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#5 The Psychology of Money: Finding Fulfillment Beyond Financial Success
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Is your pursuit of financial success leaving you unfulfilled? Join us for a thought-provoking episode where we tackle the complex relationship between money and happiness through the lens of Morgan Housel's "The Psychology of Money." Learn why behavior trumps knowledge in achieving financial well-being and discover the profound significance of knowing when you have "enough." Hear personal and societal stories that illustrate how our upbringing, habits, and societal norms shape our financial behaviors and often lead to a never-ending chase for more.
What does it mean to tie your self-worth to your net worth? We explore the dangerous sacrifices people make in the name of financial gain, such as sacrificing family time, all while perpetually moving their financial goalposts. Through candid discussions, we reveal how constant comparisons, fueled by social media, exacerbate envy and dissatisfaction. Reflecting on experiences and observations, we delve into how societal expectations can distort our financial ambitions and lead us to use money as a flawed value system.
Do material possessions really bring respect and admiration? Unpack the "man in the car paradox" with us as we share relatable anecdotes about the futility of seeking external validation through luxury items. We also emphasize the power of saving for freedom and the role of luck in financial success, using real-life examples like Bill Gates and Kent Evans. Finally, we redefine true wealth, focusing on financial security, freedom, and the joy of meaningful experiences. Dive into practical advice on avoiding lifestyle inflation and maintaining wealth, ultimately challenging the societal norms that equate appearance with financial stability. Tune in for a transformative journey into understanding and managing your relationship with money.
okay, so hello everyone. This week we did um psychology of money. This is one of my personal favorites and I convinced who had to read it.
Speaker 1:I think he's actually read it more than once yeah and to kind of like start us off, because it's such a big book that we probably won't even get to 20 of what there is to cover. It's definitely a highly recommended read to anyone that's interested about the world of finance, but also kind of like a different take on it. I feel like most financial books are in some way like a set of instructions like do this do that like numbers and percentages.
Speaker 1:This one's more like it describes in the title psychology of money. You know the behavior, what's behind your decisions when it comes to money, and you can have a lot of money and follow some of the advice here, or you can have very little money and benefit from some of the advice here. As a matter of fact, I think if you have little money or you're barely starting off, you're younger. That's when you can benefit the most out of reading this book early on. So just kind of like give like a little short introduction. You know this book explores a complex relationship individuals have with money, emphasizing that financial success is not solely about knowledge or intelligence but heavily influenced by behavior.
Speaker 1:But I also like the short introduction the author made you know Morgan Housel, in the back in the little paragraph books have, some of the books have. He wrote doing well with money isn't necessarily about what you know, it's about how you behave and I think that's that really kind of encompasses the like a summary of what he's trying to teach us here. Like it doesn't really matter. You know the numbers and what you invest in and I mean that stuff does have importance. But if you behave badly with money, you can kill all the benefit of that really quickly, whereas if you behave good with money, you can make up for not knowing all that there is to know about stocks and finances and bonds and all of that.
Speaker 2:Yeah, and the thing with finances in general. I think it's the most the topic that affects most everybody. Right, it's something we have to deal with every day.
Speaker 2:But, I feel like it's the topic that's least covered in school, right About financial education, how to guide you, know how to survive in this world in regards to finances, and I do appreciate how you mentioned how he highlights the importance of basically like good habits and behavioral mindsets and also acknowledging why you do things. Sometimes we're not aware that the way we view money is heavily influenced by you know our surroundings, our family, the way our family views money, what country we were born, like all these other variables that he covers. But he does a great job to make you ponder and self-reflect, even though you were raised with this concept of what financial success is or what you do with money. Just because you have that base doesn't mean you can't change habits to better your circumstance. And I don't think, like you've mentioned, I don't think he's trying to push greed right and he's trying to make you be more self-aware of what money does to you, like in your brain, what it does to you.
Speaker 2:So this quote I found very valuable because I feel like it was something I saw a lot growing up and he said the hardest financial skill is getting the goalposts to stop moving. So why do you think it's such a challenge for people, for society, even for ourselves. Maybe let's not make it too broad. Why is it so hard for us to make that goal post from moving right? So what he's alluded way, he's alluding to for those who haven't read the book yet he's alluding to financial goals. Right, let's say, your original goal was oh, if I make fifty thousand dollars a year, I know, if I make this amount, I I'll be happy. And what he's saying is that you achieve those goals, but once you achieve it, you increase your lifestyle. So now you have to make more money. So you got to. You keep pushing those financial goals, so to speak. It's like never ending, or at least that's how I saw it. So that's my question to you, carlos what do you think you know to give a little background before I answer your question.
Speaker 1:This is probably one of my favorite chapters in the entire book and the name of the chapter is Enough If you're reading the book and you Because, honestly, if anyone wants to read the book and jump from chapter to chapter, it's totally possible. I think the way the author broke it down, you could go to a chapter that you're interested in read it next week or next day if you have time read another one.
Speaker 2:You don't have to necessarily go in chronological order. I mean, yeah, it's not linear really, yeah, but there's really no narrative to it.
Speaker 1:Like he breaks it down, uh, by chapters. So in this chapter enough, or the name of the chapter enough, he tells the story of j Heller. And if anyone listening to us is familiar, he's a very famous author. He wrote Catch-22.
Speaker 1:And in this particular story this author is at a you know, a Vanguard's hedge fund manager's party, like this really rich billionaire. And a friend of his tells him, hey, like, are you a little bit jealous? Like that guy made more money in one day than you made in your entire life writing books. And you know, kind of like a very, you know, a very good response that, according to to the author he came up with, or he told his friend, was yeah, but I have something that he'll never have. And he's like what is that? I mean he, he's a billionaire and he has everything he wants. He's like enough, he'll never have enough that he'll keep on wanting more and more and more.
Speaker 1:And I think that's exactly kind of what you're describing, right when he says you get the goalposts to keep moving. That's the danger of money like or or financial goals for financial goals sakes, like, just, oh, I want more. If you think making $50,000 is going to make you happy, you get it. You realize it doesn't? It's kind of foolish. But some people are like, oh, maybe 100 will then.
Speaker 1:And you keep going without realizing that you're just moving the goalposts. You just, instead of enjoying that you achieved something, if you just update it by a new goal, you're never going to get what you desire, which is to feel like fulfilled, feel happy, feel like you have enough. So the author kind of makes you think about that and you know, and cause it in a way foolish right. One of the quotes that I wanted that I wrote down is it's foolish to risk something that's important to you for something that's unimportant to you. It just doesn't make any sense. But that's exactly what people do with money. Like they sacrifice, maybe, family time with friends, things that they know and they claim that they find to be important for things that they assume or they publicly say are not important to them, like, oh, money doesn't matter.
Speaker 1:You know a lot of people say that yeah, everyone says that, like everyone says that, but by their decisions they're showing that it does matter to them it matters more than you know sacrificing some family time.
Speaker 1:So I think you know, going back to your question, what you you mentioned, you know sacrificing some family time. So I think you know, going back to your question you mentioned, you know what my thoughts were on moving the goalpost and I think it's something that requires a lot of like self-knowledge, like knowing yourself well and being honest with yourself on what exactly it is that you want, because if you keep going that way, I mean the author does it, he, he does a, he does a pretty good job of showing, like how someone, no matter how much money they make, they can always be comparing up yeah a soccer player that makes half a million dollars a year is rich by any means.
Speaker 1:To like a normal person right to a teacher yeah, even to a doctor, but when they compare themselves to, like the contract that leonel messi is getting and cristiano ronaldo they feel poor. They're like yeah, yeah yeah, exactly, and cristiano ronaldo and and leonel messi. They might be comparing themselves to the owners of the team like multi-billionaires and they might be thinking, oh, I don't have nearly as much and the list goes on.
Speaker 1:I mean, you can get all the way to like jeff bezos and elon musk and if you keep moving that goalpost, you're gonna you know come to realize, when you're 80 or 90 and life has gone by, that you never sat down and said, oh, I have enough. Like this is, I'm grateful for this.
Speaker 2:I'm gonna enjoy this without looking to getting more and more and more yeah, and for me, it really made me feel like people use these financial goals or these goal goals that they're trying to reach, as the hope for some sort of solution or emptiness they might feel inside, thinking that that's what's gonna fill it it. So once, like you mentioned, once they achieve it, they realize, well, this didn't fill it, so it must be the next goal that's going to satisfy this, instead of, like you said, like taking a step back, say, well, what do I actually want, like the, or why do I want these things? Is it because? Or why do I want these things? Is it because, oh, like, my parents really wanted me to, you know, go to college or buy myself my own house? Like, is it other people's expectations you're just trying to reach that's not really your own, that you're just trying to fulfill, and because they're not yours, you end up just doing it for doing it's sake, right, but you're not happy. So I do think this book does a really good job to make you ponder and reflect.
Speaker 2:I do think in in today's world, man, with, like, with posting your best life on social media, it's so easy to envy people and want and think and think that what they have is what you want, and to also think that what they have is like they own, so to speak. Like or like, like it's stress-free or there's no consequences by those decisions, or like you know. I'm saying like. It's easy to see someone like you know going to hawaii every summer, summer, and thinking how can they afford that? They must be working really hard or have an amazing job or amazing with their money, but then in reality, we don't look at their account balance and all it is is debt. We don't know any of this, but it causes us envy and then we start affecting our personal lives, causes us envy and then we start affecting our personal lives. So it's just, it's just a sad reality that I agree with is that this is the hardest financial skill. To stop moving it.
Speaker 2:And just to add just one last point is that this is this is something that hit me hard, because I think when I first read it, I remember pausing and telling Lynette, or my wife telling her, like I think I use money as value, like as a value system, like that money represents my rank right. Like the more you make, the more valuable you are to somebody. Because there was moments where my wife was like we're good, like we're not stressed, like we have savings, like you know all these good things, but, like she saw, like my hustle mentality and just wanted to like, well, we need something else, we gotta figure something else out. And then I just this book made me question and think, like, well, maybe you think that making more is what's going to fulfill some sort of emptiness of acknowledgement or respect.
Speaker 2:And talking to Lynette, I realized that because I never went to college, I feel like the solution to like you know, because college sometimes is viewed as this value system, like, oh, you, you're smart or you're dedicated, you know whatever, and I don't have that I was using money to in my head to counterbalance. You know someone who might compare themselves to me and say like, oh well, I went to college. It's like, oh, yeah, but I have money right, like, or something like that. Yeah, yeah, and it's a terrible thing.
Speaker 1:But I, this book helped me realize that and I'm glad I did you know I was talking to someone, a personal friend of mine, and he mentioned that you know, when he was growing up, his only goal in life, his primary motivation, was to be rich. He grew up poor, you know, really, really poor, and I think all that costs some internal trauma or, you know, whatever you want to call it, but you know he was. He's pretty open. He said that he was very greedy, that was his number one priority in life and that when anyone offended him like, let's say, someone you know, call them something.
Speaker 1:You know obviously they don't, they didn't know that he was at this point, you know, 30 or 40 a very wealthy man offended him, his mind naturally, like would say, yeah, but I'm richer than you. In his mind, and when he told me this I was like, oh, wow, like there is a danger in in people having money as a value system. Yeah, instead of qualifying people by their qualities, you start thinking about the things they have, your other career they achieved or their success, kind of like external and I think one of the actually one of your favorite chapters. So maybe you want to talk about this. Oh, yeah.
Speaker 1:The one about fancy cars, like do you want to share some of the lessons there, cause I think it relates?
Speaker 2:to kind of what you mentioned the dangers of using money as a value system. The title of the chapter is man in the car paradox. So, uh, the author uh, introduces this like this reality, not even an idea, because I think I agree with it. I think this happens a lot. The author, at some point he worked as a valet and he got to drive all these fancy cars and see people pull up with these fancy cars, and he mentions the following. He says it was my dream to have one of these cars of my own because I thought they sent such a strong signal to others that you made it. You're smart, you're rich, you have taste, you're important. Look at me. The irony is that I rarely, if ever, looked at them, the drivers. So throughout this it's a really short chapter. It's literally I could probably, we could probably read it within like five minutes, this little chapter.
Speaker 2:But he basically just mentions that people tend to want wealth to signal to others that they're valuable, but in reality they just want to be liked and admired, and purchasing things, maybe out of maybe, you can't even afford for just the opinion of others puts you in such a deep hole and it made you realize that when you look at others and nice things. You even acknowledge as a person. You you more see yourself in that fancy car or wearing that fancy purse if you're a girl, or whatever that brand is. You never applaud the person. You just want what they have and that's it. So that reality should hold you back of. Why do I buy what I buy? Is it for others or is it because I truly want this thing or need this thing? Because if it's for others, you're not going to get those applauds because they don't want what you. They don't care who you are, they just want what you have.
Speaker 1:Yeah, I think that that book, you know, the lesson that really drove in me was the idea of you know, people do all these things even if they don't really want them. Like I could see a scenario where someone has a really expensive car that they know very little about except that people recognize it. People like it, you know, like they don't know much about it. You know someone like a car fanatic. They probably know all the details about the motor and you know the technology behind it. He probably doesn't. He just buys it because it's expensive and people you know it turns heads. Like people look at it. They do it out of a need for respect and admiration, which to some degree is normal in everyone. But you know, the author makes a point. He says instead of buying things to get that, you know, get it. Like if you're buying a ferrari to be admired by others, they're probably not even going to think about you, they're going to imagine how they would be driving that car as he's saying or you know they're going to be imagining themselves in it.
Speaker 1:But if you really want to be respected and admired you know why not. You know develop humility, kindness, empathy. That will bring you a lot more respect than horsepower will. And to me that was a very important lesson, like he's right, like if you really want other people to respect you, or even maybe someone wants to be admired, stop looking for exterior things and look for you know what's actually even tougher to develop, which is something internal, like qual internal qualities yeah, okay, maybe a third, third time will be where it works.
Speaker 2:We hopped onto zoom so we'll. Hopefully the quality doesn't change too much. Uh, we're gonna have to talk to riverside fam. They don't sponsor us but we use their program, so I don't know what's going on there, but, um, but yeah, hopefully. Uh, we were still talking about the the man in the car paradox, and, and carlos was talking about alluding to his own experience of a friend who for a long time, his only goal was to be rich. So you can tell us a little more about that, that friend of yours, and how that affected his opinion on life well, I think he's an example of kind of what this chapter alludes to.
Speaker 1:Some people, their sense of self-worth comes from the things they own, right, like people want to feel respected and admired. So they buy all these things, thinking that people will look at them and be like, oh, that person deserves respect and admiration because he has a super, super car or because he has this really huge mansion or or whatever it is. It could be something as simple as clothing, but you know the author makes a great point and you know, anyone that feels that way should kind of like maybe re-evaluate their value system. I feel like where he says you know, if you really want to respect your admiration, a better way to achieve those things would be to become more kind, more respectful, more loving, more humble. Those will probably provide you like a deeper or like a more real way of being respected than someone that just has a fancy car.
Speaker 1:Because in that chapter he kind of, as you mentioned, explains that when he was at ballet he liked those cars, he envisioned himself driving them, but he never really stopped to think about the driver, and I feel like that's kind of the danger if you do things in life, if you accumulate things in life, hoping that people will see you a certain way, or you yourself see yourself as a success because you have this much money or as a failure because you don't have that much money. Yeah then you, you run a huge risk of, you know, living in a way kind of like a fake life to yourself, like you're doing all these things that you actually maybe don't even want to do just for others. And you know the author, you know he. He explains like he likes cars, he likes super cars, and maybe he can afford to get them. But don't get them because you want to get something from others. Don't get it because you want to be respected or admired, just get it because you want to get it.
Speaker 2:Yeah, he encourages those soft skills, or those soft um skills of humility, of kindness. Those are the things that will gain the admiration or respect you might want. And then, when I was also reading this again, the reason it's one of my favorites, because I feel like it was the one that I saw the most growing up, I think again, I'm not trying to over generalize, but um but in my experience through my family I'll just speak about my family um, I felt like a lot of people did purchases, uh, especially like cars, vehicles like my dad.
Speaker 2:That's what he did.
Speaker 2:He'd'd buy these trucks, super mop money he didn't have and that's another reality, that's another reality that people do this, thinking that they're going to think, oh man, I'm wealthy, but in reality they're not wealthy, they're in debt, they're, they're minus 10, a hundred thousand dollars or whatever the car is worth. And that's what. That was the. That's the reality I saw in my life and and it really, like irked me because I I didn't agree with it. I didn't understand the why. Because not only, not only you know, were you doing it for others, like, oh, like I'm gonna buy this for others? But it wasn't to seek admiration, it was to put others down.
Speaker 2:That's, that's the feeling I saw, at least in my dad, was that he was. He would take these big trucks to the low pueblitos he grew up in and a lot of people were like, oh wow, you made it out good for you. But then a lot of people, it just creates feelings of envy and jealousy and maybe even hatred, right, like, how does that help anybody? Like, I don't know. And and it just I didn't like it. I didn't like thinking that others were being put down for something that that I knew, the reality that he didn't own, you know, that he was in debt over you know, so it was like a frustrating thing.
Speaker 2:So when I read this it was like, uh, frustrating thing. So when I read this it was like, uh, like a reassurance that I kind of what I was feeling is normal, that that those things don't bring value. What brings value are those important qualities like humility and kindness and love. So, yeah, I think that's why it irked me differently just reading this, because it reminded me of, and then I just think of, like driving around there in tucson, like you see these again, I'm not hating on apartments, like I think like I live in an apartment basically. So like, what I'm hating on is that people live in, you know, in tougher neighborhoods, but then you see, like these trucks or these cars with big rims, and and again, the argument could be that that makes them really happy right, but we don't know. The fear is that they're buying this for others when they could have used that money to potentially improve their family livelihood instead of just applause from some random joe, you know what that's interesting.
Speaker 1:You say that. You mentioned that because to everyone listening you know. I agree with hoyt. Like the similar feelings I feel like when I see people making maybe the wrong decisions in my mind regarding finances and money.
Speaker 1:Right, like, for example, buying a car you can't afford. You know, making payments you probably can't really afford to do just because you want to be perceived as successful to me is foolish. Right, and in one of the beginning chapters of the book he explains how no one is crazy, even if someone's making dumb decisions. He might, from his perspective, be making exactly the best decision, right, and he explains this, or he kind of like exemplifies this, through lottery tickets, explains this, or he kind of like exemplifies this through lottery tickets. And he explains that in america, every year americans spend more on lottery tickets as a whole as a nation than books entertainment. And what was the other categories?
Speaker 1:books entertainment, no me recuerdo something else, yeah something else, uh, books, okay, entertainment, I think, clothes, like a bunch of different aspects that you would think I surpassed the expenses than lottery tickets. And what you find is a lot of those people end up buying those lottery tickets are people that probably can't even afford a 400 emergency. You know, like by by some sense, people below the poverty line and you might think, oh, that's crazy, why would you buy a lottery ticket with such a small chance of you know making it, of winning? You might think that's crazy, but he, he kind of like plays in a way kind of the devil's advocate and he explains how to someone living in poverty, you know, that doesn't have the dream job, that doesn't have the dream house, the dream car, that moment when they buy that lottery ticket, from the moment they buy it until they find out if they won or not, which in most cases is obviously they didn't win they have like a small sense of hope and a dream, right like a dream, of things just changing overnight of their life completely, you know improving. And to someone that's already kind of living a dream, you know working towards their goals, kind of achieving, you can kind of like see how you know, years from now, 10, 5 years from now, 10, five years from now, okay, life will be different. So I can hope for that.
Speaker 1:But for someone that's stuck in a different reality, like a reality of okay, I'm not going to get out of this, buying a lottery ticket could be kind of like an escape. And you know, kind of using that as a metaphor, right, like, maybe you and I or people that we know, don't spend a lot of money on lottery tickets. You and I, or people that we know, don't spend a lot of money on lottery tickets. Maybe even you know, people that we know that don't have a lot of money, know that it's dumb or foolish to spend a lot of money on lottery tickets. But what about someone that buys cars they can't really afford or buys clothes with brands that you know? You look at them and you're like, oh wow, that's a $500 shirt, that's a $500 pair of jeans. Do you think that's kind of like, in a way, simple for that lottery ticket, that one thing that it kind of gives them a glimpse of hope of being someone else, of being someone that they see in TV or someone that they admire? What is your take on that?
Speaker 2:I think you're getting somewhere with that, that connection there. I didn't connect it before you, but now that you're sharing it I think I can see it. Like it's almost like they're purchasing that dream right there, like this is like almost like the we talked about, um and still like an artist is like fake it till you make it, but they're doing it financially like they can't afford it. But maybe if I buy it it somehow will bring me opportunity or respect or something that will eventually allow me to stay here or, even better, the circumstance. So maybe, again, to defend those who are doing those decisions, and maybe, maybe, maybe they're buying hope, buying dreams For me, I guess, again just the pain I saw in my family growing up, it's at what cost?
Speaker 2:Right? Because if it's I think this is, and this is just my opinion If it's just you, bro, like if it's just you as a, you know you're a single man, a single girl, you're living on your own, like you live and die with your decisions, and that's okay. Like you make those decisions. But once you have a family, once you know you're married or have kids maybe you're not married but you have children married but you have children like now that responsibility, those choices, um, they still belong to you. But now you have other variables to consider, and I think that's the hard thing for me, because what I saw growing up was that those variables weren't considered. It was like well, that's my dream, that's what I want, no matter the costs.
Speaker 2:I think that's where I don't agree, so yeah I think there is a connection there with people buying dreams. I do think it's also connected with lack of knowledge, looking for opportunities, like they believe, like this is the only route, like there's multiple routes to get to wherever you want to live, and even like and again I'm just going off to the books you've read like even designing your life. That book we just read talks about how there's multiple lives where you'll be happy, not just one route. Some people think if I just you know, make this x amount of money or buy this house or whatever, then I'll be happy. But in reality there's multiple things that would potentially make you happy. So yeah, it's. It's such a difficult subject to really analyze it is difficult.
Speaker 1:I don't think we're going to get to an answer or an agreement, but I do enjoy that chapter. That first one kind of. It kind of opens up this conversation about the psychology of money or the behavior behind money from an undjudgmental way, right like yeah no one's crazy like to me it just kind of reminds me when I see someone doing something that I think is crazy.
Speaker 1:There's probably a reason behind it this person is doing something that I, from my point of view, find foolish, whether it could be a lack of, you know, knowledge. Maybe he doesn't know that just because he can pay for the one thousand dollar a month truck, just because you know he can literally okay, he can make the payment, doesn't mean he should get it. Maybe he's spreading himself too thin. Maybe you know he's not accounting for surprises like what if he loses his job? What if, you know, something happens and he can't make that payment? He gets, you know, repoed and he ruins his credit score. You know, maybe he's more optimistic than me, maybe I'm too pessimistic. When you take this, you know, judgment away from people's decisions, you're much more able to see things from their level. Right.
Speaker 1:When I see my cousin or my friend buying a gucci belt and I'm like man, you should just buy a microwave. Like you need a microwave, man you're buying a belt, but you don't have a oven to buy some groceries man, dang bro.
Speaker 2:No, I do think that that that is what he starting off the book. Just like that reality is true. I think that it's easy to judge others. It's so easy to judge others and we don't know the variables are considering, because no one actively tries to make a bad decision. No one. No one actively does.
Speaker 1:Another thing he explains is you know in your world what is reality, what you see around you, you, the way you interpret information that's like to you, that's reality.
Speaker 2:That's the way it is like that's the way numbers work.
Speaker 1:That's the way life works. Same thing with me, right, but in reality, like, if you really start to meditate and think about it, our version of reality is probably like just a fraction, a segment of what actually is out there. Right, like to someone you know, let's say, a kid that grew up in wealth and having everything he ever desired and wanted, his way of seeing money is going to be completely different. His behavior is going to be completely different. To him, booking the private jet to go to new york, even though it's going to be like 25 000 or maybe even more, it's worth it. Right, that's25,000 or maybe even more, it's worth it. That's the only way he'll fly. And to us, flying economy and saving as much as we can and no carry-on bag, that's the way we do it.
Speaker 2:Wear all your clothes, because you have to wear a sweater Wearing five sweaters having a heat stroke mid-flight. I think you're right, though That's's such the reality. That's what he's trying to give you some insight in that everyone's. There's so many variables with finances that we don't we can't 100 comprehend what people are, why people make the decisions they make. But it also doesn't. So it allows you to the freedom of, of the to not put so much blame on yourself if you do make a mistake but also don't judge people harshly either.
Speaker 2:You don't know their circumstance fully.
Speaker 1:You know one of the chapters now that you mentioned you know like responsibility in a way, like seeing other people's success. One of the chapters I think it's called risk and luck or luck and risk yeah and people discount that when they talk about success, right when you look at someone, and when we say success in the context of this conversation, we're talking about financial success or like yeah because that's what the book is talking about.
Speaker 1:So when you look at someone that became really rich, you might think they worked really hard, like really smart. They just know what they knew, what they were doing, and we're discounting the fact that you know. Maybe just some things kind of panned out the way they didn't even expect to, for their benefit, like in a way, kind of like they got lucky right. And when you look at someone that had a misfortune or, like you know, lost everything, we might think, oh, they're dumb, right, they made bad decisions. But maybe the one that got successful and the one that lost everything both played a very equal risk yeah a very equal stand.
Speaker 1:Maybe they're equally smart, but just things didn't become like. They didn't play out the way one of them wanted to and maybe things played out way better than the other expected. You know one of the quotes that are down here. He says be careful who you praise and admire. Also be careful who you look down upon. In ways to avoid becoming because there might be some lessons on what you like look down upon and be like oh man, that's a bad example. I shouldn't do that. But maybe he was onto something. It just didn't play out like there was a risk factor to it yeah, and maybe the other guy that you know made you know millions.
Speaker 1:Maybe you shouldn't do that, maybe it wouldn't play out.
Speaker 2:Maybe he just got lucky and and it would have worked out for him yeah, and and we mentioned like getting lucky it's just like the like there were so many variables in play that it just didn't. It just happened the way it happened. It it was out of the person's control that's what we mean by that like it wasn't this person actively doing something. No, it was out of his control and it and it worked out the way it worked out for this person. And I do love this chapter because it gives you a perspective on what success looks like. And, like you mentioned giving a undue applause not undue, because you respect people's hard work ethic but also we have to acknowledge that people just have better variables than other people. We have to acknowledge that people just have better variables than other people. Like we can break it as simple as us. Like if you compare us to someone maybe born in the middle east you're in a woman in the middle east let's say, um, like our way of life or the way we personally view way of life, maybe our, our, our life is better, and we'll just put that in quotation, cause what does that even look like? But but when you compare, we don't know the variables that everyone's facing and some people just have it. And again, I'll put it in quotation easier. And the example he puts here is is Bill Gates, and I think that I wanted to just analyze this example because it just gives me a lot of perspective on maybe a lot of variables that I wasn't even aware of people's successes. And he talks about how Bill Gates went to one of the only high schools in the world that had a computer. Now is this me discrediting Bill gates? No, no, no, like he was super smart, hard working, but the reality is he wasn't one of the only high schools in the world that had a computer. And not only that, that, that the, the teacher that brought this computer, started like this computer club, so he had free range to like mess with this computer. It wasn't like a curriculum where he just had like, oh, you gotta do this and do that. No, like I was after school, he got to break it apart or, you know, do his thing. And he uses bill gates as an example of how he had great variables. Now, those opportunities, those opportunities presented to him, he had no control, he took advantage of those opportunities. So that's where I can give credit. Sometimes we are faced with great opportunities but we don't act, we don't do anything. So Bill Gates acted on those opportunities.
Speaker 2:But contrary to Bill he talks about, I believe his name is kent, kent, something here. Let me open it up kent evans. So kent evan was was another uh friend of bill gates, who was equally as smart, equally as driven, actually more, more uh, business savvy than than even, um, his, because it was three friends. It was Bill, kent. And who am I missing? I'm missing one more guy Paul, bill and Paul. And then Kent was the third one.
Speaker 2:Now, the unfortunate thing with Kent was that Bill Gates mentions we would have kept working together. I'm sure we would have gone to college together. Kent could have been a founding partner of Microsoft with Gates and Allen. So that was his potential. But what happened to Kent? Unfortunately, kent died in a mountaineering accident before he graduated high school. Every year there are around three dozen mountaineering deaths in the United States. The odds of being killed in a mountain in high school are roughly one in a million. So he's trying to give you this contrast of sometimes just variables. Play the way they play, things are out of your control. Play the way they play, things are out of your control. So, having a balance when giving credit or taking away credit from people making bad decisions exactly.
Speaker 1:And also like when you try to like, for example, if you want to become a certain thing or avoid becoming, you know you can't just follow this step by step of, oh I'm going to do what Bill Gates did, or you know it's a different world, like, you have a different reality, different set of you know opportunities and things in front of you.
Speaker 1:So instead of looking for, like a step by step, just kind of like, have these things in consideration and know that just because someone did very well, it doesn't mean that it's all because of things they did, you know. I think he put it best when he said the world is too complex to allow 100% of your actions to dictate 100% of your outcomes. So you could be making, you know, all the right choices, decisions and the outcomes are not going to pan out the way you expected, or you could be making all the bad decisions and then you have a positive outcome. You know the world is very complex, you know that's the possibility. So when you look at people you admire at least you know financially and in other ways don't forget that point, you know. Don't forget that sometimes when he calls luck, we could call, variables outside your control are at play on anything that you do yeah, and it's.
Speaker 2:It's easy to vilify things retrospectively, right, like I think of the example of the bitcoin right we have. We've all heard the story of the guy who, like, I think he sold like 10 000 bitcoins for a pizza or something. It was something crazy like that. I think it was in the news retrospectively that that was a terrible decision, right, but the reason it's a terrible decision is because the outcome of what bitcoin's valued now, what if bitcoin stayed at the value it was currently at when he sold it? Then no one would even cared of that decision. It's only when you look backwards where you could easily be like, oh, that was a terrible decision. Well, how would have anyone have known that? Like, no one did. There was people who did, a bunch of people who did the same thing, who weren't aware of this balloon that was about to grow.
Speaker 1:You know so exactly yeah, and you need to and you need to stop and think of that for you. I think he gives a very good example. He says when facebook was starting, mark received an offer from, I think, microsoft, to buy it off from him for like one billion dollars, and he famously rejected it, which turned out to be a great choice, like now, he himself is worth more than, like, I think, $50 billion and the company is probably worth close to a trillion or maybe half a trillion.
Speaker 1:Yeah, it's a crazy valuation. So he made the right choice. But then you look back at Yahoo. Yahoo, I think, received at some point like a $5 billion offer from Google or something like that, and considering the company is much lower now, people might think, oh, they should have taken the offer, they should have just sold the company to google. But who would have known? I mean, yahoo could have been the next facebook or or a similar story. It just didn't play out that way. So there's really no, you can't really be like, oh, if you're in that position, imitate, mark like, don't sell yeah because in yago's example, it would have been the right choice to sell.
Speaker 1:So you, you, you really need to kind of, instead of following a path of like I'm gonna copy that guy, just sit down with your, with your reality, your set of you, know, rules and what you have in front of you, and make a decision that you think is best, uh, based on that yeah, and it's so true.
Speaker 2:I mean, it's so easy to just judge retrospectively. I think it's unfair, right, like it's so unfair to to judge that way. Um, and that's why it's it's it's he's encouraging balance when praising people and judging people. Um, yeah, he even, I think he encourages to study patterns. I think he mentioned I think that's the word he uses like when you see someone like that's really successful, look at the patterns of decisions they're making. Don't do a blanket statement of black and white.
Speaker 1:Oh, I'm gonna do this step, this step, this step, but see the, the things they, they kind of did as a general statement oh yeah, I mean, I think one of the main things that I value about this book is that it's able to teach you about money, talking about other things that are unrelated.
Speaker 1:Right at some point he he said something that I thought was a great quote, even though it probably in his mind it wasn't going to be a great quote because he kind of put it in a small paragraph. But he said lessons from one field can often teach us something important about unrelated fields, and I think that's kind of the reason we did this podcast. Right, we might not read books about things that we are 100 dedicated to, right, but we know that if you read something about you know architecture, you know that's not a topic that I'm super interested in, but I can't say that I'm not interested in architecture. We might be able to find something that relates to other parts of our life that we are interested in, and an example he gave in this one was about ice ages oh yeah when, when he did you want to talk about that a little bit?
Speaker 1:do you remember that part? Okay, yeah, yeah, he mentioned when he. When you study ice ages, you might think that the the reason you know those miles and miles of of ice form near the poles is because of a really cold winter. Right, there's just one winter. It was super cold, it snowed a lot and that's why they formed, but in reality it usually has more to do with the summer so it was a normal winter you know it snowed enough, but during the summer it was not as hot as it usually is, so it didn't melt all this snow.
Speaker 1:So what happens is now next winter rolls around, but instead of starting from zero, as it usually does, there's still some snow left over. So now that winter it snows on top of the previous snow. The snow is white, reflects more of the sunlight, so next summer the cycle gets even repeated, but even more intensified. Right, yeah, because now there's less heat, more that heat is reflected, so less ice melts. Next winter again snows a normal amount, or maybe it snows more than often.
Speaker 1:But you know, over years, what was just one summer that it wasn't as hot as it usually is became now those polar caps, or you know those ice caps that we know about. And he applied that to investing. Right? Someone might think that to grow your retirement account, your 401k or you know whatever it is that you're investing for, you need to just make a killer year, you need to make a lot of money or you need to just get some amazing returns. But in reality it probably has more to do with, in a way, the summer, like how much you used up, like how your life didn't need as much of the money you invested. You know how little you burned that could generate that. So I thought it was very like. It was a masterful like way of drawing a lesson from one area completely unrelated to now finance and I really enjoyed how the author does that throughout the book.
Speaker 2:Yeah, because he used it like with the example of Warren Buffett's billion dollar. I mean, his net worth on writing this book is $84.5 billion. His net worth on writing this book is $84.5 billion, but it mentions that $81.5 billion of those $84.5 billion came after his 61st birthday. So he was using this illustration of compounding interest. Right that he was slowly building little habits, small ones but consistent ones, that eventually just snowballed into this ice age. Right that he was slowly building little habits, small ones but consistent ones, that eventually just snowballed into this ice age. Right, but of financial success, sometimes we do think that you have to be sure I think that's how it is with a lot of things.
Speaker 2:I think a great book to talk about later. This reminds me of a book I read At about the just increasing one percent at a time. It's so powerful and everything and health and anything you want to improve, and just just a little bit of time makes the most impact long term, because it's the easiest thing to maintain, because let's say, like in our case, financially speaking, oh I to save, you know, 25 grand this year. So you do all the stops right, you work really hard, you save money, you save the 25 grand. But you reach this goal right Now. What's next? Either you restart this goal or you realize how exhausting that was and you don't do it again. Right, compared to, let's say, if you just saved, you know, let's say, a hundred dollars a week, um, but for the next 35 years, consistently like that, that will have a longer impact than you saving hardcore once or twice.
Speaker 1:You know like, yeah, it's better to have consistency over, yeah, a large quantity and something you know if anyone listening out there you know, when we talk about financial goals or savings, you know if you don't save at all you don't feel left out because you know the author explains how saving and retirement it's such a new concept, like back in the 1950s. You know, in the 50s people worked until they died and that was kind of the assumption. You know you're gonna work until one day you just can't work and you're gonna go to hospital, you're gonna die. It was in, like I think in the last 100 years, where like a president came up with the idea I think the book even gives the name of the president, but I can't recall it at this instant that people deserve to retirement. You know that people should stop working at some point and, just, you know, get Social Security or some other ways of sustaining their life until death. So you know if you think about that, how new it is. You might feel less pressure or like less bad if you're not exactly like amazing at saving. You know if you spend all the money that you get. Another thing is, as you explained, I think most of us are pretty good at saving for a reason right, like if you have a trip coming up and you know that you want to spend some money in new york, you might be very good about putting a hundred a thousand dollars aside. Oh, I'm gonna buy some gifts, I'm gonna, you know, eat out good. But saving just to save is totally different, because what happens when you save just to save is you have this we could call it pile of cash, you know, on the side. But as soon as you see something shiny that you want, you're like, oh well, I'm not using it. Might as well get it, but without realizing you're missing out on compounding and you know growing and you might think it provides no value. Right?
Speaker 1:Which is something the author did a great job of explaining to me is, you know, if you have this savings, even if you're not, you know generating this amazing returns. You know investing in getting 100% returns, or 20 or even 10 or five. Just you have it just sitting there. It could provide a lot for you, right? And he explained some of the things that it could provide. He says what if you leave your job and you pursue a dream and you have to live off savings? It could provide you that opportunity to do that.
Speaker 1:What if, you know, instead of having to find the first job, like the first job you get, even though you hate doing this, but you have to take it because you got bills coming up. Well, you have this emergency fund that can provide you an opportunity to, instead of finding the first job you can find and taking it, maybe look an extra month and find something that kind of like relates to what you like and what you enjoy doing more. So when you see it that way, you know it's not that you're saving just to save. You're actually saving with the purpose, which is you need to provide you, you, with some important things, like maybe a little bit more freedom.
Speaker 1:You, you might not be able to retire right away, but within a couple of months you might be able to have the freedom of you. Know what? If I get sick, I'm not gonna go to work, I'm gonna take some money off of this, I'm gonna rest, I'm gonna do, I'm gonna do better. You, instead of working overtime, I have saved enough where, like, maybe I want to start going to the gym instead of spending all my time, you know, working overtime, I'm going to start working out. Going working out, getting a little bit healthier, and that improves your life a lot more than if you, you know, didn't have the savings and didn't have that ability to do that didn't have the savings and didn't have that ability to do that.
Speaker 2:Yeah, it's, it's so freeing. I mean he, I mean there's a quote I wrote here he says save, just save. You don't need a specific reason to save. I think that's what you're, that's what you're alluding to, exactly. Yeah, that, and I can. I can second that.
Speaker 2:It is hard when you, you're just saving just to save because, like you mentioned, in a world with so many shiny things, social media, all it takes is a group, a group message from your friends saying like Italy 2025. And now you're, you're like, well, I got savings, like boom, let's go. So so it is difficult but it is freeing, especially in the beginning when you're trying to. Because what this book is encouraging is again we kind of already mentioned it it isn't to get rich, it's more to find how people define happiness and how he doesn't define happiness. He doesn't define happiness, but he says a lot of scientists connect happiness with control of your time. So that's the suggestion he's saying what will allow you to have more time? Well, a lot of it is financially. If you have a stable job or savings or whatever, something that can free you up a little bit to have more time, then you will ultimately be happy. And the illustration or the the uh story he gave was his own personal story of. I think he worked in a finance, he worked on finance.
Speaker 1:I think he went to school for that he, he was going to be an investment banker.
Speaker 2:Yeah, yeah and he said that he loved the work. He loved the work, he was making amazing money, but he was working like crazy hours, like so many hours, and he said what made it hardest to leave that job was I actually enjoyed the work, but he didn't have any time for all the other things he enjoyed doing. So I think that's another reason to be mindful of what decisions we make financially, or even what career we choose. Is that just because it says you know x amount of like, whatever that financial number is for the, for all of us individually, even if it fills that void, what's the cost? Right, like there's always a cost opportunity cost. Like, are you sacrificing time with your family? Maybe you enjoy painting, but now you can't because you're working overtime all this time, you know. Or you volunteer work, like there's so many other things that provide happiness, not just this one thing. So, yeah, it's being careful with money, uh, sacrificing all the other things just for a financial goal.
Speaker 1:Yeah, yeah, adding to that story that you mentioned. You know, I think that's found in the chapter about freedom. And when he tells a story about his attempt to become an investment banker and, like you mentioned, he says he loved the job but he quit like one month in, and the reason he did and he actually put this into words he said the ability to do what you want when you want with who you want, for me, as long as you want, is priceless. You know, in his scenario he was doing something he really liked, but he had no control over the schedule, like he had to be. I think the joke in his job was if you don't come in saturday, don't even bother coming back sunday. Like they worked seven days a week and they worked till midnight.
Speaker 1:So, yes, he was doing something he liked, but he had no control of his time, of his schedule, and I feel like that is such a huge lesson to draw on. You know, like that should be the goal, like that's the the highest dividend he explained that money can pay. Is that freedom to just, if you want to paint, be able to paint more. If you want to, you know, volunteer more, be able to volunteer more. And if you do that and you stop pursuing things that you know, like we said, a lot of people say money is not important, but their decisions show that that's the most important thing in their life. But if you really stop to meditate and you know, change the way you make decisions, you might find that even without the net worth you want or the dream or someone else's goal that you're a lot happier with this, and I really like a story alice's goal that you're a lot happier with this, and I really like a story.
Speaker 1:Actually didn't write out the name of the, the person, but he gave a story of a musician, like someone that sold his music company. I don't know if you recall that chapter and he explained that you know. Years later he was asked by someone like a young person, like young person, like when did you become rich? When did you become rich?
Speaker 1:And this musician you know, he explains oh, I was when I yeah, when I was 22 years old, I worked really hard for a year, I think he worked at a restaurant or something like that. I worked really hard and I saved twelve thousand dollars or something like that.
Speaker 1:And as soon as I saved that up, I quit thing like that. And as soon as I saved that up, I quit. And I knew that, you know, for music I would be able to make enough to sustain myself at that point and if not, those twelve thousand dollars would kind of help me. And yeah, so I just started, you know, doing music and you know, yeah, I started doing gigs and things went really well, like I was free to do what I love and and he's like no, no, no, but like when did you become rich? Like, when did you start?
Speaker 1:And? And he's like no, no, but like, when did you become rich? Like, when did you start your company? He's like no, I don't think you understand the question like that is when I became rich at 22, when I started doing what I loved, when I sold my company, all I did was added zeros to the bank. It didn't really change my life. It didn't really like add that much value as you think it did. Yeah, and to me, to me, that's a huge lesson, right, because if we can get it at 22, 23, 24, that ability to kind of pursue what we enjoy, even if there's no huge number attached to that that might feel a lot richer in a way richer in a way than waiting to your 50 or 60 and have that high net worth or that ability to quit and retire.
Speaker 1:But it's just like so far, like too late in a way, right like I'm not saying, if you're 50 years old and you listen, it's not too late, but it's a lot different, right like I think it's a lot different. It's the. The lesson is, being rich is not a number, like being rich could be just oh, I spend a lot of time with my family and you know I spend a lot of time with them doing what I like, doing what I love, and I work enough to sustain our life. You know, and to me that's that was one of the biggest, the biggest lessons I took from the book is, if I can make my life as cheap as possible, in some way my happiness as cheap as possible, I can be, in a way, rich without having to have a lot of money, whereas if my happiness is super expensive, then yeah, it's going to take some time.
Speaker 2:You know it's going to be a lot slower. Yeah, I think, just connecting chapters here, just alluding back to the chapter of enough, I think that that's that's the first step, is identifying what enough looks like, because if you do compare to your friends, your, you know neighbors or, wherever you live, your social media, it's hard to be satisfied or your thirst quenched, so to speak, because you see all this, you know all these people around you um so I think it's truly important.
Speaker 2:I forgot to write it down, but he had a he throughout this book he shares, like this letter that he wrote to his, to his future son, um and again like, forgive me, author, uh for just uh, quoting, misquoting this, but he said something like telling his son that, uh, that finances can provide value, but be careful to not seek value in in finances, something like that, yeah and um, I connected, I resonated with that because a lot of uh, it's it's easy, it's easy to have these big goals, but I think it's more important to understand when you have enough, because when you do um, it becomes, like you mentioned, just freeing, and I I just just um, just connecting to a personal experience, like like lynette and our move to mexico city, like on paper, we, I was making more money and and in new york I got was like financially, but it was just bro, it was just exhausting. I was just working a lot like it was working way too much, driving too much, um, doing a job that I didn't enjoy but was paying really well, um, so now I'm making way way less, like I would say maybe half of what I was making there, but the difference is like, like, compared over there, I was working four or five, six days a week. Um, now I work three. You know like, uh, so I have more time, like the reason we can start this project, this podcast, because we have more, you know, I have more time. So so, even though I'm making less, now I have more time to do things I enjoy.
Speaker 2:And now my wife doesn't have to work so she can paint and do her own projects for youtube channel, like she has her own little fun, little creative things. And I think the connection there is that we realized that it was nice being able to have more money, right, but but it wasn't providing the value we we seeked and we realized we had enough. We had enough. This amount of money that we have is enough, and moving here has helped with everything else. So I'm just attaching this personal experience on how it is freeing once you just understand what's enough for you.
Speaker 1:Yeah, I mean, that's definitely one of the best lessons from the book. And you know, to anyone listening because, as we mentioned, everyone has a different way of looking at it, a different perspective If your honest goal, like if you tell yourself, like, let's say, I'm not saying this is my goal, but if your honest goal is to accumulate a considerable amount of wealth, like you want to have on paper a lot of money, the author says, you know, maybe that's not the best goal, but let's say that is the reality is that there's multiple ways to get there. You know, people get rich in finance, people get rich in tech, people get rich being a plumber. But he explains that there's only one true way of remaining wealthy right, like remaining keeping all that money, and that it's, according to him, a combination of frugality and paranoia. And I thought it was interesting that he like summarized it that way.
Speaker 1:Right, he says there's more, more than one way to get all this money, but once you have it, the only way you can keep it is if you're frugal and a little bit paranoid, yeah Right, because if you're not paranoid, or if you think, oh, I made a million dollars this year, I'm going to make another million next year, you might spend that entire million because you're not scared, like next year is going to be better. In your mind, you're not anticipating anything bad happening. The same thing, if you're not frugal, like if you make a million, you might think, oh, I make a million dollars a year now and it's going to be forever, so you might start spending like you make a million dollars every year. So if you want to accumulate that and be able to keep it, you need to develop at least those two qualities. Right, and I think it is a good example. Even if your goal is not to be wealthy like super, the way to grow savings, the way to just have a little more, is to live below your means. Like that is the recipe in a way.
Speaker 1:Right, and you know, in the chapter the wealth is what you don't see. He explains it sometimes when you know I think you touched on this topic earlier in the podcast when you look at someone driving a ferrari, for all you know you don't have no idea what their bank account looks like. But all you know is that either one, they have a Ferrari worth more of debt, whatever that costs can say half a million dollars or 250,000. They have that much more debt. Or two, they have the much less money.
Speaker 1:You don't know if he's a doctor and he's barely able to make the payments for that ferrari which sounds crazy that a doctor can barely make the payments. But I mean that that seems about right, like if that's all they do, if they live with their parents, maybe they can barely scratch by in some cases. Yes, when you see someone driving something like that, it does mean that they're very wealthy. But when he explained that the wealth is what you don't see, it kind of made you think, you know, like the person driving the ferrari that's actually rich, could probably afford a lot more. He could probably afford 10 ferraris, but he's only driving one. You know he only has one.
Speaker 1:So the same thing like should be kind of internalized with us yeah right, what, what really makes a better life or something for you to feel wealthier, or even we could say, like having like a richer life. It's not really the exterior things, the things you see. It's gonna be more the experiences, the ability to you know what? This week I'm gonna go it's getting too hot here. I'm gonna go. This winter I'm gonna go spend it over here with my family. That is probably a lot closer to what we assume is. Is wealth right? Because he explains when people say I want to be a millionaire, they sometimes mean the opposite. They mean I want to spend a million dollars and that's the opposite of being a millionaire. Like, yeah, you would go back to zero, zero, yeah, yeah so on.
Speaker 2:On this topic, carlos, what is again, we can't afford ferraris, yeah, so what? What is the comparable um, maybe financial purchase in our circumstance that we could potentially hold back from purchasing? Um to hold on to, to be frugal and paranoid, like what can you think of any? Like because, like, it's kind of, it's an extreme talking about ferrari because, like you know, we can't afford that. So I was trying to think of, like, what is something that people buy, um that maybe they again not necessarily can afford, or or they can live without to maintain a better financial standing yeah.
Speaker 1:Well, I think honestly in my personal opinion at least, especially here in the us we've done a very bad job of defining being able to afford something. Oh, yeah, right, if you walk into a dealership and you ask a salesman, how much can I afford, you know what car can I afford? He's gonna run the numbers, he's gonna give you the max. Yeah, oh, you can walk out of here with whatever you want, but you can. You want to get that. You know? I don't know what's a fancy car like? Uh, what do you? The challenger? Or you know what do they call that one? The hellcat, the calc? I think I've seen a lot of tiktoks about.
Speaker 1:Yeah, you walk out of there just because you thought you could afford it and and this guy just sold you. You know a high interest rate and you know horrible loan In your mind, oh, I was able to afford it. I walked out of there with the car, which means, you know, very smart people in the finance department determined that I could pay it off. Man, I'm just working for this car. Like the like let's say, you make four or five thousand dollars a month and this is 1500 or 1200 or whatever it would be. I think that's the perfect way to know if you can afford something like, if it's going to be painful at the end of the month, if it's going to be something that you're going to look at the statement and be like man, I shouldn't, I shouldn't have done that, I shouldn't have but that then maybe it's not the time right and I think there's different little tricks.
Speaker 1:Some people say if you can't pay for it in cash, don't buy it. You know, like I don't really have that uh formula down yeah but to me is, if you're gonna regret that as you're making the payments or you know after, then maybe it's not the best time you know, I've also heard the, the saying, or whatever it's called uh, if you can't afford it twice, you can't afford it at all something like
Speaker 2:that, yeah. So like, let's say it's a thousand dollar payment, could you pay a two thousand dollar payment? Oh no, that'll be super tight. Then you can't afford it. Like you can't, it's too tight of a budget, because a lot of people and I fall into this mistake. So I'm not. We're not here trying to point fingers at whoever's listening. We're talking, we're self-reflecting here, like myself.
Speaker 2:Sometimes we assume like, like, when we look at our budget right, I'm looking at my budget, like, consistently, almost every day, I'm looking at my expenses and all this. That's a good habit, by the way, I'll throw that out there. It's a good habit. The more you're aware of what you're spending, the more you're aware of what you're spending, captain, obvious. But what I'm trying to get to is that I've fallen to the trap of saying, when I look at the expenses and I'm like, oh man, I didn't save anything this month, oh, but it was a fluke month, it was because, uh, uh, you know, I had this extra expense that I didn't plan for.
Speaker 2:But the reality is that every month will have an expense like that. Sometimes we think, oh, it's just one month, but it isn't like, next month, you, your, your buddies, convince you to buy a flight to new york and you buy it and then that's that expense. And then the next month, like, oh, like your ac broke in arizona, so you got to fix that, that's that expense. So sometimes we assume if your budget is super tight, it's like, oh, it's just this singular month, but the reality is that every month has that, so it's it's being really mindful of what. Again, how you mentioned what you can actually afford, um, yeah, and also adding to like what else people purchase. I think a lot that don't realize how much it affects them is like, bro, and I fall into this. We fall into this. This coffee man coffee, now it's Starbucks, bro, it's expensive, bro, it's expensive.
Speaker 1:And again.
Speaker 2:I'm not again there's. I know I've heard this, I've heard, you've probably heard this on Tik TOK or Instagram or whatever YouTube. I'm not trying to like, say oh, oh, don't buy something, that this small thing that makes you happy. I'm not saying that. What I'm trying to say is that, um, if you want to maintain, like you mentioned earlier, like wealth, um, frugality, frugality is that the right?
Speaker 2:way that that's the best way to do it. So if you look at your expenses, like, what could you live without? Well, I could live without this. Eight dollars a day. Coffee, you know, and you could. You could make it at home. That's what everyone says.
Speaker 1:So, but again, I'm gonna mix in no, no, no, go ahead.
Speaker 1:I want to reach a chance. I was gonna say I was, I was gonna mix in something that I learned from I think it was on Netflix. It's a series called your Rich Life or Living your Rich Life, and we could probably do that book later. At some point in the podcast, but he explains his definition of a rich life and he says you know, I don't tell my clients, you know, because he's a financial advisor, I don't tell them to be frugal on everything. Yeah, you know, just pick what really makes a difference in your life, like to some people, driving a nice car. That's it. Like they really want to drive a nice car, they love cars that much. Okay, that's fine.
Speaker 1:But just make sure that maybe your housing expense is lower than it should be, maybe you don't take as many vacations as other people, maybe your clothing budget is a lot lower. So spend as much as you want in this area of your life If it really makes that much of a difference to you, like in your happiness, as long as you're extremely frugal on these other ones. And for everyone's different. He explained to me a car doesn't really make a difference in my happiness. To some people it does. But to me I can drive a honda or I can drive, you know, mercedes. I'm not gonna feel happier. I'm gonna get from point to point b. Since it doesn't make a difference in my life, I cut that expense as much as I can. But guess what does make a difference to me? It's experiences, so like when I go to a hotel I might stay at a fancy resort, like to me, that brings me happiness.
Speaker 1:So in the way he, the way he's trying to explain, is your rich life is different. Someone else, like you, explained you know they might really value eating out and drinking coffee out, but then, when you look at other parts of their life, they're like, oh, they're very frugal in what they drive, the clothes they wear and the house they have. To other people, home is everything. So they spend a lot of money at home. They've even you know I think I've heard this sermon recently they're like home poor. You know their house poor, like home makes, you know, takes up a huge chunk of their budget every, every month. That's okay in a way. In a way, maybe, as long as you're super frugal in these other areas yeah, you know I.
Speaker 1:I guess what really draws from this book is you know that there's a lot of different ways to achieve what you want, as long as you can control your behavior. You know for long periods of time.
Speaker 1:You know like whatever it is that you want, you can probably get it, at least it you know he explains. If you're reading this book, you're probably like already in a segment of you know the world where you could get it, because sadly, you know, that's probably not the reality for everyone. But if you have the time to pick up a book and read it and buy it and, like you know, if you're listening to this podcast, you probably have enough time to, you know, work on some of these behaviors and kind of change some aspects of your life yeah, and I think a danger is to like, on that point you're highlighting of, of understanding what you do you truly enjoy and and it's okay to spend on that.
Speaker 2:Um, that's another perspective, because it's easy to judge people like, oh man, they go to buy their starbucks every single day, but I'm what you're not aware of how frugal they are in other areas. But, again, we don't know that. We can only internalize our own experiences. So, yeah, the. The danger, though, is you want everything, right, you can't have an expensive car and also have the vacations and also, you know, like, have expensive clothes. You can't have everything you know, unless you were born into a really wealthy home and in life then, yeah, you can, can, but the average person- we live in what we could call an unjust world, but that is kind of a cool concept, that is kind of a neving.
Speaker 1:It evens the scale across the world, because even some very rich people I mean I can't truly say they can afford everything. Yeah, that's true, even if Jeff Bezos, you know he could go on a shopping spree and buy five or six companies and he might be, you know, without money again. I mean, I'm just giving you an example, like, let's say, jeff Bezos wanted to buy Google, maybe he could buy it, maybe, but then he would be out of money again.
Speaker 2:That's a hard argument.
Speaker 1:Yeah, out of money. Again, that's a hard argument. Yeah, that's an asset. So, yeah, yeah, but maybe there is, maybe there's top five people in the world that could afford anything they want, but for the majority of people, like, even them, like you know, even if you know someone that has a million dollars, okay, but if they buy a private jet, they're gonna be struggling for the for the rest of the year. So, yeah, knowing to live with within your means is probably the best way to not live like pressured and scared, because I mean, you don't want money to become that to you, like to become what drives you and kind of like what has you up at night, like and I think the author does a great job of you know, if you learn the behavior and you can control it, you can make money in a way, less influential in your life, you know and focus more on the things that you do value, the things that you do want to do more of.
Speaker 2:Yeah, and he encourages that. That's the power of saving right. I think that what you're talking about that's the thing that you can increase of saving right. I think that what you're talking about that's the thing that you can increase the fastest right. There's things that you I mean you can eventually change right, Like you could eventually change your housing circumstances to lower that bill. Like it's hard for you to just get like a $10 raise right, like at your job. I'm not saying it's impossible, it's difficult, but what you could do is, like you mentioned, live below, below your means, and now your saving rate is is as high as if you were making thirty dollars an hour. You just have to lower your, your lifestyle, um yeah, so he encourages that, that. That that's why it's, that's how you build wealth with the savings.
Speaker 2:And and he highlights there's a quote that I want to just talk about real quick, because I I mean I think we've already talked about it a little bit, but I just like how it's worded and we don't have to go too in depth, because I do think we talked about it pretty well, but I just want to mention it. He said the world is filled with people who look modest but are wealthy, and people who look rich, who live at the razor's edge of insolvency. So it's just a crazy how appearance is. It's so different from reality. And I think we all now nowadays, with like netflix and tv and internet, we're all aware, we're all aware of, like the oh my god, what's the facebook? What's his name? Um, mark mark zuckerberg. Mark zuckerberg, his whole, like you know, plain shirt and hoodie, right, everyone makes fun of him.
Speaker 2:Yeah, like I make fun of him, but they that that's a clear example of how he doesn't think about those things, he doesn't spend on those things, but yeah. But then I remember, like in high school, these kids that I know were couldn't, you know, their parents could barely afford it, but they had these, like you know, gucci belts or really expensive tick and tack. Um. So it is funny how we use appearance as a facade, but we don't know we, we don't know it's and it's. I think it's better to be low-key like that. What do you think?
Speaker 1:I mean, I think you're definitely right, you know, to give a funny story when, when I was in middle school, I think I was more driven maybe through family or you know experiences towards like branded clothes, like I think at some point I struggled, struggled a long time we made fun of you bro. Yeah, I save up 50 dollars and it's all I had in my wallet.
Speaker 1:I had literally just that 50, 50 bucks and I walked, walked into Abercrombie and Fitch and I bought a pair of shorts. A pair of shorts for $50. Till this day, I regret that purchase, man. Like till this day I look in the mirror. I'm like what an idiot man. What were you thinking? I literally bought it just because other people were wearing it, because, you know, I thought it looked cool, dang but I but maybe it was the best purchase I ever made. Do you know why? Why, because I don't think since then I've done something as stupid as that. Like, think about this spending a hundred percent of what you have on one article. I mean, I hope I never do that again.
Speaker 2:You're like Lexi, guess what?
Speaker 1:We have zero assets All of it's gone to this one thing. So I mean, I was thinking of that and I thought of this little kind of way of looking at it. You know, when you're driving and you see a Mercedes and a Toyota and they're both driving at 35 miles per hour, you never make the assumption that the Toyota is faster than the Mercedes.
Speaker 2:No.
Speaker 1:You don't, because you know that they're not going top speed. You know that the Toyota, if it went top speed, maybe it'll get to 80 or something like that, and the Mercedes might be able to get to 130. It's different. So when you look at someone and what they're wearing and what they're doing, you might assume, oh, they're rich. But you don't know if they're like going top speed. You don't know if like what they have right now is like, literally it's the Gucci belt and the fancy shoes and the necklace, but that's it. And someone else could have just the same, but to them it's nothing To them.
Speaker 1:It's like you know, 2% of their paycheck, like whatever. To them it's no big deal. To them it really isn't a bad financial decision, but to you it is. So when you stop comparing yourself to others is when you can really like. You know, I saw a tiktok, actually by the author of this book, which is really, you know, cool, because he said you know, the biggest gift you can give yourself is to stop pursuing what you think other people value, like stop buying things just because someone else is going to think you're better, think you're cool or think you're successful. If you stop doing that consistently for the rest of your life, you're going to be a lot better off yeah, you need to meet.
Speaker 1:It's the easy equation for like increasing your livelihood exactly like if you don't want to go to europe, if you don't care about the history or the places, don't go, don't go just to post the pictures. Don't go just for everyone to see oh, this guy went to europe, yeah don't do it.
Speaker 2:You know like it's not worth it.
Speaker 1:No, if you really want to go.
Speaker 1:Okay, then go, it's gonna be, expensive, but you really want to go, so it's different and I think that's kind of like something that I try to remind myself because you can forget, you can, you can know the lesson and then eventually forget it.
Speaker 1:Forget it. Uh one, my concluding thought and I don't mean that you need to conclude, but my concluding thought was a quote in chapter 13 where he said history is littered with good ideas, taken too far, which are indistinguishable from bad ideas. And I thought that was such an important lesson in that because you know, even when you too far, which are indistinguishable from bad ideas. And I thought that was an important lesson in that. Because you know, even when you, when you talk about money and finances and this and being careful, you need to be, like, mindful of you know, keeping it at the right level because, let's say, being frugal man, if you take that too much, you're gonna live a horrible life. Yes, you might be financially successful in a way, but you're not enjoying anything like you're living off. You know, ramen noodles, like it's not gonna be a good experience, it's affecting you in every way possible.
Speaker 1:Yeah, if you happen to read this book and I I encourage everyone listening to read it just be mindful of that. Like, take the good ideas but don't take into an extreme. You know, you just learn to extract lessons from them. You know, make your life better, hopefully, um, and keep everything with a balance, and money is a perfect example of something that you can be very balanced with, because you don't want to consume all your time. You don't want to be super greedy, but at the same time, you don't want to consume all your time. You don't want to be super greedy, but at the same time, you don't want to be the guy that doesn't care and therefore, you know, does stupid things that then cost him a lot in the future.
Speaker 2:Yeah, it affects others. Yeah, no, I think I'm happy we did this book. I think this is a book that we've already talked about, probably pretty extensively before, but it's always a joy because it's such a. This is a book that you can read like once a year just to give you like a refresher of these, like solid principles.
Speaker 2:And I also think that, especially in the Latin community. I feel like and I'm not again, I think I over-journalized too much, but I don't think finances talked a lot, like, for example, my family family no one talked about me with money like no one. Like no one sat me down and said here, buddy boy, let me tell you how to do this. No one told me nothing. You know, like I had to figure it out like um and again, maybe I'm over generalizing. Just because I experienced it doesn't mean every family is like that. I hope not every family is like that. My point being is like if that is your case, right, that's whoever's listening. If that is your case, that, yeah, who knows what that was? I don't know why I glitched out anyway if that's your ticket just today?
Speaker 2:yeah, yeah, I just said today's an off day with our, our tech today, so sorry our listeners, I was just trying to get to is I thought you're. If that's your case, don't be afraid to ask your families or relatives see what they think about money, but also be balanced, right like, because, like we also all have, like that crazy uncle that has his extreme beliefs or views, um, yeah, but take advantage of that's. What we're trying to do with this podcast is to learn through other people's experiences, a little bit through books, but this is a great book that we recommend. It has a solid principles, not necessarily about getting rich, but the importance to acknowledge how you, how you view money and what your goal is with money and what habits you can do to maybe achieve those goals. It was a great book, great read. Next week we're going to do a masterclass. It's exciting. That's what we're doing right next week.
Speaker 1:We're not doing the masterclass, we're going to go over a masterclass.
Speaker 2:Sorry, welcome to Will's masterclass. We we're gonna go over carpet installing, but yes, we're doing lewis hamilton's master class. I think it's like his mindset, the winner's mindset or something, something like that it's called. I'll correct it later, but but yes, it's gonna be a fun one. Tune in, don't forget to tune in. Yeah, yeah, it's gonna be a fun one. We're going to. He's gonna watch it on his own. I'm gonna watch it on my own, take notes of things we enjoy, things that we agree on or, uh, maybe questions we might have for each other, and hopefully you guys are enjoying it. This is episode number five, and hopefully this episode wasn't too bad because of our tech circumstances, we promise to be less frugal with our equipment in the next couple of months.
Speaker 2:Hashtag tell Carlos to get better internet. Okay, well, thank you for tuning in to Re-Enrolled and until next time we'll see you next time.
Speaker 1:And that wraps up our discussion for this episode.
Speaker 2:We hope you enjoyed diving into this topic as much as we did.
Speaker 1:If you found value in our conversation, don't forget to subscribe and leave us a review.
Speaker 2:And share this episode with your friends and anyone else who loves to learn.
Speaker 1:We've got more exciting topics coming up, so stay tuned, thanks for joining us on Re-Enrolled.
Speaker 2:Until next time, keep learning and stay curious.
