I almost made a completely idiotic financial decision the other day. I tell the entire story at Medium, but, in the shell of a nut:
I live in Hollywood. My daughter and ex-wife (who, thankfully, I get along super well with) live, in Los Angeles traffic, about 45 minutes away. Without traffic, it’s a 20-minute ride. I make this commute most days of the week, particularly during pandemic times.
Even though my kid is on the verge of the high school-to-college transition, I thought it might make sense to move back to the neighborhood where she lives. If I did this, however, it would have increased my rent by at least $1,000 a month. In fact, I was close to signing a lease that would have taken my rent from its current $1,342 to — I’m ashamed to disclose — $2,661 a month.
I pride myself on an insanely low cost of living. So I'm embarrassed to admit I was about to take on rent that would have been higher than all of my current monthly expenses combined.
I rationalized the decision like this. Without the commute, I would save money in vehicle-related expenses and increased productivity. After a couple days to sleep on it, I realized that, while alluringly intuitive, this thought trajectory makes little financial sense.
First, the amount of money I spend commuting pales in comparison to an additional $1,000 a month in rent. Second, I actually enjoy the commute. I get a lot done in the car that actually makes me more productive. This productivity triggers creative bursts that ultimately make more money.
The subsequent implications for my investment account are meaningful, if not profound.
I keep ample cash on hand because cash security makes me a better investor. Some might say I keep too
