Welcome to summer.
I hope you are doing something amazing with your family this weekend.
And if you have served in our military, thank you for all you have done for us.
Here’s what’s on deck for today.
- Why “textbook” spending advice isn’t helpful in the longterm
- The unique way I handle spending/investing my own money
- Why Nvidia is changing the world.
- Another great
Let’s get into it
There are 255,000,000 adults in the U.S.
Every single one of them spends money.
And every single one has asked the following question:
“How much money should I be spending?”
I have been tracking my spending for years and have also given many families the tools and resources to spend their money professionally.
My answer to this question has surprised many because it isn’t “vanilla,” “textbook,” or “standard.”
My answer comes from two very different experiences I’ve witnessed:
- I’ve seen people acquire too many assets only to realize they wish they had done more with their kids or grandkids.
- I’ve seen people spend too much early only to realize they can’t do what they want with their kids or grandkids for their last 40 years.
Both are very different but yield precisely the same outcome.
Missed opportunities and regret.
But before I explain this answer and share how I spend/invest my money to avoid this outcome, this is what happens to spending throughout life:
It ebbs and flows over time in a nonlinear fashion.
There are times in life to:
- Spend more
- Invest more
- Give more
This list sounds obvious, and it is.
But often, people do the wrong things at the wrong time with their spending decisions.
Which leads to later retirements, more stress, less income, and less fun.
Not ideal.
Simply put, this is what you NEED to know:
“Spend {X} and invest {Y} over any given year.”
If you know this answer, it’s almost like a cheat code in life.
It’ll change your world if you do.
It will help you be freer TO spend money or cut back and invest more.
I’ve helped many people find this answer and am here myself- It’s fantastic.
It’s freedom.
But almost every single person/media outlet who hasn’t actually helped families over a series of years preaches one message:
Always cut back.
Like “You need to spend less money every second of every day, forever.”
It’s almost preached as a lifestyle.
Well, let me tell you, in the long term, that advice is garbage.
Why?
Because it’s not true.
Why is it not true?
That is not how life works.
Over the years, I’ve met my fair share of financial scrooges, and while they may enjoy the fruits of their labor, the people around them?
Not so much.
Sometimes, you need to spend more, or it makes sense to spend more.
For example, buying a brand new vehicle slightly over your budget.
Why do this when standard advice is to drive older cars?
The alternative to new would be dealing with an old, unreliable vehicle that needs constant repair while your three kids need to be in different places simultaneously.
That’s annoying and frustrating.
Or when your kids are 14, 16, and 19, and it’s time to take that family trip—the crazy expensive, two-week one where you make the best memories before they leave home to start their lives.
Can I get an amen?!
You get what I am saying – life is more than money.
But as I said above, you need to know when you should spend more vs investing.
I want to give two examples of how I am not “textbook” but rather opportunistic and real about this stuff.
- My wife and I spend more throughout the year, peaking towards year-end. February to May is the perfect time to invest extra cash in our brokerage account.
- We put more money into our kids’ 529 plans than our retirement accounts. Why? If we save more now for school, we’ll take advantage of compound interest, and we saved a lot in our retirement accounts in our 20s.
My strategy is not “textbook” because my life isn’t a textbook.
Your financial life isn’t a textbook, either.
It’s a life with many variables that cannot be boiled down to simple equations.
It’s far wiser to play your game vs. blinding following what an Investopedia article says.
I don’t particularly care that I spend more money in the back half of the year because my wealth map (our version of financial planning) is dialed in.
I’m hitting my targets and intelligent enough to be flexible, have the discipline to do this, and have an incredible team helping me do this stuff.
The takeaway is knowing when to dial up / down spending.
It allows you to make financial decisions that may not be “textbook” but yield the best results for you and your family.
When you know when to invest, how much to invest, and when to spend more, you can actually make more money in the long term.
As you zoom out, you’ll see that there are multi-year / decade-long spending trends in life, mainly brought on by children and retirement.
It just is what it is.
The seasons of spending.
Don’t follow the textbook cause it wasn’t written for you.
Find what you need to accomplish and do it.
Tired & Rich – that’s what this is all about.
See you next week.
P.S. If you found this article helpful, reply to this email with “spending advice” and get a free spending plan template.
To summarize
- There are seasons of life.
- Spending will be and flow with them.
- Don’t fight it, but plan accordingly.
