Some people are constantly exhorting us not to buy this or that thing that might set you back a couple of bucks. We're warned again spending on things these people deem extravagant. Don't buy a sailboat, never buy a new car, never ever buy a sports car. The spending s goals even tell us don't spend five dollars on a latte. Susie Orman insists it'll ruin your retirement. I've looked at the numbers on all of these criticisms, and to be blunt,
I find them wanting and notwithstanding of close scrutiny. I'm Barry Ridolts, and on today's edition of At the Money, we're going to discuss how to buy what you love and still live within your budget. To help us unpack all of this and what it means for your bank account, let's bring in Carl Richards. He is the author of the Behavior Gap Simple Ways to Stop Doing Dumb Things with Money. His recent essay, The financial Benefits of Buying what you Love, is exactly on topic for us today. So, Carl,
you're known as a pretty modest guy. You don't flash around fancy watches or drive expensive cars. Generally you're not a self indulgent guy. But you went out and purchased a five thousand dollars Moots trailbike, and as you wrote, you said it was one of the best financial decisions you've ever made. Explain, Yeah, for sure.
And we can also get into the fact that I do own a big truck, which we know people say is really bad idea. So I'd love you.
But you live offen the you live out in the wilderness. For your truck actually touches dirt. It's the people who live in suburbia and the big trucks never leave the pavement. Why are you spending all this money on off road capabilities that you're not using.
I'm with you there. We use it routinely and regularly, and it's one of the greatest sources of happiness in my family because of the places we go. So the mountain bike. And by the way, that mountain bike is where you know, it would cost a lot more today if somebody bought the same bike, so the mountain bike. Listen,
this idea. It's so crazy to me, this idea that we might know what brings other people happiness and joy, and that it's our job to tell them that it's ridiculous to buy their morning latte or the truck or the bike is just I get equally as upset about it as you do. So the bike, I just had a simple calculation, you know. It was it was cost per unit of fun. Now it's my trail running shoes that I use to help me gain elevation in the
mountains almost every day. Those I use. Are there one hundred and fifty dollars running shoe, right, And if I take the amount of fun I get from those, they're one of the best purchases that I ever bought versus maybe for me like a waterski boat, right, a water ski boat that I used three or four times a year. I mean I grew up water skiing on the lakes here in Utah. I think it's one of the funnest things I could ever do. But the cost is so much higher. When I divide that per unit of fun,
I don't get the same outcome. So my thought is, like, look, the greatest source of happiness that we have, and the research is pretty clear about this, is memorable experiences with the people that we love. Right, going on a bike ride with my kids or my wife is one of the most important things I could do, So I'm going to spend the money.
And you're pointing to something that there's a lot of data from the world of psychology and behavioral finance that experiences are the things we remember and are worth spending money on as opposed to just accumulating bubbles for their own sake, and what seemed people seem to forget about are the purchases that allow us to share time and experience with friends and family totally.
And it's important to note those do not have to be expensive. My trail running shoes are not that expensive. And in fact, let me tell you this super interesting story. I grew up. I never traveled anywhere. We didn't. We didn't have any money growing up. I didn't I don't even think I had a passport until I was married and we had this seat. We had this year where because of some speaking engagements in the book launch, we traveled a lot and I took the family to a
lot of places. I think we went to three or four different countries, and my son, who was like seven or eight at the time, at the end of the summer, I was like, hey, Sam, what was your favorite memory from the summer, and we had been to Amsterdam, and we'd been to Paris, and we'd been all these cool places. And he thinks for a minute, and he says, do you remember that time? Do you remember that time we just threw rocks for an hour in the pond out
behind the house. And I was like, bro, He's like, yeah, no, the time. So it doesn't have to be expensive, and it can be. And if you've got the money and you love an amazing Italian sports car, who am I to tell you that that's not right now. The problem, I think is when we buy things we think will make us happy because everybody else tells us they'll make us happy, and then we discover that we don't really
like them. Well, we can talk about how to run experiments around that, but I think this whole thing starts with getting clear about what actually brings you happiness. Well, once you experiment and find a thing, spend the money. For heaven's sakes, what's it for?
Huh. So that's one of the things I think some of the Puritans get wrong. They focus on the cost, not the budget. If you can afford us boat and you love sailing, well, go buy a sailboat. It seems that all this finger wagging about spending any money of any sort is really misguided. And by the way, the first boat I bought was a short sale during the financial crisis that I think I paid twenty grand floor split with my brother and could probably sell it today
fifteen years later for exactly what I paid for. So it's not just a function of the dollar amount, it's can you afford that that item and what sort of pleasure is it going to bring you and your family? Are we focusing on the wrong things. If you can afford a nice bike and you're going to use it, why not make that purchase.
Yeah, it's so interesting. I think there's a piece of this, and I've been trying to unpack this for a long time. I just had a conversation on my podcast fifty Fires about this exact thing, Like, I think there's a a piece of this you pointed to Puritan. I think there's a piece of this that's related to this endless praise and nobility of delayed related to this endless praise and nobility around delayed gratification, And it could even be all the way back to like when I get to Heaven,
when I get to heaven, I will be happy. And I think we just need to start realizing, like, look, what's wrong with being happy now? And how can I view something as an investment instead of an expense? And the investment has a return, the return of spending an hour with my son throwing rocks in the lake, right, how do you calculate the value of that return? The return of the fifty bike rides I went on with my daughter out my back door on that bike. How do I even put a number to that return? And
what I think we miss is like who cares? And what's so funny, Barry is we all know this, Like it's cliche at this point to say, like on your deathbed, you're not going to be thinking about your bank account, right, You're going to be thinking about the time and the experiences that you had with the people you love. Right, So we know it. I think we just we just
have a hard time doing it. And then the last thing, it might be related to some of the fear, Like our whole industry largely is built on fear of the future. Are you saving enough? Are you gonna have enough in retirement? We've built into people this idea that if you're not doing everything you can, you are going to be destitute alone and living under a bridge, right, And so to unpack all of that takes a lot of work.
So let's talk about quality. You made reference to the advantage of buying something that's high quality, very well made once, rather than repeatedly replacing a bunch of lesser quality items that don't last, don't go the distance.
Yeah, I think.
Let us.
I think there was an old quote I can't remember itself, just paraphrase. It was something like we can't I remember it was something like we can't afford to buy cheap things.
That makes sense. Let's talk cars. I saw this headline. It cracked me up. Buying a new car is like taking forty thousand dollars and setting it on fire. If you can afford a new car and you want to go pick the right car and the right callar that you want, what's the problem buying a new car?
It's so interesting to me, Like like that. I have a friend who if it rains outside and you're in his car, your feet get wet, like like the floorboards arrested. Right.
I had one of those in college.
Yeah, yeah, I mean he loves it and cars are not a thing cares about. In fact, I had this conversation in Morgan Housel. Morgan says he like always he always think it was on the podcast. He always feels like he should be a car guy. He was a valet in la like he always so. Every couple of years he runs an experiment which I just thought was beautiful when he's on a business trip and he's renting
a car. Every couple of years, he's like, huh, you know what, it's an extra two hundred bucks for the day, give me the Porsche. And he says it doesn't take him even getting off the lot before he's like, you know what, I admire this thing. It's beautiful, it's amazing, but you know what, it just doesn't give me what I need now. He said, if it did, I would buy it, but it doesn't. And so I think some
people it's just not a thing. That's fine. And I think what this all comes down to is getting clear about what's true for you, not necessarily what the Instagram people say or what the scolds say. Either way, run some experiments, find out what brings you value. You may love. I mean, I really want this truck. I want an old truck to drive around, Well, I found out the best way to have an old truck to drive around was buy a new one and keep it for thirty years.
Beat the hell out of it. That's exactly right. So to wrap up, when we look at at the world of consumer purchases, there are a few lessons to be learned. Obviously, stay within your budget. If you can't afford something, well, then don't buy it. But if you can't afford something, buy quality. Buy the things that will give you experiences with your friends and family and loved ones. Buy what you love. You won't regret it. I'm Barry Retults. You're listening to Bloomberg's at the Money Norway h