“Money poisons you when you’ve got it, and starves you when you haven’t.” — D. H. Lawrence

[@houselPsychologyMoneyTimeless2020]

People do some crazy things with money. But no one is crazy. […] Everyone has their own unique experience with how the world works. And what you’ve experienced is more compelling than what you learn second-hand. So all of us—you, me, everyone—go through life anchored to a set of views about how money works that vary wildly from person to person. What seems crazy to you might make sense to me. […] We all make decisions based on our own unique experiences that seem to make sense to us in a given moment. ^{1 2}

Tails drive everything — When we pay special attention to a role model’s successes we overlook that their gains came from a small percent of their actions. That makes our own failures, losses, and setbacks feel like we’re doing something wrong. But it’s possible we are wrong, or just sort of right, just as often as the masters are. They may have been more right when they were right, but they could have been wrong just as often as you. ³

“It’s not whether you’re right or wrong that’s important,” George Soros once said, “but how much money you make when you’re right and how much you lose when you’re wrong.” You can be wrong half the time and still make a fortune.

Man in the Car Paradox — It’s a subtle recognition that people generally aspire to be respected and admired by others, and using money to buy fancy things may bring less of it than you imagine. If respect and admiration are your goal, be careful how you seek it. Humility, kindness, and empathy will bring you more respect than horsepower ever will. ⁴

Reasonable Rational

Do not aim to be coldly rational when making financial decisions. Aim to just be pretty reasonable. Reasonable is more realistic and you have a better chance of sticking with it for the long run, which is what matters most when managing money.

Academic finance is devoted to finding the mathematically optimal investment strategies. My own theory is that, in the real world, people do not want the mathematically optimal strategy. They want the strategy that maximizes for how well they sleep at night.

Philosophy

• Money can only solve money problems.

• Money isn’t nothing, it simply can’t be the only thing. Your wealthy life may involve money, but it will be defined by everything else.

  • Money is the only type of wealth. → Sahil Bloom’s The Five Types of Wealth

• Money is just a piece of paper.

  “Think of money as information — it’s just for resource allocation across time and space” — Elon Musk

• Don’t think all poverty is due to laziness. Don’t think all wealth is through hard work.

• Making money is an action. Keeping money is behavior/habit. Growing money is knowledge/skill.

• The proper financial mindset is to be scared enough to save for the short run and brave enough to invest for the long run.

  • Mental Shift: Consumer(ism) → Producer/Creator/Owner/Investor

• Earning more money increases freedom. Spending less than you earn reduces stress.

Enough is enough

“Savings can be created by spending less. You can spend less if you desire less. And you will desire less if you care less about what others think of you.” — Morgan Housel

• True wealth is found not in attaining more, but in discovering enough.
• Financial freedom is a feeling, not a reality.
• Marginal Utility: Beyond a certain point, having more money will not lead to more security, freedom, and happiness. In fact, these things do not come from more money. They come from knowing when to stop.
  • See: The Parable of the Mexican Fisherman
• You’ll never achieve financial freedom when you play status games, fall into the consumer trap, and let your ego dictate your spending.
  • The only way to build wealth is to have a gap between your ego and your income. Less ego, more wealth.
• False Belief: “If I become great at making money, you’ll automatically become wealthy.”
  • Make Money → Spend Money → Make Money → Spend Money
  • Money more in = More money out
    • Lifestyle Inflation/Creep
      • When your income increases, your expenses increase just as much to upgrade the quality of your life.
    • Expectation Inflation

      • Expectation is the greatest liability. You will never be rich (financially wealthy) if your expectations are growing faster than your asset because you are constantly wanting more.

      • If your expectations grow faster than your income, you’ll never be satisfied with your money, no matter how much you accumulate.

      • You manage financial expectations by keeping your lifestyle way below your means.

      • Your ​Margin of Freedom​ is the buffer you intentionally create between your reality and your expectations.

      • The less you need, the richer you become — wealth is about flexibility, not luxury.

      • Being rich is having things. Being wealthy is knowing you don’t need them.

        “I want it, but I can’t afford it” ➞ “I can afford this and more, but I don’t need it.”

      • Manage Your Expectations: You can be financially poor, but psychologically rich.

      • 《致富心態》（The Psychology of Money）的作者 Morgan Housel 曾舉過一個例子：

約翰 · 洛克斐勒 的財富相當於四千億美元，但他一生中從未擁有過青黴素、防曬乳或止痛藥。在他大部分成年時期，沒有電燈、空調或太陽眼鏡。財富的感受，取決於所處的時代背景與期望。

John D. Rockefeller was worth the equivalent of $400 billion, but he never had penicillin, sunscreen, or Advil. For most of his adult life he didn’t have electric lights, air conditioning, or sunglasses. Everything about wealth is circumstances in the context of expectations.

On Making Money

• Optimize for life fulfillment/experiences, not for money-in-the-bank.

  • 人生的價值，不在「金錢」的總和，而在「體驗」的加總。
  • 人們真正想要的，是食、衣、住、行、育、樂，而不是銀行裡的數字。

• Having a lot of money ≠ Rich life

  • 而財富，是這些東西的總稱，而非金錢。
  • 所以，在人生中，你應該追求「財富」，而不是追求「金錢」。

• Never allow self-worth to be dictated by net worth.

  • 為了「幸福感」賺錢，不要為了「饋乏感」賺錢。

• Use money to make more money for you. ⁵

  “Rich men use most of their money to get richer. Poor men use most of their money to look richer.” — Mokokoma Mokhonoana

  [@collinsSimplePathWealth2016]

  “Stop thinking about what your money can buy. Start thinking about what your money can earn. And then think about what the money it earns can earn.”

  • The rich get richer. Money begets money.

• Skills get you to a million, character/charisma takes you to 100 million, and time brings you to a billion.

  “The reason you’re not making $10m a year is that you don’t know HOW to make$10m a year. Therefore, that lack of knowledge is costing you $10m a year.” — Alex Hormozi

• The only way to make a lot of money is to create a lot of value. No value means no money. Money is a lagging indicator of value created, impact, and service. Don’t chase the dollars. Create the value and the money will chase you. ⁶

• MONEY and TIME is a balancing act. Stop trading/renting time for money, so money can create more time for you.

  • Millionaires don’t have salaries. They own assets.
    • WEALTH = Net Income + Asset Value
  • 真正的財務自由，是不再被困在「時間換取金錢」的枷鎖裡。

• The best thing you can do to stay poor is to start tomorrow.

  • The Action Mindset: The longer you’re not taking action, the more money you’re losing.

• The only way to make passive income is to provide value in a way that is not directly tied to your time. The best business model is the one that scales while you sleep.

  • 被動收入＝睡後收入
  • Passive income is actually “less active” income → Difference: “LEVERAGE”
    • We all have 24 hours per day.
    • We are all being paid per hour rate.
    • We all trade/rent out time for money at some levels.

• 開源節流

  • Prioritize buying assets consistently over saving excessively.
  • Don’t focus on saving (fixed mindset), focus on earning (growth mindset).
  • Saving has limited downside, earning has unlimited upside.
  • There’s a limit to how much you can cut, but no limit to how much you can earn.

On Saving Money

• It’s not how much money you make, but how much money you keep and take home.

• Mindset shift for keeping money:

  • ❌ 沒有拿去投資以獲得更高獲利的「罰金」
  • ✅ 支付未來幸福生活的「入場費/手續費」(安全邊界 Margin of Safety)

• Unspent money buys something intangible but valuable: freedom, independence, autonomy, and control over your time. Every dollar of savings buys a claim check on the future.

  [@collinsSimplePathWealth2016]

  “There are many things money can buy, but the most valuable of all is freedom. Freedom to do what you want and to work for whom you respect.”

  “What’s the point of having f*ck you money if you never say f*ck you?”

  • 金錢最大的價值是買回/留下「自由」，也就是「選擇權」。
  • Wealth is hidden. Wealth is the money you don’t spend. Wealth is the nice car you don’t buy. Wealth is the big house you don’t purchase. Wealth is the financial assets that haven’t yet been converted into the stuff you see. Wealth is an option not yet taken to buy something later.

On Spending Money

“Spend your money on the things money can buy. Spend your time on the things money can’t buy.” — Haruki Murakami

“Too many people spend money they haven’t earned (can’t afford), to buy things they don’t want (need), to impress people that they don’t like (care).” — Will Rogers

“If you buy things you do not need, soon you will have to sell things you need.” — Warren Buffett

• 我發現，把錢花在那些很快就消失/一下子就消耗掉/轉瞬即逝的東西上，會讓自己有種受騙的感覺。

• Consider spending money as a failure of imagination; a failure to solve problems by smarter means.

  • Your need for money is inversely related to your level of skill. Money buys convenience but more importantly, it compensates for lack of skill.

• Money can buy happiness_, but in an indirect way._ It’s not money itself that makes you happier. It’s the thing acquired by money that actually makes you happy.

  “Those who say that money can’t buy happiness, never had any.” — Samuel L. Jackson

• Spending can be a representation of how hard you’ve worked and how much stress went into earning your pay check.

• “Nothing you will do in your lifetime, realistically, will waste more money than buying a new car. It’s the single worst financial decision millennials will ever make.”

• Bought Status Test

  Before you buy something, ask yourself: Would I buy that thing if I couldn’t tell anyone about it?

• The best uses of money are those that create one of four things in your life: Time, Experiences, Purpose, or Health.

  “I try to keep in mind that there are two ways to use money. One is as a tool to live a better life. The other is as a yardstick of success to measure yourself against other people. The first is quiet and personal, the second is loud and performative. It’s so obvious which leads to a happier life.” — Morgen Housel

  • Don’t buy “dumb things” that offer “temporary happiness.” Spend smart on the things that bring you true, long-lasting happiness.
  • Do not attempt to achieve status, respect, or admiration through material purchases.

• Experimental Purchase (✅) Impulsive Purchase (❌)

  • Never buy things based on status/material desires. Instead, buy things that make you healthier, wealthier, or provide you free time. It’s called Practical Materialism: Products that make a material difference in the quality of your life.
    • On the one hand, spend extravagantly on things you love (e.g., travel).
    • On the other hand, save (cut costs) mercilessly on things you don’t love (e.g., car).
  • Luxury = Necessity that begins where necessity ends

• Spending any amount of money to “save money.”

  • Look at the ROI of your expenses, not the price tag.
  • Buying quality is key. If you buy quality the first time, it can last a lifetime.
  • Frugal doesn’t mean cheap.
    • Cheap is saving money in short term, while frugal is making wise choices to save in the long run.
  • Often, the more expensive item (“Buy It For Life” ) is more frugal than the cheaper item (“Buy Once, Cry Once”).

• The more money you have, the harder it becomes to know how to spend it in a way that will make you happy. And that confusion sets in at fairly low levels of income.

  The concept of the Doughnut, as introduced by economist Kate Raworth, illustrates a balance between meeting essential human needs (the social foundation) and staying within planetary limits (the ecological ceiling). When applied to personal wealth and happiness, the Doughnut highlights a crucial insight: beyond a certain level of income—where basic needs are comfortably met—people enter a more ambiguous space of desire, where knowing what to want becomes far less straightforward than knowing what to need. As Luke Burgis points out ⁷, once survival is secured, people shift from necessity-driven decisions to socially influenced desires, often struggling to determine what will truly bring fulfillment.

• Eliminate Before Accumulate: Use the “One in, One out” rule/policy when buy things

• 3 Levels

  1. Beginner: If you can’t afford it twice, don’t buy it.
  2. Advanced: If it’s more than 10% of your income don’t buy it.
  3. Pro: If it’s not making you more money, only buy it if your assets can pay for it.

• Tip generously whenever you’re able to. Be frugal with yourself and generous with others. Generosity creates significantly more happiness than consumption. It compounds. As a side benefit, when you tip generously, people go out of their way to help you, which always makes your life easier in the long run.

• FIRE = Financial Independence, Retire Early
• Financial Freedom/Independence = passive income exceeds your cost of living (日常開銷)
• Financial Literacy = understand how to manage your money

Investing in yourself is the highest ROI investment you’ll ever make in your life