31 Lessons I’ve Learned About Money
I remember learning how to play the recorder in elementary school. I remember square dancing. I remember cursive. I built a model of a Spanish mission out of sugar cubes.
Some of this was fun. Some of it wasn’t. Some of it probably contributed, in some indirect way, to my general ability to learn and function in the world. Most of it, I think it’s safe to say, did not.
Something I don’t remember learning about at all? Money. Even our math problems were mostly about potatoes and trains, not how to calculate the interest rate on credit cards or the return on an investment. There was the occasional—and now very politically incorrect—remark from teachers about how if you didn’t do well in school, you’d end up working at McDonalds. But even with all the pressure to go to college, school provided very little in the way of discussion about what kind of careers paid what, how to live within one’s means whatever that career was, let alone how one might create their own business and work for themselves.
This is sad and strange and hardly rare. We leave it to kids who become adults who then have kids to just figure it out for themselves. Not everyone does. I’ve since met high income earners who were terrible with money. I’ve met people who were quite rich by every financial metric but whose relationship with that money was quite terrible, (you’d never want to trade places with them). I’ve met people who have been the victims of scams and frauds because they lacked the basic knowledge needed to protect themselves.
To the Stoics, the solution to these timeless problems—the way to be better with money, to improve your relationship with money, to not fall for every smooth talker, Marcus Aurelius said—is the same: get smarter. Become better educated on the topic of money. “Wisdom,” as Seneca said, “offers wealth in ready money.” It’s something I’ve been thinking a lot about in my own journey—growing up with two civil servant parents, dropping out of college, succeeding in the corporate world until I dropped out of that as well to work for myself. I’ve been thinking about it a lot now that I have kids.
And I’ve been thinking about it a lot in researching and writing what is the most in-depth course ever built over at Daily Stoic: The Wealthy Stoic. It’s a 9-week course packed with the best wisdom from the Stoics, as well as today’s leading money experts, on how to be rich, free, and happy. Along with ~30,000 words of exclusive content, there will be 3 live video sessions where I’ll be joined by bestselling authors, pioneering businesswomen, and investing and finance experts. I’m really excited about this course. I think it’s going to be one of our best, and I would love to have you join us—you can learn more at thewealthystoic.com.
Here are 31 lessons I’ve learned about money…
–I’ve never met a person who ever reached ‘their number.’ You know, people say, ‘When I hit $Xm, I’ll be good.’ They say, ‘Once I have X years salary in the bank, I’ll be good.’ No one ever seems to get to that number. We’re never ‘good’ because we move the goalposts…(or because we set a preposterous and unrealistic number to begin with).
–It’s important to remember what once seemed like a lot of money to you. When I dropped out of college to work as an assistant in Hollywood, I took a salary of $30,000. I remember saying to myself–no joke–”What am I going to do with all this money?” It was enough for an apartment and all the books I wanted to read. Remembering that as an anchor point has not only kept me humble, it’s kept me grateful. Think about what your parents made, think about what you used to get paid per hour to make smoothies or mow a lawn. People manage to live on that–you yourself once did.
–Seneca said that poverty wasn’t having too little, it was wanting more. He wasn’t talking about poor people. He was talking about rich people. He was talking about people who are insatiable. ‘Rich’ is having enough–as this story illustrates.
–My work is unpredictable, and even success comes in the form of lump payments. So when it comes to savings and investing, I have always favored things that are dependable. My wife and I invested quite a bit in different real estate things over the years, with the idea being to eventually create enough annual income that we could be independent from my creative/entrepreneurial/artistic decisions. This strategy is not for everyone, but it worked for us. I could stop writing tomorrow and know the spigot isn’t going to be turned off.
-My parents did a good job modeling how to be responsible with money. They also taught me how to be savvy at investing and growing one’s money. I wish they had done a better job modeling generosity and the proper value of money (that is to say, that most things are more important than money). There have been lots of other opportunities since to learn the skills I got from them, the others much less so…
-Pick the low hanging fruit. I’ve had to remind the Daily Stoic employees several times to be sure to sign up for their 401k/matching we offer. I’ve left money for too long in checking accounts when the easiest of transfers would have significantly increased the interest I was earning. Don’t get overwhelmed by the whole of life, the Stoics would say, do easy things first.
–If you don’t take the money, they can’t tell you what to do. That’s what Bill Cunningham said: If they pay you, they get to tell you what to do. Remember his words: “Money’s the cheapest thing. Liberty, freedom is the most expensive.”
–The trope that a day job takes away from your art or your hustle is stupid. There’s a great exhibition at the Blanton Museum right now about artists who had day jobs. I wrote 3.5 books while I was the Director of Marketing at American Apparel. I started my own marketing company while I was a writer. I have my bookstore. A job for someone coming up is like a trust fund you’ve earned. It helps.
–Learning is priceless. Robert Greene used to have to nag me to submit my hours when I worked for him. To me, the money was an afterthought, I knew the real return was my access to him, that he would answer my questions, that I could see how a real pro did the job.
–That doesn’t mean internships should be free. When you make it, you have an obligation to try to support the people coming up (which is why Robert insisted on paying me even though I didn’t care). It just means sometimes you have to accept a bad deal to learn what you know you need to learn…and also to walk away if you stop learning.
–I’ve had the privilege of talking to many, many extremely wealthy people. They are not that rare. Rarer is the one who actually likes what they do for a living (for instance, half the ones I meet all seem like they’d rather be writing books for some crazy reason). Rarest is the one you’d want to trade places with.
–When you’re building a business, salaries/staff can feel expensive. But if you succeed, you’ll regret giving up equity so cheaply.
–I had this idea that I wanted to be a millionaire by 25. Where this number came from, I don’t know. I made it up, it was ego, and I didn’t hit it. But you know what the difference of getting there a little later was? Nothing. No one throws you a party. Accomplishments don’t change who you are.
–I talked with Tim Ferriss when I was starting my marketing company. He asked me what I was working on and what I was trying to accomplish, and I gave your typical answer: I wanted to be financially successful. Then he asked me something I’ve never been asked. “Ryan,” he said, “What do you do with your money?” Basically, I just put it in the bank, I told him. “Then why are you doing so many things you dislike to earn more of it?” he replied. This insight changed the course of my business as well as my life. Making money is easier than most people think—knowing why and what for, and not being driven in the wrong direction to get it? Much harder.
–You work really hard to get money…and then once you have it you spend time worrying whether you’re putting it to work right. James Altucher once pointed out that you don’t have to make your money grow. You can just have it. It can just sit there. You can spend it. Whatever. You don’t have to whip yourself for not investing and carefully managing every penny. The reward for success should not be that you’re constantly stressed that you’re not doing enough to “capitalize” on that success.
–At the same time, I love Charlamagne’s “Frugal Vandross.” The less expensive stuff you have, the less there is to worry about.
–Be responsible. I have a life insurance policy. I have money saved. If something happens to me, people I care about will be taken care of.
–But not too responsible. The reason they will be taken care of and that I feel creatively and professionally satisfied, is that I have taken a lot of big risks. I dropped out of college (this gave me a two year head start on a lot of people). I left a good job. I bit off more than I could chew many times. Why could I take those risks? Because I had been responsible. I had money saved. I knew what was important to me. I had built a support network. I eliminated the tiny risks so I could take the right ones. If you cover your bases, then you can afford to bet on yourself.
–The best decision I ever made was taking a pay cut to write The Obstacle is The Way (less than half what I got for my first book). I knew it was what I wanted to write. I thought it could sell. I had my day job. It still seemed like a TON of money to me. Sometimes you have to take a step back to go forward,
–If you can, pick up the check. If you can, tip amply. It feels good, it’s nice, it also normalizes not sweating small amounts of money.
–As I wrote recently, a couple years ago, I made the decision to stop basically all the advertising that my business does. I decided to put that money into making content instead—videos, articles, etc. I did this because it occurred to me that the money I was spending on ads made basically no positive impact on the world (if any impact at all), but articles and videos could at least be enjoyed by people (for free no less), even if they didn’t drive the same amount of ROI. In the long run, this content will be around forever and have a bigger and more meaningful reach. This is a small-scale decision given the size of my business, but if people spend more time trying to maximize the positive externalities of what they did instead of optimizing for short-term profits, I think they’d be happier…and ultimately do better…and the world would be better.
–But if I am content with what I have, won’t I stop getting better? No. We play better with house money. Feel better too.
–A wise person once told me…if it’s a problem that can be solved by money, you don’t have a problem.
–If you never hear no from clients, if the other side in a negotiation has never balked to something you’ve asked for, then you are not pricing yourself high enough, you are not being aggressive enough.
–Anticipate the fact that maintaining discipline is hard. Automate. I’m always amazed when I check the balances of accounts where we’ve set up automatic transfers for investing, for our kids’ college, for our emergency reserves–things I set up a long time ago have been doing their job, a far better job that I would have done had I put it on my monthly to do list.
–Don’t compare yourself to other people. Caesar famously wept at the feet of a statue of Alexander the Great. “Do you not think it is matter for sorrow that while Alexander, at my age, was already king of so many peoples, I have as yet achieved no brilliant success?” he said. Um, you were both fucking terrible. And now you’re both gone. Who cares whether so-and-so did this or that earlier than you? Who cares that so-and-so had more?
–Acceptance is a difficult thing, but it’s an important skill as you become successful. Accepting that there will be a certain amount of your investments that fail, accepting that mistakes will cost you, there will be fees and other costs of doing business. Taxes are another thing you have to come to terms with. We must pay all this stuff gladly, the Stoics say, otherwise success will be a form of misery.
–If you live somewhere cheap, you’ve got a head start. Moving to an expensive, popular city ‘to make your start’ is a tough gamble. There is more opportunity…but less runway. I’m grateful to New Orleans in 2011 for giving me plenty of runway as well as friendships and inspiration.
–Yes, it’s true that money is better spent on experiences than material possessions. But, I will say that just because an experience presents itself doesn’t mean you have to feel obligated to do it. Remember, there is a cost to saying yes. And not just a monetary one, but it will take your most precious, non-renewable resource–your time.
–They say that if you think professionals are expensive, try hiring an amateur. This is true in the sense that being cheap or looking for a bargain on services has come back to bite me many times. HOWEVER, I have also been disappointed with how many professionals are actually amateurs. Sometimes, if you want a thing done well, you have to do it yourself. It’s very rare that you’ll just be able to hand stuff off–and don’t be fooled by high priced experts and consultants. You may end up still doing the job yourself in the end…after having shelled out for their fee.
–If it makes you a worse person (parent, neighbor, writer, whatever), it’s not success. If starting a business makes you a worse person—if it stresses you out, if it tears your relationships apart, if it makes you bitter or frustrated with people—then it doesn’t matter how much money it makes or external praise it receives. It’s not successful.