Hey parents, join the LA Kings on Saturday, November 25th for an unforgettable kids day presented by Pear Deck. Family fun, giveaways, and exciting Kings hockey awaits. Get your tickets now at lakings.com/promotions and create lasting memories with your little ones. 1 o'clock a.m. Central Standard Time, 30,000 feet over Las Vegas.

His friends, drunk, were asleep. It was just the two of us now in first class. He extended his hand to introduce himself, and an enormous, Looney Tunes enormous, diamond ring appeared from the ether as his fingers crossed under my reading light. Mark was a legitimate magnate. He had, at different times, run practically all the gas stations, convenience stores, and gambling in South Carolina.

He confessed with a half smile that, in an average trip to Sin City, he and his fellow weekend warriors might lose an average of $500,000 to a million dollars each. Nice. He sat up in his seat as the conversation drifted to my travels, but I was more interested in his astounding record of printing money.

"So, of all your businesses, which did you like the most?" The answer took less than a second of thought. "None of them." He explained that he had spent more than 30 years with people he didn't like to buy things he didn't need. Life had become a succession of trophy wives.

He was on lucky number three, expensive cars, and other bragging rights. Mark was one of the living dead. This is exactly where we don't want to end up. Welcome to the Radical Personal Finance Podcast. I thank you for being here. Today is episode 48, and today is Tuesday, August 26, 2014.

Today's show is going to be all about why you should probably lower your financial goals. I hope you're a little bit intrigued by my catchy title. I do my best to make these fun and interesting and thought-provoking and slightly catchy titles. Probably not exactly the content that most people are accustomed to hearing and thinking of for a financial and wealth-building podcast.

I think it's a topic that we really need to explore. That intro that I read was actually the first paragraph in Tim Ferriss' book, The Four-Hour Workweek, subtitled, "Escape the 9-to-5, Live Anywhere, and Join the New Rich." I thought Tim did an awesome job with that introduction. He's a very skilled writer.

In many ways, it paints the picture, not necessarily of the straw man. We don't need to have a straw man, but it does paint the picture of what I simply don't believe we don't want. I've read and still read a lot of success literature. I read a lot on wealth-building, I read a lot of finance books, I read a lot on success, on personal success.

Many times, the primary focus of much of the literature that I read is on how to get more. More money, more love, more health, more of everything. Specifically thinking of how to get more money. It's generally assumed that more is always better. Now, I personally think that's kind of a crazy thought.

More is not always better. There's a point at which enough is enough. I mean, consider, for example, food. Is more food always better? If you don't have enough food, you've sure got a problem. But you want to have just the right amount of food. You don't necessarily always need more food.

The same thing, I think, with money is that having too little money is a major problem. But more money is not necessarily always better. I was tempted to say that it's kind of a sign of psychopathy if you just always want more and more. And I went and looked up, you know, what are the clinical definitions of a psychopath?

And it's not quite an appropriate use of the word, but it's close. There's something wrong with people who are just greedy. They're filled with greed and avarice and just always wanting more. And I'm convinced that most of us probably already have enough and we can have enough. Now, I'll give you an example.

I learned this personally by looking at people's incomes, doing financial planning. One of the things when I was doing active financial planning in the past, then I would always run what somebody's expected lifetime earnings would be based upon their current earnings amounts. So let's say that somebody's making $100,000 a year and they're 40 years old.

I would take $100,000, I would grow it by an inflation rate of 3%, and then I would back it off to say the present value. And I would show them what the present value of their lifetime earnings is. And it's a huge number. No matter how much money someone's earning.

20 grand a year over enough years is a pretty good size number. And then I would always put that side by side with their balance sheet, their current financial assets and their current financial liabilities and list them out. And I would talk to them and I would say, "Do you see how if we just do the right stuff with this income that it's very feasible and possible for you to become wealthy and for you to achieve all of your personal financial goals?" Now, most of the clients that I would work with are at least middle to upper income.

Generally, people of lower income are not usually sitting with a financial planner. Although they probably should be, but I haven't figured out how to do that. That's why the podcast is here. But in general, middle to upper income, if you look at what someone's situation is, hey, they usually have a mortgage.

Let's say it's a few hundred thousand bucks. Maybe there's some other debt. And then we want to save a million, couple million bucks. And you're looking at a two, three, four, five million dollar number. Anybody can really do well financially. So why then would most of the financial plans that I prepared show somebody with massive shortfalls?

And the reason it would show massive shortfalls is because in my experience, many clients are shooting for the moon. You know, say, "How much money do you want to have?" And it's always a huge number. "How much income do you want?" "I want a hundred grand at retirement." "Well, what do you spend now?" "Forty-seven." "Why do you want a hundred grand?

What are you going to do with a hundred thousand dollars?" People often don't think about it. And I don't know what the actual percentage of how often I would hear this, but basically, most people's financial goals are very, very high. And I don't think many people have really thought about how high their financial goals really need to be, because it's probably not as high as they're currently being set at.

Now, again, to be clear, I really think poverty stinks. But even if you are poor, just thinking about how much it stinks doesn't help. If you're poor, why not focus on appreciating the things about your life that are good, and then work like crazy to get out of poverty?

And there's a balance there. So there is an amount at which we need to be, and then there's an amount at which it's enough. So here's something that I want you to remember that I constantly tell myself to, because let me be frank. I am given to this. When I sit down and write a list of goals, I'm not the kind of person that sits down and says, "Lose 10 pounds." I'm the kind of person that sits down and says, "I want a six-pack, and I want to complete an Ironman triathlon." "Well, Joshua, do you ever run?" "No, I don't like running." "Well, why would you sit that?

Why would you set out an Ironman triathlon?" Because that's the big goal. Same thing financially. It's not a matter of, "I just want to be comfortable. I want to be rich. I want to make a million bucks a year." "Well, do you need to make a million bucks a year?" "No, I don't." "So why do you want to make a million bucks a year?" Because that's a big number.

That's the number that to me sounds like I'm doing well. But the problem is this. Getting rich requires a lot of work. It really does. For every goal, for every reward, there's a price. There's a cost. And you have to pay the price before you get the reward. So if you're going to go after a goal, it better be worth the price.

Really. My wife and I watched this last week, the movie, what was it called? It was called Don't Stop Believing, I think. And it was a movie about the Filipino singer that Journey, the band Journey, found on YouTube, the Filipino singer that they found to replace their lead singer after the previous singer wasn't able to continue working with them.

They found this guy on YouTube. It's one of those really amazing stories. Here he is. He's from the Philippines. He grew up extremely poor. He was a street child. His mother died when he was 13 years old and he took off on his own and he was living just on the streets of the Philippines.

I've been to the Philippines and I promise you living on the streets of the Philippines is not, it's a challenge. It's nothing like living on the streets of the United States. And he's just hand to mouth beggar, but he had a talent for singing. And so he sang and he built this career and he built this over time.

But I was struck by watching the interviews with these rock stars. And here you have mega rich, mega famous rock stars, the entire band Journey. But they were talking very transparently about the price that they paid to achieve their success. Even Arnel was his name, the new band member.

He talked about the price that he had paid to achieve his success. And in the documentary, I don't think the documentary was unfair, but it certainly made it seem like more of a, I got the impression from the documentary that this guy was just singing in some random hotel bar and barely making it, had never been discovered as a singer.

And they find his YouTube video and he's transported to stardom. I went later and I researched, I just read his Wikipedia entry, and it was clear that he had been honing his craft for 25 years prior to the time that he was discovered. And he had gone through all kinds of work honing and developing his ability and his stage ability, and that was when he got his break.

And I've found with most of the overnight success stories, as a kind of a sidebar, most of the overnight success stories I've ever researched, they're not overnight successes at all. It's that somebody was working, working, working, working away at their craft, and then they had a break. There was something that happened and they were found and they had a break.

So back on track, the point is that for every effect that you want to have, you have to put in the cause. So if you want to get rich, getting rich is going to require a lot of work. It's going to require earning money, saving money, deferring savings, deferring spending, deferring gratification.

There's a cost that you have to pay. And the higher you push that number, the bigger the cost. There is a much bigger cost. Let's use my running example. If I'm going to decide I'm going to go out and run a 5K, I could do that today. There's not a very high cost, but there are a gazillion runners that run a 5K.

If I decide, however, I'm going to go and run an ultra marathon, a 100-mile ultra marathon, that's a very small club, and there's going to be a dramatic cost that I have to pay to be able to achieve that. Well, the same thing with finance. Getting rich is a lot of work.

So let's make sure that the rewards are going to be worth making the sacrifice and paying the price. I think one of the most important steps on our list of goals should be to make a shopping list. So as we're developing our financial goals, which is where everything starts, what are the financial goals that are important to each of us?

We really need to start by making a shopping list. What do you actually want to buy? On Friday, I did a show that was a Q&A, and the reader was talking about developing a certain level of retirement income. Or excuse me, the listener was talking about developing a certain level of retirement income.

I'm constantly struck by how few people have any idea, when I've done retirement planning, how few people have any idea of an actual realistic budget of what they want to do in retirement. It was where I worked with all of my clients. The very first exercise of retirement planning is to sit down and create a budget, create a current.

And what we would do, just I'll give this to you as a freebie, especially if you are close to retirement, this will be useful to you. What we would do is create basically four budgets. We have a current budget, and then we have a retirement budget. And then we have a minimum budget and an ideal budget.

And this is very important for retirement planning. So the current budget is, here's what I'm currently doing. This is, excuse me, I misspoke. This would be usually three budgets, because it would be a current budget, and then it would be a retirement minimum budget, and a retirement ideal budget.

Although you can do minimum and ideal for now as well. But usually most people are not that detail-oriented with their finance, with their personal finances. So I would start by saying, well, what's the minimum? What level of lifestyle is the minimum that you're willing to accept? You know, for example, do you eat out?

Do you like to eat out at TGI Fridays, or do you like to eat out at Morton Steakhouse? There's a difference. An Outback steak and a Morton Steakhouse is going to be a major difference. Do you want to eat out one time a week, or do you want to eat out four times a week?

Do you want to, what would be an example, do you want to travel to Europe, or do you want to travel to South America? South America is a lot cheaper to get to than Europe. So we would start by making these budgets of what you would actually want. And then you would figure out, well, are we anywhere close?

But the thing is, is that it's hard for people, especially if they're not tracking their money, to be able to know what those are. But usually what you would find is if you eliminated a lot of expenses, that their budgets are actually fairly modest. This was a key takeaway if you've ever read the book "Your Money or Your Life," which is a highly recommended financial book.

It's a key takeaway, as they point out, that if you take away most of the expenses associated with working, in general, a lot of our goals are fairly modest. So the very first thing to do is to start with writing down your financial goals. On Friday's show, I mentioned John T.

Reed's book, "How to Get Started in Real Estate Investment." And when I went and dug it off my bookshelf to answer that question, because I wanted to read that list of real estate strategies, I was flipping through it, and I was reminded of how I really had benefited from this book, and how he starts.

Now, most get-rich books usually start with all the reasons why you should, you know, they're generally motivation. They're generally a pep talk about how great it is to be rich, and how you should just want a huge amount of money. One of the reasons why I have a huge degree of respect for John Reed is he starts his real estate book with this exact thing that I'm talking about.

And I had forgotten he put it in here, and it was part of the genesis of my deciding to talk about this today, because this is where he starts. He says, "Start by setting your goals." And he tries really hard to talk you down from setting your goals too high.

He talks about what are the things that you're actually going to want to buy. Make a shopping list is his thing. You can know that your finance author is actually probably someone worth reading if they'll start with trying to talk you out of wanting to be mega rich. He starts with a shopping list, and he tells you what he thinks you should put on it.

You know, he says, "You invest to make money. Wanting money implies that you have some shopping list of things that you cannot acquire until you get more money. Money is simply a means to an end. So exactly what is it that you want to buy?" And he goes on, he says, "You should want a nice house." He talks about how much that costs.

"You should want an education for your kids." How much that costs, talks about college, talks about retirement, about what you should want versus not want, and I'll skip that. But he makes some good points that I have made, and I had forgotten how much he and I were aligned with.

I need to see if I can get him on the show. I'd forgotten how much he and I were aligned philosophically and how much I had learned from him in the past about that retirement is really just a dumb concept that, let me see here, he actually says, "People who are," he says, "I'm not interested in lying in a hammock.

Generally, the only people who are are those who have not tried it. Absent some extraordinary luck, you would have to bust your butt for a long time to achieve the sort of net worth that would allow you to do so, to quit working. As a general rule, those who are capable of such butt-busting are incapable of such leisure." Much more eloquent way of saying it.

But let me read one, these are the about five paragraphs, about eight paragraphs here that I wanted to read from this book. And there's two sections here. And this is one of the points that I very have rarely have ever seen somebody talk about, but I think is so important.

Section is handled, "There are costs and risks to becoming rich." This is John T. Reed, "One reason I am trying to get you to have a realistic view of being rich is that getting there will require you to give up some important things, and it will require you to take risks.

You should think twice before you give up those things and before you take significant risks. Another way in which millionaires and average people are the same is the number of hours in their day. Everybody gets only 24. Making extraordinary amounts of money requires spending extraordinary amounts of time. If you spend more time making money, you must spend less time on other things.

To maintain your health, which is worth more than money, you must get a full night sleep, take time to eat healthy meals, and set aside some time to exercise. To maintain healthy family and friend relationships, which are also worth more than money, you must spend time with your family and friends.

Every dollar you add to your financial goals takes more time away from important things like health, family, and friends. So I want you to set the lowest possible financial goal so you leave the maximum amount of time for things that are more important than making money. I think it's good to want a good home and education for your kids.

I believe you should sacrifice for those goals, but I cannot see sacrificing your health, family, or friends for goals like flashy cars, horses, boats, or private planes. If only I were rich, life would be a dream. One mindset that disturbs me about beginning real estate investors is a naive belief that getting rich transports you to a state of nirvana.

It does not. Those of us who have acquired the million are almost uniformly disappointed to find that money has a very limited ability to improve your life. I once had supper with billionaire Ross Perot in my capacity as co-president of the New Enterprise Club at Harvard Business School. One of my friends told me to ask him, "Yes, but are you happy?" I did.

His answer was, "Yes, I am happy, but I am not any happier than I was when my wife and I were newlyweds living in cramped, Navy-based quarters shortly after I graduated from Annapolis." He went on to say that being famously rich had some serious disadvantages. For example, he had to train his children in kidnapping avoidance.

He said if you asked his daughter if she were Cindy Perot or whatever her first name was, she would answer, "No, she just left a few minutes ago." I also reject the notion that the rich are less happy than the average person. Money can buy happiness to an extent.

The unhappiness of the rich that is related to their wealth comes from such things as getting divorced because one spouse spent too much time pursuing financial success and neglected family life. Also, many men tend to marry, get rich, then conclude that not only do their first car and house need to be replaced with better models, so does their first wife.

Although I have not experienced divorce firsthand, it is clear to me from what I saw as a coach of divorced children that divorce provides a lifetime of agonizing unhappiness to those it touches. To the extent that the rich engage in dangerous hobbies, they may increase their family's unhappiness if they are seriously injured (e.g., Christopher Reeve jumping horses) or killed (e.g., John Denver flying his own experimental plane that was purchased to enable him to travel more easily to visit his divorced children).

Maybe it's a distortion caused by disproportionate media coverage, but the children of the rich seem to turn out worse than the children of the middle class on average. The rich have more ability to spoil their children, and in that case the word "spoil" reflects not only the way the adults behave toward the children, but also the way many of those children turn out as adults.

I know a number of rich people whose adult children are dependent, divorced, and living with and off their elderly parents. The children of the middle class may want to do likewise, but it is not an option. Extraordinary wealth can beget extraordinary laziness and lack of ambition in the children of the wealthy.

What a horrible turn of events if the parents sacrificed their whole lives to give their children a better life than they had, only to see those children respond by becoming leeches. That's an excerpt from about three-quarters of a page of John Reed's book here, and hopefully that'll give you a sense of the whole book.

It's well worth reading. Highly recommended buying it. But he goes on and he talks about his experience in real estate, and he talks about how one of his goals as a young man was to have a $5 million net worth and to own 100 residential real estate units. And so he traded up.

He says, "In pursuit of those goals, I became a millionaire, then a former millionaire." He traded up from 20 units to 37, then from 37 to 58, and then he got sunk by the values of his properties being destroyed by the Tax Reform Act of 1986, the oil glut, and the overbuilding caused by the savings and loan debacle, and he lost three-quarters of a million dollars.

He just talks about if he'd stopped when he had got his first 20 units in New Jersey, he would have been set for life. But he continued pursuing a higher number, and his wealth was destroyed. "Thinking back on it, all I can figure is that I picked the 5 million and 100 unit goals because they were impressive round numbers.

I guess I figured that I would impress my friends and relatives and make my enemies envious." You've never read that in a success book, have you? Or heard that in a financial podcast. But he makes a good point, and he's coming from a position far beyond where I'm at.

I'm just at the very beginning stages of my wealth building. But I've seen this, and I've noticed that this happens often. If you just moderate your goals a little bit, you lower your risk substantially. So a good place to start is make a shopping list and figure out what do you actually want.

So example, like he said, you probably want a nice house. So sit down and figure out what does that mean? What kind of house is a nice house? Do you want it where you are? Education costs. I've got a whole series of shows planned on education, but how much does the education that you envision for your children cost?

Incidentally, my opinion is you could probably get far better results if you'll free up your time and you spend time educating your children and not hiring it done, and it'll be better all around. But that's a rabbit trail for another day. Do you want to go out to eat?

Do you want to drive fancy cars? I mean, what do you want? I would encourage you, in addition to the book that I just referenced, and all these books will be in the show notes, I would encourage you to read the book, "Stop Acting Rich" by Tom Stanley. And Tom Stanley is one of my favorite researchers because he actually has quantitative data to pull from with regards to the wealthy and what they actually do and how they actually live their lives.

I'm going to read an excerpt from the book here, and this is from his chapter called "The Road to Happiness," where he talks about what the wealthy drive, and he gives a little bit of a story. But consider this very practical way of thinking, and remember the fact that this is by someone who has made his life's work the study of the affluent and their habits and their lifestyles.

Incidentally, one of the reasons why I like this book so much is because he talks about the affluent and what he labels the "glittering rich," and it really helps, those words really help me a lot to specify the difference between those people who are actually rich but seem like the millionaire next door, which was one of his books, and those adults who are just glittering rich, who are so rich that they can't possibly overspend their money.

And I'll come to an example of that in a moment when I read an excerpt from another book as to what your budgets would look like if you had varying levels of wealth. Here's from chapter 7 of Tom Stanley's book. This chapter is called "The Road to Happiness." Tony D.

of the Washington Speakers Bureau called me shortly after my first book, "Marketing to the Affluent," was selected by the Best of Business as a top 10 business book. He had two questions for me. First, would I speak at two of BMW's North American dealers' conferences? And second, if I preferred to be paid in BMW currency, the use of a BMW for a year, or in U.S.

dollars? No doubt BMW thought, or hoped, that I would be thrilled to drive a BMW. Perhaps they were surprised when I opted to be paid in cash. Why did I go for the dollars and not the barter deal? Several reasons. Driving a BMW would make me uneasy. It is at odds with my family's consumption patterns and beliefs.

It could also have proven a slippery slope. Drive a car for a year, and the next thing you know I just have to have one that I would have to pay for, which would be harmful to my wealth. Most important, I know what a car can and cannot do for a person.

You can't drive your way to happiness. Yet some people believe otherwise. They may see some fellow driving a fully accessorized BMW, Corvette, or Cadillac, and assume something about him. They whisper to themselves, "There goes a happy guy. If I had that car instead of my Toyota, I would be off the far end of the happy scale." But just what is the relationship between the car you drive and your level of satisfaction with life?

Well, according to my research, there is no significant correlation between the make, or brand, of the motor vehicle you drive and your level of happiness with life. People who live below their means understand this. The data tell the story. Consider the results from my most recent national survey of high-income producing households.

Each of the 1,594 respondents was asked about the make of motor vehicles he had acquired over the prior ten years, as well as his most recent acquisitions. Guess what? Not one significant correlation was found between the make of motor vehicle acquired and overall satisfaction with life. That's right. Not one of the 46 makes studied had any measurable effect on satisfaction with life overall.

It did not matter what measure of motor vehicle acquisition habit was studied. The results were the same. For example, those who bought and/or leased one, two, three, four, five, or more BMWs over a ten-year period were not significantly more satisfied with life than those who did not acquire any BMWs at all.

And the same applies to all the other makes studied. Independent of make, what is the relationship between the price paid for an automobile and overall satisfaction with life? There is a positive, but not statistically significant correlation. I have my own personal version of the happy story. An ABC 2020 program producer called to ask me a number of questions in preparation for my appearance on the show.

She asked, "Why does a best-selling author drive a 2005 Toyota 4Runner and not a new BMW?" The answer to this question is simple. My son bought my '97 4Runner, so I had to get a newer car. More to the point, I would not be any happier driving a BMW.

In fact, I would probably be less content if it cost $10,000 or $20,000 more than the $30,000 I paid for my four-wheel-drive, sports-edition 4Runner. And then there are the additional carry costs. It costs more to insure a BMW than a Toyota. After the 2020 interview was over, I did some additional calculations.

From my survey data of high-income producers, I computed the average level of satisfaction with life overall by the make of motor vehicle most recently acquired. Those currently driving BMWs had an average level of satisfaction of 4.25 on a 5-point scale, 5 being the highest. Those driving Toyotas had an average of 4.20.

While there is a difference, 1/20 of 1 point on the happy scale, it is not statistically significant. Yet some difference was expected, given the fact that 71% of the BMW drivers who were surveyed had household annual incomes of $200,000 or more. In contrast, only 46% of the Toyota drivers generated this much income.

My surveys indicate that there is a significant correlation between income and satisfaction with life. In other words, earning more money may make you somewhat happier, but spending that money, particularly on cars, won't. If we make the appropriate statistical adjustments for income differences in life satisfaction, then we find that the average life satisfaction among Toyota drivers is higher.

But surely I could afford to drive the dressed-up version of my Toyota 4Runner, a GX470 Lexus. Yes, I can afford a Lexus. However, I prefer to allocate the extra $20,000 to conducting another survey of millionaires, rather than to ride around with the money in traffic. Is anyone happy in traffic, irrespective of the price and make of the wheel they are gripping?

Not only is the V6 engine in my Toyota 100 pounds lighter and more efficient, and provides superior acceleration than the V8 in the gilded version, by allocating the $20,000 to the car, the money is lost forever, but by allocating it to a survey, it will generate more income for me.

The Lexus does have better paint, my Toyota has orange peel, a superior transmission, and a higher quality interior, but are those attributes worth the extra $20,000? Not to me. Most of all, the people who are an important part of my life do not care if I drive a Toyota.

Nor does my choice of motor vehicle have any influence on the number of people who respond to my surveys or buy my books. Most people who are economically successful in objective terms do not need status brands to convince themselves or others in their social circles of this fact. Nor is their high level of satisfaction in life based on the make of vehicle they drive.

To me, I think it's a good example of a rational way of thinking through a buying decision. And here's the key. You're a fool if you're caught up in the game of impressing other people. Now, I thought carefully about saying you're a fool, and maybe that's a little judgmental.

Maybe I should say it is foolish, but really, it's--I guess I should temper it a little bit. It's completely foolish to be caught up in the game of impressing other people. Get your ego out of your finances. Seriously. Now, there is a place to consider something like image. There is a place to consider something like signaling theory, where the car that you drive needs to signal something as an aspect of our modern life.

There is a place for that. But be careful. Because the majority of times, those signals come into play. People are trying to signal something that's a complete lie. Don't be foolish. Get your ego out of your financial decisions, especially in the realm of cars. So my major point is though--with this is not to get off on that tangent--but my major point is that planning to buy a BMW adds--let's assume that you plan to buy a BMW.

And let's say that you're carrying costs of buying a BMW versus a Toyota are an extra, conservatively, let's say $5,000 a year. Well, if we were to--let's use the--and where I'm bringing that number from is I'm assuming that you're driving a standard amount. Now with a BMW, you're using premium fuel instead of regular fuel.

You're paying a higher insurance cost. You're paying higher money because now you've got to put on high-performance tires instead of standard automobile tires. An extra cost. I'm making that number completely up. Just--it could be certainly valuable--extra depreciation for the additional cost of the vehicle, et cetera. I made the number up off the top of my head.

My point is that there could be a number of reasons why that number is accurate or it could not be. So don't get hung up on the number. So you're paying an extra $5,000 a year for the BMW. Well, in order to support an extra $5,000 per year, if we just use the 4% rule as a reasonable proxy for how much capital we would need to accumulate towards a retirement goal or a financial independence goal, we need to accumulate $125,000 of additional capital.

So then stop and figure out, "Well, how long does it take me to save $125,000 or how would I have to invest to earn that $125,000?" It's probably easier just to adjust your tastes and lower the risk and simply choose that the BMW is not as important than just to choose the Toyota.

It will remove a lot of risk out of your life. Even the whole retirement plan, frankly, as I've discussed in detail on the show many times, there's a big difference between being prudent and saying, "I'm going to plan for a point in my old age and a point in my time at which I'm too infirm to work versus I'm going to plan to save a bunch of money to retire at 65 to live the good life." There are so many problems with that plan.

I mean, they're just all over the place. The majority of people, A, are never getting there, as I've proven in the past. The majority of people, B, don't want to get there. And the amount of work it takes to accumulate that much money in savings is massive as compared to so many of the other options that are available.

I suggest to you that you consider if money is really going to solve the problem or not. I'm going to read another excerpt here. This is again from the 4-Hour Workweek, Tim Ferriss' book. This is a page and a half here. "Money alone is not the solution. There is much to be said for the power of money as currency.

I'm a fan myself. But adding more of it just isn't the answer as often as we'd like to think. In part, it's laziness. If only I had more money is the easiest way to postpone the intense self-examination and decision-making necessary to create a life of enjoyment now and not later.

By using money as the scapegoat and work as our all-consuming routine, we are able to conveniently disallow ourselves the time to do otherwise." Well, John, I'd love to talk about the gaping void I feel in my life, the hopelessness that hits me like a punch in the eye every time I start my computer in the morning, but I have so much work to do.

I've got at least three hours of unimportant email to reply to before calling the prospects who said no yesterday. Gotta run! "Busy yourself with the routine of the money wheel. Pretend it's the fix-all, and you artfully create a constant distraction that prevents you from seeing just how pointless it is.

Deep down, you know it's all an illusion, but with everyone participating in the same game of make-believe, it's easy to forget. The problem is more than money. Relative income is more important than absolute income. Among dieticians and nutritionists, there is some debate over the value of a calorie. Is a calorie a calorie, much like a rose is a rose?

Is fat loss as simple as expending more calories than you consume, or is the source of those calories important? Based on work with top athletes, I know the answer to be the latter. What about income? Is a dollar a dollar? Is a dollar is a dollar is a dollar?

The new rich don't think so. Let's look at this like a fifth-grade math problem. Two hard-working chaps are headed toward each other, chap A moving at 80 hours per week and chap B moving at 10 hours per week. They both make $50,000 per year. Who will be richer when they pass in the middle of the night?

If you said B, you would be correct. And this is the difference between absolute and relative income. Absolute income is measured using one holy and inalterable variable, the raw and almighty dollar. Jane Doe makes $100,000 per year and is thus twice as rich as John Doe, who makes $50,000 per year.

Relative income uses two variables, the dollar and time, usually hours. The whole per-year concept is arbitrary and makes it easy to trick yourself. Let's look at the real trade. Jane Doe makes $100,000 per year, $2,000 for each of 50 weeks per year, but works 10 hours per week and hence makes $100 per hour.

In relative income, John is four times richer. Of course, relative income has to add up to the minimum amount necessary to actualize your goals. If I make $100 per hour but only work one hour per week, it's going to be hard for me to run amok like a superstar.

Assuming that the total absolute income is where it needs to be to live my dreams, not an arbitrary point of comparison with the Joneses, relative income is the real measurement of wealth for the new rich. So Tim goes on and he makes some good points about that, but the key that I'd just like to point at is many people, in my observation, and consider if this is applying to you, are working towards this huge number, this huge goal, thinking that somehow money is going to make them happier, thinking that somehow money is going to solve all of their problems.

Money doesn't solve all of your problems. Money creates a lot of problems of its own. As part of planning, consider what Tim Ferriss calls his dreamlining program. And again, you'll have to read the book for details. I'm just going to read one paragraph from it. But basically what he talks about is figuring out what your dreams are and then determining the exact cost of those dreams, and then calculating your target monthly income for your dreams based upon various timelines.

But the key example that really -- let's see, I read this book, May of 2007, my notes in the front say May of 2007. And I've never forgotten, seven years ago, I've never forgotten about this. To me, it's a powerful concept. I'm going to read this one paragraph. And it struck me because I was always this finance nerd that said, "Don't ever finance anything.

Don't lease cars. Don't rent stuff. Buy stuff. You've got to be rich." If financeable, what is the cost per month for each of the four dreams? Rent, mortgage, payment plan installments, et cetera. Start thinking of income and expenses in terms of monthly cash flow, dollars in and dollars out, instead of grand totals.

Things often cost much, much less than expected. For example, a Lamborghini Gallardo Spider, fresh off the showroom floor at $260,000, can be had for $2,897.80 per month. I found my personal favorite, an Aston Martin DB9 with 1,000 miles on it through eBay for $136,000, or $2,003.10 per month. And he goes on and gives more examples.

But the point is that if you figure out what exactly it is, if you have a shopping list, and this is how these things tie together, if you have an actual shopping list, you can sit down and set an actual price tag and figure out how much money you have.

I don't have any interest in owning a Lamborghini. But if that's important and I want to go rent one or I want to lease one for a couple of years, whatever it is, if I have it, then I can figure it out. So it's not up to me to tell you what you should spend your money on.

But consider them. Consider really choosing your hobbies carefully. I had an example with a prospective financial planning client many years ago. And I was sitting down with him and the guy was telling me about his assets. And he's like, I think I got a lot of money. I think I got some money here, money there, money here, money there.

And he starts telling me. And I'm writing them down dutifully. And at the end of it, we calculate out his balance sheet and the guy's a millionaire. And it totally surprised him. He's like, I didn't know that. I didn't know he was a millionaire. But what I found is by looking into him, he lived in a normal middle class house.

He lived in a, you know, this guy was in Boca. He was in Boca Raton or Fort Lauderdale, Florida, not exactly inexpensive places to live. But his primary hobby was mountain biking. He loved to go mountain biking. And so for him, tossing his mountain bike on the back of the car and going away for the weekend, it wasn't an expensive thing.

It didn't cost a lot of money. Now, I'm going to read another section here. And this is from a book. Doing a lot of reading today. But these are just things as I was preparing the outline, I said, why should I reinvent the wheel if an author has already done a good job of getting my point across?

So I'm going to read a section here on budgets from a book called Seven Years to Seven Figures, the Fast Track Plan to Becoming a Millionaire. The author here is Michael Masterson. That's actually a pen name for a man named Mark Ford. He actually lives here in Delray Beach near me.

And he published for years the online website and newsletter called Early to Rise. He writes a lot about money. So one of the things that is interesting about this is in this book, he's talking about plans, how to become a millionaire in seven years. And this is really good stuff.

He points out how to do it. And it's not scammy. It's really legitimate. It's very legitimate. So in the beginning, though, he's trying to say, how do you figure out how big your goal is? Seven figures can mean anything from $1 million to $9,999,000. That's all seven figures. And so he talks through what some budgets would be.

I'm going to read these. There are four budgets. And I'm going to read some budget categories. I've pulled out a good bit of the text, and I'm just to shorten it. But just consider this. And the point of reading this is to talk about, could you actually spend millions of dollars?

Because most of the time, when people tell me how much money you want, $5 million, $10 million, when they ask me. Or I want to spend $100,000 a year if they're not spending that. Now, where I live, there's lots of people spending hundreds of thousands of dollars a year.

We'll set that aside for a moment. Because generally, if they're already doing that, they're earning a certain income. And it's a different planning situation. I'm talking just in a generalized view. And just figure out, could you actually spend this much money, coping with a mere million? To begin at the beginning, ask yourself, would a net worth of $1 million be enough for me?

A million dollars earning 10% yields $100,000 in annual income. Set aside the whole earning 10% thing for now. Just get the point. Take away about $35,000 for federal, state, and local taxes. That leaves you with $65,000 in cash. What kind of lifestyle would $65,000 buy? Well, let's start with housing.

You could spend a lot, but I've made it a rule to never spend more than 25% of my income on housing. 25% of $65,000 is $16,250, or about $1,350 a month. What kind of housing would that give you? In figuring housing costs, I always think in terms of rental costs, because the rental market is tied to what people can actually afford.

So think about where you'd like to live once you achieve financial independence, and then ask yourself, what kind of home could I rent in that neighborhood for $1,350 a month? If you did spend $1,350 a month on rent, you'd have about $4,000 left over to pay for other expenses.

Utilities, upkeep, and routine maintenance on your home might be as much as 30% of your rental costs. That's $405. And you could expect to pay another $900 a month for food and household supplies. Transportation would be your next biggest expense. Figure $600 a month for two medium-sized Toyotas. Those are your major expenses.

Do the math, and you'll see that you are left with about $2,000 for things like travel, entertainment, dinners out, and other non-essentials. Those expenses can vary greatly depending on your personal preferences. If you can be happy with a good meal at a local restaurant, you may be able to budget meals for two people at $80.

If you prefer fancier places, you'll have to figure on spending two or three times that amount. I'm in the fortunate position of being able to pay whatever I want for restaurant meals, and I'm happy to tell you that, although I do enjoy the occasional $500 meal, I'm usually just as happy eating meatballs and spaghetti at my local trattoria.

Developing a plebeian palate will do a lot for your future happiness if your goal is to achieve a net worth of only $1,000,000. The $2.5 Million Lifestyle Living on a nest egg of a million dollars could be completely satisfying, so long as you are content with modest choices. If you have a family that is larger than two people, or if you want to be able to live on a somewhat higher level, you may want to target your net worth at $2 or $3 million.

For the purposes of this discussion, let's pick a number in between, $2.5 million. What will a net worth of $2.5 million buy you? Again, assuming a 10% ROI and a tax burden of 35%, you'd end up with disposable after-tax income of about $160,000 a year. And again, figuring that 25% of that $160,000 will go into housing, ask yourself if you could be satisfied living in a house or apartment in your chosen neighborhood that would rent for about $40,000 a year, or $3,300 a month.

In my neck of the woods, near the ocean in southeast Florida, that would get you a nice, older, two or three bedroom house within walking distance of town. If you want to live in Minneapolis, you'll do much better than that on the same budget. Don't laugh, it's a great city.

On that kind of income, you can live there in a modern, spacious, six bedroom house with all the bells and whistles. Figuring, again, that you'd spend 30% of your housing budget on associated living expenses, you'd budget about $12,000 a year for utilities, repairs, maintenance, and upkeep. Other associated expenses, food, clothing, and so on, might account for another $13,000 a year for a total of $25,000.

That may seem a bit high percentage-wise as compared to the $1 million budget, but it's a financial fact of life that the more you pay for your home, the more you'll pay for living expenses. By the way, interrupt myself, notice that one, and it's absolutely true. The research shows it out, Tom Stanley's research, without question.

The more you pay for your home, the more you'll pay for living expenses, just simply due to the associated lifestyle costs. Subtract the cost of housing, $40,000 a year, and associated living expenses, $25,000 a year, and you are left with about $95,000 to spend on luxuries. $95,000 after tax dollars a year will provide two people with a lot of extras.

Just for fun, let's look at what a $95,000 lifestyle budget might buy. 10-day Hawaiian vacation for two, $11,000. 10-day London vacation for two, $11,000. 52 semi-fancy dinners at $200 each, $10,400. 52 dinners at a local place at $100 each, $5,200. Lease upgrade on two Mercedes, $14,400. Overboard holiday party for 50 friends, $7,500.

Extravagant Christmas gifts, $3,000. Golf club membership for two, $5,000. Spoil and presents for eight grandchildren, $4,000. 52 spa treatments, $5,200. 10% charity church tithing, $9,500. Where did that money go? Money, $8,800. Total, $95,000. I'm going to pause for a moment here. Notice how difficult it is to spend $95,000 after you've taken care of housing, associated living expenses with housing, and food.

It's not easy to spend $95,000. You've got to work at it. Now, I would say there are many people, again, depending on where you're at in the country, this may be a normal lifestyle or this may be extravagantly rich. To me, this is not that, just based upon where I live, this is not that out of sight.

This is a fairly normal, it's not normal. Our median income is not, the median income is not $250,000. And then the after-tax income is not $160,000 a year as far as the median wage. But that's, I would say that for a financial planner, that's probably an average client base of clients that are making $250,000 a year.

So notice that it's fairly difficult to spend that money. You have to work hard at it. Again, some of these expenditures are arbitrary. You might not, for example, enjoy traveling abroad, or you might find your grandchildren deplorable. In reviewing this list, make whatever substitutions you like, so long as they are in the same expense categories.

Overall, this is a very luxurious lifestyle, wouldn't you say? So it's a good example because there was $2.5 million on his numbers. You figure out it's a little bit challenging. Well, let's go on and let's look at two other budgets. And I apologize if these lists are long, but I just think it's kind of funny.

Because most people say, "Hey, I want to have a," many people say, I shouldn't say most, many people say, "I want to have a $5 million net worth," but the reality is that they have never sat down and figured out, "How much money would I spend if I had $5 million?" So let's look at the next level, living on a $5.5 million nest egg.

A $5.5 million net worth returning 10% is $550,000 a year, or $357,500 after paying 35% in taxes. Deduct $90,000 for your housing expense, another $30,000 for upkeep and utilities, $27,500 for food, clothing, and miscellaneous. I don't know how you spend $27,500 on food and clothing and miscellaneous, but then again, I don't shop.

And you'd end up with... I guess I do shop, but I don't shop for consumption clothing items. And you'd end up with $210,000 a year to spend on discretionary items. Let's see how $210,000 pans out. 10-day Hawaiian vacation for two, 10 grand. 10-day London vacation for two, 10 grand.

10-day Istanbul trip for two, 15 grand. Two four-day weekends in New York City, 12,000. 52 very fancy meals at $500 each, $26,000. 52 semi-fancy meals at $200 each, $10,400. 104 meals at the local place at $100 each, $10,400. Lease upgrade on two Mercedes, $14,400. Overboard holiday party for 100 friends, $14,000.

Extravagant Christmas gifts, $5,400. Golf club membership for two, $5,000. Spoilum presents for eight grandchildren, $4,000. 100 spa treatments, $10,000. 10% charity or church tithing, $21,000. Where did that money go? Money, $15,000. Two season tickets for an NBA team, $8,000. Tennis club membership, lessons for two, $5,000. Slightly used ski-do snowmobile, $3,000.

120 sessions with a personal trainer, $11,400. Total, $210,000. Living like this takes a lot of effort. Spending this much money requires diligence, determination, and imagination. For one thing, you must be willing to eat out four nights a week. You must devote nearly all your spare time to golfing, tennis, spa treatments, and professional basketball games.

You would have to eschew low-cost leisure activities like reading, hiking, and fishing, except for deep-sea fishing in luxury spots. And you'd have to...okay, I'm kidding, or at least half-kidding to make a point. You don't need $5 or $6 million in the bank to enjoy a very good lifestyle. Good point, huh?

Let's look at the last one, and then we'll be done with these budgets. The ultimate lifestyle. Again, $9 million at 10% will yield an income of $900,000. After paying 35% of that to Uncle Sam, you'd have $585,000 to spend on yourself and your spouse. If you spent 25% of that, or $146,250 a year on housing, you'd be living in luxury, even in California, Florida, or Manhattan.

Figure $45,000 a year for upkeep and utilities, a whopping $50,000 a year for food and clothing. Let's stick to Italian designers, please. And you're left with about $345,000 a year. How could you get rid of $345,000 a year? 10-day Hawaiian vacation for $2,000. 10 grand. 10-day London vacation for $2,000.

10 grand. 10-day Istanbul trip for $2,000. 15 grand. 4 four-day weekends in New York City, $24,000. 52 very fancy meals at $500 each, $26,000. 52 semi-fancy meals at $200 each, $10,400. 104 meals at the local place at $100 each, $10,400. Lease upgrade on two Mercedes, $14,400. Way overboard holiday party for 100 friends, $20,000.

Ultra extravagant Christmas gifts, $10,000. Golf club membership for two, $5,000. Really spoil 'em presents for eight grandchildren, $8,000. 104 spa treatments, $10,400. Charity church tithing, $40,000. Where did that money go? Money, $24,000. Two season tickets for an NBA team, $8,000. Tennis club membership for two, $5,000. 120 sessions with a personal trainer, $11,400.

Bose home theater system, $4,100. Sony VAIO notebook computers for you, your spouse, and all eight grandchildren, $22,000. High definition mini-cam quarter, $3,600. Matching diamond and platinum ring earrings and pendant from Tiffany, $16,250. 52 weeks of fresh flower delivery, $4,450. Three widescreen plasma TV sets, $15,000. Stereo systems for two cars, $4,000.

Digital cameras for you, your spouse, and all eight grandchildren, $13,600. Total, $345,000. As you can see, you can live reasonably well without working on a net worth of $1,000,000. Having $2,000,000 or $3,000,000 in the bank makes life easy. If you target the $5-$9,000,000 range, you'll be able to enjoy all the luxuries you have ever imagined, and still have money left over that you won't know what to do with.

Of course, if you decide to target the higher end of the seven figure range, you'll have to expect to work harder and take more risk to achieve your goal. Interesting, huh? Hopefully you enjoy that. I know it's easy to get lost in the columns of numbers. This book was published...

Let's see here. When did I get it? I don't have a note as far as when I got it, but the copyright date is 2006. It's funny. 2006, notice this. Sony VAIO notebook computers, 10 of them for $22,000. High definition mini camcorder, $3,600. Three widescreen plasma TV sets, $15,000.

Consider 2006 to 2014 as eight years, and consider how much cheaper those things are today. He puts in here, "Digital cameras for you, your spouse, and all eight grandchildren, $13,600." Just think of how much cheaper those things are. The point is, have you ever actually sat down and made a budget?

If you're targeting a net worth of $5,000,000, have you ever sat down and figured out, "Do I need to target that, or am I just targeting that for some stupid ego reason?" I challenge you to see if you can figure out how to spend that much money. It also illustrates why.

Think about that lifestyle that he went through of $9,000,000, of a $9,000,000 net worth. Why, when Tom Stanley talks about the glittering rich, who can walk in and buy a brand new Mercedes and not pay any attention to it, who can spend money lavishly without even paying attention to it?

That's one of many reasons why the rich continually get richer. Because once you reach a certain point of mass, it's hard to spend the money. You can't possibly spend the money. And so because you can't possibly spend the money, you either give it away, or it grows over time, or you become very imaginative at spending the money.

I shouldn't say you can't possibly, because the financial newspapers are rife with examples of people who have blown through massive fortunes. How I'm always perplexed, but they do. It's so easy in today's world, and in the United States of America. I want to be specific about that. The rest of the world is not the same.

But in the United States of America, or in any well-developed economy, I don't know what the politically correct term or even the right term is. Western world, I'm not sure. In today's modern rich economies, it's so easy to live rich. The poorest person, I guarantee, the poorest person listening to this show right now lives better than John D.

Rockefeller lived in many ways. I'm reading a biography of Rockefeller right now, and it's just, I mean, the poorest person lives better than he does. So what is wealth? Is wealth the number of dollars in the bank? Or is wealth the amount of time and the energy that you have?

A billionaire doesn't get more than 24 hours in a day. Where do you spend your 24 hours? I think it makes all the sense in the world to focus on living rich. If we spend eight hours a day in bed, make sure it's a really great bed. If we spend eight hours a day in an office, make sure it's a really awesome office that you like being in.

And make sure if you're going to spend eight hours a day doing something that it's something that you want to do. A rich person really can't get that much better coffee than what you can get for a few bucks. If you want a bottle of wine, you can't drink more than a bottle a day.

You could afford, on a fairly modest income, you can afford that. A brand new, what are these things cost? $8,000, $9,000? A brand new $9,000, let's call it $10,000 because I can't remember what the actual number is. A brand new $10,000 Kia Rio is an amazing car compared to a 1990 Cadillac.

Which would you rather go in? The Cadillac that's kind of flying down the highway, the springs up and down? It's better than a 1990 Mercedes. The Kia Rio will drive all day long at 75, 80 miles an hour, has air conditioning, it'll get 40 miles a gallon. And it'll be more comfortable, safer than the 1990 Cadillac.

Now, maybe there's exceptions to that. Maybe a 1990 Rolls Royce would be better. But the point is that things are cheaper now than they've ever been. A millionaire can't eat more food than you can. The rich, the glittering rich, if they want to stop for a hamburger, they're still going to stop at the same fast food restaurants that you are.

They're going to fly in the same airplanes, unless it's a private plane, but they're going to get there as fast as you are. They're going to drive on the same road, whether or not you're sitting in a $300,000 car or not, if you're sitting in traffic, you're still sitting in traffic.

You know, it's interesting, I live very close to Palm Beach Island and also to Jupiter Island, which are two of the enclaves of the rich. And I'll tell you, there is a very sharp culture difference between the old rich and the new rich, the nouveau riche, you know, if you were going to go with the way that you usually see it written.

And that culture, I think, is the nouveau riche is the guy who struck it big in acting, or who struck it big in, you know, in sports or something. And it's just, how can I spend on everything that glitters? The old money, you know, frankly, the other reason by my best guess, why people live on Palm Beach Island, they live there for privacy, and they live there to have a community of people who are like them.

It's hard if, you know, it's hard if you're if you are mega wealthy, it's hard to be rich with, excuse me, hard to be friends with people who aren't, because it's difficult for people to understand each other's lifestyles. It's not that they're not friends, but it's that it's just hard.

So the money pays for a certain level of privacy, and it pays for a certain level of social club, people understanding you. My major point is there are costs to achieving your goals, and it takes time to make money. So is your wealth measured in money? Or is your wealth measured in time?

Is it measured in energy? Physical financial wealth is a burden. It really is. You have to give up something to get it. At the very beginning, you have to give up hours of your time, you may then later have to give up energy, you may have to give up focus.

Having multiple houses is a burden, now you have to manage these multiple houses. Wealth is a burden. People quickly say, well, it's a burden that I'm ready to take. True. And I think a certain level of it is valuable, but it really is a burden. The key is that if you see yourself as constantly being able to just buy more, buy more, buy more, you're being manipulated.

The idea of conspicuous consumption is pure manipulation, it's pure propaganda that has been fed to our culture intentionally by the marketing industry. You're being manipulated. Get rid of your ego, shut off the manipulation, turn off the TV, stop paying attention to the ads, and think about what you actually want.

It's all marketing. It's amazing how if you'll cut some of that influence out of your mind, if you'll cut the commercials off, if you cut yourself off from the Madison Avenues and the magazines, the ads in the back of the magazines and all that stuff, if you just cut all that off, your desire over time will die.

I learned this myself with traveling. When I was in college, I lived in Costa Rica for a semester and studied abroad. When I was there, I didn't have a car, and I was living in Costa Rica, which is not a poor country, but it's also not one of the mega-rich countries.

One of the things that I learned while being there is that I really wished I had a car, but many people didn't have cars because they're very expensive in Costa Rica. After I got back from that trip and I got back to the States, I was just so excited about simply having a car.

I didn't care what it looked like. I was just excited about the pure having of a car being valuable. If you cut off the influence and you cut off the input, you can make some substantial progress toward your goals. I'm going to close by reading an excerpt from the end of Tom Stanley's book where he has a letter.

This is how he finished his book. He has a letter that somebody wrote to him and then his response, which really illustrates my point. I think he's done such a great job of writing this. This chapter is entitled, "All that glitters is not the millionaire's goal." It opens with a quote, "That man is richest whose pleasures are cheapest." Henry David Thoreau.

There is something else about wealthy people that sets them apart from others. Most wealthy people have a wide variety of interests and activities. In fact, there is a substantial correlation between the number of interests and activities that people are involved in and their level of financial wealth. Some wealthy people feel that owning a vacation home, for instance, would restrict them, obligate them to spend a lot of time there, and if they do not spend much time there, they feel guilty for allocating lots of dollars on something that is underutilized.

Most millionaires came to this realization without first having to make the mistake of purchasing a vacation home. Many respondents have told me about the emotions associated with owning vacation homes. First, joy and euphoria, shortly followed by a loss of interest, and then resentment at having to pay for something that is rarely used but drains financial resources.

Many rich people, however, rank high on the cosmopolitan scale. They like variety and change in their lives. Being tied down to a vacation home is just so parochial. They say the same thing about owning a boat. So if millionaires don't own vacation homes, what do they do? I asked the DECA millionaires I surveyed about some of the activities that they engaged in during the prior 12 months.

Here are some of the more popular activities reported. Visiting museums, 83%. Raising funds for charities, 75%. Consulting tax experts, 75%. Attending fundraising balls, 75%. Participating in civic activities, 69%. Attending major league sporting events, 69%. Vacationing overseas, 69%. Attending Broadway plays, 67%. Participating in trade or professional association activities, 56%.

Shopping for original art, 56%. Gardening, 55%. Attending antique fairs or sales, 55%. Fishing, 33%. Skiing in the Rockies, 33%. Vacationing in Paris, 28%. Popular activities that DECA millionaires listed in their diaries over a 30-day period included socializing with children or grandchildren, 95%. Pay attention to this one. Planning investments, 94%.

94% of DECA millionaires in the last 30 days have spent time planning investments. Entertaining close friends, 87%. Watching their children or grandchildren playing sports, 66%. Studying art, 63%. Playing golf, 60%. Attending religious services, 52%. Jogging, 48%. Praying, 47%. Attending lectures, 44%. Caring for elderly relatives, 44%. Playing tennis, 30%.

What do these wealthy people know that many vacation homeowners, boat owners, and seekers of prestige brands have overlooked? You cannot be in two places at one time. Mostly what they know is that it is life activities that give pleasure and satisfaction, not the watch on your wrist. The following letter exchange is a reminder that we should all take time to stop and smell the roses.

Dear Dr. Stanley, I have finished your book, The Millionaire Next Door. I have some experience with some millionaires, and I'd say you have them down real well. They know who they are. Frugal. Cheap. I sure don't believe in living beyond my means and never have. It is a great idea to invest in your own business, or in stocks, or real estate.

The only error I see in your book is that this is the end-all and be-all of life. Owning cars. The expensive model looks better, lasts longer, runs faster, needs less repairs, has better resale value, and is generally a lot nicer to own. I've owned both types of cars. A nice Mercedes costs more than a Ford because it's a better car.

A number one Oxford or Hickey Freeman man's suit is better than a seer's off-the-rack suit. The material is better, the workmanship is better, the style is better, and it lasts at least five times longer. I've had both. A cheap golf shirt from Walmart costing $6-10 will last about one or two years with proper care.

A $50 Ralph Lauren golf shirt is a lot better quality and with good care will last about 20 years. I know. I've had both. A Casio $20 watch from Walmart will keep just as good time as a Gubelin watch from Switzerland, but I hope you don't think it's just as good a watch.

I've got both, and I don't think so. A vacation in Emporia, Kansas, Athens, Georgia, or going through the south of France or to Athens, Greece. I don't think they are all equal vacation spots, and I've been to all of them. Shopping at Walmart or Sears is not quite the experience as shopping at Neiman Marcus or Saks Fifth Avenue is.

It is great to make money and save money, but if these types don't let up after a while and smell the roses, they are a little bit nutty, aren't they? As I recall it, Mr. Sam Walton lived a life pretty much like you seem to feel is great. Unfortunately for Mr.

Walton, I seem to recall him getting some terrible form of cancer and meeting an early death. I wonder if he said to his doctors and close ones on his deathbed, "Gee, I wish I would have spent more time at the store." What do you think? Sincerely yours, Mr. H.

Affluent, Florida Dear Mr. H., Accumulating wealth is not the end-all and be-all of life. Yet it is considerably easier to accumulate wealth if you get great satisfaction from elements in your life that do not require hyper-spending. Far too many people believe that in order to smell the roses, in essence to enjoy life, they must purchase prestige brands.

Yet the data indicates that there is little correlation between this type of spending and happiness. But those who spend with the hope that happiness will result will be disappointed. Basic to happiness are factors such as health, family, job, and values. If you have good health, a loving family, are surrounded by a network of caring friends, have a job you enjoy, doing without certain luxury items is not painful.

But what if your work pays well but is not satisfying? You may think that loading up on luxury goods will cure your discontent, but hyper-spending will only make things worse. Displaying luxury brands may or may not impress your neighbors, but it will not transform an unhappy person into a happy one.

Or as many millionaires have told me, money makes life easier, not better. Most millionaires were happy even before they became financially independent. They set goals and achieved them. One of their goals was to accumulate wealth. They built their wealth slowly but steadily and controlled their spending instead of the other way around.

These are confident people, people in control of their lives. Products and houses do not control them. Certainly, smelling the roses has something to do with being married to a wonderful spouse. Most millionaires, 91%, are married, on average, for 36 years to the same spouse. Fully two-thirds have never been divorced.

I have often said that if you want to live forever, marry the wrong spouse. Do so and every day will be an eternity. No amount of luxury goods will make you happy if each day is an eternity. But marry the right person and every day will be a joy.

Millionaires are not misers, especially when it comes to funding the educations of their children and grandchildren, and even nieces and nephews, or donating to noble causes. Certainly, part of smelling the roses is the realization that you helped finance your son or daughter's business school, medical school, or law school education.

This variety of rose has an aroma superior to owning even dozens of expensive cars, watches, suits, boats, or even vacation homes. Those who are frugal in spending tend to be the most generous in terms of donating to charity and other so-called "good causes." But those who are hyper-spenders, including many high-income, low-net-worth types, have few dollars, if any, to give.

Generous givers smell the aroma that emanates from the flowers produced by helping others who are not so fortunate. You mentioned that the founder of Walmart, Sam Walton, may have not smelled the roses. I never had the honor of meeting Mr. Walton, but from my reading I have a different view of the man.

I have come across his profile and picture more often in sports periodicals than in the business press. From his profile, I can only surmise that Mr. Walton was not an all-work, no-play type. Often, he was depicted on a bird-shooting hunt, along with his pickup truck, Remington shotgun, and favorite hunting dog, Ol' Roy.

In honor of Ol' Roy, you might note the brand name on Walmart's private label, Dog Food. Yes, it is the Ol' Roy brand, in a wide variety of sizes and textures. It was not only Mr. Walton's choice of motor vehicle, a Ford pickup truck, that impressed me. His shotgun was a Remington 870 Wingmaster pump.

I purchased the same gun because I figured that if it were good enough for a billionaire, it was certainly good enough for me. I do not know how much he paid for his Wingmaster, but I paid $449.92 for mine at a Walmart store. You can pay $2,000, $5,000, $10,000, or even $50,000 for a shotgun.

But you can't buy a better shotgun than an 870 Remington. To date, they have sold more than 10 million 870s. It is strong and extraordinarily reliable. It gives me all the rows I need, and I have a feeling that Mr. Walton felt the same way. Yet the aspirationals at my gun club, a small minority, refer to my shotgun as obsolete, an iron boat anchor.

They own Gilded Shotguns, European brands of the four- and five-figure variety. Their comments about my Remington never bother me in the least. In fact, I think of them as humorous. Plus, they provide input for my research. The clay pigeons that I shoot at do not seem to care how much I paid for my shotgun.

It shoots straight and has never jammed. I bought mine to shoot, and not in an effort to display status among my fellow club members. My status comes from my score, not the gun. Plus, being around my good friends, all are frugal, when shooting, is much more important than the price of the gun.

This is in sharp contrast to those people who feel the need to own the Gilded variety of every gun they shoot, every suit they wear, and every car they drive. These types of people think that anyone with means who acts otherwise is suffering, never smelling the roses. Nothing could be further from the truth.

Yes, even some billionaires and maybe many deca-millionaires prefer to drive pickup trucks. And there are plenty of wealthy people who shoot Remingtons. In contrast, I recently read an article that mentioned the sale of a shotgun for $287,500. It was originally made for Tsar Nicholas of Russia. The gun not only had a lot of history, but it also had hand engraving all over it.

To me, it looked really ugly, like the gilding of gildings. I understand that most things that the Tsar owned were top-of-the-line brands. He used these "things" to tell his subjects and himself that he was superior. Well, we know what happened to him. In contrast, most of the self-made rich in America do not have the same urgent need to document their superiority via the display of prestige brands.

What does this tell us about people who try to act rich by spending and displaying but are not? While searching for roses to smell, they overdress, overdrive, and overact. No, they are not Walmart type shoppers, but they would enhance the probability of actually becoming rich if they would patronize stores of this type.

America is a nation of excesses, and these excesses, especially when it comes to consumption, have a profound influence upon our young. They are constantly told that spending is the American way. Often, their role models are highly compensated professional athletes and entertainers. Day after day, the public relations machinery keeps cranking out stories about the multi-million dollar mansions that this athlete has purchased or the fleet of exotic cars that this movie star owns.

By sensationalizing and glorifying these powerful role models, the press sends a message. It says that happiness is obtained by spending freely on cars, homes, and parties. But in reality, spending will not make people happy, and very few people grow up to become star athletes or movie celebrities. Recently, our local newspaper published an article that featured in glowing terms the home of a professional baseball player.

The article mentioned that the interior space of the highly decorated nine-bedroom home was 25,000 square feet. Apparently, this fellow is an all-star in terms of spending. What else is so interesting about this home? Nationwide, only 3% of America's deca-millionaires live in a home that has nine or more bedrooms.

The square footage of this baseball player's home is four and one-half times larger than the medium square feet (5,600) of the primary homes owned by the chief executive officers of Standard & Poor's 500 firms. These are America's Major League caliber business leaders who run companies that generate billions in sales revenue and employ millions of Americas.

Could it be that many of these CEOs do not feel the same need as the baseball player to display their success and supposedly enhance their status via homes, car, and accessories? Perhaps just being the head of a major corporation has a lot of status attached to it all by itself.

And, in terms of making a real contribution to our economy, these CEOs have a much higher batting average than the baseball player. In fact, in this regard, he probably belongs in the minor leagues. Nonetheless, he is still a role model, a poster child for the "Smell the Roses" society of hyper-consumers in America.

We cannot count on the press to paint an accurate picture of how carefully most achievers allocate their dollars. Yet most achievers are very satisfied with their lives. Their satisfaction has little to do with the brands that they own. We would do well to adopt the values of the majority of the real achievers in America, and not those who are of the "star" variety.

The big house baseball player, a one-in-a-million young phenom, was born with his extraordinary talent. But most achievers know that their type of success was not predetermined. Often it takes twenty or thirty years before they break into their own version of the really big league. What happens when owning the better brands takes priority over achieving?

When it's about having money just to spend, people can't survive. It is one thing to enjoy an increased standard of living. It is another when it is all about money for spending on prestige brands. Individual achievement, small and large, today and tomorrow, is what leads to an increased standard of living.

It is about the Bill Gates of the world creating firms that make products that make our lives better and more productive. It is about the teacher who labors to teach a class of fifth graders math. These are the things and activities that lead to improvements in life. In short, when it becomes about brand, less energy and money is spent on things and activities that will actually benefit people, which may explain why America has to import its engineers from India, a place where academic achievement is highly valued.

It is not easy to break bad habits, but doing so will make us happier and ultimately lead to richer lives for all, now and tomorrow. Sincerely, Thomas J. Stanley. Get his book. The nice things are toys, and it is fine to accumulate them, but accumulate them after you build wealth.

Don't increase the risk you take with your financial plan just to accumulate some nice things. Money makes life easier, but there are lots of things that it cannot buy you. It may make it easier to achieve many things, and there is a certain amount of money that is necessary.

Being poor is not fun, but money can't buy you everything. As the saying goes, money can buy you a house, but it can't buy you a love-filled home. Money can buy you a clock or a fancy watch, but it can't buy you more time. Money can buy you an amazing bed, but it can't buy you a good night's sleep.

Money can buy you a book or even an entire library, but it can't buy you knowledge or wisdom. Money can buy you a diploma, but you can't buy an education. Money can buy a doctor, but it can't buy you good health or energy or vitality. Money can buy you food, but it can't buy you an appetite.

Money can buy a position, but not respect. Money can buy blood, but not more life. Money can buy sex, but not love or a joyful marriage. Money can buy insurance, but not safety. Money can buy a companion, but it can't buy you a friend. Money is not everything. Consider what you actually are trying to buy with money and consider figuring out that shopping list.

Consider the importance of actually describing exactly what you want and exactly how much you need and making an actual realistic budget. Whatever your target level of wealth is, sit down and figure out, "Okay, if I had to spend that much money, how much money, you know, what would I buy?

What could I spend?" The research is fairly conclusive when you study it. Again, read all of Tom Stanley's books. Those who accumulate money, it is important, but it is not the most important. You do have to pay a price to accumulate money. Whatever that price is, it's important to make sure that it's worth it, that the juice is worth the squeeze, as they say.

Money can buy power, but it can't buy respect. Money can't buy sleep, but it can buy a bed. Money can't buy you love, but it can buy sex. You possess money, you buy money, and you possess. Money can buy a house, but it can't buy a home. So even with money, you still feel all alone.

Money can buy you friends, but it can't buy family. Money can't make you happy, that's just a fallacy. It can buy a bath, but it can't buy purity. It can buy bodyguards, but it can't buy security. You all people around the world start by eight, because money can buy war, but it can't buy peace.

Some do everything and anything to get the peas. The society we're living in, it's a necessity. It's got the power to turn your best friends to enemies. It's funny, but money doesn't follow us to the beach. If you think something you don't need, you keep it. Then you're stolen from somebody else who's hungry.

Everything that you do is everything you are. Everything that I am is everything you ever need. Does happiness live in a mansion with a swimming pool? I know people with plenty of money that are miserable. We all need to earn in this world we live. Most work for it, some steal, but many worship it.

Some self-raise and for it, some seek employment for it. We need it to survive, so some clean the toilets for it. I need things to live, but never will I live for peace. Abolish the queen, I don't want to see that witch's face. I'm not for it, no, not me.

Some will try to tell you that it doesn't grow on trees. I heard the saying said many a time, but they were wrong. 'Cause if it doesn't tell me, then where do you get the paper from? Most think they'd be happy if they only had more of it. Some waste it, some feel more important 'cause they're born with it.

Some have got the nerve to say a portion of a fortune if the truth is you don't need a fortune to be fortunate. Say you don't need and keep it, then you're stolen from somebody else who's hungry. Everything that you do is everything you are. Everything that I am is everything you'll ever be.

Share, share, share. I can be rich in anything, don't you take from me. Share, share, share. I can be rich in anything, don't you take from me. All the books that I read from will be in today's show notes. I thank you for listening. I hope that you enjoyed today's show.

Hope I gave you something to think about. Have a great week everybody. Talk to you tomorrow. Don't need and keep it, then you're stolen from somebody else who's hungry. Everything that you do is everything you are. Everything that I am is everything you'll ever be. Share, share, share. I can be rich in anything, don't you take from me.

When you download the Ralphs app, you have easy access to savings every day. Get the most out of weekly sales and receive personalized coupons to save on your favorite items, all while earning one fuel point for every dollar spent. Ralphs makes it easy to save while you shop, whether it's in-store or online, so you get the most value out of every trip, every time.

Download the Ralphs app now to save big on your next purchase. Ralphs, fresh for everyone. Must have a digital account to redeem offers. Restrictions may apply. See site for details.