[00:00:00] Speaker A: In this episode, we answer life's biggest questions about how you manage your money, what you're doing with your life, whether you're on the right path, on the wrong path. It's a tall task, but we're to start tackling it right now. Let's get started.
[00:00:11] Speaker B: Let's get some money from new money new problems. It's the new Money New Problems podcast, a show for successful professionals searching for the tools they need to navigate financial opportunities and obstacles uh, they've never seen.
Negotiating compensation, purchasing your first investment property, helping your family with money, the highs and lows of, uh, entrepreneurship. New money brings new problems that require new solutions. Join us as we work through them together.
I'm Brenton Harrison, and this is the new Money New Problems podcast.
[00:00:50] Speaker A: Hello. My name is Brenton Harrison of new Money new problems and your host for the new Money New Problems podcast. Hope the holiday season finds you working a little less, spending more time with family, as I am trying to do. And today's episode, like last week's, is less about the technical and more about the introspective. And it comes at the confluence of several events and me thinking about several conversations I've had over the past several months and even a longer period of time. The first thing that brought this topic to mind is in January. Um, my church, Riverside Nashville, is doing the financial literacy symposium, bringing it back for the first time since before the pandemic. I'll put the link if you're in the Nashville area, in, uh, the show notes to RSVP. We'd love to have you, but it's an annual symposium where we have workshops on everything from credit to budgeting to entrepreneurship and homeownership. And this year, the keynote speakers for the event are a couple that goes by the name rich and regular Julian and Kirsten Saunders. They met in corporate America, decided that corporate America was not for them, uh, and through a series of events and plans, simultaneously put themselves in a position to walk away from corporate America while also building a brand that teaches others how to do it. And I don't want to say it culminated, because culminated implies that they're done, but it led to the release of their book, cashing out win the wealth game by walking away. If you're following along with us on screen, you're looking at the COVID of this book. We're going to put a link to this in the show notes. And if you're a part of our email community, a little Easter egg at the end of this podcast, uh, we will make sure that there's an incentive for being in that community that involves this book, but we'll put the link to it in the show notes. And Julian and Kirsten are a couple that, um, just seem really genuine in their ability to not just teach others, but also to be honest with themselves about the steps that they're taking now to pursue a certain objective. The next thing that had me thinking about today's topic is Fincon. And at Fincon, you come across several people who are pursuing their own version of fire. Fire stands for financial independence, retire early, and the concept of it gang steam ten to twelve years ago. And there were several acolytes who were pursuing the ability to build their investment portfolios to a certain point where they could just live off of the interest that those investments earned each year. And if you follow along to earlier episodes of this podcast, it sounds like they are adherents to the 4% rule. The concept being that you can build your investments to the point where you can live off of 4% interest each year with some level of certainty that you're not going to outspend your corpus. As an example, a million dollars in investments at 4% generates a $40,000 income. Now, there are several offshoots of the fire movement. There's fat fire, there's barista fire, there's coastal fire, there's lean fire. We'll put an article in the show notes that details all the different versions of fire. But again, even if they are more extreme than Julian and Kirsten's version of walking Away, the concept is similar. They are assessing the life they live now, comparing it to the life they want to live. And they're charting a course of action that builds towards the right objective. And the last thing that reminded me and had me thinking of today's topic was a conversation that happened over ten years ago. We shared the money story in earlier episodes of my professional mentor, Marcus Henderson. And Marcus used to let me tag along to all of his meetings. And I remember there was a meeting with an older gentleman who happened to be one of Marcus's mentors. Had several assets, property all over town, uh, owned several businesses, but he did not take a significant amount of money or as much as he could from those businesses home. He lived off of a certain salary, drove the same car, he went to the same places, and Marcus was joking about it with him. And know, you're making all this m money. Why won't you just take it home? Why are you leaving it all in the businesses? Why don't you enjoy it a bit. And the guy looked at him, and even though Marcus was joking, he seriously replied and said, I am enjoying myself. I do the things that I want to do, and I do it within a certain income. And I've told myself that at this certain level of income and the amount that he said is irrelevant to the conversation, but at this level of income, I can keep my priorities straight and do what I want to do. And if I were to bring home more, then my priorities are out of order. I'm either doing something, trying to impress somebody, or to generate additional income. I'm going to have to sacrifice a part of what makes my life fulfilled now. And I thought that was just incredible. Perspective. If you're following along with us on screen, there's an article from CNBC that's entitled, more money means more happiness for most of us. Here's when earning over $100,000 doesn't help. And in this article, they reference three studies. And the first study was published in 2010 by researchers at Princeton University. And what they found is on the path to earning $75,000. The more money you earn, the happier you become. But once you crack $75,000 in income, earning more does not generate the same amount of happiness. So if you go from 75,000 to 90,000, you don't get as much additional happiness as you did when you went from 60,000 to 75,000. Now, in 2021, a, uh, researcher at University of Pennsylvania published a study that disputed those findings and said that when you earn more money, you do get additional happiness. And there is not a plateau. So these studies are conflicting. There's a breakdown. There's a difference in opinion. And the way that they resolved it is they actually teamed up researchers at the University of Pennsylvania teamed up with researchers at Princeton University who published the initial study, and they performed a new study trying to find the nexus between the two. And what they found is, in fact, for the majority of people, there is no plateau. When you make extra money, you continue to get more happy the more money you make. So when people say money doesn't buy happiness, it's not necessarily true. But they also found that there is a small minority for which happiness does plateau when they earned additional income. But here's the interesting thing about that minority. They are people who were already somewhat unhappy before they started earning a high income. This brings to mind what the older gentleman was saying. I'm happy now. There is the possibility that I could earn more and be a little happier. But if that comes at the expense of something I'm doing now that I enjoy, then that's a sacrifice that I'm not willing to make. But there are also some people who are living a life that they don't like now, and the idea of adding more money without changing that lifestyle drastically, it would not lead to any significant additional happiness, even though they're earning a little bit more. So, after the break, we're going to give you three quick things that you can do to assess whether or not you're moving in the right direction with your finances and what to do if the answer is no.
[00:07:44] Speaker C: This is the new Money New Problems podcast, a show for successful professionals searching for the tools they need to navigate financial opportunities and obstacles they've never seen. We'll be right back.
[00:08:03] Speaker B: Are you wondering what new money problems you might be overlooking in your financial life? If so, we've got great news.
We've crafted the new money new problems Gapfinder to identify potential weaknesses in your finances in areas ranging from budgeting, investments, insurance, and even the threat your extended family's finances could pose to your household. Please head to newmoneynewproblems.com gapfinder to complete it today. Again, that's newmoneynewproblems.com gapfinder. To take the assessment.
[00:08:41] Speaker C: You'Re listening to the new Money New Problems podcast. Subscribe
[email protected]. Welcome back.
[00:08:52] Speaker A: Before the break, we talked about some of the events that led to this moment of introspection. And I want to share three high level things that you can do to ask yourself if you're moving in the right direction with not just your money, but also the way that you're earning your money. And we're keeping it high level because as I shared, there is a couple out there who gave you more concrete steps. And, uh, if they are willing, we'll invite them on the podcast one day and they can share some of those steps in more detail. But the first thing I would love for you to do is to take out two sheets of paper. Now, on one sheet of paper, I want you to write out the life that you are living now in terms of how frequently you're working, how long you're working, the flexibility of your schedule, how much you're earning, what you feel in terms of your stress levels with family, with finance, just the ability to do the things that you enjoy. I want you to honestly write out how you're living your life now. Then, on the second sheet of paper, I want you to write out your ideal life, how frequently would you be working? Would you be working at all? Would you be traveling more frequently? Would it be domestic or international? What does life look like in your version of a fulfilled life? I want you to put those pieces next to each other, and I want you to line them up. And as objectively as you can, see how far you are from your fulfilled life. I've shared on this podcast that, uh, my goal in the next five years is to build myself to the point where I am working either four days a week or working ten months out of the year and traveling the other two months. Part of what led me down that path is during the pandemic, the ability to spend more time with my family was something that I really enjoyed. And I also recognized that if I were to go back to the same work schedule post pandemic, the life that I was living wasn't conducive to the one that I wanted to live. And now my son is five years old, almost six, and I can tell you that even now you would think kids don't pick up on it. But late in the evening, if mommy and daddy are on their laptops, he'll come and bang on the keys or try to grab our phone, and it seems he's being impished, but in reality, he wants our attention. So it makes me cognizant of what I'm doing now and asking myself the question, are the activities that I'm doing today making it more or less likely that I'll be able to work four days a week or work ten months out of the year four years from now? It's not helpful if my activities earn more income, but don't bring me more flexibility, because flexibility is a big part of what leads to my fulfilled life. Now, you may be able to, like me, structure the life that you live and the work that you do so that you can have your fulfilled life while still working in your job of choice, while still working in that company, that industry. Or you might be in an industry where when you look at your ideal life, you realize it's not conducive. You might be a corporate attorney and you're realizing that if you want more time back in your day, unfortunately, your industry doesn't mean that just because you're promoted, you suddenly have more time back in your day. If you want a fulfilled life that tells you you might have to pursue a different industry, you might have to dial back on work, which could mean dialing back on income, which leads to the second activity. The second activity is, I want you to as best as you can estimate how much it would cost you on a monthly basis to live your fulfilled life, not the extra lavish things that you would add on top. Oh, if I want to travel internationally, I want to go to the Maldives, and I want to go for two weeks at a time. Literally, just the basics of your fulfilled life. I want to travel. Here's a reasonable amount that I would spend on travel. I want to be able to pursue these hobbies. Here's a reasonable amount that I can put in my budget to pursue these hobbies. Now, write down your fixed expenses. You might still have a mortgage, you might still have rent, you might still have utilities in this scenario. But write out what it costs for you to live your ideal life, because how are you going to build towards something if you don't even know what that number is or that lifestyle is to what you're building now? We know the lifestyle. We know how much it costs to live that lifestyle. And the last thing that I want you to do is I want you to compare that amount of monthly income to what you're earning now. Now, when you do this, you might be like me. I'm in a scenario where I'm in an industry where I can structure my days so that I can work efficiently to earn the amount of income that's needed to live the life that I want to live. But I'm not there yet. I'm short of that income goal. And that gives me some perspective on making sure, again, that the activities that I do now don't just generate income, but they do it in a way that also generates flexibility. If you're in a scenario where you fall short, but you recognize that in your industry, there's not going to be that flexibility that at least lets you know that you may need to pursue something else. And as daunting as that may seem, what would be the point of knowing that you're going in the opposite direction of the life that you want to live and not making any changes? I would want to know that as soon as humanly possible. The second group of people are people who are on pace, right? I'm earning the amount of income, but maybe I don't have the flexibility. And now you can start to ask yourself, are there ways that I can establish that efficiency? Is it just being more productive? Is it changing the way that I work? Is it changing the structure? Is it delegating some tasks and putting myself in a position where someone else is doing the work and I can go generate more revenue with less time? Knowing that you're on the right track at least allows you to look at the structure of your days, the structure of your years, and figure out where there's some give and take in some ways that allow you to keep your income, your net income, without changing the overall structure of your work. Now, uh, there will also be some people in this second group who have the income and they have the flexibility, but they're still not doing some things that are in their fulfilled life. And some of that may be fear that they need to save more, that they need to do more, that there needs to be some magical number that they hit. And I would ask myself, what are you waiting for? We have no guarantee that we're going to be here ten years from now to enjoy the fruits of our labor. If you're already earning enough to do what you want to do in your fulfilled life, it's not about just spending to excess, but there is some value in enjoying things while you build them. And this may be the perspective you need to start to loosen the reins a little bit and enjoy what it is that you're building. And then the last group of people are people who are ahead of the game. You are earning more than what you need to live your fulfilled life, but you're still not doing it. And if you're doing this and you earn the income but not the flexibility, I would say you're now in a position where maybe you can dial back on the work that you're doing and structure your days with a little more authority and say, I have the freedom to lose income, but gain time and still live the life that makes me fulfilled. Now, those are three quick exercises. I'm telling you, I did this for myself. I know my income number, I know my fulfilled life, and it took me less than 30 minutes to do. But going into the year 2024, I think this is a valuable exercise that you can do. I hope you will take the time to do it. Last week is the last episode of the year for the new Money New Problems podcast. But before we let you go, if you're on our email list, which you can join by going to newmoneynewprobs.com podcast, we want to thank you all for this past year and also get this book from Julian and Kirsten in your hands. So we are going to give away ten copies to people in our email community. So join the email list if you haven't already. And after the holiday, we're going to send you instructions for how you can be in that number. I hope you all will join us next week. I hope you have a great holiday season with the ones that you love, and I look forward to seeing you.
[00:16:15] Speaker B: From new money, new problems. This was the new money, new Problems podcast, a show for successful professionals searching for the tools they need to navigate financial opportunities and obstacles they've never seen.
