The Algebra of Wealth: A Simple Formula for Financial Security

wealth is the absence of economic anxiety. Freed of the pressure to earn, we can choose how we live. Our relationships with others aren’t shadowed by the stress of money. It sounds basic, easy even.

wealth is the absence of economic anxiety.

because it’s much easier to be successful when people are rooting for you. Strong character is a wealth accelerant.

The more decisions means you get more feedback and get better

Mike Bloomberg once said, “I have always had a policy: If it’s a friend and they get a promotion, I don’t bother to call them; I’ll see them sometime and make a joke about it. If they get fired, I want to go out to dinner with them that night. And I want to do it in a public place where everybody can see me. Because I remember when I got fired from Salomon Brothers—I can tell you every single person that called me. That meant something. When I was made a partner? I have no recollection of that whatsoever.” My friend Todd Benson puts it this way: “Show up when it matters, when it means something. Never miss a funeral. Attend every wedding.

Anything or anybody who is living rent-free in your head is squatting. That energy and bandwidth could be better invested elsewhere

Temperance is to me the most important virtue because it is the one most tested by modern culture. Capitalism is fueled by our lack of self-control, our obsession with status and consumption. And not just in the obvious sense of super-sized fries and luxury handbags. Western society encourages indulgence not only in spending but also in emotional outbursts, in victimizing, and victimhood. Temperance is the resistance—or at least the management—of all our indulgences.

The [hedonic] treadmill does not have to be a trap. You can’t get off it, but once you realize how it works, you can stop being its slave

Follow your passion” is Latin for “Prepare to be exploited.

Outliers make for great inspiration… but lousy role models

Relationships of long-standing have inherent value that cannot be replicated any other way. True friendship is a gift.

two (there is almost no level of income that your offspring won’t consume).

(Research suggests that the simple act of writing down your goals24 can have a profound effect on outcomes.)

security and follow your passion on weekends.

creates a virtuous circle. Your accomplishments come faster, they reinforce your confidence, and encourage further focused effort. Your brain works better as well, as the flow of rewarding neurochemicals improves

Friedrich Schiller put it, “Against stupidity the gods themselves fight in vain.

Getting marriage right is a lifelong project of many dimensions, but money is a bigger one than we want to admit. The greatest predictor of divorce in America for both men and women isn’t cheating or parenting decisions or career goals—it’s financial disagreement. Money is the second-most-argued-about topic among American couples (number one is tone of voice or attitude). Half of Americans struggling with financial tension say it’s had a negative impact on intimacy with their partner. Lack of money is one of the greatest—if not the greatest—strains on relationships, which is why divorce rates are significantly higher among lower-income Americans. Marrying someone who is better at money than you can be a great benefit (note: “better at money” doesn’t mean cheap). Marrying down in terms of money skills is fine (half of all spouses do it), but know what you are in for. I have a friend who makes an incredible living, and his spouse is pathological when it comes to spending. This person will spend $1,500, no joke, on flowers for a dinner party. They are broken when it comes to managing money. It’s a source of anxiety for both of them. Unhealthy relationships with money can come in many forms and will eat away at relationships.

is the second-most-argued-about topic among American couples (number one is tone of voice or attitude).

Failure is the raw material of success- if you learn from it. p110

In the next chapter, I'm going to tell you to work hard, and I believe it's essential not just for economic security, but for personal fulfillment. "Do hard things" is as good a piece of advice as you'll ever get. But while working hard is necessary to personal and professional success, it is not sufficient, and more important, it is not the point. Working hard by itself is just burning energy into the capitalist void. Get strong so that you can provide for others. Gain power so you can do justice. Work for work's sake is economic masturbation. Too many people use working hard as an excuse. An excuse for ignoring their partner, neglecting their health, being rude or cruel or exploitative. I said earlier that the pursuit of wealth is always a cover story. Equating hard work with character is shoving your fingers in your ears and singing "Roxanne" to drown out what's really driving you, what you need to work on. p29

The median home price in the U.S. is six times the median annual income—fifty years ago it was two times—and the share of first-time buyers is barely half the historical average and the lowest on record.

Roll with the punches. Bad things will happen; you’ll make mistakes. These are reasons to adjust your plans, not abandon them. Nothing is ever as good or as bad as it seems. FOCUS

The twentieth-century American poet Delmore Schwartz wrote, “Time is the fire in which we burn.” Dark, but he had a point. Time consumes us, inexorably and inevitably. The past is a memory, immutable. The future, a dream. What you have control over, and the opportunity to be present in, is the now.

plan your out ahead of time, so when the emotion of the moment takes over, you’ve got a signal you can count on. Knowing when to quit is essential. It’s an art. All successful people have quit. Some, often. Find people you trust who have the backbone and perspective to tell you if/when you should hang in there or fold your cards.

Two thousand years ago, Seneca wrote: “Associate with people who are likely to improve you. Welcome those who you are capable of improving. The process is a mutual one: men learn as they teach.

pulled down to their level. If you don’t, you’ll be ruined. . . . You must choose whether to be loved by these friends and remain the same person, or to become a better person at the cost of those friends . . . if you try to have it both

But the uncomfortable truth is that even once-strong friendships can become toxic. Not everyone grows out of

All of this can get you to the profound more quickly and let you be in the company, in the moment, of the profound . . . others. This is the whole shooting match.

Young people seem deflated when I tell them this, but working at an organization or platform offers better risk-adjusted returns. The reason the organization exists is it can pull together resources and be greater than the sum of its parts. Be one of its parts, and it will share that excess value with you. If you have the skills and patience to navigate the obstacles and the politics, and the maturity to endure the guaranteed injustices, you will over the medium- and long-term reap rewards.

An essential aspect of character, and one that contributes to success, is an appreciation for and a belief in our interdependence. In The 7 Habits of Highly Effective People, Covey describes three ways we can relate to others: dependence, independence, and interdependence.