Saving Money Early, Musings On Death, Micromort & Microlife, Five Year Journal
The Contrarian Letter
Hello folks
Thank you for your feedback on the last week’s newsletter. Please do keep them coming.
Should You Save Money Early?
For someone who is starting out in their 20’s, should they save money aggressively or live their life and push saving for a rainy day. You will find different view points. On one end of the spectrum, you will find folks who will tell you to not bother too much about money and focus on accumulating as many experiences as possible. On the other end, you will find folks who will tell you to save aggressively so that you can compound your money better.
I, personally have been an aggressive saver in my 20’s. I just didn’t know otherwise. Secondly, the experience of my dad passing away early also shaped up my financial decisions. Would I change anything today? I don’t think so. I am in a much better position today and do not have to think much before spending few thousand bucks. That would be different if I only had experiences in my kitty and no money. The idea that one should collect experiences sounds good only when you have money.
Your experiences should remain occasional. By buying peak experiences less often, you get a chance to preserve your financial capital. Focus on creating more optionalities with your money.
I am not saying that one must be a miser but a well planned strategy where one invests at least 15-20% of their income is enough too. I also recorded a youtube video on this topic.
Musings On Death
A close relative passed away last week after suffering from a chronic disease for more than 7 years. Deaths are tragic. It’s even more tragic when someone passes away young. I have seen plenty of deaths in my extended family ever since I came to my senses (I mean since I grew up!). Every death is a reminder that life is short. Its amusing to see that very few people, despite seeing so many deaths around them, continue with their monotonous life.
No, I am not asking you to change your life overnight. I see folks smoking everyday, drinking frequently and partying every other night. Our body can definitely accommodate these habits in 20’s and 30’s. I have always mentioned that compounding is non-linear. Impact is felt only after a few decades. Negative habits only create irreversible damage. Something you cannot undo in 40’s. Time to act is today. We are all going to die. However, we can try to minimise the chances of a painful death.
A micromort is a one in a million chance of death. There is a 24 micromort chance that you may not survive the next 24 hours. Probable death from skydiving is at 10 micromorts. See the below chart to understand the micromorts for various activities we undertake.
A microlife is a unit of risk representing half an hour change in life expectancy. A smoker who smokes 20 times a day is living his life at 29 hours a day while the rest of us live at 24 hours per day. This chart sums it up beautifully.
Five Year Journal Project
My wife & I recently started a five year journal project wherein we write about the day on each page for the next five years. For example, if I start on 1 January, the first page of the Journal will be dedicated for notes from 1 January 2021 / 2022 / 2023 / 2024 / 2025, the next page would be for 2 January and so on. We started this on 1 August. I think it’s going to be fruitful in the later years. You should try it too.
🚀🚀 I AM LAUNCHING A PODCAST!!
I have been meaning to start a podcast for a long time now. I finally did announce it earlier this week. Take a look at this twitter thread for all details or head to Youtube / Spotify/ Google podcasts to listen to episode zero.
If you know someone who should be a guest on the podcast, please let me know.
Books I Am Reading
The Compound Effect - This is a great book on helping you figure how to achieve major life goals. The idea is that you focus on the little things rather than the big things. I am more than half-way through this book. More on this in the next newsletter. Meanwhile, please watch this video where Michael Phelps talks about focusing on the small things.
Bull - This came recommended to me. I am yet to start but I hope to make enough progress to talk about it in the next week.
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In other news, the savings rate calculator was downloaded more than 400 times over the weekend after I made it free for a day. 15 people gave five star ratings. If you are interested, you can buy it here.