Would You Trade Places with Warren Buffett?

This isn’t another one about Buffett’s wisdom on investing or life. It is about the relationship between time, health and money using Buffett’s wealth and age as clickbait. The author begins with “Would you rather have $0 and be 20 years old, or have $100 billion and be 90? Most people respond to this hypothetical with a resounding “Of course not, there’s no amount of money I would take to fast-forward to being 90 years old.””

Whilst we are in the business of helping our clients create wealth, this answer helps put that in perspective. Wealth as a means to live a life full of experiences and fulfilment is what the author articulates beautifully.

“There’s a popular movement called F.I.R.E. (Financial Independence, Retire Early), where followers are devoted to living as frugally as possible so that they can retire as early as possible. While I agree with a lot of the merits of F.I.R.E. (namely the F.I. part), I disagree with the R.E. part. Retiring 10 years early at the expense of a considerable portion of one of the most valuable periods of life (your 20s/30s) seems absurd.
For one, what is 10 years in the grand scheme of your life? On the back end, the last 10 years are almost negligible (besides, you don’t know if you’re going to live to 90 or 100 anyways). But on the front end, they’re considerably more valuable.
Secondly, work can (and should) be a large part of what drives fulfillment. Progress with whatever we’re pursuing (whether we call it work or not) is one of the key drivers of happiness, so we shouldn’t discount the value of work and its impact on our overall well-being.

Would you give up 10 years on the tail end of your life if it meant that you would have a more fulfilling 20s/30s? I think most of us would take that rather than the opposite —  optimizing solely for wealth early-on to get an extra 10 years of retirement at the end.”

Buffett and Munger are perhaps the best example of deriving fulfilment from their work well into their 90s.
He then ties health, time and money together:
“Certain experiences that require peak physical health might only be possible in the 20s and 30s phase. For example, say you want to run your fastest marathon, or you’re like these two friends, Phil and Carter, and you want to journey from Beijing to Barcelona by bike. Sure, no one needs to do these things, but they’re experiences that would be incredibly enriching and novel.

And sometimes, physical health isn’t the constraint. If you have children, they will only live with you for 18 years of their lives, and before you know it, they’re gone. Any experiences you want to have with your kids, you have a limited time window to do those things. So, it makes sense that at this phase (the roughly 20 year period where you have children at home), most people would find the greatest fulfillment by optimizing for time spent with their kids — earning those experience points while that window exists.

A bonus of having richer experiences earlier in life is that you not only get experience points, but these early experiences pay “memory dividends” in the value of the stories they create — stories that can be retold time and time again.

Experiences yield dividends because we humans have memory. We don’t start every day with a blank brain… We wake up every morning preloaded with a bunch of memories that we can access at any time.

When you add in this concept of a memory dividend to the net fulfillment equation, something becomes clear: it pays to invest in experiences early.
Compounding works not only with money, but also with experiences.”

The author concludes with some brilliant graphic illustrations on why ‘Net Fulfilment’ over ‘Net Worth’ is a better pursuit in life. Worth clicking on the link just for that.

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Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.