I spent the first decade post-graduation chasing money. Well to be exact I spent it chasing a career which had the indirect goal of making money. I’ve at this point of my life where I don’t think I have a lot of money, but I have enough to cope with our not so simple but yet not so luxurious needs.
I’ve always thought more money would make me happier. More money would mean I could eat out more, buy all the nice things I want, or buy gifts for the people I love who would be happy and pass that happiness to me. Money would give me new experiences, a trip to Disneyland or Europe, a stay in a nice resort. All those kind of things.
It’s only this year that I realise that money has the ability to make me sad too. I didn’t come across this realisation myself or from meditating in the Himalayas. No I got it from books that I’ve read that have given me perspective.
Now let explain why money has the ability to make us sad. Have you ever heard the saying that the pain of losing is stronger than the joy of gaining?
That’s why it’s hard to leave a casino table when we’re on a winning streak, but even harder to leave when we’re on a losing streak. Because while it’s great to win, it hurts to leave on a loss and accept that we have loss. That’s why when we invest in a stock, we tend to take profit too early but cut losses way too late.
Therein lies the problem. Having more money means that you have a bigger risk of losing that money and going through the pain that comes with it. The more money we have, the more we think about how we’re guarding it. If we keep the money just in a bank, we think to ourselves if we’re maximising the yield it could give us and when we get into investing, we feel terrible when we lose.
Let me share a personal experience I had. A few months ago I bought some Facebook shares. It had come down because of the data scandal but hey I thought that Facebook is a good company to invest in so I bought it. Within a few months I had made RM50K on that investment. I was over the moon.
The stock hit its all-time high when it neared it’s earnings announcement for the most recent quarter. I considered selling it and taking profit but I thought hey, what’s the worst that could happen., They’ll most likely beat expectations like they always have in the past and the stock will go up a few percentages more, or if they miss it, it’ll go a few percentages less. I decided not to sell.
The next morning I woke up and checked my phone for the news. I half expected to see news that Facebook had beat expectations once again and Mark Zuckerberg is now the 2nd richest man in the world or something like that but instead they posted results that were below expectations. Their stock tanked 20% in a single day, one of the largest loss in market cap in history (or was it the largest), wiping out most of my RM50K profit.
I felt terrible. The saying goes that it’s not your money until you sell the stock and take profit but there I was already feeling as if I made that money only to have it all wiped out. I felt crap that day and the next few days, even though other things were going well with my days.
Then I thought about this other friend of mine who’s my inspiration of how to enjoy life. She doesn’t save too much and instead makes it a point to buy things that make her happy all the time. I compared those few days with her. When I was feeling shit, she was feeling happy. She’s happy…. because she never made that investment and had that paper profit in her pocket only to have it disappear. I did. I was going through the pain of loss.
That put things in perspective for me. I tend to hoard money, I don’t spend too much on myself (though I admittedly spend a bit more on everyone else be it friends, family etc). But hoarding money and the fear of losing money that comes with it makes me a lot more risk averse. Like I’m afraid to make investments that could either financially pay off in the future or just make me happy.
In the past year it has really helped that I realise I don’t need too much money in life. I don’t crave European or Japan holidays, nor watches, or fancy cars.. or any of these things. There is one luxury that I really appreciate and that’s having a driver though because he helps me send our kids to school or my car to a workshop… and also because I hate driving.
But really if I don’t need too much money, and the fear of losing money makes me sad… what am I chasing here exactly?
Don’t get me wrong, I never want to take money for granted. I appreciate every cent which is why I hoard it and am very careful with it… but now is the first time ever I realise… that having money… can make you sad too. I suppose that’s why we hear so many stories of lottery winners go into depression or suicide.
Perhaps the answer is to have just enough money… but how much is just enough? That’s the million dollar question.