Review: The Art of Spending Money

 The Art of Spending Money is a really verbose book that takes a long time to tell you what it wants to say. Normally, I'd be very annoyed at something like this, but I read it on a transatlantic flight and found that the style it was written in was so conversational and easy to read that I didn't mind.

The book makes a few points:

1. You should avoid spending money to try to buy social status. That's because it's counter-productive --- first of all, people you like don't care how rich you are. Secondly, any status you can buy is by definition temporary.

2. Don't think of saving money as sacrificing something you want. Think of it as buying independence. By keeping your lifestyle costs low, you're effectively buying independence from the capriciousness of your boss, the economy, and even your future.

3. Utility is worth paying for. But you need to understand what utility you want. He describes author David Trips taking a trip to Africa where they stayed at a mix of high end hotels and lower end camps.

After the trip Brooks and his family realized they enjoyed the lower-end homely camps more than the nice hotels. At the cheap camps they got to socialize with locals and meet other guests. His kids played soccer with the staff. At the expensive hotels they were isolated in cocoons of sterile safety. That was the entire allure of the nice hotels—“stay here and you will hardly notice any difference between Midtown Manhattan and the Serengeti.” But it wasn’t at all what his family actually wanted. The pursuit of luxury and perhaps status detracted from the utility of the trip. (kindle loc 1193)

4. When you buy experiences, it's not a matter of buying expensive travel or exotic locations. It's really about building memories.

 People love to gawk at the power of compounding when investing their money. It’s much harder to think about the value of compounding memories you get by trading money for time, but the results can be just as incredible. (kindle loc 1379)

5. Try spending more as an experiment. If the extra expenditure brings you joy, then you know you've uncovered a taste and it's worth future spending at that level. If not, then you'll know you aren't missing anything by paying more in the future. (I will note that this can quickly lead to a hedonistic treadmill that makes your lifestyle super expensive --- one item he mentions is private jet travel!)

6. If you make a big deal of having money and succeed in being rich, you will spoil your kids. The unspoiled rich kids he encounters are the ones where the parents (for whatever reason) don't treat people as if the money they have matter.

Warren Buffett once said that he often hears rich people talk about how dangerous a welfare society is, creating a generation of moochers reliant on food stamps and unemployment benefits. But “these same people are leaving their kids a lifetime supply of food stamps and beyond,” he said. “Instead of having a welfare officer, they have a trust fund officer. And instead of having food stamps, they have stocks and bonds that pay dividends.” (kindle loc 2125)

Ok, I've summarized the book for you. Yes, that's all the content that was in the book!