Mindy and I recently recorded with Ramit Sethi. Talking to Ramit was hard. He isn’t afraid to ask difficult questions. It was a therapy session and after it was done (3+ hours!), I felt like I had been run over by a steam roller.
However, just because it was difficult didn’t mean it was bad. I have some emotional issues around money that aren’t healthy and Ramit called me out.
Anyway, the therapy session caused me to rethink a lot of things and the thoughts in this post are a direct result.
Negativity bias is a powerful force. When I talk about leaving work early, most don’t react positively:
I just don’t trust the 4% Rule.
The future isn’t going to be as good.
What if I spend a lot more in retirement?
Social security won’t be around.
If inflation gets really bad, I may run out of money.
What if I get sick?
I get it. Our brains are programmed to keep us scared to avoid danger. However, this algorithm is an artifact of evolutionary programming that now mostly holds us back.
There are millions of things you could choose to worry about. A better strategy is to focus on resiliency. Instead of:
What if <insert bad thing> happens?
Think like this:
I know I have the brains and resiliency to deal with whatever curve balls life lobs my way.
You only have so much time. And to make the situation more urgent, our bodies peak in our 20s. It’s a cruel reality that most of us will have the most money when we’re old and frail.
The Seasons Of Life
As I approach 50, I often consider how many good years I have left. Life is great now. Everything still works. On many days, I walk around 30,000 steps (12 miles). I can move rocks all day and be fine to do it again the next day. I’m thankful that I can be incredibly active and with no pain. Besides having to use reading glasses (this drives me nuts because it’s one more thing to remember), I’m in great shape. But it won’t always be this way. At some point, my joints will start to hurt. My strength will fall away. My mind may fail. Happy thoughts, right?
So I value Present Life differently than I value Future Life. In Present Life, my body and mind are in the best shape they will ever be in. And since I know I’m in decline, I place tremendous value on my time right now. To go further, I think that it’s worthwhile to sacrifice some of Future Life for Present Life. Many things I want to accomplish including learning Spanish, playing instruments, long distance bicycle trips, and exotic travel will only get more difficult. This may sound extreme, but here goes:
My goal is to optimize for right now, even if it means having a lot less money later on.
Consider this question:
Would you rather have really rich experiences when you’re 50 or be really rich when you’re 80?
Here are some of the experiences that I’m considering splurging on soon:
- Buying a place in the mountains and then frequently inviting friends and family to hang out.
- Taking my mom, siblings, and their partners on a cruise.
- Buying a ridiculous car and then take wild road trips with it. I’ll see friends and National Parks. In between, I’ll cruise down scenic byways and lost highways. A Tesla Model S would be great for this.
- Renting a ridiculous property for a month and then invite everyone I know to come visit.
This thinking isn’t easy because it’s the opposite of the FIRE life many of us have embraced:
Save! Save!! SAVE!!!
It’s hard to turn off the saving and turn on the spending.
Also note that fancy experiences aside, most of my life stays the same. I still enjoy manual labor and building stuff, especially outside on days when it’s not too hot. We’re staying in the same house. I buy the same cheap clothes from Costco or the thrift store. Walking is my favorite way to get around. Daily life is surprisingly inexpensive.
Points To Consider
Social Security will not die. Despite what the media tells you, it’s a sacred cow that no politician would dare kill. Seniors vote. The program definitely has issues, but they can be solved easily.
Money vs. Time. Most of us value money too much and don’t value time enough. It’s only when our time is almost over that we really appreciate it.
Being an optimist is a hell of a lot more fun than being a pessimist. I’m a natural born pessimist, so this is something I have to work at. If you also struggle, print out this post, hang it up in a place of high visibility, and refer to it when you have bad thoughts.
Spending money is a skill. I would argue that spending money effectively is trickier than saving and investing. For most, saving/investing is quite similar; create a surplus and invest in index funds. However, figuring out what to spend money on for maximum happiness isn’t easy.
Believe in yourself. If you have accumulated a lot of money early in life, you probably worked hard and figured out a lot of stuff. If your investments go to hell, I’m confident that you’ll be able to figure it out. Here is another post to hang up and refer to frequently: Money and Confidence are Interchangeable
Are you still worried about running out of money? I have more good news: spending tends to decrease as we age.
Don’t be stupid. This isn’t a call to be reckless or spend with wild abandon. Be smart with your money. But also consider that it would be a tragedy to die with millions in the bank.
Everything You Love Will Go Away
The ultimate call to action may result from thinking about growing old and death. Once you do this, it makes your time feel much more precious and urgent.
- Your kids will grow up and move out.
- Activities you love now like biking or skiing will become hard.
- Travel will eventually become difficult.
- Live long enough and you won’t even be able to walk.
To those who say this:
What if I run out of money?
I answer:
What if you run out of life?
Oh honey, tramps like us,
-Bruce Springsteen, Born To Run
Baby, we were born to run.
Come on with me, tramps like us,
Baby, we were born to run.
One More Thing
Let’s quickly revisit my list of stuff I’ll spend big money on:
- Buying a place in the mountains and then frequently inviting friends and family to hang out.
- Taking my mom, siblings, and their partners on a cruise.
- Buying a ridiculous car and then take wild road trips with it. I’ll see friends and National Parks, and lost highways. A Tesla Model S would be great for this.
- Renting a ridiculous property for a month and then invite everyone I know to come visit.
All of these activities involve experiences with other humans. I’m an introvert, but some of my favorite moments are ones that I’ve shared with friends. Many of these have been with folks I’ve met through the FI community. Some are even become my neighbors.
I’ll be at Camp FI Rocky Mountain week 1 and may show up for part of week 2 as well. Week 1 is sold out, but there are still tickets for the second week. Maybe I’ll see you there? Some folks worry that these camps are for content creators or people just talk about index funds the whole time. This couldn’t be farther from the truth. The camps are mostly attended by people who aren’t influencers. And most of the talk is about what comes after money.
Get your tickets here and save 10% when you enter coupon code Jensen. Please note that I have no financial affiliation with Camp FI. I’m just telling you about it because it’s such a cool event.
More 1500 Days!!!
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I struggle with this too. I realize it’s an issue, I have made some progress but when you grow up with little family money it is a hard habit to break. I also feel like I don’t want to seem like I am wasting money as my young adult children are starting their careers. The die with zero book provides similar viewpoint.
Kudos to you for taking bold action.
It’s a great struggle to have. And it’s totally worthwhile. Here’s why: It’s not really a search for stuff to spend money on, but a journey into finding what really gives our life meaning, contentment, and joy. Once we have that figured out, we can use money as a tool to accelerate those parts of our lives.
This is a struggle for me as well. My parents modeled good financial habits, but even when I was entering my teenage years they were will still in the stage of recovering from many poor money decisions in their early adult years, so while we weren’t in poverty we didn’t have a lot of extras. Between the behavior my parents modeled and my natural aversion to spending, I developed into a very frugal individual long before I was introduced to the FIRE movement in 2014. My parents did a really good job in their own lives and today they are in a great financial position.
The problem I face is that as I am trying to shift gears towards spending more on things that I find beneficial/enjoyable, essentially none of my peers in my real-life social circle (siblings, other relatives, friends, etc.) apart from my parents are in anything even remotely approaching my situation.
I quit telling people “I’m retired” several years ago and instead I go with “I’m a part-time programmer” (since I technically still do some part-time contract/free-lance development work). But at my age, the looks I usually get are along the lines of “that’s too bad that can’t find full-time work”, though nobody says that out loud.
All of that to say, apart from my own natural frugality and decades of exercising my frugality muscle, changing into a “spendier” sort of person is complicated by the fact that most of the people in my social circle tend to key in something different. Like one of my siblings who is deeply in debt, working 60+ hours a week and still having issues, has to wonder how I can work only part-time, afford a new car, and be able to go hang out with my dad to go to taco Tuesday at the local Mexican place or to find out that my truck needs new tires one month and new brakes a couple of months later and not sweat it. If I decide to go off for a week or two overseas I know that must make people wonder.
I am definitely not complaining. I mean, it is such an amazing blessing to know that I can just take my car to the mechanic and pay whatever it costs to have the repairs done (I have the skill to do much of the work myself and did so when I was younger, but since I don’t enjoy automotive work I decided this was one area worth outsourcing). It’s great to know that the other day when I noticed a leak in the roof during a rain storm that I could call my dad and have him come over to help me fix the leak (I would be willing to hire out stuff like this, except for that my experience with contractors doing stuff on the house is that if it doesn’t require a special license/equipment like HVAC, I am better off doing it myself).
But there is a real struggle when the people close to you are mostly in such a radically different place.
So much to unpack!
I’m with you on automotive work. It’s one of the rare things that I outsource too. Working on cars sucks! Too many skinned knuckles from bolt that don’t want to move.
Also agree about contractors. What a pain in the ass many of them are. And it’s awesome to know that if something does break, you have the resiliency to deal with it yourself. (No joke, I just got back from fixing the garage door opener at our rental house)
But there is a real struggle when the people close to you are mostly in such a radically different place.
This is a tough one. FIRE is such a strange thing in that it isn’t that complicated, but it can radically change your life. Saving and investing a lot of money at an early age is the ultimate life hack. I have mostly given up trying to help folks. Perhaps the best we can do is lead by example. I hope that others notice how good my life is and that leads to questions which could lead to me helping them. Of course, it all sometimes leads to resentment as well.
All of that to say, apart from my own natural frugality and decades of exercising my frugality muscle, changing into a “spendier” sort of person is complicated by the fact that most of the people in my social circle tend to key in something different.
I wish money wasn’t so taboo. If we all just talked about it more, I think we’d all be in a better place.
If you think something is going to make you happy, I think you should totally do it though. The actually spending is still uncomfortable for me. My heart races and I get sweaty typing my credit card number in. However I find that after I’ve clicked the Purchase button, I feel great.
> I wish money wasn’t so taboo. If we all just talked about it more, I think we’d all be in a better place.
This one gets me all the time. I am totally comfortable talking about money (earnings, investments, the cost of things) and my parents are as well, but I find that most other people are not. I’m glad they raised me without teaching me an aversion to talking about money, but I rarely encounter someone else who is comfortable talking about it too.
> If you think something is going to make you happy, I think you should totally do it though. The actually spending is still uncomfortable for me. My heart races and I get sweaty typing my credit card number in. However I find that after I’ve clicked the Purchase button, I feel great.
Agreed. I don’t let the fact that someone who knows me might ask themselves “how can he afford that?” or “why does it seem like he never works?” stop me. I just wish that more people would take of the blinders, get off the hedonic treadmill, and live a better life.
I just wish that more people would take of the blinders, get off the hedonic treadmill, and live a better life.
The struggle is real. I’m so damn happy with the way my life turned out that and I want it for others as well.
Maybe our lives seem unattainable, so others don’t try? Maybe they can’t get past the expectations of society (“Buy this shiny new thing! Now! It won’t last!”). Dunno.
I think that there is a genetic component to it too. As a kid, I loved to earn and save. I LOVED going to the bank and depositing money.
Coincidentally, I happened to glance down while typing this comment and noticed that the car bank that Liberty Savings gave me for opening an account at age 7 is sitting right there. Hi little car!
Nice photo from FinCon 2018, good memories!
When and where is the conversation with Ramit airing? Would love to hear it.
I’m not as far along as you on my FI journey, but definitely at a point where I could loosen up a bit, and continue to work on overcoming scarcity mindset.
Ramit: They don’t tell us! So, I have no clue.
Great post.
You are nothing but an optimistic person. Everyone’s background and relationship with money is different.
Spending is skill but where we spend to be maximum happiness at that time is very important.
Pre-2020, my wife and I travelled a lot in the last decade. We had been to 40 states in the USA and at least 20+ countries around the world. We love new food and culture, landscape and meeting people. But something was missing. Slowly it felt like a job to research where we want to visit. Slowly the excitement died completed during covid-19. I figured later, it was fast travel (a separate story altogether).
Then, I found you back in Jan 2020. I was super excited to find a path for my retirement. However, it was just unidirectional as for any new person jumping on to FI journey. Save and invest as much as possible and retire early. I am in a unique situation where I can be FI in 5-7 years but cannot retire because of my work visa situation. If I quit working, I cannot live in the USA (where I want to grow my young kids).
When I was going through your blog, I came across Death march to FI which you wrote years back. It gave me a realization that we should slow down to enjoy life. I changed my approach. Instead of saving 50-60%, I let go the gas pedal little bit. I reduced to a certain percentage where I can spend that money for things I love: travelling and meeting people. I also started my journey to be healthy so I ran races and spent money without second guessing.
YOU CHANGED MANY LIVES INCLUDING MINE 🙂
I really liked the list of things you would want to be part of your rich life. I wish you all the happiness in your future.
Note: I have booked my CampFi Rocky Week 1 last week. I will see you (and my family) will see you there.
Rakesh! I’ll be giving a talk at week 1! It will be awesome to see you again, especially in that environment!
Thanks again for the kind words and I’m glad you learned from my poor example!
See you soon!
Still having a rough time with this. But yeah. I’ll come to a conclusion soon I hope.
They say life is what happens when you’re busy making other plans and there’s something to it.
These are the golden years for us. We can always go back if we need to.
Still having a rough time wrestling with the decision though.
One place to start, and I think this will really help you have a break through, is to take some of your favorite neighbors on a really nice trip! Trust me on this one!
It can be hard to swallow but good on you Carl for acknowledging the difficulty of spending, especially being a FI pioneer! You deserve those things you’re considering “splurging” on, and that question really made me stop to think “What if you run out of life”
Tomorrow is promised to no one, and I read somewhere the other day that 1/3 of retirees actually increase their assets during retirement…maybe it was while listening to Die With Zero?
Thanks Gary! I feel kinda silly even talking about it. I have the ultimate First World Problem. It’s silly even calling it a “problem.”
It will be fun to give most of it away in the decades to come.
I really appreciate this post. Living in the present moment is important as it helps us appreciate the beauty and experiences around us, fostering a greater sense of fulfillment and connection. By excessively fixating on the future, we may miss out on the richness of the present and the opportunities it presents for growth and happiness. Striking a balance between planning for the future and embracing the present allows for a more well-rounded and satisfying life.
Great article Carl and I can’t wait to hear the Podcast. I do think there is also a balance and cadence to Ramit’s suggestions that sometimes gets lost. For example, if you were to buy the Tesla, rent the house, and go on the cruise back-to-back-to-back, some of the joy would start to diminish by the 2nd or 3rd adventure. But, if you mixed in home projects, and other enjoyable activities, it would probably be more sustainable. I’m personally trying that this summer by taking on a part time seasonal job to add a little more “fun work’. Then, back to travel in the fall.
Great point on balance. To me, nothing would be more horrible than a never ending vacation. Living on a cruise ship without a laptop (from which to write) would drive me insane.
I LOVE the feeling I get when I work working.
Where are your fall travels going to take you? Please stop in and say “Hi!” next time you make it to Colorado.
Heading it Italy but expect to be in Colorado next spring. I’ve always wanted to visit the Epicenter of FIRE in Longmont. Thanks for invitation!!
Awesome!
And enjoy Italy!
Looking forward to listening to your interview. I really enjoyed this post. One of the things I like about Ramit is how he challenges you to DREAM BIG, literally shouting that phrase at people when they throw out small rich life ideas. It feels so contradictory when you are walking the FIRE path, but I love your wish list of big splurges and hope you write about these great adventures.
Yeah, Ramit is good. I often get tunnel vision and have a hard time seeing new opportunities and possibilities. Perhaps Ramit’s biggest strengthis that he pushes you to think different.
Thank you for the kind comment KaLynn!