investing for the future

Published on April 20, 2020

There is a fine balance between optimizing for the future and living in the moment.

I consider myself to be a long-term thinker. I exercise every day because I know that, by exercising, I can stay healthy. This will allow me to be happier, because I should not have to worry as much about my health if I am healthy.

This is the same motivation behind why I am a conservative spender. I save money as much as possible because I know that my savings will provide a cushion in case anything goes wrong. In addition, my savings will give me more freedom in the future, because financial security is the essence of freedom in the modern economy (i.e. the more money you have, the less you need to worry about scrounging your next paycheck).

Yesterday I ate a cupcake. It was delicious, and I regret nothing. Why am I telling you this? Well, prior to eating the cupcake, I had a personal rule against eating sweet treats, and up until yesterday I had been doing really well.

What changed was that I started to ask myself the question: am I saving too much for the future at the expense of today?

Before eating the cupcake, I think my definition of living in the moment was more focused on doing what I could to make tomorrow easier for myself. This is a good principle, because the more prudently I act for my future self, the better off I will be tomorrow.

But there is a fine line between acting in your future interests and completely eliminating all of the things that make each moment so special. I realized this with the cupcake.

As I ate the cupcake, I walked down memory lane. Its flavors reminded me of times past, and took me back to an occasion that I continue to think of as one of my fondest memories. I would not have had this experience had I followed my rule of “no sweet treats.”

What encouraged me to eat the cupcake was that I knew, in the moment, that I would derive a lot of pleasure from consuming the cupcake. It was not that I necessarily needed to eat the cupcake -- or that I felt a desire to have it. Rather, my mind said, in the moment, this was the right time for me to have a cupcake.

I could have continued my rule about not eating any sweet treats, but today I am asking myself: would I have been better off if I had not eaten that cupcake? I think the answer, controversially, is no, because today I would be regretting not acting in the moment and doing what I felt was right.

I am starting to think that, while personal rules can be useful, there are moments where those rules can -- and should be -- broken. Like yesterday, for example, I knew the cupcake would provide me with pleasure, and so I ate it.

Of course, where this thinking gets dangerous is if I allow myself to eat a cupcake every day. If that were to happen, each individual cupcake would become less special, and a large part of what made yesterday so great was that the cupcake was a treat -- a reward for my work.

Investing for the future is wise, but I don’t want to let “the future” that does not technically exist distract me from enjoying my life as it is now, in this moment.

I don’t have a specific rule on how I intend to implement this policy. I think it will come down to just ensuring that, when I see an opportunity to do something, I ask myself two questions.

First, I should ask whether the thing I want to do is in my future best interests. This allows me to evaluate the long-term consequences of my decision. Second, I should ask myself whether I will regret not doing this thing in the future. This forces me to think about whether this experience is actually something that can provide my life with meaning, even if its exact long-term value is questionable.

Under this heuristic, eating one cupcake is not considered bad -- indeed, it is considered a good thing, because if I didn’t eat it when the opportunity arose, I would feel guilty the next day about passing up a meaningful experience. But, eating one every day for a week is bad, because my brain knows the long-term consequences of that behavior are high.

My goal is to develop an internal compass that tells me when it is best to save for the future, and when it is best to cash in my rewards and embrace the present moment.

Saving 80% of my paycheck in a savings account may be a good idea. It may protect my future. It may provide me with a better financial cushion. But, what if tomorrow never comes? Should I really be depriving myself of so much if the thing for which I am saving is uncertain?

That’s why I only save 50% of my paycheck. That number allows me to invest in my future, while still giving myself freedom to spend some of my capital today. It’s the balance that I have found, after trying out many different approaches to fiscal conservatism.

Taking care of tomorrow matters a lot to me, but there is, and will only ever be, now. And so, when I feel like I am depriving myself too much, I should cut myself some slack. It may result in more nuances in my decision making, but so what? Life is for living.

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