Hacker News Reader

Comment by trabant00 | Hacker News Reader

I have two rules to guide me that can be summed up to maximizing the joy of spending:

It's not what you have, it's what you do with what you have that matters. Going with a car example, spending significant income for a nice car that you use for normal transportation like commuting and shopping will bring little joy. On the other hand if you are into motor sports, regularly tour on or off-road, like to restore classic cars, etc, you will get a lot out of a big car purchase.

Spend it on one thing, don't have it for another. It's really hard for me to calculate if something new is worth X amount of my money. So I transform that money into something I already know how much it costs and how much I enjoy it. Would I rather change my car for a new one or take 10 one week trips abroad? I'll take the later so I decide against the new car even though that will not be exactly what I spend the money for.

View on HN

> So I transform that money into something I already know how much it costs and how much I enjoy it. Would I rather change my car for a new one or take 10 one week trips abroad? I'll take the later so I decide against the new car even though that will not be exactly what I spend the money for.

This is a really important idea to me, it's a way of optimising your spending without doing big central planning. If I would get more from doing X rather than Y, why would I do Y at all? You could then repeat that with 10 trips abroad vs some other thing.

You can also compare a relative thing as well. You may need a new car, but can choose between different options. If one is £5000 cheaper than the other - what's the most fun you can possibly have with £5000? Would you rather whatever that list is for you or the more expensive car?

Would you rather have a larger rented apartment or £Z to spend at restaurants every month? Or £Z on track days, or whisky, or having an extra few days off a month?

All of these things can be answered any way and it's totally fine - the key is to identify what provides the most value to you without getting stuck in trying to optimise your entire life as that's (to me) paralysing.

Just being pedantic here, but: if we take your approach to the extreme, we would only ever pick the one thing that maximizes joy. Eg say one week trips above are the coolest thing you can think of. then you'd compare any potential purchase against it, and it would fall short. So you'd end upmnever buying anything (except tickets for one week trips). Don't get me wrong, your strategy sounds sound, I'm just saying that it's too greedy of an algorithm to apply it thoroughly. A slightly improved strategy would be to instead think of marginal prices: how much would I be willing to pay for X, instead of another piece of Y. Ie, if you already had 10 one week trips this year, you'd not be willing to spend as much for #11 than you'd be willing to spend to go from from 0 to 1 trips or 1 to 2

> then you'd compare any potential purchase against it, and it would fall short. So you'd end up never buying anything (except tickets for one week trips)

I think there's a number of folks out there who do this all the time, except it's not trips. It's saving for retirement in general.

If all you do is compare every outgoing dollar to "but if I invested this instead, then over X years it would have compounded to $X" you never buy anything non-essential because spending $400 today really means $1,787 in 30 years at 5% (of which $1,387 is interest), so now you need to ask yourself if future self is happy about that decision.

This becomes more important with larger purchases, a $30,000 car is really $134,032 after 30 years at 5%. Now this becomes a question of "is this 30k car worth trading 1 year of my life while working?" because it kind of is, especially if you factor in income tax on a pretty normal software developer's salary.

> Would I rather change my car for a new one or take 10 one week trips abroad? I'll take the later so I decide against the new car even though that will not be exactly what I spend the money for.

Wait till you experience one with a heated steering wheel. That might change your mind, especially if you live in a colder climate.

Reply on news.ycombinator.com