3539: The Paradox of Money by Mr. 1500 with Budgets Are Sexy on Money and Priorities

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[00:00:47] This is Optimal Finance Daily, The Paradox of Money by Mr. 1500 with Budgets Are Sexy Quote, I really like my life. I've arranged my life so that I can do what I want. Warren Buffett

[00:01:09] I'm a big fan of Warren Buffett, but not for the reason you may think. While Warren is an investing genius, there are plenty of others who have also figured out how to build vast wealth. The trait that makes him really great is that he's a genuinely good person with plans to give almost all of his billions away to charity. And he's frugal too, living in the same home for most of his life.

[00:01:32] And I love listening to Warren's folksy wisdom in person every spring. If you're a shareholder of Warren's company, Berkshire Hathaway, you have the opportunity to attend the company's annual meeting. The big party takes place in Omaha and is informally called the Woodstock of Capitalism. It's a fun event where folks from all over the world ask Warren anything they want during the question and answer session. My wife even asked Warren a question about real estate at the 2016 meeting.

[00:02:01] There is one question that will always stay with me though. At the first meeting I attended, a 20-something year old asked Warren what books he'd recommend for getting rich. Warren didn't have many recommendations, but he went on a tangent that was much more interesting. While ruminating on his age, Warren said this, quote, I'd give away every cent I have to be your age again. End quote. Healthy is better than wealthy.

[00:02:29] Warren is a wise man. As he approaches 90, he realizes his days on the little blue-green sphere we all share are almost over. Money means less and less as we approach our expiration date. Health is the most important aspect of life. I hadn't been taking good care of myself until recently. Retiring early has allowed me to go for runs in the middle of the day or swing the kettlebell first thing in the morning. If you don't have your health, what else matters?

[00:02:59] Relationships are better than riches. Everyone wants to give you advice when they hear that you're expecting your first child. This certainly happened to me and I quickly grew tired of it. But while I was least expecting it, I received the best child-rearing advice ever. I was at work when my manager called me into her office. She asked me to sit down and I thought I was in trouble for playing pranks on my coworkers. Not an uncommon occurrence. Instead, she told me that she had advice for me.

[00:03:28] I was skeptical, but her advice blew me away. Quote, all your children want is your time. End quote. She went on to say that I didn't need to buy them tons of toys or take them to Disney every year. Just give them your attention. Deep down, that's what they really want and need. I walked out of her office in a daze. The advice was simple but profound. And it made perfect sense.

[00:03:53] How many times have you seen children act out only because they want the attention and love of their parents? My manager's words were completely true. Quick note, if you're a parent listening to this now on your phone, you have permission to listen to the rest of this article before setting your phone down and asking your children how their day was. Hundreds of thousands don't bring you happiness. I need about $40,000 per year to fund my life. Per the 4% rule, that means I need a nest egg of a million dollars.

[00:04:23] My portfolio sits at $1.4 million and I have an additional $400,000 in home equity. For those unskilled in the ways of math, that comes out to $1.8 million. When I left my job, I expected an instant boost in my happiness. And then it didn't happen. I started thinking about it and I had an epiphany. The money didn't make me happier either. I was no happier as a millionaire than I was when I was just out of college with $60,000 in debt.

[00:04:52] Wealth doesn't create happiness. You must figure that out for yourself. The paradox of money. None of what I've mentioned requires money. You don't need money to be healthy. You certainly don't need it to spend time with your family. Where does money fit into all of this then? To get money, we must trade our time. You can always earn more money, but you can't trade your expiration date. The only thing you can do then is increase the amount of time where work is optional.

[00:05:22] And this is the paradox of money. It's simultaneously the most and least important part of life. While you don't need money to be happy or healthy, it buys time. And once you have time, you can structure your life optimally. The real goal is this. Save enough money so that you don't have to worry about money. Money is not the end, only the start. Advice for my younger self. If I were to do it all over again, I wouldn't buy two new cars.

[00:05:52] I'd hack my living situation with roommates. I'd build wealth as fast as I could to minimize my working life and maximize my freedom years. Time is a finite resource. If you're younger than Warren, embrace his wise words and appreciate the years you have ahead of you. Put the pedal down and start living.

[00:06:15] You just listened to the post titled The Paradox of Money by Mr. 1500 with BudgetsAreSexy.com. Dell PCs with Intel inside are built for the moments that matter. For the moments you plan and the ones you don't. Built for the busy days that turn into all night study sessions. The moment you're working from a cafe and realize every outlet's taken. The times you're deep in your flow and the absolute last thing you need is an auto update throwing off your momentum.

[00:06:45] That's why Dell builds tech that adapts to the way you actually work. Built with long lasting batteries so you're not scrambling for the closest outlet. And built in intelligence that makes updates around your schedule, not in the middle of it. They don't build tech for tech's sake. They build it for you. Find technology built for the way you work at Dell.com slash Dell PCs. Built for you.

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[00:08:06] Air Doctor comes with a 30-day money-back guarantee, plus a three-year warranty, an $84 value, free. Get this exclusive podcast-only offer now at airdoctorpro.com. A-I-R-D-O-C-T-O-R-P-R-O dot com. Using promo code OFD. And thank you to Mr. 1500 and Jay Money, the creator of Budgets Are Sexy. Jay has a little editor's note that I'll share.

[00:08:36] I think about this trade-off all the time and actually have a saying for it. I'd rather be young. That's what I tell myself anytime I catch myself getting jealous of what someone older than me has that I desperately want. It doesn't help when they're much younger than me, but it does if they're much older. No way I'd trade decades of my life for more money. Also makes you appreciate how long it takes to acquire such wealth as well. It doesn't come fast. So there you have it. Thank you to both of them for their insights.

[00:09:06] And I couldn't agree more with this article. The more I evaluate the role of money in my life, the more I come to realize that it's only as valuable as my clarity on how I'm going to use it and my comfort level with how much is enough. While I'm not yet financially independent, I do have enough financial solvency to focus on my other two most important resources, my time and my energy. Whereas I used to ponder such questions as,

[00:09:33] how can I further reduce my expenses and how can I increase my income? Now I'm asking myself things like, what ways can I use my time that's going to have the biggest return on investment for my energy? How can I invest further in the people around me? What can I create that I'm really proud of? I'm extremely fortunate to be in a financial position to start asking these bigger questions. And I recognize that I don't need excessive amounts of money to explore this level of freedom.

[00:10:03] I know lots of people with much bigger net worths than me, but a much lower level of comfort when it comes to using that money to explore more freedom in their lives. To me, that's where this paradox of money becomes really apparent. We're all chasing more money and the options that financial freedom opens up. But if we never get to a place where we truly feel we have enough money, where we can explore different ways of using our time and energy, then what's the point?

[00:10:33] And that should do it for today. Have a happy rest of your day. And I'll catch you tomorrow on our next episode, where your optimal life awaits.