We’ve been working on buying our first house. As part of that process, there are all kinds of decisions to make and negotiations we can do. Things like:
In theory, optimizing all of these decisions could save us thousands, even tens of thousands of dollars. But the thought of grinding over each and every negotiation is exhausting and stressful. How can we possibly get the best deal on everything?
I sometimes browse subreddits relating to the FIRE (financial independence + retiring early) philosophy. Many people want to get a second opinion on their retirement plans, and ask for others to check their math and their thought process. They post things like: "Can I retire now?"
What I’ve noticed is that it’s usually pretty clear-cut—either people seem to have plenty of money to retire, or they’re not quite there yet. There aren’t a lot of stories about people who were able to retire earlier than expected because they made a few tweaks to their plan, or ran out of money because they didn't have the right mix of stocks and bonds.
You’re running late for dinner. You’re supposed to be there in 20 minutes, but it’ll take you 30 minutes to get there.
Maybe you can speed to shave off some of that time. To make it there in 20 minutes, your average speed will have to be 33% over the speed limit. I hope you don't get a ticket!
Or you could have just left 10 minutes earlier.
Recently, I’ve seen a couple examples of the meaningless waste of resources that seems to be common at big companies.
One is this post from 2018 about an engineer saving his company half a million dollars with 10 minutes of work (!). All he did was fix a simple misconfiguration.
The second is this more recent (lengthy) post about a software engineer’s job search. He describes the many, many ways he’s saved his previous companies money and improved performance, usually by fixing obvious mistakes. Unfortunately, these companies still ended up going out of business:
I’ve only worked at startups or initial idea attempted “scale-up” companies, so now my resume is now just a series of 5 completely dead companies nobody cares about, which looks great for applying to jobs...I try to help, but when VC brain disease runs all companies into the ground instead of prioritizing building good products on high performance platforms, there’s only so much you can do.
What do all these examples have in common? Optimization isn't good enough.
Success is determined by your "initial conditions", not whatever improvements you can make on the margin:
This isn’t to say that optimization is worthless—but it is worth less.
It's easy to get caught up in the details. Buying a house is a perfect example—there are so many little ways to save a few hundred dollars here or there with some effort. But the single most impactful financial decision you'll make in the whole process is what your target price range is.
Focus on setting up initial conditions that make failure almost impossible. Once you have those, sure, you should try to optimize if you can. But you don’t need to stress out about it. ⧈