{"id":16831,"date":"2024-12-03T10:25:56","date_gmt":"2024-12-03T18:25:56","guid":{"rendered":"https:\/\/www.scotthyoung.com\/blog\/?p=16831"},"modified":"2025-11-13T14:04:23","modified_gmt":"2025-11-13T22:04:23","slug":"money-day-one","status":"publish","type":"post","link":"https:\/\/www.scotthyoung.com\/blog\/2024\/12\/03\/money-day-one\/","title":{"rendered":"Money – Day One"},"content":{"rendered":"

Money is the third foundation in my year-long project<\/a> (and course<\/a>) to improve the universal elements of a good life.<\/p>\n

Today is the first day of my challenge for this foundation.<\/span>1<\/sup><\/a><\/span> In case you missed them, here are my updates and notes from the previous two foundations:<\/p>\n

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Fitness Notes:<\/strong> beginning<\/a>, ending<\/a>, books<\/a>
Productivity Notes:<\/strong> beginning<\/a>, ending<\/a>, books<\/a><\/p>\n<\/blockquote>\n

Money is an interesting foundation. It\u2019s highly technical, driven by spreadsheets and equations\u2014but it\u2019s also emotionally charged, driven by greed and fear. <\/p>\n

Nobody naturally thinks about money the purely rational way economists say we should\u2014instead, we come with the enormous baggage of our beliefs about how we should think and value money.<\/p>\n

Why Care About Money?<\/h2>\n

Unlike fitness or productivity, which many people overlook, few elements of modern life are as omnipresent as money. If you work, you probably spend much of your daily life doing things in order to get money. In your off time, you spend even more time thinking about how to spend, save or invest the money you earned.<\/p>\n

This obsession with money tends to cause extreme views on its true importance. On one end are people who derive their self-worth from their net worth and judge those around them by the size of their bank account. On the other end are those who insist that money doesn\u2019t matter at all.<\/p>\n

The truth is somewhere in between.<\/p>\n

Money alone can’t make you happy\u2014but it can provide options in your life that do offer happiness: financial freedom, not needing to work for extra years into your retirement, being able to travel or get an education. Money makes a difference.\u2028\u2028 <\/p>\n

At the same time, the idea that becoming really rich will somehow fix all your problems is perhaps one of the greatest self-delusions. Financial health matters, but your physical health matters more, as do your relationships with your kids, friends and family members.<\/p>\n

So it\u2019s with some trepidation that I write about money, one of the most emotionally-charged and contentious topics in this entire project. But it\u2019s these very emotions money evokes that make it worth exploring in more depth.<\/p>\n

My Money Story<\/h2>\n

I have been incredibly fortunate in my life. Financially, my family and I are well-off. I\u2019ve been financially independent since my early twenties. I\u2019ve never had any consumer or student debt. And for nearly two decades, I\u2019ve earned more than I spent, leading to fairly substantial savings.<\/span>2<\/sup><\/a><\/span><\/p>\n

Looking back, I can see three sources of amazing luck I\u2019ve had in my life that helped me arrive where I am today:<\/p>\n

First, my parents. My parents were both public school teachers, and we lived in a modest home in a small town. They offered me some help with accommodations during my first couple years of university, but otherwise did not pay my tuition or living expenses. Since then, I haven\u2019t received any financial assistance from them or any other relatives.<\/p>\n

But my parents gave me something worth far more than an inheritance: they showed me how to live within my means.<\/strong> My parents always stuck to a budget, paid credit cards off in full and never took out loans for anything other than a car or house. These financial behaviors are so normal for me that it took years before I understood that some people buy things on credit cards when they don’t have enough money to pay for it in their chequing account.<\/p>\n

To be fair, my parents weren\u2019t poor or cheap, either. We had the good fortune of living a solid middle-class lifestyle where paying for food, shelter, books and the occasional vacation was never an issue. Financial prudence and stability were part of my childhood, which I belatedly learned is often not the case.<\/p>\n

My second source of good fortune was deciding to go into business for myself in my late teens. <\/strong>After learning about \u201csolopreneur\u201d software developers when I was fifteen, my life\u2019s dream became to run an independent online business.<\/p>\n

On its own, there’s nothing particularly prudent about my choice. It was a gamble then, certainly. While making money online is the dream of the average teenager today, it was almost unimaginable to a normal person in 2004.<\/p>\n

In the beginning, my goal was modest: I wanted to make $20,000 a year, which was enough money to live off my business full-time. If I could hit that threshold, I would be able to devote myself to growing the business. Despite that initially modest target, it still took me seven years of near-constant work to reach it. \u2028\u2028<\/p>\n

During that time, I lived quite frugally. But, again, I was a college student. Everyone around me was broke too, so there was no difficulty or stigma for living cheaply as I worked on my side hustle. When I finally did start earning past my original goal, I was so used to living cheaply that I was fine letting my business income contract during projects like the MIT Challenge<\/a> or my Year Without English<\/a>.<\/p>\n

Since then, my business has grown. I’ve hired a team, published a bestselling book, and partnered with Cal Newport on two course projects.<\/span>3<\/sup><\/a><\/span><\/p>\n

In the rearview mirror, those decisions appear prescient. It turns out 2006 was an excellent time to start writing online. The first project that put me over my initial goal, a monthly study-skills subscription, was a decade before Substack made premium content subscriptions a widely-accepted business model.<\/p>\n

While it would be easy to pat myself on the back for my foresight, the truth is that I got lucky. Yes, there was a lot of hard work, but the wind was at my back in ways I cannot take credit for.<\/p>\n

The third source of good fortune in my financial life was learning the right way to invest money early, and saving a substantial portion of my earnings<\/strong>.<\/p>\n

Before I knew much about business or finance, I was lucky to get pushed toward the idea that investing in low-cost index funds is the best financial strategy. This belief was further reinforced as I went through business school and studied finance formally. By the time I was in a position to save anything, I was able to put most of my extra income into one of the best-performing vehicles for growing wealth.<\/p>\n

This was fortunate. In the early days of my personal development, I spent a lot of time reading advice for various life domains online. I shudder to think of what I might have put my money in had I heeded the advice to pick stocks, gamble with leveraged investments, or chase crypto fortunes that pervades internet discussions today.<\/p>\n

Instead, my money has mostly grown steadily in the decade-and-a-half I\u2019ve been able to invest.<\/p>\n

I bring up these three points not to brag\u2014there are plenty of people who are much richer or savvier money managers than me\u2014but to underscore the outsized role luck plays in financial health. Good practices matter, I know people who were dealt better hands than I was but still struggle with money problems, but few domains are as skewed to the vagaries of chance as money. And in this case, I can count myself extremely lucky.<\/p>\n

My Plan for the Month<\/h2>\n

In the Foundations course, this month\u2019s focus is tracking spending<\/strong>. Getting a complete picture of your financial health and habits is necessary for making adjustments, and most people don\u2019t track their money adequately to do this.<\/p>\n

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Since I\u2019ve maintained this habit pretty consistently for nearly two decades, my personal goals for the month diverge slightly from what I\u2019m advocating in the course. In particular, I want to look at three areas of improvement:<\/p>\n