83 | The Ambiguity of Money

This post is Part 2 of 3 of the "Embracing Trade Offs Instead of Seeking Perfection" series.

The line that gets us from individual decisions to eventual outcomes is twisty and usually pretty faint if it even exists at all.

It's difficult to attribute outcomes to specific factors because there are a lot of factors and because the factors are always shifting.

The shifting starts with constantly changing facts and circumstances which are further complicated by our emotions and relationships.

Once you layer on our incomplete memory of the facts and circumstances and our single-minded perception of the emotions and relationships, you can begin to imagine the challenge of re-telling the story.

Of course, we want to believe that our relationship with money is cause and effect in nature, but we're kidding ourselves when we're tricked into thinking it's that black and white.

Life experience alone sets the scene for a complex narrative and then...

Good decisions result in bad outcomes.

Bad decisions result in good outcomes.

Some decisions result in what appears to be no outcome.

Some outcomes trick us into believing that we made a perfect decision.

And we haven't even addressed luck and risk.

As Morgan Housel says, "Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort. They are so similar that you can’t believe in one without equally respecting the other. They both happen because the world is too complex to allow 100% of your actions to dictate 100% of your outcomes. They are driven by the same thing: You are one person in a game with seven billion other people and infinite moving parts. The accidental impact of actions outside of your control can be more consequential than the ones you consciously take. But both are so hard to measure, and hard to accept, that they too often go overlooked."

This kind of ambiguity makes it easy for "more" to become the hammer and all our feelings about money to become the nails that need to be pounded.

But most ambiguously, ironically, and persistently of all, once we've reached a basic level of financial wealth and income, incremental additional dollars don't change our relationship with money or our feelings about the uncertain future.

"More" doesn't change our ability to manage burn out risk or make it more likely that we might find ourselves actually finding joy in the way we generate income.

"More" doesn't address the emptiness that accompanies spending once it fails to bring lasting contentment or begins to feel like dollars running through a turnstile.

"More" doesn't decrease our feelings of overwhelm or stress if we're confused about where surplus dollars need to go or wondering why extra dollars aren't changing the uneasy feeling in our gut.

"More" doesn't help our investing behavior, because "more" means that the inevitable dips in the future will feel bigger than they do today even when our wealth is substantially greater.

"More" doesn't change our relationship with money if we're not ensuring that the numbers and the story we tell ourselves about those numbers are becoming more aligned over time.

"More" is a sneaky way to avoid trade offs, but trade offs are less scary and more life giving than they seem...

Previous
Previous

84 | The Refinement of Trade Offs

Next
Next

82 | The Comfort of Black and White