I am super excited about today’s guest; he has literally traveled light-years to be with us today. Cirro, my alien friend, said he would be in the Galaxy this week and wanted to get some things off his chest. I have no idea what this is all about. Cirro tends to just blurt out whatever he is thinking so I’ll just apologize now for anything offensive.

 

Hello Cirro, thanks so much for coming down.

You’re welcome C.J., thanks for having me.

So, you called me up yesterday and said you wanted to talk to me about something.

Yes.

Before we start, I should probably clarify what I mean when I say you called. You somehow communicated with me telepathically, you just sort of broke into my mind without asking.

Yes, sorry about that. It’s actually a very simple device.

Oh, you used some sort of device to do it?

I meant your brain,,, your brain is a very simple device. I had never really got in there and looked around before; not really much going on is there?

Geez…. Well I’m glad to see you haven’t lost your tactfulness. 

As you know, one of my hobbies is the study of humans, which I mostly do by watching your planet’s over the air televised transmissions.

Yes, you have told me about hundreds of intelligent beings across the Universe. What makes you so interested in Earthlings?

It’s just a lot more interesting to study a species that is still in its primitive state. Most of the other life our planet associates with are much further up the evolutionary ladder?

Gee thanks…. So you think we’re primitives?

Indeed. It would almost be cute, if it wasn’t so sad.

What are you talking about?

Well it’s why I’m here today. I know you have a personal finance blog, so I wanted to share some related observations on humans and their primitive spending habits.

OK…. I realize we don’t use our time and money with perfect efficiency, but to call us primitive is a little harsh. This isn’t the 16th century; we’re not still trading gold for glass beads here.

Are you married C.J.?

Yes.

Isn’t it customary in your country to spends a couple month’s pay on a shiny carbon-based rock mounted to a piece of metal?

Uhggg,,,, I hate it when you’re right. 

Look, someday this whole money thing will be a thing of the past for your people, but for now you really need to learn how to spend it in a way that is in your best interest.

I realize the ring-thing looks weird to you, but that’s an old tradition. How else are we really wasting our money?

First you need to think about what money is. It is what you agree to take in exchange for giving somebody else your time. You should always think about your money as time.

Is time really money? You certainly can’t buy more time.

Sure you can.

Really?

Of course you can buy time; that’s exactly what employers do. They don’t have enough time in their own lives to accomplish their dreams on their own,,, so they purchase a chunk of your life to accomplish their dreams.

I hadn’t thought of it that way… that’s mildly depressing… thanks.

Time is a finite resource in the universe; if you don’t use it wisely the only thing you will accomplish in life is helping somebody else’s business accomplish its dreams.

Ahhh… So you’re here today to talk about how we spend our time.

Seriously? How can your brains be so big, yet do so little? No… I am here to talk about how you spend your money.

OK… OK… Fine,,, you don’t have to be such a jerk.

Look. Here’s my point. There are 24 hours in an Earth day and humans sleep for 8 of them. That means if you spend 10 hours a day at work or getting ready for work, or commuting to work, then you are basically spending half your waking life making somebody else rich.

OK…  You’re still talking about time,,, and is there anything wrong with making somebody else rich.

No, making someone else rich is fantastic… unless YOU end up poor.

Ahhhh.

Adding value to society is noble and should be sought after. But… If you are adding value to other people’s business only to remain poor yourself then you have missed the whole point of working. You should be working to accumulate wealth so that someday you don’t have to work. Wealth buys you freedom from financial slavery. If you aren’t accumulating wealth every month, then you aren’t actually making money; you are just surviving while making somebody else rich.

Dang, that’s pretty heavy. Well what do we do about it?

Well the answer should be obvious… but you are human so let me clarify.

Man, you are an ass.

If we can conclude that working for someone else is essentially trading part of one’s lifetime to someone else in exchange for currency, then I think it is safe to assume that one would want to trade as little of that lifetime as possible.

Right, if given the option of working for the man until 80 or working until 50… Pretty sure most people would choose 50.

Yes exactly. Now some people might say that they like work and want to work forever. Well I think that’s great, purpose is joy. But I am talking about not “having” to work until you’re 80. There is a big difference in “having” to work and “choosing” to work.

Agreed,,, an enormous difference.

Hey, you’re catching on. If you want to become wealthy, you have to accumulate wealth. Obviously you will need revenue coming in, and for most humans this comes in the form of a job working for someone else. This is fine, the issue is how that revenue is managed though. If you spend everything you make in a year, then you essentially made nothing.

Right.

Here is what I see humans doing in your country. They get out of school not making much, and start off life living paycheck to paycheck. They could probably save a little, but not much really, so it just gets spent. At some point they start making more money. Instead of saving this increase in revenue they decide to spend more money.

They think a nicer car, a nicer purse, nicer sneakers, or a nicer phone will make them happier. What they don’t realize is that it really doesn’t. Once humans overcome their basic needs and have a little spending money for entertainment, their happiness doesn’t really rise any more with material possessions.

Knowing this, a wise human should invest most of those pay increases so that someday he/she won’t “have” to work at all. This way you are maximizing happiness. Having peace of mind will bring most humans more joy than a new car; they just don’t appreciate this idea until they get burned a couple times.

Some people feel like they need to live their life now. Why sacrifice my present for the future?

That’s what I am saying; it’s not really a sacrifice. For example, do you think you would be significantly less happy if you spent $10 a day less, and invested it instead? Could you imagine what that would add up to over 40 years?

Let me get out my financial calculator.

Seriously? You need a calculator for that? If we assume a 7% annual return it would be about $750,000. Now when you realize that most 25-year-old’s could find a way to save $10 a day, you also realize that as they get older they could easily save more than the $10. It becomes apparent that almost anyone in your country who starts young can accumulate well over $1,000,000 by their 60’s with very little sacrifice.

So basically you’re saying that you can effectively save for a wealthy retirement with almost no impact on your present happiness. That people have been duped into believing that their happiness is based on material goods, so they are actually sacrificing their future for no reason.

I could have worded it better…. but yes.

Well I think that sums it up. Thank you, sort of, for all the great insights Cirro

You are welcome C.J.

 

You may also enjoy Cirro’s previous article:
BEATING THIS ONE HABIT COULD EARN YOU THOUSANDS. – AN ALIEN PERSPECTIVE

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