5 Things I Will Never Spend Money On as a Multimillionaire (And 5 That Are Worth Every Penny)
Your Money Guide on the Side
Tyler Gardner explores the psychological shift required when moving from accumulating wealth to spending it purposefully in retirement. He a
Key takeaways
- EBRI research shows 60% of retirees with $500k+ still have at least 80% of their money a decade into retirement.
- Spending money on others, such as through generous tipping, is scientifically linked to more lasting happiness than spending on oneself.
Main topics
- Retirement wealth management
- The psychology of spending
Notable quotes
The money was not the finish line. The money is just the tool to buy what you already value.
Conclusion
True financial success in later life involves optimizing your budget t
Transcript preview
Speaker 1 (0:00) You spent your whole life making sure you wouldn't run out of money, but nobody warned you that you might just run out of time first with the money still sitting there. Unspent, unenjoyed, waiting for a version of the future that guess what? Is right in front of you. The money was not the finish line. The money is just the tool to buy what you already value. And at some point, I want you to use it. Speaker 1 (0:30) Hello, friends. This is Tyler Gardner welcoming you to another episode of your Money Guide on the Side, where it is my job to simplify what seems complex, add nuance to what seems simple, and learn from and alongside some of the brightest minds in money, finance, and investing. So let's get started and get you one step closer to where you need to be. Speaker 1 (0:54) Quick note before we start, September's pre-order bonus for my book, Real Wealth, is something I've wanted myself for years and never been able to find. So I created it. It's called the Real Wealth Money Calendar. 12 months, five action items per month, all on one page. Because most people I know already know what to do. They just don't necessarily know when and they don't have accountability. So this is your 2027 on one page. 60 moves in the month you actually need to make them. Pre-order Real Wealth at tylergardner.com slash book. Let me know you did, and your money calendar will be in your inbox in early October. Welcome back, my friends, to another episode. And I'm going to start with a question that almost nobody in the financial industry will ever ask you that I know of. Not your advisor, not your 401k provider, and certainly not the guy selling you an annuity at your free steak dinner this evening. What is the money actually for? I know, I talk about this a lot. Not how you get the money. Not how to grow the money. Not how to protect it from taxes, inflation, and your brother-in-law's business idea. But what is it for? What at the end of... All of the compounding is the money supposed to do for me, my family, my well-being, my sense of purpose and fulfillment. Today we're doing something a little bit different. I'm not going to go into the data. I'm not going to go into historical trends. Mostly, this is a very personal episode. And I'm going to tell you exactly what I spend money on, exactly what I refuse to spend money on, and why I think the second half of your financial life is a completely different skill than the first half. A skill, by the way, that the data says most of us are not doing too well at. And fair warning, one of my answers for what I spend money on is absolute financial heresy. And I'll stand by it forever. And familiar ask, As always, if you have found this show helpful in any way, if you've ever found it made your commute just a little less hectic, or you've shared it with a friend who could use some quick guidance, please consider leaving a review on Apple or Spotify as it helps more people find the show. And it helps me know that this entire endeavor in free financial literacy is getting through to some folks and we're all getting a little bit closer to where we need to be. Speaker 1 (3:28) Let's start with the skill nobody taught you. The most devastating retirement statistic that I will read you all year is from the Employee Benefit Research Institute, and it's about as sober and unglamorous an organization as exists in America, but they published new research this spring tracking real retirees over decades, and they found that among people who retired with $500,000 or more, 6 in 10 still had at least 80 % of their money a full decade into retirement. 45 % had more money than they started with. And even after 22 years of retirement, 42 % still had most, all, or more than all of their original savings. Nearly half of well-funded retirees are 10 years into retirement. and richer than they were the day they quit. Now, some of that has been good markets, but EBRI's own director of wealth research looked at the number of people in their mid-80s still sitting at 100 % of their savings, and his conclusion was blunt. These people are being too conservative. Now, obviously that's subjective, and as always, do what works for you and your family. But here's the part about that that really does get me. When researchers asked thousands of Americans between 45 and 79 which outcome they'd regret more, 56 % said running out of money while still alive, but only 6 % said dying with money left over. Only 6 % of people fear the thing. that is actually happening to almost everybody. Now, I'm sure much of that has to do with legacy planning and knowing that money can continue to serve a very important purpose for future generations. But for sake of this thought process and this particular episode, I'm going to put that aside just for a moment, but knowing that it's there. We spend 40 years terrified of the wrong ending. We armor ourselves against a famine that for most diligent savers never comes. And meanwhile, 38 % of retirees admit they're spending less than they want to. Not because they're broke, but because they can't give themselves permission. I've talked before on this show about the Trinity Study, and I'll give you just one number today. In the original research, a retiree with a stock-heavy portfolio who followed the famous 4 % rule didn't typically run out of money after 30 years. That's the stat that everybody knows. But what most people don't pay attention to, or what most people have never even heard, is that the median outcome of those portfolios was ending with more than 9 to 10 times what they started with. So the 4 % rule was never really protecting somebody. It was protecting your heirs from ever needing jobs again. So here's my thesis for today. Getting money is a skill. It's an important one. Spending money is a different skill. And most of us spent so long mastering that first one that we never learned the second, or at least we've never learned to spend the money on things that really matter to us individually. Worse, we spent decades telling ourselves a certain story. And I've been over this before too. When I have enough, Then I'll be happy. Then I'll buy the boat. Then I'll get the first class seat. Then whatever. And then the money arrives as we went over in the Ithaca episode months ago. And that strange thing happens that half to most of the stuff on our old fantasy list turns out to really do nothing for you. If anything, it kind of depresses you because it was supposed to do something for you. And a lot of the stuff that actually makes life turn out to be worth living really and truly is the stuff that costs almost nothing. The folks at MIT's Age Lab like to point out that the average retirement is about 8,000 days long. 8,000 mornings. That's roughly the same length as your entire childhood. The question isn't whether you can afford those days, because the data shows you probably can. The question is what you're going to do to fill them. So today, with total honesty, some mild embarrassment, I've produced the two lists that I have come up with. Five things I will happily overpay for, and five things I will never buy again, no matter how large the portfolio grows. Your lists are... Absolutely going to be different. That's the entire point. But if nothing else, I thought this list would at least get the gears turning. This episode is brought to you by Momentous. For about a decade, I was what you might call a cardio bunny. I loved swimming, running, and daily walks with the hounds. I felt virtuous. I also continued to look exactly the same, like a man in a before photo who never got an after. Then I finally started lifting heavy. Not a few curls between podcast episodes heavy, but actually heavy.