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00:00:29.920 | Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets and I'm your host.
00:00:34.000 | This is a special edition of the show recorded in advance while I'm traveling for two weeks
00:00:38.160 | here in the month of September. If this is your first time listening to the show,
00:00:42.880 | feel free to listen to today's show. I'm glad to have you here. I'd encourage you also to
00:00:48.000 | check out the archives and also check out the shows that are starting after October
00:00:51.920 | so that you can see the more normal flow of the show. But today's show is going to be essentially
00:00:58.160 | a short audio essay, short monologue on some ideas that I think would be helpful, that are helpful
00:01:07.600 | to me and I hope might be helpful to you. Today I would like to share with you a couple of
00:01:14.240 | ideas about hobbies. One of the things that I learned, I'll tell a short story, which is where
00:01:22.400 | this thought really came from, and I've proved it out with other research that I've done, but
00:01:27.040 | I had, when I was working as a financial planner, I had a really unique experience. I was a brand
00:01:31.920 | new financial planner, I think my second or third year in the business, and completely
00:01:36.640 | wet behind the ears, didn't know what I was doing, was working very well-meaning and
00:01:41.040 | well-intentioned, but I didn't know what I was doing. And I was sitting and talking with a
00:01:45.600 | prospective client. And this prospective client was working for a business. He was the manager
00:01:51.600 | of some department. And he agreed to meet with me and we had one meeting and then we had another
00:01:56.800 | meeting. And the second meeting we were going over some of his assets and he kept listing more
00:02:01.920 | things off, kind of off the top of his head, but he wasn't really sure exactly where everything was
00:02:08.000 | and what all he had. And I had had him do some homework and bring actual statements, and he
00:02:15.360 | didn't open his mail, he didn't look at his statements to some of you. You're shaking your
00:02:19.840 | head and you're saying, "How could this be possible? I promise it's more people than you
00:02:24.400 | might think." But he never looked at anything. He just didn't bother. And as we're totaling
00:02:29.120 | things up, we get to the end of the total as we're constructing a balance sheet for him,
00:02:33.200 | and I find out that we discovered together that he's a millionaire. And he was genuinely surprised
00:02:40.720 | and genuinely shocked that he was a millionaire. He had no idea that he was a millionaire.
00:02:46.320 | And again, some of you are hearing this and saying, "How is that possible?"
00:02:53.680 | So many people have a goal of becoming a millionaire. Here's someone who's a millionaire
00:02:57.440 | who simply doesn't have the goal. And he was really surprised, pleasantly. I mean,
00:03:02.880 | he knew that he had money, he just never worried about money and he didn't pay too much attention
00:03:07.520 | to stuff. He just kind of let stuff flow over time. So as I got to know him more and more,
00:03:15.360 | I started to see some themes in his life that really stood out to me. And these are themes
00:03:24.480 | that I have seen confirmed in academic literature and also just an experience in many ways.
00:03:29.920 | And Tom Stanley would be proud that one of the themes was that he had a modest home,
00:03:35.440 | just a modest middle-class house. Tom Stanley talks a lot about that as being a major predictor
00:03:41.520 | of wealth because with the housing development that you live in, there are associated lifestyle
00:03:46.880 | costs with that house that have to be accounted for. And it kind of drives everything else. But
00:03:54.400 | he lived in a modest house, not cheap, certainly not cheap. Again, I live in South Florida, so I
00:03:59.040 | guess there's not really anything that's cheap, but not cheap, but also not expensive, just kind
00:04:04.080 | of mainstream, middle-class. And he drove some older cars, but he was not particularly frugal
00:04:12.960 | with cars. I think he and his wife each drove, I can't remember at this point, it was either Honda
00:04:17.600 | or a Toyota sedan of some kind. But I think they bought their cars new. It was not really a big
00:04:23.040 | deal, but they kept them for a while. They just weren't really car people. But as I dug out,
00:04:27.120 | what stood out to me about this person's experience was that this person, I found out,
00:04:33.120 | that their favorite hobby was mountain biking. And we live in Florida, and there's not a lot
00:04:40.800 | of great mountain biking hills around, but he still enjoyed mountain biking. And what his idea
00:04:48.320 | of a good time was to take the weekend off and drive up north somewhere and go mountain biking.
00:04:54.640 | And it really struck me that this was the person's primary hobby. Now, he had a good income, not a
00:05:01.760 | phenomenal income. He wasn't making a half a million bucks. I think he was six figures, but
00:05:06.640 | not multiple six figures. I don't remember right now. But just simply had a good income,
00:05:14.240 | moderate expenses, just kind of spent on what he wanted to spend money on. But his hobby was
00:05:18.320 | mountain biking. And as I talked to him, I just found out he really loved it. He really loved to
00:05:23.280 | go and travel, and they really loved to go to these tournaments and these races and take his
00:05:27.280 | bike and be involved in the community. And it just struck me that the value of having a relatively
00:05:33.360 | inexpensive hobby. Now, I'm not an expert in mountain biking. I'm sure you could spend lots
00:05:39.200 | and lots of money at mountain biking, but as with any hobby and any sport, but he didn't spend a lot
00:05:45.200 | of money on it. And you compare it just the built-in costs to many things. There is a much
00:05:52.240 | less of a built-in cost of mountain biking than many other things. So I like to ride motorcycles
00:05:57.760 | when I have the opportunity. There's a big difference between buying an entry-level Harley
00:06:03.520 | for what, I don't know what they go for, 17, 20,000 bucks, probably 20 plus thousand bucks,
00:06:09.600 | even for an entry-level Harley. And by the time you get one of the fancy ones, you're at 25,
00:06:13.360 | 30 grand easy. So there's a big difference between buying a $20,000 motorcycle versus a really nice
00:06:21.680 | $2,000 mountain bike. And I'm sure there's ones that are 10,000, but again, we're out of my area
00:06:28.160 | of expertise. But I was struck by just how this guy had just kind of accidentally stumbled into
00:06:33.120 | wealth because he had a moderate lifestyle. And it made me think about how can I proactively
00:06:39.920 | choose my hobbies that will serve all of my best interests. There are a lot of ancillary benefits
00:06:46.160 | from mountain biking that he didn't really even talk about. For example, I would guess that Harley
00:06:56.080 | riders on average tend to be more overweight than mountain bike enthusiasts on average.
00:07:02.400 | Probably exceptions, but I bet that if I did some research that I could probably prove that one.
00:07:08.480 | You prove me if I'm wrong, but that just one seems intuitive to me. Well, I would also bet
00:07:15.680 | that if you actually study the lifespan, that extra level of weight would probably lead to
00:07:21.760 | extra levels of length of life, excuse me, extra lifespan. And I just thought,
00:07:31.680 | what a neat ancillary benefit. Here, this guy has more money and he has more health and he has
00:07:37.760 | a longer lifespan. He has greater enjoyment of his current health and a longer anticipated lifespan
00:07:44.720 | just simply because he chose to get interested in mountain biking versus getting interested in
00:07:51.600 | Harley riding. Huh. Now, if you take this idea and you compound it, you can find an amazing
00:08:01.040 | ripple effect in every area. Example, I think as I remember, he either had a sedan or he had one of
00:08:09.920 | those small hatchback cars, like these crossover things, like the Toyota Matrix type of thing,
00:08:16.000 | like a Pontiac vibe, Toyota Matrix type of vehicle. I don't remember specifically, so I'm
00:08:20.480 | going with an impression here, not a specific fact. So forgive me if I'm wrong. I mean, none
00:08:25.200 | of you know who I'm talking about, but I just have this impression that he had that kind of car.
00:08:29.680 | If this man were a Harley rider and he wanted to go and pursue a, go on a motorcycle ride,
00:08:37.760 | and if he wasn't, if he weren't going to ride the motorcycle there, then, which many Harley
00:08:42.960 | riders don't, many Harley riders do, and I shouldn't, I'm not mad at Harley riders. I like
00:08:46.800 | riding Harleys. They're fun, man. If you've never, if you've never pulled out on the highway on a
00:08:51.120 | Harley, on a big one, and pulled on the on-ramp and nailed the throttle on a Harley with a good
00:08:57.920 | set of pipes, oh, that is an experience. I love doing that. I love doing it. I've done it lots
00:09:03.040 | of times. I will do it many more times. So I am not bashing Harleys. I think everybody ought to
00:09:07.360 | do that before they die. That is a fun, a fun thing to do. So Harley riders, I'm not mad at you.
00:09:14.160 | Just simply making an observation here. I'm one of you. I don't own one, but I like to rent one,
00:09:18.720 | or I like to buy, I like to borrow one anytime I have the chance. By the way, put that on your
00:09:23.600 | bucket list. Go and ride a Harley across, across a state or across a country. Especially in America,
00:09:29.360 | where you have these big, long, flat roads that are built for Harleys, or Harleys are built for
00:09:35.600 | them. I would encourage you that you would enjoy that. All right, rabbit trail aside.
00:09:40.960 | So if you compare the cost of him going to his mountain biking events, all he does with the
00:09:48.000 | mountain bike event is just toss a bike rack on the back of the car and drive there. He gets the
00:09:52.320 | same fuel mileage without it. He doesn't have to buy a bigger vehicle or an extra vehicle or
00:09:56.960 | anything like that. But if you drive a Harley, you got to have a pickup truck, which is going to
00:10:03.120 | cost him more than the car to get there. You got to have a trailer, maybe, if your car doesn't have
00:10:08.560 | a, if you don't have a pickup truck. So you have to buy now an extra thing to sit around. And if
00:10:12.960 | you have to buy a trailer, you got to buy an extra trailer that has to be tagged. And maybe in some
00:10:18.320 | states insured, I don't know, in my state, it doesn't have to be. But so you got all these
00:10:23.360 | extra costs associated with it. And now you've got the Harley, you have to insure the thing,
00:10:28.720 | it's 20 grand. You just got a lot of extra costs, you got to change oil, etc. And so whether you
00:10:36.480 | look at it with financial costs that just ripples on and on and on and on and on, by choosing to
00:10:41.440 | ride Harleys versus mountain bikes, the health costs, the society costs, just every aspect of it.
00:10:47.680 | There's so many ways that these hobbies can continue on. Then I think about compounding
00:10:54.720 | that with other areas of life. So what about with kids? Well, it's a lot easier, probably,
00:11:00.160 | to get out with your kids on a mountain bike trail than it is on a motorcycle. Now, I think I would
00:11:07.360 | be one who would be willing to ride motorcycle with kids, some people that freaks them out. But
00:11:10.880 | I've seen plenty of kids all around the world riding, you know, their whole life on motorcycles,
00:11:15.440 | and some of them wind up dead, but, you know, it can be done safely. I, it's no big deal for me.
00:11:22.640 | But if you just compare the group togetherness time of the family bike ride, or with your spouse,
00:11:29.040 | there's a big difference between that versus going off on your Harley.
00:11:32.800 | So I don't want to pick too much on Harley riders. I just want to say, consider carefully
00:11:39.120 | how you can get maximum benefit out of a hobby. I really feel and believe that
00:11:44.560 | the appetites that we feed are the things that we wind up being interested in.
00:11:51.280 | It's really the case. The appetites that we feed are the things that we wind up being interested in.
00:11:55.920 | There is no genetic predisposition of one sport versus another. Why does one male in, I'm going
00:12:05.520 | to use some stereotypes here, but why does one, what would be some good male, some good stereotypes,
00:12:12.000 | why does one male white country boy in rural Florida wind up wanting to drive a large lifted
00:12:23.920 | four-wheel drive pickup truck? Whereas a white Hispanic male in Miami wants to drive a, what are
00:12:34.960 | those things called? The low rider cruiser things that they put, they lower the things down and put
00:12:39.360 | the shiny paint on them. Whereas one black male in downtown, any city, West Ball, Miami or whatever,
00:12:48.880 | wants to drive one of those cars with a new Cadillac or a Cadillac Escalade with 24-inch
00:12:55.040 | rims on them. Whereas one Asian male wants to drive the important tuner scene, I think is what
00:13:04.880 | they call that, a souped up Honda Accord racing car with white, small carbon fiber wheels or
00:13:12.800 | something like that. Now, I've just probably made everyone upset and made some massive stereotypes,
00:13:18.560 | but those, I should throw in another, why does one other person want to drive a Ferrari?
00:13:27.840 | All of these things are appetites that are built in, whether that's through external culture,
00:13:33.600 | external forces or internal forces. These people are not genetically different, really. Race has
00:13:41.440 | nothing to do with it. It's environment. The guy out in the country, the country boy from
00:13:49.040 | Central Florida doesn't care that much about the low rider classic, low rider pickup truck with
00:13:56.640 | the, what are the things that make it go up and down? I don't remember. It's so cool when you see
00:14:01.680 | them. Hydraulics, where they make the cars jump up and down. If you've never seen that, that's so
00:14:05.680 | fun to see at a car show. Why does the country boy not care about that? It wouldn't fit in with
00:14:10.160 | his culture. Now, why does the Ferrari, the BMW crowd, why would they not want to drive a pickup
00:14:17.120 | truck? Doesn't fit in with the culture. So, everywhere you have this culture and people,
00:14:20.400 | you choose what you're into. I'm a guy, I like cars. I've always been interested. But what I
00:14:28.320 | learned is that over the years, as I fed that desire and fed that appetite in myself, I used to
00:14:34.960 | read magazines on four-wheel drive, four-wheel drive magazines, and I just was obsessed with
00:14:40.240 | big trucks. And I just fed this appetite, fed this appetite, fed this appetite, fed this appetite.
00:14:44.720 | And as I fed that appetite in myself, it just grew and grew and grew and grew and grew until it
00:14:49.520 | became a lust. And then once it becomes a lust, then it's hard to get away from. Well, there are
00:14:55.280 | some spiritual components to that issue. And for me, a lot of that was, there was some spiritual
00:15:02.400 | release that happened in my heart and I just didn't see any point in most of it anymore.
00:15:07.360 | But I've also learned to starve some of the appetites. So, I've learned to starve appetites
00:15:11.440 | that don't serve me. So, I live in boating country where if you're going to go boating,
00:15:16.800 | I mean, you got to buy a big boat, you got to go fishing. I don't have any interest in feeding that
00:15:20.480 | appetite. It would be a foolish appetite for me to feed at this point in time. If I were to feed
00:15:25.280 | that appetite, I could be galling to boats, I could get into interested in all of those things,
00:15:30.160 | and it would just suck money out of my life and it would suck time out of my life. Or golfing,
00:15:34.800 | I live in golf country as well. I've hit a golf ball a few times. I get why people like it,
00:15:41.040 | but I'm not going to feed that appetite. Because a golf outing, that takes you away from your
00:15:47.760 | family for six hours at a time, eats up tons of money. Now, can it be useful? All of these hobbies
00:15:54.720 | can be useful. Can you go golfing and do lots of business deals on the golf course? Of course you
00:15:58.480 | can. That's what it's known for. That's why half the people that do it, do it probably. And then
00:16:02.080 | you find this satisfaction of hitting that little ball and just knocking it across the way. That's
00:16:08.320 | intensely satisfying. But if I'm going to be thoughtful about feeding these appetites and
00:16:14.960 | these habits, it's going to be a lot better for me just to consider it in advance and consider
00:16:20.400 | what my options are. And I think there'll be much better results accompanying that.
00:16:25.680 | There's a time and a place, I think, for most hobbies. Boating can be a wonderful way to build
00:16:32.160 | family memories. If you have a ski boat out on the lake and that's just the way that your family
00:16:36.640 | bonds together, that's great. Do it with purpose. But don't just feed the appetite and let the
00:16:41.920 | appetite control you. So to wrap up here, my encouragement is consider the hobbies that you
00:16:48.400 | have and the things that you're interested in. And then consider the fact that it's likely that
00:16:52.480 | most of those things are built into you by your parents, by your surroundings, or by the appetites
00:17:00.400 | that you've chosen to feed. I'm not into football, but then again, my parents weren't into football,
00:17:06.320 | so I didn't have a desire to please my dad. I don't have memories of sitting down and watching
00:17:11.840 | football with my dad and that being an invaluable part of my life. If that is for you, cool. That's
00:17:16.160 | cool. That's fine. But that's probably what's building the appetite for football in your son
00:17:20.400 | rather than anything inherently good or bad about football. I'm not mad at football. Just
00:17:25.600 | another example that came to me. Consider carefully the hobbies that you choose,
00:17:32.400 | and consider if they're going to serve your goals in every area. Are they going to serve your
00:17:37.280 | financial goals or are they going to be a massive sink of money? If there's something you're really
00:17:43.280 | interested in, is there a way that you can adjust that interest? Can you adjust from the thrill of
00:17:47.760 | the two wheels on the open road on the big motorcycle to the thrill of the two wheels on
00:17:52.560 | the narrow single track trail on the dirt bike and get that same thrill with a little bit more
00:17:59.760 | well-rounded way? And then can you choose hobbies that are going to allow you to experience multiple
00:18:08.000 | benefits? Can you choose hobbies that you can be with a good friend? Can you choose hobbies that
00:18:12.960 | you can be with your family, with your children, with your spouse? Can you choose hobbies that are
00:18:18.320 | going to enhance your health? Can you choose hobbies that...you get the point. Hope this
00:18:25.840 | concept was interesting to you. I find it to be a compelling one for me that I think a lot about.
00:18:30.720 | Haven't read much about this anywhere or really ever heard anybody talked about it, but I'd
00:18:37.200 | encourage you to just consider it. If you have good examples of things that you've chosen because
00:18:43.200 | of this concept for yourself or for other people, I'd be thrilled to hear about them. Come by the
00:18:47.440 | show notes for today's show and let me know. In the meantime, be back with you soon. Talk to you
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