The modern world has a funny habit of making it difficult for us to pursue our dreams. Our dreams are often held back by the limits of our finances. Therefore, in order to achieve your dreams, you must understand money on a deep level, and create a lifestyle that supports your financial goals.
The fact that we must work isn’t an issue. Whether we work for money or otherwise, being devoted to a cause is what makes us human.
We need to live in a way that allows us to do our best work. This gives us the best chance of providing for our needs, both now and in the future.
Welcome to the Work Series – my thoughts on using money as a tool that allows us to do the work we truly desire.
The Quest For Money & Meaning
Money and meaning are both integral aspects of modern life. We need money to survive, and we need meaning to thrive.
The problem is that that we tend to have to live in a way that forces us to sacrifice one of them.
This challenge is often grappled with early in our careers. We enter the workforce after finishing our education, often becoming laden with debt in the process. But we soon realise that we have much less free time than before. And we also seem to need more money to pay for our changing lifestyle.
The first stage of our career becomes finding a way to get on top of our finances. Meaning falls to the wayside as we focus on earning enough to survive. If you repeat this cycle for too long, this leads you towards an burnout, stress, and an unfulfilled life.
We need to be able to pull ourselves out of this cycle. Avoiding the usual money pitfalls allows you to slowly build a safety net for yourself. Working hard to save and invest your money opens the door to financial freedom. And securing your financial position allows you to Choose Work You Love, allowing you to find the meaning you lost along the way.
Choosing both money and meaning is a non-negotiable for a sustainable life. While we can make do without one at certain times in our lives, we need a healthy amount of both in the long term. Until we have enough money to design that lifestyle, we’re forced into the balancing act of modern life while hoping we don’t fall off the rails.
Your job, therefore, is to understand what your ideal lifestyle is, as well as how you plan on earning enough to achieve it. Consideration of what you truly want, combined with a concerted effort to unlock it, is the mission that allows you to live your ideal life.
Find Your Ideal Lifestyle
An ideal lifestyle is one that provides you with meaning.
Meaning is what motivates us to learn and grow. It’s the pursuit of meaning that makes us better at being ourselves.
The earlier stages of my personal philosophy focused on developing the skills of Saving and Investing. These skills allow you to protect the profits you earn in your life-business, and use them as a force for improving your circumstances.
Knowing how to Save and Invest gives you the best chance at attaining the freedom to pursue what matters to you. My Saving Series and Investing Series explain my thoughts on creating this freedom in detail.
Building these skills first serves two key benefits. Firstly, you know how to determine the value of things. And second, you know what time, money, and effort is required to transform investments into rewards.
Saving and Investing give you the launch pad you need to start finding what matters to you. With reasonable control over your spending, you don’t need much money to start doing this. Perhaps you take leave from your job, work in a project or casual capacity, or simply by rely on savings and other income.
When you know what matters and what commitments are required to pursue certain things, the way forward becomes clear.
Achieve Your Financial Goals
Financial goals are incredible motivators for inspiring change in your life. A good financial goal is one that, once achieved, will make a dramatic impact on your life.
A goal provides the North Star that gives your actions meaning. Good financial goals include paying a student loan, saving for a holiday, or investing a certain amount.
Be careful about pursuing poorly planned goals. A goal with no clear direction that makes no impact on your life can be dangerous. Your goal should inspire you as you can see how your life would be better once it’s achieved.
For instance, paying off a credit card gives you additional cash flow every week that you can use to pay down debts or invest. It provides a clear and tangible reward once it’s achieved.
Some goals don’t provide this immediate benefit to your life. And in many cases, they encourage avoiding the rewards of your goals entirely.
I realised this the hard way when pursuing Financial Independence.
Achieving “the number” wouldn’t make my life any better, as I wasn’t taking active steps towards improving my life in the present. Working overtime in a consulting role was destroying my mental health, and left me with little productive free time. I loved the work I was doing despite this, and didn’t plan on retiring early. But I realised that the goal I was pursuing was simply the wrong one for me at that time in my life.
Setting quality financial goals is essential. Set the wrong goals, with faraway time horizons, and you risk climbing the wrong mountain and wondering why you have the same problems.
You need to achieve your financial goals, just as you need to live a meaningful life. While you may be able to get by with just one, both are necessary for a healthy lifestyle. They feed into each other to give you the freedom to pursue your calling, while offering you the chance to earn a living from what you enjoy. This relationship allows you to provide for your current and future needs, without forcing you to live in a way that robs you of meaning.
How To Create a Lifestyle that Supports Your Financial Goals
Living your ideal lifestyle doesn’t come easy. In some cases, it may be impossible right now. But designing that ideal lifestyle is something that anyone can do.
No matter what you plan to do, you’ll need to know where you are and where you want to get to. Look at your current life and finances to understand what you want. From there, you can begin to create a negative vision for your life – a vision of what you don’t want.
Understand What You Don’t Want
With a keen idea of what matters to you, you can start to identify the things that detract from your idea of value.
Perhaps someone desires the ability to read every day, but their full-time job makes this difficult. Defining desires in this way ascribes failure to not reading every day (which has its own host of problems). In this manner, their job becomes an obstacle preventing them from being the happiest they can be.
Happiness is a spectrum, ranging from the highest joys to the lowest despairs. Whether you are happy, unhappy, or somewhere in between, every aspect of our lives falls somewhere on this spectrum.
We can’t (and shouldn’t) eliminate unhappiness entirely, unless you desire to paint your world the dull grey of apathy. Instead, we should prioritise building an understanding of what makes us happier or unhappier.
It’s easy to look at the example above, and think that the job must make them unhappy because it means they have no time to read. But how they engage with work is what’s causing the problem.
When we flip the scenario around, we can figure out what our friend doesn’t want. Rather than “reading every day makes me happy”, consider “working full time prevents me from doing everything that I want to do, which makes me unhappy”. A reversal of the scenario allows us to consider another perspective, think about the problem in more detail, and find a new solution. Our friend now has a goal to work towards, with an action that will directly improve their life.
Framing your desires or goals in both positive and negative ways allows you to crystallise the source of your desire. Through this, you get a better understanding of what your real desires are under the surface.
Develop a Strategy
Once you know what you don’t want in life, you can create a strategy to avoid it. Your life strategy should also encompass lifestyle design, and earning enough to fund that lifestyle.
If a goals feels overwhelming, your strategy should break that goal down into easily actionable steps. For instance, if you wish to save $10,000 each year towards a home deposit, try thinking in chunks of $500. Now your goal is to save $500 20 times per year.
For more complex goals, you can use reverse engineering to find a strategic path to your goal. Take an aspect of your goal and ask yourself, “What would I need to do to achieve this aspect of the goal?”
Once you determine a method, outline how you would achieve that method. Repeat this process as many times as it takes for you to reach your current position. This allows you to determine what tactics will be necessary to execute your strategy.
A good strategy provides a broad overview of why you want to get from A to B to Z. Your tactics will help you get there by detailing the specific steps necessary to do so.
Experiment
Once you have a goal to work towards and a strategy to achieve it, all you can do is make it a reality. The easiest way to do this is to experiment to find the way forward.
Let’s use the same reading example we touched on above. If our friend wants to be able to read every day, they need a way to create time to do so. Maybe our friend earns more than they need, so they try working part-time for a while to improve their life-work balance. Alternatively, they could try altering other areas of their life (e.g. meal prepping on weekends) to free up time to read.
It’s through the experimentation process that we begin to understand what truly matters. Sometimes, what we thought was the goal wasn’t the goal at all. Trying new things and seeing what works is how you find out what truly makes you happy.
Understand How Much You Need
As part of your experimenting process, you’ll begin to learn how much of everything you need to live a good life. Everything from money to free time to social interactions should be measured.
When creating your ideal lifestyle, you can do anything you want – but not everything you want. Every path we take will involve some sort of sacrifice.
Working less than we are capable will result in us leaving earnings on the table. Consuming too much will leave us incapable of acquiring all that we need. And pursuing a perfect lifestyle without achieving the means to support yourself leaves you vulnerable to the whims of corporations and governments.
All of these types of sacrifices can be mitigated based on your lifestyle strategy. But not all at once. You may need to determine how to have enough without sacrificing other things in your current or future life.
Knowing how much money you need both now and in the future is of monumental importance. I outlined my strategy of determining how to earn enough for now and the future here.
This process is not only understanding how much we need to be happy, healthy, and at peace. It’s also understanding how much we don’t need, and what sacrifices we’re willing to make on our journey towards living our ideal lives.
Use Your Existing Investments
The investments of time, money, and effort you’ve made along the way give you power. Now is the time to utilise that power.
Use the things you’ve collected in your life to make achieving your goal easier.
If you’ve developed useful and lucrative skills, work in a way that allows you to utilise them to maximise the value of your time.
If you’ve been pursuing Financial Independence, you can alter your life-work balance and draw income from your investments.
Being able to design a life you love that also allows you to achieve your financial goals is rare. It often requires a high income, some investments, or a combination of both. For those earlier in their career or investing journey, your ability to earn, invest, and avoid overspending is what allows you to free yourself from the hedonic treadmill.
Achieving a financial safety net you can rely on gives you options – even if it doesn’t cover all of your expenses. You may be able to change your life much sooner than you think once you begin to design it.
Take Control of Your Money-Making Methods
This step may be controversial, but I believe it’s becoming more and more important over time:
You need to have a higher degree of control over your primary sources of income.
Job security in the modern age is dead. Technological advancements are rendering entire skill sets obsolete. Layoffs and redundancy plans are stripping thousands of workers of their jobs. And the job market is tightening as an influx of talent begins seeking new opportunities.
This is especially true for knowledge workers with deep specialisation. Hyper-specialisation is useful if you can solve problems that won’t go away and can’t be automated. Otherwise, it’s only a matter of time until you are replaced – unless you continue to learn new skills to replace those that fall out of favour.
Use those skills to work with others in a way that works for you. Learn how to control the process by which you work. Just like you diversify your investment portfolio, you can diversify your working career.
Not only does this reduce the risk of losing an income source, but it forces you to continue to grow to support those you work with. This naturally makes you better at working in different ways, which serves only to improve your circumstances further.
Closing
Being able to live as you please and also earn enough to achieve your financial goals is a privilege that few can attain. However, it’s a goal that I strongly believe we should all strive for.
An excellent North Star for anyone is to determine how to design their ideal lifestyle. This may take years of preparation in order to lay the foundations, but it’s an essential first step. The sooner you plan the positive changes you want in your life, the sooner you can implement them. This allows you to benefit from the impacts of compounding returns for as long as possible throughout your life.
Once the foundation is laid, you can take the time you need to discover what truly makes you happy. But you need time and space away from the drudgery of the modern day grind to experience this.
All it takes is some conscious saving and committed investing over a few years to get the spiral spinning outwards. Once you start to feel the impact of your upwards momentum, you can begin to build the life you always meant to live.
Thank you for reading.
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