3644: Which Part of the Money Wave Do You Surf By Mr. Money Mustache on Personal Finance

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[00:00:56] This is Optimal Finance Daily. Which part of the money wave do you serve? By Mr. Money Mustache of Mr Money Mustache.com. And I'm Justin, your new host here on the show. I first want to thank Diania Merriam for being our amazing host since October of 2020. I can't believe how much time has passed. She did a great job and we're excited as she focuses all her attention on her economy conference. And as she does that, I'll be taking over here.

[00:01:26] I created this show back in 2016 and have always edited it, but didn't have the time to host as I was hosting Optimal Living Daily and still am. But now it's possible. I've been into personal finance for quite some time, probably since I first read Your Money or Your Life as an assignment back in business school. And I'm hoping I can offer some value for you here with the experience. Thank you in advance for giving me a shot and continuing to listen.

[00:01:53] So with that, I'm going to get to the article, this one from Mr Money Mustache. A little nod to Diana as that was one of the first authors that got her started on her financial journey. So let's get right to it as we optimize your life.

[00:02:18] One of the silliest objections I run across to the Mustachian lifestyle is the concept that it is extreme. MrMoneyMustache needs to go out and buy more shit right now because otherwise he's depriving himself and his family too. You only live once, and what good is money if you don't spend it on yourself? You can't take it with you.

[00:02:41] You might imagine my fists starting to clench at such a statement, but in reality, I admire the sentiment behind it. Yes, we really should live life to its fullest, and I'm doing my best to do so right now. My disagreement is only regarding the detailed tactics on how to do it. So today we're going to take a trip to the beach for our lesson.

[00:03:04] You see, I spent this past winter in Hawaii, and pretty much every day I jumped in the ocean to play in the big waves of Kailua's beaches. Although I haven't learned to surf yet, I still did my best to catch rides on the waves, on a stand-up paddleboard, on boogie boards, and even with just my own frantically swimming arms. Sometimes you get your timing wrong, and the wave just passes under you or crashes on your head.

[00:03:31] But in certain magical situations, you can wedge yourself into the sloped wall of water and just stick there, roaring diagonally across the shoreline for free until you are deposited way up in the shallows next to all the sandcastles. What an amazing feeling. Eventually, the Hawaiian vacation ended, and the MMM family had to pack up our stuff and return to Colorado.

[00:03:57] But the feeling of the waves came home with me, and I've noticed that the same pattern comes up in our financial lives as well. Your life and mine, and the very different lives of our spendy-pants opponents. Some people just can't seem to get ahead. They get up early every weekday and get to work on time every day. On the second and fourth Friday of each month, they collapse into the couch, having earned a much-needed paycheck.

[00:04:25] Despite the 80 hours invested, they won't be keeping any of that money because it is already all spoken for. Student loan payments, car payments, credit card interest, a mortgage or rent, and any number of additional bills. They could stop the work, but the bills would keep coming, leaving them rapidly swamped.

[00:04:47] Other people have a sensible cushion and are not so afraid of losing their jobs, but still could not imagine retiring early. Where would the money come from? And they enjoy the luxuries they have earned at this point in their lives. Best to keep working so as to afford them. Finally, there are the wealthy people. Many of you are among them, and some have even retired early. They've got a pretty cushy life.

[00:05:14] It's the full American middle-class all-you-can-eat buffet with just a few of the fatty edges of the steak trimmed off. We don't even have to go to work to sustain this lifestyle, and we can go anywhere or do or buy whatever we want at any time. Considered on a practical level, it is as complete a freedom as any generation of humans has ever known.

[00:05:39] The funny part is that, in theory, all three of these groups could be living at exactly the same level of spending. The only difference is the portion of the wave upon which they are surfing. The struggling person has debt. It's an absolutely destructive and useless thing to bring into your life, unless done on an investment basis with a calculator firmly in hand.

[00:06:04] Debt used to finance luxuries just creates a backwards current on your life. Suddenly, you must paddle fiercely just to stay in one place. Just a few feet forward on the exact same wave rides the debt-free person. Everything they earn can be applied to spending, which means they have much more power to buy things when compared to the indebted person. A few feet ahead of the debt-free surfer is the investor.

[00:06:33] This person doesn't subscribe to the statement, money is no good unless you spend it. Quite the opposite, their belief is, money does you no good if you just go out and spend it. Because the investor has put most of her past earnings to work, there's now an unstoppable wave behind her, pushing her along whether she decides to work or not. Any additional work will push her forward very quickly,

[00:07:00] and spending in moderation won't knock her off the wave. All three of them may be moving along at the same speed, buying the same stuff, and living the same lifestyle. And they're only a few feet apart. They can converse freely over the roar of the water because the difference between wealth and poverty is only really changing a few spending habits until you amass a sufficient stash. But the level of struggling and cubicle sitting

[00:07:30] and clock punching and money stressing is completely different just because of how they have positioned themselves. The lesson is therefore to get yourself to the front of that wave. Whether you value the simple living philosophy of Mr. Money Mustache, or your goal is a Walmart-sized garage full of Bentleys, the only efficient way to get there is on the front of the wave. If you do your shopping too early in life,

[00:07:59] like the 99% tend to do, you're screwed. Instead, why not lie down and paddle a bit first? You'll look better when you eventually stand up anyway, sporting a well-pumped set of frugality muscles. You just listened to the post titled, Which Part of the Money Wave Do You Surf? by Mr. Money Mustache of mrmoneymustache.com. And I'll be right back with my commentary.

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[00:09:53] Because the right pair doesn't just show up. It shows off. First day fits, handled. Walk out ready for whatever's next. Visit your nearest Crocs store today. Thank you to Mr. Money Mustache. The wave metaphor is a fun one, even though I've never served. But it makes his point really well. Three people can be living the exact same lifestyle, spending the same amount, but one is drowning in debt, one is breaking even,

[00:10:22] and one is being pushed forward by money they already put to work. And the only real difference is where they're sitting on the wave. I like that because it takes the focus off how much you make and puts it on the position you've set up for yourself. I like the line about how the gap between struggling and wealthy is often just a few spending habits. I can relate to the habits part. If you're a listener over on my other show, Optimal Living Daily,

[00:10:51] you'll know that back in 2010, tracking every dollar in and out of my life started as a homework assignment in a business class. And I liked it so much, I never stopped. First on a spreadsheet, and now with an app. And what that really did was just make me aware. You can't change a habit you can't see. Now I'd add that his tone can come off as a little extreme for some people, and that's okay.

[00:11:20] You don't have to love it to get the benefit. Even nudging yourself just one spot forward on that wave, like knocking out one debt, changes how the whole thing feels. So maybe this week, just take a look at where you're sitting on the wave. Awareness is always the first step, or first paddle, forward. But that'll do it for today. Thank you for being here and allowing me to be your new host on the show. It means a lot. Have a great rest of your day,

[00:11:49] and I'll see you tomorrow, where your optimal life awaits.