How to Afford Anything

Summary of Video at YouTube channel: ‘Talks at Google’

Photo by Alexander Grey on Unsplash

Original Source

“How to Afford Anything” | Paula Pant | Talks at Google (YouTube , 56 mins)

Jottings

• Afford Anything == Opportunity Cost
• “You can afford anything but not everything”, for money, time,, focus, energy, etc. resources.
• Allocating limited resources with intention, based priority of self, not society.
• Financial Independence (FI): When passive income (through investments) is enough to let you survives.
• Passive Income: does not come through exchange with time. {Money that comes while you are sleeping!!], eg, rental income, 401K fund, investments, royalties, etc.
• What's enough: to get life going, food, shelter, etc.
• FI reduces anxiety.
• Investing Philosophy:
  - Passively managed investments, eg index fund.
  - Rental properties. Not much of flipping.
• Growing the gap, debate: Earn more or spend less. Suggestion: Growing the gap between earning and spending.
• Get 3 Big things right, on biggest expenses: Housing, Food, Transportation
• Anti-Budget: No breakup of budgets, but spend money = Income after tax — Savings.
• Loss Aversion: Losing money feels more terrible than gaining the equal amount.
• Habit == Will power any-day. Will power is like a muscle. Strongest in the morning, weakest at night.
• Build habits are unconscious
• Forming habits (Ref “Power of Habits”): cue, time, location, immediately preceding action, emotional states.
• Attach new habit with existing (stacking).
• Increase net-worth in risk managed way.

The above summary was also posted in the Comments section of the original YouTube video.