Life's Most Important Resource (Not Money) feat. Aaron Tang | EZ On The Money #2

Note:The Ezra Zaid Project is proudly produced by a crack team of audiophiles and the best way to enjoy it is to listen to it. This allows for greater nuance and emphasis that sometimes may not translate as well to the written transcripts that are available to download for each episode. It would be best to cross check the corresponding audio, before quoting us in print.

AARON

I saw a tweet recently: Warren Buffett is worth, I think, hundreds of billions of dollars now. Would he give up 99% of his billions if he could prolong his life by say, another 20, 30 years? And I'm pretty sure he would. So yeah, I think all the money in the world, at certain points in your life, doesn't matter that much anymore. And, you know, people (then) start to think about, ‘Am I using my time correctly?’ 

[music]

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You’re listening to the Ezra Zaid Project.
On the programme, Aaron Tang.

(music)

Hey there, Ezra here. And this is another edition of EZ on the Money. 

And you just heard Aaron, at the top of the programme. And he posed a pretty basic yet fully loaded question: Are you using your time correctly?

Low-key, it’s a question I’ve been asking myself more and more now. 

But Aaron wrote an article on his blog, and the title read: “Time, money, or love, which is more important?” - So, you can find the link in the show notes, but I’ve picked out some quotes to summarise it so you get the gist of it. And here’s what I got from it:

So he writes, as early as we can, we all try and figure out how to make money. Now so, it’s a tricky venture, but we do our best to figure it out. Money brings you the basic necessities: food, shelter and more. So if that’s taken care of, you have more time to focus on the things you love. 

But then, ironically... somewhere along the line, when you are able to earn that money and have that stability, you find yourself in this zone of having more work, more money and ultimately more stress. And here’s the kicker: you find yourself with less time to do things you love. This is something you could not even imagine - because all your time and energy previously was dedicated to the mission of: “How do I make more money?”

So, if you zoom out look at the connection between your time and money, it seems like you have two choices: On the one hand, because of how much you work, you have less time but you make more money. On the other hand, you could work a whole lot less and gain more time, but that means you’ll also earn a lot less money.

So here’s where Aaron introduces the third  variable to the time and money equation: and, it’s love. Define love however you want: your interests, your passions, love for your family, hobbies, your partner: but it’s the question of how do you introduce love into the time-money relationship so that it becomes an equation that’s worth living, no matter how young or old, rich or poor you are. So hopefully at the end of this chat, we’ll have a clearer idea of how time, money and love are all interlinked; and maybe how we get to live a more meaningful life.

So I hope you enjoy this conversation, Aaron is a personal finance writer, his must read blog is called Mr Stingy. His writings are dedicated to the ‘art of optimisation’; many have been published on the Huffington Post. And currently, he’s the Country Manager at Malaysia’s first and largest cryptocurrency exchange, LUNO.

Without further ado, here’s Aaron Tang. 

AARON

So I think the premise of the whole article was trying to choose, you know, if you had to prioritize (things) in your life, which would be A, which would be B, which would be C? And I think, at that moment in my life, which was about five years ago...the conclusion of the article was, ‘If you can, try to have a life filled with love.’ Now, five years on, I think I still believe in that wholeheartedly. But what I have realized over the years is that, you don't necessarily need to choose one or the other. It's not extremes, like how it's often painted in the media, or stories that you hear. It's not that, ‘Okay, if I choose to have a high earning career, it means that I will completely have no time with my kids.’ It's not always like that. And I think something that you brought up at the start of this episode was the whole concept of balance, which is what I've been trying to find along the way. And if we go back to the article, and what you mentioned about how people don't really give time that much credit or that much priorities, I think it's because for a lot of us, at least those of us who grew up in say, middle class, or not so well-to-do, the immediate need that you always think about is money. How do I pay my bills? How do I save enough? How do I buy this and that? And I think perhaps the question of, ‘Am I prioritizing my life correctly?’ comes when you get to a position where you're a bit more comfortable with money. And it's very hard for say, somebody who's 20 years old, or 25 years old, to think about it that way. Because you're (always) struggling to chase the next bill payment. But I think the whole point of the article is to get you thinking, about what's really important. And I think for a lot of people - people will realize that once you get to a certain level of financial stability, then it's not always just about chasing money anymore.

EZRA

In this financial ladder, we're going to be encountering different hurdles that require different specific solutions. And I think one of the things about time is actually to begin thinking about it as early as possible, because you'll hit a certain mark. (And) Through no circumstance or doing of your own, life hits people in different ways, where suddenly, that time resource becomes super, super important. And all the money in the world doesn't actually move the needle on what you want in life. So, it's something I wanted to address. And it's something, sort of, that you kind of mentioned very briefly, that it is a bit of a paradox, that it takes someone who has money and less time - and that specific combination - to realize that time is more valuable than money, right? So you were saying earlier that a younger person has all the time in the world, but not enough money. And so therefore, that lens, and that arc is different. But the paradox is that when you do eventually realize that time is the finite resource, you need to be in a position where you have (more) money and less time to actually appreciate that equation.

AARON

It's, again, like you mentioned, a paradox. It's - you're not going to be thinking about, ‘Oh, you know, am I utilizing my time efficiently? Am I doing what makes me happy? Am I spending enough time?’ If, for example, you're struggling to pay your bills, or struggling to feed your family. It is a bit of a paradox. And it is hopefully something that people get to move through in life. For example, you might spend your early 20s trying to build a financially stable base. And then hopefully, when you get to your early 30s, or mid 30s, and you have a family, and you're able to allocate more time to building your family and having this nice balance kind of thing. But of course, this is a very ‘ideal fantasy’ kind of ambition. And I realized that for a lot of people, it's not gonna be so straightforward and so easy, but at least, thinking about it, and trying to figure out what balance works for you, is at least very important as a first step.

EZRA

I was concerned about talking about this topic about time, because there is this certain type of abstractness that can be put onto us and say, ‘Guys, you know, this discussion is so highfalutin, and it's so philosophical, that it’s really not going to move the needle.’ But I wanted to get into the weeds into this video a little bit more because I feel it's quite important to articulate as best as I can, about the issue of how, when you actually sort of draw out your life, in terms of (the) number of weeks. And I think there's a particular blog that you reference in the writing of this article that I've been talking about. And of course, I'm gonna include this in the shownotes. But in this article, it sort of like, visualizes what your life looks like on approximate, if you live up to the age of 70, 75, or 80, about how your life is sort of blocked out. I'm wondering if you could find an analogy, or I don't know, maybe use an apple or something, to visualize an analogy of how useful looking at your life in this way is? 

AARON

They call it the memento mori, I believe? I think it comes from the philosophers of - what do you call that... that stoic philosophy thinking? So they drew out 52 weeks in a line, so 52 boxes horizontally, and vertically there's 70 rows. And then as you go along the weeks you mark the time that you've already passed. And then you look at, okay, how much time do I have remaining? And I think I did this exercise when I was in my early 30s. So that was maybe like, five years ago. And then I realized that ‘Oh, hey, that's quite concerning, because like, I think at least 1/3, if not getting close to half my life, is already mapped out.’ And if we go back to the apple analogy, I think almost half the apple of my health, or of my life, has already been eaten up, and what am I going to do with the remaining half? Like, am I going to be spending it on the right things, and am I going to be doing the things that bring ultimate happiness to myself? So I think that thought itself was pretty concerning the first time I looked at it, and kind of shook me a bit and made me think (about) my life choices.

EZRA

This is interesting, because, it reminded me of when you’re buying tickets for a concert, and you get to choose your seats, it's kind of like this row of seats, right? And then suddenly, you realize, if you're 35, or 37, you've actually sort of taken out that first chunk of your life, and it's already done, and you've got maybe act two and act three to go through, if you're lucky. And then you start calculating how you're actually spending your time, and spending your life, and where your resources are. It pulls into focus this conversation that we're having about time. And I guess, you mentioned that it was a shock to the system. And I'm wondering, has it made your lens a little bit happier, that the realization has kicked in, and you can take a more proactive shot at it? 

AARON

Yeah, absolutely. I'm fairly certain. And I say I'm fairly certain, because you never know for sure 100%. But I'm fairly certain that going through this exercise has reoriented my life towards things that I really believe in. And if you ask me, like on a scale of one to 10, ‘How aligned is my life and behavior with the direction that I want to go in?’ I would say it's pretty high. It's probably like a 9 or 9.5. So in terms of long-term happiness, or fulfillment, I think that the exercise has been absolutely helpful. The one thing that I've realized, and I've tried to stay away from the extremes, is if you draw everything out like that, and if you always view things from a lens of scarcity, like, ‘Okay, oh, shit, I only have like 100 weeks to go. So I better do something really important.’ You know, it sort of adds some pressure to your life, which isn't what you want, as well. So, again, it's a bit like a high-level philosophy kind of thing, but I don't think you want to be at either extreme - Number one, you don't want to be like 100% YOLO, you know, ‘Live as if I'm going to live forever.’ On the other hand, you don't want to live like, ‘Okay, you know, my days are ending and I'm going to be gone tomorrow.’ So you want to find that that nice little area, which kind of maximizes everything. And again, that's the whole concept of the blog. That's the whole muse that I'm been thinking about.

EZRA

Let's say you take in a perspective that is somewhere in the middle, that sort of that golden mean, that sweet spot where the Venn diagram overlaps - is it so that you can activate the purpose? Or perhaps, I think in your article you talk about love. And I think my interpretation of that was, maybe passions of what you have in life. Is that the variable that sort of kicks in once the framing of what time means to you has already been established? 

AARON

That's the direction of the article, though I wouldn't say it's necessarily sequential. It's not necessarily like, ‘Okay, number one I have, I need to have financial stability. And then after that, I need to prioritize my time. And then after that, I'm going to fall in love and have a family.’ For most people that love part, whether it's love in your family, or love in your career, or your hobbies, that comes to you concurrently. So I think that's always a process of balance as well. It's balancing these few things. But what I will say is that for most people is that, the love that comes in their life is going to come from your family. For most people, whether it's your partner, it's your kids, or it's within your parents, I think that is the (most) normal or most common means of finding meaning and value in your life. And I think that when you when you have that very strong(ly) in your life, then perhaps you may not be so calculative in terms of the money or the time that you spend, but absolutely all these three things are kind of working together with each other. And again, it is a whole balancing thing that everyone needs to go through.

EZRA

If I can just circle back just a little bit, you know, we spoke earlier about I guess, the value of time and what that means in relation to one's life, and perhaps one's own choices and pursuits. Could you break that down for me as to what that means in terms of the money value of time, once you acknowledge the resource as something as finite? 

AARON

I think where I was coming from in this angle is that, if you (want to) be absolutely calculative, if you take, say, your monthly salary, and let's say I’m starting with a monthly salary of say, 4000 ringgit, and if I'm working say 20 days a month, I can more or less roughly calculate how much am I getting paid per day, which is 4000 divided by 20 working days, which is, I think, 200 ringgit a day. And then if I'm being very, very calculative, I can go further and calculate, ‘Okay, I'm working 8 hours a day, so I can calculate 200 ringgit divided by 8 hours.’ So by right, I'm actually earning, for example - I think 200 divided by 8 is maybe 25 ringgit an hour, or something like that. And this sort of gives you a quantifying way of how much your time is worth. So if you're, for example, buying something that's worth 100 ringgit, a way of calculating, ‘How hard do I have to work to get that RM 100 item, if I am earning 25 ringgit an hour?’ That means that I work 4 hours to buy that RM 100 ringgit item. And you can repeat this exercise for RM 200 items or RM 1000 items. And if you stretch the timeframe out longer, a lot of people have used this concept to calculate, ‘Okay, how many hours do I have to work to afford that vacation, or that car, or that house?’ And I think this is just another lens to look at the whole, you know, ‘value of my efforts and my time’ thing, and it's a helpful thing to look at, though, again, I will caution that you don't want to go to the extreme and be calculative about everything, because I think that just takes all the fun away from your life as well. 

EZRA

Because of my experience in my background with numbers or math, the appeal of these approaches have never appealed to me at a younger age, or maybe somebody didn't sit down long enough with me to sort of really roll it out. But having understood that, then I'm going, ‘Well, that certainly presents a lot more interesting perspectives and options,’ and I think that's what I like the most right now. But where I'm at is the idea of having as many options as I can, and then taking the one that is most suited to me at this juncture in my life. And I think when you're younger in life, it's because there are so many options and you don't know really sort of where quite to begin and how to sort of narrow it down. That's why I think maybe some of these very easy tropes begin to kick in, which is, well, money will buy you happiness, ergo, go do that route, get to that point, get that piece of paper, get that job, buy that home, marry that person. And hopefully, at the end of that cycle, you'll get this thing called happiness. But I think that's why the road to that endpoint, if that's even an endpoint that's worth pursuing, is so interesting, because people have different wants and desires and needs, given their circumstances. 

AARON

Yeah, absolutely. If I had a pet peeve of the, well, almost the Money Advice (industry), or the personal finance industry, is that sometimes there's this impression that there's a ‘one size fits all’ kind of path to achieving your dreams, as if everyone needs the same things, (and) everyone wants the same things. And then you'll see, you'll see all this clickbait-y headlines like, ‘Top Five Ways that Every Young Millionaire Needs To Do’, or ‘The Eight Money-Saving Tips that Every Young Executive Needs. And I think when I was younger, I absolutely loved these kind of things, right? 

EZRA

Yes. 

AARON 

I definitely lapped all those things up. 

[Ezra and Aaron chuckle]

EZRA

There's something definitive about those headlines as if that particular blog post will provide all the answers in your life. 

AARON

Yeah, it's like we're all searching for that guru, that figurehead, who can give us all the answers to every single thing we need. And now that I'm a little bit older, I've realized that, you know, you have to find what works for you. That whole balance of money, tips, or money principles that works for you, you know, what works for you, for your relationships, and your family. And, hopefully, you'll be able to balance everything.

EZRA

Can we just, you know, take another swing at this because, many people interpret money as a very literal value. It has an... I think, depending on your culture that you come from, and the background that you come from, the economic bracket that you've grown up in...the way that hits into the reality of your life is a very specific experience. How could we explain to listeners that, you know, money simply isn't worth the same as its numeric value and what that represents? Because it is very specific to how your environment pushes you towards it.

AARON

The problem or rather, the challenge, is your views about money. Like you mentioned, it very much comes from the environment you grew up in, the books that you read, the relatives and how they react to money, the friends that you have. So, actually, money isn't a very static concept. If we were being a bit more philosophical, the concept of having wealth or being rich...it is not just about earning a big salary, it's not just about getting as much savings or having as much investments as possible. There's so many other things that go into it. But I think at a start, what would really help is - and I'm coming from my sort of mathematical logical kind of thinking -

EZRA

Sure.

AARON

- because that's kind of my background, in maths and engineering. I think actually quantifying it is actually a very, very powerful exercise. So when people are thinking about - okay, people say ‘I want to be rich, right?’ Nobody says, ‘I want to have passive income of say, RM 2000 a month,’ (or) ‘I want to have emergency savings of six months,’ (or) ‘I want to have A, B, C.’ When people say ‘I want to be rich’, it's almost very aspirational. But I think, as a first step, if you break it down into the numbers, that helps because you start to realize, ‘Okay, if I want that, say, RM 3000 a month income, or something, maybe what I'm doing my current choices will never, ever allow me to get there.’ Okay? And then you start to realize that, ‘Okay, I may need to make some changes in my life if I want to achieve that number.’ Now, numbers, again, aren't the end goal of everything. But I think actually breaking it down into numbers, is really a good first step.

EZRA

For many who don't break down that process, let me tell that I'm on the other side of the spectrum of where you're at. I think many people like myself, heard that process and said, ‘You know what, that's not for me. But here's what I'm going to do: I'm going to try find almost like a hole in one moment - a home run moment, a ‘free kick that's going to bend into the top corner’ moment - that's going to change my life, and immediately resolve all of these issues that were dealt with, and immediately solve everything that you articulated, in having to sort of map out the problem.’ But it doesn't work. And it takes many, many steps in your life to figure out that actually, that process doesn’t work. But why is that approach so appealing? And why was that so appealing to me, I guess?

AARON

I think the whole goal, the whole aspiration thing...Number one, it can be very intimidating. For example, if you tell a guy who's earning, who’s a fresh graduate earning, say RM 3000 or RM 3500, and you tell him that, ‘Hey, man, you're gonna need RM 1.2 million to retire at 50.’ Now, if that guy doesn't have a background in finance or anything where he hasn't done the compounding calculations, he's going to think that, ‘Oh, man, you know, in RM 3000 a month, I can only save maybe RM 100 or RM 200, there's never going to be a way that I'm going to reach that 1.2 million thing. I'm not even going to try. This thing is so foreign. This thing is so intimidating. I'm not even going to explore it. I'm going to hope for the hole-in-one, ‘Skim cepat kaya’, that banana, free cake thingy that’s going to let me win it. And then I'm going to go based on hope.’ I think it's the the whole thing about, ‘If it seems out of reach, I'm not going to strategize or come up with a practical plan. I'm just gonna like, okay, I'm just going to hope.’ And as we all know, hope is not a very good strategy.

[music]

EZRA

When I started this series, EZ on the Money, it was really to sort of begin these conversations about how to make sense of that relationship between oneself, and money, and everything related to it. And maybe let's start somewhere there: If you can recall one of your earliest memories with money, whether that was a positive or neutral or negative moment or something that sparked that relationship with money? 

AARON

So, I think the first two things that I can remember about money are that, number one, that savings is important. So back then, you know, we had piggy banks, or rather, not the piggy banks, but rather, it was like...I think it was like a Donald Duck thing from Standard Chartered or something? So you'd always save. And the other critical thing that I always remember from my mom is the importance of tithes. So I think that's the Christian equivalent of the zakat. So, I grew up in a Christian family, and my mom was always very clear that 10% of your earnings or your your salary needs to go to good causes. I think that was my earliest recollections of money. And yeah, I think they have more or less shaped how I've continued through this journey.

EZRA

And when you first got those explanations, did you receive it wholeheartedly? Or, were you able to calculate it, make sense of it, and attach value to it?

AARON

Yeah, I think back then, I was young, and maybe a bit simple-minded. So it was accepted as gospel truth, right, that this is what people do with money. And if we fast-forward a little bit further into memories about money...I can remember the stock market craze of the mid-90s. And I think my dad was pretty involved in the stock market. And I think that's perhaps the seeds of my interest in investing, in growing money. And that's a very clear memory as well.

EZRA

So, if we're going to this point where, okay, there's an acknowledgement that, ‘I am willing to do something.’ You know, we spoke earlier that, you know, different people have different needs - what are some of the more meaningful ways in which somebody can begin to customize their own financial strategy? 

AARON

Yeah, if, if we're looking at it from a long term, the huge goal I think, I think it's always intimidating. Which is why I think the whole thing about personal finance, the whole thing about saving investing, in recent years, has shifted more towards the behavioral side of things. So I think it used to be more like, ‘Oh, you're going to need to save 15% of your salary.’ Classic example, ‘You should stop drinking the lattes and you should give up your avocado toast. Okay, so you can save like 15, 20%.’ I think that was very blunt, and it was very ineffective, because it never considered the behavioral aspect of things, or how people behave, how people think. And I think there is a positive shift towards these kind of things nowadays. And the whole thing about getting better with money, it starts with really small behaviors, really. It's about, okay, if I go back to the story, it's about my mom teaching me that, ‘Okay, regardless of whatever you earn, you're always going to need to put aside 10% to give to the charitable causes.’ And then you're always going to save a small percentage of that. So I think, without diving too much into the plans, it all starts from behaviors. So behavioral stuff, (like) always trying to save at least 10% or a small percentage of salary, (or) always trying to read, trying to learn, I think these are very powerful first steps that one can take. And these are hopefully, small enough steps that are not too intimidating.

EZRA

Tell me why these very small behavioral steps, that are clearly very boring - why is it such a sexy move at this juncture in one's life, and how might it benefit one of the future? Because behavioral is, whilst not intimidating, it is repetitive, and boring, and it doesn't have the rollercoaster emotion of picking the right stock and exiting at the right time, right? So make a case to me as to why that kind of behavioral change, however small, and that modification, actually brings great, great value.

AARON

I'm gonna give you two examples. So first example is the old saying in Malay, ‘Sikit sikit, lama lama jadi bukit,’ right? Now, that may sound like cliche advice, whatever. But when you draw it out in the area of finance, especially in the area of saving and investing, that is absolutely true. So the early example, I gave you: a guy earning RM 3000, and you know, if you tell him that he needs RM 1.2 million when he retires? He's gonna go like, ‘Okay, that's insane. That's crazy.’ But what I did realize was, many years ago, a colleague actually drew up a spreadsheet for me, and, you know, geeks, we love spreadsheets. And he's like, ‘Did you know, that if you just had the normal salary raise every year, which is say, somewhere between 3% to 5%, by the end of your career, if you did not touch your EPF, you would have RM 1,000,000 in your EPF savings. And he said it, and I was like, ‘Okay, this sounds like BS, because it doesn't sound realistic.’ But when he drew out the spreadsheet, I realized that it was absolutely, absolutely true. So the thing about saving and compounding, which is what 100 finance textbooks will tell you, is that it takes time for your savings and investments to grow. So for me, it made sense when I looked at the graphs and the Excel spreadsheets. It might make sense to people differently. But that part is absolutely true. And I'll give you another example of this principle, playing out to extremes. So Warren Buffett is, I think, worth more than 100 billion dollars. Now, in his case, 99% of his wealth was achieved after he was 50 years old. So imagine that, let's say the guy has more than 100 billion dollars. He achieved most of it, 99% of it, after he was 50 years old. So he had been investing, saving, for for like 30, 40 years of his life - because he started early - before he actually reached that crazy, mega-rich thing. So I think these two approaches I will take - first approach is the whole numbers, spreadsheet thing, (where I) looked at the graphs, (and the) second example of a really old guy who made it, but it was due to his long, long, long investing years. 

EZRA

Maybe, if I can sort of dive into a little bit of your personal story as to how this came into focus? What have you learned from this process for yourself? And from when (did) you actually sort of begin to actualize and realize this for yourself? 

AARON

Something that I realized, which was very powerful, and I sort of mentioned earlier, is that there is no ‘one size fits all’ solution. And I realized this because when I was younger, I was like, okay, looking for role models - okay, for example, am I the Dave Ramsey clan? Or am I the Ramit Sethi clan, you know, choose a figurehead and join that, and they'll have all your answers. 

EZRA

I remember growing up, Robert Kiyosaki was one of those guys that you know, ‘You need to buy real estate, and then all of your problems will be solved, you'll be a millionaire.’ 

[Ezra laughs] 

All of those kind of archetypes.

AARON

Yeah. And, for me, it was, number one, the realization that you can learn A, B, C from say, Robert Kiyosaki ‘Rich Dad’; you can learn D, E, F from Dave Ramsey, you can learn a little bit more from Ramit Sethi. And you don't have to set your personality to be emotionally invested in that clan, or that way of thinking. The second thing that I learned in this journey is that, your needs and wants change over time. So when you are, maybe in the late 20s, you want to be flashy, because you think that, ‘Oh, if I drive a nice car, maybe it's easier to get a girlfriend’, or something like that. But as you get older, maybe when you have a family, and then you realize that your needs and wants change. You don't necessarily want to impress people, but you want security for your family. So this whole concept of changes, over life, I think it's important to realize that, because it adds a layer of humility to yourself. In that, you realize that,  at 25, at 30, at 35, at today, ‘I don't know everything, because things are going to change.’ And I think that's very helpful, in whatever journey, money-related or otherwise.

EZRA

I'm wondering if you've had encounters with that type of short-term cycles where surviving is the only order of the day?

AARON

Yeah. If we're talking about specifically money-related, I've been pretty fortunate, privileged, blessed, to not be in those situations. What I would say is that I've never been like hardcore poor, really struggling. But when I was just starting out in my life, just starting out in my career, salaries back then weren’t huge - RM 2500, which I guess it's still okay. But, you know, I got into the habit of like, just spending all my money every month, just blowing all the RM 2500. I promised myself that I would save whatever I had left over, and invested at the end of the month. Of course, that never happened, because I blew through everything because you're young and foolish. So I've been in that cycle where I just live from paycheck to paycheck. And I think it's one of those things that, if you don't sort of pull yourself into thinking and reflecting, you can just go through this in months, years. And you'll just realize that time has just flown by and you’ve not really made much progress.

EZRA

The challenges, that change brings, is the other layer of intimidation that I would add to the equation. So there's that sort of static intimidation of the challenge being presented to your life. But then even when you make progress, and even as you progress through life, and gain more experience and gain more financial advantages, the change in itself is actually going to upend all of the progress that you've made. And that becomes intimidating because it's been, I guess, planned to a T, but you almost need to reset. Is there something positive that you can put onto that particular moment or experience? 

[Ezra and Aaron laugh]

Because I think I've gotten better at understanding that it is part of the equation, but I think my younger self would probably be a lot harder on my current self, because it just means, ‘Ezra, you didn't plan well enough.’

AARON

 I think this is where the power of savings and and compounding over many years, really comes into practical play here. It's the concept of, ‘If you had saved, say 10%, when you were in your early 20s, when you’re 25, in your 30s, over a period of time, it's not so much that the savings are going to make you rich or anything, but it's that those savings are actually what gives you: number one, peace of mind, and number two, it gives you options.’ Because as you continue to build that ‘cash savings’ kind of buffer, you realize that okay, even if some huge changes come to the industry I work in, or (to) my own desires, or my own wants, I actually have a little bit of that savings, which can ride me through whatever changes happened. So I think that's really powerful. And it's more of a peace of mind, rather than actually saying that, ‘Oh, I'm rich, I can retire young or early.’ It's that savings, bringing that additional security into your life.

EZRA

I think the other part that's worth mentioning about sexy things like, you know, security, and buffer, is the assumption about how life is actually going to play out for yourself. The assumption that a terrible pandemic won't sweep into your life, the basic assumption that something might not happen to a loved one in which you might have to involve yourself financially, the assumption that a disease won't be inflicted upon you at an earlier stage in your life, in which you hadn't accounted for. I think that is also part of that lens in which we don't wish to deal with, right? Because even the notion of that is intimidating.

AARON

It's not something easy or comfortable to deal with. And if we're going with analogies, it's the defensive part of your strategy. The offensive part is fun, sexy, right? Like you mentioned: picking stocks, going in low, you know, coming out high, making lots of money. That's the offensive strategy, which everyone loves. The defensive strategy, that's the one - thinking about insurance, thinking about, ‘What happens if I lose my job, due to no fault of my own, due to - I don't know, (a) pandemic happening?’ Or, you know, if I'm a pilot, and then the airline shuts down for six months, right? These are stuff that we don't control, but to a certain extent, our strategies with money need to cover for these defensive strategies as well.

EZRA

I think I like this bit very much now, now that we've gone sort of through the gamut of our conversation, which is that, there are offensive strategies and defensive strategies to uphold. And there's real value in having a balance of both. And why is that?

AARON

Yeah, the thing is, if you go to, say, a licensed financial planner, if you go to someone who, that actually has a license to advise you on how to manage your money, It’s  not going to be like, ‘I'm going to teach you how to become a millionaire.’ That's not the first thing that they'll talk about. The first thing that they'll want to do is speak to you, interview you, (like) ‘Okay, you know, in all areas of your life, you know, how many family members do you have? How many people do you need to take care of, you know, what's your job? How much savings do you currently have?’ That's because they're trying to get a holistic view of all angles of your finances. And I think, for a lot of us who want to DIY, or ‘do-it-yourself’, we tend to focus on the part of money that makes more sense for us. For example, if you are an aggressive, hot-blooded, male in your late 20s, then you might (be) like, ‘Oh, yeah, I'm going to trade the stock market. I'm going to be like those people I see on TV making tons of money’. But on the other hand, you also have people who are very conservative and they are going to focus on, ‘Okay, I'm going to insure myself against A, B, C,’ and I know people like that, right? They are completely insured against everything, because their whole mindset is very defensive: what if A happens? What if B happens? Now, I think the reason why you want a mix, is because in your life, over the next four or five decades, it's not going to go just one way, right? The world is not going to go in just one direction, it's not going to go always up, neither is it going to go all the way down. So I think having this holistic view or rather, mix of strategies, both the offensive and defensive, is what's going to: number one, keep you stable and afloat, whatever happens up or down. And number two, hopefully, get you enough security and stability for you to go out and really enjoy your life.

EZRA

I wanted to get to this, this love variable, in which, I guess, maybe my question is: what caused you to begin thinking differently about the time and money equation? And then inserting, I guess, the love variable? I know that you've mentioned before, that these things are not sequential, but from your personal experience, did it click at a later stage in life?

AARON

I think I've always had this variable, this thinking about, you know, how important is love, how important is family. I spent a lot of my childhood reading these extreme stories of, ‘Okay, celebrity A got filthy rich, and then he wasted away all his money, partied too much, and then now he's bankrupt.’ And then of course, you have the other end of the stories which say that, ‘Okay, you don't need very much, as long as you have your family and you know, everyone's healthy. And then you don't even have to worry about anything.’ And I always felt that these were somewhat incomplete. Because they're very simplified stories, right? They're like, ‘Oh, you have A you have B, you don't need C, okay?’ So I was trying to find like, ‘Is there a common theory or something that can that can unify everything?’ What I realized is that - again, my background is engineering, and we do a lot of math - 

[Ezra laughs, Aaron chuckles] 

- So, I realized that, you know, I tend to think about things in a very black-and-white, digital 1s or 0s way, hence- 

EZRA 

Right. 

AARON 

- hence your fascination with what he called the ‘memento mori’, filling up boxes. So I kind of brought in this whole emotional love angle, because, otherwise, I would just try and maximize for either money, or number two, once I have enough money, then getting as much time as possible in leading, like a very, I would call it a very selfish kind of life. Like, just do whatever makes me happy. I want, like, lots and lots of time to do whatever makes me happy. But I realized that, if I bring in the third angle, which is perhaps a more responsible way, like, if I bring in the angle of having emotions, and love, if I think about family, if I think about contributing to society, then I think that makes more sense in terms of a well-balanced life. So that's kind of where that whole angle came in, is, maybe it's more of a reminder for me to not just calculate in terms of money, and not just in terms of time.

EZRA

The way I thought about it has also been in those binary terms, which were, ‘Let's live our rock and roll life’, or ‘Let's live a completely frugal life.’ And as if they weren't enough narratives that were presented to me growing up, that there is this really interesting, middle, fulfilling, sweet spot. And in doing so, have you been able to take action on this, at this juncture in your life?

AARON 

Yeah, absolutely. So I think I'm at the stage where I'm pretty satisfied, happy with what I have, got enough financial security, got enough time to work on my hobbies, and you know, do fun podcasts like this. That being said, of course, it's not like, perfect, it's not utopia. I still have challenges. But I think overall, it's worked out really well. And the one thing I wanted to  add on to what you say is, it's the whole thing about narratives. You said very powerfully that it's almost that there's not enough narrative of this nice, balanced, ‘sweet spot’, happily satisfied kind of person. Because what you see in the media is the crazy rock star, party-till-you-die kind of person. Or you see, on the other hand, the really suffering (kind of) guy who's broke, penniless. And you get very, very extreme views in the media. And I think these extreme stories, these extreme views always get clicks. If you read some of my favorite websites, every week, they come up with, ‘Oh, 30-year old Millionaire Shares Six Tips on How He Managed to Retire at 28.’ And you think that everyone can retire at 28 and everyone's going to become a millionaire, because that's the outlier story. But if if those same publications publish a story about like, how a 40 year old guy is happily married with two kids, almost nobody's gonna read that article. Because it's boring, right?

[Ezra laughs]

 But I think, actually, most people would be really happy if they got to that well-balanced life, with with your family and two kids kind of thing.

EZRA

Because both of us have been involved in media in some shape, way, or form, in either contributing or contrasting some of these narratives. And that feeling right now, where, if you are in your late 20s, or early 30s, mid 30s, and even maybe touching 40 - and you haven't brought out your treasure chest of tips and tricks on how to be rich, and you don't have all of these things to show for - there is this sort of feeling or narrative that if you haven't achieved that by a particular time in your life, that you are a failure. And therefore, it perpetuates more disgruntlement. And it perpetuates a very sort of unhealthy view of what is actually valuable to you. And I can't say that it has not even impacted me myself. Because, well, you know, if you've lived in this particular economic bracket, if you've supposed to have achieved all of these goals, and therefore, if you're not at that station in your life, you can be categorically defined as a failure. And how do we change the lens on that?

AARON

Yes, this is a tough one. Because even if you look at myself, when I started my whole blog thing, I was basically ‘syok sendiri’, right? I thought, ‘Oh, I'm maybe better than everyone else.’ That's why I want to start a blog and share my views. And I realized that that's actually not a very healthy approach. I think that we need to shift the focus a bit away from very achievement-focused kind of things like, ‘Oh, I've got to be a millionaire by 30, I've got to be, you know, I've got to have that BMW by 35.’ I think if we shifted away from just being achievement-oriented, towards, ‘What are the behaviors that are going to bring me long-term success?’ I think that's going to be more helpful. So if we're following some of the, I guess, terms that are thrown around: ‘If we shift away from goals so much, and we shift towards systems - Systems (meaning) the behaviors that are going to bring us happiness and success in the long term. So some of that we've already mentioned, like saving, like thinking about how we are spending our time - I think that helps.’ And again, I will admit that it's not easy, right? Because people love to compare. People are always thinking, ‘Oh, but my friend is 30. And he's already having two houses.’ It's absolutely difficult. But I think if we shift away from just focusing on achievements, but (to) what we're doing on a daily basis, I think that helps.

EZRA

I think given what we've been discussing, I wanted to ask if you had, almost, a starter-kit of things that listeners can think of for themselves, given what we've discussed about the issues of time, the value of money, and how we sort of bundle that up into our interests and passions, or the things that we love. How would you position that starter-kit so that listeners can take away something from this conversation?

AARON

I'm going to share two things which I found to be really helpful in in my personal journey. And the first of it is very common exercise that every financial advisor of every financial article will ask you to do. So a lot of people are probably going to roll their eyes. But I will say that it's absolutely powerful. And that would be: you have to track where you're spending your money. I use an app to do that. And the reason why it's so powerful is because, if you're not already quantifying how you're spending your money, it gets a little bit difficult to plan for 5 years, 10 years, and to get to that place where you want to be 10 years from now. So number one, I would say is that, excuse me, you absolutely have to start tracking your expenses. Because then you'll be able to realize, okay, I'm spending say, 40% of my salary on this. And it might actually not be so useful for me, maybe I should be spending 35% instead. The other thing about why tracking your expenses is so powerful is because it gives you almost a...rude awakening, or wake-up call. So if you're struggling, and then you realize that, ‘Okay, this salary is isn't really meeting my needs, what can I do to increase my salary or increase my earnings?’ But without actually writing it down or seeing it in numbers, it can sometimes be a bit hard. So that's the first thing. Now the second thing I would encourage is a little bit similar to the tracking (of) your expenses. But this is tracking your time. So I learned this from the blogger/ writer, Mark Manson. And he suggests doing somewhat like an audit exercise. And you draw this box out. And you do so on a weekly basis. You roughly calculate, how much time do you spend a week doing some doing things, and then assigning a value one to 10, on how much meaning or benefit it brings to your life. So for example, I would say working. First example might be working and I spend, say, 45 hours a week, on a scale of one to 10. How much benefit does it bring to my life? I would say maybe 8 or 9, because without my job, obviously, I'm going to be struggling. But then you get to other stuff, right? You get to stuff like, ‘Oh, am I spending 10 hours a week doom-scrolling on social media? And how much benefit is it actually bringing to my life - is it like 5 out of 10, or 6 out of 10?’  And then you think about, ‘Oh, I spent an hour a week calling my mom. And that might bring say 9.5 out of 10 benefit to my life. So the whole idea of writing all these things down is that you kind of figure out where you're spending a lot of your time. And if you're spending a lot of time there, on certain things, are these the most important things to you? Again, this may sound a bit like a fluffy kind of, you know, team-building kind of exercise where you go rah-rah or something like that. But I found that if you continuously do this, over the years, you can kind of realign where your life is headed towards. And I find that it's very powerful. So yeah, I recommend that everyone - if you haven't been tracking where your time is going, everyone knows that time is very important - do give it a try.

EZRA

Well, you know, I'll be straight with my listeners - that the two things that you've recommended are probably two things that I either am partially embarrassed to have to confront, or also partially hesitant to know the answer. It's kind of like doing a medical exam that you must do yearly. And it's, as you say, an audit. But the plus side in which when one has done this, is that it actually sort of recalibrates - well, that explains why certain outcomes have resulted in one's recent experience, because you've been spending 50% of your time, leading towards that direction, and therefore, it had no other designated outcome, but the outcome that you're living in right now. So I think having that audit is particularly useful, I guess, if only at the very least, to understand where your current behavior is, and then knowing what you would like to do with it after that.

AARON

Yeah, absolutely. And I would recommend that if anyone does it, don't do it with the intention of of judging yourself, right? 

EZRA

Right.

AARON

For example, somebody might spend 20 hours a week reading on social media, and yeah, I've moved away from the whole, you know, ‘There’s one way to live your life.’ You know, there are certain principles that make sense for most people. But ultimately, you are the guy who decides, or you are the lady who decides what your time is worth and where you want to spend it. So now, maybe social media 20 hours a week, for most people would probably be a bit too much. But, you know, to each their own, right? Whatever that brings value to your life, I think go for it. Try to figure out what doesn't bring value to your life, do less of that, and do more of what really makes you happy. What brings value to you and your family.

EZRA

I think one of the things for me, and having, you know, this series, or even having these conversations about one's relationship with money, is (that) we're living in such a unique time, with regards to the recovery process of what the pandemic has brought on to people. And I think many, many people who have either prolonged these very difficult conversations about money, are really starting to begin to have those conversations with themselves and with those around them. And it is going to be a slow and steady process, despite what stimulus or relief packages that are introduced into our economy. Each individual's challenges are, as we said, going to be very, very specific and unique, some more dire than others, certainly. You know, even with some of the things that we're speaking about here, is even more applicable now than ever before? Or are there some more specific and drastic moments of reflection that we need to do towards ourselves to, almost, catch up with the moment that's being presented?

AARON

Yeah, I think a lot of things that we've spoken about, you might consider them first-world problems, because these are things like, you know, ‘Am I spending my time well? Do these (things) align with me?’ And a lot of this might not make sense if, for example, someone is really struggling to pay the bills at the moment. So I like to say that survival is the biggest priority. So if you're struggling, you know, absolutely do whatever it takes to get that money. You know, if you can't be tackling these questions at that moment, that's totally fine. Because it's a journey, right? And not everyone is able to confront these questions at this moment. It's absolutely fine, if you need to do whatever you need to get through the next couple of months, especially in the middle of a pandemic. But I think, longer term, if we're talking about decades, 5 years, 10 years, 20 years; these are questions that you eventually have to confront, because you don't want to be sort of, in this short-term survival cycle for the rest of your life. You don't want to be continuously fighting just to get to the next month, if you can help it. And I know this sounds like a very privileged kind of thing to say. But if you can help it, if you have options, which is what I think middle class people have, then these are questions that you absolutely need to confront someday. If not, you run the risk of actually heading towards the twilight years and then you're thinking actually, ‘Where did all the years go?  What was I doing?’ You know, and you might end up with regrets instead of saying ‘Yeah, it's been a hell of a journey.’

EZRA

Maybe it is an assumption that the problems that you and I've been discussing are applicable, either to young people, or people who are in that midway juncture, where changes still can be made. Have you encountered conversations where people who are quite late in life, and still want to or have that desire to make those changes, because maybe it hadn't been presented to them that they could? 

AARON

Yeah. So the majority of people I interact with people that you mentioned, around our age, or, you know, younger people who are finding their way. But what I have realized with older folks, as well, is, as you grow in life, or you get to the later stages, I think the whole thing about money, it shifts away so much about that whole ‘dollar-or-cents’, you know, ‘I want to get rich, I want I want to do this and that.’ It shifts a bit away into the more philosophical stuff that we've been speaking about, things like, fulfillment, satisfaction, happiness. So well, I won't say that I am an expert on, you know, people who are like in their 50s, or 60s, and I absolutely haven't lived it myself. I would say that these principles of, you know, confronting where you're spending your time, thinking about, ‘Am I really doing things that are fulfilling to me? Am I doing the best for my family?’ I think that these would be absolutely applicable, no matter what stage of life you're in.

EZRA

If you were to, I guess, have a moment to get into a time machine and perhaps have a conversation with, I don't know, a younger, reckless, early-20s Aaron, and you'd bump into him - what would be some of the things that you would like to share with him?

AARON

Man, I think the first thing I would say is, you've got to be more humble. Don't think that you know it all, don't so ‘syok sendiri’. Because you absolutely don't know it all, right? Someday you'll be approaching 40 and realize how stupid you were, in doing some of the things you were doing. So I would encourage that younger guy to continue to learn, to be humble. And especially try to speak to people who are more experienced because you know, you can learn so much from people, and books, and people who have done it. And don't just think that you know it all.

EZRA

You know, I'm taking that message to your younger self to heart because this is what I'm trying to do, in speaking to persons like yourself to gain a better sense of this. And hopefully, a lot of this can be applicable to other people and their lives as well. I'd really like to thank you for taking the time to speak to me on this and I'm sure that we will be speaking on other topics in the future as well.

[music]

AARON

Thanks so much, Ezra. It has been absolute pleasure and honor.

OUTRO

That was Aaron Tang. He’s based here in Kuala Lumpur, where he serves as Country Manager at LUNO, Malaysia’s first and largest cryptocurrency exchange. To find out more, head over to LUNO.com — that’s spelt L-U-N-O.com. 

Check out the show notes which includes transcripts and supporting links including Aaron’s blog, Mr Stingy. 

And you know, it is awesome that so many of you are invigorated about unearthing some of your questions and concerns on all sorts of money matters. Let’s keep the conversation going: drop me an email on what questions you have about money at hello@ezrazaid.com

CREDITS 

The Ezra Zaid Project is made by me, Ezra Zaid. I host, produce and edit the show. 

Our team includes Ting Yen Min, Sabrina Yusof, Rahmah Pauzi, Melati Kamaruddin and Chun Saw.

A special shout out to Asper Goh; she’s been an intern on the project for the past few months and we wish her all the best.

This episode was mixed and mastered by Meelz.
Our theme music is by Breakmaster Cylinder featuring Rakin Suflan.
Follow us on social media: our handle is @projectezrazaid and you can find us on Instagram, Twitter and Facebook. Listen to previous episodes on ezrazaid.com or subscribe to us on Spotify, Apple Podcasts or however you listen to podcasts.

And until next time, stay safe and we’ll see you soon.