Getting Rich vs Building Wealth #488

and being wealthy, and we're gonna talk about that today. Like, this is going to be a good episode because, like we're laying down some like some foundational truths that I think if you don't already have some of these ways of viewing the world in your mind, they have the ability to like drastically change how it is that you

view everything right like from it's like a new filter. Yeah, how you spend your time, like how it is and why it is that you work, what you spend your money on, um, your expenses, but even just money in and of itself, how you approach your money. So we're gonna spend some time, like we're gonna zoom out a little bit and talk about some of these differences. I'm

looking forward to this episode. Yeah. So it just kind of makes me think of when Instagram first launched and how everyone was using filters, like people when people are all about those filters, myself included, Hey dog, you ever used the Nashville filter? I was gonna say the Nashville like it was my go to. I was like, it makes everything look better, right, But now these days that just makes it look right and dated. I don't think anybody uses those like Vinta style filters on Instagram anymore.

But but when you first started, it was kind of like a revelation here, like all my pictures like what a fun thing? Um, And and now just that's not how people think about it. But I think, yeah, when you view uh, this this getting rich versus building wealth psychotomy, there can be a huge gap and how we actually think about and approach our finances, depending on which one we're pursuing. But before we get to that, matt Um, I just wanted to quickly mention a website that we've

talked about before on the show. But you've got a quick tip for us to very quick tip. I have just scheduled a chip Drop and I forget if it was a listener that first tiptos off. I think you knew about it all anyway, I'd heard about it, but I think a listener maybe in the Facebook group. Yeah, Well, just before I forget, the website is get chip drop dot com And if you ever need like a giant pilot mulch. And I do mean giant because mine should be coming this week and who knows how big it's

going to be, but supposedly quite large. Then this is a great website to sign up for a freeload. And so yeah, because we just did some renovations, our backyard still a mess, kind of a money mess. We're gonna drop some grass feed back there and stuff, but we need a lot of mulch to cover up some of those, you know, shoddy areas in the backyard that have been

kind of roughed up. So dude, yeah, getting your home renovated, like your yard, like the grounds take a beating because like you gotta porta potty set up there like a holloway dumpster. There's nails everywhere and just like broken bits of like construction. To bring your kids over to do trash treasures in my yard now, because there's gonna be

a bunch. So yeah, the girls having that experience of having already done trash treasures prior to our innovation a few years ago came in handy because they're constantly finding nails, uh, And I want to reward them for getting those out of the yard. I don't want to you don't want

anybody to to step on that Joe. By the way, I gotta say, random people have used my porta potty and it's kind of been funny to like hout the window and see people just like park their car, get out, hop in the bathroom, and hop back in and go. It's it's true, it happens. That's disgusting. I don't even like to go to the bathroom like out in public at a like a gas station. I'm not a huge fan of going to public bathrooms in general. I get going into that's like it's even worse ten times worse.

But so get chip drop dot com if you ever need like random free mulch um. It's it's a website you can use to make that happen. Not only that too, but you can get rounds cut so like you know, chunks of a trunk of a tree if you want the one on hand to stop your own firewood. Yeah exactly.

But again, like you said, you need to make sure that you're ready for a lot of it, because when they show up, I mean they'll dump an entire like dump truck full in your yard and not like, hey, you want three or four, and it's like, no, here's two. You know, that's kind of how it goes. So it's all or nothing. Yeah, whether it's a would that you're gonna split or just this massive pile of mulch, it's

not like just for a small garden bed. It's for like something like you're doing where you're looking to make a big dent. Yes, exactly, all right, Well let's move on. Matt. Let's mentioned the beer that we're having on this episode. This one is called Tropicalia. It's by Creature Comforts. I cannot believe we have never had this on the show. I was we got some recently and I thought about bringing it down. I was like, well, no, we've already

had on the show. But then I checked. We have never had Tropicalia on the show before almost fisodes in and we've avoided what is probably the most classic Southern ipa available. So um, yeah, I'm glad we get to have this one today. And we'll give our thoughts at the end of the episode, but for now, let's get onto the topic at hand. We're talking about getting rich versus building wealth, and Matt this episode topic it made me think about shortcuts A great example of a terrible

shortcut is smoking in order to lose weight. And uh, I guess the joy highly recommends it. I am not a physician. I do not recommend that at all, but I guess someone could ask the question does it work and the answer would be yes. And in fact, it does that by lowering your metabolic rate, reducing your appetite. Right, it suppresses your desire to eat, and so then, yeah, you want to eat less if you smoke regularly, and well, law, you lose weight. But smoking, as we all know, it

comes with legitimate tradeoffs. Right. It costs money. Um? And yeah, I know cigarettes in in certain parts of the country cost something like fifteen dollars uh for a pack, which is really expressive. Well, I think a lot of a lot of states have just massively raised the taxation levels on some of these what are considered like sin devices. It's like a syntax, right, and so yeah, the other other trade offs include the fact that you don't smell great.

On top of that, the kicker, by far the worst trade off you're making is the negative health effects like heart disease, lung disease, diabetes, and cancer. Um, do I need to go on do I need to list all that, I don't think so. Um, but yellow teeth, Yeah, yeah, that's another one. But basically, that short term benefit of shutting a few pounds to maybe be able to fit into the genes that you used to be able to wear it comes with long term downsides that far outweigh

the benefit based. It's a terrible trade off. And so yeah, that's that's exactly what we would say is happening when you prioritize getting rich over building wealth, and and that's what we want to talk about the day on the show. Yeah, and well, I think a lot of folks might laugh at the idea of trying to lose some weight by picking up smoking, right, Um, I know, I am like just the thought of actually somebody like logically approaching that problem and being like, Okay, how do I go about

losing weight? Should I exercise? Nah? Should I eat less? Nah? I'm gonna pick up smoking. Back in the mad Men days, I mean, that wasn't okay suggestion, I think, Yeah, and so like, at least now today that feels laughable. But I think it can be a lot easier to fall into the trap of trying to take the shortcut to be rich. A lot of folks understandably, they probably want to achieve their financial goals more quickly. Maybe your neighbor they might drive a nicer car, Maybe your best friend.

They may have just bought a new place, and you want those things too. There might even be a level of flashiness that you would like to show off a little bit, maybe some fancier clothes or cars, fancier vacations. Head out to that exotic location that all sounds pretty nice. It will feel nice to to post the pictures on

social media. Uh. And sure, you might find some short term success and be able to buy something really nice or maybe take that lovely trip, but the long term effects of pursuing a lifestyle like this are ultimately going to undermine your financial foundation. The tradeoff of trying to get rich quickly in order to inflate your lifestyle almost always comes with severe consequences that other have these unattended ripple effects, or they keep us from even achieving our

financial goals altogether. Yeah, that's true, And and we've all been subject Matt. If you've been on YouTube at all watching Mr be Squid game video or whatever, that's one of the most popular videos of last year, and it was an interesting one. What we've been subject to pre roll ads, right, and and many of those pre roll ads feature young people or maybe at least the algorithm is serving these up to me because they know my

interest in personal finance. But it's often a young fellow who is like in an incredible mansion, or who's in front of this fleet of sports cars and rhythm knows, like, we know what Joel wants. He wants that nicknasion, he want, he wants the flash and these these hellas they're promising that if you just give them some of your hard earned dollars, that you too can learn the secrets of getting rich quickly and of getting large muscles right and a fleet of sports cars right like, and that is

of course the life that everyone desires. But yeah, the problem with this is is twofold one that house might just be an Airbnb rental for that day, right, This might not be their actual cosa that they live in full time. And same with those cars. I bet they rented a few of them off to row to uh make it look like they were rich even though they're

not actually. But the problem is that the opposite of what they promise actually happens, right, that thousands of people give these people money, allowing that person to then be able to afford the flashy lifestyle while creating a real financial setback for themselves. So I think sometimes in our pursuit of quick gains, of of riches, often times we're making other people rich and making ourselves Poor's right, we're

shooting ourselves in the foot, were undermining our own efforts. Man, One thing to mention here, too, Like, it doesn't have to even be like the slashy lifestyle that you're aiming for. You might just want to be able to afford a more modest, you know what you might consider a normal lifestyle. Like you're not looking to own a mansion or lambo. You're just maybe you're tired of living in a studio apartment.

Maybe it's just like a decent three too, that's not a ridiculous commute away from your job that you're after. But either way, the sirens song of quick riches to achieve whatever it is that you're after, it's easy to get caught up in, and it has this real possibility of getting us off track and actually keeping us from our goals. We go from playing the long game to the short game, and it messes with her head and

it messes with our bank account. Okay, so before we move much further, man, I think we do have to give some some definitions so people can kind of understand, because because when you when you look at the love definitions, man, I know, you gotta like lay it out there that way,

we're all on the same page, that's right. And when you look at the definitions on let's say you got a dictionary dot com or you open up your old school read Miriam Webster's dictionary that that's you know, sitting on your shelf, they actually look like synonyms, right, and so rich and wealthy are actually going to kind of um sound really similar when you're looking at at the textbook definition. So yeah, in this episode, we're kind of

offering up our own urban dictionary style definition. We're not necessarily going with the classic definition because I think in the common parlance, the way we talk about these terms, at the way we discuss them just on you know, societal level, we see a difference, right, And so you and I we think of getting rich as the thoughtless thirst for more and to get there quickly, whereas wealth on the other hand, is the desire to be able to fund and sustain a life that's meaningful to you.

And so if you're in the pursuit of riches, really you kind of never really quite arrive. More is always good, and in fact it's necessary, right, It's kind of like the hamstral wheel that keeps on turning. But if you're building wealth, it's really just about being able to fund the lifestyle that fits your goals, and oftentimes those goals

are more modest. And so there's this realization I think when you're building wealth versus attempting to it rich, that more money alone isn't going to be the thing that makes you happy, but earlier looking at the holistic self um the physical, the emotional, and spiritual well being, which are crucial elements to living a good life too. And it's also important for for all of us who are playing the long game that you have to be able to acknowledge the getting to that point. It takes time

and it takes intentionality. Yeah, and you know that being said, like, there's nothing wrong with having a fancy car as long

as you have the wealth to support that. And so especially early on the order in which you take actions with your money matters significantly, and so early on, if your money is tied to you know, different items like cars, fancy clothes, different things like that that are depreciating, that is also sort of the epitome of riches as opposed to that same money instead tied to income generating assets, like if that money was invested in the stock market,

or if that money was invested in real estate, and so that's also one of the major differences as well. Yeah, there's a difference between buying a Lamborghini or a Ferrari or a Rumian truck when you're twenty three, just starting out and you're trying to make an impression on the people around you, even though you don't have the income or the assets to justify that, versus buying it after twenty years of making smart moves with your money being able to pay cash for that, not financing for thirty

or forty years. Well, yeah, when it's a drop in the bucket, basically when it comes to your net worth, I guess if it depends if you're rolling in the money and so like, maybe you can do that in fifteen years. It's so good for you. I mean, I know, there's people out there who are living that kind of life right where they're thirty five years old and they're driving a hundred thousand dollar vehicle. I just have a

hard time wrapping my head around that personally. But a huge part of the difference here as well, it's it's just the focus on the short term versus the long term, right Because like someone who is focused on getting rich and amassing a fortune in short order, they might be tempted to play the lottery or or download sports gambling apps or Flight of Vegas in order to distrike it rich, or even to speculate on the newest cryptocurrencies or memestocks

and hopes of making a quick return. They want that money to materialize out of thin air, as opposed to the person who's pursuing the wealth. They're gonna hot for just a more time tested strategy that doesn't necessarily put their capital in harm's way. I'm not saying that they don't take any risk, but that they're willing to take calculated risks in the slow pursuit of those goals. It's

kind of the old tortoise versus the hair story. Oftentimes the hair that's somebody who's seeking the riches, right, Like they're looking to to have what they want now, as opposed to the tortoise who's willing to put in the time to stick with methods that are sustainable. And it kind of goes back to the whole smoking example that you gave earlier, Joel, Right, if you're looking for maybe a more immediate results, it's like, Okay, how can I trick myself into eating less? Well, maybe I should just

start smoking now versus healthier and more sustainable behaviors. It makes me think of one of my favorite movies, the old school Willie Wonka and the Chocolate Factory the Gene Wilder of course, because let's the only one worth watching. But Charlie Buckett. He he does not take go drink from the Chocolate river like Augustus Gloup does, and he falls in and he gets sucked in, and you know his his trip to the chocolate factory ends really quickly.

All these kids deciding that they want the quick candy in front of them versus playing the log game, and who ends up owning the Trac Chocolate Factory in the end is Charlie, right, So yeah, he's the big winner in that scenario. But you know, we've got more to get to, including the kind of unhealthy behaviors that prioritizing riches more than building wealth can lead to. We'll we'll

get to that right after this. We're back and we're talking about getting rich versus building wealth, and even you know, let's let's point out to even the words that we chose there, those verbs of getting rich versus building wealth.

Like when you get something, you just want it, like you're just like give me, gimme, gimme, you know, like it makes me, like you were just talking about Willy Wonka, it makes me think I want it now seriously, as opposed to like when you think about building wealth, like it's just something that it's methodical, it's something that takes the plan, it takes discipline, and it takes some time

to actually execute that. And so that's why we're talking about this today because there is a significant difference between these two. And let's talk about looks versus reality for a second as we're talking about these two concepts, because it's easy to actually look rich, right, you might be living paycheck to paycheck, but everyone around you they think that you're crushing it. Wealth on the other hand, it's much more like I would say, kind of stealthy, right,

Like it's under the radar. Makes me think of a guy like Warren Buffett. If you saw the house that he lives in, if you saw the breakfast that he eats every morning, which I'm pretty sure it's still McDonald's. I don't know how he's in his nineties and eating McDonald's every morning. Maybe it's the dieta Champions, the breakfast of Champions. It's used to be weedies but no longer.

What if there's some study that comes out in light ten years that talks about because of the amount of preservatives with it with the McDonald's, that it's actually causing people to also become preserved and mummified. Yeah, they really going to do an autopsy when Buffett dies at like, and they're gonna realize that it was all those is the McDonald's, but nothing mcgriddles. You want to stay away from those because of the saturation. Yeah, I think that

bad for the artery is definitely. No. But like seriously, like we're talking about Warren Buffett, Like if you look at the way he dresses, right like, you wouldn't assume that he's loaded, but the oracle of Omaham he is worth more than a hundred and fifteen billion dollars right now, give or take a few hundred million. That is, of

course an outlier example. But the reality is that the more that you try to convey to the world that you have money, since it basically all comes via consuming and owning more in particular items that depreciate and value quickly, the less money that you actually have in the bank, and that means the less financially secure that you are.

In reality, that's true. Yeah, you are prioritizing looks over substance, and and let's be honest, Matt, looking like you have money it can actually become more of a headache than it seems on the surface. If if it looks like you're swimming in dough, people start to assume that you're swimming in dough because it looks like you are, of course, and they might treat you accordingly. There is um I hate to resurrect an old rap song, but more money,

more problems. Pete Puff Daddy in that Peviga says, just the way it is, that's how it that's how it goes, and and so that's why it does you know Biggie that's well, it's not that was Biggi's rab but puff Daddy was heavily I looked up on YouTube. It's got over nine million views. Can you believe that he is the quite the philosopher and poet. But it's but it's true. It's like to get to your point because what happened to Biggie dude was murdered and it has a lot

to do with money, that's true. Yeah, money can create real problems. And I'm not not suggesting that your pursuit of riches will lead to your early demise, but but it is one of those things worth considering, like how do people perceive me? Do they treat me differently? And that's why we would suggest that like stealth wealth is such a better goal to have than like ostentatious riches.

And uh yeah, because the family in societal pressures that often come from having more money than your peers, they can be tougher to deal with and you might assume and for that reason, yeah, keeping it on the d L is actually preferable. I think that that term stealth wealth, Matt is I'm glad it's kind of come into vogue. In the last four or five years, because it is one of those things where where that's a that's a

good thing to strive for. Um, spending some of your wealth is fine, but but flaunting it, I would say, I would suggest to something to avoid. Yeah, there's a big difference between those two. And this is why we see negative effects, uh, you know with those who win the lottery as well. Right, because it's really difficult when you all of a sudden have I don't know any millions of dollars, Like, it doesn't matter who you are. Well,

it's easy, come, easy, go to right it. It's it's different when you have four million dollars because you've been doing the hard work for thirty years. It's it's a whole lot different if you haven't been doing the hard work and someone hands you four million dollars tomorrow, you

treat it differently. Yeah, And it's also hard to disguise it when all of a sudden you've got a ton more money than you used to have, which, like it's a lot harder to actually be secretive about it, right, Like, you can't you can't keep it secret and keep it safe when it comes to the money that you went Lord of the Rings references with with the lottery. Did you know so in most states in the country, you

are not allowed to remain anonymous. It is up to the states as to what are nuts you're able to keep your name or your information private. Only eleven states, including the state of Georgia, by the way, allows you to remain anonymous, which I think it's great. I don't understand why it is that. I mean, you know, I'm not a law professor or anything like that, but like, why do more states not allow people to remain anonymous.

I think it's marketing for the lottery and they want to show faces and look, look how your wife could also be ruined me, Like, there are so many examples. People don't play the game because they think their life is gonna get ruined. They think it's that because it's gonna change their life for the better. But you know, we talked about this, Actually, you're so right when we talked about what would you do if you won the lottery?

And and you know, we talked to that episode about how many people's lives are actually ruined by winning millions and they actually end up filing for bankruptcy, they end up in a worse spot their kids exactly fortunately die because of drug overdoses, relationships in tatters, so many instances of that happening. But yeah, it's it's harder than it looks to come into a lot of riches like that

and maintain a balanced life. All right, So let's talk about unhealthy behaviors for a second, because there are a number of different risky actions that we might be tempted to take in order to achieve the shortcut and get to where we want to be faster if we're aiming for riches as opposed to building wealth. And you know, one of those might be playing the lottery, which would be an unhealthy use of your money in your time.

And we talked about scams last week, Matt Well. A lot of scammers, as it turns out, prey on folks who wants to get rich quickly. They take your emotional desire for financial security and then they use it against you. It's like a weapon, and which means that they are often able to get you too willingly hand your money over to them. And yeah, scams often target people who have a get rich quick mindset. So if you're focused on making money in short order, you make yourself a

mark you're more likely to get taken advantage of. If you are going the slow and steady round the tortoise route instead of the hair route, you are much more likely to avoid a lot of those targeted scam attempts. You're just not going to be interested in the same way as someone who is looking to make money quickly. Yeah, and scammers, they're always playing on the latest trends as well.

The Wall Street Journal they just recently had an article, uh, talking about an actual, a real giveaway that the performer, Megan the Stallion, was doing via cash app, which is pretty cool, right, Uh, something we've even done. We've given given away money via the cash as right. We weren't scaming folks, and neither was she. Uh. If you're a fan of free music, you probably thought this is pretty cool.

But what happened is more than a dozen imposter accounts sprung up overnight to try to take advantage of unsuspecting folks who were all about getting that free money but they didn't know any better. Uh. Scammers target folks looking for freebeesh and easy cash opportunities, so you gotta look out for that, that's right. Yeah, And another unhealthy behavior could be the pomo that we feel if we are

trying to get rich really quickly. When it comes to investing, conventional wisdom has kind of been turned on its head in some ways recently, Matt, Like you can document the rise of thousands and thousands of folks who have who have actually gotten rich almost overnight, whether it's like through bitcoin or some other random alt coin. There are people investing in n f t s, in board a n f t S, let's say, and those in f t s have appreciated really really quickly. So um, you know,

celebrities are influencing in that regard. I think justin Bieber Steph Curry they both own board eighte U n f t s. Everybody's got board a yacht club. Yeah, every everybody's got one. And so we live in the information age. So these stories are a dime a dozen, like we we've all read them. We've seen people getting rich, and

we feel like we're left on the side sidelines. And so if it starts to feel like at some point that you're the only one who isn't making money, hand over fest like, look at everybody else, and what's wrong with me? And so I think more folks feel like they're being pushed towards speculative investments just to keep up.

And one of our favorite investment writers, Michael Battnik, he wrote recently, everything we've been told not to do from a financial planning standpoint is paying off right now, And I agree with him. I think, you know, that can be a frustrating experience, making us want to jump in on the trends in order to to nab some of these riches for ourselves. But but ultimately that leads us to playing the short game, and there's a lot of

heartache for a lot of people in that game. All right, real quick, the board apes n f T S. So do you not think that that's just conspicuous consumption right, Like it's just the celebrities signaling that they've got a lot of money. Uh, and it's being disguised as an

actual investment. I think that there is something I played here, Like they're they're telling themselves it's an investment, and then the common folks like us, they're like, we're convincing ourselves that, oh no, they actually are investments as opposed to just being just like lifestyle essentially. And if you're on the ball and you're savvy, you can potentially make money in short order, but that is also the recipe to lose a lot of money in short order. So yeah, you

just never know what's gonna happen there. But but I agree, there's there's a whole lot of signaling going on out there right now. And that's really that's really what we're saying here, is that riches are are there's a lot of signal, there's a lot of noise, and when it comes to wealth, like a lot of it's hidden and it's not flashy and nobody sees it. But but for you, for your peace of mind, for your ability to pursue

financial independence, like that's the way forward. It and specifically with n f T s, it feels like it's just so much more obvious, right because like with something like a house or a really fancy car, like there's an argument there where you say, oh, no, I really like to drive this car. I love how fast it goes, or I love the smell or whatever, like I love the craftsmanship. When it comes to these n F n f T s, like you can't say there's anything about

it that you truly appreciate. Dig My new two Twitter profile pick. It's sound stupid. So I feel like there's like hardly an argument there that you're actually gaining value from some of these these things as opposed to it being signaling and showing to others that you have this wealth. But what this means, though, is that folks are putting their money towards ridiculous uh pursuits, different ridiculous quot unquote investments. We saw that there's this invisible sculpture that recently sold

for eighteen thousand dollars by this Italian artist. Pretty ridiculous. Just think about that. It's an invisible uh school ulture statue. Excuse me, sir? When will that invisible sculpture be delivered to my house? Have any of these folks ever read I delivered it last night? You didn't notice read the King's new clothes. Uh, there's every you might remember remember the like a banana? It was a duct tape to the wall in this art gallery, Like was that last year?

And then things sold for like hundred and twenty dollars. Uh. This is completely illogical. It's truly bonkers, And I want let's get like kind of a psychological here for a second. There's something that is known as the Dunning Krueger effect, which shows that the less you know, the more likely you are to overestimate your abilities. It's very different than the Freddy Kruger effect, by the way, and much less scary.

But there's this chart that accompanies this effect. And basically, when you know very little right, which is far on the left hand side, it shoots up your your your confidence. Essentially, uh, you know a little, You're like, I know at all?

You're Basically it's kind of like where kids are, like, you know, little kids, they think they know everything, and what they call that peak, they call it Mount stupid because it's this peak it's before you know any thing, and once you gain some more knowledge, you realize how much you truly don't know. They call it. I think that's called like the value of despair or something like that. But then over time, as you truly gain more knowledge and experience, you work your way out of that and

eventually you do know something. And so I guess basically, what I'm realizing is that what we're trying to help folks to do is to not make significant financial decisions while they're standing on top of Mount stupid, because uh, they can have incredibly lasting impacts, and we want you to be wise with the money and what you do with it. Yeah. I think that's where a lot of people are Not that they specifically are stupid, but you're right.

There is a point at which we think we know something, but we know very little, and we we get over confident. We make quick decisions in an attempt to then make money, but we end up losing that little money that we had that should have been funneled toward more traditional assets

that actually help us build wealth exactly. Yeah. So if you've seen the different headlines of folks making bank on digital art or freshly minted crypto coins, it's terribly easy to fall prey to the belief that you, too, you can have the same outcome by following their playbook. Uh. And instead what you're doing is just throwing your money after some of these ridiculous investments. Yeah, and so we

talked about FOMO. I think that's certainly a major part of the reason that people are shoving their money into these digital assets that they know nothing about. And if everyone else around you is partaking, you start to look

like an idiot standing on the sidelines. People view your discipline as stupidity, and then you kind of maybe start to view your discipline as stupidity too, And it's it's hard to look like a dummy or to be on the outside looking in, especially if you know the folks around you are are making money quickly, they're they're potentially getting rich faster than you are. And then you feel like you need to partake in riskier investing behavior in order to close that gap or you're gonna get left

behind even more. But that is not a good place to be because the end result typically means you losing money, not building wealth for your future. That's right. So on the path to getting rich quickly, you might fall prey to scams. You might make some poor investing decisions. You also might find yourself over working in order to build up your income quickly so that you can get rich in shore or order. Uh, sort of that nose to the grindstone mentality where you're trying to you know, stack

some Benjamin's Uh, you find yourself exhausted. There are going to be sometimes in your financial journey when it makes sense to expend some extra energy in order to you know,

more quickly achieve a goal. I'm specifically thinking about maybe working a second job or picking up a side hustle if you're looking to pay down some high interest rate debt, or when you had a day job your own business, but you also flipped the house, it was like, all right, there's a reason I'm I'm going in this direction, or picking up some merntal properties. That becomes kind of a side hustle too Exactly. You're right, there's a method to

that madness, but people can go too far. Well, that's what's so hard. It's like kind of once you start going down that path, you have to have the self discipline to put a check on yourself and a preoccupation and in trying to get rich, it can change your priorities quickly, can cause your life to become imbalanced. Like I'm thinking about when it comes to like our different

relationships that we have. I think early on in our careers, it can be really easy to neglect our relationships, right, Like I'm thinking about for a lot of folks who went to undergrad they are in a very relationship rich environment, Like you're surrounded by friends, You've got very few responsibilities, and you have a ton of time, and so what that means is it's incredibly easy to make these relationships.

You graduate, then you go off to work, and I think it can be so incredibly easy to take that nose to the grindstone mentality and you get sloppy with your old relationships, you don't pursue new relationships. And we all know that relationships are key to happiness and in a sense of fulfillment in our lives. But that is something that we uh push off to the side in pursuit of success, you know, with with our jobs, um

or you know, maybe you do have friends. There are other ways that we sacrifice though, right Like I'm even as I get older, I think about physical health because being healthy, you know, like as a twenty something year old, it's pretty easy. It's it's easier than it is now. Like I'll say, in the further I get from my twenties, I realized that, like, this is something I'm going to

need to be more intentional with. But there are just so many things in our lives that we can push to the margins in an attempt to, you know, get rich a little more quickly. Yeah, I think you're right, and and we all have to kind of assess those priorities in our own lives so that we don't let things get too far out of whack in pursuit of quick money. And so, yeah, how do we actually build wealth?

What are kind of the tenants that that we would suggest, um that make building wealth different and better than getting rich. We'll get to our thoughts on that right after this. All right, Joel, we're back. Let's talk about how to build some wealth, because you know what, it's not actually all that hard, surprise everyone. There's no secret formula, there's

no secret recipe. I mean what our friend Jail Collins, he wrote the book The Simple Path to Wealth, and it's like, yeah, there's some credible right, but there are a lot of folks out there who want to make it sound difficult, right, so that they can sell you their products or their services. And there are some folks who grew up in and maybe like lower or middle class households, who have a hard time accepting the belief that they actually can get to the point of financial independence.

Like to them, it just seems like this pipe dream, you know, like, how how's little me actually going to get there? I know that not everyone has the same abilities or gifts, but a whole lot more folks can be pursuing financial independence. Is just the belief that they can actually get there that's holding them back. It can seem so daunting that you are scared to, you know, go for it with actual gusto. But let's talk about some of the time tested ways that you can build

wealth that are wide open to most folks. It's not all about your mentality. I'm not trying to get Tony Robbins on you over here. There are some actual steps that we can take. Yeah, Matt, the next person we're gonna interview on the show has I think a really inspiring story along those lines. Looking forward to yeah, talking to that person and then releasing that episode here. But yeah, So let's talk about some of the tenants to to build wealth. And and one is that personal growth leads

to income growth, and I believe it. Yeah, Basically, the sharper your skills get, the more you become a valuable commodity for other companies or when it comes to your own thing. An important concept worth highlighting is what our friends Brian and Jonathan call the aggregation of marginal gains, and that means that, yeah, every little bit that you get better if you're getting better every day, that adds up and in a meaningful way. And it doesn't just

add I think, I think it multiplies. And so we would suggest that investing in yourself is crucial, and that means educating yourself so you don't fall prey to the Freddy Krueger or Dunning Krueger effect that we mentioned earlier. Um, the more that you grow as a person, the more likely you are to generate value for other people. And this is a big end to build wealth for yourself. That's right, You need to invest in yourself. You also

need to invest your actual dollars. Because one of the things we want to mention here is that it's important to mention that you you can't save your way to wealth. You have to actually take some risk in order to build up an army of of dollars. Uh. And that's become abundantly clear of the past eighteen months as inflation has reared its ugly head and savings rates have been

close to zero. Do you know that if you had a dollar in one and you put it under your mattress, it would have lost of his purchasing power by the time you got two. And so if you do nothing. That dollar that you has sitting there in the bank earning nothing is going to get devalued. Having some of your money in a safe haven like a bank, it's smart, but if you overdo it, and if you neglect to invest, it's like trying to go up an escalator that is

going down. So keep in mind that you can never get wealthy if you focus on savings only and you refuse to become an investor. Yeah, if you're so focused on savings to the exclusion of investing, you better be out earning everybody else if you want to build wealth, it's it just makes it that much harder. And so yeah, when it comes to investing, matt Um low cost index funds are, of course the easiest way to build wealth. Index funds are incredibly simple to understand, and they come

with little to no fees. Here's the thing, It's not going to happen overnight though, right. This is building wealth, not getting rich, and so for most folks it takes multiple decades. But here's we would say dollar cost averaging with every paycheck is one of the most sure fireways for you to build wealth and even to achieve millionaire status. It makes me think. On a recent Friday episode, you know, we we shared the results of a Fidelity study which

showed that the US has all the millionaires. Yeah, there's this record number of people who in their four one K, I RA and TSP had become millionaires. These just right straight up everyday retirement accounts that have annual contribution limits. And so you know, it takes at least a decade plus for almost all of those people to get to that million dollar standing. And so they don't do it overnight.

Even if you're maxing out let's say two accounts like the four one K through your work and a roth IRA, it still takes a good long while to get to the point where you've got a stash of more than a million dollars. But the key here is that it is doable, and it's this like replatable process that a

huge percentage of Americans. It sounds dumb, or it sounds like it's going to go really slow, it doesn't sound like it's possible, but it's gonna help a ton of people get there if they just trust the process and continue to shove money into those accounts week after week, month after month, year after year. Yeah, and a major reason that those retirement accounts have swollen over the years, uh and even decades is due to the fact that they're running on autopilots, right, So part of that process

is automating those investments. Uh. It's it's hard to remember to send money aside every couple of weeks or every couple of months. If you want to build wealth, you can't just hope you're discipline enough to think about your future self in the moment. You need to build those contributions into your monthly budget if you're funding inn I ra A, and then set up percentage of your income to go into your workplace retirement accounts if that's available.

You want to get that ball rolling in. Over time, you're going to experience those compounding returns. You know. The ultimate goal here is to have your money working for you without you having to lift a finger. The the idea is to create this machine that is basically manufacturing you know, dollar bills on your behalf because of those years of hard work and dedication that you've been put in on the front and now your money is working harder for you than you are. That's right. Yeah, it's

exchanging what human capital for your capital. Doing that heavy lifting. And and I want to talk about shortcuts, mat because that's how we kind of started this episode off, was you know what, there are a lot of shortcuts that you can attempt to take that are actually gonna backfire

on you. Smoking was the example that we gave. But I do want to say and encourage people that there are certain actually healthy shortcuts that you can take on the way to building wealth that aren't in this like pursuit of flashy riches and and and you can basically make that wealth building journey happen more quickly. And I'm talking about ways that don't require you to speculate or to um try gambling on the third horse in the fifth race or something like that. But here's the thing.

Those methods actually require just greater levels of sacrifice for you. It means working harder to to get that raise. It means living frugally um, which is a good principle in general, and it might mean living differently from lots of folks around you. We would suggest things like driving an ugly car. It's like that's like one surefire way to prioritize building wealth overlooking rich. That is one of the big line items in most people's budgets every month is what they

pay for transportation. And so if you're willing to sacrifice a good looking ride for a much cheaper ride, then you can funnel a lot of that extra money towards your future self. Drive that ugly car and live in that ugly house. Your life should be characterized by ugly. I mean you can still look beautiful, but that you know,

that's that's different. And and instead of buying, yeah, like an XE our house for your family, like you said, house hacking maybe even in order to generate additional income, Like that's one of those things where the pursuit of riches, you're not willing to go to that extent. You're not willing to put yourself through the ring or for a

couple of years. You know. We talked with Craig Kurlap, who is like the house hacking guy, and he talked about living in his living room while people were living in the bedrooms and he was making money every month. But that's not necessarily a fun way to live, but it it is a reasonable short term move if you have a greater goal in mind, which is to build wealth.

And so for Craig, he has found all these ways to house hack that have maybe made him uncomfortable for a period of time, and now he has this money making machine that's allowed him a whole lot more flexibility. And he's still really young. And so it's not that you can't reach financial independence in a shorter time frame, but the route that you take to that endpoint just matters a whole lot. That's right, man. And you know, the great thing about building wealth is that it's not

terribly difficult. It doesn't it doesn't take up a whole lot of brain space. If you're trying to get rich, we think that you are likely going to be focusing too much on money. And because of that, part of the reason that we're partial to wealth building over trying to get rich is because there are a lot more important things in life to focus on the just money. You know, we talked about this on the show a decent bit, but building up more and more financial wealth,

it's not and unto itself. We want to encourage you to dig deeper and to figure out what we call the why behind your money, you know, like we want you to ask yourself what goals are you shooting for? Like, what do you want your life to look like. And so to that end, we actually have the PDF to help you to come up with a money mission statement. It is freely available. Just go to the show. No, it's for this episode. Uh, and there is an email sign up there where you can have that worksheet showing

up within your inbox. Yeah. It's a quick two page exercise where we try to present some helpful questions so that you can kind of figure out what what is my personal money mission statement? And Yeah, we think spending thirty minutes with a document like this could be really informative for how you view money and then how you

pursue building wealth in the future. Yeah, thirty minutes now or a lifetime, because you know, like this is one of those things where like building wealth, like we're talking about earlier, it's easy, it's incredibly simple. But the reasons why you want to build your wealth, I mean, that's a question that only you can answer. Like, that's something that's gonna take a lot of time, a lot of mulling over. Into's something that's going to change over time.

It's something that is going to have a massive impact on your ability to generate that wealth. And so this is something that we don't want you to skip, is what we're saying. But Joe, lets let's shift gears. Let's get back to the beer that you and I both enjoyed during this episode. This was a tropically by creature comforts out of Athens, Georgia. What were your thoughts? So? I think I mentioned at the beginning of the episode that this is maybe at this point the classic southern

I PA and Atlanta. That's kind of what you see people drinking on a nice spring or summer day, which now we're in I don't know, it feels like spring weather here, no, that which is nice. I mean literally, coming down from lunch, I saw a bunch of carpenter bees flying around. That's like, oh, that's how you know springs, That's how you know. It's forget the groundhog it is, It's more about the carpenter bees. I would say that this I PA is really balanced. It's juicy, but it's

not over the top. It still has kind of that old school grapefruit bitterness that a lot of I p A s have. It definitely is like this blending of the old school and new school I p A. And but it's just incredibly flavorful. At the same time. So it's no wonder. I think it's the branding, but also the taste of this beer that made this beer such an instant classic when it came out. I don't even know how many years ago that was now seven years ago, but in a minute, but this is the beer that

put Creature Comforts on the map. Basically, like I remember when these when these Tropicalia, when it was hitting the shelves, like people were lining up, like it was flying off the shelves. It was difficult to get your hands on. It was basically like a beer celebrity. It's like, oh, have you seen the have you seen the new Creature Comforts beer? Tropicalia? And people were following the truck to get something seriously. Uh. And it's also the one of

the beers of choice of thor uh. So if you watch some of the Marvel movies, like some of the Creature Comfort sperit like actually, I think we talked about this with Athena. That was one of the beers that thora was drinking during Avengers Endgame, but Tropicalia was one of the other ones that he was drinking. So you can actually see this beer on the big screen, which

is pretty hilarious, I think, But I agree. Yeah, this is a well balanced beer, got a little bit of that bitterness, but it doesn't have like that orange juice vibe going on. It doesn't have like that sharp blue cheese flavor that I tend to associate with double dry hot I p a s. Like you said, this is a classic I p A appropriate hailing from the classic city.

So Joel, that's gonna be it for this episode. Like we mentioned, we will have that worksheet available and you can get that worksheet just head to the show notes for this episode up on the website at how the Money dot com. Yeah. I've never been a teacher, Matt, so I don't usually get to assign homework, but I love it that we get to assign a little bit homework today to our listeners. And so yeah, go grab that on our site. And this is worthwhile homework too. Yes,

I agree. I agree. It's it's that kind of deep. Anybody that you talk to who's been doing postal finance for any length of time, they know that you need to do some soul searching to to end up handling your money better. Like you have to come to either a moment of crisis in your life or and then that leads you maybe to kind of figuring out your why behind money. And we think that this, yeah, that this worksheet is going to help you kind of do some of that seeking. It's so important and nobody else

can answer these questions but you. That's right, all right, So um yeah, Matt, that's gonna do it for this episode until next time. Best Friends Out, Best Friends Out the numberso