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Chapter 1: Why is spending money well a skill most people never learn?
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Well, thanks. That means a lot to me. Thank you.
You could have chosen to write about anything. Why choose to write about spending money?
Well, I'll take it back to the start of my career, which was like a lot of young men, particularly in the mid-2000s, the ultimate goal before tech really existed, the ultimate goal was be an investment banker on Wall Street. And it's hard to remember that era because now if you're a young person at Stanford or whatever, your goal is like go work at Google, go work at OpenAI.
Back then, it was all go work at Goldman Sachs. And so my sole kind of life aspiration when I was 20 – was to be an investment banker or a hedge fund manager. And I knew I loved investing. Even at that age, I used to go to Barnes & Noble and read investing books. And I loved it to begin with. I was fascinated with money. And then I haphazardly got a job as a writer because I graduated in 2008.
The economy was a wreck and nobody was hiring. No banks were hiring. And so the only finance job that I could find was as a writer for The Motley Fool. Didn't want to be a writer, hated writing, was embarrassed that I had dreams to be a powerful investment banker. Now I was a journalist. I was like, I hated that. But I actually like pretty quickly fell in love with it.
And what I loved about it was I loved being an outsider who was not being influenced by the incentives of that career. And so if you are a hedge fund manager, you have a lot of incentives and biases based around that. If you are a financial advisor, there's a lot of just you have to think a certain way to fit into that profession.
And I felt like as a writer, and I'm not a journalist, as a writer, I could just be on the outside looking in. I felt like I was just up in the bleachers looking down and be like, let me try to figure out what's going on down there.
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Chapter 2: What can we learn from high performers about investing time and energy?
And so I feel like there's just an endless well of interesting stories to tell about it.
What can you tell about someone from the way that they spend money?
So much of it is about your ambitions and who you think about yourself. I'm not anti-materialistic at all, and I really don't judge other people. But when I see somebody driving a yellow Lamborghini, I'm like, there's a story there. There's a story there. And it's not a judging story, but that's a story of who you want to be and what you want to show off.
Now, some people have expensive cars because they love the craftsmanship and the engineering and whatnot. They're truly doing it for— Which is still a story. It's still a story. Right. But whenever I see someone clearly peacocking, and there's a lot of it, you see it, there's a story in there. I found this headline from 1929, which was the peak just before the Great Depression.
And it was such a good headline. It was in the Washington Post. It was, the more you are snubbed while poor, the more you enjoy displaying being rich. And I was like, it's almost like you don't even need to read the article. Like that's it. That's so astute.
And I think so true that for a lot of people, not everybody, but for a lot of people, the more you are showing off or you just desire to show off, a lot of it is a wound that was inflicted upon you. And you're like, I'm going to get back. And sometimes too, you're not even showing off for other people. You're doing it to prove to yourself, to signal to yourself that I did it.
I remember talking to Anthony Scaramucci about this. And he said that he grew up in one social class where the ultimate signal that you made it to yourself, that you overcame where you became, was the Lamborghini. That was it. And so he said, he was like, I don't want it for other people. I want to do it to show myself that that kid who grew up down there made it up here.
So it's a signaling of a story either way. And that's why it's not judging. But it's an interesting window into who you are.
Like retributive materialism is what it's making me think of, that I am going to get back at whatever that thing was from my past. Yeah, and we... You see this across everything. You see this across... People who spend a lot of time beautifying themselves because they probably at one point in their life felt quite ugly. Yeah.
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Chapter 3: How does comparing ourselves to others affect our happiness?
And who I want to be is not who you want to be. Everyone has their own very individualistic definition of that. It's waking up and saying, I can do whatever I want today and having the independence and the freedom to do that. And the distinction is there are billionaires who have no control over their time.
no control over their schedule, spend their entire day doing things that they don't want to do. And there are people who make $50,000 a year who are living their absolute best life and totally control their life, control where they live, where they work, who they spend their time with, doing the hobbies that they want to do. And so to me, that's really what wealth is.
And I think a lot of people can get this wrong in their ambitions, that if your sole financial ambition is I want the highest net worth, And the way in which you're going to get that is to basically put on a performance of somebody that you're not and wake up every morning and do things that you don't enjoy doing. And... That's not to say hard work.
I think the vast majority of people get a big thrill and a lot of pleasure out of hard work. They like being productive, doing the thing that they want to do. It's working hard on things that you genuinely don't enjoy solely because you're attracted to a bigger bank account. But then that's a very common thing.
So I think the definition of wealth is the ability, the pleasure of being who you want to be, being independent, waking up every morning and saying, what I'm going to do today is the thing that I want to do.
Wealth without independence is a unique form of poverty.
That's what it is for a lot of wealthy people. This to me is one of the most fascinating things of meeting a lot of wealthy people. If you associate wealth with material and you go, they have a big house, have a big car, maybe have a plane. And you associate, oh, this person is very wealthy.
And for a lot of them, not all of them, but for a lot of them, if you get to know them, they spend the vast majority of their day doing things that they don't want to do. And that, to me, that still might be appealing to some people. Or if you're not at that, you might say, look, I understand you say that, but let me experience it for myself. Let me try to do that. That's always the appeal.
So I get that. But of the very wealthy people I've met, some of them have truly amazing lives. And I wouldn't say jealous, but I look at them and be like, I want to be you. I think there's a greater number, though, that if you get to know them, you're like, wow, that's not what I thought it would be.
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Chapter 4: What is the real relationship between money and personal identity?
That's what progress is. I want to live in a world where my grandkids live in a world where cancer is cured and they don't even think about it. That's the dream. Rising expectations is progress. That's what it is.
But you also have to expect and understand that in that world, that growth individually and as a whole society is never going to feel like you think it would be because it just becomes the norm that you're expecting.
Yeah, the median income is $83,000.
For a household. Individually, it's lower because there's more than one worker per household. Oh, is that per household? There's one and a half or whatever workers per household.
Oh, that's interesting. You're right. The median U.S. household income. Household income, yeah.
So individually, it's probably $60,000 or something. Whatever, maybe $50,000, whatever it is.
Oh, interesting. I think the sort of relativity thing is... Completely true. There is no such thing as objective wealth. There is only subjective wealth compared to the people around you. But there's another comparison, and it's you yesterday.
Yeah.
So not only do you need to be more than the people around you, but let's say you even manage to do that, right? Which is, by design, you're the outlier in that group. So however big the group is, which is now 8 billion people, but local... friend group, neighborhood, whatever it might be. I've done it. I'm in the top 10% or 1% of people that I compare myself to.
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Chapter 5: What is the impact of parental expectations on children's financial mindset?
But the regression to the mean usually happens. Like... if you have this outlier freak of an athlete, typically the sun goes a bit closer to whatever the median is, except for with more skill-based players. And that is typically free throw shooters.
Because not only have you got some of that genetic material that's percolating through you, but you've also got all of the expertise, all of the tactic and all of the training and Steph Curry is the canonical example of this, that his dad was really, really great at what he did. And Steph Curry's better. So there's some cool, you know, it's okay.
Well, what are the kind of inheritances that I can take from my parents? My dad left school with no qualifications at 16, none, zero qualifications at 16. And I'm the first person in my family to have gone to university. But I was able to learn stuff from him that I didn't need to use in an academic setting. Get a fucking master's in international marketing, I can't remember.
None of that really mattered.
Yeah, no, that's interesting.
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Chapter 6: How do generational differences affect financial behaviors?
I think there's a lot of people who are very talented in their own right, but will always be in the shadow of their parents. Colin Hanks is a very talented actor. Unbelievably talented. Tom Hanks? Exactly. I could tell you don't even know who Colin Hanks is, but you know he's Tom Hanks' son. And he's unbelievably talented. If you just put him in his own right, he'd be an A-list actor.
But I think he'll always be known as Tom Hanks' son.
There's an interesting explanation about why the children of wealthy families perform so well in school. And it's not the additional tutoring or the after school clubs or the going to a higher rated local comprehensive. It's not to do with any of that. Even if you control for all of those things, it seems to be the fact that those are the kinds of kids who are driven
to do unreasonable things in a desperate attempt to escape the gravity of their parents accomplishments yeah and that's why you see more drug use among the kids of wealthy parents again not because maybe because they can afford it they've got either having these sort of swanky parties at 16 and they're bringing their friends around and one of them's got ecstasy or whatever it is
But how much of it is just trying to escape the fucking expectations of their parents?
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Chapter 7: What are the consequences of excessive frugality in wealthy families?
Yes. And how unpopular of an opinion is this to talk about? Oh, sorry, these poor upper-class kids that are out in, you know, fucking Long Island, off on the tails of the fish, just partying it up in the Hamptons. It's like... Hey, I mean, these kids are driven to do unreasonable things.
To get into a varsity league university, to do the things that are needed, unless you're unbelievably naturally talented, to do the things that are required in order to become a billionaire. If you've read Walter Isaacson's book about Musk, it's evident that he is just on an intergenerational, generational run to disprove all of the shit that happened to him as a kid.
Yeah, yeah. And I think... There's a different flavor to this. I met – I did some work for a family many years ago that they were – they're multi, multi billionaires. And it was the grandfather who made all the money. And I was working with the grandchildren who were mostly like probably 18 to 25 years old, let's say. And I was there to teach them about some money stuff.
And one of the things they said, because the other element here was all of these kids were very good looking.
Chapter 8: How can wealth be used to enhance family well-being?
The guys and the girls are extremely good looking and they all have access to unlimited money and live unbelievable lives. One of them had a helipad in his backyard kind of thing. Just unbelievable quintessential billionaire children. And one of the things they brought up was how hard it is to date.
Yeah.
And they said two things. One is it's almost impossible to find someone who can just look past the money and actually like me for being me.
The other thing is that if the relationship progresses long enough, basically the family's lawyer pulls the boyfriend or girlfriend aside and says, if this relationship gets to a proposal, you will be met with the most ironclad prenup that has ever existed in the world. And after that meeting, so many of the boyfriend and girlfriends are like, I don't know.
I don't know if this is what I wanna do. And so you have these very good looking, 19 year olds with unlimited money and they're almost undateable. It's like, and so this, this, that's like a, a, a tiny violin thing, but the social pressure, I've called it social debt. There's a social debt that can hang over having a lot of money.
That's very difficult to contextualize when you don't have a lot of money.
What are the worst ways to spend money then? Like if, if someone wanted to guarantee dissatisfaction with their wealth, what would you tell them to adopt?
I think you would anchor all of your expectations and all of your goals to the chasing the admiration of people who are not important in your life. I desperately want my wife and kids to admire me and love me and pay attention to me. After that, it drops off precipitously.
And I think if you're the kind of person, and social media has really put a spotlight on a lot of these people who are just desperate for the attention and the engagement of total strangers and their life's purpose, like they're the only thing that matters to them in their life. is the engagement of strangers. And it's a very unhealthy way to go about things.
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