Not sure if you know who Tynan is. But if you don’t, get to know him right away. Especially if you’re not a fan of the average lifestyle and are all about personal growth.
At least for me these 2 are the main reasons why I follow people like Tynan online. And without any need for direct communication, I’m learning valuable life lessons from them.
I realized that in order to learn from someone or to follow his advice, you need to resonate with his way of thinking and respect him. And if you tell me that it’s not possible to have such a connection with someone in the digital world, I’d say you haven’t experienced it.
Anyways, here are some powerful money lessons, tips and strategies from Tynan we can all give a try today:
1. Assets, Experiences and Indulgences.
I love the way he writers as most often it’s just a realization he came to throughout the day, or something he noticed that made him think, or a self-analysis he did. It’s all part of daily life, but it can also be applied to anything else in life if you can see the bigger picture.
In this case, he shared his way of thinking about money spent. He divides it into 3 groups:
- assets – “things that should be worth something significant in the future. Maybe more, maybe slightly less, but nothing consumable or with huge expected depreciation. Examples would be certain high-end watches, art, gold bars, or real estate.”
- experiences – “obvious things like travel and visits to museums, but I’d also count dinner with some good smart friends. My defining line is that an experience is something that has some reasonable potential to impact me long-term.”
- indulgences – everything else.
He gives plenty of examples, but it’s different for anyone according to what’s important to you in life, what you consider a good investment, how much you earn, etc.
So you should start by defining what is what. Then, cut down the indulgences to a minimum.
2. Retire first.
The previous money lesson hit me hard when I read it. It’s simple, yet super powerful advice. And I’ve decided to pay attention to it from now on and be careful what I spend money on.
But with the second lesson it’s different, as it’s a big realization I’ve come to a long time ago. I can’t agree more with Tynan here, we should all work as hard as possible to retire first so that we can live the rest of our life the way we want.
The ultimate freedom and independence (and success and happiness accordingly) can’t be found in the 9-to-5 lifestyle.
It doesn’t matter how much money you make there, you’re still making someone else rich, don’t control your time, answer to other people, more often can’t work on the projects you like and thus can’t unleash your true potential.
Here’s a solution he offers on what to do first (as that’s what most people struggle with):
“If you can save up $1000 per month, you can buy a place cash in three years. That’s not too long of a time to work hard and deprive yourself of entertainment a little bit. Start when you’re 21, and you own a place free and clear before you’re 25.
When you’re done, you are guaranteed low expenses for life. You have a place to live, which is most people’s biggest expense. You can even rent out one of the bedrooms, which should be enough to cover your expenses, including food.
The point of this isn’t to sit around and do nothing. It’s to get your time back. Once you own your time, you can be picky about jobs you get. You have time to build your own business. You can take a year off to learn skills you need to move to the next level. You can spend six months writing a book.“
Check out the whole article here.
3. It’s better to make $40,000 a year doing something you love than $400,000 a year doing something you hate.
More money doesn’t lead to more peace, contentment or happiness in life. But if you define your passion and follow it, if you find a way to monetize your art or hobby, if you start a business on the side that you enjoy and manage to turn it into your main source of income, then you’re on your way to a happy and fulfilling life.
For Tynan, it’s writing books, working on his site and programming.
I managed to monetize my skills and interests digitally too, although not a business owner yet (but it will happen in the near future).
I know people who are aware of what they like but are absolutely sure that they can’t make money from it online. I believe they can. If you’re in doubt too, share your case in the comments below and I’ll give you an example of how to monetize that (through hard work and consistency, of course) in the digital world and add the ultimate freedom – location independence – to the arsenal of benefits of working for yourself.
4. Cut your expenses to the bare minimum.
Tynan is all about minimalism and freedom. And he had to let go of many things – both objects and stuff on his mind – to see that he didn’t really need them in the first place.
“Cancel everything that doesn’t have a termination fee, sell everything you own, and live at your parents’ house for a couple months. That’s how you find out what you actually need and want. I found out by selling everything and traveling around out of a 28L backpack. I discovered that I needed even less than I thought, and now I’m looking for a smaller backpack.
Once you find out the bare minimum of what you need to be happy (hint: most people who have tried this are HAPPIER with less stuff. It removes a lot of stress), then start thinking about how to move from working a job to living a life.”
Read the whole post here.
5. Buy only what you can easily afford.
Part of cutting expenses is this. And Tynan’s advice is quite specific:
“I don’t buy things I can’t afford, and I don’t buy things I can barely afford. I buy things that I can easily afford.”
6. The 3 types of financial modes.
“There are essentially three different financial modes people fall into. Some spend money they don’t have, falling into the quicksand trap of debt. Others spend the money they have, but live paycheck to paycheck. Last are those who don’t spend money they have, which inevitably leads to wealth of some scale.
If you’re in debt or always cutting it close, think about the relationship between money you earn and money you spend. Decouple those two parts of your life, and make sure that you’re saving money rather than going into debt. This requires changing your habits, but pays off forever.”
So which one are you? Be brutally honest here so that you can avoid getting into debt and being miserable your whole life and dependent on others.
Related: The Only 10 Ways to Become Rich
7. Save more than you spend.
“The biggest reason by far not to overspend though, is so you can increase your freedom. I’m not saying money always equals freedoms, but having a good amount of money in the bank significantly opens your options and lowers your anxiety levels. Living paycheck by paycheck, or not having a clear long term financial goal can lead to distress and insecurity.
In the end, ask yourself: What are you doing with your money? Where is it going? How much am I saving? Where am I allocating it? Am I diversifying my investments?” (original post)
Tynan lives frugally, and is happy with that. He’s spent some money on some pretty amazing things like RV, an island and being a world traveler. But he also likes to save money and knows it’s a big part of taking control of your finances.
8. Value over price.
People think about price too often, and forget that value matters more.
In this case, that’s the way the things you spent money on will improve yourself or your life in the long-term and whether it will be remembered at all.
As Tynan says, an expensive hotel room won’t, and an Apple laptop or a car is usually not worth it if you really don’t need it. But traveling is forever, so is education. They’re “methods of transferring financial value into personal value. You become a better person by going through them.”
“The key to a good life is thinking about one’s decisions, rather than going on autopilot. This extends to financial decisions. Build a surplus rather than debt; focus on the cost of things, not the price; spend on experiences and education when it’s a good value.”
9. Money management is like time management.
Spend money when there’s a reason to, not when you have it. Value your money, and as a result you’ll spend it on things you value.
These are both precious and finite resources, and we need to respect and cherish them.
“Enjoy life to the fullest now, because fifty years from now is just going to be another “now” and if you aren’t doing it today, you won’t be doing it then.
At the same time, realize that there’s no point in enjoying now if it comes at the expense of later; allocate your time and pleasure so that the next “now” is better than today’s, but that both are great. Don’t spend so much time on recreation that you have none left to spend later on. That’s not any more sustainable than working all the time.
Treat your time like it’s valuable, because it is. There’s time for investment in the future and there’s time for enjoying today, but there’s no time for wasting. Make time for work even when your immediate happiness doesn’t depend on it, and make time for pleasure even when you’re busy.
Combine productivity and play whenever you can.”
If you take a closer look at each item on the list, you’ll see that it’s not just money lessons, it’s life lessons.
In life, we should all try to build systems, to find out what works and do more of it, and to replicate our successes and apply them to other areas in life too.
It all starts with self-analysis and eliminating what’s unnecessary. Unfortunately, most people start with the opposite – they look for solutions in outer sources, and think they need more of everything they already have.
But the real more in life comes only when you choose less.
What other money lessons can you share?