Expanding my economic well-being without working too hard

If you work in the technology world (as a designer, developer, engineer, pm, etc), it’s easier than ever to become someone with wealth. This also applies to you if you have internet on your smartphone or laptop and know how to work remotely.

What most haven’t figured out yet, is how to become wealthy without working too hard.

Let's define wealth

Most people measure wealth as the sum of all the bank accounts and assets. Hence, maximising wealth becomes just a matter of maximising the total amount of currency you have.

This is the "Greedy capitalist formula":

We know life is very multidimensional, but to some extent, we all end up using that formula to estimate what's better.

We know it's wrong but we still use it for many choices because it's simple and universal. It's also easy to justify to our peers: I did that because of this gain (or avoided loss). Humans are not very rational, and we need to phrase what we do to others to make sense of our own decisions. Without wording our thinking to someone else, our brains don't really function. This is also why almost all forms of psychology work: because talking to others works.

So, what should we optimise instead?

My personal mantra is: “try to get 80% of the reward with 20% of the work”. I’m not interested in giving 100% to get 100%: that is an overcrowded game.

So instead of "make more money", I look for more free time, more agency, more future freedom. That often means looking for more remunerative opportunities and quitting a Contract to jump on a better paid one. But it also means quitting a job because that company does too many meetings and wants me on the screen for too many hours. I want to be on the screen 2 hours a day and make 80% of the salary I could make.

Two years ago, when my son was born I started to fully apply this philosophy to every aspect of my life. I was divorced, but I had a newborn son that I wanted to spend as much time with as possible, give him a life full of opportunities and restructure my own life.

One of the places where I began to diversify my income, time and efforts was in financial markets.

While researching and studying at Platzi, I came across the Daniel Marin team (Pro Trading Skills) and was hooked on their unique approach to evaluating and trading the markets.

Growth is easy when you have a playbook

I learned from Daniel Marin to put in the most effort on learning about trading and investment and then to going war in the market using the playbook.

Now It’s grown the fastest for me. My portfolio has grown 3x in one of the most volatile years in the financial markets. And this, taking into account that I operate with a very conservative profile. For someone who spends only a few hours a day on this and who lives in the country with the highest inflation in the world. Overcoming the time barrier and geographical obstacles is a giant victory in itself.

A lot of us are going to die of unpredictable diseases, some of us young. Really, don't spend your life getting fitter, healthier, more productive. We are all going to die, and Earth will explode in the Sun in a few billion years: please, enjoy some now.

I'm advocating a sort of Moderate Hedonism. Work and self-actualisation can be rewarding and meaningful, but looking at the sea from a hammock and drinking too much wine with friends three times a week is also a completely respectable way of waiting for the gravitational swallowing of the planet.

Compound

The monetary system is really a Spreadsheet that keeps track of the hours worked by everybody.

If you invest €100 in some asset that returns 5% per year, after the first year you will have €105. The following year you won't have €110, but €110.25. That tiny difference is the real way to get rich. People don't take that tiny difference seriously enough. In 10 years that tiny difference will make all the difference.

In general, if you have P amount of money, and invest in something that returns r every year, after n years you will have:

That's an exponential function. People that get wealthy take a sit on the exponential function ride, while regular people lose to inflation. You don't need to do much, nor to be clever. Just take a sit on the exponential ride.

Note: If you take the previous formula, and make it continuously compounding, you get what finance books call the Time Value of Money:

Money is literally defined as exponential so, don't sit on your linear ass. Learn in deep here.

Stay focused & inspired

When we turn on mechanisms to generate parallel income that take little of our time, are in constant motion and generate a compounding effect, we will literally be creating wealth while we sleep.