There are so many different temperaments and circumstances among people that I don’t think it makes sense to take any one financial strategy and hold it up as the one, true way.
The investments that are available to you are also specific to your country, its laws and institutions, and the time period in which you’re alive. Trying to look at strategy philosophically, it’s important to consider this, because what constitutes a specific “investment” is never truly universal.
But one thing I do see is that people are frequently a key source of their own problems. People also limit themselves to what their culture defines as good or worthwhile, sometimes with extremely detrimental affects.
I finally ordered a book on Ecology the other day, because I’ve seen several analogues between ecology and life choices, and realized it really was time I studied some of that. Take employment, for example: different jobs, careers, and types of employment occupy different niches in the overall landscape. We might think justly that fraud is objectively wrong, but it’s important to realize that people do it because there is money to be made from fraud, and it occupies a particular niche in the economy. Similarly, parasites feed off of other organisms, so while the ecosystem could never be dominated by parasites (in which case they would lack the resources to survive in the first place), they are nonetheless a part of the ecosystem because there is a place for them. I suspect the comparison breaks down at a certain point, but I think there is merit to the concept of “economic niche” which could be valuable to understand.
This applies to strategy, too, I believe. Because of the social pressure for both high-paying careers and the ownership of standalone houses, a large number of people expend a tremendous amount of effort trying to secure these things, which consequently raises the expense in both education and cost, respectively. But these things are only niches within the broader economic categories of “sources of income” and “places to live”. There are alternatives, and they are far less competitive, but I think it takes some creativity and a willingness to go against the herd to secure them. Humans are adaptable, and our anthropological history is a solid witness to this.
While you could never say, “You should never buy a new car” – which would result in even used cars eventually not existing [ecosystems!] – it’s important to understand the behavior of buying a new car as being one of many decisions within a spectrum of transportation options. I don’t personally think there is anything wrong with buying a new car, but my strategy has been to learn how to work on cars so I can avoid the expense of buying a new one. Which is not to say that my strategy doesn’t have a cost (blood, sweat, and tears on the garage floor), but it is one of many approaches that can be used to avoid the steep economic costs of new cars, which are otherwise held in high social regard (some clever marketer must have coined the term “new car smell”). Alternatively, you have to find a way to maximize your income to be able to afford such things, which for many people simply isn’t a viable strategy, based on their interests, aptitudes, education, etc.
If you don’t have the money for a new car, don’t have the money to maintain an old car, don’t have the opportunities to learn how to work on a car, or the physical ability to do so, there’s another strategy: find ways to significantly reduce your car use, which generally allows the car to last longer with fewer repairs. There are always options. But again, the struggle humans face is mostly a social struggle.
The job market, quite amazingly, affords an awful lot of full-time jobs, but it’s also pretty narrow in its focus on careers. I watched a YouTube video the other day about China’s 9-9-6 work pattern, and it was pretty grim. It featured a clip from a movie where two guys are talking and one explains things using an illustration about a movie theater. One person stands up, which causes others to have to stand up, and by the end, the whole theater is standing up. They still get to experience the exact same movie as before [life], but now they all have to stand [work a lot harder]. The description was meant to explain how economic competition tends to wipe out its own gains. It’s like college degrees: once it was “decided” that a college degree was the path to a good, middle-class life, it became recommended to everyone wholesale, but then the value of having a degree was largely wiped out, and you have no shortage of highly-educated people with degrees who earn very little. I’ve long been a fan of Thoreau in this respect: he says something along the lines of, rather than search for ways to convince people to buy my baskets, I sought how I should avoid needing to sell them in the first place.
So…yeah. The reason why the “normal” life is so expensive is because people insist on doing things the same way everybody else does. Maybe you’re an obsessed hyper-achiever and can pull that off and enjoy all the accolades that come with it, but again, everyone has different temperaments and circumstances, and that changes your possibilities immensely.
If you ask the question “Why are houses so expensive?” there might be a dozen answers, but I honestly think the most important answer is “People keep buying them”. A large majority of people think houses are investments that you can’t lose on, which perpetuates this belief among others. In a sense, it becomes a self-fulfilling prophecy, but an increasingly inaccessible option, which takes more and more of a person’s income, until you have people paying 50% of their incomes just to somehow, hopefully, experience the gains in the future. It is, in my opinion, a house of cards, though there will be a lot of winners in the interim who experience token gains, which prop up the mythos, and good if that is you, but again, different temperaments, different circumstances. [It’s also why I would buy a small house if I were to buy a house at all, but that’s a longer story. It doesn’t come with the same gains, but in my opinion, gains are not why you should buy a house]
For me, personally, I find some very compelling arguments for generalization over specialization on the income front. However, I’ve kind of had to backtrack on this and realize that just because there are compelling reasons for it doesn’t mean it’s the path that God has called me to. In fact, looking to get into cyber security, it seems very much that this is a specialist field (incidentally, built on top of generalist IT knowledge). There are far fewer jobs in cyber security than in software, which doesn’t sit well with me, but at the higher levels of experience it pays incredibly well. As such, it might not necessarily be as reliable, but if you can take advantage of even just 10-15 years at those income levels, it can actually work out quite well income-wise. But don’t ever neglect your emergency fund.
I’m sure I’ll have more thoughts on all of this once I start reading the book, but I was kind of excited to share a few thoughts beforehand, too. I’m rather curious to see what I learn from it, even though I’ve never been particularly interested in biology or nature.