Many years ago, my friends and I used to joke that the Senior Manager position where we worked was the perfect job.

High enough to get great benefits. Low enough to not have real accountability.

Of course, it was said in jest by a couple of boys who’d just started work. An oversimplification.

On the other hand, almost two decades later, I can’t help wondering if there was some wisdom in what we were thinking.

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In astronomy, there’s a concept known as the “Goldilocks Zone.” (Remember Goldilocks and the three bears? She eats all of Baby Bear’s porridge because it’s not too hot, not too cold — just right.)

Similarly, the Goldilocks Zone describes “just right” conditions that allows life to thrive. Our planet is a Goldilocks planet because it’s just the right distance from the sun. Too close, and it’d be too hot for anything to survive. Too far, and it’d be a lifeless freezer.

I like to think of this principle as the Sweet Spot.

Some applications of the Sweet Spot in money and life:

Getting Motivated When You’re Not

Psychologists have long known that tasks in the sweet spot of challenging are best for motivation.

Bestselling author James Clear describes this perfectly:

“If you love tennis and try to play a serious match against a four-year-old, you will quickly become bored. It’s too easy. You’ll win every point.

In contrast, if you play a professional tennis player like Roger Federer or Serena Williams, you will quickly lose motivation.”

If you’re feeling demotivated, is it because whatever you’re doing is too easy — and you need a bigger challenge?

Or is it too difficult — and you need more guidance?

Finding the Sweet Spot at Work Promotions

As someone who sometimes feels overwhelmed at work, I often wonder about the Peter Principle:

“In a hierarchy, every employee tends to rise to their level of incompetence.”

In an ideal world, you’d achieve success in your role, get promoted, show further success, then keep moving upwards.

In the real world, perhaps there’s a ceiling to everyone’s abilities. Some jobs are too far beyond the sweet spot. They’d make you miserable.

Not a popular thing to say. But true.

Extreme example: Consider the lifestyle gurus who talk shit about people working regular 9-5 jobs. Great for stirring up attention but also bad advice. Obviously not everyone is cut out to be an entrepreneur. Or a CEO.

This doesn’t mean you have to be stagnant or stuck in the same job for life. (Change happens anyway — whether you ask for it or not.)

There’s a stereotype that men apply for promotions even before they’re ready. Meanwhile, women get promoted slower because they want to feel 100% ready before trying.

Perhaps the sweet spot is somewhere in the middle.

Calculating the Cost of Making More Money

Recently, I was at lunch with someone influential who’s 13 years older. We talked about his earlier years and the best job he ever had.

Unsurprising words that showed up: Flexibility. Travel. Autonomy. Friends.

Surprising words: “We were paid peanuts.”

Again, a bit of an extreme example. I’m practical enough to know that making more money is the default solution for improving many, if not most people’s lives.

However, there’s a sweet spot in making more money too.

James Clear recently tweeted:

If you already live a comfortable life, then choosing to make more money but live a worse daily life is a bad trade.

And yet, we talk ourselves into it all the time. We take promotions that pay more, but swallow our free time. We already have a successful business, but we break…

— James Clear (@JamesClear) April 11, 2024

At some point, making more money isn’t going to make your life much better.

What are you giving up to make that additional money? The stereotypical example is someone who works too hard for too long — neglecting their family.

Warren Buffett once said: “Don’t risk what you have and need, for what you don’t have and don’t need.”

Figuring Out a Reasonable Investing Style

In the crypto world, I’m always shocked to hear stories of young investors making six-seven figures, then round-tripping. Making a million then losing it all.

I joke with more-conservative friends that even though I work fulltime in crypto — I’ll never get wildly rich from it. Because all my bets are sized according to risk (i.e. I’ll only allocate a small amount to high-risk things + I don’t use leverage), even a 100x gain on my fave dog coin won’t change my life.

On the flip side, I’ll never go broke either.

I’m convinced there’s a sweet spot for investing — somewhere along the risk-reward spectrum that allows you to sleep well at night.

Of course, your risk tolerance might be higher or lower than mine, and that’s fine. What’s important is you find the sweet spot that works for you.

“Good investing isn’t necessarily about earning the highest returns, because the highest returns tend to be one-off hits that can’t be repeated.

It’s about earning pretty good returns that you can stick with and which can be repeated for the longest period of time.”

– Morgan Housel –

Saving the “Right” Amount of Money

Everyone knows saving too little money is bad, but is it possible to save too much money?

I think so.

So much of personal finance advice is about restrictions. Don’t do this. Don’t buy that.

I get it — many people overspend, that’s why you keep hearing “save more money.”

But for people who’re already doing the personal finance thing — surely there’s a sweet spot before it becomes too much.

There’s a vast difference between moving from 5% to 10% savings rate (likely a good thing) and moving from 40% to 50% savings rate (is all that saving for the future impacting your ability to make today special?)

What good is all the money in the world if you don’t get to enjoy it?

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At the end of the story, Goldilocks gets discovered by the bears and runs away.

All the porridge, chairs and beds she’d tested and found so sweet weren’t hers. She’d have to find her own.

If you haven’t found your own sweet spot — keep testing, keep tasting.

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Pic from Pexels: Pixabay