Let me tell you a story about reusable rockets.

Since the 1960s, most parts of rockets have been discarded as they’re launching into space. Typically, only a small module — containing the humans or cargo — made it to orbit. Most parts were detached during ascent, either crashing into the sea or burning up in the atmosphere.

It’s as if every time you drove cross-country to visit your parents, you disposed of 99% of your car. Why? Engineers hadn’t figured out a cost-effective way to make reusable rockets.

SpaceX solved this.

Today, rockets come back to Earth like a joey returning to Mama Kangaroo’s pouch. Although some minor parts are still discarded, the reusable rockets save costs by up to 70%. Meanwhile, SpaceX has become one of the 10 most valuable companies, while Elon Musk has become the richest man on Earth.

Physics, math and rocket science can solve mind-boggling problems.

Are There Any Fully Solved Personal Finance Problems?

A formal science like math allows problems to be completely solved.

However, there aren’t actually any 100%-solved personal finance problems. In the world of money, there are no universal laws like gravity — which was true long before Newton discovered it, and remains true for scientists calculating the trajectory of rockets today.

Why?

Things change, the market reacts, and personal finance is tied to human behavior.

For example, even if you discovered some mysterious crypto trading technique (“Bankers HATE him!”) that allowed you to print money, the other players in the market would eventually figure it out and compete with you. Your edge would diminish over time, and eventually you’d need a new solution.

But wait, assuming we don’t expect perfection, aren’t there personal finance solutions that work most of the time?

Yes. I like to call these 90%-solved money problems.

Many Money Problems Are 90% Solved

Morgan Housel once wrote that 90% of personal finance is:

• Live below your means.
• Invest, diversified with a 10 year+ horizon.
• Expect and accept volatility.

There are other well-respected personal finance principles:

• Buy low-cost index funds / ETFs. Don’t choose individual stocks.
• Pay yourself first i.e. with your monthly income, save and invest before spending on anything else.
• Build a 6-12 month emergency fund.
• Get reasonably-priced insurance.
• Increase your income via promotions, switching jobs or starting a side hustle.

I’m not being precise, so let’s assume these would solve 90% of all money problems. Statistically, most people who practice all these pieces of advice would do well.

But if that’s such good advice, why do most of us adherents still feel like we’re still struggling with money?

I can think of a few reasons:

Sometimes It’s Just Bad Luck

Let’s call this out first. Not everyone who’s rich is smart and hardworking. Not everyone who’s struggling is dumb and lazy. Sometimes it’s just luck: A medical emergency at a critical moment. Getting robbed by a skilled thief. Being born into the wrong time, country or family.

You can’t do much about it.

Okay, maybe I could try to move to a safer city with more job opportunities. Or if I’m super ambitious, I could run for elections and try to revitalize the economy.

But I can’t change the color of my skin. Or when the stock market decides to crash.

Some things I have to accept.

With that being said, here are five other reasons why money problems never seem to get solved. And the good news: these are things you can actually do something about.

1. Nobody Wants To Get Rich Slowly

Everyone wants to get rich fast.

It’s usually portrayed as a bad thing, but maybe trying to get rich quick is default human nature.

Why? Our time on Earth is limited. You want to live your life fully. You want to climb the Stairs of Santorini when you’re still fit and look reasonably hot in pictures. Not travel Europe in a wheelchair when you’re 90.

However, we also know trying to get rich quick leads to poor decisions. Not a day goes by without me reading the news about some big investment scam.

So perhaps the question is: at what point does the desire to get rich change from something that drives progress to something dangerous?

I think it’s when it causes you to take unnecessary risks.

As a guardrail, maybe we should borrow the “hurdle rate” concept from corporate finance. Take an honest look at your history of investing time and money. If you can’t even beat benchmark returns (e.g. a broad market 60/40 index portfolio) with your efforts, then why bother? Just put most of your money into the 90%-solved solution.

Understand the very human desire to improve your life. And then look out for when it causes you to start making bad decisions. No need to rush.

2. Everyone Wants To Be the Outlier

“If you can’t even beat the benchmark (e.g. a broad market 60/40 index portfolio) with your efforts, then why bother?”

My idealistic 30-year-old self would have immediately fought back with:

• Because “life is a daring adventure, or nothing at all.”
• Because my past failures don’t determine my future successes.
• Why be like everyone else who’ll retire barely-comfortable after 30 years of corporate slavery? Even if there’s a 0.001% chance to build generational wealth, I’m going for it.

Back to human nature: Dr. Ali Binazir once estimated the probability of you being born to be 1 in 10^^2,640,000. Like winning the lottery 320,000 times in a row. Your life is already a miracle. It’s natural to think you can be an outlier.

When it comes to money though, understand you’re comparing yourself to all the other miracle babies — all the other outliers. Among so many others, it’s improbable you’re gonna be the exception.

Here’s a balanced approach: I like to think of 90%-solutions as building the foundation to launch your moonshots from. Launch from a position of financial strength, not survival.

Even if your moonshots to build generational wealth fail (as they likely will), you’ll still be okay. Keep yourself afloat, so you can attempt to ride the next wave.

Wisdom is understanding everyone is fighting similar battles, and spectacular outcomes aren’t guaranteed. By surviving and trying longer, your odds get better.

3. You Will Always Desire More

You’ll get used to your level of wealth and then you’ll want more.

When you’re 23, you think you’ll get a TAG Heuer Carrera one day and it’ll be enough. But after you buy your TAG, your dealer starts educating you about Rolex Submariners.

Worth remembering that super-wealthy people also struggle with this. And actually, all the money problems we discuss today afflict both rich and poor alike.

A few things that’ll help in the lifelong battle for satisfaction:

• Practice gratitude for the blessings you already have.
• Get better at the art of comparison (e.g. instead of just comparing yourself to people richer than you, compare to your younger self. Appreciate how much you’ve grown.)
• Focus on the things that money can’t buy: health, love, and your relationship with the Divine.
  
  

4. The Things That Make You Good with Money Can Also Make You Bad

In the crypto world, there’s a concept called the 4-year cycle. Whether you believe it’ll continue or not, historically, Bitcoin has reached a new high every 4 years: 2013, 2017, 2021 and 2025.

On Crypto Twitter you’ll hear amazing stories of people getting rich quick. In a bear market like now though, you’ll hear the flip side: people getting rich, then losing it all.

Consider the story of James Wynn. He reportedly turned $7.6K into $25 million on a memecoin in 2023. Traded it up (on leverage) to $100 million in unrealized profits, but then got liquidated — leaving only $900 in his account.

Two sides of the same coin. The behaviors which allow one to grow amazingly rich in a short period of time are also behaviors which may lead one to lose all their money.

(It’s also why people say making money and keeping money are two different skills.)

That’s an extreme example. Closer to home, I’ve done my fair share of investing in risky crypto coins over the years. Just did the math: if I had ignored everything else and put it all into Bitcoin, I could have paid off my mortgage by now.

How do you come to terms with past mistakes? It’s not about looking back and beating yourself up over poor choices. It’s about recognizing your strengths and weaknesses. Understanding that your strengths also have a flip side, correlated with a weakness. Then using that knowledge to make better decisions in the future.

5. Time Changes Everything — Including Your Money Problems

You go through different phases in life. What you want at 39 is different from what you want at 29. You used to want to travel the world, now you want your kids to have the best daycare.

There’ll always be a new challenge to face. Another peak to conquer.

Guess what — you’ll still have problems even if you have too much money. Consider what former U.S. President Richard Nixon once said:

“To me, the unhappiest people of the world are those in the watering places, the international watering places like… the south coast of France… Going to parties… Drinking too much, talking too much, thinking too little. Retired. No purpose.”

Your money problems won’t ever get 100% solved and that’s okay.

Some final thoughts to help your journey through the phases of life:

• Solving money problems to the 90% level is still a great foundation to build your life on. Don’t underestimate it — it’s usually good enough.
• We’re not robots. Our humanity also prevents us from solving money problems completely. By understanding our irrational behaviors, we can build healthier relationships with money. We can’t fix the past, but we can get better for the future.
• You will always want more. You don’t have to stop reaching for the sky. Just pull back before you fly too close to the sun.
  
  

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Pic from Pexels: SpaceX