Money – Day One

Money is the third foundation in my year-long project (and course) to improve the universal elements of a good life.

Today is the first day of my challenge for this foundation.¹ In case you missed them, here are my updates and notes from the previous two foundations:

Fitness Notes: beginning, ending, books
Productivity Notes: beginning, ending, books

Money is an interesting foundation. It’s highly technical, driven by spreadsheets and equations—but it’s also emotionally charged, driven by greed and fear.

Nobody naturally thinks about money the purely rational way economists say we should—instead, we come with the enormous baggage of our beliefs about how we should think and value money.

Why Care About Money?

Unlike fitness or productivity, which many people overlook, few elements of modern life are as omnipresent as money. If you work, you probably spend much of your daily life doing things in order to get money. In your off time, you spend even more time thinking about how to spend, save or invest the money you earned.

This obsession with money tends to cause extreme views on its true importance. On one end are people who derive their self-worth from their net worth and judge those around them by the size of their bank account. On the other end are those who insist that money doesn’t matter at all.

The truth is somewhere in between.

Money alone can’t make you happy—but it can provide options in your life that do offer happiness: financial freedom, not needing to work for extra years into your retirement, being able to travel or get an education. Money makes a difference.



At the same time, the idea that becoming really rich will somehow fix all your problems is perhaps one of the greatest self-delusions. Financial health matters, but your physical health matters more, as do your relationships with your kids, friends and family members.

So it’s with some trepidation that I write about money, one of the most emotionally-charged and contentious topics in this entire project. But it’s these very emotions money evokes that make it worth exploring in more depth.

My Money Story

I have been incredibly fortunate in my life. Financially, my family and I are well-off. I’ve been financially independent since my early twenties. I’ve never had any consumer or student debt. And for nearly two decades, I’ve earned more than I spent, leading to fairly substantial savings.²

Looking back, I can see three sources of amazing luck I’ve had in my life that helped me arrive where I am today:

First, my parents. My parents were both public school teachers, and we lived in a modest home in a small town. They offered me some help with accommodations during my first couple years of university, but otherwise did not pay my tuition or living expenses. Since then, I haven’t received any financial assistance from them or any other relatives.

But my parents gave me something worth far more than an inheritance: they showed me how to live within my means. My parents always stuck to a budget, paid credit cards off in full and never took out loans for anything other than a car or house. These financial behaviors are so normal for me that it took years before I understood that some people buy things on credit cards when they don’t have enough money to pay for it in their chequing account.

To be fair, my parents weren’t poor or cheap, either. We had the good fortune of living a solid middle-class lifestyle where paying for food, shelter, books and the occasional vacation was never an issue. Financial prudence and stability were part of my childhood, which I belatedly learned is often not the case.

My second source of good fortune was deciding to go into business for myself in my late teens. After learning about “solopreneur” software developers when I was fifteen, my life’s dream became to run an independent online business.

On its own, there’s nothing particularly prudent about my choice. It was a gamble then, certainly. While making money online is the dream of the average teenager today, it was almost unimaginable to a normal person in 2004.

In the beginning, my goal was modest: I wanted to make $20,000 a year, which was enough money to live off my business full-time. If I could hit that threshold, I would be able to devote myself to growing the business. Despite that initially modest target, it still took me seven years of near-constant work to reach it. 



During that time, I lived quite frugally. But, again, I was a college student. Everyone around me was broke too, so there was no difficulty or stigma for living cheaply as I worked on my side hustle. When I finally did start earning past my original goal, I was so used to living cheaply that I was fine letting my business income contract during projects like the MIT Challenge or my Year Without English.

Since then, my business has grown. I’ve hired a team, published a bestselling book, and partnered with Cal Newport on two course projects.³

In the rearview mirror, those decisions appear prescient. It turns out 2006 was an excellent time to start writing online. The first project that put me over my initial goal, a monthly study-skills subscription, was a decade before Substack made premium content subscriptions a widely-accepted business model.

While it would be easy to pat myself on the back for my foresight, the truth is that I got lucky. Yes, there was a lot of hard work, but the wind was at my back in ways I cannot take credit for.

The third source of good fortune in my financial life was learning the right way to invest money early, and saving a substantial portion of my earnings.

Before I knew much about business or finance, I was lucky to get pushed toward the idea that investing in low-cost index funds is the best financial strategy. This belief was further reinforced as I went through business school and studied finance formally. By the time I was in a position to save anything, I was able to put most of my extra income into one of the best-performing vehicles for growing wealth.

This was fortunate. In the early days of my personal development, I spent a lot of time reading advice for various life domains online. I shudder to think of what I might have put my money in had I heeded the advice to pick stocks, gamble with leveraged investments, or chase crypto fortunes that pervades internet discussions today.

Instead, my money has mostly grown steadily in the decade-and-a-half I’ve been able to invest.

I bring up these three points not to brag—there are plenty of people who are much richer or savvier money managers than me—but to underscore the outsized role luck plays in financial health. Good practices matter, I know people who were dealt better hands than I was but still struggle with money problems, but few domains are as skewed to the vagaries of chance as money. And in this case, I can count myself extremely lucky.

My Plan for the Month

In the Foundations course, this month’s focus is tracking spending. Getting a complete picture of your financial health and habits is necessary for making adjustments, and most people don’t track their money adequately to do this.

Since I’ve maintained this habit pretty consistently for nearly two decades, my personal goals for the month diverge slightly from what I’m advocating in the course. In particular, I want to look at three areas of improvement:

• Updating our family’s monthly expense tracking. Since getting married, my wife and I have kept joint expense spreadsheets for our household. We’ve been through a few versions of these, but I want to make some tweaks to make the system is easier to use. I also want to more clearly incorporate other aspects of our personal balance sheet so it’s easier to see if we’re on track to reach our financial goals.
• Improving my investing. I already invest in low-cost index funds. For the last decade, I’ve mostly ignored my investing strategy, preferring to park any extra money in index funds and let the stock market do whatever it will. However, now that I’m managing more money, there are probably gains to be made by improving my asset allocation and investment timing decisions.⁴
• Getting life insurance. For the longest time, I didn’t really worry about insurance. I had no dependents and enough emergency funds to cover almost any eventuality. Now, I’m a provider for my family, and if I were to suddenly die or couldn’t work, it could make it hard for my family to continue to live as we do currently.

Since I already feel comfortable with my basic money management, I’m using this month as a chance to deepen my knowledge and to look for things I might be missing. I have a 1000+ page textbook, Personal Financial Planning: Theory and Practice, on my desk right now and another large textbook on investing arriving in a few days. While a lot of it seems to be things I already know, there’s always a chance I’m missing something that could make a material difference.

Despite my current material comfort, I never really strived to be rich. Instead, I wanted to be free to choose how I work and live without needing to worry about money. Many of the residual worries I have around money seem to stem more from my beliefs than my bank accounts. And so another major focus in my reading for the month is going to be on that psychology—not just to be materially secure, but to foster the psychological security that money cannot buy.

Want to Improve Your Money Foundation for This Month?

While I’ll be going into a lot more detail on the financial advice I’m reading (and have read over the last two decades) in the Foundations course, anyone following this challenge here is free to join too.

All you need to do to participate is to start tracking your spending and conducting a monthly review to ensure you’re moving toward your goals. I use a custom spreadsheet, but the service YouNeedABudget.com has been recommended to me multiple times as an excellent tool. I also recommend Ramit Sethi’s book I Will Teach You To Be Rich, which is a fairly comprehensive guide for mastering the basics of your financial life.

At the end of the month, I’ll share some notes from the books I read, as well as offer some final reflections on which changes I made in the month to improve this important foundation.

1. As a reminder, I’m working three months ahead. So, while this post is coming out early December, it was originally drafted at the end of August.
2. I went to university at a school in Canada where annual tuition was less than $6000. I paid for it mostly through scholarships and jobs I worked.
3. Another stroke of good luck: befriending Cal when we were still both students writing about studying.
4. For instance, there’s a well-documented home-country bias in investing. Additionally, owing to my practice of investing when I feel I have money to spare rather than on some disciplined timetable, I’ve probably trailed the true market performance through bad market timing. At the beginning of the pandemic, for instance, I held onto extra cash for fear of a further market crash—in fact, that would have been an excellent time to invest.