In stocks and trading, there is something called a “stop loss” — where you pre-determine that you will exit a position (if the value of a stock drops below a certain point).
In reality, nobody ever does “stop losses”. We become married to our stocks and our positions.
For example, let’s say you bought a stock for $100. If you were “rational” you might create a “stop-loss” for $80. That means if your stock drops below $80, you take the loss of $20.
But most people don’t do this. Their stock might drop to $70, $60, $50, or even become $0. We become “married” to our stock, and we make these rationalizations why the stock will increase.
I think in stocks and investing, stop-losses are the best way to prevent ourselves from going bust.
But I had another thought — what if we took this concept of the “stop loss” and reversed it— brought up the concept of a “stop gain”?
I think there is also a certain concept of a “stop gain” — let’s say if your stock raises from $100 to $120 — then you cash out the profit of $20.
But in life, we don’t know when to “stop gain”. We are bloodthirsty. We want more and more and more.
Don’t blame yourself. It is human nature. It is what has helped us survive across the millennia — we constantly are in fear of dying, so we continue to stockpile our food, money, and resources, in fear of famine.
Yet in today’s world we live in a world of super-abundance. Rarely anyone in the developed world dies from starvation. In-fact, the bigger problem is that we are dying from abundance— think of all the deaths from heart disease, obesity, diabetes— from all the sugar and crap in our diets.
A limit to our gains?
I’ve been thinking a lot about my personal finances lately. How much do I really need in life to be “comfortable” and “happy”?
Is that $40,000 a year? $60,000 a year? $80,000 a year? $100,000 a year? $200,000 a year? $500,000 a year? $1,000,000 a year? Is there a point where “enough” is truly “enough”?
Living in Vietnam
I’m currently writing these words while I’m in Vietnam. By conservative approaches, my expenses don’t exceed around $1000 a month. I can use that to pay rent, my coffee, and food. What else do I need?
Effectively I feel like a millionaire living here in Vietnam. I’ve achieved a point in my life where I literally don’t stress out about money anymore. And now that Haptic Industries has been doing well, my “passive income” can cover my monthly expenses in Vietnam.
So I’m at a strange impasse or road in my life — what do I do with my life, when I no longer worry about paying the rent, feeding myself, and when I no longer feel anxiety about money?
Cindy and I have been talking a lot more about philantrophy — donating some of our extra money for causes we believe in. To empower the arts and other things we believe in — like the local photo scene in Hanoi, and also some local poetry and art scenes.
But above all — I see philantrophy not as just giving away a bunch of money. Rather, for us to use our mental resources, energy, and brains to help empower others with information.
This is the biggest impetus for me at the moment— to use all of my life’s resources to come up with ideas, and blog.
I’m the happiest when I’m helping others. Once my basic needs are met, I can devote the rest of my energy on helping others.
To be human is to be useful to other humans. To love humanity means to care less about your own needs, and to focus on the needs of others.
Of course you can’t help others if you’re barely paying rent, and starving. So I encourage you — hustle as hard as you can, to earn more money, to earn more freedom. But know that you need to find a point where you know that you don’t need any more money.
If you already have a Honda Civic, live in a modest apartment, and can pay your phone bill — do you really need to work more to buy a BMW, live in a more fancy apartment, and always upgrade your smartphone?
The quickest way to become rich
To wrap-up this essay, I think one of the best ways to accumulate “wealth” in life is to prevent going broke. To prevent yourself from wasting money on superfluous things. I think it is easier to subtract from your expenses, rather than to add to your income.
Furthermore, it is easier to downgrade your lifestyle (in terms of eating out, buying organic food, always having the newest gadgets) as a way to become more wealthy.
To be “wealthy” isn’t to have a bunch of money. To be “wealthy” is to be satisfied with what you have. And to have no desire besides what you already own.
Poverty is simply wanting something you don’t have. If you are content, you are wealthy. If you’re still craving for other things— you are poor (a billionaire can be living in ‘poverty’).
How much is “enough” for you, really? Is there anything else you “need” in life — or is it something you “want”?
Know that you already have all the tools at your disposal to become great.
Once you liberate yourself from need, devote the rest of your life empowering others.
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