Personal Finance FAQ

Don’t Think You Can Outearn Your Stupidity

In the main it will be found that a power over a man’s [salary] is a power over his will.
–Alexander Hamilton

In the mid-2000s, if you asked most any upwardly mobile young professional to project his future salary, you’d have received an answer that was the start-up’s answer to the hockey stick. Just like real estate, salaries were supposed to go up and up and up.

Awash mentally in future cash, these optimists went and bought new cars, big houses, and developed the dream man caves, mortgaging their future selves to a life of toil so that the present selves could enjoy the pleasures of the day. The amygdala, our monkey brain, won again. In our minds is a constant battle between the lesser-evolved sections of our brains, which want immediate gratification and make us freeze in stressful sections, and the more developed sections of our brains, the frontal lobe, which is where our rational thinking occurs, and we are able to recognize the future consequences of current actions.

With immediate gratification (“look at my man cave!”) and delayed pain – the older version of yourself delaying a retirement that seems a long, long, long way away anyway, our Monkey Brain gets to belly up to the bar and get a double shot of dopamine.

How do we rationalize these decisions? We do so by accounting for the monthly payments in our mental budgets and counting on those future raises. Instead of saving up for our purchases and buying cars with cash and making large down payments for homes, we get them now and count on our future selves to provide us with the wiggle room to have more discretionary income or to pay off those loans. Words like “need” replace “want” and “desire” to justify the purchases. We turn on our rationalization engines and run them overtime. We disregard potential negative outcomes such as layoffs, disability, or medical issues as things which happen to other people and blithely explain away the risks.

In doing so, we consign our future selves to account for our excesses of today. Your future self would like to smack you around; that nice car probably wasn’t really worth it, he’ll tell you. Meanwhile, repo men all over probably owe Monkey Brains thank you cards. They should also send bananas.


Jason Hull, CFP®, was the co-founder of Broadtree Partners, a firm that acquires $1-5MM EBITDA companies. He also was the co-founder of open source search consultancy OpenSource Connections, a premier Solr and ElasticSearch firm. He and his wife FIREd (financial independence retire early) at 46 and 45, respectively. He has a BS from the United States Military Academy at West Point and a MBA from the University of Virginia Darden Graduate School of Business.

You can read more about him in the About Page.

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