The Price of Everything

Value Investing Workshop in Chennai, Bengaluru, Mumbai: Before we begin, a quick personal note. I’m bringing my full-day offline Value Investing Workshop to three cities this September:

Chennai — Sunday, 6th September
Bengaluru — Sunday, 20th September
Mumbai — Sunday, 27th September

Very few seats remain in each city. Once those go, that’s it until next year.

Click here for details and registration.

Now, on to today’s letter.

The Almanack of Good Life is where I share all that I am reading and reflecting upon about living a good life. In this age of constant information overload, I’ve found immense value in taking time to pause and reflect upon meaningful insights about life. This newsletter is my way of sharing that journey with you.

Someone recently asked me what was the single worst thing I bought with my money in the last few years. Being the careful spender that I am, I took some time to answer that question. And the answer was one of the cheaper things I own.

It was a sunrise alarm clock, which is supposed to wake you gently with a glow that imitates the dawn. I was certain it would fix my mornings, but I used it only a few times and it now sits in a corner, gathering dust. It cost very little, which is exactly why it took me so long to name it. I had been ranking my purchases in rupees, and rupees turned out to be the wrong measure.

We think we buy things with money. I don’t believe anyone ever has. Money only plays the role of a translator, and what it translates is time, the hours of your life you handed to someone in exchange for that money, long before you spent it.

I learned this from Thoreau who, sitting by Walden Pond in the year 1845, wrote this:

The cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.

Think about that quote for a minute and it may just change the arithmetic of almost everything you own, like it did for me.

Say you earn some amount of money for every hour of your work. It could be any amount. Now, a thing you want to buy costs 40 of those hours. The price tag says the amount in rupees. What it should say is: FIVE WORKING DAYS OF YOUR ONE LIFE.

Would you still reach for it if the price were printed that way? I think the answer would be easy and yes for some things, like a good chair you sink into every evening for the next ten years, or the money you spend taking your family for a holiday they’ll remember for life. Those are certainly worth a few days of anyone’s life.

But a lot of what we buy would look ridiculous with an honest label counted in days of our lives instead of rupees. Not many people would knowingly trade a week or month of their life for a gadget they will be bored of by the next year.

Yet we do it all the time, because the rupee hides what the hour would reveal.

This took me years to learn, but money runs in both directions while life runs in one. You can lose money and win it back. You can spend a fortune or go broke, then claw your way up and end richer than you started. People do it every day.

But what about the hours you burned earning that first fortune? They are simply gone. There is no clawing those back.

So, every time you turn your hours into money and then turn that money into a thing, you have made a one-way trade out of the only thing you cannot replace. That alone should make you slow down at the billing counter far more than you do.

And it doesn’t stop here. Most things do not cost you life just once. They cost you a long tail of it.

A car is the easy example. You buy it with a truckload of your past hours, and then it keeps asking for more of your future ones by way of servicing, insurance, and fuel. This does not mean you don’t buy a car. But be aware of why you need it, and of the amount of life you are giving away to get one.

In 2011, I walked out of a job in equity research that I had done for eight years. It paid me well.

On paper, quitting it looked like a mistake anyone could see. But somewhere in that eighth year I ran the sum in the currency of life, and the answer scared me.

I was handing over my finite days to buy a version of life I would not have the days left to live inside. The money was real. So was the fact that I was selling my life to earn it, and I had stopped asking what I was getting in return.

“You’re being cynical, Vishal!” you may wonder. “Not many people have the time to live such a calculated life.”

I somewhat agree with your thinking, but I can also tell you that once you start pricing things this way, you come upon a strange kind of freedom, which is the freedom to say no.

Saying no to a purchase does not feel like deprivation anymore. In fact, it starts to feel like keeping something. Every no is a few hours of your life you decline to sell, hours that stay yours to spend on a morning walk, with your family, or on doing nothing at all and not apologising for it.

None of this requires you to stop spending. I spend on plenty, and happily. It just requires you to run the sum in the right currency before you sign.

How many hours of my life does this cost me, and is the thing worth the hours?

Ask this question honestly and the answer, more often than you would guess, is a no.

I have made my share of those trades I regret, the ones where I gave up good hours for things that gave me nothing back. What I have never once regretted is a no. The hours I kept are still here, and I am spending them on this.

Two Books. One Purpose. A Better Life.

“Template on how to lead a happier and fuller life.”

—Ramesh Damani, Member, BSE

“Teaches you how to think, judge, and behave…”

—Arnold V. D. Berg, Century Mgt.

Notes to Myself

The next time you feel behind on all the books you haven’t read, pick up one that already changed you and read it again. What changed you once has more left to give than anything still waiting in the queue.

***

When you catch yourself admiring someone in your head, say it to their face before the moment closes. A kind thought, spoken out loud, becomes something the other person gets to carry around for days.

***

Stop checking the app just to watch your money move. Watching has never changed a single price. The number does what it was going to do anyway, and all your worry buys you is more worry.

Quotes I am Reflecting On

How we spend our days is, of course, how we spend our lives.

– Annie Dillard

We suffer more often in imagination than in reality.

– Seneca

Play long-term games with long-term people.

– Naval Ravikant

That’s all from me for today.

Let me know your thoughts on this issue of The Almanack of Good Life newsletter, and ways I can improve it. Also, if you have ideas or resources you think I can share in future letters, please email them to me at vishal[at]safalniveshak[dot]com.

If you know someone who may benefit from today’s post, please share it with them.

Thank you for your time and attention.

Be useless, sometime.

~ Vishal