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Speaker 1: Welcome to how to Money. I'm Joel and today I'm

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Speaker 1: talking the Art of Spending Money with Morgan Housel. Okay,

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Speaker 1: so spending money is easy, right, It's saving and investing

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Speaker 1: that's the hard part of finances. Well, not necessarily so.

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Speaker 1: My guest today he's not going to judge your spending habits,

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Speaker 1: but he does want to help you learn what's worth wanting.

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Speaker 1: Morgan Housel he wrote what many consider to be the

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Speaker 1: most compelling book in recent memory, The Psychology of Money.

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Speaker 1: His new book is called The Art of Spending Money.

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Speaker 1: I'm looking forward to digging in with a true legend

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Speaker 1: in the personal finance space today. So Morgan, thank you

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Speaker 1: so much for joining.

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Speaker 2: Me, Thanks for having me. Happy to be back.

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Speaker 1: All right, First question I got to ask you, and

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Speaker 1: honestly I can't remember what you said. Was this probably

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Speaker 1: six years ago on the podcast, But what is your

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Speaker 1: craft beer equivalent that has a change over time for

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Speaker 1: a lot of people too. What do you spend money

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Speaker 1: on like frivolously even though you're doing the smart and

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Speaker 1: intentional thing saving for your future simultaneously.

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Speaker 2: We'll give you three different answers. If that's cheating a

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Speaker 2: little bit, allow it The first is that I travel

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Speaker 2: really well, and do I pay for travel things that

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Speaker 2: most people would consider to be frivolous wastes that I

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Speaker 2: consider non negotiables. I spend a lot of my time

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Speaker 2: on the road. I usually travel every week, and to me,

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Speaker 2: the one it's not even a luxury when you travel

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Speaker 2: that much, flying first class and doing Uber black and

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Speaker 2: staying at the nice hotel with the big upgraded room.

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Speaker 2: That becomes like survival when you're traveling as much as

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Speaker 2: I do, So that is non negotiable to me. That's

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Speaker 2: one element. The other that's more general over time, is

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Speaker 2: that I'm much more willing now to pay up for

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Speaker 2: the quality item that I think will last longer. That

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Speaker 2: could be anything from a washer and dryer to close

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Speaker 2: what it might be if there's a next level up

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Speaker 2: that I think this one's gonna last a couple of

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Speaker 2: years more great. Now, let's do that.

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Speaker 1: Does that mean you own a speed A speed queen.

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Speaker 2: You know, we just got new washers and dryers. I

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Speaker 2: looked into the speed Queen and almost did it. We

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Speaker 2: didn't get them. There's lots of reasons for that, but

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Speaker 2: I did look into that, and those look like amazing things.

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Speaker 2: The third one that I think is the most important

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Speaker 2: to me, and this is definitely cheating on your answer,

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Speaker 2: but it's the most important to me by far, is

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Speaker 2: that I spend money on independence. What do I mean

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Speaker 2: by that, I save money, but I always I've never

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Speaker 2: viewed it as saving money. I view it as purchasing independence.

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Speaker 2: That when I put transfer money into my brokerage account,

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Speaker 2: my savings account, whatever, I don't view it as I'm

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Speaker 2: saving for the future. I view that as right now, today,

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Speaker 2: in this moment and tomorrow when I wake up, I

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Speaker 2: have more independence than I did prior, and that is

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Speaker 2: something that I benefit from right now. That is not

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Speaker 2: delayed gratification. It's the most important thing in my life

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Speaker 2: is that I wup every morning and say I can

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Speaker 2: do whatever I want today, and I have that because

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Speaker 2: I've saved money since I was a teenager. And so

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Speaker 2: that is cheating to your question. It's not spending on anything,

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Speaker 2: but philosophically, I've always viewed it as spending on the

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Speaker 2: most important thing that money can buy, which is independence.

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Speaker 1: Is it possible to overdo it by trying to buy

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Speaker 1: your own independence, like you're like where maybe you're trying

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Speaker 1: to squirrel away acorns because maybe out of fear of

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Speaker 1: the unknown what could happen in the future, and you're

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Speaker 1: banking so much and you're not taking advantage of your independence,

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Speaker 1: or maybe like does it conflict with like the die

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Speaker 1: with zero mentality?

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Speaker 2: Yeah, you said the key words there, which was you're

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Speaker 2: not actually taking advantage of your independence. So if you

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Speaker 2: are squirrelling a bunch of money away in the philosophy

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Speaker 2: of independence, which I think is good, but you still

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Speaker 2: work in a job that you don't like, you live

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Speaker 2: in a town that requires a long commute, you worry

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Speaker 2: about this, you worry about that, then you're not actually independent.

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Speaker 2: You're not actually taking advantage of what that is. But

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Speaker 2: if you're using your independence to say, look, I'm either

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Speaker 2: going to retire when I want to or work in

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Speaker 2: this job that pays a little bit less less but

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Speaker 2: I love it, and live in this city that costs

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Speaker 2: a lot more, but I have a shorter commute and

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Speaker 2: I love that. And I'm going to take the time

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Speaker 2: off when I'm going to take time off when I

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Speaker 2: want to to actually, and I'm going to stop worrying

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Speaker 2: about this and stop worrying about that and sleep better tonight.

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Speaker 2: That's actually taking advantage of your independence.

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Speaker 1: Okay, writing a book about saving money makes sense to me.

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Speaker 1: You know, Americans are not great at that. There's we

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Speaker 1: look at the average savings rate of Americans versus like

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Speaker 1: so many other countries around the world. You see that like,

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Speaker 1: that's not our thing. But our countries like were really

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Speaker 1: good at spending money, I guess, at least in the

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Speaker 1: sense that we spend a lot of it. Why did

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Speaker 1: you feel like writing a book about spending made sense?

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Speaker 2: I think it was. It was two things. One it

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Speaker 2: was if you had asked me five years ago, Morgan,

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Speaker 2: what is your philosophy on investing and earning and saving money?

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Speaker 2: I could have talked to you, to you about that

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Speaker 2: for hours. I thought so much about that in my

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Speaker 2: own life, my own personal life. But if you said,

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Speaker 2: what is your spending philosophy in my own life? I

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Speaker 2: would have drawn a blank. I really hadn't. I really

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Speaker 2: hadn't thought much about it. And it dawned on me

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Speaker 2: the irony of that that spending is the ultimate purpose

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Speaker 2: of money, whether it's today or fifty years from now,

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Speaker 2: whether it is you or your heirs or charities that

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Speaker 2: you give to it, doesn't matter. It's the ultimate purpose

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Speaker 2: of it. It's spent something on it. And I had

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Speaker 2: spent no time whatsoever thinking about this topic and looking

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Speaker 2: into it, wanting to learn more about it, being kind

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Speaker 2: of stunned that nobody else had really dug into this

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Speaker 2: that deeply in books and literature that I could really

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Speaker 2: dig into. So it felt like this giant void in

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Speaker 2: the financial sphere that I wanted to figure out for myself.

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Speaker 2: I didn't go into this as saying I'm the expert

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Speaker 2: on spending, let me impart my wisdom on you. I

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Speaker 2: really went into this being like, I'm trying to figure

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Speaker 2: this out for myself. And just like what I've always done,

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Speaker 2: I've never been interested in formulas that tell you how

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Speaker 2: to do something, here's how to invest, here's how to spend,

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Speaker 2: because everybody's different. But I wanted to dig into the

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Speaker 2: psychology of these topics. So for spending, it was the

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Speaker 2: psychology of envy, of greed, of social aspiration, of jealousy,

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Speaker 2: of contentment. That's what I really wanted to dig into,

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Speaker 2: because how you and I spend our money might be

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Speaker 2: very different, but how you and I think about jealousy

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Speaker 2: and why we think about jealousy tends to be very

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Speaker 2: similar over time, across cultures for different people. So if

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Speaker 2: I can dig into those topics, that to me was

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Speaker 2: just interesting in my own life, and that's where this

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Speaker 2: book came from.

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Speaker 1: Yeah, I mean that's one of the things I've appreciated

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Speaker 1: about your work, is it just hits another level instead

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Speaker 1: of like advice how too, it really is touching on

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Speaker 1: the common threads of human existence and reality, the things

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Speaker 1: that we butt up against every single day. And so,

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Speaker 1: I mean, you're right, we're talking right now to people

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Speaker 1: who live in Iowa who make forty five thousand dollars

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Speaker 1: a year and Los Angeles who make four hundred thousand

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Speaker 1: dollars a year, and like recently heard from a listener

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Speaker 1: who's selling a business for like three hundred million dollars. Like,

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Speaker 1: everyone is in a different sort of situation in terms

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Speaker 1: of like percentages and amounts, but we combat all of

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Speaker 1: those feelings right every single day. So yeah, that's one

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Speaker 1: of my favorite things about kind of how you tend

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Speaker 1: to tackle things. You what do you think it takes

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Speaker 1: to transform our minds to think differently about money, especially,

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Speaker 1: let's say, for a lot of people, their spending habits

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Speaker 1: are causing pain. They're they're realizing that, hey, the way

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Speaker 1: I'm spending money is leading me to a lack of savings,

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Speaker 1: a lack of freedom. Right, how do you then start

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Speaker 1: to deal with maybe the reality of what's going on

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Speaker 1: with your spending.

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Speaker 2: I think for most people it takes a pronounced effort

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Speaker 2: to understand the difference and to follow the difference between

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Speaker 2: the internal and the external benchmark. Are you spending money

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Speaker 2: on this thing because it makes you happy, it's giving

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Speaker 2: you and your family a better life, a better quality

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Speaker 2: of life, You enjoy it, Or are you doing it

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Speaker 2: because it is a yardstick of social status that allows

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Speaker 2: you to compare yourself against others. It's always one of

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Speaker 2: those two, their internal versus the external. And I think,

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Speaker 2: if we're honest, most of us want to live a

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Speaker 2: life of internal benchmarks. I want to have more money

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Speaker 2: and spend more money so that myself and my family

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Speaker 2: are better taken care of and we're happier and more

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Speaker 2: and more comfortable, and we're in better health. And that's

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Speaker 2: what I want to spend my money on. But so

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Speaker 2: much of the modern economy you mentioned this earlier, like

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Speaker 2: Americans are very good at spending, but so much of

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Speaker 2: it I would say the majority of it is a

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Speaker 2: status driven endeavor, and status seeking is not always a

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Speaker 2: bad thing. I do it. You do it like it's

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Speaker 2: unavoidable in a world that is competitive and we're trying

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Speaker 2: to send signals to other people. But so much of

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Speaker 2: spending money is let me show my status to a

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Speaker 2: group of strangers who are not even paying any attention

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Speaker 2: to me whatsoever. They don't even care, And so you

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Speaker 2: spend all of your day working to earn money, to

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Speaker 2: spend money on things to impress people who are not

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Speaker 2: even paying attention to it. To begin with, I heard

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Speaker 2: this quote. I think it's originally attributed to Winston Churchill,

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Speaker 2: but many people have said this over time, that in

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Speaker 2: your twenties you care about what everybody thinks of you.

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Speaker 2: You worry about what everybody thinks of you. In your

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Speaker 2: thirties you say, I don't care what anybody thinks of me,

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Speaker 2: And in your forties you finally realize the truth, which

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Speaker 2: is that nobody was thinking about you all along. And

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Speaker 2: I think a lot of people will eventually you realize

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Speaker 2: that truth over time, and that no one's thinking about

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Speaker 2: you as much as you are maybe your spouse, your children,

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Speaker 2: a couple of your friends and co workers are paying

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Speaker 2: attention to you and spend a lot of time with you,

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Speaker 2: But the vast majority of other people don't, could not

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Speaker 2: care less whatsoever. And so once you grasp that difference

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Speaker 2: between internal versus external are you doing this for you

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Speaker 2: or for the performance of other people? That I think

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Speaker 2: is the biggest philosophical shift to put your spending on

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Speaker 2: a healthier path.

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Speaker 1: I think the most compelling chapter of the book From

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Speaker 1: Me Me was the chapter on identity. Some people in

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Speaker 1: the personal finance space, they really have made their financial goals,

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Speaker 1: their financial progress like this core part of who they are. Right.

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Speaker 1: If I'm hitting these metrics, if my net worth is

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Speaker 1: growing this amount every year, if I'm maxing out this account,

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Speaker 1: then that informs who I am. You don't want that

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Speaker 1: money to essentially be an identity metric for us, though?

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Speaker 1: Why is that?

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Speaker 2: I want to use money as as a tool to

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Speaker 2: live a better life. But once it becomes an ingrained

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Speaker 2: part of your identity, it is using you, it's controlling

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Speaker 2: who you are. And this happens in very innocent ways.

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Speaker 2: I think there are people, let's say, in the fire

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Speaker 2: movement financial independence, retire early, like in general, a really

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Speaker 2: cool thing and a really great idea that I think

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Speaker 2: has given a lot of people a lot of happiness

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Speaker 2: and purpose. But once you establish yourself as a card

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Speaker 2: carrying member of the fire community, you're kind of tied

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Speaker 2: to that. And I have known several people who've done this,

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Speaker 2: who saved like maniacs in their twenties, retire hired when

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Speaker 2: they were thirty one, and by age thirty one and

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Speaker 2: a half were bored out of their minds because they

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Speaker 2: realize they really underestimated how much of working and being

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Speaker 2: productive was important to their soul and their happiness. But

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Speaker 2: these are card carrying members of the fire community. You

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Speaker 2: know what happens to their ego and their identity if

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Speaker 2: they go back to work. It's crushed, it's ruined. They've

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Speaker 2: attached themselves to that. Everybody understands in politics how dangerous

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Speaker 2: it can be once you really firmly attach yourself to

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Speaker 2: a political philosophy. It's like you're almost offsourcing all of

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Speaker 2: your critical thinking to others at that point, and you're

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Speaker 2: just saying, whatever my tribe believes, that's what I'm going

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Speaker 2: to believe. Everybody can see what that happens in sports

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Speaker 2: as well. It's very obvious. It's less obvious when it

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Speaker 2: happens with money, but it happens all the time. But

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Speaker 2: when people attach themselves to a yolo spending philosophy, to

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Speaker 2: a value investing philosophy, to a tech investing philosophy, it

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Speaker 2: seems like a like, not even a harmless thing to do.

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Speaker 2: It seems like a very beneficial thing to do. But

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Speaker 2: anytime in life where you say I am a blank,

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Speaker 2: whatever that blank might be, it's time to your identity,

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Speaker 2: and at that point it's very difficult to let go

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Speaker 2: of it. I think why this is important is because

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Speaker 2: not only are individuals different person to person, but you

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Speaker 2: change throughout the course of your own life. I'm a

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Speaker 2: very different person today, and I have different financial beliefs

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Speaker 2: today than I did ten years ago. And I'll have

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Speaker 2: different financial beliefs ten years from now, just because I'll

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Speaker 2: be in a different phase of my life. Hopefully I'll

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Speaker 2: learn new things about the world that will update my

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Speaker 2: views over time. And so that's why, again, when you

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Speaker 2: assign yourself to any kind of financial identity, it becomes

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Speaker 2: very difficult to detach from that and to evolve as

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Speaker 2: a person.

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Speaker 1: And that's why you look back to the hyper frugal

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Speaker 1: blogs of the early two thousands, and there's a lot

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Speaker 1: you can learn from that, and there's a lot of

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Speaker 1: really cool stuff in suggestions and ideas and stuff that

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Speaker 1: you can glean from some of those blogs. But then also,

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Speaker 1: at some point frugality just isn't a sufficient identity in

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Speaker 1: terms of how you approach money, and at some point

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Speaker 1: maybe you want to grow beyond that, and maybe you're like,

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Speaker 1: actually spending in certain ways proactively makes me a happier person.

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Speaker 1: I think one of my other favorite things he wrote

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Speaker 1: in the book, and it actually made me feel a

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Speaker 1: lot better because I feel very inconsistent in my money habits.

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Speaker 1: Like my best friend who I do the podcast with,

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Speaker 1: he is like super disciplined, and I'm a little more

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Speaker 1: erratic at times, and I'm less of a budgeter. He

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Speaker 1: has his spreadsheets back for fourteen years and I've got

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Speaker 1: a lot of margin built in. But I'm also I'm

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Speaker 1: just like, oh, yeah, random concert over there, let's go.

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Speaker 1: And you wrote that the people I know, you said

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Speaker 1: who have used money best have inconsistent spending habits, So

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Speaker 1: that kind of made me feel a little bit better.

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Speaker 1: But what why is that?

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Speaker 2: Well, there's two ways I've I've always been like that

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Speaker 2: as well. I've always been a big saver, but I've

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Speaker 2: never had any kind of budget, and it's always just

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Speaker 2: whatever looks good to me, like ray, go buy that,

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Speaker 2: and and so that that's always been there. But really,

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Speaker 2: what I mean by inconsistent is I think if if

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Speaker 2: you show me your income and I can guess exactly

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Speaker 2: how much you're spending on homes, cars, clothes, jewelry, travel,

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Speaker 2: then you're you're probably not thinking independently. You're probably just

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Speaker 2: doing what society tells you you should want. I think

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Speaker 2: a true independent thinker, just for example, just making this up,

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Speaker 2: if you told me your income was you know, you know,

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Speaker 2: if if if I were looking at how you spent

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Speaker 2: your money over time, a true independent thinker would be like, wow,

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Speaker 2: you spend twenty percent of your money on concerts and

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Speaker 2: none on travel. Like that's like just something weird like that. Yeah,

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Speaker 2: And and so.

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Speaker 1: For your marching to your own drummer.

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Speaker 2: Yes, you're you're you're you're doing things because they make

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Speaker 2: you happy, not because this is what society told you

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Speaker 2: to do. And so I really love and admire the

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Speaker 2: billionaire who drives an F one fifty, not because they're

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Speaker 2: cheap or frugal, just because that person clearly just doesn't

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Speaker 2: value cars like somebody else would. And there's so many

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Speaker 2: different examples like that. You have someone who spends a

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Speaker 2: ton of money on clothes and none on cars, a

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Speaker 2: ton of money on fancy restaurants and none on clothes,

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Speaker 2: whatever it might be. They're doing it because they like it,

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Speaker 2: not because it was some kind of rubric that society

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Speaker 2: told them to follow.

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Speaker 1: Do you think to find what that is is like

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Speaker 1: experimental spending? How important is that? What does that? What

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Speaker 1: does that look like in practice to kind of test

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Speaker 1: things out instead of buying into the narrative like I

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Speaker 1: guess I should buy a new car every four or

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Speaker 1: five years and saddle myself with one of those car payments.

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Speaker 1: What does it look like to kind of test out

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Speaker 1: different spending models to see what fits you.

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Speaker 2: I think it's a combination of experimenting that's definitely part

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Speaker 2: of it, and also a strong propensity to just not

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Speaker 2: care what other people think about it. And so I've

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Speaker 2: done this myself when I travel a lot for work.

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Speaker 2: I'm fortunate that I can expense almost any restaurant that

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Speaker 2: I go to, but I'm not a fancy food guy.

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Speaker 2: So in a situation like that, I'm like, I'm going

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Speaker 2: to Chipotle tonight and I couldn't care less what anybody

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Speaker 2: thinks of that. That's what's going to make me happy

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Speaker 2: in that moment, and so be it. So it's a

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Speaker 2: combination of experimenting and not caring. The experimenting part is

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Speaker 2: really interesting too. I think I think there's lots of

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Speaker 2: little experiments you can do of like when you're renting

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Speaker 2: a car, like do a big upgrade, see what it's

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Speaker 2: like to drive a BMW seven series or a Port

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Speaker 2: or something like that, and see what it feels like.

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Speaker 2: And my guess is that half of people in this

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Speaker 2: situation will be like, the BMW that I rented was

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Speaker 2: the most amazing experience I've ever had. I should definitely

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Speaker 2: buy one of those, or the opposite. They'll be like,

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Speaker 2: I don't know, it was not nearly what I thought

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Speaker 2: it would be. I'm actually totally fine with my Honda

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Speaker 2: Pilot back at home. It'll be one of those two things,

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Speaker 2: But it's very difficult for you to predict which side

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Speaker 2: of that you'll be on until you experiment with a

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Speaker 2: million different things, different restaurants, different clothes, different travel, whatever

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Speaker 2: it might be.

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Speaker 1: I was obsessed with my friend's Rivian, or just with

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Speaker 1: Rivians in general. Then I rode with my friend in

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Speaker 1: his Riban and I was like, I'm over it. I'm

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Speaker 1: super happy with my twenty year old car. It's nice,

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Speaker 1: but it's I'm just not There's other things that light

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Speaker 1: me up a lot more than that.

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Speaker 2: We've had so many of those experiences. We just bought

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Speaker 2: a new car two weeks ago and it was the

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Speaker 2: absolute classic. Anyone could have seen this coming. The first

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Speaker 2: forty eight hours, my kids were like, this is the

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Speaker 2: coolest car ever. This is so great, And by day

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Speaker 2: three they're like, whatever, it doesn't matter at all anymore.

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Speaker 1: You know. They feel the same way about old cars, though,

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Speaker 1: Like I upgraded my car. It's still a twenty year

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Speaker 1: old car, but I got a nicer, like old cool

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Speaker 1: Toyota four Runner, and my son just thinks it's the

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Speaker 1: raddest thing ever. Like he's talked about Ribbean's, but he

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Speaker 1: like he likes the fore Runner now. Yeah, and so

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Speaker 1: it doesn't even have to be all that splashy for

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Speaker 1: your kids to think it's cool. What about the role

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Speaker 1: of emotions. I think often, like when we're talking about

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Speaker 1: money and finance, emotions. You're supposed to be robotic, take

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Speaker 1: emotions out of the equation. That way, you're going to

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Speaker 1: handle things with precision, but you don't demonize emotion and

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Speaker 1: the role that emotion plays in in how we spend

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Speaker 1: In the book.

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Speaker 2: Yeah, I think I think it's unavoidable, particularly for huge

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Speaker 2: things that you're spending money on, like buying a house.

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Speaker 2: Let's not pretend that you can or should pick a

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Speaker 2: house based off of a spreadsheet where you're like, oh,

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Speaker 2: let's just put it like we want this many bedrooms

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Speaker 2: in this square feet and then we just go find

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Speaker 2: the house that matches that spreadsheet. It never works like that.

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Speaker 2: It's always you pull up to the driveway and you

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Speaker 2: will You or your spouse is like, oh, it's beautiful,

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Speaker 2: I love it. Look at the barbecue. Oh, the neighbors

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Speaker 2: look so friendly. That's like, it's those emotions that you

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Speaker 2: cannot capture in a spreadsheet that do it for you,

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Speaker 2: and it's it's almost unavoidable. It's unavoidable. Now you don't

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Speaker 2: want to be all uh, you know all of that

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Speaker 2: when when when you're making a big purchase. But I

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Speaker 2: think a good purchase should be like half heart and

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Speaker 2: half spreadsheet. That's probably a good balance of what you're

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Speaker 2: looking for for big purchases, especially like nobody should pretend

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Speaker 2: that when you're buying your the engagement ring for your

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Speaker 2: for your girlfriend, that that is just an unemotional, heartless

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Speaker 2: spreadshet endeavor, like all these the big purchases, not not

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Speaker 2: at the grocery store, but the things that you're that

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Speaker 2: are actually going to move the needle, which is like education, house, car, childcare.

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Speaker 2: Those are always very emotional and we shouldn't pretend otherwise,

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Speaker 2: And so we should just acknowledge and kind of embrace

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Speaker 2: with both hands the emotions that come with it.

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Speaker 1: And I got more. I want to get to with you, Morgan.

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Speaker 1: I want to talk about spending money today versus saving

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Speaker 1: for tomorrow. And I also want to I don't know,

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Speaker 1: is there a spiritual component to what we're talking about here.

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Speaker 1: We'll get to that and more right after this I'm

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Speaker 1: talking to Morgan House, I'll talking about the artists spending money. Morgan,

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Speaker 1: You're you're not a psychologist that I know of, unless

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Speaker 1: you're like undercover psychologists, but like you, you play one

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Speaker 1: on TV a little bit. It's something that you for

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Speaker 1: sure are interested in. But how how deep do the

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Speaker 1: roots of our current day spending habits go? Like when

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Speaker 1: we're talking about it feels there's a lot of unearthing

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Speaker 1: that needs to happen just to figure out kind of

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Speaker 1: what's going on under the surface. So there is some

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Speaker 1: psychological work that needs to be done to figure out

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Speaker 1: why we are tempted to spend in the ways that

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Speaker 1: we do.

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Speaker 2: I think in many ways, the culture that we have

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Speaker 2: around spending and money has been with us forever. It's

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Speaker 2: like money is a very established and easy way to

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Speaker 2: track social hierarchy. I can compare my net worth to yours,

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Speaker 2: I can compare the square footage of my house to yours,

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Speaker 2: and it's apples to apples. Whereas if you and I

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Speaker 2: were trying to compare, like who's funnier, who's a better dad,

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Speaker 2: It's very difficult to compare each other. Money is very easy.

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Speaker 2: So it's always been like that. It has definitely evolved

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Speaker 2: and progressed in the last fifty years. I saw this

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Speaker 2: really interesting study that if you go back and ask

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Speaker 2: college students in the nineteen fifties, what do you want

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Speaker 2: out of college? Why are you here? What do you

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Speaker 2: want out of your bachelor's degree? The most common answer,

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Speaker 2: by far was a strong philosophy for how to live

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Speaker 2: a good life. That's what students went to college for.

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Speaker 2: And if you ask students today, why do you go

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Speaker 2: to college, what is the purpose of your degree? Overwhelmingly,

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Speaker 2: like ninety percent people like to make money, to get

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Speaker 2: a good job, that's it. So that has really evolved

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Speaker 2: over time from like the philosophy of having a good

433
00:21:15,359 --> 00:21:17,600
Speaker 2: life and being a good spouse and a good parent

434
00:21:17,640 --> 00:21:20,320
Speaker 2: and a good citizen has moved into just I just

435
00:21:20,359 --> 00:21:22,640
Speaker 2: want to make a lot of money, and that's effectively it.

436
00:21:22,720 --> 00:21:24,800
Speaker 2: I don't know if that's bad, good or bad, but

437
00:21:24,880 --> 00:21:27,520
Speaker 2: it has changed and evolved over time. I think at

438
00:21:27,600 --> 00:21:29,960
Speaker 2: least part of that is that we are so much

439
00:21:30,200 --> 00:21:33,240
Speaker 2: it's so much easier to compare yourself to others today

440
00:21:33,280 --> 00:21:34,800
Speaker 2: than it used to be, because go back to the

441
00:21:34,880 --> 00:21:37,600
Speaker 2: nineteen fifties, when those college students were saying that who

442
00:21:37,640 --> 00:21:40,720
Speaker 2: they compared themselves to back in the day were other

443
00:21:40,760 --> 00:21:44,080
Speaker 2: college students and other kids in their tiny little town

444
00:21:44,119 --> 00:21:47,240
Speaker 2: in Iowa. That's who they're comparing themselves to, Whereas today

445
00:21:47,400 --> 00:21:52,080
Speaker 2: everybody compares themselves to a curated highlight reel of the

446
00:21:52,119 --> 00:21:54,879
Speaker 2: top moments of the top people in the world on

447
00:21:54,920 --> 00:21:58,240
Speaker 2: social media, on social media, and so it's much easier

448
00:21:58,240 --> 00:22:02,040
Speaker 2: today to actually doing pretty well, to be like, look,

449
00:22:02,119 --> 00:22:03,720
Speaker 2: you have a median income and you live in a

450
00:22:03,760 --> 00:22:06,000
Speaker 2: median size house, and you drive a median car, like

451
00:22:06,040 --> 00:22:08,919
Speaker 2: you're doing great, and in that situation feel like you

452
00:22:08,960 --> 00:22:12,840
Speaker 2: are desperately falling behind relative to everybody else. And so

453
00:22:13,000 --> 00:22:16,639
Speaker 2: I think when that when it's easier to compare yourself

454
00:22:17,240 --> 00:22:21,040
Speaker 2: to other people and money is the ultimate measurement of

455
00:22:21,080 --> 00:22:23,680
Speaker 2: how well you're feeling, how well you think you're doing

456
00:22:23,720 --> 00:22:28,320
Speaker 2: in life, it just becomes this cult, this like religion

457
00:22:28,359 --> 00:22:30,720
Speaker 2: of money that I think describes where we are today.

458
00:22:31,000 --> 00:22:33,920
Speaker 1: So we're using the wrong measuring stick for sure, when

459
00:22:33,960 --> 00:22:35,600
Speaker 1: we make money the end all be all, and not

460
00:22:35,720 --> 00:22:37,800
Speaker 1: just what money can do to facilitate all these other

461
00:22:37,840 --> 00:22:40,920
Speaker 1: beautiful things that we can we can do in our lives.

462
00:22:41,600 --> 00:22:44,919
Speaker 1: I'm curious too, that there's so much like psychological, behavioral,

463
00:22:45,000 --> 00:22:48,080
Speaker 1: historical part of the work you've done. Is there any

464
00:22:48,080 --> 00:22:50,880
Speaker 1: spiritual component to this for you? Because when you think

465
00:22:50,920 --> 00:22:54,000
Speaker 1: about what a good life looks like like, you are

466
00:22:54,119 --> 00:22:57,520
Speaker 1: kind of broaching spiritual ground at times. Does that factor

467
00:22:57,600 --> 00:23:01,160
Speaker 1: into how you think about spend money and helping other

468
00:23:01,200 --> 00:23:02,760
Speaker 1: people think about spending money.

469
00:23:02,520 --> 00:23:04,800
Speaker 2: Well, well, I think the only formula that I lay

470
00:23:04,840 --> 00:23:07,159
Speaker 2: out in this latest book is what I think is

471
00:23:07,200 --> 00:23:10,359
Speaker 2: a formula for a pretty nice life, which is independence

472
00:23:10,359 --> 00:23:14,200
Speaker 2: plus purpose. I think it's whatever that might mean to you.

473
00:23:14,720 --> 00:23:17,800
Speaker 2: It's hard to imagine a good life without independence plus purpose,

474
00:23:18,160 --> 00:23:20,800
Speaker 2: and purpose is the biggest you know, you have to

475
00:23:20,800 --> 00:23:22,880
Speaker 2: figure it out for yourself. For some people it's work,

476
00:23:22,920 --> 00:23:25,640
Speaker 2: for some people, it's family, for some people it's religion.

477
00:23:26,080 --> 00:23:30,640
Speaker 2: And so whatever that purpose is for you, that's so important.

478
00:23:30,720 --> 00:23:33,000
Speaker 2: And I have seen, and this is maybe not surprising

479
00:23:33,000 --> 00:23:36,840
Speaker 2: to people, so many very wealthy people who have all

480
00:23:36,880 --> 00:23:39,399
Speaker 2: the money they could ever spend, all the financial independence

481
00:23:39,440 --> 00:23:42,920
Speaker 2: that anybody could ever want, and no purpose, zero purpose

482
00:23:42,960 --> 00:23:45,240
Speaker 2: that they're doing it. They sold their business, they don't

483
00:23:45,240 --> 00:23:47,200
Speaker 2: really have much family life, they don't really have anything

484
00:23:47,200 --> 00:23:50,840
Speaker 2: else that they're going for, And that is an empty life.

485
00:23:50,880 --> 00:23:53,560
Speaker 2: I think that is an empty or life than having

486
00:23:53,960 --> 00:23:57,119
Speaker 2: no money, no independence, but tons of purpose, a family

487
00:23:57,119 --> 00:23:59,399
Speaker 2: who loves you, a community who adores you like that

488
00:23:59,480 --> 00:24:01,560
Speaker 2: kind of thing, and so I think that's where it

489
00:24:01,640 --> 00:24:05,200
Speaker 2: falls into the spending equation. Is that like that, that's

490
00:24:05,240 --> 00:24:07,120
Speaker 2: the equation that I'm trying to solve for in my life,

491
00:24:07,160 --> 00:24:10,679
Speaker 2: independence plus purpose. And you can see how money can

492
00:24:10,720 --> 00:24:13,840
Speaker 2: be part of both of those things, but it's only

493
00:24:14,160 --> 00:24:16,800
Speaker 2: a small component of it. And that's where things like

494
00:24:17,240 --> 00:24:22,959
Speaker 2: family and community and morality and spirituality come into the equation.

495
00:24:23,119 --> 00:24:23,520
Speaker 2: Right there.

496
00:24:24,359 --> 00:24:26,600
Speaker 1: Certainly, somehow money listeners are at this point where they're

497
00:24:26,640 --> 00:24:29,359
Speaker 1: like pretty close to financial independence. They're on their way,

498
00:24:29,440 --> 00:24:31,240
Speaker 1: They've at least got a decent chunk of marchin. But

499
00:24:31,280 --> 00:24:32,600
Speaker 1: then there's a lot of people who listen to this

500
00:24:32,640 --> 00:24:36,280
Speaker 1: podcast and they're like, that's the goal, right, I want

501
00:24:36,520 --> 00:24:41,120
Speaker 1: this sort of freedom, this time freedom, the many many

502
00:24:41,200 --> 00:24:44,720
Speaker 1: years of saving investing compounding that it now allows me

503
00:24:44,840 --> 00:24:47,240
Speaker 1: some of that independence. And Morgan's talking about how do

504
00:24:47,280 --> 00:24:49,600
Speaker 1: you then square talking to somebody like that who's like,

505
00:24:49,760 --> 00:24:52,760
Speaker 1: that's kind of where the trajectory I'm on, but I'm

506
00:24:52,800 --> 00:24:56,280
Speaker 1: not there yet. How do you square the value of

507
00:24:56,560 --> 00:25:01,600
Speaker 1: spending dollars today on things that bring you joy versus

508
00:25:01,720 --> 00:25:04,359
Speaker 1: trying to work harder to buy that independence?

509
00:25:05,000 --> 00:25:07,440
Speaker 2: I think it's it's it can be a pretty dangerous

510
00:25:07,440 --> 00:25:11,320
Speaker 2: philosophy to be like, I'm going to live a very

511
00:25:11,440 --> 00:25:15,200
Speaker 2: low lifestyle so that I can save, and therefore one

512
00:25:15,280 --> 00:25:18,040
Speaker 2: day live a high lifestyle. Like almost certainly that's not

513
00:25:18,080 --> 00:25:22,280
Speaker 2: going to work. And here's my version of this. I've

514
00:25:22,320 --> 00:25:24,399
Speaker 2: always been a huge saver from the time I started

515
00:25:24,400 --> 00:25:27,320
Speaker 2: making money when I was sixteen years old. And if

516
00:25:27,320 --> 00:25:29,960
Speaker 2: I go back to those years when I was sixteen, seventeen,

517
00:25:30,000 --> 00:25:33,040
Speaker 2: eighteen years old, if I saved one hundred bucks, that

518
00:25:33,160 --> 00:25:36,000
Speaker 2: was like heroic. That was so much work. That was

519
00:25:36,000 --> 00:25:38,320
Speaker 2: like weeks and weeks of manual labor to save one

520
00:25:38,359 --> 00:25:41,920
Speaker 2: hundred dollars. And I invested that money in index funds.

521
00:25:42,080 --> 00:25:44,199
Speaker 2: And let's say because I did that, that money is

522
00:25:44,320 --> 00:25:48,960
Speaker 2: now today worth five hundred dollars, which is probably about right.

523
00:25:49,160 --> 00:25:51,520
Speaker 2: Five hundred dollars means nothing to me today. It does

524
00:25:51,560 --> 00:25:54,560
Speaker 2: absolutely moves, no needles whatsoever. So then the question is,

525
00:25:55,320 --> 00:25:57,760
Speaker 2: was at a waste back when I was seventeen and

526
00:25:57,840 --> 00:26:01,280
Speaker 2: worked so hard and invested for an amount of money

527
00:26:01,320 --> 00:26:03,200
Speaker 2: that means nothing to me today. Was that a mistake?

528
00:26:03,600 --> 00:26:07,080
Speaker 2: I think my answer to that is no, because what

529
00:26:07,160 --> 00:26:10,200
Speaker 2: that taught me what that did for me back when

530
00:26:10,200 --> 00:26:13,200
Speaker 2: I was sixteen years old was it taught me saving skills.

531
00:26:13,760 --> 00:26:15,399
Speaker 2: And it would be foolish for me to think that

532
00:26:15,440 --> 00:26:18,600
Speaker 2: I could have just spent with abandon back then and

533
00:26:18,640 --> 00:26:20,800
Speaker 2: then once I was thirty five years old and started

534
00:26:20,800 --> 00:26:22,520
Speaker 2: making a lot of money, I could just flip the

535
00:26:22,520 --> 00:26:25,000
Speaker 2: switch and become a saver. It just doesn't work like that.

536
00:26:25,119 --> 00:26:27,400
Speaker 2: Like it taught me skills back then that I could

537
00:26:27,480 --> 00:26:30,359
Speaker 2: then put into use once I started earning much more money,

538
00:26:30,400 --> 00:26:32,520
Speaker 2: so it was not a waste whatsoever. But I think

539
00:26:32,560 --> 00:26:35,720
Speaker 2: inherent in that is like it's almost impossible for people

540
00:26:35,800 --> 00:26:37,680
Speaker 2: to just flip a switch and say I'm going to

541
00:26:37,720 --> 00:26:39,600
Speaker 2: be frugal now so that i could be a big

542
00:26:39,640 --> 00:26:42,479
Speaker 2: spender at some point in the future. That's just that's

543
00:26:42,560 --> 00:26:44,240
Speaker 2: just not how it's gonna work. And so for a

544
00:26:44,240 --> 00:26:46,199
Speaker 2: lot of people who might have that mentality that you

545
00:26:46,960 --> 00:26:49,280
Speaker 2: said of like, look, I'm saving a lot of money

546
00:26:49,280 --> 00:26:51,120
Speaker 2: so I can get to this place, You're not gonna

547
00:26:51,119 --> 00:26:54,080
Speaker 2: be able to make any kind of profound shift in

548
00:26:54,160 --> 00:26:56,880
Speaker 2: your thinking. You're probably gonna be the same person ten

549
00:26:56,960 --> 00:26:59,520
Speaker 2: years from now that you are today. And what a

550
00:26:59,520 --> 00:27:01,760
Speaker 2: lot of these people do and this isn't necessarily bad.

551
00:27:02,359 --> 00:27:05,120
Speaker 2: Is they have a goal and say, once I hit

552
00:27:05,160 --> 00:27:07,119
Speaker 2: a million dollars in net worth, I'm going to retire

553
00:27:07,160 --> 00:27:08,879
Speaker 2: whatever it might be. And then they get there and

554
00:27:08,920 --> 00:27:12,040
Speaker 2: they're like, well, how about two million, Okay, maybe it's

555
00:27:12,080 --> 00:27:15,560
Speaker 2: four million. They just keep pushing on because they can't.

556
00:27:16,080 --> 00:27:18,320
Speaker 2: And I think it's very hard for anybody to make

557
00:27:18,359 --> 00:27:21,480
Speaker 2: a fundamental shift in who you are, and so I

558
00:27:21,480 --> 00:27:23,200
Speaker 2: would encourage people. And this is what I've tried to

559
00:27:23,240 --> 00:27:26,760
Speaker 2: do for myself is to try to, yes, have financial goals.

560
00:27:26,760 --> 00:27:29,679
Speaker 2: I have financial goals and net worth goals that I

561
00:27:29,680 --> 00:27:31,919
Speaker 2: want to get to as well, but I want to

562
00:27:31,920 --> 00:27:34,800
Speaker 2: live a good life today for myself and for my family,

563
00:27:35,119 --> 00:27:38,080
Speaker 2: and not sacrifice that. Be on a journey that puts

564
00:27:38,119 --> 00:27:39,480
Speaker 2: me on a path to where I want to be

565
00:27:39,560 --> 00:27:42,040
Speaker 2: in the future. Have goals to strive for, but never

566
00:27:42,080 --> 00:27:45,640
Speaker 2: have it come at the distinct sacrifice of right now.

567
00:27:46,280 --> 00:27:48,400
Speaker 1: Yeah, That's where for me, the craft beer equivalent thing

568
00:27:48,440 --> 00:27:51,439
Speaker 1: is so powerful because it's like, let's it can be

569
00:27:51,480 --> 00:27:54,320
Speaker 1: whatever it is, whatever that is for you as an

570
00:27:54,359 --> 00:27:58,480
Speaker 1: individual out there listening, right, it's pick two or three

571
00:27:58,480 --> 00:28:00,200
Speaker 1: things where you're like, I'm going to spend kind of

572
00:28:00,240 --> 00:28:01,840
Speaker 1: in a crazy way on that thing where other people

573
00:28:01,880 --> 00:28:03,560
Speaker 1: might be like that, that's ridiculous. You just bought a

574
00:28:03,560 --> 00:28:05,680
Speaker 1: thirty dollars bottle of beer and you make forty five

575
00:28:05,720 --> 00:28:07,720
Speaker 1: thousand dollars a year and you're doing that once a week,

576
00:28:07,800 --> 00:28:11,040
Speaker 1: I mean, or a fancy gym membership, whatever it is

577
00:28:11,080 --> 00:28:13,400
Speaker 1: that really lights you up, but then like cutting back

578
00:28:13,400 --> 00:28:15,080
Speaker 1: in those other areas that don't matter to you. And

579
00:28:15,080 --> 00:28:16,760
Speaker 1: I think that's the problem is that we're like often

580
00:28:17,280 --> 00:28:19,600
Speaker 1: mindlessly spending in so many ways. I think this is

581
00:28:19,640 --> 00:28:21,160
Speaker 1: really what you're getting at, in a lot of ways,

582
00:28:21,640 --> 00:28:24,680
Speaker 1: just based on what's happening around us in society. Well,

583
00:28:24,680 --> 00:28:28,520
Speaker 1: I guess that's normal, and then adopting that quote unquote

584
00:28:28,560 --> 00:28:32,320
Speaker 1: normal societal mindset, spending in ways that just don't light

585
00:28:32,359 --> 00:28:34,720
Speaker 1: us up, don't really matter, when we would have been

586
00:28:34,720 --> 00:28:38,000
Speaker 1: better off either saving more of those dollars or spending

587
00:28:38,000 --> 00:28:39,680
Speaker 1: them more on the things that we've already said that

588
00:28:39,680 --> 00:28:40,400
Speaker 1: we care about.

589
00:28:40,640 --> 00:28:44,280
Speaker 2: Right, That's exactly it. And if you're not doing that,

590
00:28:44,520 --> 00:28:47,120
Speaker 2: I think you have outsourced your critical thinking to other

591
00:28:47,200 --> 00:28:50,000
Speaker 2: people who are telling you what you should enjoy.

592
00:28:50,680 --> 00:28:53,280
Speaker 1: So you just said something along the lines. I don't

593
00:28:53,320 --> 00:28:54,840
Speaker 1: know if one hundred percent agree that, like, hey, you're

594
00:28:54,840 --> 00:28:57,160
Speaker 1: probably going to be the same person ten years from now.

595
00:28:57,440 --> 00:28:59,920
Speaker 1: Do you think I feel like I've changed a lot

596
00:29:00,000 --> 00:29:01,600
Speaker 1: and actually in the way I think about money and

597
00:29:01,600 --> 00:29:04,520
Speaker 1: handle money and grown a lot, because for me, it

598
00:29:04,600 --> 00:29:07,000
Speaker 1: was kind of a nose to the grindstone, let's be frugal,

599
00:29:07,080 --> 00:29:09,840
Speaker 1: let's get to this point, and now I feel very

600
00:29:09,920 --> 00:29:13,080
Speaker 1: very differently about how I approach it. And I'm my

601
00:29:13,160 --> 00:29:15,600
Speaker 1: wife the other day was like, actually, my best friend

602
00:29:15,600 --> 00:29:17,800
Speaker 1: friend lives in Hawaii and some of my other friends

603
00:29:17,840 --> 00:29:19,760
Speaker 1: are going to go visitor. What do you think? Like

604
00:29:19,800 --> 00:29:21,600
Speaker 1: this is spur of the moment whim should I go?

605
00:29:21,640 --> 00:29:23,440
Speaker 1: And I'm like, yes, heck, yeah, we're spending money on that.

606
00:29:24,120 --> 00:29:26,120
Speaker 1: And like ten years ago I would have been like,

607
00:29:26,280 --> 00:29:28,959
Speaker 1: oh no, we can't do that, even if we actually

608
00:29:28,960 --> 00:29:31,680
Speaker 1: had the money. But I think that's like a helpful

609
00:29:31,720 --> 00:29:34,360
Speaker 1: mindset shift that probably more of us need to go through.

610
00:29:34,360 --> 00:29:36,160
Speaker 1: That was really helpful for me. How do you think

611
00:29:36,200 --> 00:29:39,280
Speaker 1: about maybe changing the way you maybe loosening the purse strings,

612
00:29:39,280 --> 00:29:43,280
Speaker 1: feeling a little more comfortable opening up and using the

613
00:29:43,320 --> 00:29:47,160
Speaker 1: money that you've been able to amass for your benefit

614
00:29:47,160 --> 00:29:48,080
Speaker 1: for your family's benefit.

615
00:29:49,080 --> 00:29:51,719
Speaker 2: I have a thousand percent agree that everybody changes, and

616
00:29:51,800 --> 00:29:53,640
Speaker 2: I'm not the same person now that I was ten

617
00:29:53,720 --> 00:29:56,240
Speaker 2: years ago. Either. What I think is impossible to do

618
00:29:57,280 --> 00:30:00,680
Speaker 2: is to plan that out ahead and say, once my

619
00:30:00,760 --> 00:30:03,800
Speaker 2: net worth hits X, then I'll change my behavior. I

620
00:30:03,840 --> 00:30:06,640
Speaker 2: think I think we all evolve and adapt based off

621
00:30:06,680 --> 00:30:08,960
Speaker 2: of our own experiences life and the age that we're

622
00:30:08,960 --> 00:30:10,960
Speaker 2: at and the age our children are at. But I

623
00:30:10,960 --> 00:30:13,040
Speaker 2: think it's very difficult to say I'm going to eat

624
00:30:13,080 --> 00:30:15,960
Speaker 2: top Ramen until my network, until my net worth hits X,

625
00:30:16,000 --> 00:30:17,600
Speaker 2: and then I'm going to go out and enjoy the

626
00:30:17,600 --> 00:30:20,280
Speaker 2: fancy food. It's it's you. You. You have to get

627
00:30:20,280 --> 00:30:23,120
Speaker 2: there on your own terms and doing your own thing.

628
00:30:23,200 --> 00:30:24,880
Speaker 2: It's mapping it out, because I think when you map

629
00:30:24,920 --> 00:30:29,000
Speaker 2: it out, that's when you are almost explicitly sacrificing today

630
00:30:29,440 --> 00:30:32,840
Speaker 2: for some imagined joy down in the future. So it's

631
00:30:32,880 --> 00:30:35,240
Speaker 2: it's it's not that we don't change, it's that it's

632
00:30:35,320 --> 00:30:38,080
Speaker 2: hard to restrict who you are and then assume that

633
00:30:38,120 --> 00:30:39,760
Speaker 2: you're going to turn a dial at some point in

634
00:30:39,760 --> 00:30:41,160
Speaker 2: the future and become a different person.

635
00:30:41,680 --> 00:30:44,800
Speaker 1: You've also talked about money becoming a liability past a

636
00:30:44,800 --> 00:30:47,280
Speaker 1: certain point. What do you mean by that because is

637
00:30:47,720 --> 00:30:50,680
Speaker 1: especially when you think about somebody, uh, you know who's

638
00:30:50,760 --> 00:30:53,719
Speaker 1: a great saver, great investor. They reach retirement, they've got

639
00:30:53,720 --> 00:30:56,400
Speaker 1: four million dollars, there's a there's a decent chance that

640
00:30:56,400 --> 00:30:58,720
Speaker 1: they're like money continues to grow even as they're spending

641
00:30:58,760 --> 00:31:01,440
Speaker 1: it down. Why why would be a liability for them?

642
00:31:02,080 --> 00:31:06,160
Speaker 2: It can become a liability personally when you have the

643
00:31:06,200 --> 00:31:08,200
Speaker 2: amount of angst of like what am I supposed to

644
00:31:08,200 --> 00:31:10,160
Speaker 2: do with this? For a lot of people, how that

645
00:31:10,200 --> 00:31:12,440
Speaker 2: comes into play and this is the ultimate tiny violin.

646
00:31:12,520 --> 00:31:14,480
Speaker 2: You don't feel that bad for these people where it

647
00:31:14,480 --> 00:31:16,760
Speaker 2: comes into play, or people who are like man, my

648
00:31:16,960 --> 00:31:20,880
Speaker 2: entire life, I told myself that once and if only

649
00:31:20,920 --> 00:31:23,280
Speaker 2: I had X dollars in the bank, four million dollars

650
00:31:23,280 --> 00:31:25,960
Speaker 2: at retirement, then I'd be happy. That I would wake

651
00:31:26,040 --> 00:31:28,080
Speaker 2: up with a smile on my face and I'd get

652
00:31:28,080 --> 00:31:30,040
Speaker 2: to do the things that bring me joy. And then

653
00:31:30,040 --> 00:31:33,280
Speaker 2: they get to that level, and nine times out of ten,

654
00:31:33,640 --> 00:31:36,400
Speaker 2: nine point nine times out of ten, the persons realizes

655
00:31:36,440 --> 00:31:37,959
Speaker 2: that they're not nearly as happy as they thought they

656
00:31:37,960 --> 00:31:40,560
Speaker 2: would be, that a lot of the hole that was

657
00:31:40,640 --> 00:31:43,000
Speaker 2: in their life that they were trying to fill had

658
00:31:43,000 --> 00:31:47,240
Speaker 2: to do with relationships and health and purpose, and they

659
00:31:47,280 --> 00:31:49,120
Speaker 2: thought that if they just dumped a bunch of money

660
00:31:49,120 --> 00:31:51,200
Speaker 2: in that hole, it would all be filled up. And

661
00:31:51,200 --> 00:31:54,239
Speaker 2: that is a very tempting thing to tell yourself, and

662
00:31:54,320 --> 00:31:57,200
Speaker 2: it is it could be devastating for people to actually

663
00:31:57,280 --> 00:32:00,640
Speaker 2: experience in real life. The other area where money becomes

664
00:32:01,160 --> 00:32:05,000
Speaker 2: a financial asset but a psychological liability is when it

665
00:32:05,120 --> 00:32:08,880
Speaker 2: changes how other people think of you. Your children, your friends,

666
00:32:09,040 --> 00:32:10,960
Speaker 2: your spouse. How they look at you and what they

667
00:32:11,000 --> 00:32:14,600
Speaker 2: expect from you can change in profound ways once you

668
00:32:14,600 --> 00:32:17,520
Speaker 2: start accumulating serious amounts of money. And you will not

669
00:32:17,600 --> 00:32:21,479
Speaker 2: find a single ultra high net worth person who doesn't

670
00:32:21,640 --> 00:32:25,760
Speaker 2: struggle daily with the concept of how do I use

671
00:32:25,760 --> 00:32:29,040
Speaker 2: my money to benefit my children without turning them into

672
00:32:29,080 --> 00:32:32,360
Speaker 2: spoiled little jerks? It is and the reason that they

673
00:32:32,400 --> 00:32:35,120
Speaker 2: all struggle with it, the reason they all struggle with

674
00:32:35,160 --> 00:32:37,240
Speaker 2: it is because there's no answer to that question. There's

675
00:32:37,360 --> 00:32:39,360
Speaker 2: no oh, here, just go out and do X, Y

676
00:32:39,440 --> 00:32:42,040
Speaker 2: and Z, and then you can give your kids tons

677
00:32:42,040 --> 00:32:44,400
Speaker 2: of money and they'll be very appreciative and well balanced

678
00:32:44,400 --> 00:32:46,920
Speaker 2: people for it. There's no way to do that. And

679
00:32:47,000 --> 00:32:49,600
Speaker 2: so it's not that these are the biggest financial problems

680
00:32:49,640 --> 00:32:51,760
Speaker 2: in the world. They're not, but it's too easy to

681
00:32:51,800 --> 00:32:54,400
Speaker 2: tell yourself that life will be perfect if only I

682
00:32:54,440 --> 00:32:59,040
Speaker 2: had more money without taking into account the psychological social

683
00:32:59,080 --> 00:33:00,479
Speaker 2: downsides that can with it.

684
00:33:01,640 --> 00:33:03,720
Speaker 1: How big of a problem is underspending, especially like in

685
00:33:03,760 --> 00:33:06,880
Speaker 1: the personal finance and in the fire community. Uh, just

686
00:33:07,040 --> 00:33:09,680
Speaker 1: not valuing what a dollar can do for you today?

687
00:33:10,000 --> 00:33:15,120
Speaker 1: From an experiential standpoint, do you think that that's an

688
00:33:15,240 --> 00:33:20,960
Speaker 1: underconsidered like risk of the sort of like future thinking mindset.

689
00:33:20,960 --> 00:33:23,120
Speaker 1: I think, like for a while that was I was

690
00:33:23,160 --> 00:33:26,360
Speaker 1: just always thinking about this, like this future that I

691
00:33:26,440 --> 00:33:29,920
Speaker 1: could build, and I wasn't living in the reality of

692
00:33:30,200 --> 00:33:33,400
Speaker 1: today for a lot of years. Man, And like, yeah,

693
00:33:33,600 --> 00:33:36,320
Speaker 1: has that did that benefit my my bank account or

694
00:33:36,360 --> 00:33:38,239
Speaker 1: my four one case? Yeah it did, it did, but

695
00:33:38,360 --> 00:33:41,400
Speaker 1: like at what cost? And in some ways I have

696
00:33:41,440 --> 00:33:44,680
Speaker 1: a lot more flexibility because of that now. But yeah,

697
00:33:44,760 --> 00:33:48,040
Speaker 1: just how big of a problem is that risk of underspending?

698
00:33:48,680 --> 00:33:50,440
Speaker 2: I think it's definitely a problem. But on the spectrum

699
00:33:50,480 --> 00:33:52,240
Speaker 2: of problems we have in the world, it is it

700
00:33:52,360 --> 00:33:55,800
Speaker 2: is is almost unmentionable. It's probably the equivalent of people

701
00:33:55,800 --> 00:33:59,520
Speaker 2: who over exercise, And is over exercise a problem? Yeah,

702
00:33:59,600 --> 00:34:01,800
Speaker 2: you can your joints and do all kinds of things.

703
00:34:01,840 --> 00:34:05,640
Speaker 2: But like, look, relative to the alternative of not exercise,

704
00:34:05,880 --> 00:34:08,439
Speaker 2: is it is the tiniest little problem in the world.

705
00:34:08,760 --> 00:34:12,640
Speaker 2: And so what percentage of people in America have an

706
00:34:12,719 --> 00:34:16,239
Speaker 2: underspending problem? It is so in intensively small, and of

707
00:34:16,280 --> 00:34:19,360
Speaker 2: those people, it's the ultimate problem, because you're just banking

708
00:34:19,440 --> 00:34:21,040
Speaker 2: up money that you might be able to spend some

709
00:34:21,160 --> 00:34:23,640
Speaker 2: day in the future. So I'm not discounting the problem

710
00:34:23,640 --> 00:34:26,040
Speaker 2: that some people can have with it of money hijacking

711
00:34:26,080 --> 00:34:29,719
Speaker 2: their personality and taking over their identity and causing them

712
00:34:30,160 --> 00:34:32,799
Speaker 2: the inability to spend. Especially where you see this as

713
00:34:32,880 --> 00:34:35,239
Speaker 2: a problem are people who have saved a lot of

714
00:34:35,239 --> 00:34:38,880
Speaker 2: money for retirement and they've they're sixty five years old,

715
00:34:38,920 --> 00:34:41,560
Speaker 2: they've got five million dollars. Congratulations, you won the game.

716
00:34:42,080 --> 00:34:46,080
Speaker 2: You now go comfortably spend thousands and thousands of dollars

717
00:34:46,120 --> 00:34:48,160
Speaker 2: a month on a great retirement. And they can't do it.

718
00:34:48,360 --> 00:34:50,840
Speaker 2: They can't bring themselves to do it. And so that

719
00:34:50,960 --> 00:34:53,640
Speaker 2: is an example of money hijacking your personality. There's also

720
00:34:53,719 --> 00:34:56,120
Speaker 2: part of this where I'm like, look, if you are

721
00:34:56,160 --> 00:34:58,799
Speaker 2: sixty five years old and you retire, there's a good

722
00:34:58,920 --> 00:35:01,960
Speaker 2: chance that either you or your spouse or both of

723
00:35:02,000 --> 00:35:04,360
Speaker 2: you are going to live into your nineties, and so

724
00:35:04,520 --> 00:35:06,640
Speaker 2: that nesttag that is a lot of money that you

725
00:35:06,760 --> 00:35:11,680
Speaker 2: saved up might need just to sustain you for three decades. Yeah,

726
00:35:11,760 --> 00:35:14,160
Speaker 2: and under those terms, it makes sense you have a

727
00:35:14,200 --> 00:35:17,120
Speaker 2: little bit of angst of overspending this and that is

728
00:35:17,160 --> 00:35:19,759
Speaker 2: causing you to underspend it based off of what the

729
00:35:19,760 --> 00:35:22,040
Speaker 2: spreadsheets and the financial advisors tell you that you should

730
00:35:22,040 --> 00:35:23,600
Speaker 2: be able to do. So some of that makes a

731
00:35:23,600 --> 00:35:26,120
Speaker 2: lot of sense going into it, but on the spectrum

732
00:35:26,160 --> 00:35:28,600
Speaker 2: of problems that people have, that is not even the

733
00:35:28,600 --> 00:35:29,200
Speaker 2: top fifty.

734
00:35:29,480 --> 00:35:32,800
Speaker 1: But it does make me think of your the chapter

735
00:35:32,840 --> 00:35:35,520
Speaker 1: in your book, the wealth without independence is a unique

736
00:35:35,560 --> 00:35:40,319
Speaker 1: form of poverty, and the inability right to spend the

737
00:35:40,360 --> 00:35:44,480
Speaker 1: money that we've accrued can can feel like a little

738
00:35:44,480 --> 00:35:45,640
Speaker 1: prison of our own creation.

739
00:35:46,440 --> 00:35:51,160
Speaker 2: It definitely can, and I've experienced that personally myself at

740
00:35:51,160 --> 00:35:53,640
Speaker 2: times of being like I don't, I don't. I mean,

741
00:35:53,680 --> 00:35:55,520
Speaker 2: this is a conversation I have when my wife, like

742
00:35:55,560 --> 00:35:59,120
Speaker 2: in the last week of like, are are we doing

743
00:35:59,160 --> 00:36:01,400
Speaker 2: the best job that we can spending the money that

744
00:36:01,440 --> 00:36:03,880
Speaker 2: we have? And because there's a lot of times where like, oh,

745
00:36:03,920 --> 00:36:05,680
Speaker 2: wouldn't be cool if we had one of these. And

746
00:36:05,800 --> 00:36:08,399
Speaker 2: we always talk ourselves out of it, and I mean

747
00:36:08,480 --> 00:36:10,399
Speaker 2: we do a pretty good job. I think we spend

748
00:36:10,520 --> 00:36:12,000
Speaker 2: a hell of a lot more money now than we

749
00:36:12,000 --> 00:36:14,960
Speaker 2: did five years ago. But it can it can be

750
00:36:15,200 --> 00:36:18,440
Speaker 2: a difficult thing, I think, especially when you you know,

751
00:36:18,480 --> 00:36:21,520
Speaker 2: it's easy when you're nineteen years old to be like, oh,

752
00:36:21,880 --> 00:36:24,600
Speaker 2: you can so easily imagine a world in which having

753
00:36:24,600 --> 00:36:26,359
Speaker 2: more money would give you a better life. And you'd

754
00:36:26,360 --> 00:36:28,680
Speaker 2: be like, I'll have a mansion and that'll make me happy,

755
00:36:28,840 --> 00:36:31,120
Speaker 2: and I'll have a Lamborghini that'll make me happy, and

756
00:36:31,239 --> 00:36:33,319
Speaker 2: big diamonds and those will make me happy. And then

757
00:36:34,000 --> 00:36:36,600
Speaker 2: a lot of times you get those things and you're like,

758
00:36:36,680 --> 00:36:38,759
Speaker 2: I don't know, didn't it either did nothing for me

759
00:36:38,920 --> 00:36:40,840
Speaker 2: or it did way less than I thought it would

760
00:36:40,840 --> 00:36:42,960
Speaker 2: for me. You know, easy to dream about the mansion

761
00:36:42,960 --> 00:36:45,640
Speaker 2: when you're nineteen, much harder to care for and take

762
00:36:45,719 --> 00:36:48,359
Speaker 2: and replace the roof on a mansion when you're forty five.

763
00:36:48,680 --> 00:36:52,000
Speaker 2: You know, that's a that's a totally different world. And

764
00:36:52,080 --> 00:36:56,520
Speaker 2: so it can be an issue that requires again experimenting

765
00:36:56,880 --> 00:37:01,600
Speaker 2: with other kinds of spending and being okay with I'm

766
00:37:01,600 --> 00:37:05,520
Speaker 2: perfectly okay, Again, spending money on my independence, by which

767
00:37:05,560 --> 00:37:08,000
Speaker 2: I mean just not spending it today, and that it

768
00:37:08,040 --> 00:37:10,400
Speaker 2: gives me pleasure both in the independence I get today

769
00:37:10,680 --> 00:37:12,440
Speaker 2: and in knowing that it's going to go to at

770
00:37:12,440 --> 00:37:15,200
Speaker 2: some point in the future my errors or to charity

771
00:37:15,320 --> 00:37:17,000
Speaker 2: like that gives me a lot of joy and happiness

772
00:37:17,000 --> 00:37:17,719
Speaker 2: to think about as well.

773
00:37:18,040 --> 00:37:20,200
Speaker 1: All right, I want to get to more Morgan with

774
00:37:20,280 --> 00:37:21,560
Speaker 1: you in just a second. I want to get actually

775
00:37:21,560 --> 00:37:27,200
Speaker 1: really personal, especially as someone who has been really successful,

776
00:37:28,400 --> 00:37:32,040
Speaker 1: how has more money changed your life? I'll put Morgan

777
00:37:32,040 --> 00:37:41,480
Speaker 1: on the hot seat right after this talking with Morgan

778
00:37:41,520 --> 00:37:44,919
Speaker 1: hasel talking about talking about spending money, spending it well,

779
00:37:45,000 --> 00:37:47,400
Speaker 1: spending it in ways that kind of allow you to

780
00:37:47,920 --> 00:37:52,720
Speaker 1: live a life that gives you meaning, right purpose, Morgan,

781
00:37:52,760 --> 00:37:55,600
Speaker 1: You've sold I think like ten million books? Is that right? Something?

782
00:37:55,760 --> 00:37:56,120
Speaker 2: That's right?

783
00:37:56,200 --> 00:37:59,040
Speaker 1: Yeah? More? Okay, that's I mean, that's crazy, especially in

784
00:37:59,440 --> 00:38:03,560
Speaker 1: the modern how many people read to that the extent

785
00:38:03,560 --> 00:38:06,160
Speaker 1: they used to do anymore? How has that sort of

786
00:38:06,200 --> 00:38:10,840
Speaker 1: like success and making more money impacted how you spend like,

787
00:38:11,360 --> 00:38:14,120
Speaker 1: especially as someone who is such a good saber and

788
00:38:14,160 --> 00:38:17,520
Speaker 1: a thoughtful investor, how how's that change you?

789
00:38:17,800 --> 00:38:21,040
Speaker 2: Well? I'll give you it. In analytic terms, I think

790
00:38:21,080 --> 00:38:23,920
Speaker 2: it's it's probably right that we spend about as much

791
00:38:24,000 --> 00:38:27,439
Speaker 2: money per month now that we did per year six

792
00:38:27,520 --> 00:38:30,200
Speaker 2: years ago. That's that's that's close to right. It's something

793
00:38:30,280 --> 00:38:33,600
Speaker 2: like that, And I would say that that's great. It's

794
00:38:33,640 --> 00:38:35,719
Speaker 2: been a lot of fun we have my family has

795
00:38:35,760 --> 00:38:38,680
Speaker 2: a great life now. But I would also the reason

796
00:38:38,760 --> 00:38:41,200
Speaker 2: I'm comfortable saying that is because I would also say,

797
00:38:41,320 --> 00:38:44,160
Speaker 2: if you asked me six years ago, Morgan, what would

798
00:38:44,200 --> 00:38:47,400
Speaker 2: your life feel like if you were spending X dollars

799
00:38:47,440 --> 00:38:51,080
Speaker 2: that we are today, I would have predicted that it

800
00:38:51,080 --> 00:38:53,640
Speaker 2: would have felt twice as good as it actually does

801
00:38:53,719 --> 00:38:56,640
Speaker 2: right now. So it's good, it's great. I have no regrets.

802
00:38:56,680 --> 00:38:59,400
Speaker 2: It's fun. I don't want to go back. I would

803
00:38:59,400 --> 00:39:01,919
Speaker 2: not pretend in a million years that it's as good

804
00:39:01,920 --> 00:39:03,480
Speaker 2: as I thought it would be. And I would even

805
00:39:03,520 --> 00:39:06,120
Speaker 2: say I'm making these percentages up. But I would say,

806
00:39:06,120 --> 00:39:08,120
Speaker 2: in the last six years, and my in cup has

807
00:39:08,160 --> 00:39:11,319
Speaker 2: gone up very considerably, there have probably been, you know,

808
00:39:12,080 --> 00:39:16,080
Speaker 2: five parts of my life that have gotten better, two

809
00:39:16,120 --> 00:39:18,719
Speaker 2: parts of my life that have stayed the same, and

810
00:39:18,800 --> 00:39:20,799
Speaker 2: three parts of my life that have gotten worse. It's

811
00:39:20,840 --> 00:39:23,560
Speaker 2: probably something like that. So on. You know, on the whole,

812
00:39:23,960 --> 00:39:26,840
Speaker 2: it's gotten better, but it's just not what the dream

813
00:39:26,960 --> 00:39:29,239
Speaker 2: would have told me it would have been. Forget six

814
00:39:29,360 --> 00:39:31,839
Speaker 2: years ago, but especially when I was seventeen eighteen. If

815
00:39:31,880 --> 00:39:33,840
Speaker 2: you had told eighteen year old Morgan, hey, by the

816
00:39:33,840 --> 00:39:36,000
Speaker 2: time you're forty years old, you're going to be earning

817
00:39:36,040 --> 00:39:38,360
Speaker 2: and spending X dollars per year, I would have been like,

818
00:39:38,400 --> 00:39:40,719
Speaker 2: this is this is it. It's going to wake up every

819
00:39:40,760 --> 00:39:46,120
Speaker 2: morning laughing with joy. And of course I'm proud, and

820
00:39:46,160 --> 00:39:49,120
Speaker 2: I have a lower sense of anxiety and stress than

821
00:39:49,120 --> 00:39:52,600
Speaker 2: I would have. But it's not what I imagined it would

822
00:39:52,680 --> 00:39:55,040
Speaker 2: have been. That's not disappointing to me. I think it's

823
00:39:55,080 --> 00:39:58,480
Speaker 2: mostly just interesting. And there's also an upside to this

824
00:39:58,600 --> 00:40:01,120
Speaker 2: is when you realize that money is not the solution

825
00:40:01,200 --> 00:40:03,719
Speaker 2: to all your problems that I thought it was when

826
00:40:03,760 --> 00:40:06,560
Speaker 2: I was when I was younger, then it forces you

827
00:40:06,880 --> 00:40:08,840
Speaker 2: to say, okay, well, then what is the solution to

828
00:40:08,880 --> 00:40:12,440
Speaker 2: my problem? Is it better relationships? Better health? But like

829
00:40:12,520 --> 00:40:14,919
Speaker 2: those kind of things, And so I spend more time

830
00:40:15,000 --> 00:40:18,839
Speaker 2: thinking about those topics now because I know, yes, what

831
00:40:18,880 --> 00:40:21,120
Speaker 2: money can do for me, but more importantly, what it

832
00:40:21,160 --> 00:40:23,399
Speaker 2: cannot do for me, and so now, for the first

833
00:40:23,400 --> 00:40:25,840
Speaker 2: time in my life, I'm focusing on things that I

834
00:40:25,880 --> 00:40:27,440
Speaker 2: think are much more important than money.

835
00:40:27,560 --> 00:40:29,839
Speaker 1: Can I ask what the parts of your life they

836
00:40:29,840 --> 00:40:30,400
Speaker 1: got worse.

837
00:40:30,239 --> 00:40:35,440
Speaker 2: Were higher expectations from myself and others, my kids becoming

838
00:40:35,480 --> 00:40:40,359
Speaker 2: spoiled and unappreciative of the absolutely sensational life that they have.

839
00:40:41,120 --> 00:40:45,040
Speaker 2: That's mostly it. Higher expectations in my own career, higher

840
00:40:45,120 --> 00:40:49,839
Speaker 2: expectations from other people around me, family and friends and kids.

841
00:40:49,920 --> 00:40:51,319
Speaker 2: I think that's the majority of it.

842
00:40:51,640 --> 00:40:56,120
Speaker 1: I totally get that. Yeah, And as you do well financially,

843
00:40:57,080 --> 00:40:58,680
Speaker 1: like part of the impetus for me to do well

844
00:40:58,719 --> 00:41:01,439
Speaker 1: financially was like growing up up in a home where

845
00:41:01,480 --> 00:41:05,120
Speaker 1: money was like super tight and not handled all that well,

846
00:41:05,520 --> 00:41:07,480
Speaker 1: and I was like, I don't want my life to

847
00:41:07,560 --> 00:41:11,000
Speaker 1: be run by poor money management. And then you do

848
00:41:11,080 --> 00:41:13,560
Speaker 1: well with money, and then there are other problems, especially

849
00:41:13,680 --> 00:41:17,840
Speaker 1: especially with the kiddos who are watching everything you do. Okay,

850
00:41:17,880 --> 00:41:20,799
Speaker 1: so I know that your ultimate goal is independence. Independence

851
00:41:21,040 --> 00:41:24,000
Speaker 1: is like this huge thing for you. I'm curious, and

852
00:41:24,040 --> 00:41:26,799
Speaker 1: we've talked about the importance of doing something with the

853
00:41:26,840 --> 00:41:29,600
Speaker 1: independence you've earned instead of just leaving that money locked

854
00:41:29,640 --> 00:41:32,400
Speaker 1: in a vault. What are you doing with the independence

855
00:41:32,680 --> 00:41:34,719
Speaker 1: that you've earned? How is it impacting you right now?

856
00:41:34,920 --> 00:41:38,120
Speaker 2: Let's say, from a big picture, I now only work

857
00:41:38,160 --> 00:41:40,359
Speaker 2: on the projects that I want to work on. I

858
00:41:40,400 --> 00:41:43,440
Speaker 2: only write the articles and the books that are interesting

859
00:41:43,480 --> 00:41:46,040
Speaker 2: to me. I only speak at events that are in

860
00:41:46,080 --> 00:41:49,839
Speaker 2: cities that I like going to. It's purely optional now

861
00:41:49,880 --> 00:41:52,640
Speaker 2: and I just do it for my own enjoyment and thrill.

862
00:41:52,920 --> 00:41:54,960
Speaker 2: And that's very different than fifteen years ago, when I

863
00:41:55,000 --> 00:41:57,480
Speaker 2: was like, I will do anything for anyone who's willing

864
00:41:57,520 --> 00:42:00,719
Speaker 2: to send me money. That's effectively I mean, there's some

865
00:42:00,760 --> 00:42:03,120
Speaker 2: cardrails around that, but that was effectively it. And so

866
00:42:03,160 --> 00:42:05,000
Speaker 2: from a work point of view, it's that from a

867
00:42:05,040 --> 00:42:07,399
Speaker 2: day to day point of view, things I do now

868
00:42:07,440 --> 00:42:09,440
Speaker 2: that I wasn't doing six years ago. I usually go

869
00:42:09,480 --> 00:42:11,160
Speaker 2: for a one hour walk every day, or I just

870
00:42:11,200 --> 00:42:13,399
Speaker 2: listen to a podcast. I walk my dog and go

871
00:42:13,440 --> 00:42:15,960
Speaker 2: for walks with my wife much more than I used to.

872
00:42:16,960 --> 00:42:19,319
Speaker 2: I take a nap around two pm every day. It's

873
00:42:19,360 --> 00:42:21,680
Speaker 2: those kind of things where it's like, look, if I'm

874
00:42:22,000 --> 00:42:25,600
Speaker 2: you know, that's taking advantage of the independence, and it's like,

875
00:42:25,719 --> 00:42:28,399
Speaker 2: there's no point in my mind of having it and

876
00:42:28,440 --> 00:42:31,360
Speaker 2: not doing those kind of things that I find so

877
00:42:31,520 --> 00:42:32,360
Speaker 2: valuable in life.

878
00:42:32,520 --> 00:42:35,560
Speaker 1: Yeah, wonderful, Morgan. This has been a great conversation. Thanks

879
00:42:35,560 --> 00:42:38,200
Speaker 1: for joining me work in how Money Listeners find out

880
00:42:38,239 --> 00:42:41,200
Speaker 1: more about you what you're up to, and the new book.

881
00:42:41,440 --> 00:42:43,480
Speaker 2: The three books I've written, The Psychology of Money same

882
00:42:43,520 --> 00:42:45,760
Speaker 2: as ever, and The Artist Spending Money. That's where everything

883
00:42:45,800 --> 00:42:50,320
Speaker 2: that I've ever thought about put together in this behavioral

884
00:42:50,360 --> 00:42:52,000
Speaker 2: finance sphere is written down.

885
00:42:52,360 --> 00:42:54,160
Speaker 1: Lovely awesome. We'll link to them in the show notes

886
00:42:54,239 --> 00:42:56,560
Speaker 1: up on the website as well. Thanks again, Morgan. Thanks

887
00:42:56,600 --> 00:43:02,000
Speaker 1: so much, Morgan Housel the goquote. It was an absolute

888
00:43:02,040 --> 00:43:05,960
Speaker 1: pleasure to talk with him, and I've just learned so

889
00:43:06,080 --> 00:43:09,440
Speaker 1: much from him over the years that I mean, I

890
00:43:09,440 --> 00:43:12,880
Speaker 1: didn't even bring this up, but my favorite quote, I

891
00:43:12,880 --> 00:43:14,319
Speaker 1: don't know, one of my favorite quotes of all time

892
00:43:14,400 --> 00:43:17,480
Speaker 1: comes from Morgan from many, many many years ago, when

893
00:43:17,520 --> 00:43:21,240
Speaker 1: he says to save like a pestimist and to invest

894
00:43:21,280 --> 00:43:24,439
Speaker 1: like an optimist. And I think that is just such

895
00:43:24,440 --> 00:43:28,160
Speaker 1: a pillar of money advice. I'm sure how to money

896
00:43:28,160 --> 00:43:29,839
Speaker 1: listeners who we listened for a long time have heard

897
00:43:29,840 --> 00:43:33,440
Speaker 1: me bring up that quote many many times, and Morgan

898
00:43:33,560 --> 00:43:38,480
Speaker 1: just has these these insights. It's largely because he's so

899
00:43:38,719 --> 00:43:42,640
Speaker 1: well read and he's so thoughtful that far few people

900
00:43:42,840 --> 00:43:46,680
Speaker 1: have the ability to come up with so and even

901
00:43:46,719 --> 00:43:49,040
Speaker 1: just in this conversation, like so much good stuff. I

902
00:43:49,040 --> 00:43:52,840
Speaker 1: think my big takeaway was when we're talking about the

903
00:43:52,960 --> 00:43:55,880
Speaker 1: role that emotions play and how we think about and

904
00:43:55,880 --> 00:43:59,840
Speaker 1: in how we spend money, and like at times I

905
00:43:59,840 --> 00:44:02,919
Speaker 1: think Matt and I have probably we've talked about home buying.

906
00:44:02,920 --> 00:44:06,000
Speaker 1: We're talking about not getting out over your skis from

907
00:44:06,040 --> 00:44:09,359
Speaker 1: an emotional standpoint, and it's really easy, Like think about

908
00:44:09,400 --> 00:44:12,759
Speaker 1: the bidding wars of three and a half four years ago,

909
00:44:13,239 --> 00:44:16,400
Speaker 1: right where people were like competing for homes and they're like,

910
00:44:16,440 --> 00:44:19,640
Speaker 1: I'll pay one hundred thousand dollars more than list price,

911
00:44:20,400 --> 00:44:23,080
Speaker 1: and some people now regret it. Right they're in a

912
00:44:23,120 --> 00:44:26,839
Speaker 1: home that they paid too much for and maybe they'd

913
00:44:26,880 --> 00:44:30,040
Speaker 1: like to move on to do something else, but they

914
00:44:30,200 --> 00:44:32,759
Speaker 1: just it's hard to get out from a decision like that.

915
00:44:33,440 --> 00:44:36,880
Speaker 1: And what Morgan said was go half heart, half spreadsheet.

916
00:44:37,560 --> 00:44:40,319
Speaker 1: And I think that's a really really good approach. That's

917
00:44:40,680 --> 00:44:43,759
Speaker 1: really good advice because you don't want to like take

918
00:44:43,760 --> 00:44:46,480
Speaker 1: your heart completely out of it. Sometimes you find a house.

919
00:44:46,719 --> 00:44:49,239
Speaker 1: I mean, I still remember my favorite house that we've

920
00:44:49,239 --> 00:44:51,919
Speaker 1: ever owned, not the house we're currently in it's great,

921
00:44:52,080 --> 00:44:54,839
Speaker 1: but the last house. And it spoke to me. I

922
00:44:54,880 --> 00:44:58,440
Speaker 1: remember walking in that house, this nineteen twenties bungalow, with

923
00:44:58,680 --> 00:45:03,719
Speaker 1: the original hardwood floors, the unpainted molding around, and it

924
00:45:03,800 --> 00:45:06,759
Speaker 1: needed a lot of work, it was in disrepair. But

925
00:45:06,800 --> 00:45:09,000
Speaker 1: I was like, this is the place. This is home,

926
00:45:09,320 --> 00:45:13,560
Speaker 1: this giant front porch on a corner where I get

927
00:45:13,600 --> 00:45:18,040
Speaker 1: to talk to my neighbors every thirty seconds, which is

928
00:45:18,440 --> 00:45:21,239
Speaker 1: my jam as an extrovert. And so there was a

929
00:45:21,280 --> 00:45:25,200
Speaker 1: lot of emotion, positive emotion about that house when I

930
00:45:25,200 --> 00:45:26,759
Speaker 1: saw it for the first time, when Emily and I

931
00:45:26,840 --> 00:45:29,799
Speaker 1: saw it. But the other thing was we didn't leave

932
00:45:29,800 --> 00:45:32,879
Speaker 1: out the numbers right, and we were I remember even

933
00:45:32,960 --> 00:45:35,879
Speaker 1: paying more than asking price for that, but we thought it, oh,

934
00:45:35,920 --> 00:45:38,560
Speaker 1: you know what, this is actually a duplex and we

935
00:45:38,560 --> 00:45:41,000
Speaker 1: can rent out the back. And so part of it

936
00:45:41,040 --> 00:45:44,160
Speaker 1: was limiting our parameters to begin with and saying, well,

937
00:45:44,200 --> 00:45:48,399
Speaker 1: we really do want income producing property, but it has

938
00:45:48,440 --> 00:45:51,759
Speaker 1: to work for our lifestyle as well. And so that

939
00:45:51,800 --> 00:45:54,359
Speaker 1: half heart half spreadsheet is just such a great way

940
00:45:54,880 --> 00:45:59,560
Speaker 1: to think about big purchases and big spending line items,

941
00:46:00,080 --> 00:46:03,600
Speaker 1: and I mean so much good advice from Morgan in

942
00:46:05,120 --> 00:46:07,400
Speaker 1: this episode. And if you're looking to learn more and

943
00:46:07,440 --> 00:46:10,240
Speaker 1: you want to learn more about thoughtful intentional spending, highly

944
00:46:10,280 --> 00:46:13,640
Speaker 1: recommend his book The Art of Spending Money, Simple Choices

945
00:46:13,719 --> 00:46:17,720
Speaker 1: for a Richer Life. And there are so many things

946
00:46:18,000 --> 00:46:22,880
Speaker 1: that will tempt us this year to spend money, and

947
00:46:23,160 --> 00:46:26,120
Speaker 1: some of them will bring a meaningful return many many

948
00:46:26,160 --> 00:46:30,160
Speaker 1: will not. And when we can recognize that on the

949
00:46:30,200 --> 00:46:33,560
Speaker 1: front end and identify what we care about, what we're

950
00:46:33,560 --> 00:46:36,600
Speaker 1: intentionally spending money on versus the things that just pull

951
00:46:36,680 --> 00:46:40,640
Speaker 1: at our wallet because of the culture we swim in

952
00:46:40,800 --> 00:46:43,480
Speaker 1: and what we see happening around us, the happier will be.

953
00:46:43,680 --> 00:46:45,760
Speaker 1: I love to you know, when we talked about someone

954
00:46:45,800 --> 00:46:48,759
Speaker 1: who spends two percent of their money on transportation twenty

955
00:46:48,760 --> 00:46:52,239
Speaker 1: percent on concert tickets, it's an egregious, crazy example, but

956
00:46:52,400 --> 00:46:55,680
Speaker 1: that to me, I agree with Morgan, that is the

957
00:46:55,760 --> 00:46:59,120
Speaker 1: kind of person who is deeply thinking about what matters

958
00:46:59,200 --> 00:47:01,560
Speaker 1: to them. Don't spend twenty percent of your budget on

959
00:47:01,680 --> 00:47:03,279
Speaker 1: concert tickets if you can't afford it, if you're going

960
00:47:03,320 --> 00:47:05,960
Speaker 1: into debt, right, But if you are purposely making those

961
00:47:06,000 --> 00:47:08,880
Speaker 1: choices and you're dialing back in other areas. More power

962
00:47:08,880 --> 00:47:12,080
Speaker 1: to you. It makes me think of a recent Head

963
00:47:12,120 --> 00:47:15,320
Speaker 1: of Money question where a listener had like six cars

964
00:47:15,440 --> 00:47:18,000
Speaker 1: but they were all paid for in cash, and it's like, dude,

965
00:47:18,200 --> 00:47:20,719
Speaker 1: do your thing. Like, if that is your jam and

966
00:47:20,760 --> 00:47:22,960
Speaker 1: that's where you're choosing to allocate your money, that's not

967
00:47:23,080 --> 00:47:26,440
Speaker 1: my thing, but clearly it moves the needle for you,

968
00:47:26,520 --> 00:47:31,040
Speaker 1: so go do it. So spend with reckless abandon don't

969
00:47:31,080 --> 00:47:33,120
Speaker 1: just cut the quote there. Spend with reckless abandon on

970
00:47:33,160 --> 00:47:34,840
Speaker 1: the things that matter to you, cut back in the

971
00:47:34,880 --> 00:47:37,160
Speaker 1: areas that don't. And I think that is a good

972
00:47:37,200 --> 00:47:40,200
Speaker 1: recipe for healthy spending in twenty twenty six. All Right,

973
00:47:40,239 --> 00:47:43,480
Speaker 1: thanks as always for listening to the show. Put links

974
00:47:43,520 --> 00:47:46,680
Speaker 1: to Morgan's books and some other resources up in the

975
00:47:46,680 --> 00:47:50,239
Speaker 1: show notes at howtomoney dot com. We'll catch you back

976
00:47:50,280 --> 00:47:53,400
Speaker 1: here on Friday for a fresh Friday flight. Until next time,

977
00:47:53,680 --> 00:47:54,399
Speaker 1: best friend, out

978
00:48:00,640 --> 00:48:03,960
Speaker 2: The