Why Blowing $53,000 Makes Me Wanna Scream

Life can be fun but is it always worth the cost?

In the late 1990s, I was in South Korea and the exchange rate strongly favored the dollar as Asian countries suffered a currency crisis. As a 24-year-old, I was having the time of my life and took advantage of the currency crisis. Looking back now, I wished I would have made smarter money decisions. Instead, I had six custom-made suits, more than half that I never even wore since I outgrew them.

The currency crisis started off in Thailand as the country decided not to peg their local currency to the US dollar. What followed was a chain reaction in eight nearby Asian countries which eventually led to ripple effects in the United States, Europe, and Russia. The stock market took quite a fall on Wall Street as investors wondered what happened.

The Korean won reached a high of 1707 won (pronounced one) in 1998 against one dollar. The low rate a year before was 1166 won against the dollar. As a foreigner, I did some calculations in my head. Many Korean stores took the worthless Korean won instead of the dollar. I figured I could make a killing if I exchanged my dollars for won and pay for food, drink, clothes, and souvenirs. Store owners didn’t like it when I walked in with their Korean currency as I heard their frustration as I handed them their currency.

Turning back the clock

In any case, you can’t turn back the clock.

Michael Patini

If I could go back 23 years, I would have invested the money and bought fewer suits. As a young person, I was living in the moment. I was having fun, single, and running around Korea when I was off duty.

Even though I had finished college, I spent my last three years at school studying hard carrying five or six classes a semester. I didn’t go to a party school and focused on my education spending most nights in the library.

When I got to Korea, things were different. I was in the Army but because of where I was stationed, we were limited to travel off base. Basically, we had to get a pass to leave the base and that was usually on the weekends if we were not working. Then we had to take turns with our co-workers since we had to have so many people available in case something happened with North Korea. Some days it felt like you were in a prison trapped on a little base with 500 other male soldiers.

Comparing how life is today with the coronavirus was a little similar to how some days were in Korea. A few times the entire base was on lockdown and I stuck at the base. I couldn’t go anywhere unless for official work reasons which wasn’t too often.

How much I would have made

The rich invest in time, the poor invest in money.

Warren Buffett

If I would have invested the money, instead of spending it, things might be a little different today. If I estimate how much I exchanged at the time, I don’t have a hard figure since I don’t remember. I probably exchanged about $1,200 for Korean won.

After I exchanged the money, I was a 24-year-old sitting on two million won which made me feel like a king. I could buy Korean food for about 12,000 won which was nothing in comparison to what I had. With the money I had, I could buy 1,666 Korean meals which were meals for more than an entire year.

If I had invested that money I would have $4,500 on the low end to a high of $53,000. When I was investing during this time, I was chasing high returns. Any investment that was returning 20% a year looked good to me. I was young and could handle any drops in the market even though I didn’t like it when these drops happened.

Investing is about compounding. You don’t see the compounding of your investment but this happens almost daily as your money is reinvested in your portfolio. You see your investment when you look at the total return each month. The higher the return, the better.

Summary

Deep inside, you want to be like the Joneses. Rolling around in the nice car, sporting the nice watch, and clothes. Living in a fantasy world is a dream of a lifetime. Trying to live within your means is a completely different story.

Everyone falls into scenarios like this at least once in their lifetime. You’ll have an opportunity to make millions. The key is to think smarter. It’s too easy to make the wrong mistake and live a glamorous life even if it’s just for a few minutes.

Tom Handy is a top writer on Medium, former Quora writer, and father of two kids. He retired from the Army and sits on several non-profit boards. You can find him on Twitter @tomhandy1.