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Welcome to personal finance for long-term investors, where we believe Benjamin Franklin's advice that an
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investment in knowledge pays the best interest both in finances and in your life. Every episode teaches you personal
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finance and long-term investing in simple terms. Now, here's your host, Jesse Kramer. Hello and welcome to
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episode 109 of Personal Finance for Long-Term Investors. My name is Jesse Kramer. By day, I work for a fiduciary
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wealth management firm helping clients all over the country. and by night. I write a blog called The Best Interest. I
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podcast here on personal finance for long-term investors where I simplify complex ideas about personal finance
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from investing to taxes to retirement and beyond. Today, we've got a fun episode for you. I asked a few other
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terrific financial creators to share a a funny story or a cautionary tale from their own lives, specifically about the
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idea of spending money. Perhaps it's a keeping up with the Joneses type story
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or a a total misunderstanding of how the world works or a a painful lesson learned or even in one case I know a
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question to ask of all you listeners. The point is our choices to spend or to save. They're some of the most basic but
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most fundamental choices in our financial lives, right? Spending and saving is this foundational principle.
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We we can't talk about Roth conversions in retirement unless we're first making
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prudent spending choices and abundant saving choices along the way. But before we get into that content today, we have
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a review of the week and I want to tell you three quick stories somewhat related
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to spending. At least two of them are. So, first our review of the week. Shane Immler left a five-star review on Apple
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Podcasts. He says, "The complete package. I found Jesse through another finance themed podcast, and I'm glad I
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did. He has a way of breaking down complex financial topics into digestible, easy to understand
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conversations. His humor and personality make him likable and more importantly relatable. Whether you're a finance pro
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or a new investor, you should subscribe to his podcast and don't forget to check
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out all the articles on his blog. Shane, thank you so so much for those kind words. And yes, listeners, if you
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haven't heard, I now have a new batch of super soft t-shirts specifically branded
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for personal finance for long-term investors. They're no longer the best interest branded shirts, but instead
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personal finance for long-term investors shirts. So Shane, uh, you know you have
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one on the way. Shoot me an email. make sure I have your your name and address, which I believe I already do. And I'm
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going to get you hooked up with one of those new Supersoft t-shirts. So, that's
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exciting. And another not quite normal, but also just exciting news. I want to share a a quick success story, a a
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win-win story that I think proves the concept of what I'm trying to do here on
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the podcast, and I I wanted to share it with all you listeners. So, a listener, Paul, he reached out to me in January,
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and Paul's brother, we we'll call him Peter, although I'm I'm intentionally
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keeping him somewhat confidential. his identity confidential for now. Peter works for big tech company. You know,
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think Microsoft, Amazon, Google, etc. And like many longtime employees of those big tech companies, Peter has a
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lot of restricted stock units, stock options, some vested stock in that company, plus he has a large salary paid
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for by that company. In other words, so many of Peter's financial eggs are all
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tied up to this one company's basket. And and that's a really big risk. And
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with retirement probably within five years or so, ideally for Peter, there's
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a lot of work that he has to do to ensure that his retirement plan is set up for success. So Peter went to Paul,
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his brother, who's our listener. Paul's our listener. And Peter knows that Paul
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loves personal finance. And he went to ask him some questions. And Paul gave him some answers, including sending
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Peter some of our podcast episodes here. And Paul also said, "Hey, Peter, why
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don't you reach out to Jesse directly? He helps people like you." So, Peter and
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I started a conversation and over a couple months of good conversations that led to Peter now working with me
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full-time as a client. And the reason I'm sharing this story with you listeners is because that's the the
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virtuous cycle that I'm hoping for here with this podcast. This is super fun for
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me to produce and talk into this microphone. It's awesome to interact with you all via email to answer your
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questions on the AMA episodes. But, as you know, I I don't run outside advertising. I'm not pushing book sales
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on you. I don't have affiliate marketing relationships. The one and only way I
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support this podcast financially and the way I support my family financially is by working with clients all over the
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country here from Cobblestone Capital Adviserss in Rochester, New York. Right. We're a fully fiduciary independent
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wealth management firm. We solve complex financial questions for the individuals
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and families who we work with. So, Paul, thank you so much for listening and for
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thinking of me and and helping out this business model, if you will. At least, you know, it's working the way I'm
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intending it to work. Peter, thank you for coming on as a client if you're listening. My vision for the podcast is
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that it'll always stay free and very high density in terms of the helpful content to everybody out there
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listening. So, if you or someone in your life is seeking trusted expert financial
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advice, I hope you'll continue to think of me. Okay, on with the show. Before we
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get to everyone else's spending stories today, I want to share two powerful stories that I learned from from clients
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from my work recently. If you read all my blog posts, you actually probably saw this blog post in last month, but I
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wrote this recent article. It's called scar tissue, and the link to the article
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is in the show notes. So, if we think of a deep wound, a terrible burn, the remnants of of life-changing surgery,
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that's scar tissue, the body's natural way of healing after an injury. I had to
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look this up. So, when skin or other tissue is damaged, the body produces something called collagen fibers to
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close and strengthen the wound. And that repair process results in scar tissue with an appearance and a texture
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different than the original tissue because it's laid down so quickly to heal from the wound and without the
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original structure of our of our normal skin. Physical scar tissue it it does carry some sort of memory component with
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it too. The same event that burned us or cut us can create some emotional psychological wounds or quite often a
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particular event might not leave any physical scar tissue at all but it creates this deep memory scar tissue. I
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don't know if you all listening remember this, but at the end of 2022, there was
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a terrible blizzard in Buffalo, New York that killed, I think, 40 or 50 people. And I was actually caught driving in
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that blizzard, actually in the early hours of that blizzard. And I have no physical damage, thankfully, from the
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blizzard. But there's a mental wound in my brain that gets very hyperactive when
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I'm driving in the snow. Kind of like, you know, your your uncle's knee that
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aches when a storm is on the horizon. Those mental scars, right, forged from some sort of intense or traumatic
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experience, they shape the way we think, the way we react, and the way we feel long after that proximate event itself
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has passed away. The scars can protect us in some ways. You know, making us more cautious for future events. But
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they also limit us if we never learn or heal or reframe the story behind the scar. If you've educated yourself enough
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on personal finance and investing, you know that money's mental and psychological aspects probably matter
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much more than the numbers do. I'd argue that most people I speak with struggle
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more with the mental and the psychological than they do with rational arithmetic. But sometimes you need to
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hear a a firsthand account, a real story for that fact to sink in. And back in May, I was blessed to hear two stunning
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anecdotes of this type. And I want to share those anecdotes with you. So the first one is from an elderly lady I met
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with just this delightful woman, very kind, very funny. She was born in the late 1930s, so just on the tail end of
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the Great Depression. And by the time she was 16 or 18 or 21 years old, those kind of ages where we really start to
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shape our personal worldviews and the Great Depression had been done and dusted for a couple decades, but I'm
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sure even though maybe she didn't realize it as a child, the echoes of the Great Depression surrounded her. She was
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really she was swimming in it. And if we think of the adults and the role models
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in her life and their experiences as adults in the Great Depression, it starts to make sense. Those echoes,
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those lessons, those fundamental changes in American life all informed the person
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that she grew up to be. And in some way, they informed the person she is today in
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2025. Now, regarding financial planning, she and her family saved and invested wisely for many, many decades. And here
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she is in her late 80s living off less than 1% of her portfolio assets every year. And as we've discussed here on the
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podcast and I've written about on the blog, living off of 1% per year is very,
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very, very low and doubly so for someone her age. And yet, despite that mathematical fact, this woman looked
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around the room at her children in a meeting with us and looked at my colleagues and looked at me and she
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said, "Thank you all for what you're doing, but I just want to make sure you
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guys really understand. I do not want to run out of money. So, if all we do is look at the math, we'd think to
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ourselves like, wow, that's kind of a silly thing to say. Someone withdrawing
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1% per year, let alone someone who's 85 plus years old withdrawing 1% per year,
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they will never ever ever run out of money. But if we pause and zoom out remembering where she came from and what
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she's been through, the light bulb goes off. Aha, this is great depression scar
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tissue. It's still there 85 years later. not an opinion. It's there. It's fact.
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It's very real to her. And we might think to ourselves, well, the numbers just don't justify feeling that way. And
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sure, I agree with that. The numbers alone don't justify her concerns. But that memory scar tissue, it didn't just
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manifest on its own. Just as with a real scar, it got there through some sort of
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burn or cut or traumatic injury, right? Traumatic. This woman's concern, her
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memory scar tissue is born out of real financial trauma from the Great Depression. It doesn't just disappear
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with a few off-the- cuff lines of retirement math. And the second story along those lines comes from a
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45-year-old man, as nice and humble as you can imagine, the very salt of the earth kind of guy. 25 years ago, he
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started his career in a bluecollar technical manual labor field, and he just worked, worked, worked, progressed
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one step at a time. And now for the last couple years, he's been managing his
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entire company's manual labor workforce of 1,700 employees. So serious, serious
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progress. But to explain where he came from, he told me this story. He said, "I'll never forget it. Our daughter was
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young at the time. We were in Wegman's grocery store. I walked over to the meat
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department. I got one of those packages of chicken breast. I put it in the cart,
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but my wife stopped me and she looked at me and she said, "I'm sorry, honey, but
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we can't afford chicken." So, just imagine that, listeners, what did that
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chicken cost, but the budget was tight, right? Kids are expensive. Income was hard to come by at the time. And you
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fast forward to today, he's leading a team of 1,700 employees. His compensation definitely matches his
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responsibility. We're talking easily within the top 1% of all earners in the
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country. Hard work is really paying off for him. He's the kind of guy who deserves it. But he admitted to me, he
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goes, "I'll never forget hearing that we couldn't afford chicken, and sometimes I
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still feel like that's my relationship with money." Okay, so once again, we
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might think, well, the numbers just don't justify feeling that way. And once
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again, I would agree. The numbers alone shout out, "You know what, man? Eat
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nothing but chicken for the rest of your life. You'll be fine." But his memory
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scar tissue. It didn't manifest on its own. It got there through burns or cuts
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or traumatic injury. Traumatic. So, I'm not sure if it was disappointment or
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sadness or shame, a combination of those things, maybe a different emotion altogether, but the feeling that you
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can't afford a quote unquote simple grocery item for your family, that feeling sticks with you and it leaves a
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mark. And even as life goes on, the financial floodgates might open like they did for this guy, but the scar
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tissue still sticks around. So then I think to myself, what about you listening? And what about me? And I
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mean, we don't have any financial scar tissue, right? Well, we're going to jump
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from scars to opthalmology. It's not that I'm becoming a medical expert, but
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I do know this. We all have two blind spots in the middle of our visual field. The optic nerve blind spot. I had to
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look this up. It's a small area on each of our two retinas where the optic nerve
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exits the eye. It contains no photo receptors and therefore is incapable of detecting visual information. And the
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great irony is that most of us are ignorant or blind, you could say, to those blind spots. Most humans have gone
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their entire lives without realizing that they have blind spots in their visual field. Yes, you listening, you
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have two blind spots in your visual field. And I'd argue that most of us, you listening at home, me talking to
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this microphone, the two people I talked about before, we go our entire lives blind to our own financial scar tissue,
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blind to the trauma, blind to the long-lasting effects that define our very lives, define the way we choose to
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spend money or not spend money. We make daily financial decisions as a function of those long-held beliefs. Some are
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logical and and maybe well thought beliefs, but other are a function of pure financial trauma. Yet again, this
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is one of those times where I want to call upon David Foster Wallace's speech,
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This is Water. Longtime listeners, longtime readers know it's one of my favorites, especially the opening story,
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The Parable of the Fish, where David Foster Wallace says, "There are these two young fish swimming along, and they
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happen to meet an older fish swimming the other way," who nods at them and says, "Morning, boys. How's the water,
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and the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, "What
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the hell is water?" We're so immersed in it, we forget it's even there. Or as
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Wallace said, the most obvious and important realities are often the ones that are the hardest to see and talk
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about, just like our blind spots, just like our scar tissue. Here's a quick ad
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and then we'll get back to the show. Did you know my written blog, The Best Interest, was nominated for 2022
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personal finance blog of the year, and it's been highlighted in the Wall Street
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Journal, Yahoo Finance, and on CNBC. I love writing, especially when that writing is to share financial education.
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And I usually write one or two articles per week. You can read them all at bestinterinterest.blog.
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Again, the web address is bestinterest.blog. Check it out. So, thanks for listening
00:13:53
to those stories. I'm interested to hear what you have to say. And now, let's get
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to some of our awesome guest contributors today and start with their stories. So, for the first one, let's
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pass it off to Joe Salaul Seehi from Stacking Benjamins for his hilarious mini bar story. Hey there, Jesse and
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personal finance geeks. This is Joe Salaul See from Stacking Benjamins and I have a story that didn't kill me but was
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a fantastic time with money. I was dating this wonderful woman at the time. I'm from farm country West Michigan. I'd
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never been to an upscale hotel. And this woman I was dating was fantastic. By the
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way, now we've been married 32 years. And I decided I was going to invite her
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to go to Chicago with me. And I found this beautiful hotel just north of all the bars, which was called at the time
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the Clarage House. And it's in this kind of brownstone neighborhood. Beautiful
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place. And we pull up and of course I immediately see that the parking's going
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to be a bunch of money and the money that I really don't have. and I could barely scrape together the money for the
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hotel room, but I really wanted to impress this fine young lady. And so I figured it all out. We get up to the
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hotel room and everything looks great, but there's a refrigerator. And so I walk over to the refrigerator while
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Cheryl is getting ready to go out this first night in Chicago. When she comes out, I've got some macadamia nuts and a
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Bud Light and I'm watching the football game. And Cheryl said, what are you doing there? And I said, it's amazing.
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There's this refrigerator in our room that's just full of snacks. And she said
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something ridiculous. She said, I think you have to pay for those. And I said to
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her, I don't think you know how much I paid for this room. Cuz in my mind, there was no way that of course that
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they were going to charge for this. Well, what was really cool was not only do we go out, we have a wonderful time
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at this jazz club and at dinner, we come back and not only do they have little chocolates on our pillow, but they've
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restocked the Bud Light and the macadamia nuts from the refrigerator. So, the next morning we go out to the
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museums and before we go, I grab some potato chips, I grab some M&M's, and a
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couple bottles of water. And then we come back, those have been restocked. We had the best best best weekend. But
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the next day, as we're getting ready to check out, and of course, we've been
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married now for 32 years, so this is before, you know, maybe you could do some type of phone checkout, but I
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thought you had to stand in line. So, we get our suitcases. We begin to leave. We
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get to the elevator and I all of a sudden got this idea cuz I'm a pretty moneysavvy guy and I don't want to waste
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money. I said, "You know what? You go downstairs and I'll be right back." She
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goes, "What are you doing?" And I said, "I forgot something. I'll be right
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back." So, I go back to the hotel room and I take my suitcase. I unzip it right
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in front of the refrigerator and I take my hand and I just pile everything in the fridge into my suitcase and I zip it
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back up and now I'm getting a ton of value out of all this stuff. So, I go back down and I wait in this super long
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line to check out. We waited forever and Cheryl's just over sitting in the front
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window of the hotel watching the cars go by and pedestrians. And I finally make it up to the front and the woman says,
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"Well, how was your stay?" And I said, "Oh, this place is amazing. We had the
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best time. Thank you so much." And then she said, "Did you enjoy the mini bar?"
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I thought to myself, "What business of yours is that?" But I'm a pretty polite
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guy, so what I said out loud wasn't that. I said, "Well, thank you. We enjoyed it very much." And then she
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says, "Well, I've see here the purchases you made the first two days." And then
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she takes out a piece of paper and said, "Would you kindly list here all the
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other things that you had?" And I see those. This is 30 years ago. And the M&M's were not 75 cents like they were
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at the store at the time. They were like 350. This Tober loan, I'd never had to
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loan was like five bucks. Those little Jack Daniels things, you know, six, seven, eight bucks. And I've got all of
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it in my suitcase right next to me. And there's this just pit in my stomach because I was really struggling with
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money and I don't know what I'm going to do. So I look at this list and then I look
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down at my suitcase and I look back at the list again and I look back at my suitcase again. The guy behind me coughs
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because he's been in line every bit as long as I've been and I'm clearly
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wasting time. I look over at Cheryl and she's just giving me the like, "What's
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up look?" And then I look at the woman and I thought for a second and I said,
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"I had all of it." And she goes, "Excuse me?" And I said, "I had all of it." And
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she was super professional. Her mouth only went up for like a quarter second into this unbelieved, unbelievable
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smirk, like this laugh. But then she went, "Okay, very good. Just sign here
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on the bottom and we'll just charge it to your card." And as she is putting in
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these expenses and getting me my receipt, I'm just praying, "Please let
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my card go through. Please, please, please, please, please let my card go through." And I blocked out exactly how
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much money it was. But that day, we had Toberlone all the way home and potato chips and more macadamia nuts and a
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Snickers bar. And it was a fun drive back to Michigan, but it wasn't fun paying that bill later. So, there's my
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stupidness with money. Turns out the mini bar, Jesse, isn't free. How many times in your life have you spent money
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without even realizing it? Have you ever been so embarrassed about something that
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you simply accepted your fate rather than trying to maybe find a way out of it? Have you ever eaten a tollerone
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candy and washed it down with a mini bottle of Jack Daniels? Thank you, Joe, for sharing that story. And I think a
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good takeaway here is that very few things in life are truly free. And if it seems too good to be true, that might be
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the case. Okay, now let's hand it off to Justin Peters, host of Fiminded. Hey
00:20:11
listeners of Personal Finance for Long-Term Investors. I'm Justin Peters, host of Fi Minded, a podcast for people
00:20:17
chasing financial independence and having fun along the way. Jesse asked me to share a spending story. I definitely
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had my fair share of like keeping up with the Joneses moments, but today I want to go a little bit different
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direction and tell you about a situation that taught me an unexpected lesson. It
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was fall of 2024 and I heard a bunch of noise outside my house. I stepped out and saw a construction crew putting up
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no parking signs right in front of my place. I live in a neighborhood with no restricted parking, so I asked one of
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the workers what was going on. Turns out the city was installing a crosswalk. I was a little annoyed because this is
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where I usually park and I hadn't received any notice, but I brushed it off. That was until the weekend. I had
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just picked up a piece of furniture and when I got home, I realized I couldn't
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unload it on my own. I called my sister and she said that she could come help me
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in 20 minutes. So, I parked halfway in front of my driveway, halfway in the new no parking zone and I went inside to
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wait for her. When I came back outside, there was a parking ticket on my windshield. I was so furious. Those
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signs had literally just gone up that week. The curb and the crosswalk weren't
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even painted yet. I was mostly blocking my own driveway and I'd only been inside
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for maybe 30 minutes. I thought to myself, "Well, there goes $50." Later
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that night, I went online to pay the ticket. There wasn't a cost on the ticket, so I was expecting about a $50
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fine. And instead, I found out it was $512. Apparently, since I was blocking a crosswalk, I was cited for impeding the
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mobility of the disabled. Yeah. Yeah. I was fuming and ready to fight. But I ran
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into an issue. I'd been driving my girlfriend's car, so the ticket was in
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her name. Whenever I called her and told her about this, she didn't want anything
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to do with going to a courthouse and contesting the ticket, which is honestly totally fair. It was my mistake and my
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problem to deal with. So, I did some digging. And to contest it, I could have completed an affidavit, got it
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notorized, and then scheduled a court date, which of course had limited daytime hours. I think it was like
00:22:28
something ridiculous like 10:00 a.m. to 3:30 p.m. with like a 12 to 1:00 lunch hour. So, I was like, "Ugh, man, I'm
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going to have to like find some time during the day to go and take care of this." But I was ready. I was going to
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go full crusader and get this parking ticket reduced. But that's when my girlfriend asked me a very simple
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question. Is all that time and energy worth it? At first, I was like, "Oh, hell yeah." I was so defensive. I felt
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so wronged. a $500 parking ticket, parking in front of my own house for a crosswalk that didn't even exist yet.
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But then later that night, I started thinking about it. I was already overloaded and stressed with other
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things that I needed to take care of. And the whole process, I know, would have drained me. And honestly, there was
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no guarantee that I would have won. I think I had a legitimate case to to prove, and hopefully I could have got it
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reduced to a normal parking ticket, but that wasn't guaranteed. So, what did I
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do? I paid that freaking ticket the next day. Sure, I still grumble about it now
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and then, but as soon as I hit the pay button, I felt this overwhelming sense of relief. And honestly, I'm glad I
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didn't put myself through all that hassle. That's where the lesson comes
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in. Sure, I recognize that this comes from a place of privilege. I had the financial means to make a problem go
00:23:43
away, but that isn't something I normally do. I usually go out of my way to save money, even if it means
00:23:50
inconveniencing myself. But this experience showed me something important. As I gain more financial
00:23:56
freedom, there are moments when it's okay to let go. Since then, I've been
00:24:00
experimenting with spending a little bit more on convenience. Just last week, I paid extra for a later flight so I
00:24:07
didn't have to wake up at 4:00 a.m. My younger, super frugal self would have
00:24:11
been absolutely horrified, but my future self, the one that's trying to find
00:24:15
balance between financial optimization and enjoying life, would be proud. Jesse, thanks for giving me a chance to
00:24:21
share my spending story. And if you're listening and you want to find a healthier balance between your money and
00:24:26
your happiness, come check out my podcast, Finded. Now, it's not a perfect correlation, but it seems that many
00:24:32
younger people feel like they have enough time that they're comfortable sacrificing time or sacrificing
00:24:37
convenience in exchange for money. Like Justin's example, a person might gladly
00:24:41
take the earliest flight possible to save 50 bucks. But as we age and likely as life or careers or relationships get
00:24:47
more and more timeconuming, our internal calculus of time versus money starts to
00:24:51
change. Personally, if I knew it would cost me one or two hours, would I go to court to explain Justin's parking ticket
00:24:58
snafu for 500 bucks? I mean, I think I probably would. You know, would I trade an hour for 500 bucks or for the
00:25:04
potential of saving 500 bucks? Yeah, I probably would. But if it was 50 or $100 ticket, no way. I don't think I'd do
00:25:09
that at all. I mean, my go-to example that's very obvious to me at least when
00:25:13
I hear is someone is willing to drive across town for cheaper gas. So, they'll
00:25:18
spend 10 minutes in their car, they'll drive 5 miles to save 15 cents a gallon,
00:25:23
which is what, $2 on on a fillup. Your 10 minutes is worth way more than $2. And I bet if we each paused and thought
00:25:30
about it, we could find some places in our lives where we don't value our time
00:25:34
and convenience enough, and we ought to be spending a little more money to save ourselves a little more time. even a big
00:25:39
celebration, would you spend a little extra money to celebrate the big special moments in life? Now, for that question,
00:25:45
let's pass it off to Jordan Grummit, aka Doc G, from the Earn and Invest podcast.
00:25:50
Hi, I'm Jordan Grummit, aka Doc G, and this is my money story about Keeping Up
00:25:57
with the Joneses. I grew up in an upper middle class neighborhood and because we
00:26:04
were surrounded by wealthy people, we were used to this idea that you spent a lot of money on houses and cars and you
00:26:11
spent a lot of money on restaurants. In fact, one of the most expensive restaurants in
00:26:18
our area was one of the few that I think was rated five stars. It was called Le France. And LRA was the place to go to
00:26:27
get the best meal. And when my stepsister graduated high school, she asked for her present to be a family
00:26:35
meal at Lefrance. Now, this was back in the whatever 1980s and probably would cost around $400 to $500. A lot of money
00:26:44
certainly at the time, but not particularly prohibitive for my mom and my stepfather who both owned their
00:26:51
businesses, who saved 50% of their income and were well on their way, if not already at financial independence.
00:27:01
So, keeping up with the Joneses in this case was no big deal. We could go to an expensive restaurant just like our next
00:27:06
door neighbors, by the way, who owned two Bentleys. But there was a catch. You see, my mom is the child of a woman who
00:27:16
lived through the Great Depression in an orphanage and never had enough money. And then my mom was married and the main
00:27:23
bread winner in our family, my father died. And so my mom had a lot of money trauma both generational from her mother
00:27:33
as well as lived from the loss of my father. So even though years and years after my father died, she had remarried,
00:27:41
we had accumulated a decent amount of wealth, the idea of spending that much money to go to a restaurant was painful
00:27:51
and anxietyprovoking. And I remember for the weeks leading up to this dinner, my
00:27:57
mom had serious reservations. In fact, it was unclear whether she would even go up to the last minute. We all eventually
00:28:05
did and the dinner was lovely and then we moved on with our lives and it didn't
00:28:12
have a huge impact on our wealth. In fact, it had zero impact on our wealth. It was one splurge, one day where we
00:28:21
spent more than we normally would to celebrate my stepsister's graduation. years later, I think a lot about my own
00:28:31
ability to spend. Often, I have trouble spending money, too. I have the same generational trauma. I remember my
00:28:40
grandma hoarding money. I remember my mom being anxious and worrying about running out. And so, for me, spending
00:28:48
money is really, really hard. It's not that I'm so connected to my net worth as
00:28:54
being that important. It's just I was brought up with this idea that things aren't that important and you shouldn't
00:29:02
spend money needlessly. Now, I've gotten better at that and we live a life where
00:29:07
we spend a lot of money by necessity. We are lucky we have a high enough net worth where we can do that. But I often
00:29:14
think back to that dinner at Leon when I get anxious about spending and I tell myself that occasionally
00:29:26
occasionally it's okay to spend money even more than you had planned. Occasionally it's okay to keep up with
00:29:32
the Joneses. Occasionally, it's okay to do what other people in your area are
00:29:36
doing, especially if it is brief, if it's one time, if it's not going to hurt
00:29:42
you in the long term. What it made me realize is it's not the oneoffs that get
00:29:48
us in trouble. It's the habits. And so you can sometimes spend frivolously as a
00:29:55
one-off to do something that lights you up or celebrates a family member or creates a moment that you'll always
00:30:02
remember. And those one-offs are fine. The people who get in trouble are the people who have a habit of keeping up
00:30:10
with the Joneses, a habit of spending too much. And by nature, I will never be one of those. I love that quote. It's
00:30:20
not the one-offs that get us into trouble. It's the habits. What an awesome takeaway. Now, do you have any
00:30:25
habits that you think are quote unquote keeping up with the Joneses? Or going back to the scar tissue example that I
00:30:30
was telling you, do you think you might have some blind spots that are kind of jonesy in nature? It's a little bit of a
00:30:35
scary question, and it might be worth consulting with your spouse or a friend or a colleague to get their input on
00:30:40
that one. But there might be another side to that story, too. Can we be blind to our own frugalism or blind to our own
00:30:46
minimalism? blind to our own cheapness, so to speak, to our own deep down desire
00:30:51
to spend much, much less. For that, let's pass it off to Diana Miriam, the founder of the Economy Conference and
00:30:56
the host of Optimal Finance Daily. Hi, this is Diana Miriam, creator of the Economy Conference, which is a party
00:31:04
about money designed for the FIRE movement. So, my philosophy in general is that the less materialistic I am, the
00:31:12
more idealistic I get to be. And that has served me very well. I also really like the idea of stealth wealth. Like no
00:31:21
one would ever look at my house and my car and my material possessions and think that I had money. I very much
00:31:29
enjoy being underestimated. However, I am not completely immune to the perils of consumerism and I certainly have
00:31:39
moments where I feel like my house is dumpy or I feel insecure about my clothes or whatever, right? I'm human
00:31:47
just like everybody else. And right now, I am dealing with this as it relates to
00:31:53
my car. So, I love my car. It's a 2010 Mazda 3 that I bought for $6,000 cash in
00:32:02
2018. When you think about like keeping costs low for a car or like optimizing car costs, I think it really boils down
00:32:11
to like how you've engineered your life to drive less or that's how it's worked
00:32:16
out for me. And so I don't drive very much. Like I work from home. I go to the
00:32:20
grocery store. I mean I certainly drive around but I don't drive much. And I've
00:32:24
only put maybe 40,000 miles on this car in the last, what is it, 7 years. So, I love this thing. It served me very well.
00:32:35
I've done routine maintenance. I've never had any issues with this car. And
00:32:40
it's a rebuilt title, but it's great. The thing is, there must have been a
00:32:45
time that when I cleaned the dashboard, I used maybe a cleaner on it that I shouldn't have used on the dashboard.
00:32:53
And with the sun beating through the windshield, it created this like sticky dashboard. And I have pets. I drive
00:33:02
around my dog everywhere. And so this sticky dashboard is now like covered in like fur and dust and it just looks
00:33:13
gross. And I am so tempted to buy a new car just because of my sticky dashboard.
00:33:20
I would say this is an example of me feeling like peer pressure to buy something because the car is very
00:33:30
functional. And in general, I really value function over aesthetics, but in this case, it just looks so gross. And I
00:33:40
don't want anyone in my car because I feel like they're going to judge me for
00:33:44
my sticky dashboard. So, the reason why I tell you this story is mostly as a desperate plea. I've gone down Reddit
00:33:51
rabbit holes to like figure out how to fix this sticky dashboard situation and there's apparently no solution to it. If
00:33:59
you have dealt with this and you figured out a way to fix it, please, please, please contact me. Or if you see me
00:34:06
driving around in a new car and you thought that I was all about stealth wealth and not buying things that I
00:34:12
don't need, now you know why. Here's a quick ad and then we'll get back to the
00:34:17
show. I love getting your questions and some of you ask me questions about the wealth management firm I work for in
00:34:22
Rochester, New York. Others ask about the Best Interest blog and this podcast, Personal Finance for Long-Term
00:34:26
Investors, which operate without advertising, without pushy sales, and with no payw walls. How can the blog and
00:34:31
podcast stay afloat without me dumping my own money into it? Well, to answer both those questions, I want to point
00:34:36
you to episode 78 of Personal Finance for Long-Term Investors. I intentionally recorded episode 78 to shine light on
00:34:43
those topics and inform you how you are actually helping and can continue helping these projects carry forward. So
00:34:48
if you've ever been curious about the business of my blog and podcast or if you're curious about my day job in
00:34:53
wealth management, please check out episode 78 and let me know what you think. What is a sticky dashboard worth?
00:34:59
Perhaps more importantly, what's it worth to you? A lot of the spending and saving questions come down to that type
00:35:05
of question. What's this thing worth to you? It could be a bigger house or a
00:35:09
nicer car. It could be dining out. It could be going on vacation, being fashionable, hanging out where the cool
00:35:14
cats hang out. There's nothing wrong with saying that something in life has a
00:35:18
lot of value to you and that you want to spend more money on it. But we can't say
00:35:22
that everything has that much value to us. We can't spend all our money and all
00:35:26
those things such that we end up not saving a single penny. But Diana is showing us some of the opposite side of
00:35:31
that coin. There's nothing wrong. In fact, there are many things right with stealth wealth. It's that iceberg
00:35:36
principle, right? Wealth is what you don't see. Morgan Hel says it's the cars
00:35:40
not purchased and the diamonds not bought. It's the renovations postponed, the clothes foregone, the first class
00:35:46
upgrade declined. It's the assets in the bank that haven't yet been converted
00:35:50
into the stuff you see. That's wealth. But is wealth also the dashboard that
00:35:55
you left uncomfortably sticky for years and years and years? Going back to Justin Peter's story, perhaps there's a
00:36:01
season in life when you simply accept the sticky dashboard for what it is and you continue to save save. But I'd argue
00:36:07
there are other seasons of life where the the sticky dashboard or the t-shirt that's ripped and falling off your
00:36:12
shoulders or the insistence upon only buying the bargain cuts of meat at the grocery store. There's a later season of
00:36:18
life where those habits don't really do you that much good anymore. I listened
00:36:21
to an episode of Bigger Pockets Money the other day and the two co-hosts Nindi and Scott, they're both very financially
00:36:27
successful by any metric. They were chatting about how they're likely to never sell a single share of any stock
00:36:33
or stock fund that they currently own and instead they're going to live off the dividends from those stocks. They're
00:36:38
going to live off the income from their real estate investments. They'll work
00:36:41
part-time in some capacity forever. They'll never need to sell any stocks. And I understand that part of that
00:36:47
statement or that idea, which can be a point of pride, so to speak. You know, it takes a lot of time and dedication
00:36:52
and saving in order to accumulate that kind of wealth. But as I listened to Mindy and Scott, I did find myself
00:36:58
asking, "Well, then what's it all for?" If you've reached the season of life to
00:37:03
consider selling stocks to fund your lifestyle, but you decide not to, then what was the point of those earlier
00:37:09
decades of scrimping and saving and building that portfolio up? There's a famous quote in economics by Stiglets,
00:37:16
and he says, "If you've never missed a flight, then you're wasting too much
00:37:19
time sitting around in airports." Similarly, I'd argue that if you never
00:37:23
have to sell a single share of any of the stocks you own, then you might have wasted too much of your own life
00:37:28
acrewing those stocks in the first place. Well, speaking of time, some of us get started a little too late, but
00:37:34
it's not too late to catch up. And here's a great person to share that story, Bill Y, the co-host of Catching
00:37:38
Up to Fi, and also the former captain of a boat named Yolo. Hello, Jesse. This is
00:37:44
Bill Yan from Catching Up Defi, a podcast that I co-host with Jackie Kumcosski for late starters to the
00:37:50
financial independence journey. You've asked me to come on the show and tell
00:37:54
you a little story about Keeping Up with the Joneses. So, I have many of those unfortunately as a late starter, but the
00:38:01
one that comes to mind is a story about our boat named YOLO. And as we all know,
00:38:08
YOLO means you only live once. So, my wife and I moved from Chicago to Tennessee in sort of an incidental
00:38:14
geographic arbitrage. We built a house in a classic Jones's neighborhood where
00:38:20
the houses all looked the same. They were all many thousands of square feet and it was a boating community. Now, if
00:38:29
you're going to build or buy a house in a boating community, aren't you going to
00:38:34
buy a boat, too? Doesn't it seem only natural? The good news is there was 200
00:38:39
some odd uh properties in this community and only 32 boat slips. So it was a hot
00:38:46
commodity. We got in on the ground floor and thankfully in addition to buying a boat and naming it YOLO, we bought a
00:38:54
boat slip. So we went on to enjoy this boat. Our kids were growing up and in high school. We had their friends over.
00:39:02
We went tubing. We went wakeboarding. We truly enjoyed the memories that this boat provided us with. However, one day
00:39:12
we were out lounging around as the sun set and the waters were calm and we were heading home at the end of a long day in
00:39:20
the sun and I opened it up wide open and proceeded to run across a rocky shaw and
00:39:29
crashed Yolo uh on this shaw. Luckily, we did not sink, but we required a very embarrassing tow all the way home. Now,
00:39:38
what do you do when you crash a boat? Well, of course, you have full replacement insurance and you take that
00:39:44
money and you buy another boat. Actually, you buy a bigger boat. And that's exactly what we did. Now,
00:39:50
luckily, we bought used and didn't buy new uh for these fun but very depreciating assets. Actually, I
00:39:57
wouldn't call them assets at all. They're liabilities. What is the definition of a boat? It is bust out
00:40:03
another thousand. What is the best day of a boat owner's life? Well, it's the
00:40:07
first day or the last day. Uh these are things that are holes in the water in which we fill them and they're going to
00:40:16
sink your finances if you're not careful. Now, we had them for the memories and our kids think fondly of
00:40:23
the times that we had the boat, but after the crash and upsizing our boat to the next level, Jones's boat, we called
00:40:32
it Rocky Bottom because what happens to YOLO when Yolo crashes on a rocky shaw? Well, you end up with a rocky bottom.
00:40:40
And we live in Tennessee where we proudly sing the song Rocky Top. So, Rocky Bottom I found to be a very unique
00:40:48
name for our next level Jones's boat. The boating life ended for us after a handful of years. It has it it had its
00:40:56
season in our life and our kids went off to college. We became empty nesters. The
00:41:01
boat sat on its slip gathering dust and requiring maintenance ongoing of course and eventually we decided okay we need
00:41:11
to sell. The good news is, in spite of having to have all the gas, carrying cost, maintenance, a motor engine
00:41:19
overhaul, my wife had had the foresight to have us buy the slip as part of our foray into this, keeping up with the
00:41:27
Joneses community. That slip appreciated remarkably in the seven years that we lived in that house and in that
00:41:35
neighborhood. And thankfully all of the carrying costs, all of the maintenance costs, all of the motor rebuilding costs
00:41:44
that we had incurred in owning the boat were covered by the cost of selling the asset of the slip. So what are the
00:41:52
morals of the story here? Well, first of all, buy utility and rent luxury. We did
00:41:58
we really need to buy a boat? Probably not. Did we feel that we needed to buy a boat for our kids and the having the
00:42:04
pressures of living in a boating community? Well, of course. Of course we did. Where you live is where you eat,
00:42:11
where you who you socialize with, and you know, the cars start to look the same, the people start to look the same,
00:42:18
and if you upsize the neighborhood in which you live, your lifestyle is only naturally going to upsize. So, buy
00:42:25
utility and rent luxury. Could we have rented a boat that we use 10 to 12 times a year? Absolutely. Did we need to own
00:42:33
one to do it? No. But it did give us naming rights. Buy assets to pay for your luxuries or liabilities. This is
00:42:40
what the wealthy do. You can afford the the car if you have assets that are covering the cost of this. The boat slip
00:42:48
was what saved us in our boating journey. And what we did do with this, however, is we bought experiences. We
00:42:56
bought memories. So, was I a happy boating owner? Yes, I was. Would I do it the same again? Maybe. But I might have
00:43:06
given it some more thought. And without buying the slip, it truly would have sunk our finances. uh with the sunk cost
00:43:13
and the opportunity cost lost and paying 16 to $20,000 for a boat and then $25,000 for a slip that in a matter of
00:43:24
five to seven years appreciated to $55,000. So it was nice in the end that all these costs were covered, but guess
00:43:31
what? So we sold the boat, we sold the slip, we covered our cost, but then the money went into building a hot tub in
00:43:37
our new home. So, go figure. You know, different neighborhood, different Joneses. Remember the morals of the
00:43:43
story. Buy assets to pay for your luxuries and liabilities. And you don't have to keep up with the Joneses. You
00:43:50
can stay ahead of them if you're monitoring your finances and prudent with your purchases. Thanks for inviting
00:43:58
me to be on the show, Jesse. I hope this has uh helped your audience realize that
00:44:02
they too can don't have to keep up with the Joneses. Take care, Jesse. We'll see
00:44:06
you soon on catching up to FI, I hope. And thanks for the invitation to be on your show. Rent your luxury and buy
00:44:14
utility. And another way that I've heard that is rent your fun. So, you know,
00:44:18
owning a boat, owning a snowmobile, owning a a ski chalet in the mountains 5 hours away from where you live. Those
00:44:23
are luxuries. And it seems like, you know, 90 95 99% of the time the sentiment you hear from the people who
00:44:30
own those luxuries is that it's just not worth the effort or the cost or the time
00:44:35
to actually own those luxuries. I've shared on my blog and the podcast before
00:44:39
that one of my biggest and dumbest spending mistakes of my adult life involved both sides of that sentiment
00:44:44
actually. So, a group of friends and I, we rented the smart thing. We rented our
00:44:48
luxury by taking a long weekend trip to Lake Placid in the winter. Stayed at a little cabin in the mountains. The cabin
00:44:53
had a hot tub. And if you've never spent a snowy mountain night with good company
00:44:57
in a hot tub, it's a pretty cool thing to do. So, coming off that weekend, I
00:45:01
decided that I needed to buy a hot tub. And I did. And I spent too much money on
00:45:06
it. And I never used it as much as the initial cost would have merited. And when I sold my house in 2023, I very
00:45:12
intentionally kept that hot tub sitting right there at the old house. But whether we have a little money or a lot
00:45:18
of money or something in between, the habits in our spending life play such a vital role. And Jeremy Schneider,
00:45:24
founder of Personal Finance Club and founder of Nectarine, he built decades of habits being a borderline broke
00:45:30
entrepreneurial startup founder until he sold his business for 5 million bucks. And this story that he's about to tell
00:45:36
just goes to show that habits usually don't shift as quickly as our life circumstances do. Hello long-term
00:45:42
investors. This is Jeremy from Personal Finance Club. My frugality journey is a little bit different than most. I spent
00:45:49
most of my 20s and early 30s living like I was still in college very very frugally. I was starting a company that
00:45:56
I started out of college, but we were bootstrapped. And so I was always paying myself the least of anyone at my
00:46:02
company. My max take-home salary was $36,000 a year. And so I was just trying to live on as little as I could to put
00:46:09
as much into the company as I could. And so for a decade plus, I was living basically with extreme frugality until
00:46:17
something really great happened in my mid-30s when I sold my company for just over $5 million. And so I went from
00:46:23
being borderline broke to being a multi-millionaire with a click of a refresh button on my bank account
00:46:29
website. But, you know, those habits that had been ingrained in me for 15 plus years didn't stop overnight. you
00:46:38
know, I became more of a more of a afficionado of investing. I was putting my money away. I was growing my wealth.
00:46:44
You know, my share after taxes of the company say I was about 2 million, but over the years that grew to about 5
00:46:49
million. And one day, as a a multi-millionaire with a net worth of $5 million, I was flossing with and I hate
00:46:57
flossing. And I had this little piece of floss that was about eight inches long and it kept slipping out of my fingers
00:47:03
and just made made it this frustrating and it it had always been so frustrating to me. And I stopped and I asked myself
00:47:10
why am I using using such a small piece of floss and the only answer I could come up with is to save money because
00:47:17
that's what I'd always been doing because I didn't want to waste you know
00:47:20
when I was trying to pinch every single penny I could in my earlier years. I wouldn't want to like waste these huge
00:47:27
pieces of floss. So now as a multi-millionaire, I was still trying to floss with an eight eight inch piece of
00:47:31
floss and it was literally negatively impacting both my like person or my behavior and my mood because I was
00:47:39
getting frustrated and my health. My gum health was frust was was suffering from
00:47:44
not flossing as much as I would otherwise because this was such a frustrating experience. And you know on
00:47:49
that day it kind of snapped that I could just pull out yards and yards of floss and wrap around my head and around my
00:47:55
body and just bathe in the stuff and it wouldn't even be a rounding air on, you
00:48:00
know, any of my bank accounts. And so I've started using much longer pieces of
00:48:04
floss. And uh it's just a funny example of how money decisions and spending decisions are often very ingrained in us
00:48:15
from either our childhood or our young adulthood. and we do things because it the way it feels or the way we've always
00:48:21
done things. And even when there's like evidence staring you in the face that
00:48:24
it's not good for your life. And so on that day, I decided to start using longer longer floss. I now floss more
00:48:31
often. My gum health has improved. All good things. That's my story of frugality. This has been Jeremy
00:48:39
Schneider. And you can follow me for more dental tips on Instagram, personal finance club. Listeners, thank you for
00:48:47
tuning in to this episode. I'd love to know what you think of this specific episode because if you've been listening
00:48:51
for a long time, you've probably seen that I enjoy some experimentation with
00:48:55
episode formats, whether it's the AMA episodes, the simple fact that I start
00:48:58
most episodes with a monologue before the interview or write fun experiments like this one. So, let me know if you
00:49:04
enjoyed it. As always, please send your questions to my email, jessebinest.blog.
00:49:08
These are awesome ways we all get to learn together. You know, a rising tide, it lifts all ships. An investment in
00:49:13
knowledge pays the best interest. So, thank you for listening to Personal Finance for Long-Term Investors. Thanks
00:49:19
for tuning in to this episode of Personal Finance for Long-Term Investors. If you have a question for
00:49:25
Jesse to answer on a future episode, send him an email over at his blog, The Bestin Interest. His email address is
00:49:31
jessevestinterest.blog. Again, that's jessevestinterest.blog. Did you enjoy the show? Subscribe, rate,
00:49:39
and review the podcast wherever you listen. This helps others find the show and invest in knowledge themselves, and
00:49:46
we really appreciate it. We'll catch you on the next episode of Personal Finance
00:49:50
for Long-Term Investors. Personal Finance for Long-Term Investors is a personal podcast meant for education and
00:49:57
entertainment. It should not be taken as financial advice and it's not prescriptive of your financial
00:50:02
situation.