Another way to look at true wealth

In this issue, I want to start by sharing an article I recently read about one of my favorite topics, money and wealth. The article is written by Khe Hy, where he talks about Freedom-in-attention as an alternate measure of wealth. Let me elaborate.

The author talks about how he recently met his friend from his cohort in college. Both did similar jobs but one main difference was in their Investing approach. The author just invested a fixed amount of money every month in a diversified index fund, so pretty passive kind of investing, while his friend was a super active real estate investor. His friend was able to have returns in low teens over past 20 years, while author’s returns were 9%. And this small difference of 4-5% per year over 20 years is a pretty sizable thing and Khe agrees with it too.

But his friend also spent close to 10 hours every week talking to contractors, accountants, real estate lawyers, plumbers, angry tenants and who not. That turns out to close to 10k hours over 20 years. Plus friend had to deal with all the receipts for insurance and everything, all these tasks taking up mental space. Khe’s strategy however, involved 0 effort or any of this logistical time.

That’s where author introduces another measure of wealth apart from just the amount of money accumulated, which is the Freedom-in-attention. Many rich people author has talked to have said that they wish they didn’t have to check email so often, they wish they didn’t have to be on the run always. In this case, his friend even told him:

“I think my life would’ve been way less stressful if I had followed your approach.”

This is something I guess we also come across- people super rich but having absolutely no time for themselves, always rushing from one thing to the other. A lot of money but too many things demanding their attention. However, as with many other things in life, there is hardly one-size-fits-all here too. There are lots of trade-offs we make, and sometimes, the choice involves having less freedom in attention. If you are running your own business, or managing 100s of people in a top position in an existing business, chances are high that you have way more things demanding your attention than an average person. But at the same time, if you enjoy the work, are excited about what you do, the trade-off is absolutely worth it. Even the author of this post writes in the end as his team is growing:

“Managing a team will most definitely eat into my freedom-in-attention. Yet, I’m ok with that. I want that. I’m passionate about the mission. It’s a trade-off I’m excited to make.”

As for me, this article got me thinking how I have also been checking my Robinhood app (one of the investing apps here in US) too much, especially lately, with everything going down (thank you Russia, Omicron, inflation and everything else affecting the market!). Moreover, I also realized I could definitely benefit more from a more passive form of investment, especially considering how my recent returns have been 😛