Another one from Mr PoP!
If you take a look at some of our recent income statement posts, you’ll see that months like June are what we consider to be “mediocre” months for our savings goals. This means that we managed to put about $3K into after tax savings; either by paying down debt or increasing our after tax savings. July and August were a little better, but still in the same ballpark.
Over the course of a year this would mean we increase our net worth by about $36K per year in addition to the whatever the markets do with our investment portfolio and real estate values and what we (and our employers) put into our 401Ks.
The dirty secret to this Financial Independence game is that it gets a little boring sometimes, and you can still fall victim to Hedonic Adaptation. And since we realize this is the definition of a “first world problem”, don’t have any pity on us.
But we’ll start with the boredom…
No, really, becoming wealthy by spending less than you earn is so easy it gets boring…
But its not like Mrs. PoP or I feel the need to start partying on the weekends. Ohhh no, when we get bored we start looking into exotic asset allocations, buying local small businesses and learning about buying stocks in emerging markets like Brazil and China. The truth is that all of these things offer some upside in exchange for risk that we just don’t need to take; we’re accomplishing our goals just fine in our own time.
…but you still have to watch out for Hedonic Adaptation.
Hedonic Adaptation is the very human ability to become completely accustomed to the ridiculous luxuries in our lives, and then want to upgrade into something “better.” This can lead to a lifestyle of consumption and possibly consumer debt as somebody can upgrade again and again but never achieve happiness with their various purchases. A good example of this is watches; I splurged on a Seiko watch a few years back, but now I want a Rolex even though nothing is wrong with the Seiko.
So what does this have to do with saving large amounts of money every month? The problem is that after a while $3K of savings doesn’t seem large. In fact, it seems normal, boring, and really something that needs an upgrade. So the cycle begins; we are unhappy with something that is really quite amazing, feel empty inside and struggle to figure out how we can raise that figure. Talk about First World Problems!
So what are we going to do about it?
Damned if I know. Every now and then its nice to sit back and see how far we have come in the past two years, and it’s nice to know we are ahead of many of our peer group as well. But that doesn’t mean we need to be taking a lot of unnecessary risks.
Note From Mrs PoP – I have mixed feelings about this. We set our $3K per month goal when Mr PoP was just starting out in his current sales job and we based that on what was quoted as his targeted pay (since his pay is largely commission based). Though he’s outperformed his targets, raising that goal feels (to me) like putting a lot of pressure on him, and that’s just not the kind of wife I want to be. So $3K might be boring sometimes, but I’m trying my hardest not to get desensitized when big bonus checks come in every once in a while.
Anybody else out there have this problem with getting bored with their savings program?