The personal-finance industry — filled with advice that sounds and feels good without moving the needle — needs to recognize this.1. Accepting that living below your means requires suppressing your ego to below your income.
Spending above a certain level of basic needs/leisure is mostly ego and social climbing. So savings is just a diversion from boosting the appearance of your status today for more productive use tomorrow. When you define savings as the gap between your ego and your income, you realize why many people with decent incomes save so little. It’s a daily struggle against instincts to extend your peacock feathers to their outermost limits and keep up with others doing the same.
5. A finely tuned BS radar that screams “red alert” when promises of abnormal gains without abnormal sacrifice are offered. This includes skepticism of most financial hacks, which tend to be appealing, but fictitious, shortcuts. Also: sales commissions, and suits when they’re unnecessary.Comedian Chris Rock’s advice for kids — “You can be anything you’re good at, as long as they’re hiring” — is good. NYU Stern School professor Scott Galloway’s advice — “People who tell you to ‘follow your passion’ are already rich” — is great.
Read next, by Jared Dillian: The less often you check your brokerage account, the more money you’ll make
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