Do you ever wonder if your money is being wasted when you spend on other people?
Well here's the short answer: Yes.
And I'll explain to you why.
For three months I performed my own personal experiment -
To see where I would get the most returns
based on my spending towards other people and myself.
The first month I would spend more on myself.
Then the second month I would spend more on my relationship and family.
And for the third month, I focused on spending socially with friends and going out.
For simplicity, I categorized these expenses as the following:
Here are my observations from spending on each of the mentioned categories:
Self-Investment: This is money that is spent on yourself as an asset and building a business/brand.
Whether in the short or long run, these investments will bring you positive returns in the future.
If it improves your life, that’s self-investment.
Whether it's money spent on travelling, clothes, tools, nootropics, seminars, etc.
You are the best person to put your money into, hands down.
Needless to say, if you're smart with your money you won't regret most of your self-investments.
Relationship or Family: This is money spent towards your girlfriend or family (leave out the shitty relations).
Relationship and family spending is meant to cultivate a supportive give-and-take relationship between people who should be closest to you.
This spending includes trips, dates/outings, gifts, and favors.
This is a clear second place when it comes to spending money on people.
If you have a lucky lady in your life, she will give back to you by spending money on you and save you time doing menial daily tasks while you're busy doing other things.
Put money into your healthy family relationships as they "fit" more into your life.
This makes them more reliable in certain situations.
Plus I find them funner and there's an inherent "let's build each other" relationship.
Social: This is money spent on a night out with friends and acquaintances, going out to eat together, covering their tabs, and gifting. Ultimately to recieve value after you've given it.
I spent a good amount of money socially but the returns were incredibly minimal (regardless of sex).
I would only say that it’s not a waste if you’re using money to pick up on someone’s tab or give them a gift.
Don’t do the whole ‘buy everyone lunch’ thing, because nobody cares. No one cares.
Because if you’re not doing something to make one person feel special, that means you’re doing it for a lot of people.
If you’re doing it for a lot of people, no one is going to feel special.
There is no respect or feeling of obligation from them.
They assume it is completely from the kindness of your heart.
And if it is, that’s great, that’s the way it should be.
But if you’re looking for a return on your investment, that is not the way to go.
You’re largely just throwing away cash.
This is why I suggest you only have one or two social outings a week.
Because for the most part, it's a waste of time or money that could've been best spent on Self-Investment or on your Relationship and Family.
When you do choose to go out - it should all be for you. Spend for your enjoyment.
If you really think about it, spending socially buys you the opportunity to meet up again and spend more socially.
And that can be a complete waste of resources.
Why does this all matter? Simple.
Because ultimately, everything should return to you as a Self-Investment.
You want to always improve yourself and you want to have that social support can give you that edge to do so.
As per my experience, my returns are from best to worst in the following order:
- Family / Relationship
However, this might not be the same for you as it is for me.
So I suggest you dedicate three months to explore these three categories of "people" expenses to see where you get the best returns for your investments.
Then ask yourself:
Did you gain more influence or opportunity from investing into your personal relationships? Are you closer to achieving your personal goals thanks to "people" investing? Do these people give back value when you put in?