Caught in the scale up net

I was reading an article that caught my eye for a couple reasons. Firstly, it was about an Australian rugby player who retired a few years ago with millions, but is living off 300 dollars a week (which isn't much). And secondly because it mentions a company my friend's parent's founded, That he is a major investor in. It is nice to have the sense of connection, after 18 years out of the country.

But more interesting than my friend's company mention, was why this wealthy football player was living off 300 dollars a week. Apparently, he comes from a poor background and in order to get to the development camps and travel, his parents would raise money with raffles at the local pubs and the same year he made his professional debut, he was also washing cars five days a week.

But, there are plenty of rags to riches stories in sports, so that isn't so interesting either. What is interesting in my opinion is that at the start of the career, his agent put him on a 400 dollar a week allowance and he stuck to it all through his career. As a result, he is now one of the wealthiest ex-players in the history of the game.

Very, very few people can manage this kind of frugality as they start to earn more - but if you are old and a professional in a career, you can also probably remember back to living the university life. A time where living off nothing and still having money for beer was possible. However, as the career starts, the tastes expand to eat up any new incoming money and of course, there is the expansion of relationships and living standards.

Can you imagine being able to go back to those levels of spending? I am 42 now and my wife is turning older every year and we are both doing okay professionally, squarely in the average, her a little below perhaps. But together, okay. But if I think back to the income of my first relationship here, we were renting and living on probably one half of what we do now and if it was the same still, the amount we would be able to save would be very significant. Even though we are pretty careful spenders on average, we are still nowhere near the levels we were when younger.

This is one of the problems I have identified with economic availability, as the more available income is, the easier it is to spend. People often think that they are "smart with money" because spending it is a decision they make and if they thought they were doing the wrong thing, they would have made a different decision. However, in hindsight most of us are actually pretty crappy with our finances, evidenced by the levels of debt the average person has and, the level of struggle we face.

The fact of the matter is, that despite what we tell other people, most of us are far less financially capable than we might make out. Some of us might be far more capable than we make out too - I wish that was me!

But it isn't.

The reason I have struggled with money for most of my life isn't because I haven't earned enough, it is because I didn't learn the lessons like this player - I wasn't able to build the habits of a budget and stick to it. Instead, the money would burn a hole in my pocket and it would end up being used frivolously. What is interesting with this is that even though I was spending, I still never felt like I could, I was always painfully aware of the scarcity involved - me not actually being able to afford what I was buying, regardless of what I told myself in the moment.

I am far better with this now and have been improving for a long time, but I think being on Hive supercharged my process to build more understanding and better habits around the way I use value. Some people see HIVE for example as "free money" because they don't have to necessarily do much work for it or, not traditional work, but money is money - it doesn't matter how easily it comes, it is how it is used that matters. This is especially true when the "free money taps" dry up and what was previously possible because of it, is now out of reach. I know many who have put themselves in this situation over the years.

Perhaps it is a mindset thing, where some percentage of people see something they get for free as being something they can dispose of because they wouldn't have had it otherwise, it is like a windfall. Where some others see the windfall being that now they have something valuable that they would normally have to work hard for, so they treasure it as if they had already done the work, already earned it.

When something is earned, it is far more likely to be treated as something valuable as it introduces ownership of process, not just delivery of result. Many lotto winners end up in worse financial positions than before they won because of this, as they don't value what they have. We could also assume that most lottery winners are not very good investors, because they are buying lottery tickets with terrible odds of getting a positive return, rather than investing it into something that will likely get a return, but won't likely be a massive return.

My father bought lottery tickets every week in the hope for a big win - but just imagine if he had invested that same money for the space of 40 years instead. 10 dollars a week adds up and if you are buying lottery tickets instead of crypto, you probably aren't very good at math. Sure "somebody's got to win" but it looks like out of those who use a little caution in crypto, everyone is going to win. Every new All time high means that all who bought and held are guaranteed to be up, remember.

But, life happens and we get "scope creep" in our finances. The more we earn, the more we spend, the more we spend, the more we want to spend and therefore, the more we need to earn. It becomes a cycle and eventually, the earning stops, but that doesn't mean the desire to spend dies with it. Instead, we feel the pinch and we feel bad.

I am definitely not one to give advice on what to do with money, considering over the last year and a half my wife and I have sunk the vast majority of what we have into a house that might never return the value, but we are also not going to expand our life once it is complete. Yes, it is never complete but the big things will stop arriving and we will potter around the house, unsure what to spend our income on.

Well, I know what to spend it on.

Our future.

I don't want a life of financial struggle for us where my wife has to work until she is 70 in a job she doesn't like (she currently lies her job a lot) but in order to have that, we need to prepare for it now. I really dislike the only live once crowd who admonish that there is more to life than money, while in the next breath they are complaining about not having enough to pay for the kind of life they want. It is interesting that they don't seem to see the contradiction of their words and action though, but that is because it is very easy to compartmentalize, especially when trading in platitudes.

The player in question hopes that he has set some kind of example for other players and sports people too, as rather than the celebrity life, they can be a little more retrained early on and ensure that their entire life is comfortable. Something that is very important for an athlete who is lucky to play past maybe 35 years of age and in Australia at least, the money isn't that good - they aren't on 100M dollar contracts.

But, most people don't care about their financial wellbeing, until it is too late. It is like stress - everyone thinks they are good at handling stress, when they aren't experiencing stress.

The earlier good habits are learned and practiced, the greater their effects on the rest of our life. It is very much like compound interest in this way - something we don't have a natural intuition for and as such, undervalue greatly.

Taraz [ Gen1: Hive ]