You're listening to TIP.
I decided to call this episode Reflections on Money, Life, and Happiness.
The word reflection seems most fitting to hit the right tone.
They're not commandments, not frameworks cut from stone, and certainly not universal truths.
They're simply observations, things I've noticed and patterns I keep bumping into.
Money, life, and happiness are strangely intertwined.
My reflections are admittedly anecdotal.
That is the premise of this episode.
They might apply to you or they might not.
I'm still learning, still adjusting, and still getting a lot of things wrong.
But if any of these reflections help you at the margins even a little, then it's well worth our time together today.
And through more than 180 million downloads, we've studied the financial markets and read the books that influenced self-made billionaires the most.
We keep you informed and prepared for the unexpected.
Now for your host, Steve Broderson.
Welcome to The Investor's Podcast.
I'm your host, Dick Brodersen, and let's jump right to the first reflection of the intersection between money, life and happiness.
Number one, money magnifies who you are.
Today, when I look at my group of friends, their financial wealth spans a wide range.
Some can barely make ends meet, whereas others have more money than they could ever use in multiple lifetimes, and most are somewhere in between.
For those of us who are in between, and even more so for those who can afford anything in the wildest dreams, I found that incremental happiness is the best.
And so what do I mean by that?
Well, let me use a metaphor here about traveling, and you can replace that with any type of consumption good.
If you fly economy and you suddenly get wealthy, don't fly private right away if you want to optimize for your happiness.
Get excited about upgrading to economy premium, get accustomed to that.
Then get excited about flying business class.
Then get excited about that and then, whenever it wears off, fly first.
And after that, perhaps you can get excited about flying private.
Wait, you say, there are at least two fundamental problems with that.
The first is that very few people suddenly get a windfall and can go directly from economies of flying private.
The other thing you notice is if you should metaphorically fly private in the first place.
Hence whether increasing your consumption is a game you can't win and therefore shouldn't play in the first place.
Lifestyle creep is difficult to resist.
It doesn't look like a big decision.
It looks like a series of small upgrades that feel harmless.
But if you're going to let your lifestyle cost increase, I encourage you to do it slowly and intentionally.
Small, gradual changes tend to give you the most satisfaction per dollar because you're not numbing yourself with too much too fast.
But the problem, of course, and the benefits of nice things is that they are, well, nice.
And, of course, if you can avoid lifestyle creeps altogether, you can argue that it might even be better.
But most of us are human.
So once you cover your need-to-haves and start on your nice-to-haves, be deliberate about doing it slowly.
Regardless, I found that money tends to magnify who you are.
Some of my friends are kind, and with money, they're even kinder than before.
And then some of my acquaintances, and I say acquaintances and not friends here, they're jerks.
And now with money, the jerk genius on steroids.
My past as a poker player has taught me important lessons about biases.
Most poker players think by definition that they're great players.
They will look you straight in the eye and tell you that if they win it's because they're playing great.
And when they lose with their ineligible will, it's only because they're unlucky.
Now, let me tell you, all poker players play horribly at times.
Let's say they play their C game.
Now, Also, all poker players have times whenever they play great, let's call it their A game.
What poker players mistake is that they compare their A game with others' C game.
So of course, they always find a reason to believe that they're way better poker players than they probably in reality are.
And I've carried those learnings into other walks of life too.
I see the same things in how we pass judgment on others.
We all have chapters we would rather leave unpublished.
And we shouldn't judge a person on their highest high or their lowest low.
Most of us spend 99.9% of our lives somewhere in between.
So be kind to yourself and be kind to others.
The person you speak to might be playing his sea game.
And you've been that and you've done that too.
And if money magnifies who you are, it naturally sparks the question of how you can spend your money on being the best version of yourself.
Of course, this is easier said than done.
And one approach I would recommend to you is to spend your money on how to avoid being a bad version of yourself.
And I hesitated to use this example because I know I speak from a position of comfort.
So please take the following example, literally or metaphorically, whatever best applies to you really.
Now, I work from home today and I live in the north, where you don't see the sun past 330 in the wintertime.
And so whenever I had an office job, there were simply days whenever I did not see any daylight at all.
And I left in the dark, and I returned in the dark, and it wore more on me than I'd like to admit.
Now my calendar is open and I make sure to spend time outside while it's still light, every single day of the year.
But I recognize this may not apply to you.
You may enjoy the office, have no choice in the matter or simply not care whether the sun is out or not.
But my point is that it's hard to go to the counter at your local store and ask for 100 worth of happiness.
The world just isn't that kind.
An investment with a higher expected return is to ensure you are less frequently a bad version of yourself.
And it might look boring on Instagram, but it makes a big difference in real life.
A slightly more expensive condo with natural light, perhaps a slightly nicer gym close enough that you actually use it?
I don't know.
None of those things will likely make you happy in the moment.
But if you think about your triggers, that might cause you to become short-tempered, resentful or numb, and money can help you avoid that.
Well, perhaps you want to magnify the version of yourself who has slept, seen the sun and isn't running on fumes.
Reflection number two, I decided to call it grow rich, grow kinder.
Now, power and money are not the same, but they tend to walk hand in hand.
And one of the surprising problems that comes with having more of both is that you can suddenly afford to be more honest than before.
Remember when you started your first job at the bottom rung of the ladder, laughing nervously at your boss's bad jokes?
I certainly can.
Fast forward, and you might be the one in the position of power.
Perhaps now you're the employer speaking to an employee or job candidate, or perhaps you're in a group of friends where you unintentionally steer every decision where to eat, what to do simply because no one wants to be the one who disagrees.
Think of any situation where you, for whatever formal or informal reason, are ranked the highest.
We are taught that honesty is always the best approach, but many of us don't live that way.
And I want to say, for good reason, honesty works in theory.
It's much harder in practice.
So why does some of the most successful people in the world talk about honesty as a rule to live by?
Now, I think that there's a strong degree of selection bias.
The written powerful are often in situations where they can afford to be honest.
If they don't get their way and you happen to be the reason why, it's more your problem than theirs.
You know that, and they know that.
Now, don't get me wrong.
Honesty is a great rule to live by.
But just as a good chess player knows, it's usually wise to trade his pawn for a bishop, He also knows the rare moments when he shouldn't.
So, when you find yourself in a position of power and people begin laughing at your jokes and let's be honest, you're not always as funny as you think you are make sure you're kind.
The richer you get, the easier it becomes to be, well, honest, and the harder it becomes to be kind.
Not long ago, I believed honesty could always be managed if you deliver it with care.
Be direct, but saying kindly.
That was the rule I tried to live by. into a situation that challenged it.
I spoke with a member of a mastermind community who volunteers to sit next to people in the final hours, men and women who have no one else to sit beside them.
And I asked whether she would lie if a small untruth would give someone peace as they took their final breath.
And she said, yes, right away, no hesitation.
What a great example of neat principles around honesty, not always standing up to compassion.
And you might say rightly so.
This is an extreme example and I do understand where you're coming from.
But my point is that as your influence grows and keep in mind that I'm not necessarily talking about money and professional success here, but as your success slowly grows you may not notice how your interactions with others change.
And my suggestion to you is that you default to become nicer than you otherwise find it natural to be.
Seriously, every year, make sure to be even nicer than the previous year.
And I have to say, for many, it's like walking upward on an escalator going down.
You end up where you started, even though you feel like you've been in motion.
So don't be a jerk just because you can.
Be kind and compassionate just because you can.
Now, so does that mean that you should tell your jerk acquaintances to be kind and compassionate?
In my experience, no.
And that takes me to the next point.
The only one who wants to be changed is a wet baby.
Okay.
So whenever I was younger, I assumed that if something worked for me, it ought to work for everyone else.
It took me far too long to understand that people carry different stories, different wounds and different priorities.
And that all of these invisible threats quietly pulled them toward different conclusions about how they want to live.
With age, I learned a subtler truth.
Yes, some people are really more enlightened and more involved, but a different opinion isn't by itself evidence of lower ground.
And navigating that distinction is delicate.
It would be too easy to say that people don't want to change.
People do change, but they do not change because you want them to, and certainly not at the tempo you find convenient.
Now, you might have this friend who would do weird crypto trades.
And you want to teach them the gospel of value investing.
But how appealing is it to a new investor who just made I don't know 10x in a week on leveraged crypto?
Whenever you tell them there's this company, it's called Berkshire Hathaway and you get 10 annual return over the next 30 years.
You tell him that compounding is the eighth wonder of the world and he looks at you like you're speaking a foreign language.
For most people, change isn't a thing you can hand to them.
At best you can stand nearby with a lantern ready to show the path when they finally decide to walk it.
This, of course, is much easier said than done.
Other people are just as excited to learn that you think that they're wrong as you're as excited to be told that you're wrong.
And, as a result, sometimes we push people toward what we define as better behavior, with different notches, as if the human mind was a thermostat that could be adjusted by enough pressure.
And one of my favorite examples of how difficult this is is this SEC rule requiring public companies to disclose their CEO to media employee pay ratio.
The idea, of course, was that this daylight here would shame executives to restraint.
After all, what CEO wants to see a ratio of 200 to one in print?
Did it work?
Did CEOs truly feel ashamed about making a lot of money?
No, it failed as predictably as the 2006 rules that forced companies to disclose executive pay in the proxy statements.
No CEO opens his proxy, see that he earns 200 times as much as the average employee and thinks ah yes, clearly the board must reduce my pay.
That is just not how the CEO species operate.
The real thought is somewhat closer to.
I wonder what other peers at comparable companies are making, and whatever it is, I deserve more because I am better than average.
Now you might object that half of the CEOs in the SP 500 must, by definition, be worse than the average and should therefore be paid less than average.
A fair point.
But that is not the psychology of power.
No one climbs the corporate ladder by believing he's worse than the average.
Especially not at the one thing he prides himself to be very good on, being the CEO.
And this is not a modern phenomenon.
You know, George Washington Hill, president of the American Tobacco Company, was paid more than a million dollars in 1930.
A fortune.
Perhaps he once imagined that a million dollars would make him never want another race?
Ah, I doubt it.
Humans are built to desire things others do not have.
A man once believed that if he owned a car, he would never want for more.
If anyone truly thought that, it was only because almost no one else at the time had a car.
And people sometimes say the same about flying private.
If I could do that, I'd never need nothing else.
But that, too, is a fantasy owned by those who don't have a private jet yet.
As soon as everyone has one, we will want two.
So where does this leave us?
Human nature has never been particularly responsive to nudges dressed up as moral lessons.
So come to see it more simply, if you like.
You hold your values quietly and consistently.
While people change, they don't change fast, never at the pace you want them to.
If you don't accept that everyone else is running on their own internal clock, shaped by experiences, you will never fully see.
You'll be banging your head against the wall.
If and when they finally change, it's because something inside them finally shifts, not because you arranged the state lighting just right for them.
Reflection number four, surround yourself with people who play cricket.
Now, one common piece of advice here is that you're the average of the five people you surround yourself with.
When I heard that More than a decade ago, I thought it was all an exercise in hanging out with rich and successful people and then having something, whatever.
That something was rub off on me and help me rise through the ranks.
Today, I look at it a little differently.
Now, don't get me wrong.
The advice is still very solid that you should just surround yourself with people better than you, but I learned that there was some nuance to it that I didn't know the first time I stumbled on the principle.
When I think better, I'm thinking of people with values and life philosophies you want to make your own.
Let's take a quick break and hear from today's We'll see you next time.
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Let me play this clip with my friend, Guy Spear.
Notice the concept of, it's just not cricket.
I'll take you into even more esoteric sport.
And the famous phrase is, well, that's just not cricket.
And this idea that there are rules that are behind the rules.
And so the rulebook doesn't cover it all.
There's plenty more.
And there's a kind of a shared understanding of what this game is supposed to be about.
And that should modulate your behavior.
And in a way, I mean, that's just not cricket.
And it sort of comes with things that you don't do, even though they're not in the rulebook.
It comes down to understanding perhaps that people in that game are not playing to win.
They're not playing to win that game.
They're playing to win the infinite game, which is the game of continuing the relationship with these people and making them like you and want to play another game with you, and displaying your personality as being willing to take the win when it's acceptable to take the win, but also being willing to stand back and not push your advantage to the very limit, because it would be kind of not right to do so.
And actually, I just feel compelled to say it.
I think that I don't know if you're following this women's boxing at the Olympics.
And, if you take a very, very narrow reading of the rules, as the International.
So there's this Iman Khalif woman, and I think that she is now in the finals with another person with XY chromosomes, which are kind of male chromosomes.
If you read clearly, according to the rule book that the International Olympic Committee has written on how you define female and male and what allows somebody to compete as a female, they meet the criteria period.
End of story.
But when you see these boxing matches between somebody who's an XY chromosome, which is effectively a functional male, versus an XX chromosome, which is a female, what you see is, even if they're labeled female, you see a man punching a woman and it offends that basic sense of decency.
And that would be an example of that's just not cricket.
It's what the British would say.
I think the concept of it's just not cricket is so powerful and can be applied to so many walks of life.
One of the things I love in business and in life is empowering other people to help them for the sake of helping them.
And I learned that the best approach is not to expect anything in return.
It's wonderful if it happens, but if it doesn't, being useful is the reward in itself.
Now, TAP has helped many asset managers on and off the show raise capital for the funds, and it's generally been a good experience.
But then, not too long ago, we learned that one of the asset managers we had helped has tried to post a team member from TAP.
And going back to Guy Spears' wonderful example here there's nothing illegal about posting someone from a small company that's helping you and expecting nothing in return.
And apparently in modern boxing you have instances when functional males can punch women and win medals, but it's just not cricket.
And this individual is, for all intents and purposes, very successful.
But perhaps you don't want to be surrounded by someone like him.
And of course, you don't have to be too hard on them.
People have different life experiences and all their own reasons for doing so.
Wish them well, mean it, and then don't look back.
Rather surround yourself with people who play cricket, people who have beautiful values and believe someone else doesn't have to lose for them to win.
Reflection number five, you can have anything but not everything.
A decade ago, I was ambitious and my drive for success was much higher than today.
I read book after book about Silicon Valley, and the idea of being a serial entrepreneur really resonated with me.
And as the years went by and we became more successful, more potential buyers approached our company and I would sometimes dream about what kind of valuation we could get.
Now I read this book about Spotify called Play, and it really struck a chord with me in the situation I was in at the time, just on a, of course, much smaller scale.
But the decision was the same.
At some point, Daniel Ek, the co-founder and CEO of Spotify, had the opportunity to go big.
And to do that, he would oust the old guard and bring in music incentives from the big labels.
And when he did that, the culture radically changed, but the bottom line went up and to the right.
And I felt I was at a similar crossroads.
TAP could at the time go much bigger if they wanted to.
Again, not Spotify big by any means, but something that's called the meaningful.
We were roughly at a 30 million valuation at the time, but I could easily see us at another zero and, who knows, even more, whenever I was daydreaming of what would happen if we doubled down.
But, and this is a big one, it would require a different team and a different culture.
Not a better team and a better culture, but it would be very different.
I was thinking a lot about Jeff Bezos and his regret minimization framework at the time.
Would I regret not taking my shot at going back?
And, of course, the regret.
Minimization framework works both ways and the decision was essentially very easy.
I would regret parting ways with wonderful people much more than missing out on the search for money I didn't need.
Now, Jeff Bezos and Daniel Ek thought about it in the same way and came to a different conclusion than I did.
Regret minimization doesn't mean that you have to go big and change the world.
Yes, the world belongs to the discontented, but sometimes happiness may lie with the contented.
Business is essentially a bundle of relationships with all of your stakeholders.
Successful business owners handle relationships well.
It's different than with friends and romantic relationships, but the principle, I would argue, is the same.
I have a wonderful friend.
Now his religious and spiritual beliefs are different from mine, and he never misses an opportunity to tell me that I would live a better life if I believed in what he did.
And I sort of try to avoid the topic, but he always finds a way to tell me that he has seen the light and I haven't.
And who knows?
He might be right.
But my point is that he has a trait that isn't my favorite, just as I'm sure I have a trait that bothers him.
And ultimately, our differences are not a big deal.
He is a wonderful friend.
And I learned that you can have anything you but not everything, in business as well as in life.
And I would be very sad to go through life without such a wonderful friend.
And we live in a time where we're used to getting everything customized to us.
So whenever I would go on YouTube, I get served content, the algorithm things I would want to watch.
And if I get bored, after 10 seconds I can jump to another video that promised me eternal youth, ultimate riches or whatever the YouTube deities are promising us these days.
Now, I don't think the algorithms are making us happier.
They tell us that we can have everything we desire, but we can't.
We may be able to get anything, but we certainly won't be able to get everything.
And I was not surprised to learn recently that singlehood is on the rise throughout the developed world.
Among Americans age 25 to 34, the proportion of living without a spouse or a partner has doubled over the past five decades, to 50 for men and 41 for women.
Now, how can you find a spouse who is customized exactly to your needs, who looks exactly the way you want them to, who has the education and wealth you want them to have?
And, of course, if you don't feel it's perfectly customized to you when you want it, you can always swipe.
Not good enough?
People don't work that way.
We're all imperfect and while everyone can get a wonderful spouse and a terrific friend, in life as in business, you can get you guessed it, I've said it more than once anything, but not everything.
And the sooner you realize that, the happier you'll be.
Trust me, I speak from better experience.
Reflection number six, what is your unfair advantage?
In business, investing in life, you tilt your odds in your favor if you lean into your unfair advantages.
One of our salespeople would buy tickets to podcast conferences, or I should say he's not buying the actual ticket to the event.
He flies to the event, chats up people in the lobby, and just starts networking.
What an unfair advantage to have, and the reason why he's such a great salesman.
Another example, a friend of mine buys and flips houses.
His wife is a veteran, so they can buy a primary residence with no money down.
His father-in-law is a contractor who can get materials at cost, and together they're quite handy and they can do a lot of the renovation themselves.
And once they live there for two years, they can sell and pay no taxes on the gain.
In the game of capitalism, my friend has an unfair advantage.
Of course, not unfair in the sense that I begrudge people who serve the country and get privileges.
But unfair in the sense that if you don't have any of those advantages, it's just harder to compete.
It's like playing football and simply being faster than your opponents.
You need to be able to do a lot of things right to compete with someone who has advantages you don't have.
It's not impossible to win against unfair advantages, nor is an unfair advantage a guarantee of success.
But the latter is a good place to start looking.
Now, I don't think you need to spend many minutes with me before you see my shortcomings.
If I began listing them, we will never end this episode.
For starters, I can't lean into my expertise in, I don't know, semiconductors or cryptography.
It's essentially nonexistent.
And don't get me started on my fear of rejection.
But there are a few, very few things where I may have an unfair advantage.
For many people, money burns a hole in their pocket and they never seem to have enough to buy what they want.
I like to save and hopefully to gradually work myself down to only spending 10% of my income.
You could say that it's an unfair advantage to be wired that way.
So as I'm building my portfolio, I need to lead into that.
For example, if you spend within your means, you're not the whims of Mr Market as you would if you live above your means, which makes portfolio decisions that much harder.
Now, I don't know what your unfair advantage is.
Many of the best businesses were built on unfair advantages.
Bill Gates had access to a computer at unlimited programming time where almost no one else in the world had.
And it was easy for him, but not for others to stay focused and program for days on end.
He would literally fall asleep while coding, wake up and continue coding where he left off.
It was just one of his many unfair advantages. or take Jeff Bezos.
People often credit him with superhuman discipline or extraordinary foresight, but one of his earliest unfair advantages was simply how his mind is wired.
He had an unusually long time horizon, almost unnaturally so.
Bezos funded this wonderful 10,000-year clock bird inside a mountain in Texas.
It's designed to tick once a year and it has a so-called century hand that moves.
You guessed it once a century.
Yes, there is a reason why Bezos famously said that he's surprised when people congratulate him on a good quarter, because that quarter has been planned years in advance.
And it leads me to another reflection I want to share with you.
If one side of the coin is to seek out situation where you hold an unfair advantage, the other side is knowing when you don't and having the discipline to cap your downside.
In investing.
I could tell you to stay within your circle of competence, but I found the same applies to my interactions with people.
For most of my life, I was terrified of people seeing me at my worst.
And I'm not past that, certainly not fully.
But one of the quiet secrets of adulthood, at least for me, has been learning to tell people when I'm not at my best, to name it before it shows up in some awkward, unhelpful way.
Not too long ago I knew I was meeting a friend of my co-host, William and Kyle, and I wanted to make a good first impression.
But I also knew that the setting, a dinner party, just isn't my scene.
So I asked him if we could jump on a call before meeting in person, because I knew the version of me he would meet.
Just wouldn't be that good.
And the funny thing, when you're honest about your limits, people are almost always kinder and more understanding than you expect.
Think about it.
When was the last time someone told you that they were having a bad day and your reaction was great.
Let's make it even worse.
It doesn't happen.
Instead, you soften.
You see the interaction through a different lens.
Sometimes people you speak with are not as kind or they don't seem as present as you had hoped for, but you can brush past it quickly, because you had plenty of days where you just weren't the best version of yourself either.
And that takes me to the seventh reflection, welcome surprises of growing wealth.
And I have to say that it's with great hesitation that I included this segment in the episode.
And I think this is such a challenging thing to discuss because we all have such specific expectations and definitions of what a good life should look like.
And I'm also mindful of the fact that it might sound boastful as in oh, you have money, so let's hear how perfect your life is because of that.
And I hope it doesn't come across as that.
And, don't worry, the subsequent segment will all be about the unwelcome surprises of growing wealth.
So there are plenty.
But I've found that happiness is results minus expectations.
It's one of the reasons why you find these wonderful Buddhist monks to be quite happy.
They train to have low expectations.
And I have to say that until I turned 30, I always had someone in my life I didn't really like and took up more space than I wanted them to have.
And it basically boiled down to one thing.
I was put together with people I didn't want to be with.
And In school there was always someone you know not as in I hope the worst for you and your future kids dislike, but someone I would just prefer not to be a part of my life.
Sometimes it was something they said to me, but most often it was just like oil and water.
It's just I wasn't sure why, but we just didn't, well, click.
And of course, in school, you really can't do much about it.
In elementary school you're together with fellow pupils because you happen to live in the same zip code.
And even in college.
While you might have some interests in the same courses, it doesn't guarantee you have much in common or that you like each other.
And of course, after I graduated, I had different jobs with the same issues.
Some coworkers were just nicer to be around than others.
Now, running the MSS Podcast Network, I only work with people I like.
And I don't pretend that everyone on our 20-person team is the best friend I ever had, but I don't work together with people I dislike.
And whenever you add to that that I don't have a commute, I cannot begin to explain how much it has done for my mental well-being and how often I avoid being a bad version of myself because I chose the people I spend time with.
And so you know, whenever I was younger, I looked at business owners as people who were never off the clock, and perhaps I even sometimes felt sorry for them.
But I didn't question a life where you were frequently around people you didn't like.
I never tried anything different, so how would I know?
And today, I don't want to be off the clock.
I'm yet to need a break from being with awesome people who want to build awesome things.
They say that a man has two lives.
The second one starts when he realizes he only has one.
And this might be the midlife crisis talking, but when I realized how much it meant, to my happiness or lack thereof, to spend time with who I like, for as long as I like and where I like, you know, working with the right people became even more important.
I sometimes read books and listen to podcasts about the sacrifices people who work all the time make.
They're constantly sacrificing friends and family whenever they're working and vice versa.
And if you work with the right people in the right way, it might feel less like a trade-off and more like a blessing where you can have your cake and eat it too.
And of course, the best things in life aren't things.
It's typically your relationship with people for better or worse, that determine whether you're happy or not.
But money buys you time and flexibility to spend your time with the people you want to spend time with.
And, with all of that being said, I sometimes feel lonely.
Especially before I met my wife, I felt more lonely than I care to admit.
And I think one of the reasons was that I just didn't know many people who were on the same wavelength as me.
But then, of course, powered by the internet.
I today know hundreds of people who are, but few of them are in my proximity.
So I have to go to Omaha, around the world, to meet people who are as passionate about value investing as I am and take it for what it is.
But money makes that possible.
And you don't need an obscene amount of money to travel the world and meet kindred spirits.
But I just found that a regular average paycheck and two weeks vacation simply wouldn't allow me to do that.
And growing up, I didn't appreciate how important it was to find these kindred spirits.
Sure, I like watching movies, playing football, and hanging out with my friends.
But meeting people where you just get excited from having a conversation about the intersection of business, investing and life was never something I considered possible.
And surely, not in person, regardless of where they're based.
And it might be my cultural bias talking, but being a born and raised Dane, you're constantly told that money doesn't bind your happiness.
And the way this is typically proved and I put proved in quotation marks is by pointing to one of the wealthy individuals in the country and then have someone saying look, this guy died from cancer or look, this guy got a divorce.
It's likely because he liked money more than his family.
And I have to be honest, to me, it sounds like sour grapes.
Sure, if you are unlucky and get cancer, it may not be so that Any amount of money can save us.
But money still buys access to better healthcare and improve your odds, everything else equal.
And speaking about divorces, 4% of all marriages end in divorce.
And I know a lot of poor people who got divorced, and money problems certainly didn't make their relationships any better.
And yes, 99 or whatever kind of high number of problems does not go away because of money.
But some are just less bad if you do have money.
And while you can say that above a certain threshold, more money doesn't buy you extra happiness, it sure has the power to remove many negative emotions.
I once heard some say that rich people can spend a lot of money suing each other, which poor people just can't afford.
And maybe...
That is true in some circles, but from what I've experienced, the fiercest argument about money happened among those who don't have enough of it.
And whenever the adults in the household have healthy relationship with money and enough flexibility to get what they want well, money stops being a battlefield.
And perhaps I have the wrong data points or I live too much in my own bubble.
Perhaps I'd think differently if I knew the top 10 wealthiest people in the world who, by definition, are somewhat extreme.
But from what I've seen, a million dollars in annual income buys you more peace of mind than 100000.
Everything else equal.
And this is not my way of saying that capitalism is fair or anyone can just go out there and make a million dollars in annual income.
I'll be the first to say that the world is unfair.
Luckily, sometimes it's unfair to your advantage.
For example, many who listen to this podcast are great at allocating capital and It pays much better than saving lives as a nurse, and you even pay less in taxes.
But frequently the world is unfair and money surely doesn't make you happier.
On a straight line up and to the right.
So let's also talk about some of the unwelcome surprises of growing wealth.
And I know I sound like a jerk and I certainly feel like one whenever I'm recording this.
I really feel I can't win on this one. called Unwelcome Surprises of Growing Wealth.
And honestly, I even considered not publishing the episode because of it.
If I didn't include the not so nice things about becoming wealthier, you might rightly say that I sugarcoated having money.
And if I did include a segment about all welcome surprises of growing wealth, you would rightly say that the problems I list aren't real problems.
And I don't really like to play games where I can only lose, but here we go nonetheless.
So I mentioned this segment before that happiness is expectations minus results.
And when you imagine yourself with money, you typically imagine the one thing is getting better.
The car you can now drive, the watch you wear or the vacation.
You can go on if you have much more money.
And then you assume that the rest of your life stays the same.
That is not how it works.
You get accustomed to things.
And let me give you an example.
The first time I flew business class, I felt like the king of the world.
If I fly business today, I mainly think about how bored I am and whenever I would arrive at my destination.
And if the passenger sitting next to me is annoying, I get 10 times annoyed because I paid for business and I pretend that annoying passengers should stay in economy, though the reality might just be the opposite.
And, of course, these examples are anecdotal and, more than anything, they're a microcosm of the unexpected so-called problems encounter as you become wealthier.
So please take them more for the metaphorical point than the actual example.
Because how does someone dare complain about flying business class?
If your problems are small, and then that's all you have, well, they artificially just inflate.
Yes, the world is just not that kind.
Because your reality changes with money.
And I was speaking with a friend the other day, and he happened to mention that he was middle class.
And I had to call him out because both him and his wife are very successful business people and they have a combined total of 3000 employees reporting to them.
But whenever I called him out, my friend looked at me and said without blinking that he just came from a meeting with another friend who had 4000 people reporting to him.
So he felt he was firmly in the middle class.
And that might seem like an extreme example and that my friend has no sense of reality, but I do see it all the time.
We focus on what we don't have rather than what we do have.
And I don't know what the technical term is for this, and I'm sure there are some.
So I call this unique condition being human.
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No one says the global average income is $10,000.
I work at Walmart as an associate making $40,000 a year.
I have clean drinking water and Wi-Fi.
I made it.
The point is you get used to things.
You look at what people around you have, especially those who have more than you.
And what used to look appealing is suddenly the new normal whenever you get there.
And then you want more.
People living on a dollar a day are so far removed that you don't really feel a sense of gratitude whenever you see it.
And you likely don't want to say that out loud.
I certainly don't, even though I just did it.
It's not politically correct to do so, but it's so much easier to look at your neighbor's bigger house and feel envy than to feel gratitude that you have clean drinking water and access to electricity.
And you might think that you would be happy moving into this new neighborhood and never compare yourself to anyone again.
But after some time, most people will.
Remember my friend from before who felt like 3,000 employees were being middle class?
He, and it doesn't surprise you, he lives in a very nice neighborhood.
And whenever he bought his car his newest car, as you say, which was a slick Porsche, and The third car in the household, he didn't fail to mention that it wasn't a nice car compared to the other cars in that's what he called middle class neighborhood.
And he didn't mention to me that.
Well, half of the world's population is living in less than 10 a day, and they're driving a car.
Any car should make us feel privileged.
And of course, I'm no better than my friend though.
I never owned a car, but I'll be the first to say, as much as I know, that envy is the only thing you can't have fun with.
It's not a foreign feeling for me.
And I too have this unique condition called being human.
And I hesitate to bring up the next point.
If someone had complained about this 10 years ago, I would likely just have walked away from that person.
And that is going to be my disclaimer.
Well, here we go.
And you can decide if you want to turn off the episode if you haven't done so already.
I love the Godfather movie.
Not so much the third one, but honestly, that story for another day.
But what really stayed with me was this small cultural detail woven into the narrative.
Early in the first film there's this brilliant scene where Don Vito Caglione sits in his dark study while, one by one, people approach him asking for favors.
They come with problems, grievances, and requests for justice.
All of it presented with deep respect and the expectation that the dawn will help.
And that moment isn't just cinematic flair.
It's actually rooted in real Sicilian tradition.
On the day of a daughter's wedding, a Sicilian patriarch is expected to be generous, gracious and unable to refuse a request.
And turning someone away would be considered dishonorable, even unlucky.
So in that scene, it's not just neighbors and acquaintances showing up.
It's everyone who has ever needed something from the dawn, all waiting for the one day.
He cannot say no.
It's such a subtle but perfect way to introduce who he is and how the entire community depends on him.
And to me, that was such a cool scene.
You know, you sit there and you're this rich and powerful man.
You're able to say yes or no to people's request.
And Then you realize when you have money, a lot of people are prospecting you and you end up saying no, a lot.
And it turns out that it's a lot less fun to do that than what it looks like in the movies.
And you might be thinking if having money is hard because you have to say no all the time, but being an employee who cannot afford to say no is also hard, isn't it just a question of choosing your heart?
Sort of.
And yes, your point is well taken.
And I do know that I probably shouldn't complain about this.
All of that being said, let's go back to the scene of the godfather.
What struck me the most in that scene is in a way, it's really not about money.
It's about obligation.
The don isn't just powerful because he's rich.
He's powerful because everyone around him believes he could or should owe them something.
And that's the real weight he carries.
And it's the best, but it's also the worst thing that comes from growing wealth.
And it is a good reminder that in life some of the most demanding responsibilities comes from relationships and expectations.
But more about that later for better or for worse.
Because it does take me to my ninth reflection here, which is about being useful in the best way you can.
Since I was a kid, my parents always taught me to do charity work.
And as a child, I didn't think too much about it.
I considered everything my parents told me at the time to be true.
I had to say then in my preteen years, I'm sad to say that I felt it was a little embarrassing.
I was in this material phase.
Perhaps I still am.
I don't know.
But I remember being fascinated by expensive things.
And I felt it was weird to ask people for money and then give that money to someone else.
And I vividly remember my mother having this what to me was a magical card that let her get anything she wanted.
And I was just flabbergasted why she just wouldn't buy anything I wanted or give that money to the poor instead of doing charity work.
And, of course, it turned out that the so-called magical card was just a regular credit card.
And Well, it was just around the time when everyone stopped using cash.
But anyways, it seemed quite magical at the time.
But it wasn't until I was 20 that I started doing charity work on my own.
And perhaps it was because of my parents' influence.
I'm not sure.
But I volunteered in the local refugee organization.
And looking back, I don't really know if I added any value to the refugees.
I had very low practical skills and even fewer social skills.
And we helped them with a variety of things.
One was to teach them how to read and write Danish.
And another was to teach them how to ride a bike.
And you might be thinking, why would anyone learn how to ride a bike?
Well, partly riding a bike is how you get around here, but then there's also a lot of odd jobs you can take on if your skillset isn't matched too well with the labor market and you also don't speak the local language.
So it's actually a very, very useful skill here.
So I was literally running around with an adult on a bike and then having a broom at the back to make sure they didn't crash.
And it was a brand new world opening up.
Because at the time, I didn't think of myself as privileged at all, even though my parents told me that we were.
I felt like we were just like everyone else in the neighborhood wherever I grew up.
But really, working with refugees put everything into perspective.
So despite feeling like I was a broke student, I probably shouldn't complain.
I was making a decent living playing poker outside of my studies.
And this happened to coincide with the charity work.
And of course, In the beginning, I felt like the man, being able to make money in poker.
But slowly but also surely, spending my time helping others gave me much more purpose than well, taking other people's money for a living.
And yes, I know what you're thinking.
Go figure.
Volunteering was a powerful experience.
And being useful, especially for those less unfortunate than ourselves, may be an option.
I have systematically given away money for the last 18 years.
And you might think that by now, I would know how to do it and do it in a good way.
And today, I honestly think I still do it poorly, but perhaps less poorly than what I used to.
And I wanted to share a few reflections with you.
One thing is to do charity for those less unfortunate than yourself.
That is no easy task, but ironically, I found it even harder to give money to those who have enough, but just not as much as you do.
As you grow older and you can donate larger sums of money, you may feel compelled to help loved ones, perhaps their friends or family.
And a child who is 18 years old may on paper be broke, but if they're born into a top 1 family, are they truly broke?
How do you teach that child to be resilient but at the same time always wanting to give your child enough to do anything, but not enough to do nothing?
And I have to say that answering that is surely above my pay grade, but I do have some experience helping friends with money, and it's both giving me a lot of purpose and a few headaches too.
One approach to take is to never put a dollar between you and a friend.
And if that is your approach, I don't fault you for it.
I sometimes wish that that was the road that I had taken, and it surely would have made my life simpler in many ways.
At the same time, helping friends make their dream come true, it's just been a wonderful experience.
And I would, with no hesitation, do it again.
And if you have chosen to listen to this podcast, you may be more privileged that you think you are at first glance.
For starters, you likely don't have friends whose unattainable dream is to feed their family and not live on the streets.
Perhaps your friends wants to start a business or perhaps buy the dream home.
With most things in life, you don't only get the upside, and this is no different.
Things may change in your relationship and some of it not for the better.
Whether that change in your relationship outweighs the joy you give the other person by helping them, I leave up to you.
Because I was well aware of the potential trap I was walking into when I lent money to friends.
And I found a few techniques to counter that.
The first thing is to let your friends say face.
And, depending on your dynamic, you can sign a loan document so it doesn't look like charity but a true business transaction.
And it might seem odd.
Especially if you, like me, you know you're never going to see that money again.
But remember, you're not doing it for you, you're doing it for your friend.
And also remember there is a selection process where people who need to borrow money from you are well, typically not good with money in the first place.
And then the next thing to do is to mentally accept that this is money you will never see again.
And if some of the money gets back to you, you have already made an agreement with yourself that the entirety of that money will be donated to charity.
And so this also implies that if your friend feels bad about not paying you back, you can tell them that the investment just didn't work out, and you experienced that multiple times in the stock market, which is likely also true even the best intentions and expectations.
Stig Brodersen And of course, as you listen to this, I'm almost sure that many of you are not feeling rich.
You might feel like you don't have enough money for yourself and certainly can't afford to donate money.
And I don't know your circumstances and you might very well be right.
What I would encourage you to do is to be useful to others.
Give an hour away or dollar away to someone in need and see how it feels.
You might get an unexpected happiness boost and want to do it again.
And of course, you might find it to be a waste of time and money.
And that is okay too.
But you should get nothing out of this episode.
That is the one takeaway.
If you do decide to give it a try and don't get this happiness boost, perhaps you can be useful in a different way.
You know, I can't help but share this reflection.
I used to solely give away money in my own name.
And at the time, I simply couldn't fathom why anyone would give away money anonymously.
And it doesn't reflect well on me, but getting the praise and seeing my name as a donor just meant more than what I cared to admit at the time.
Now today, my wife and I donate money anonymously, and we have taken more joy in doing that which I would have never expected.
And another thing I have surprisingly found to be very useful is donating money in someone else's name, even though I also have to say it took me a long time to get around to it.
And I don't pretend that there is no selfless good deed.
And then at the same time, why shouldn't you feel good about helping others?
If you give a homeless person a loaf of bread, it doesn't matter to him whether you're happy or sad when you do it.
And if making you happy makes you want to do it again, it seems like everyone wins.
And it takes me to the 10th and final reflection I want to share with you.
And I called it the journey is the best part.
I can easily understand if someone is sitting out there thinking that I'm proselytizing for telling you to give away money and that is not my intention.
Now I've read that I'm still reading a lot of books about happiness and while there are some coming themes, as you might imagine, there's also a lot of different advice.
That's very much tied to each author's own values.
Many books will tell you to travel or spend time with your loved ones.
Very few people will tell you that material possessions will make you happy.
And there's certainly an element of truth to that.
Happiness doesn't lie in possessions, at least not above a certain level.
But if you subscribe to the idea that people are driven by incentives and authors like to sell books, how many authors writing about happiness would tell you to buy stuff you can't afford?
All books will tell you not to buy a fancy car and spend time with your family, because that is what you're supposed to do.
And I by and large sympathize with that.
But I also wholeheartedly disagree with that.
Now, I have friends who love fancy cars.
They would go to different fairs to check them out.
And sometimes they would buy older cars and fix them.
And I sometimes think they would make a bug or two, but it's close to nothing in the grand scheme of things.
And it's certainly not worth their time if they truly did it for the money.
They just love cars.
And then I have another friend.
She has the best personality that you will ever meet.
I've never heard anyone ever say anything negative about her.
And the only reasonable complaint I could make is that there's only one of her.
I truly believe that the world would be a better place if she could be cloned.
And this wonderful friend cut ties with her father years ago.
What can I say?
He was a terrible person and I couldn't agree more with her decision.
And on my end...
No, I never owned a car and I couldn't find nicer people than my parents.
But I would also be the first to cut ties with them if they weren't nice.
And I would also be the first to say if owning a Ferrari makes me happier than giving away money to charities, I would probably buy a Ferrari any day.
And I'm sure someone out there made the trade off and is perfectly happy with that.
Stig Brodersen.
The more I study happiness in history books, the less I'm sure of how many universal truths there are about money and happiness.
We are such a product of our time, and it's hard to see the forest for the trees.
Experiences are supposedly making us happier than things.
Well, the king of Egypt didn't travel to Babylonia to enjoy the view, and perhaps he thought traveling wouldn't make him happy, or perhaps he didn't.
You know, I once heard a criticism about consumerism that said something along the lines of we all buy things, we don't need to impress people we don't like.
And that's probably true.
And it's certainly not something I encourage you to lean into.
At the same time, I like nice stuff.
And perhaps society has tricked me into believing that I like things I don't really like.
Perhaps I'm fooling myself.
I don't really think about it in those terms.
Sometimes nice stuff is, well, nice.
And sometimes it makes me, well, happier having nice stuff than not having it.
And believe me, I tried both and I know what I prefer.
But of course, that said, I never believed in the idea that the one with the most toys would win.
On the contrary, I've always had a deep respect for monks who chose to live without possessions in their pursuit of enlightenment.
But to me, not owning anything nice seemed like a terrible, sad way to live your life.
And not in a way that monk isn't living a good life, but because we're all different and just want different things.
So for me, proselytizing about money, life, and happiness is exactly what I want to avoid.
Much of what works for me likely won't work for you and vice versa.
And that is absolutely terrific.
That is the premise of this episode.
And, with that said, there is one thing I feel strongly about sharing, and I hope you take a moment to reflect on it.
Whatever you choose to do with your money to increase your happiness, make sure that the journey is the best part.
Thanks for listening to TIP.
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