Insidious forms of waste

From How To Lose Time and Money

I spent a lot of the past several years studying the paths from poor to rich, I knew practically nothing about the paths from rich to poor. Now in order to avoid them, I had to learn where they were. So I started to pay attention to how fortunes are lost.
If you'd ask me as a kid how rich people became poor, I'd have said by spending all their money. But in fact, the way most fortunes are lost is not through excessive expenditure, but through bad investments.
Senra noticed the same
Senra noticed the same
 
I've read a bunch about this too. It's fascinating.
This is also in line with the research I've done. I was shocked by it. I think I've told you in the past, one of my oldest friends, his dad played in the NFL, but it was like years before they made a ton of money. When he retired, he started a nonprofit. And that nonprofit was the fact that 90-something percent of them, wind up becoming bankruptcy.
And I think now they've expanded way past just this one form and to other sports and everything. This has been going on for quite a while, decades. But I'll never forget this -- I don't know, 10 or 15 years ago when I learned this, but they said the same thing. It's like they don't go -- you're thinking they're going poor, because they are buying Ferrari's. he says like no, they gave their idiot cousin, $250,000 to start a restaurant that tanked.
It's all these investments. It's like, hey, I'll give you $50,000 for this and it just goes up in smoke. So let's go back to that. In fact, the way most fortunes are losses not to excessive expenditure but to bad investments.
It's hard to spend a fortune without noticing. Whereas if you start trading derivatives, you can lose $1 million or as much as you want in the blink of an eye.
Senra again:
Senra again:
He makes the point why this is so difficult because in most people's minds, if you're spending a bunch of money, there's like alarms that go off and say, "Well, I spend way too much money on luxury or stuff I don't actually need.
But the point Paul makes here is that when you reframe the money leaving your bank account as an investment, it bypasses these alarms even if a lot of these investments are going to go to 0. Investing bypass these alarms.
You're not spending the money. You're just moving it from one asset to another. Which is why people trying to sell you expensive things say, "it's an investment."
The most dangerous way to lose time is to not spend it having fun, but to spend it doing fake work. If I woke up one morning and sat down on a sofa and watched TV all day, I'd feel like something was terribly wrong. Just thinking about it makes me wince. But if you do fake work, kind of bypasses that alarm, just like a fake investment, right? And yet I've definitely had days when I might as well have sat in front of the TV all day.
Days at the end of which, if I ask myself what I got done that day, the answer would have been basically nothing, but the same alarms don't go off on the days when I get nothing done because I'm doing stuff that seems superficially like real work, dealing with e-mail, for example. You do it sitting at a desk, it's not fun, so it must be work. With time, as with money, avoiding pleasure is no longer enough to protect you. The world has gotten more complicated.
The most dangerous traps now are new behaviors that bypass our alarms about self-indulgence by mimicking more virtuous types. And the worst thing is they're not even fun.