I've been blogging for almost 4 years now--during that time, I've not always been the most productive blogger, but I've gone through phases where I was full of ideas and I have well over 100 draft posts in various stages of completion, some dating back to the first month I started this site. Below is a post I wrote in January 2006. I'm not sure why I never published it. At the time, I'd just signed a contract on an unfinished new-construction condo priced at over $300,000. My salary was $82,000. My net worth was about $256,000. It was definitely a turning point in my life, and I was thinking about the idea of worry:
Everyone worries about money, right? Well, yes and no. There are different kinds of worry. Poor people worry about money, for obvious reasons. Rich people also worry about money, in different ways. And so does almost everyone in between.
I'm trying to think back (without actually reading everything) about how much of this blog has been me "worrying" about money. I've talked about my concerns about retirement, I've anguished over what kind of home I could afford to buy, I've obsessed over saving money, interest rates, the stock market, and picking up change. But over these past 7 months or so, and even over the past few years, I have never really worried about money. I've had some anxious moments when I had a little cash flow crisis, and even one when my wallet was stolen in a foreign country and I temporarily had hardly any cash, but under all that, I have had a sense of security.
Why this blithe lack of concern? It's simple: I've had cash in the bank, and I've known, as well as it's possible to know, that my expenses were under control. Of course I sometimes wondered what I'd do if my home burned down or something, but hey, I have insurance. If I lost my job? Hey, I have a lot of contacts in my industry and a lot to offer as an employee. Sure, nothing in life is guaranteed, but beyond protecting yourself to a reasonable level, why lose sleep over it?
But the other day, I realized that I was worried about money in a way I haven't been in a really long time, if ever. I keep looking at bank balances, adding them up, and trying to make sure I haven't made some horrible mistake. I am pretty sure I will be fine, but there is this edge of uncertainty that makes me nervous. Quite a lot of my net worth has been in cash. I've already taken a big chunk out of that with the 10% deposit on my condo. Soon, I'll be paying another 10%, and a slew of closing costs including various taxes and attorney fees. And I'm doing all of this on my own, with no help, no safety net.
I have enough money for all these things right now, if I count my stock and mutual fund holdings. And I'll have a little more money over the coming months as I get my tax refunds and bonus, hopefully. And then I will have some bonds and CDs that I could cash in case of an emergency. According to my trusty spreadsheets, I will have at least 5 months worth of living expenses on hand after I close on my new place. But at first very little of it will be liquid.
I know I've been sort of spoiled-- this is nothing compared to the way I would feel if I had a lot of debt and had lost my job, etc. But I can't help it-- it makes me a little nervous to have comparatively little cash, especially since I know I'll be entering a phase where I won't have as much of a positive cash flow each month. If I don't have any expensive disasters and keep getting at least small raises at my job, I should be ok, but I won't have the same feeling of security for a few years to come. But still, I am trying not to lose any sleep over it!
OK, fast forward to 3 1/2 years later. There's been a housing bust and a massive stock market crash and unemployment is close to 10%, all part of an economic crisis unrivaled by anything since the Great Depression. Has my attitude towards worrying changed?
Fundamentally, no. Global crises aside, my life went on: I bought the condo without it being a total disaster and I love living there. I got a promotion and a couple of raises and bonuses. I even splurged on a big vacation, which is another long-overdue post in draft form! I kept contributing to my retirement funds and got my cash flow back under control after all the new home expenses. My net worth took a big dip, but it's still quite a bit higher than it was in January 2006.
I am not a blind optimist: I think a false sense of security is dangerous, and I certainly don't mean to sound smug. But I still feel like I am relatively well-positioned to live the way I want to live, or to make adjustments as needed in order to get by in a crisis. "Worry" is a flexible word-- if you read it as meaning "taking care of" or "thinking ahead about" my finances, then yes, I worry. But otherwise, I'm still sleeping pretty well. It's a good feeling, and one I hope I can hold onto for many years to come.