Habit stacking is one of my goals this year. I've been so focused on improving my software engineering skills, staying fit, and networking. But I realized I have completely ignored one habit: learning how money works.
Software engineering is a lucrative career but that doesn't mean we are automatically good with money.
Keeping money is a completely different skill from making money.
Because of this, I've decided to read one chapter a day from the book "The Psychology of Money" and these are the lessons I think every software engineer should hear.
hugeSalary !== beingWealthy
Staying wealthy is a skill in itself. Saving consistently and letting compounding do the work is the way to go. I know, revolutionary. But that's the point. It's boring, and it works.
"Wealth is what we don't see."
Many of us, myself included, dream of landing a FAANG-level salary. But we also have to check our lifestyle inflation. Huge salaries don't matter if you keep spending more "just because" you needed a bigger apartment, a new car, or more expensive habits.
Never Underestimate the Power of Compounding
Maybe some of you shrugged off my initial remark on compounding. Honestly, I wouldn't blame you for it. I also underestimated compounding but the more I read about it, the more I am fascinated by its power to change people's lives.
We software engineers stack skills almost every single day to keep up with the latest tech. Each day, we improve and that compounds. It's the same thing with money.
What's stopping us from applying that same mindset to our finances?
Nothing.
Freedom Is the End Goal
As I read through the book, one theme keeps lingering inside my head and that's freedom. When you have something saved, you have options.
"Controlling your time is the highest dividend money pays."
The goal is not just to be rich but to be able to use your money to save your ultimate currency: your time. Then to be able to spend it on things that matter the most is one of the most beautiful gifts of life.
I love the tech industry but I also have plans outside of it and I'm sure many of us are not planning to code through our golden years.
We're All on Different Branches
Someone you know got hired by Google at 18 years old. Someone else got promoted while you've been waiting for months. Plus many other stories that make you feel small.
But these are stories you can't control. Timing exists, luck exists, risk exists, factors you don't even have to power to change exists. These are real life scenarios and each of them happens differently for each of us.
Everyone has different circumstances.
We are all committing to our own Git branches on the main timeline. If you stop and inspect other people's branches, you'll just end up wasting time that could have been used for growing yours.
Looking at other people's finances is inviting comparison, envy, and elitism. But if we focus on our own, we'll spend less time feeling bitter and more time getting better.
Work, Work, Work
All of these will be wasted if you are inconsistent. Investing in your engineering skills while investing your money should grow together.
For this to work, you have to do the work.
Sounds easy on paper but it's definitely hard to do. There will be days when your body feels sluggish that you want to just lie down and rest. Learn to maneuver around that feeling to stay consistent.
It may not be what you'd hoped for that day, but at least you did the bare minimum. There's still progress.
Compounding skills and investments only works if you stay in the game long enough.
Some Remarks
What I love most about this book is that it didn't tell what to invest in. It taught me how to think about money. It taught me how little my knowledge is when compared to the world's history of wealth and economics.
I also believe the lessons can be applied to every level of the tech career ladder. That's why I was so excited to make it the first topic for my first solo blog post on this platform.
I am still learning and applying the lessons every day. Maybe five or ten years from now, I'll come back and read this post I wrote at 2:00 AM. I hope that by then, all the small, consistent efforts I made in my career and finances have compounded into a life I'm proud of.