Hello there reader,

Happy summer season!

Not long ago - last year at the same time - the things I spent most of my money on were probably not that different from the way you managed yours. 

Online communities, a cozy desk chair, an extremely giga fast internet connection to ensure that there will be no lag when streaming the second season of whatever show was now most popular? Probably yes. Since our homes were the only physical reality we were experiencing, it was smart to make some upgrades to our fortresses - which were simultaneously our dungeons.

Now things are starting to recover. We can - or at least in most of the countries - go out!

And while now is a good time to spend the hard-earned cash you've saved during the cold winter and the months of isolation on outdoor experiences. The book I recently read provided a lot of insightful arguments on what not to spend your money on.

Curious to know the main thing we spend our money on?

It's this: Spending money on things only to showcase to others how much money you have. 

It sounds bizarre. Why do I want to cough cash for things only to make myself more likable and potentially look premium in the eyes of others? The answer is simple: to feel better.

We are social animals. Besides food, water, and shelter. We need social validation. We need reinforcements from others that we matter. 

And how do we go about doing this? Most commonly, we spend money to showcase our self-worth. We wear bright colors and get bigger homes to express ourselves and give a glimpse to others of how our bank accounts look. 

Male peacocks tirelessly show their feathers to exhibit their extravagances. We do not different. We add more luxuries to our lives and more bling on our wrists. The goal is the same: make ourselves more attractive in the social dynamics, hoping that this will lead to more future gains for us. Actually, this simple human characteristic is responsible for the fast growth of the now popular social media platforms.

But how is this habit of trying to prove to others that we matter by getting more expensive things is influencing the outflow of our money?

Well, let me tell you this, it's surely not makings things better.

And it's not only you and me. It's everyone.

As reported in the book The Psychology of Money by Morgan Housel:

"Singer Rihanna nearly went bankrupt after overspending and sued her financial advisor. The advisor responded: “Was it really necessary to tell her that if you spend money on things, you will end up with the things and not the money?”

The book The Psychology of Money is now part of my Thinkers Club membership. I've created a workbook based on a title that will help you re-think the way you approach spending.

• The Psychology of Money by Morgan Housel: Our behavior patterns prevent us from having good financial health. We accumulate debt and fail to meet our investment goals not because we don’t know what to do, but because we’re too greedy or deeply involved in social games where we compare ourselves to the people around us. To become better and smarter with your money, you don’t need to study new investment strategies. You need to examine how you behave with your money and make adjustments.

Become a Thinker: Unlock all of the book summaries on my site and get access to digital workbooks by becoming a Thinker: Join The Thinkers Club.

Interesting books I recently added to my reading list (and hopefully will read at some point):

• It's Not How Good You Are, It's How Good You Want To Be
  by Paul Arden: The book starts with this quote: "Nearly all rich and powerful people are not notably talented, educated, charming, or good-looking. They become rich and powerful by wanting to be rich and powerful." Even if you don't wish to dominate the world, you can still learn something from this. Create a vision and don't stop till you're there. This is your greatest weapon.
• Ten Ways to Destroy the Imagination of Your Child by Anthony M. Esolen: An advice manual for adults who don't want their children to become unimaginative office workers who only sit behind computers. What to do and what not to do when you're raising your child.
• The Psychopath Test by Jon Ronson: Here's a quote from the book worth thinking about: “I've always believed society to be a fundamentally rational thing, but what if it isn't? What if it is built on insanity?” This makes you stop and ask yourself: "How can you prove that you're sane?

Interesting words from books and around the web:

• Philocalist (noun): A lover of beauty. Someone who finds and appreciates beauty in all things.
• Silence (noun): The best answer to someone who doesn't value your words.
• Rasasvada (noun): The state of bliss in the absence of all thoughts. The setting of having removed all of the thoughts that have previously blocked one's path to enlightenment.

Born in 1533, Michel de Montaigne was one of the most significant philosophers of the French Renaissance. He was a breath of fresh air in the snobbish corridors of the academia of the 16th century. Lord of Montaigne, as he was also called, wrote many essays on a variety of topics and some of his views are still relative today.

Big idea: Question the information you consume:

The educational practices when Montaigne was alive were not that different from the way we teach our children today. We force students to learn through reading books, and we tell them that what teachers, writers, and intellectuals are saying is an absolute truth. We don't give the chance to our children to question the information we share with them. To have an open discussion about the possible flaws in the arguments. Montaigne believed that to truly learn, a student has to take the information and make it his own. Observe the shared material and have an open dialog with the teacher. This type of learning allows students to teach themselves on the presented facts.

From my desk:

• Where Do You See Yourself in 5 Years? A Guide To A Brighter Future: "There is no way of knowing where exactly we will be in the next 2, 3, 5, or 10 years. Heck, we can’t be sure what will happen in the next 60 minutes. We can presume, but we can’t know with certainty."

From around the web:

• How to write your Money Rules: While I don't agree with all the rules mentioned in this blog post, I do agree that setting rules on how to spend your cash is crucial. Check the post and create your own set of rules.
• An evolving list of 32 things I've learned in 32 years: "I was told on my multiple occasions it’s impossible to solely write about creative people, or that I’m not “cut out” for a career in the creative industry. Instead of taking their advice or so-called insights at face value, I tested the parameters. I went on to write hundreds of articles about the arts industry, and interviewed hundreds of creatives about their lives, and experiment with my own creative practice. Don’t let people tell you who you are or what you’re capable of."

Recency Bias

Recency bias is a cognitive bias where we fail to see the big picture. The mind is giving greater importance to the most recent events instead of checking the historical data.

This is a common flaw. We all experience this. What we consume today in the news and what we read in the books makes us more interested in these specific things. For example, if you read in the news that a plane has crashed, you'll be more conscious about flying even though statistically, plane crashes are really rare. Or, if you're running an e-commerce store, and if you're getting more sales today, you'll become more confident in what you're doing. The spike in sales can be due to pure luck - people sharing a specific item. But if you do not take the time to properly digest the information, you can make wrong conclusions.

To avoid making a suboptimal decision, take some time to consider the historical data. The big picture. Not just what recently happened.

I wanted to end this edition with a short poem I found recently.

Written more than 100 years ago, the Don't Quit poem:

Don't Quit

Thanks for reading!

Ivaylo Durmonski