own house with a 20% down-payment and a 30 year fixed rate mortgage and live in it for a long time. This is a good goal. Buying a big house by making no down-payment and a low floating rate mortgage in the hope that house prices will rise and you will make a bundle is not a good goal.
- You want your kid to go to a good school, learn well and have good values. This is a good goal. Overspending money for an expensive private school, thinking the school will make your kid brighter than he really is, is not a good goal.
Look at your goals and see whether they are good goals. Change them if they are not. You are the master of your own destiny.