Disclaimer: this article is not directed toward those struggling with poverty. It is written toward the middle class consumer, from a similar perspective. However, there is a philosophical element here, so take what value you can find, and leave what is not relevant to you.
Grind culture is in these days. Work yourself to the bone. Be an entrepreneur. Start that side hustle. Bring home that bag. Be up before the sun and to bed after it.
But.
Often over-looked in the pursuit of financial health, is the power of consistency and anti-consumerism.
Often over-looked in the pursuit of financial health, is your mental health and the benefits associated with creative hobbies.
Often over-looked in the pursuit of financial health, is physical health and the time and effort it takes to maintain it.
Forgotten is the fact that all things are one.
In basic economics, there are three principles I have found to apply to all aspects of life.
- Supply & Demand
- Opportunity Cost
- The Law of Diminishing Returns
Supply & Demand:
The model of supply and demand basically says that the less exists (or smaller supply) of something, the more precious it becomes (think gold versus copper). The opposite is true as well. The more available of something, the less valuable it becomes.
Very simplified explanation, for the purposes of philosophy. Also, an important thing to remember about economic models is that they are general assumptions, but there are always exceptions.
Opportunity Cost
The principle of opportunity cost is written for capital. The capital you are using for one endeavor, cannot be used elsewhere. If you invest $1,000 into Microsoft, you cannot invest that $1,000 into Apple. Meaning, it will cost you the profits you could have had, with a different choice. If $1,000 dollars of Microsoft becomes worth $1,100 and $1,000 of Apple becomes worth $1,200, then your choice to invest in Microsoft over Apple had an opportunity cost of $100.
The Law of Diminishing Returns
The law of diminishing returns is the antithesis to another general economic model “more is always better.” Professor Jonathan Gruber of MIT uses food to explain this concept. More is always better. If you can get one piece of pizza for $5 or two pieces of pizza for $5, naturally a person would choose the two pieces. Even if you don’t want to eat it right away, you can share it or save it for later. More is better. The law of diminishing returns is tied to it in that because, while more may be better, there comes a point of saturation. Professor Gruber again uses physical consumption as an example. If you buy an 8 ounce coffee, it can generally serve its purpose in dosing a person with caffeine and helping them kick-start their day. The next 8 ounces of coffee do not double the effect of the first 8 ounces and are therefore not as valuable to the consumer. Consequently, the price for a 16 ounce coffee is not double the price of an 8 ounce coffee. And, at a certain price-point, a service provider will offer all you can drink coffee because the consumption rate will have become extremely low.
So, how do these apply to to life outside of the market?
It is a common saying that “time is your most valuable resource,” but rarely is it treated with the consideration it is due.
I have begun to consider the hidden costs, diminishing returns, and supply chain of time in my own life, and would recommend it to anyone.
I like to maintain an awareness of my personal market’s tipping points, in all aspects of my life.
Based on my lifestyle and goals, there is a point where increasing wealth is so small a return, comparative to cost, that I will not put energy into it.
There is a point in eating chocolate muffins, where the excess calories no longer out-weigh the extended sensory experience.
There are types of men I won’t date, because my time alone brings more joy, and because committing to someone who isn’t right for you, costs the opportunity to date someone who is suited.
There is a point in practicing my music, where the improvement in skill no longer out-weighs the boredom and opportunity cost that comes with excessive repetition-where the physical discomfort outweighs the pleasure of playing.
Hobbies I’ve tried, but chosen not to continue. Lifestyles I’ve experimented with, but walked away from.
The cost of a late night out drinking applies not only to the funds I spend and what else I could do that night. It also applies to the energy I don’t have the next day. The financial cost of cabs and delivery food I don’t need. The short and long term physical toll on my body directly from the alcohol, and indirectly due to associated irregular sleep and unhealthy eating. The energy cost of becoming caretaker to excessively inebriated individuals. I found the main “return” to be building relationships with good friends, but I’ve also found higher “returns” with lower physical, emotional, & financial costs in the day-time dates with my friends I now invest my time in.
Occasionally, it’s worth disregarding all costs and having a wild night out though.
Because, as with everything, there is a point in moderation, where the return on “more” of it is not worth the additional cost.
So, on the subject of a grind toward financial stability, consider the purpose of the goal. Consider also where your resources might be better used, to reach the same goal and achieve those purposes.
Think outside of yourself and your immediate social culture, and see how many proverbial birds you can kill with the stones that you have, rather than running yourself ragged on the pursuit of more stones. Ask yourself if you even want to kill birds.
Maybe the answer isn’t an additional 20 hours of work per week. It could be walking or cycling rather than using a car. It could be 5 hours of cooking a week, and a reduction in take-out. Maybe the answer is less consumption, not more income. Maybe the answer is different consumption. Maybe the answer is an end to your daily Amazon packages and instead a routine of fresh flowers in your house.
Maybe the answer is saying no to things that create a brief temporary high, for the sake of spending more time, energy, and resources on the things you deeply value.
What is more valuable to you? Where is your energy going? Where is your time going? Where is your money going?
What are your priorities? Do you even know?
