Forgive Me Father, For I Have Sinned
Frugality, balance, and when not to listen to my hero
“The sin of obsessive frugality is just as bad as the sin of greed. Both are sins of selfishness.” - Sean Iddings, Life is More Than Compounding Money
I have a confession to make, I am not good at spending money. It’s a problem. I know how this sounds but it’s true and I am sure the fellow Buffett-ites would agree with me.
In 2017, the documentary, “Becoming Warren Buffett” was released and I paid a little too much attention to it. I probably should have been spending the time studying Spanish or Chem but I felt in my bones this was WAY more important. So I sat there, on the dusty old dorm room couch, eating the Ben and Jerry’s I got from the C-Store on campus, and didn’t blink through the entire 90-minute program.
My study of this man could be deemed relentless during these formative years and it has caused both a blessing and curse for me. The blessing is I am fairly confident my attitude toward money and investing will benefit me so much that I won’t have to worry much about retirement when I am older. Compound interest is one hell of a drug and I started early.
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The curse, however, is now whenever I think about money, I no longer think about it in static terms. I am overly conscious of the opportunity cost associated with every dollar spent which has helped keep me on the financially conservative side, but it has also caused some headaches.
For a long time, I only saw my life through the lens of an investor and this idea of opportunity cost only revolved around the idea of money. Every decision I made came down to the margin of “is this thing that’s worth X, worth giving up $X*3-4 down the road?”
It was such a relentless focus on maximizing every dollar because to me, this was the only currency I was willing to base my decisions on.
When you do this, it causes problems. Not financial ones, but emotional ones. Stress on an object is caused when two opposing forces are pushing in the opposite direction. Whether this is illustrated by a playground teeter-totter ride or someone sitting in a 9-5 office job who would give anything to leave and go somewhere else.
The constraints imposed on us, whether by choice or not, are what determines where we are and any opposing force pushing somewhere else causes stress. We all know the feeling. Your stomach gets tight, the mental dashboard lights up, maybe your heart starts to race a little, and maybe you have to take a step outside for the fresh air. This is what happens to me when I have to spend money on things that don’t make sense to my financially rational self but are good for the other parts of my life.
The financial part of my brain drives the majority of my decision making but sometimes this hat isn’t the right one to wear.
It’s like my default setting and it takes effort to switch my thinking over to the other thinking hats. For example, I naturally will shy away from any activity that would make me open my wallet, like eating out or maybe grabbing drinks, going snowboarding, or playing a round of golf. For a long time, I didn’t do any of these things. I was more than willing to forgo the happiness associated with them if it meant I could sock away that little bit of extra cash that week.
But as I get older, I see even more the need to push myself into these other areas of life because when put on balance, I think my life would be a failure if all I did was pile money in my account. Even if it was all given back through charity in the end. I want this to be a part of me, but not the whole.
If a genie appeared in front of my 20-year-old self and said, “If you want, I will make your life exactly like Warren Buffett’s starting now do you want it?” He would have sold his soul for this wish. He dreamed of sitting in an office reading reports all day just focused on compounding money.
Now, I would swat the genie away.
It has been a growing process with plenty of pain but I understand more and more the need to spend money on happiness, at the moment, whether it is financially rational or not. Just this past month I was talking with a business partner of mine about how I was debating whether or not to buy a snowboard and all the gear. My girlfriend taught me how to do it last year and I fell in love with the sport but the capital outlay to get all the equipment was keeping me from pulling the trigger. I was thinking through how much it would cost to rent the gear for the season or even just rent at the mountains on the days I go. But owning the equipment provides the flexibility to grab and go when the opportunity comes and with her schedule, being flexible is a big variable.
And when I look in the mirror I can say doing more activities with her outside of the walls we call home will strengthen the relationship, something I have probably, sadly, neglected.
If left alone I naturally gravitate to my vices of reading, writing, and thinking. It’s an exercise done in solitude and I have no problem doing it for long periods of time. But I understand I need to get out more because life is more than the world inside my brain. And the act of making time and putting some money towards “living” could benefit me and my relationships. It might not maximize the investment account but it will round out the other “accounts” needed to live a full and happy life. Plus, the last thing I want is for my lady to hate me 5 years down the road because I didn’t want to spend some money on some vacations, even the most moderate of ones. It’s a risk I am not willing to underwrite at all.
There is a balance to all of this, one I am still trying to figure out. The default setting comes out every so often and I have to catch it because I am more than capable to afford the round of golf or the dinner out with friends. I did end up buying the snowboard and we are both excited for the coming winter. The look she gave me when I told her was the biggest ROI I might have to date.
I have learned a lot from Warren Buffett. He taught me how to compound money, analyze a business, how to conduct myself professionally, guard my reputation with everything I have, and how to remain rational when others are not.
But he didn’t teach me the importance of balance and how this can affect a life.
Following his blueprint for life blindly will have you using money as a way to gauge happiness. You will think about the opportunity cost of every dollar, which is great in business, but not so much in life. There are other costs when you say no to things. And like money compounding, these “debts” also compound and if neglected long enough they can be crippling.
Like in the quote above extreme greed and obsessive frugality are sins of selfishness. I’ll do my best to avoid either end of the spectrum.
Peace and Love,
Please be advised, Wall St Gunslinger is not an investment advisor and does not give personal investment advice. All content is for educational and entertainment purposes only. Investing entails a lot of risks and should be managed appropriately. Please do your own research and consult with an investment professional before making any investing decisions. Thank you.