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Exploring distorted dollars, keystone habits, and energy hotspots
Logan
November 21, 2024
Exploring distorted dollars, keystone habits, and energy hotspots
Happy Thursday! Thanks for reading Intentional Dollar — where we look at old money ideas through a new perspective.
What’s inside?
One tool to experiment with
Two quotes from others
Three questions to dig deeper
Four lines of poetry for the point
Disclaimer: This is not investment advice. These weekly posts represent my simple thoughts, a few quotes, and some questions — for educational purposes only.
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One tool to experiment with:
Distorted Dollars:
Would spending $500 feel like parting ways with a lot of money for you?
For most of us, the answer is a simple yes. We’d likely engage in research and spend time to ensure we were trading those dollars for an item or service that delivered $500+ of value.
But there’s an edge case that bends this common view of spending. One where we easily part ways with hundreds or thousands of dollars, and don’t think twice about doing it.
Think about the last time you made a large purchase. A purchase over $1,000. What did you buy? A house? Furniture for your house? Car? Laptop?
These sizable transactions have a sinister way of altering our money psychology. When we are in the process or planning to spend a lot of money, the relative transaction size has the uncanny ability to distort our normal radars and judgment on “smaller” spending.
In the case of buying a home: you’ve saved a chunk of cash as a down payment, and maybe even some extra for furniture. We have mental radars that normally scan our purchases, but they get distorted because of relativity. When the big transaction clears, the nature of the relative size to the smaller transaction makes the small transaction feel innocent. After opening the gate wide to push all the dollars out, we accidentally miss the importance of the “small” dollars that sneak out behind.
Weighing the down payment on a scale and then instantly weighing something like a laptop purchase or a piece of furniture feels like nothing — it’s so small compared to its predecessor.
Has this ever happened to you?
Putting $20,000 toward a house makes the $1,000 chair seem small. But in normal times, perhaps you drop a fraction of that.
As a percentage of our large spending, $1,000 is only 5% of the $20,000 down payment. But on a day with clear skies, $1,000 is 100% of $1,000; we have nothing squishing the relative size of these dollars down — we have nothing distorting the way we feel about them.
And it doesn’t have to be categorically consistent. It just becomes easier to spend money you otherwise would have kept. It’s like the switch is flipped and we enter the spend matrix.
But there is a cure.
To insulate from this risk, you can install a time governor. An intentional and preventative measure. This governor is a simple time rule. Anytime you spend a certain level of money, $500, $1,000, $10,000 — whatever threshold makes sense for you — give yourself a week to let the radar recalibrate, to let the gate to close, and to let reality reset, so you can evaluate the next spending opportunity with sober eyes.
Whether it’s the dopamine and adrenaline from the large acquisition, or simply that our relativity analysis is thrown off — large ticket transactions can put a sizable hole in our money boats.
With intentional, proactive planning, you will sail safely.
large purchases can skew the next spent dollar to seem small
Two quotes on keystone habits:
The keystone habits are the bits that have bounce to them. You perform one and it shoots you into a cascading, productive, feedback loop. All of a sudden, your performance on the things that matter increases. You get better. Look for the keystone habits that start your flywheel.
“Typically, people who exercise, start eating better and becoming more productive at work. They smoke less and show more patience with colleagues and family. They use their credit cards less frequently and say they feel less stressed. Exercise is a keystone habit that triggers widespread change.”
“As people strengthened their willpower muscles in one part of their lives—in the gym, or a money management program—that strength spilled over into what they ate or how hard they worked. Once willpower became stronger, it touched everything.”
Three questions on energy hotspots:
What time of day is my energy potent?
What series of events seem to lead to this higher energy state?
How might I program a keystone habit into the day to strike more of these energy hotspots?
Which question stuck with you? Questions like these are spotlights for the mind. Reply to this email and let me know which one shined light on a previously dark cave.
Four lines of poetry for the point:
Dollars get distorted when relativity prevails.
The larger the amount pushed out the gate,
The less significance we feel,
Toward the eager dollar that trails.
Contact Me:
Content ideas, questions? Reply to this email or reach out to me at [email protected]
Disclaimer: This is not investment advice. These weekly posts represent my simple thoughts, a few quotes, and some questions — for educational purposes only.
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