156. Unseen Impediments to Wealth Creation (8. Building Finance Intuition)
“Three of your most important decisions you’ll make in life are — Where you live, who you’re with, and what you’re doing.”– Naval Ravikant
In my previous blog on building financial intuition, I wrote on how ignorance can be one of the biggest impediments in creating wealth. In this blog, I aim to bring out a set of commonplace impediments that tend to have disproportionately high, negative impact on wealth creation.
Health
“When health is absent, wisdom cannot reveal itself, art cannot manifest, strength cannot fight, wealth becomes useless, and intelligence cannot be applied.” — Herophilus
Being blessed with good health is a great advantage in life. Good health allows you to take on challenges of life with more aplomb and vitality and also derive more fun and pleasure out of the good things in life. However, bad health can cost heavily in terms of ambition and the general trajectory of life. The “genetic lottery” aspect of good health is something you can’t do anything about. It is pure luck. However, there is the lifestyle effect on health that you can do a lot about, to significantly reduce the chances of bad health. The power of eating well, sleeping well and doing basic physical exercise is surely underestimated. For most people, two balanced meals a day are more than good enough, 7–8 hours of sleep is necessary and 45 minutes of brisk walk six days a week is plenty of exercise.
Relationships
“Your family and your love must be cultivated like a garden. Time, effort, and imagination must be summoned constantly to keep any relationship flourishing and growing.” — Jim Rohn
Family relationships can help make or break your wealth creation journey. A bad relationship can prove to be very costly — directly in terms of financial costs and indirectly, emotionally. I’m really no expert on relationships but one thing I have realized is that marriages require a great level of understanding and compromise from both partners. Giving space to each other and tolerating, even relishing, each other’s idiosyncrasies is necessary to make a marriage work. Of course, it is not always in your hands. A great deal of good luck is indispensable.
Job/Profession
“The law of work seems unfair, but nothing can change it; the more enjoyment you get out of your work, the more money you will make.” — Mark Twain
Wrong job or profession can also lend significant blow to one’s wealth. Being stuck in a dead-end job that does not inspire any sense of purpose can prove quite costly even if it is high paying. Its effect is also felt surreptitiously in health and personal relationships. It is much better to change to jobs that are engaging even if they pay less. Also, all other things being equal, it is better to take up jobs in progressive/growing domains than in static ones.
Friends
“Don’t join an easy crowd; you won’t grow. Go where the expectations and the demands to perform are high.” — Jim Rohn
The nature of friends you keep has potential to elevate the trajectory of your life but it equally can be a big impediment to wealth creation. If you spend time mostly with folks who value living it up and giving into instant gratification, you run a serious risk of not making any serious dent in your wealth journey. You may ask what is the point of life with no gratification. The point is not to give up gratification but calibrate it in one’s context. Our brains apparently come with a tendency called “habituation” — the satisfaction and happiness that we derive from any gratifying activity tends to rapidly reduce with continued indulgence. A long enough break in gratification (“dishabituation”) restores ensuing satisfaction. So, you need not break up with those friends but space out interactions with them. On the other hand, friends with a growth mindset can pull you up in all important endeavours of life.
Where you reside
Where we live matters significantly. Living in costly cities can render high salaries meaningless in terms of creating wealth. Even within a city or town, the spending profile of people in your neighborhood matters significantly. As social beings, most of us can’t escape the urge to keep up with the Jones’s. If people around you drive expensive cars, the pressure to acquire expensive cars will weigh heavily on you, irrespective of whether you personally value fancy cars or not. Expense profile of the families of your kids’ classmates will also play a big role.
Then, for the sake of creating wealth, do you not spend money on good cars, or, not get into meaningful relationships for fear of break-ups, or, not eat junk food lest it may affect your health?
Financial wealth is meaningless if you are forced to live like a monk, fighting off material desires all the time and giving up on living a “good” life. A sense of proportion in indulgence that is calibrated in your personal financial and social context will help — e.g., cheat days to eat junk food, spending due time in finding the right partner etc.
In the next blog in this series, I will cover what I believe to be the greatest impediment to creating wealth, viz., our “human” ness. It seems like, for evolutionary reasons, we are naturally endowed with a number of mental heuristics, which automatically predispose us to make bad or sub-par decisions in the context of the relatively recent phenomenon of creating wealth.
Bottomline
“Money is usually attracted, not pursued.” — Jim Rohn
As we get on in life, we tend to make many decisions by default and thus, without conscious realization, may end up compromising our wealth creation journey rather significantly. This impact on wealth is particularly pernicious because it results from acts of omission. The everyday nature of this impact, thankfully, throws up a silver living — overcoming these impairments is not really all that difficult. All it requires is a series of little nudges in the right direction — start improving the quality of food you eat, start with walking 15 minutes a day, start going to bed 15 minutes before your usual time, be more mindful in your interactions with your loved ones, prioritize your family’s goals over trying to measure up to your neighbours’ material possessions etc.
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A bit on my background
I help people make better decisions.
I coach people on “Making Better Decisions”, “Financial Intuition” and “Building Great Careers”. I’m open to run sessions on these topics in institutions — this will help me create larger impact.
I’m also an Investment Advisor (RIA) registered with the Securities and the Exchange Board of India (SEBI). As an RIA, I analyze and prepare financial plans to help people achieve their financial goals.
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