

Fools and their Money Metaphors - mbrubeck
http://www.ribbonfarm.com/2009/03/02/fools-and-their-money-metaphors/

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Anoncoward
<regular posting anonymously> Through joining a firm at the right time, and
paranoid saving thanks to growing up poor, I've ended up with $400k in savings
and no plans for kids.

It's way better than being poor, doesn't even compare, but I'm completely
unprepared. I left bigco last year and have been self-funding a startup, but
the security of having those savings to fall back on has been a curse. I still
freak out about not having a salary, even though that's not logical, but at
the same time I've been able to procrastinate on compromising my grand vision
to achieve revenue without the company dying.

Anyway, world's tiniest violin, most of my life I'd never even have dreamt of
having 'problems' this good, but I wish I could get some good advice on how
not to screw it up.

~~~
Mz
I can somewhat relate to your remarks.

I have a boatload of financial problems, which I do fret about constantly, but
my debts have bought me and my sons good health. Most folks with the diagnosis
I and my oldest son have are also drowning, financially, and getting nothing
but sicker. In contrast, we are on an upward trend (both financially and
health-wise). The amount I owe is the equivalent of one or two hospital stays
for this condition. It's a drop in the bucket. So I kept doing what I was
doing, in spite of going wildly deeply in debt at a fast pace, because it
wasn't simply my best hope, it was my _only_ hope. It was clear to me that
getting well was the only hope I had of ever getting my finances straightened
out. Whenever I feel like I just can't keep going, I inevitably wind up
talking with someone who is also under enormous financial stress but for whom
there is no fix because the financial problems are rooted in their health
problems and they can't fix the health problems.

I can relate to your remarks in that as long as I had more income, I kept
making some of the same choices. I don't regret that because it was making me
well, but when I hit a wall financially I gave up my car (which has been a
wonderful experience and something I always wanted to do but wouldn't have
done without a financial crisis to motivate it). And I have had other
occasions where excellent solutions that resulted in overall improvements in
how we did things grew out of the fact that I simply lacked the money to do
what I had been doing for x issue so I had to think up something workable but
cheaper.

So maybe you could find some means to get perspective on your worries so you
can fret less? Perhaps doing a couple of hours a week of volunteer work at a
homeless shelter or some such? And perhaps you can work on the issue of "not
compromising your grand vision" so you can try to get out of a rut and make it
profitable BEFORE the money runs out and financial catastrophe finally
motivates you to do something else? Since this is a known issue, perhaps
working on some "creativity" things (workshops, reading books on the topic,
etc) and re-examining the idea with an eye towards keeping its soul but also
making it profitable so you don't have to go back to bigco? If you haven't
done so already, maybe you need to crunch the numbers and figure out when the
money is likely to run out so you have some idea of what your timeline is for
making this work? Maybe that would help make it less nebulous?

I started some websites and didn't want them to "be commercial". Then noticed
that a) some of the webmasters I knew who were similarly idealistic were
bitter as hell about the time and energy they put into their websites and the
fact that they weren't getting the recognition and money they wanted and b)
other webmasters who started similarly idealistic sites later turned their
sites into an ad for a paid service because it was popular and they couldn't
do this for free anymore. I ultimately decided that I wanted to keep my sites
"free to the public" but also make money. I added ads, donate buttons, and
have joined a few affiliates. I am not making much money but it at least pays
for costs of webhosting and domain names, something that came out of my own
pocket for years. It shows promise for doing more than that. So I decided that
the "soul" of my idealistic ideas was keeping the information free to the
public and I began looking at models which achieved that but also adequately
monetized the work for the person behind it. It is clear to me that the bitter
webmasters I know are causing the problem themselves. One individual has forum
members practically begging for the chance to give him money and all he does
is spit in their faces and turn them down while at the same time whining about
the site not making enough money. He has a strangle-hold on the income-
potential of the site and won't loosen his grip. And no one can tell him
anything. So, in short, I would suggest you work on YOU -- your attitudes,
your mental models, your stumbling blocks in terms of feeling like making
money would somehow compromise your vision.

Good luck with this.

------
anigbrowl
I'm getting very fond of Mr Rao. I had some (mild) economic good fortune
recently and to my great surprise, after a protracted period of being broke it
made me uncomfortable because it was simply too big to handle. My entire
attitude about how to spend it and use it has changed - as he says, largely
because I've never had to make these sort of decisions before.

So this thinking tool has come along at just the right time for me. Do HNers
have any other suggestions for ways to think about using capital?

~~~
mahmud
Rao is proving to be a treasure of a mind. I hope this new fame doesn't make
him churn out wisdom for the blog-post assembly line.

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DTrejo
This article is full of words, but he doesn't really get to the point.

What I got out of it: stop dealing with your money passively and take control;
reduce your expenses; act like you're super poor; and never stop thinking of
ways to save. Note: I am a starving college student, so maybe it's just me.

~~~
anigbrowl
I have spent a long time in that position and entirely get where you're coming
from. Having recently experienced a change in circumstances, though, I have to
side with the author - my previous frugal mindset has left me unprepared to
manage larger resources.

If you'd asked me 3 months ago what I'd do with a windfall, I'd have said
something like 'enjoy 10%, share 10%, use 30% for a project, put the other 50%
in some savings vehicle, then get back to work'. In actuality I've got option
paralysis because the consequences of such decisions loom larger than I'm used
to.

------
duh
> One guy goes to work straight out of college, saves strategically, quits and
> starts his own SAP consultancy in 5 years, and is worth a few million by age
> 30.

I guess this is me. I fit this rubric, and now I deal with $100k+ sums on a
quarterly basis. On an annual level it goes into the hundreds of thousands.
I'm by no means wealthy (I do not own significant amounts of property, for
example) but I am capable of fundamentally understanding large sums of money
on a personal and professional level.

Dealing with money is _definitely_ a skill that is taught. If you don't have
parents or a business partner or someone else in your life that teaches you
the old-fashioned way (through unflinching and strict discipline and what
borders on verbal abuse when you fuck up), you're never going to learn. The
credit card companies and banks are not this person/entity.

~~~
neilk
Chris Rock had a great ilne about being wealthy versus rich. One-hit-wonder
rappers are rich. The people who sign their checks are wealthy.

You have the means to generate money, both in your self-discipline and
experience, so in the Chris Rock dichotomy you're a wealthy person.

