Do you spend by a code?
I have been spending the last couple weeks reviewing a few podcast. While I have in no way done a deep dive (or even a shallow one) I have enjoyed my foray into the media. In fact this post's topic comes from one of the podcasts. I still think that it is a relatively undefined media outlet. I did come up with a thought. My semi boomer brain recalls Ross Perot and his bid for the presidency in 1996. On Larry King he famously coined the phrase "Let me finish!". Perot was frustrated with being at the mercy of "sound bites". A sound bite being a snippet of a previously recorded interview or conversation. In Perot's opinion these sound bites rarely accurately represented his true views on a subject. The podcasts I reviewed do seem to give guests a chance to fully explain their positions on topics. It would have been interesting to see how Ross Perot would have faired in this age of pod casts.
On to this posts topic: as the graphic implies this is about a code. This topic came from Theo Vons podcast, This Past weekend. Theo's guest was the NYU professor Scott Galloway. Theo Von is not an intellectual slouch. He did graduate from University of New Orleans with a degree in Urban Planning. However it is highly likely that Professor Galloway uses more scholarly language in his day to day life than Theo does. When professor Galloway used some of these terms Theo would often ask him to further explain the meaning or meanings behind the terms. This made the podcast more understandable for me and I assume for Theo's audience. These explanations and clarifications were mentioned in several viewer comments. This comment had several positive replies:
Thank you brother Theo for not pretending you know what he’s saying when you don’t. Makes everything feel so relatable. I respect it a lot.
This post's topic centers around having a code. This came up in the Theo Von podcast around the twelfth minute. The word "code" is one that has many uses but share a very common root. I rarely get into the etymology of words but I do think it is appropriate here. The word "code" comes from the Latin word codex or caudex, which means "the stock or stem of a tree, a board or tablet of wood smeared over with wax". One may think of the word code synonymous to the word foundation. If we continue with the tree analogy the foundation is more represented by the roots of the tree not the stem. The main purpose of a tree is to bear fruit. The fruit contains seeds and these seeds lead to more trees and a healthy forest or orchard. The stem of a plant or tree unites the foundation (the roots) and the output (fruit, leaves). the stem carries moisture and nutrients from the roots to the leaves. It holds the leaves aloft so that they can get energy from the sun.
If I recall one of my earlier posts regarding strategic, tactical and operational decisions I would view my understanding of a code as tactical. A good definition of what I understand as tactical is:
showing adroit planning; aiming at an end beyond the immediate action.
I find the last phrase particularly descriptive. Staying with the tree analogy, as I stated the stem's immediate action is the transport of nutrients and moisture. In the end the tree or plant bares fruit and leaves allowing the plant to produce more trees. A tree trunks immediate action is the conveyance of moisture and nutrients from the roots to the leaves and fruit. The end game is to bear fruit and seeds.
Leaving the tree example behind we can look to create or recognize codes that shape our lives and affect the way we make daily decisions. Starting with a straight forward goal, "I would like to be financially independent when I retire." There is very little mystery regarding what needs to be in place when you retire. To reach this goal one needs a big pot of money (assuming that there is no private pension available). The amount needed is not the issue, the main characteristic is that it has to be enough to live on for several years. This would represent a nest egg of several years of living expenses. For arguments sake lets assume $90,000 a year of living expenses and a retirement time of 20 years. Simple arithmetic would require a nest egg of 20 X $90,000 or 1.8 million dollars. I am ignoring social security in this example. Also I am going to stop with the minute details. The goal is to save a large amount of money.
So now back to 25 year old me, the goal is to to be financially independent when I retire. One obvious course of action is to immerse myself in learning about money, compound interest and the stock market. This seems to be the current emphasis these days. There seems to be a continual promotion for more financial literacy. Although I do feel some knowledge of money and investing is important I also feel it is not the most important element in saving money. In 2023 I wrote a series of blog about morality and money.
One of the themes of these posts were the ways that we as a society consume products that we really do not need. One of the shocking facts in these posts is that a substantial number of households that have an income that would allow them to save money do not have any savings. Why do they not have any savings? Understanding saving is quite simple, don't spend it and at the very least put it in the mason jar under your mattress. In these posts I outline several ways we spend money: uber eats, ten dollar lattes, fast fashion, etc.. If our first thought is to spend, how are we ever going to have money to save. If we have no money left over what good is any knowledge of markets and compound interest do to our nest eggs.
What I am really saying is that you need a code of behavior first then knowledge of the mechanics second. Did I have a code? No nothing formal. I was fortunate enough to have the gene that allowed me to not spend money. The savings then just came as a result of not spending. In reality I was very lucky to be "built" this way. Along with physics, chemistry and math I did take accounting and economics classes in high school. Neither of these affected the way I spent and saved in my adult life. The biggest factor affecting my spending and saving was my parents teaching me the difference between a "need" and a "want". I think this had the greatest affected my innate spending habits. Think back on 40 plus years of adult spending here is my code of spending.
Mikes intrinsic code of spending:
Think 2, 3, or 4 times before buying anything.
I do have to spend money to live but I do not have to live to spend it.
If I buy it how much effort will be needed to maintain it?
On rare occasions it is ok to be frivolous and really enjoy it (and I mean REALLY enjoy it).
Stealth is more rewarding than outward lavishness.
I am much happier with a few really nice things than a lot of so so things.
I am happiest when my spending is leads to shared experiences with friends and family.
I have never been so detailed about this spending code before. That is why I titled it "intrinsic". In my next post I will expand on this code and maybe even change a few things.
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