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S4.E5 - Psychology of Money - Ch. 15-16
63 Plays5 months ago
This week, Thomas leads our discussion of chapters 15-16 from The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness by Morgan Housel.
- Chapter 15: “Nothing’s Free” (0:51 - 29:55) - Have you ever tried to get “cute” with your finances and attempted to outsmart everyone else or make some quick cash, but in retrospect it wasn’t a good idea?
- Chapter 16: “You and Me” (29:56 - 50:55) - Do you take investors’ advice at face value, or have you first considered what your own financial and investment goals are when listening to others’ opinions?
Resources referenced or discussed in today’s episode:
- Article related to early 401K withdrawals - here
- Link to The Daily podcast episode about the 401K - here
- Article related to history of “In God We Trust” being added to U.S. currency - here
- Article related to Thomas Jefferson’s “Bible” - here
- Article related to the “Great Wealth Transfer” - here
Next week we’ll discuss chapters 17 - 18 (pages 175 - 202).
You can buy the book on Amazon by clicking here.
You can also borrow it at your local library. Don’t have a library card, or unsure where your local library is? Search on Google Maps, or find your local library by clicking here.
Follow us on Instagram @booksbrotherspodcast
Connect with us at [email protected]
Please subscribe and give us a review! We would really appreciate it.
See you next week! Until then - read, reflect, and connect.
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Transcript
Introduction to The Books Brothers Podcast
00:00:05
Speaker
Welcome back to the Books Brothers podcast. We are a group of 30-something dudes who met in college. And being the wild guys that we are, we read books together. Breathing together keeps us in touch and provides the structure and time needed to connect with each other by sharing our experiences and reflecting on how these topics relate to our lives. I'm Thomas. I'm Rob. I'm Adam. I'm Matt. I'm Buzz. And I'm Gary.
Exploring 'The Psychology of Money'
00:00:33
Speaker
Today we continue discussing the psychology of money, timeless lessons on wealth, greed, and happiness by Morgan Housle.
00:00:41
Speaker
You guys are in for a treat today because chapters 15 and 16 are absolutely bonkers. All right chapter 15 nothing's free. Everyone knows the term you get what you pay for. For me it's usually the phrase that gets tossed around after something's purchased that's unusually cheap. Like those all white pants you get off Timu hoping to save a few bucks that end up ripping while trying them on for the first time. Or maybe we say it after an amazing meal to appreciate how good it was while at the same time justifying the high cost. Chapter 15, Nothing's Free, explains how this term might apply to investing and how when it comes to investing in markets, we face this difficult problem of trying to figure out the true cost of success when
Misconceptions and Personal Stories in Investing
00:01:27
Speaker
investing.
00:01:27
Speaker
The author is not talking about monetary payments. He's talking about our willingness to pay the price for returns and to put up with market volatility, fear, doubt, uncertainty, and regret. These are things new investors don't anticipate before jumping into the market. When the market drops 30%, we see it as a fine for doing something wrong instead of a fee for doing something good. We are warned in this chapter that the inability to recognize that investing has a price can tempt us to try to get something for nothing, which usually turns out badly.
00:02:01
Speaker
One example given is trying to find quick easy and risk-free gains in the market as an active investor so that you avoid volatility or stock market downturns. The author compares it to trying to get a car by stealing it instead of paying a fair price. Some may get away with it but for most it's a horrible idea. We're willing to pay the price for everyday items such as food, housing, and vacations, and we happily do so. So why do most investors think they can outrun the price of investment returns?
00:02:34
Speaker
It's because the price tags on the returns are nebulous. We don't really see them before we buy, and then we feel the need to react when the bill comes due. So guys, anybody ever tried to get cute with your finances, thinking you'd outsmart everybody else, take a shortcut, avoid risk, or try to make some quick cash when, in retrospect, it was not really a great idea? Scratch offs. Scratch offs. I mean, I like scratch-offs every once in a while. They're kind of fun. But if you put your faith in that, I mean...
00:03:07
Speaker
You're in for probably a depressing night or whatever. I thought this chapter was really interesting. Thomas, I know we were kind of chatting about this chapter a little bit ah last night even. It reminds me of a couple of things. One, reflecting back on like my time where I had put some money in and some good investments and basically right before COVID had pulled out. and so I think I was telling you, Thomas, if I just would have taken like a four year nap or just threw away my credentials to take the money back out, that it would have been tremendous gains over those years. And so it's just, wow, I wasn't prepared
00:03:52
Speaker
to pay the fee, if you will. I think he equated it to like Disney World, where you get something out of it, right? like Are you ready to jump in, strap in, and go for the ride, knowing that it's gonna take you a lot of different places, but if you believe in it, um and you've put your money in something good, that most of the time it will take you upward. I also think of, do you guys remember like the GameStop trend, like when GameStop went to the moon and stuff like that and AMC? Yeah, I remember that. Where it just went, like it was basically the mighty small investors basically took it to the moon and they were Twitter stocks that, you know, the small guys
00:04:39
Speaker
put all their shares in and bought up and sent it to the moon. And so I jumped in on some of those. i And believe it or not, I still have shares of AMC that are worthless right now um that I lost some money on. And I think getting cute by jumping in on the trend and going to the moon with all of these guys, And yeah, I went up with them, but I quickly went down. And now I'm just sitting, holding the bag, waiting for it to go up. Thomas, it's like what you were saying in episode two, where it's like to realize something that got cut in half means that you have to have double the gains to get it back. And like, it's never going to happen with AMC or GameStop. I feel like it's a once in a lifetime situation. And I tried to get cute.
00:05:32
Speaker
and get in with it and it's funny like i remember sitting at my desk doing calculations at different exit points where it's like okay i bought in at twenty but if it goes to fifty then i'll have this much but if it goes to eighty i'll have that much and it's like you start to envision what it could be and then at the end of the day it's like It just goes negative. Rob, I'm curious how soon after you purchased the stock, did it go down? Typically, these meme trends happened for a couple days, maybe two days max, and then they just start to tank. so like AMC just recently went up tremendously like this past week.
00:06:21
Speaker
And it was two days and then it's just been going downhill since then. So it's really, really quick. um It's like what they call pump and dump. So they pump these stocks up and then they just dump it just to get all the gains. And so I pumped, but I didn't dump right before. Before it dumped on me.
Risks in Crypto and Meme Stock Investments
00:06:45
Speaker
Oh, I was talking about um crypto, Rob, and Matt had said he had some crypto. It's like a dollar. It's only like a dollar in crypto.
00:06:59
Speaker
I mean, crypto can be compared to some of those meme stocks because tons of people watch the trend and jump on it thinking that they're going to make some money. And by the time they jump on it, the trend is over. The momentum is lost. Everybody who got in early already sold and the price is gone. You know it it is um ironic because i feel like the people who actually gain the most from these mean stocks and these these things that are momentum based. They're actually the people who already have a lot of the money in the market right like.
00:07:32
Speaker
Their actions are influenced by some insider knowledge or the fact that they have so much to invest with they can actually move markets with what they do and then like the institutional investors like ourselves are usually the last ones in on it. And then we end up sort of losing out. if we play that game. But the the chapter mentions a couple companies like General Electric who used accounting tricks to make their quarterly earnings beat estimates and make it look like they were doing better than they were certain quarters so that people thought that they were a very consistent stock. ah Freddie Mac and Fannie Mae sort of did a similar thing in the early 2000s, which everybody know how that ended up with a mortgage crisis.
00:08:17
Speaker
And some people might say the comparison of this to going to Disneyland, like paying your dues, if you will, to be in the market, um it's not a good comparison. But I mean, like if you paid $100 to go to Disneyland and then it rained, you wouldn't really know what you're getting. like You might have a pretty bad time and think it wasn't worth it. So it's kind of similar with the stock market. You pay to get in, not really knowing if your return is going to be what you had hoped. And that's just life. And I feel like that's something not a lot of people want to accept because the stock market's supposed to be guaranteed returns as long as you keep your money in so long or as long as you put your money in these places. And yeah, I don't know. Do you guys feel like that's that's sort of how you've always seen it? like If you put money in, you better you know you better get something out of it. Or do you see it a little more realistically in terms of you know anything could happen and I'm okay
Investment Strategies and Financial Reflections
00:09:10
Speaker
with that risk?
00:09:11
Speaker
I think, and I've mentioned this in the past, I mean, we're not really, I mean, we're really just doing like 401k investing. We're not really doing any other kind of like long-term investing right now. And it just feels really conservative. And again, like, ah I don't feel like we've taken risks. that we would have as much concerns or stress about. So when he tells these stories of people basically getting like these companies being greedy almost, I can't relate to that as much just because I think of my level of fear to even do anything, make a move on anything. And I do think getting to an age in life right now, or you know really should be doing
00:09:49
Speaker
and looking at more and and taking some level of risk. But I think, yeah, I know Rob and Thomas, you guys have alluded to, there's just, I think it brings up fear. And you can still be a little bit more, take a little bit of risk and still be pretty conservative though. And I think I need to i need to start looking into that more. And yeah, because I think i think there's a lot of wisdom in trying to grow in investments. And there's a lot of ways you can invest that are not extremely risky. So what I was kind of talking about was like getting cute with finances with like fun money, you know, like grand to grand max kind of thing.
00:10:29
Speaker
But like I'm curious, you know me going through, or at least starting the pre-approval process for a house, I'm curious if some of like the bigger expenses, so like car, house, if you've made a big purchase that not maybe you regret, but you like now realize like, oh wow, that was a really big purchase that maybe I didn't get cute with, but now it's really forcing me to kind of strap down in other parts of our finances to actually keep up with the rising cost of a house or whatever. I'm curious if anybody's dealt with that where you've almost like gotten into something that maybe you can't actually afford after you're living with it, you know?
00:11:18
Speaker
and I'm someone that honestly I need to push all the times. so like This is just a different perspective. I'm trying to play devil's advocate on what we've talked about this whole time of living within within your means. So I think a devil's advocate way to look at it might be you have these things that are expensive and so you have to keep pushing. You have to stay motivated to work and like, otherwise those are going to go, you know? So that's like not necessarily a good thing, but it's also like, that's the other end of the ah the spectrum there. So are you saying you use it, you use it as motivation to work harder or you recognize maybe the bad decision that you made, which then forces you to work harder because you don't want to cave or fail? Yeah. I mean, I guess it could be either one really, you know, um, I didn't really think about it in my terms of like your purposefully making bad decisions so that you have to work harder. That's not what I mean. I guess it's more of like, uh,
00:12:20
Speaker
I don't know. Sometimes maybe you need a little bit more like of a push to... Like you need to be in the mindset to where if you don't do it and work hard, then you'll fail. So you you have no choice, essentially, is what you're saying. Yeah, I guess. Cause I could see that and I've actually heard that philosophy touted by a few different people in my life. Um, friends and family members who are like, I never really focused that much on savings. I just had to focus on earning more every year because I had more expenses and it was kind of like, you know, their success depended on them kind of being on on the edge of being able to afford everything they wanted to do. Yeah. I think a lot of people get like, uh,
00:13:04
Speaker
Comfortable living that way and I don't discomfort of living in that way. but Yeah, I Try to get cute by finding good deals on things that I don't need Nice like sunglasses or a watch Yeah Get them from like these sketchy websites and sometimes they work out sometimes you just lose ten bucks Because you never get the product yeah i mean how ah When everything is when everything's made in China, how often does that happen where you look at something online and you're like, oh my gosh, this is too good to be true. I have to buy this and you get it and it just falls apart instantly. And you're like, I just wish I wouldn't have bought it. It took a month to get here. And now it's just in my living room.
00:13:54
Speaker
There's no customer service, but i I don't take risks with money very much. I'm more the type of person that would like to be secure in having like an emergency fund rather than putting a lot of money into stocks or investments where There's a chance I could be losing that money. And I think a lot of that is just fear and ignorance because I don't know a whole lot about how to go about that. I just never really taken the time to research and learn.
00:14:27
Speaker
And I think I've learned a little bit over the years, over the last couple of years, and so I'm becoming more okay with putting some of my money into other things like stocks. But at the same time, I also want to be saving for my kids. and so I can't be putting a bunch of money into stocks when I need to be saving up for two daughters and helping to pay for their college and buying a car eventually and weddings. Oh my gosh, that's going to be so much money. That time horizon is still pretty long. Don't you think 15 years is long enough to put that sort of stuff in stocks for your kids? It is, but it also goes by really fast. You're kind of betting it too a little bit.
00:15:11
Speaker
Yeah, and that's just on top of everything else that we're trying to do. What if somebody like 20 years older than us came into the chat and said, hey, the biggest fear you should have is the fear that your savings for your kids should well get eaten up by inflation instead of growing exponentially but between now and the time that they go to college and get married. That's kind of like what this whole book is saying is, you know, that stuff we should be scared of. What's ironic is like the earlier you start, the better you do mathematically. But it's so hard to start early because we don't understand what people like 20, 30 years older than us understand and know to be true.
00:15:51
Speaker
and then deciding where to put your money and then just leave it, let it grow. So yeah, I mean, we're we're trying to save and let it compound. So I'll see where it goes. It's a funny story I've heard that the CEO of where I work has shared. He's been on a a guest on a couple podcasts lately, and he talks about wealth, managing his personal finances and giving, things like that. He used to work with crew at University of Oklahoma and he tells the story that when he was on the crew, missionary salary that in his wife for trying to buy a house, but he didn't make enough for the bank to want to give him a loan unless he put like 60 to 70% down as a down payment.
00:16:46
Speaker
So he had invested in a stock right when he got out of college, and he and his wife decided to sell that stock to put the money down on a down payment. And if he had kept that stock, he would now have $40 million dollars in Netflix stock. Oh, that so painful. Wow.
401k Challenges and Long-term Strategies
00:17:11
Speaker
That's such a bummer. He's he's worth over five X that so it's worked out for him now, but he joked on the podcast that it was the most expensive house that he's ever bought was like a $100,000.
00:17:25
Speaker
Have you guys seen statistics on like 401k withdrawals and stuff like that lately? I wonder where you're going to go with this Thomas because I shared a ah podcast episode I just listened to from the daily and it's titled was the 401k a mistake and I listened to it this morning because I thought it was a timely topic in light of this book but Thomas let me know where you were going with it but basically the discussion is the people who are wealthy are able to have discretionary income to put in the 401k but lower class middle class that sure they might put some money away but then they have a family medical emergency and so they
00:18:06
Speaker
pull from that to afford medical expenses, things like that, and then they don't have enough money to retire. So the 401k replaced the pension, which was a guaranteed source of income. It got swapped and it was just an interesting discussion. No, that was along the same lines. I know that since COVID, COVID actually opened up some opportunities for people to take out of their retirement accounts without penalties or taxes like you usually would get hit with. Maybe not taxes, but I know the penalties were waived for a little bit there.
00:18:38
Speaker
And then I know, you know, with everything that the pandemic shook up, I think a lot of people just needed that money too. If you were to do a analysis 30, 40 years from now looking at all the money that was taken out during this period, I'm sure the people who let their stuff stay in there would be way, way ahead in terms of retirement than the folks that thought it was a good idea to take some money out in order to do something like you said, buy a house or a car or whatever. It's hard to trust that it'll pay off, but history history has proven it's it's probably going to. I think what the author says though, he he has already alluded to it, but I know he gets to it at the end of the book, but he's right that it should come down to
00:19:24
Speaker
What is your personal values and what's like what's your family's personal values towards being wealthy or building wealth? Because there's always something to chase. There's always a get rich quick scheme or opportunity, Bitcoin, whatever. And I know you asked the question earlier, so I know I'm going back to it. but I definitely felt that more in Denver that I was behind some of my peers and friends. And I thought to myself, I'm being too conservative. I need to try to be a little bit more aggressive or risky. I was i didn't really do anything other than a couple of friends and I. We got into NFTs.
00:20:14
Speaker
when when I remember that Garrett. Oh yeah. I remember I told you about that. You were showing them to me in Colorado when we were waiting before that storm. Yeah, that's right. And when we were skiing, you got one of those apes, what are they called? No, I did it with the and NBA and in the NFL and with the NBA, it was, it was crazy. Like people were truly making insane amounts of money and the market had not adjusted yet. We ended up getting this LeBron James NFT one time and we sold it an hour later for $3,000. It was really bizarre. And we're like, this is great. like we're We're just printing money. And we watched the trends and we're like, we need to get out of here ASAP.
00:21:07
Speaker
And then the NFL rolled around and we're like, let's do it again. Let's get in early. And the market had corrected. we didn't We didn't lose, I think we lost a little bit on the NFL, but I mean, I'm talking dollars lost, not hundreds of dollars. So it was it was fun having that one story of selling the LeBron thing. But at the end of the day, a lot of that stuff comes back to my heart. and tying in the faith component. Where's my identity in? Is it in how how much money is in my bank account? How much wealth I have from a dollars and cents standpoint? Why does that make me better or worse than someone else? Why do I feel better about myself if I feel like I'm
00:21:56
Speaker
making the right financial decisions. And just recognizing that, hey, what what is my wife and my personal financial goals? What do we want to be a priority? And working in our own hearts and wrestling with our identity, putting that in the Lord of having enough. And we're okay with what we're putting away. We're okay with what we're spending, saving. trying to stop playing the comparison game. And that's a much better lifestyle than that mindset in Denver where it was like, where's this next opportunity? And I need to be more risky or what I was like, I'm content with what I have. and
00:22:42
Speaker
If it grows great, if it all gets eaten up by inflation in 30 years, I want to try to have the mindset that I attempted to steward it as well as I could and being content with whatever wealth possessions that the Lord gives me. So question, Garrett, do you think if you were in the same financial situation that you were in Denver with you, I think you mentioned you were you know not very far up on the corporate ladder at the time and Brooke still being in residency. If you're still in that same situation, would you have the same mindset you just said you have now? I think that's a good question. And I've thought of that at times during this book. I think it it takes a little bit of honest reflections.
00:23:28
Speaker
um I would say even back then, I would say and in Denver, yes, I can get into all the specifics at a good company, 401k match and things like that. But Yes, some doors have been unlocked lately with Brooke getting out of residency that has definitely helped where I think because we had some good foundations that we've talked about with my parents raising me with a financial mind that when her salary increased, some of our level of lifestyle did increase, but relatively it did not. And we were like, okay, now's the time to make adjustments to what we're saving and investing.
Aligning Financial Growth with Values
00:24:10
Speaker
And so yeah, our savings and investing rate is the highest it's ever been. And it's a lot easier to say that now. So I think it's a good question. On the other end though, something that I deal with is when we made probably a seventh or an eighth of what we make now, our percentage of our income that we gave away was much higher than it is today. And again, we've talked about this, there's inflation, there's daycare costs, a joke I've said like i've said it before, we've sent our kids to college two or three times at this point. So I don't deal with guilt like I used to, but I used to deal with a little bit of guilt where it's like, man, we were given like, it doesn't matter what we were giving, we were giving more as a percentage.
00:24:59
Speaker
And then as we've gained more income, it's like, oh, we got to, we got to save more. And dollar absolute dollar wise, we give more today than we did in the past, but percentage wise. And that's been more convicting of where am I putting my trust in? Is it how much we're saving and investing? Well, well right there. In God we trust like I was literally journaling on this last night because I've been so focused on like the financial aspect of things right recently and sorry to cut you off Garrett, but I think The money itself literally says in God we trust So it's like it's a good reminder to pull out go get a dollar bill and then look at it and like Do and do you actually believe that? You know
00:25:48
Speaker
Like our founding fathers believed it enough to print it on the money that we still use today. But like, do we believe that God will continue to provide everything that he has for us in the past, into the future and today? But it's tough, man. I get it. The percentage component and the, I recognize what you're saying. I didn't mean to cut you off. ah You're good, Matt. That's a very perceptive question. It's a wise question to ask. It's ah very similar. It reminds me of talking about Shoe Dog where in his postscript, he's like, you know what I've learned is money just really isn't that important. And it's like, well, Phil, it's very easy to say that when you're worth literally billions of dollars to say that money doesn't matter that much.
00:26:38
Speaker
um na We are not billionaires or millionaires to set the record straight, but to have the same mindset that like, yes, it's when you're content with how much you're saving or you feel like you have enough money, if an emergency comes, it's a lot easier to not be as stressed or worried about it. It's a very fair question, man. I learned yesterday that our founding fathers actually didn't put that on the currency. It's really ironic that I learned that yesterday.
00:27:09
Speaker
It was actually put on in the 1860s and it was also added to the paper currency. I think not until like the 50s or later. I don't know. I was surprised by that because I thought it was our founding fathers also, but. Our founding fathers did separate church and state, so I guess it makes sense they didn't do that. That was done after their time. So just thought I'd throw that in there because I didn't know that until yesterday. and Have you ever heard of the Thomas Jefferson Bible? I have, yes. Apparently he just would literally cut out parts of the Bible he didn't agree with. um That's not the version that you guys read?
00:27:52
Speaker
Like basically anything, if I remember correctly, anything that had to do with supernatural things like miracles, he would cut out. Interesting. He left Noah's ark in there, right? Seems like Stalen reads it. So Stalen, why don't you tell us? ah We're going to have to go to our our fact checking team on this one. Garrett, what's kind of ironic is you talking about how much you try not to see money in a worldly way, but see it like from the heart in a sense to where you let it have it have its respect for its utility in your life, but you don't give it more than that. You don't give it so much respect to where it drives you as a person. That is
00:28:39
Speaker
pretty in line with what the author said earlier in this book about being able to increase your wealth without it affecting or your income rather without it affecting your spending and being able to increase your savings rate because you aren't driven by the fact that you have more money you're just being a good steward. So I feel like yeah I mean what you said is really in line with what we've read so far about kind of the right way to do things which is also pretty encouraging because it is in line with ah a lot of the right things to do from like a spiritual or mental health perspective, if you will. Let's take a quick break for a word from our sponsors. Are your shoulders so big that you can't frit?
00:29:25
Speaker
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00:30:24
Speaker
You start running thinking you're all headed towards the same goal or finish line. However, after a minute or two, you see your competitors do weird stuff like lie down, make up a pretend finish line or start running in a different direction or back the way you came. And you're just like, what kind of crazy race is this? The stock market can be seen in a similar way because when we start investing, it may look like we're running the same race as everyone else. But once you understand the way markets work, you realize that everyone is running their own race with their own beliefs, using their own mental model of how the world works. It's hard to accept that rational people can see the world through a different lens than our own, meaning a rational decision for them might be totally crazy to you. In terms of the housing crash, it really did make sense to pay literally any price for a house
00:31:19
Speaker
before 2008, if all you were going to do is sell it again for a huge profit in six months. And people did this for years before 2008, making a ton of money in the process. But then again, like what we just discussed, we all paid the price for those quick returns when the housing bubble popped. Bubbles do their damage when long-term investors playing one game start taking cues from those playing the short-term game. So should a day trader investor invest the same way that someone buying stocks for retirement 30 years later? The author offers that we should all identify what game we're playing by writing a mission statement. He provides his example. I'm a passive investor, optimistic in the world's ability to generate real economic growth. I'm confident.
00:32:08
Speaker
that over the next 30 years that growth will accrue to my investments. So when you guys listen to people give investment advice, which there's a lot out there, do you ever ask yourself if those people know who you are or understand your particular goals or do you take their advice at face value? Do you ever consider that you might not even know what game you're playing yet? Yeah, mean I think for me, I would view this similarly as I view like advice in any other kind of category, where it really depends on like how aligned I am with that person and their values. And you know so if it's a close friend who you know we have a similar value system, some similar morality, I'm going to be more apt to listen to what they have to say, what advice they have to give me.
00:32:57
Speaker
But if they have a very differing view of the world, I'm i'm not as interested. I think that this one for me, I know Thomas, you've mentioned some about like the the fire movement and you know folks who are saving like crazy to basically be able to retire young. I mean, for me, I have zero interest in that. I think that comes from a place of seeing the value in working into older older age, you know not necessarily like elderly, but I think there's a benefit to continue working, keeping the mind moving. And I think it's all in how you you know you view your your purpose, right? Your purpose in life. and think And this is me probably judging some, but I think I think someone who would say, like oh, I'm going to save all this money so I can retire early. I think my question to them is, like well what are you putting your value in? What what you know what do you see the end goal of this life or the purpose of this life is? And so I think with that, I really only want to hear, I'm really only like seeking to gather advice when it comes to financial stuff with folks that I would feel more aligned
Christian Values and Financial Ethics
00:34:07
Speaker
with. um you know If someone's brilliant about
00:34:11
Speaker
finances, but I see the way they live and I'm not interested in that and I'm not as im not as apt to listen to them. you know um I do think there are some pretty cool examples out there. like you know We've obviously talked about Warren Buffett a lot and he's one that I think from my understanding for being how wealthy is he is, he's lived a simpler life than a lot of very, very wealthy people. I met him in Omaha at a dairy place. Yeah, him and his wife. They just went to this Dairy Queen and they were just and sitting at a booth and enjoying some ice cream. I mean, he owns Dairy Queen, just going and eating ice cream and getting in his car and driving off. Now, if that was like Elon Musk or LeBron James or whoever, people would have been like freaking out, right? and would It would have broken the internet.
00:35:03
Speaker
Yeah. Do you feel like him going to Dairy Queen is like, is comparable to like us going to our free, like if he owns it, is it us comparable to going to our freezer and getting ice cream? yeah you um But yeah, no, I think, you know, you hear kind of these more famous exam examples. And I mean, the one that I go back to that he's already referenced several times so far is this janitor who, who, you know, he died and When he died he was worth eight or nine million. I think somewhere in the ballpark was the number and that too to me I'm like, I don't know if the way that he did that is I how I value things either because it sounds like he he you know What was he storing all of his money up for and and maybe he had a very valuable, you know, very, you know know, meaningful reasons why he was essentially leaving that money to his family. That's a very noble thing. But there's also part of me of like, you know, the questions, if you lived such a simple life, like when you died with this money, what was your purpose? And I'm not, I guess, judging as much of that one, but I'm more curious. So i don't if I answered your question there, Tom. But again, for me, I think it has very much to do with like, do I align with individuals values? And if I do, then I'm interested to listen to him.
00:36:22
Speaker
it It's kind of a little contradictory like as us Christian men. like Yeah, we're growing more intently in like our financial understanding, um personal finance, et cetera, but it's like, Staling to your point, maybe that guy was living his life, was a devout Christian, knew that his purpose wasn't in this life, it was in the next life, and he just so happened to accumulate $8 million dollars in the process. yeah Clearly he wasn't like living by it or you know getting off that he had $8 million dollars in the bank every night, but like his focus was probably not on this life.
00:37:07
Speaker
maybe, you know, yeah and it's just a good reminder that like like, as I get more focused on personal finance, it's like, making sure that I don't lose the whole purpose of this life, which actually isn't about this life, right? It's about the next life. But there was a good, I think it's in a later chapter, but the whole doctor, you know, doctors giving it advice and then them not following that same advice. I thought that though that mention in the book was really interesting and true because
00:37:44
Speaker
I don't know. You have a financial advisor giving you advice, but yet are they taking that same advice that they're giving you? And it makes you question integrity, honor, like the advice itself. And I mean, everybody's different. Every, you know, a 65 year old guy versus a 25 year old guy is going to be different advice. So that makes sense. But it's like the doctor's doing way different things are not even the things that they're recommending. So Who can you trust, you know? Well, I mean, to speak to that a little bit, and I know we're not quite to that portion of the book, but I don't think you could take that as he's giving bad advice, but he's maybe trying to, align like, ah you know, maybe a physician he or she is trying to align with what the patient wants in that scenario too. And I mean, you'll have, I mean, I know, you know, Ruth works at the children's hospital and she worked for a while with but um kids with cancer and
00:38:38
Speaker
Parents feel very differently about how they want to manage that and how they they want that to be treated Have you guys and do you guys remember the parable about the the Master that goes away and he gives his servants coins to invest while he's gone The parable in the Bible. Yeah. Yeah only heard it a hundred times. Yes, it's in Matthew Is that in the Jefferson translation? Yeah, yes. The servant who buries the coin in the ground instead of investing it and making some money gets freaking rocked by his master, calls him evil, lazy servant. And you guys don't want to be evil, lazy servants.
00:39:19
Speaker
No, nobody wants to be an evil, lazy servant. I have to go back and look at the context of this because I've heard it a million times too, but I don't remember like in what context is being injected here. But a lot of, I think a lot of stuff as Christians that has to do with money feels icky. because there are also verses about how it's harder for a rich man to get into heaven than to pass a camel through the eye of a needle and things like that. Isn't there something about the root of all evil being related to wealth or money or love of money or something like that? Love, love of money. I miss this song, love, love of money. I used to struggle with that.
00:39:57
Speaker
We've got some stories here that I find to be needing a lot of nuance in terms of, you know, how they relate to how we make our decisions. And I think a lot of it's just about making sure we keep that nuance in our own lives instead of making black and white rules about what's right, what's wrong all the time. essentially Adam wants his advice coming from someone that's playing the same game, basically. Yeah. you right yeah i get yeah that's a good That's a good point. fliers Thanks for calling that out. That makes sense. Yeah. I have a hard time adding any real value to the conversation because I ah like a former personal and trainer, you know, I defer
00:40:39
Speaker
this kind of stuff to someone that has way more knowledge about all of this. And for me to act like I know anything about any of this is honestly comical. So I don't really have a whole lot to add. um You know, watching Jagger deeds, my boy Jagger, and doing what he does all day, like he manages financial people and like to think that a guy with two master's degrees managing people that are managing other people's money like to think that I know anything would absolute no education on any of this or like I don't know you know what I'm trying to say it's like I'm like I have been very humbled by all of this because I don't know anything yeah
00:41:31
Speaker
It's more about the psychology though, rather than like fundamentals, like behavioral stuff. yeah If I talked to Garrett and i didn't and I didn't know Garrett's background and I was interested in investing in NFTs and he showed me his $3,000 NFT gain, I would assume he knows a lot more about NFTs than he actually does. And that's, I feel like one of the hard things about trusting other people with your money is there's There's obviously those degrees and all these other things that you can do. There's also so many statistics about people who supposedly are professionals and experts who don't even meet or exceed the index market's gains when they do active investing. They actually mess it up more often than they
00:42:15
Speaker
then they exceed like the S and&P 500, which is the easiest thing to just invest in. so the book The book says that, yeah. Yeah, I totally get what you're saying, but I'm also just leery of the fact that like we, as human beings, love to overanalyze and overcomplicate everything, and the same can be true for investing, I think. Yeah, for sure. Yeah. He talks about that in the first or second chapter, Fles, so yeah, it's it's not about how much you know, but your approach and what Rob was saying, the psychology of it. So give yourself some credit. And I think the, the humility behind it is actually a very powerful tool when it comes to finances, because when you get big headed, that's when the smartest people become greedy and then they go into bankruptcy with all the degrees, right? And we're talking about that janitor who
00:43:08
Speaker
and gas station attendant who died with 8 million in net wealth. So don't count yourself out because you're in a completely different career field. Yeah, I was thinking about it more in terms of like, I've met people that they manage other people's money well, but their own terribly. Yeah. And vice versa, really. um And so it's like, I don't know, this stuff is all like, Is it just chance? Like is everything just kind of chance or is just you literally just like put it here and just let it sit and just don't touch it and you're like, that's your best bet. And especially like the chapter about how new the 401k is and like, we don't even really know what's going to happen. So it just.
00:43:51
Speaker
I don't really feel secure about any of it. So just putting your, you know, yeah, I mean, faith in God that it's going to work out in the end for
Psychological Aspects of Financial Decisions
00:44:00
Speaker
sure. But ah I guess you're right, Garrett, though, like the the humility and differing and that that is a behavior itself. So I guess that's good. Yeah. Thanks for that. I think if you can just get past the hardest part, which is just doing something in the first place and then stop before you do too much, which that's a really hard line to find, but like that's the sweet spot. It's like do something that kind of agrees with your risk profile and then let it ride. That's kind of how I'm feeling.
00:44:32
Speaker
One of the things that I have enjoyed about this book is the fact that he takes a little bit of a historical approach in the United States over the last hundred years or so, and how some things 50 years ago, 20 years ago, they would not be okay to do today. So another aspect of your question, Thomas, is who is the person that you're taking advice from? And are they keeping up with trends? Are they only looking at historical data? Is his information going to be accurate in today's world? If he's looking at past experience, things like that. What we are investing in today could be irrelevant in 10 years. Crypto. You never know. Or it could be more relevant than the dollar. You just don't know. Yeah. Another thing is
00:45:24
Speaker
Even if you do meet with an advisor who knows your game, your intentions, I think it was in this book, I can't quite remember. But I think the author mentioned like if you are spending your money when you're young, you're not saving, maybe you're going on vacation, you're traveling a lot, a lot of those people might be regretting in their old age that they didn't save enough for retirement.
Balancing Savings with Life Enjoyment
00:45:51
Speaker
And then you look at the flip side and I think of that janitor example, you save all this money for retirement, but then what are you going to do with it? Are you, did did you regret not traveling when you were young? Did you regret not spending money on some experiences or you might even just be too old to experience some of the things that you would have enjoyed when you were younger. Plug for blue zones.
00:46:19
Speaker
Yeah, for sure. There's a, there's a book called die was zero. I really want. Well, I was going to ask you Matt, and then everyone else, a question from blue zones that we asked was more or less how old do you want to be when you die?
Debating Inheritance and Wealth Transfer
00:46:35
Speaker
So I've never thought of this question. I'm thinking about it in real time. How much money do you want a tie to your name when you die? Not rhetorical. I have no idea. In today's dollars or inflated dollars? Oh my gosh. I don't know. For the sake of go the conversation right right now. How much gold? Seven kilos. about No, we said gold not campaign. Wait, sorry. How about caps? In my legal business. You guys watch Fallout yet? Caps? Yeah, Fallout's good. I don't know, Garrett. What do you think?
00:47:16
Speaker
um Like I said, I've never thought of it. It's interesting, Garrett, you asked that. So, you know, Ruth listens to the to the podcast, which is nice. It's good to have a supportive wife. And it is interesting because we were talking about this very thing. And I think in my mind, I had this idea of like, You know, I think in some ways that concept of an inheritance, it feels like it's kind of going away, maybe not as common in current generations as has been in the past. And so like in my mind, I'm like, I don't think that I think it's probably going to be, it's already more societally normal to not really have an inheritance left or
00:47:57
Speaker
And it probably is going to trend more that way. And so in my mind, I'm like, yeah, like very minimal, very small number and and not feeling bad or guilty about that. And, and I kind of told her that that was what I thought. And she was like, Oh, and she, you know, she had a very differing opinion. And so it was the really interesting conversation that we had. And very, very quickly it went back to What we believed about finances and what we experienced growing up and so it was kind of a a cool one because it united really relate back to the earlier chapters and really one of the main themes of like no one's crazy like people do what they do because of like what they grew up in what they believe.
00:48:35
Speaker
um And so, you know, you know, for me, the number was kind of nothing and essentially, and her number was different. And, and so, yeah, that's definitely something Garrett that we're going to have to talk about more though Ruth and I. Something Larry used to always say was it's all just fun tickets. And so you always used to say it's so funny cause he's like this chief of anesthesia making can bank and he's like, yeah, it's just fun tickets. As long as you can pay all your expenses, I kind of agree. Yeah. You know, going to the lake, getting on a boat, it's fun tickets. Like it's like, it's not a need. It's a, it's just like, okay. So money is just fun tickets is what you're saying. Yeah. Not me. I'm not saying that. That's what Larry used to say.
00:49:22
Speaker
His point was don't keep it all because then you won't be able to use it on the things that matter in life, you know, or use it doing things with the people that matter in life. I dropped a link in there for you guys. There's something called the Great Wealth Transfer because Stalyn was talking about inheritance. And what's kind of like ironic is I i feel the same way as you, Stalyn, in terms of like people I know, they actually get an inheritance. But what's ironic is that the boomers are poised to pass down $84 trillion dollars through the year 2045, which is ah the the largest transfer of any generation to another. It doesn't feel like that's going to happen, but it will technically have to happen somehow. What about the second part of the question? How old will do you want to live till? 125. Really?
00:50:17
Speaker
Yeah, that's you're in your prime man years or I've always loved the ah it's the parks and rec quote. It's it's Chris Traeger Rob Lowe's character. um He says he says they believe the first human has been born. That's going to live 200. They believe that the first human to live to 120 has been born. I believe that that team is me.
00:50:45
Speaker
I was going to say that because I'm in Vegas right now and Rob Lowe was here. We like walked right by him. no I was going to quote that. I love that we were thinking the same thing. yeah Yeah, that's one of my favorite lines from that show. And I've never really like related to the the concept of a spirit animal. um But if the closest thing I had to a spirit animal would be Chris Traeger in Parks and Rec, the character. I've been reading The Hobbit with my girls and they loved it, but one of my favorite quotes out of any book ever is from The Hobbit.
Conclusion with Reflections on Wealth and Joy
00:51:22
Speaker
It is, spoiler, Thorin dies at the end, but as he's dying, he's talking to Bilbo and he says, if more of us valued food and song and cheer above hoarded gold, the world would be a much merrier place.
00:51:40
Speaker
Thank you for listening to this week's episode of the Books Brothers podcast. Join us next time as we discuss chapters 17 and 18 from the book, The Psychology of Money by Morgan Houssel. If you haven't yet, there's still time to get the book so you can follow along with us. If you've enjoyed listening or benefited from our conversation, please subscribe, give us a review, and share with a friend that you want to connect with. Lastly, we'd love to hear your thoughts. You can reach us by email at connect at booksbrotherspodcast dot.com or on Instagram at booksbrotherspodcast. Until next week, read, reflect, and connect.