Do the rich actually think differently than the rest of us?

Let’s talk about that.

When most people say they want to be a millionaire, what they might actually mean is “I’d like to spend a million dollars.”

And that is literally the opposite of being a millionaire.

Morgan Housel

We say we want to be rich.

But what we really want is control of our life.

The ability to do what you want, when you want, with who you want, for as long as you want, is priceless.

When I say rich, I mean I own my time.

I make my schedule. I choose my own path.

So how do you get to freedom?

What’s your path to a new rich life?

“If you skillfully follow the multidisciplinary path, you will never wish to come back. It would be like cutting off your hands.”

Charlie Munger

You’re always thinking about money…

You’re worried about money.

You’re stressed about money.

But you don’t know what’s next?

Maybe you don’t even know what money actually is.

Money is green Sometimes.

Money is paper. Sometimes.

Money is keeping count. Usually.

Money is kind of like an I.O.U.

But there seems to be some limit to how much of money is out there. Or at least, there is limit for how much you can get your hands on.

But then again, some people seem to rack up money like points in a video game.

And now some people are saying money is digital.

Money is on the blockchain.

But that definitely sounds like complex bullshit.

You can spend online with your credit cards. And that’s real.

So are the bills that come at the end of the month. Those numbers add up fast.

Your debt is real money. So is your pay check. And so is your stress.

But somehow you never have that many green pieces of paper or zeros in your bank account. What’s up with that?

You just want to know why some people become wealthy while others are permanently trapped by their debt. And you want to learn how you can change your thoughts on money before it’s too late.

But too late for what? Escaping financial ruin? Bankruptcy? Debt?

The Money Trap

In The Psychology of Money, Morgan Housel introduces a simple idea.

The premise of this book is that doing well with money has a little to do with how smart you are and a lot to do with how you behave. And behavior is hard to teach, even to really smart people.

This is an idea I am all too familiar with in my own life. I have had brushes with celebrity, and wealth beyond my own wildest dreams.

I painted the mansion of a shampoo and hair product impresario worth billions when I was a teenager. I also shovelled the clogged shit, tampons and towels that people stuffed down drain at one of his many salons.

But that’s another story.

I worked at bars and restaurants frequented by pro athletes. Some of these guys earned 8 figures a year. But there were also rumours that some of them were broke, in debt, bankrupt.

One night, I served the heavyweight boxing champion of the world and his best friend, an olympic gold medallist who crashed his super car as he sped home drunk on the freeway…. twice!

“A genius who loses control of their emotions can be a financial disaster. The opposite is also true. Ordinary folks with no financial education can be wealthy…”
Morgan Housel, The Psychology of Money

Somehow I survived my own money journey. But not before I woke up homeless on Broadway in San Francisco. Kicked out of my $137 a week slum hotel. I couldn’t afford to pay rent. My whole life was waiting for me in black garbage bag.

I had crippling credit card debt, student debt and a line of credit. I was over $90,000 in the hole. And I found myself locked into the vicious cycle of wage slavery.

I worked as a teacher, bartender and Uber delivery guy at the same time.

But Somehow I got here. Now I make a living with a minimal, low stress 4 hour work day on a tropical beach.

So what’s the secret to money?

If I had to choose one book to keep in my back pocket right now, it would be Morgan Housel’s The Psychology of Money. He ponders all the ups, downs and eventualities of money and human nature:

“Getting money requires taking risks, being optimistic, and putting yourself out there. But keeping money requires the opposite of taking risk. It requires humility, and fear that what you’ve made can be taken away from you just as fast…

The challenge for us is that no amount of studying or open-mindedness can genuinely recreate the power of fear and uncertainty.”

Money is one of the most important but also most stressful aspects of life.

Your bank account affects your happiness, health, relationships, and future opportunities. Debt exposes you to risk, uncertainty, and losses.

If you are like me, you are still afraid of losing money. Make a few bad decisions, or miss out on opportunities in your middle age and you’ll be right back to zero.

But I have a few short lessons to share that helped me deal with my money stress…

The goal is to change your behaviour.

Develop a more resilient and flexible mindset.

Prepare for unexpected stress. Equip your mind and wallet to deal with the avoidable financial struggles of adult life.

Time is your friend. The longer you invest your money, the more it will grow.

The exponential power of compound interest let’s you accumulate wealth when you sleep.

I’m not going to bore you with the numbers or charts, you can find those in the book.

But know that “the magic ingredient in compounding is time.”

You don’t need to be a genius investor to build wealth.

You don’t need to have been born rich.

You don’t need to have a wad of cash to start.

You just need to start now.

Even if you are in debt. In fact, especially if you are in debt. This lesson is for you. Start saving part of your income today. Stay consistent. Be patient.

Housel also includes a few great stories about everyday schmucks and working joes, like you and I, who managed to change their money behaviour.

“Financial success is not a hard science. It’s a soft skill, where how you behave is more important than what you know.”

More money than you can imagine

🤲🏽 “History never repeats itself; man always does.”
Voltaire

There are so many money stories and journeys. What’s your story? Who are you?

A 90 year old janitor who surprised his family with 8 million dollars in his will.

Or a Harvard Surgeon who foreclosed his Palm Springs house and declared bankruptcy after the 2008 crash.

The financial crisis led Housel, like so many of us, to think more consciously about the psychology of money.

“To grasp why people bury themselves in debt you don’t need to study interest rates; you need to study the history of greed, insecurity, and optimism. To get why investors sell out at the bottom of a bear market you don’t need to study the math of expected future returns; you need to think about the agony of looking at your family and wondering if your investments are imperiling their future.”

I remember those days myself:

Just graduated from college with massive student loans. The job market flat lined.

I lost a three hundred dollar a night bar gig at a restaurant full of pro athletes. I woke up as a green aproned Assistant Manager at a Starbucks earning twelve dollars an hour.

On bad days, I slept in my Honda Civic. I remember the rusty wheel wells and the driver’s side door that swung open when the locking mechanism froze in the winter months. I had to steer with my stick shift hand and hold the door closed while I cornered.

Patience over pride.

I remember reading the story of Sam Bronfman, founder of Seagram’s distilling.

A self-made billionaire who came from a family that escaped Russian pogroms. He was raised on the harsh Canadian prairie, literally surrounded by wolves and bears.

Yet he bought the Texas Pacific Oil company for 61 million in 1963. His children sold it for 2.3 billion in 1980.

But what his heirs remembered about their patriarch were his stories of walking to school across the snowy prairies with holes in his trousers.

Bronfman was so embarrassed in front of the other school children that the shame of poverty still made him shiver decades later when he was one of Canada’s richest.

How is that possible?

What about the legendary Warren Buffett?

He is one of the most successful investors of all time. He started buying stocks at age 11. His net worth is more than $100,000,000,000.

That’s 11 zeros, folks!

But did you know that 99% of his wealth was accumulated after his 50th birthday?

Buffet was worth 1 million at 30 years old. 300 million on his 50th birthday. Yet he was somehow worth over 3 billion when he turned 65.

He did not retire.

Compound interest seems like magic, but it’s just multiplication.

Money is counterintuitive. But the money lessons of psychology are simple and clear. Be reasonable, not rational, with your money.

“There are a million ways to get wealthy, and plenty of books on how to do so. But there’s only one way to stay wealthy: some combination of frugality and paranoia.”

Money is not just a numbers game, it’s also an emotional and psychological one. You need to understand your own biases.

What are your goals? What do you value in life?

Don’t blindly follow what others do or what the experts say, but find what works for you and your situation.

Housel tells us, Be reasonable with your money, not rational.

Consider other factors besides the number of zeros:

How much do you value homeownership?

How stable is your income?

How comfortable are you with debt?

How long do you plan to stay in your house?

What are your other financial goals?

Do you plan on working forever?

There is no time like the present.

Start by writing out your goals.

State your priorities. Then act.

Remember, actions express priorities.

Improving your own money relationships and psychology is as simple as following these steps to do LESS— Learn. Earn. Save. Sleep.

🌊 My mission: I will teach you how to do LESS.

I believe everyone can learn to earn, save, and sleep well with financial freedom.

Thanks for reading.

I write copy & content. I teach courses. I show up everyday.

But I do LESS. Learn. Earn. Save. Sleep.