I must admit, I tend to leave most things about my finance geekery off any dating profiles.
For some reason, personal finance just isn’t sexy.
ISAs, managing upside and downside risk and leverage don’t seem to send many hearts racing.
But it is also fair to say that personal finance deserves a lot better than its reputation of spreadsheets and budget constraints.
Your finances are pretty much directly tied to your time. The few people who have money can have more time.
If like most of us, however, you don’t have money then you have to give up your time in order to make money which you can then exchange for goods and services that you could not have done yourself.
As you are selling that time it is no longer your own – your boss can impose on it pretty much whatever they want within the bounds of your employment contract, if you are even lucky enough to have a contract. If you don’t then you must know the familiar feeling of bending over backwards to find opportunities to sell your time.
Our time is also limited by our mortality – which is one of the key reasons we can charge for it as a limited resource.
I’m a hypochondriac and I want to hold on to as much of my time as possible. I’m also quite ideologically opposed to my time being owned by someone else.
Personal finance skills can turn the balance around. Every one of us has the ability to invest the time and money we do have in order to minimise waste and optimise returns.
When you buy a drink with cash you are drinking your time. If you buy a drink on credit then it’s going to keep costing you time until you pay off the debt.
We can’t all stop working at 30. But a huge amount of wealth generation is in the mind. You don’t have to start a tech company, win the lottery or be born to a rich family. But you can say no to unecessary expenses that offer no long term value – status symbols, fast fashion, shots at the end of the night out. Many very rich people are not wealthy for this very reason as they keep having to level up and spend more and more.
By living within your means you start to generate wealth. The mindset of making do with what you have and growing a saving. That saving is both your safety net and a huge opportunity. It’s the ammo you could invest in the stock market to earn passive returns. It is your startup capital to fund your own business. It is the deposit to buy yourself a property and get off the rent ladder. These returns are compounding and will keep driving you wealth down the line – until you can say goodbye to your boss and build the life you want.