How to Lose Time and Money

When I sold my startup in 1998, I was suddenly faced with a new challenge: protecting my newfound wealth. I realized that it was just as easy to lose a fortune as it was to make one, but I was much more familiar with the latter path. To avoid the pitfalls, I began to study how fortunes are typically lost.

The common belief is that wealth is squandered through excessive spending, but the reality is that bad investments are often the culprit. Spending large sums of money triggers internal alarms, but investing seems rational, even when it's risky. This is why sellers often label expensive purchases as "investments."

To safeguard our finances, we must develop new instincts to recognize bad investments. These are not innate and can be counterintuitive, unlike the natural aversion to overspending that might be hardwired into us.

Similarly, I've come to understand that the most dangerous way to lose time is not through leisure but by doing 'fake work.' Activities like dealing with emails can consume our time without contributing to our productivity, all while giving the illusion of real work. Unlike leisure, which quickly sets off alarms of self-indulgence, fake work can pass unnoticed, wasting our time without any of the enjoyment.

The modern world has introduced complexities that make it easy to fall into traps that don't trigger our traditional alarms. Both with time and money, avoiding pleasure is no longer a sufficient strategy to protect ourselves from loss. We must learn to recognize and avoid the new, subtler dangers that don't necessarily bring us any joy.

The original article: https://paulgraham.com/selfindulgence.html