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The hardest financial skill is getting the goalpost to stop moving.

Morgan Housel

Do you know what social class is the largest?

It’s the upper middle class.

It stretches from the rich, to the richer, to the richest.

Yet everyone in this group thinks they are upper middle class.

People who are classified as Ultra High Net-Worth have at least 30 million in investable assets.

They will say, with a straight face, that they are not like the billionaires.

Now those are the truly rich, they declare.

This is not to impeach the sensibilities of those with money.

It reflects the old saying that 一山还有一山高. For every mountain, there is one that is higher.

You will never be satisfied

Hedonic adaptation is the psychological term that describes how we quickly return to a baseline of happiness after experiencing either positive or negative events.

It gives us resilience.

But it also makes us pursue ever more.

Sometimes this is good.

The pursuit of more can make us work harder to achieve a faster 2.4km timing or a new personal best in weightlifting.

But when we push too hard, we injure ourselves.

The same happens with careers, incomes, and lives.

The pursuit of more can lead to progression in our career.

But taken too far, it will result in burnout, unfulfilment, and golden handcuffs (which make us worse investors).

Spending on new luxuries quickly turns them into necessities.

I have experienced this myself.

Paying for someone to clean the house.

Flying full-service instead of budget.

Taking a cab instead of the MRT.

All are steps on the hedonic treadmill.

The time-value audit

To figure out if something is worth increasing your spending on, use the time-value audit.

When we commit to a major purchase, we will need to work longer to reach our retirement goals.

A simple example might be car ownership.

Suppose owning a car costs 200k more than the equivalent cost of public transport.

If you earned 100k a year, would you be willing to work for an extra 2 years to own a car?

Or would you prefer to retire 2 years earlier?

The answer can shift our mindset away from “can we afford it” to “am I willing to trade my freedom for it?”

When we say “no”, we have found our enough.