For the next few months on this blog, I’ll be hosting an informal book club devoted to All the Money in the World. I’ll go through one chapter a week, and will link back to earlier posts so you can start whenever you pick up the book. Last week, we looked at the introduction, and talked about what an observer would discern of your values by looking at your finances.
This week we’ll look at Chapter 1: What Else Could That Ring Buy? While I spend a chunk of the chapter talking about wedding spending (hence the title), that’s really just a way to get at the idea of opportunity cost. Money is completely fungible. A dollar spent on one thing could always be spent on something else. We tend to view certain amounts of spending as “normal” — spending $5000 on a ring is normal; spending $5000 on outsourcing your laundry is profligate — but the beauty of a fungible entity is that you don’t need to view it in context. A diamond ring and never having to do your laundry again could conceivably cost the exact same amount. Which would make you happier? There’s no right answer, but it is a legitimate question.
Last week, we looked at the big picture. So here’s this week’s primary question: looking at the smaller, discretionary expenses in life, what do you spend a lot more on than a “normal” person would? And what do you spend a lot less on than normal? Why have you made these decisions?
And a bonus question: About half of people (according to one poll) feel underpaid. About 47% feel fairly paid, and the rest — a very tiny sliver! — feel overpaid. Which category do you fall in? Why? And if you fall in the underpaid category, what do you think you could do about it?
My answers: I spend less on casual restaurant food than most people. Since I’m not commuting, and not in an office, there’s no cafeteria fare, or Starbucks near the subway stop. There’s not a question of packing my lunch or not. So unless I’m traveling, I don’t go out for convenience. When I go out to eat, there’s usually a festive reason: meeting a friend for lunch, date night, a party. That may be why I like eating out so much!
I splurge on nice notebooks, especially for my journals. I’ve kept a hand-written journal for decades. Literally, two decades now. When I started, I used a notebook with dates to build the habit. In high school and college I used wire notebooks (like school notebooks). Then, around 2002 or 2003 I started buying nice cloth ones or nice leather ones, and haven’t gone back. $20 is a lot for a little notebook, but I really like to write on nice things, even if my words are occasionally inane (if any historians wade through my journals, let’s just say they’ll have a lot of wading to do).
Earning: I feel underpaid. Not for a writer — I feel like I’m doing fine as a writer. I’ve more been thinking about the comparison with other fields. Some things tend to be rewarded more than others. You could be among the top 1% of poets in the English language, and still not earn as much as a really mediocre investment banker. What can I do about that? I go back and forth. I may explore setting earning targets for myself this year. Part of me wants to just focus on building the brand but I as long as I set minimum guidelines (the money has to come from bylined articles in major publications), higher earnings also correlate with getting my name out there more. The more stuff you throw against the wall, the more likely something is to stick.
Please share your answers in the comments!
Links to past weeks: