Introduction: The Paradox of Money and Value
In his new book, The Art of Spending Money, author Morgan Housel says that one of the most important assets you can develop is good memories. I like this for several reasons. We’re so obsessed with money that we learn how to earn it, save it, invest it, and spend it. What we never learn, though, is that the most important things in life you can’t buy. Some of these include a spouse who loves you, children who admire you, or a fit body.
It’s paradoxical that we focus so much on money, but our happiest moments cost nothing. Long meals with friends, watching your child discover something for the first time, or staring at the night sky are all free activities. The happiest moments in life aren’t loud and performative. They are quiet and intentional. Which probably explains why none of them ever go viral on Instagram.
Your best accomplishments aren’t quantifiable. You can’t turn the respect you feel for your partner or the love you experience whenever you’re around your children into numbers. The most enduring memories you can create are related to emotions, and you don’t need money to evoke kindness or respect.
So here’s a counterintuitive idea about money. Money on its own means nothing. The best value you can get out of money is when you use it to live a better life and when it makes you a better person. The best returns in life come not from spending money, but from investing time, attention, and love in the things money can’t buy.
The Hidden Currency of Memory
An asset is anything you own that holds monetary value. Examples of assets include cash, real estate, intellectual property, or land. The best assets, though, are those that compound over time. Compounding is earning returns not just on your investment, but on the returns it has already generated. Some call this “interest on interest” or “the snowball effect”. This is how investing in the stock market works and how a lot of people have been able to amass incredible amounts of wealth.
Other things that compound over time also include your health, developing personal knowledge or skills, and your relationships. If you devote one hour every day to learn a skill you find valuable, what you end up with is more than the accumulated time you spent learning it. Learning isn’t linear, but exponential. It’s worth pointing out that the compound effect also works in reverse. So every time you doomscroll, this negatively compounds, draining your overall happiness and confidence. This explains why five minutes on social media turns into an existential crisis… with interest.
I bring this up because compounding also relates to good memories. All families have shared folklore, something that happened within the family that’s memorable, and it’s usually the one you personally hoped had been forgotten forever. It could be a ritual you all shared or a funny event that happened a long time ago. The thing you retell (or you’re forced to listen to) every Christmas or Thanksgiving. And then you laugh at it because you remember it so vividly. It’s your mom telling you how cute you looked when you used to wear your pajamas backwards, and your dad reminding you that your haircut in 7th grade was a crime against humanity..
If you think about it, the event itself is almost meaningless, but you and your family gave it meaning. Someone pointed out how funny it was, and the rest is history. Even if you’re mildly annoyed every time someone brings this up, memories bring you closer together with your family. More importantly, remembering those experiences increases in value the more time passes, just like money invested in the stock market.
The Illusion of Wealth
At some point in our lives, we’ve all chased money because we thought it would give us lasting happiness and control. This is the case because consumer culture encourages us to measure success in terms of possessions. The implicit idea is that if you buy something in question, you’ll get other people’s love and attention. The only time this worked was when I bought the scorpion jacket, and I turned into Ryan Gosling because he’s literally me. Companies don’t sell you things; they sell emotions. And whether you want to admit it or not, they’re very good at it.
When you’re talking about money, few people can say “I have enough”. If you’re chasing more, that implies you don’t have enough. This is a paradox of sorts: if you chase something, that means you don’t have it already. It’s a never-ending pursuit that leaves you unfulfilled and dissatisfied, like trying to keep up with Netflix’s new releases or reach inbox zero. To some, real wealth isn’t pursuing what you don’t have, but appreciating what you do. The problem is that we live in a world that offers endless opportunities for dopamine, so we end up addicted to the wanting and not the having.
The True Economy of Life
Most people think having more money will give them respect and admiration. After all, it’s easier to acquire those qualities through money than it is through intelligence, humor, empathy, or hard work. This is why we default to buying things rather than becoming a better person.
The most valuable assets are earned through character and time. For instance, you build a family through care and presence, you build purpose through reflection and struggle, and you get respect through integrity and effort. These things can’t be bought, only cultivated, and unlike buying a Rolex or a BMW, they take time. It’s no coincidence that the idea that “the best things in life are free” has been echoed by every major philosophy and religion throughout history.
The hardest part about living “the good life” is turning ideas into action. So what does it mean to spend money to live a better life? I think there are three parts to this answer. First, there’s spending with time. This means working less to spend more time with family. Alternatively, you could uninstall social media during the holidays so that you can play with your children or talk to your spouse. Second, research says that one of the best ways to spend money is on experiences rather than possessions. Finally, and this is the most important one since it served as the core of this article, you should spend to create memories, not status.
Spending money on status is stupid because it’s unsustainable. You’re basically subscribing to other people’s approval, and there’s no worse subscription service. If there’s something I’ve learned, is that you shouldn’t outsource your happiness. And when you’re spending money for status, you’re essentially signaling others that you won’t be happy until you get their attention permanently. Buying a Rolex because you want respect is a bit like spraying cologne instead of showering: it works for five minutes and then everyone notices. As difficult as it is to admit, money is a tool and as such, it’s useful when it amplifies meaning, but empty when it replaces it.
Conclusion: The Richness of Enough
One day, you and everyone you know will die. Everything you worked toward, every worry, and every achievement will vanish. That’s not to say that your existence wasn’t for nothing. Your memory will outlast you. Your children will remember you, and so will your close friends. Nobody will talk about your money at your funeral. They’ll talk about how you made them feel. Live accordingly.
