Only enough to cover the next round of automatic bill payments. I keep everything else invested. You can always sell your investments if you need cash for emergencies.
But the traditional personal finance advice of the “emergency fund” is still reasonable advice for people just starting out, who don’t yet have a base of investments. You need to be able to cover unexpected expenses without going into debt.
How does your philosophy of happiness tie in with your financial advice and way of life?
The idea that material luxury, beyond having your basic needs met, has almost nothing to do with happiness is life-changing. It allows you to live equally happily on almost any level of spending, which obviously does wonders for your savings rate. But it also does wonders for your happiness, because as soon as you let go of the handles of the consumer treadmill, you are free to move on to activities that actually make your life better.
People would be much better off if they started getting excited about how much they can accomplish with the money they already earn, rather than fretting about how difficult things are in modern life. The key lies in optimizing spending — it is only after you do that, that additional income can be efficiently put to use.
Since you’ve started your blog, what are some of your favorite tips from readers?
Readers have introduced me to:
- low-carb eating through Mark’s Daily Apple and Tim Ferriss-style exercise, which made me healthier
- much lower cost mobile phone plans, such as the Republic Wireless $19 unlimited-everything smartphone plan and menu-based ones like Ting
- more efficient investing (William Bernstein’s The Four Pillars of Investing) and more about stock fundamentals and dividends
- philosophy (Stoicism, Buddhism, and being happy in general). Books included Guide to the Good Life, The Art of Stoic Joy, and the Art of Happiness with the Dalai Lama
Is there anything else I didn’t ask you that you’d like to say?
The one thing that nobody has asked me is why the blog exists and how I think it might accomplish the mission.
It’s really a way of re-teaching some of the greatest past wisdom of human civilization — stuff that has been lost in the consumer rush of the latest decades. Sure, it’s lots of fun to become wealthy and quit your job and be free to do whatever you like. But if we can re-learn these lessons about what happiness really means, we will all be a lot richer and healthier for it.
However, this mission involves changing the culture of the whole rich world. So we need a financial superhero to function as the leader of the movement, and an unstoppable cult-like and ever-growing body of devotees to share it. So far, so good.