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People talk a lot about passive income.
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This
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is not a thing. Look, there's two ways
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to get wealthier and passive income is
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not part of that equation, but what's
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really important for people is how we
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should spend money. Cuz I've written
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about money and finance and investing
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for 20 years. And I can tell you the
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correlation between how much you spend
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and how happy you are. It can exist, but
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it is not as simple as you think. Like
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if you're unhappy with your life, it is
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a very easy assumption to make that if
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you had more money, a bigger house, a
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better car, whatever it might be, things
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would be better. And it's a lie we tell
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ourselves, of course, because here's the
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truth. So much of spending is a
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psychological itch that you're trying to
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scratch. And that manifests in so many
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different ways. For example, life is a
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competition. It doesn't matter how well
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I'm doing. It matters how well I'm doing
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relative to you. And the most tangible
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way to do that is the material stuff.
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I was reading some funny stats. They say
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that if you win the lottery, the
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probability of your neighbor going
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bankrupt increases.
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It's an amazing statistic. So be careful
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who you socialize with because you're
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going to anchor to them as a baseline
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level of success and happiness.
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So is it wrong to buy a Rolex?
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Absolutely not. But when it's
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controlling your personality, it's no
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different than any other addiction where
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it's forcing you to do things that you
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otherwise don't want to do.
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What about people who don't seem to
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spend anything?
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It's just as dangerous. Like there's
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something called post-traumatic broke
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syndrome and I'll talk about that. But I
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guarantee you that everyone can spend
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money in a way that's going to make them
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happier.
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So if I wanted to make a framework to
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know how to spend my money, where do I
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start? But also based on everything you
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know about money, if I want to get
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complete financial freedom, what's the
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five things that I should be thinking
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about?
