Hi! Welcome to another edition of Daanish Writes, the weekly newsletter where I share ideas about personal growth, life design and my thoughts.
This week we're talking about: 1) Money and 2) Thoughtful spending.
Money is arguably one of the most valuable resources in today’s society. Having money is one thing, but knowing how to spend, save and manage it sensibly is another. I've been thinking about different approaches to dealing with money and I've come across a few interesting viewpoints.
As usual I begin with my intentions: I will be sharing some ideas about money and spending that I found useful. I hope you can find these ideas of use too.
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Measure and Magnitude
This is an incredible mental model I discovered from Episode 3 of the Not Overthinking podcast. The idea originally came from this blog post by Taimur Abdaal, someone I consider to be quite wise - that's my favourite podcast btw, check it out!
You can think of your life as a series of events (moments in time), each having some value. Good events have a positive value, and bad events have a negative value. Through this lens, your task is to maximise the total value of all the events in your life.
Diagram from this blog post.
Different events contribute value in different ways:
Some provide a one-off burst of high value.
Example: having a really good meal is nice while it lasts, but once it’s gone, it’s gone.Some provide lower value, but which recurs over time.
Example: wearing comfortable shoes is only subtly nice, but this niceness is felt for many hours a day, every day, over the lifetime of the shoe.
So there are two components that determine an event’s value contribution to your life:
“Magnitude” — the value of the event at a particular point in time.
“Measure” — the time period over which the event acts on your life
I think we have a bias towards thinking about magnitude, but when making decisions, what really matters is measure.
This can sometimes feel counterintuitive.
Diagram from this blog post.
If you want a full explanation of this concept, read the blog post or listen to the podcast, they're both worth it! Otherwise, I will summarise it now in short.
From the diagram above you can see there are 2 types of expenditure, high measure and low measure items.
Low measure items have high magnitude, so they have a high level of 'feel good' which lasts a short period of time. An example of this is going out for dinner. You eat the meal and it provides a high level of value for maybe 3-4 hours. After that, you're no longer receiving any value from the meal.
In the podcast, Taimur talked about why you should invest in a good kitchen bin. If we compare this purchase to the meal, this is a relatively low magnitude event. You don't really have an amazing experience with the kitchen bin, it's something you will use at least 4-5 times daily for around 5-15 years, depending how long your bin lasts. But the kitchen bin lasting so long makes it a high measure, low magnitude item.
High measure items have low magnitude, so they have a low level of instant gratification, because the niceness is released in small amounts over a long period of time.
Here are some examples from the blog post:
Here are some other physical items that are high-measure for me, and that I’m always glad to invest in:
Laptop — used at least 8h/day every day for 3-5 years. I use my laptop so much that money doesn’t factor into my purchasing decision, since I know it’ll provide far more than that in value.
Backpack — used for a few hours almost every day, I take it everywhere. A really nice backpack was the first purchase I made on the grounds of measure. 4 years on, I still get a lot of value from knowing that it “just works” and can handle anything I throw at it.
Glasses — used at all waking hours, so I’d be happy to spend whatever it takes to get the best possible lenses for my glasses.
Jeans — worn at least 8h/day almost every day. Having a pair of jeans that I love rather than just like doesn’t really get old.
Trainers — worn at least 8h/day almost every day. Much like the jeans.
The main take away message here is that when you spend money, you should try to spend on high measure items. Sure, a meal out here and there is nice too, but if you're looking to optimise the value you get from your money, high measure is the way to go.
Before I read about this concept, I would hesitate to spend over £20 on any item of clothing. Since then, when I buy new bed sheets or a new pair of shoes - high measure items - I don't hesitate to invest more money into them because the value I will be getting from them will make the price worth it.
Zero to One
Zero To One is an inside look at Peter Thiel's philosophy and strategy for making your startup a success by looking at the lessons he learned from founding and selling PayPal, investing in Facebook and becoming a billionaire in the process.
Going from zero to one means going from nothing to something. This is the greatest leap possible — greater than going from one to 10 or even from one to 100. To go from zero to one is to conjure something into existence from the dark void of oblivion. This is the essence of true innovation. - passage from this book summary.
I think you can use this philosophy when spending money, where opting for a zero to one purchase is favourable to something greater than zero (>0).
If you already have a laptop and you upgrade your laptop, you're making a jump from say 1 to 10 in the world of laptops.
If you don't have a camera and you buy your first camera, you have gone from 0 to 1 in the world of cameras. You have gone from nothing to something in terms of cameras.
I think making a 0 to 1 purchase is more beneficial to you because it opens you up to discoveries that weren't previously possible. Of course you should upgrade the things you already have, but making a jump from 0 to 1 is going to give you more than making a jump from 1 to 10. So whenever you have the choice between a 0 to 1 purchase versus something else, try going for the 0 to 1 and see what change it brings.
I quite like the excitement with 0 to 1 purchases because you have no idea what's in store. A couple of months ago I bought a new camera, something I had never bought before. I made a 0 to 1 purchase and it opened me up to the world of photography and videography. Now when I watch a movie or a TV show, my appreciation of the effort that goes into the filming is completely different. Take a look at this video, it'll give you a good appreciation of how much effort goes into just a simple clip of making coffee. I think a lot of us let incredible videography go right over our heads.
Anyway back to the point, 0 to 1 moves are the best moves you can make.
Perfect vs 'Just Good Enough'
I spoke about this concept in last week's edition on Perfectionism. I think sometimes we waste money in getting the best option possible, when something a little less expensive would still get the job done. I do this a lot.
I realised that most of the time, I can save a few bucks if I just get something that does the job. Take phones for example. At the time or writing the latest iPhone is the iPhone 11 pro max (I think), but I'm sure getting the next model down would do the job just as good and save you a little money.
Imagine you're buying a white T-shirt, you could buy one from Hugo Boss for £50 or you could go to H&M and get one for £6. Both T-shirts would do the job of covering your upper body, they are both white and if I blindfolded you and asked you to touch both, I doubt you'd be able to tell the difference between the two. So by going for the H&M T-shirt you're getting something that does the job and you’re saving £44 in the process.
Next time you make a purchase, think about this concept. Ask yourself, will this do the job? Small decisions like this can add up overtime and save you a lot in the long run.
Minimalism
Minimalism is the philosophy of 'less is more'.
In terms of spending, this means spending less. Minimalists will traditionally only buy the things they need, which means they save money by not buying unnecessary items.
I'll give you an example. I have 6 caps (I like hats ok). I don't need 6 caps. I would be fine living with 4, 2 or even 0. The minimalist approach would be to just keep one. In terms of money, the money I spent on the remaining 5 could have been saved or spent else where.
I always think to myself when I complain about finances, maybe if I just followed the advice above, I wouldn't be in that position. Also on a side note, I'm starting university again very soon and I will be well and truly living the student life, so I will try to adopt a thoughtful spending mindset. I might do a follow up newsletter to this one in a couple of months talking about life as a thoughtful spender.
That's all for today anyway.
Got any money saving hacks? Comment them below or tweet me here, I'd love to hear your thoughts.
If you made it this far, thank you for taking the time out of your day to read this. I appreciate it more than I can put into words :)
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✏️Insights of the week:
💬QUOTE OF THE WEEK: This is a quote about communication. Think about this next time you're having a conversation, are you listening for the right reasons?
Most people do not listen with the intent to understand, the listen with the intent to reply. - Stephen Covey
👁️INSIGHT: Cleaning your shoes. This has honestly been a game changer for me. Last year I worked part time in a shoe store, purely for the money, I didn't care much about shoes. Something I noticed was all the other shoe-fanatics had really clean shoes compared to my battered ones. It turns out people clean their shoes to keep them looking nicer for longer. Honestly I never used to do this and I never saw the impact that clean footwear can have on your appearance. It really does make a difference. Since then I have started regularly cleaning my shoes, restoring them back to their original brand new look. Now my shoes are lasting me almost twice as long as they used to.
🎙️PODCAST:This episode from my favourite podcast, Not Overthinking was a real eye opener about how we treat children. People say 'Ugh I hate kids' but you wouldn't hear people make the same comment about any other group of humans. Taimur talks about how children are treated almost as 'less-human' than adults and when you think about it, it makes a lot of sense. A really interesting listen.
📖CURRENTLY READING: Today I started reading The Four Agreements - Each week I'll add a little bit about the book as I read more.
About the Author:
Daanish is a Biomedical Science Graduate and a Medical Student working as a Tutor.
You can find him on 📽️YouTube, 🐦Twitter, 📸Instagram and 🤓LinkedIn.
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