My Rich Nerd,

A 23-year-old photographer came to me making around $20,000 a month after taxes and business expenses, with $260,000 sitting in a high-yield savings account. “I don’t know what to do with it,” he said. His personal expenses run about $5,000 a month, so the savings keep growing. He already has $70,000 invested, split between a solo 401(k) and a brokerage account. On the liabilities side, he has a $4,000 car loan and a $700,000 mortgage.

The Patch

Some people are comfortable carrying debt. The older I get, the more peace I find in being debt-free, so I floated the idea of paying off his $4,000 car loan, which he could comfortably clear. We discussed wiping it out while keeping at least $50,000 for emergencies, enough to cover ten months of his current spending. We normally recommend keeping six months of emergency savings, but he didn’t feel at ease and needed more (there is no one-size-fits-all approach to personal finance). With the remaining cash, we discussed putting roughly $100,000 toward his mortgage and $100,000 into investments, adjusting those amounts for home renovations and any other upcoming cash needs.

The Lessons

Earning more money doesn’t automatically make you more comfortable managing it. Sometimes it just gives you a bigger number to worry about. His biggest hesitation was investing a lump sum at the wrong time. What if he put it all in right before the market dropped? I told him what I’ll tell you: you can’t count on timing the market perfectly. In Schwab’s hypothetical 2005–2024 comparison, investing immediately each year beat spreading purchases throughout the year.

Whether you have $2,600 or $260,000, ask yourself: How much is for emergencies, how much is for upcoming expenses, and how much can I commit to long-term goals? Give every dollar a purpose.

There’s another lesson here that has nothing to do with picking investments. He started shooting real estate properties as a junior in college and built a successful business in Boston around something he already loved: photography. When I asked whether he was having fun in life, he told me most of his fun comes from shooting, managing the business, and putting clients on his calendar. The actual work makes him happy. That stood out to me as much as the $20,000 a month.

We spend so much time talking about having enough money to stop working. It’s also worth asking what kind of work you’d be happy to keep doing. This guy found a connection between something he enjoys, a skill he’s developed, and a service people pay for. Pay attention to where those three things overlap in your own life. Building wealth is a lot more enjoyable when you like how you’re earning it.

Thanks,

Imran