Join me and my co-host John Pover for a compelling journey through the intertwining worlds of psychology and personal finance. As we dissect the reasons behind our attachment to financial choices that may not serve us in the long term, you'll gain insight into how upbringing and life's unique challenges shape our economic decisions. I'll share a stirring tale from a recent advisory session where ethical considerations took center stage, and we'll tackle the hard truth about the necessity of delayed gratification. This episode isn't just about fiscal advice; it's a deep dive into the emotional currents that influence your financial wellbeing.
Defense isn't merely for athletes on the field—it's a cornerstone of a robust financial plan. We'll draw parallels from the sports world to underscore the paramount importance of a solid financial defense strategy. By examining the gender dynamics of risk-taking and the psychological underpinnings, you'll come away with a nuanced understanding of how to better protect yourself and your loved ones from life's financial uncertainties. From the value of insurance to the benefits of early financial education, this episode will serve as your playbook for navigating the complexities of financial security.
Finally, we'll confront the illusions surrounding financial success and the pursuit of happiness. Through the lens of my conversation with a young entrepreneur, we'll explore how social media can distort our perception of success and self-worth. By reframing the conversation around wealth and contentment, we offer strategies for fostering a healthier relationship with money. This episode is a treasure trove for anyone looking to align their financial goals with their true sense of joy, as we guide you toward celebrating every victory on your journey to personal and financial growth.
Join me and my co-host John Pover for a compelling journey through the intertwining worlds of psychology and personal finance. As we dissect the reasons behind our attachment to financial choices that may not serve us in the long term, you'll gain insight into how upbringing and life's unique challenges shape our economic decisions. I'll share a stirring tale from a recent advisory session where ethical considerations took center stage, and we'll tackle the hard truth about the necessity of delayed gratification. This episode isn't just about fiscal advice; it's a deep dive into the emotional currents that influence your financial wellbeing.
Defense isn't merely for athletes on the field—it's a cornerstone of a robust financial plan. We'll draw parallels from the sports world to underscore the paramount importance of a solid financial defense strategy. By examining the gender dynamics of risk-taking and the psychological underpinnings, you'll come away with a nuanced understanding of how to better protect yourself and your loved ones from life's financial uncertainties. From the value of insurance to the benefits of early financial education, this episode will serve as your playbook for navigating the complexities of financial security.
Finally, we'll confront the illusions surrounding financial success and the pursuit of happiness. Through the lens of my conversation with a young entrepreneur, we'll explore how social media can distort our perception of success and self-worth. By reframing the conversation around wealth and contentment, we offer strategies for fostering a healthier relationship with money. This episode is a treasure trove for anyone looking to align their financial goals with their true sense of joy, as we guide you toward celebrating every victory on your journey to personal and financial growth.
Welcome to the Bounds Blueprints podcast, where we discuss the optimal techniques for finances and health and then break it down to create an Individualized and balanced plan. I'm your host, justin Gaines, here with my co-host, john Pover. In this episode, john and I break down the psychology of money how to accept where you currently are and then make a plan for where you want to go. Thank you for listening. We hope you enjoy. We talk a lot about the things that we should do and what's optimal, but then naturally we also constantly are bleeding into an episodes. You know, if you can do suboptimal and that's just because you don't have the muscles built. Yeah, and you'll get to optimal and and all that stuff, but it's we never really break it down. So I figured it'd be good to do an episode on why we, why we feel more comfortable, even if we know on paper it's not the best option.
Justin Gaines:Right right so yeah, it'll be it'll be able to be conversational too, because we can even like dig into, like you know, you need some life insurance, but you haven't taken a step on it. So we can also dig into that of like you know, having an actual one-on-one conversation about, like, what reservations Do you have? And, you know, do you actually know that you need it or do you think you don't need it? I might break that down.
John Proper:Yeah, that actually probably be good, especially for other people, because I know I'm sure I'm not the only person that obviously Procrastinates it.
Justin Gaines:Yeah, yeah well, and a lot of people do, and a lot of times it's it's the comfortability thing. I had a client this week that we literally in the meeting Meeting. He wanted me to sell him something that was like completely suboptimal. I was like we're not doing that, we're not doing that, we'll do this other suboptimal but still efficient for you process. It's always funny, too, when I'm talking to clients and like in that situation I'm literally decreasing my income because I'm like it's not what works, it's not the best option for you.
John Proper:Yeah.
Justin Gaines:So, but that's ultimately, one ends up winning sales, as they understand that I'm actually working with somebody who understands, who appreciates ethics and understands the processes and is concerned about the client and not about how much they're making at the end of the day.
John Proper:Yeah, and I think even obviously our shared interest from a long time ago of Psychology and just stuff like that. That's what helps sell too, because it's it's not just about the money, it's more of a Person approach which obviously always talking about, yeah, I mean ultimately sad.
Justin Gaines:And that's that's why, like understanding the psychology, money is so important is because all sales, regardless of whether or not it's you buying your food at the grocery store, or buying life insurance policy, or buying a car, or buying a house, they're all driven by emotions.
John Proper:Yeah, they're all like the marketing on packages and stuff like that's what.
Justin Gaines:It's how does it make me feel, especially in the culture, in the society we live in now? It's how does it make me feel? Does it make me feel good? Because it makes me feel good, then it's okay. And that's not necessarily good you know it's not necessarily true and accurate no, yeah that's.
John Proper:That's bittersweet because it's good in terms of there's so many options. It's like you almost have to stand out. You have to make someone feel good, but yeah, on the other side of it, yeah, but just makes you feel good, and that's why you're doing it.
Justin Gaines:Well, I'm feeling good. I would argue that most of my client meetings it's not about feeling good. Most of my client meetings, that's gonna require you to feel very uncomfortable. We have uncomfortable conversations and it does not feel good.
Justin Gaines:But, it's going to put you into a position where, long term, your life satisfaction is going to increase because you're having the uncomfortable conversation now in your 20s, 30s, 40s, 50s, instead of having the uncomfortable conversation in your 60s, 70s, 80s, 90s when you're like, oh, I don't have any money now or you know it could be. We're having a comfortable conversation today so that, if God forbid, you ever had a house fire or a big car accident or, you know, an employee stole money from you.
Justin Gaines:We're prepared for that and it's less painful. It's a matter of having the uncomfortable conversations now so that we can be in a more comfortable position, Because what was comfortable for us when we were kids isn't the same thing that's comfortable for us now.
Justin Gaines:That's only because of the things we've learned the things we've been taught and that's the biggest issue with financial education is that what is comfortable for us is what we got taught by our parents. If our parents weren't in a strong financial position, then what we're being taught isn't going to be optimal. The other thing is is your parents could have been in a strong financial position, but you're not taking the same life paths that they are. Don't have the same goals and now you're also making some optimal decisions. There's a reason why the rich get richer, the poor get poorer.
John Proper:Yeah.
Justin Gaines:Some of it's economic, some of it's the system, but a lot of it is understanding what you were taught and the tools you have about finances may not be accurate. You may need to rewire your brain on those things.
John Proper:Yeah, that's interesting because I've always probably understood this, but this is the first time it's getting talked about and it's really clicking in terms of for both of us. I think one of the hardest things you have to sell is that ability to see into the future and say do the hard stuff now, for you're selling delayed gratification, which is basically one of the hardest things to do, especially.
Justin Gaines:In a world that loves instant gratification, you're selling delayed gratification.
John Proper:Yeah, how finances you're selling delayed gratification. I think there's probably we'll talk about this too but a spectrum, because you do too many health things and everyone likes to say I've gotten this comment so many times, all this just to be hit by a bus and it's the dumbest thing you can say, but at the same time, I do get it. You don't want to go too far and just only think about the future. That's where I'm at now. I still want to lean towards that way, but it's definitely an interesting scale to be on and to figure out the right one.
Justin Gaines:Well, it's why I use the analogy with my clients of every professional sports team that wins championships has a strong offense and a strong defense. Now, the offense is the one who sells the tickets. They're the ones that get the viewership. That's why you watch these sports games. You watch the sports games to see the goals, to see the touchdowns, to see all of these things. Very few people watch sports because they're like, wow, I love this defensive tackle or I love this center. Back on the soccer team.
John Proper:I love the score being 0-0. Yeah, the goal is amazing.
Justin Gaines:It has all these crazy cool saves. That's why I watch the game. A lot of people aren't in that capacity, but that's what our job is. Our job is to develop the defensive strategy of your financial position, of your health position, so that you can have the offensive performance.
John Proper:Yeah.
Justin Gaines:Because if you have a really strong offensive team that scores a ton of touchdowns or scores a bunch of goals, but they also let in a bunch of goals and allow a bunch of touchdowns to be scored on them, they might not be winning, they might not be getting ahead in life. Yeah, we're there to say listen, I know it's not glamorous, I know it's not pretty and I know it's not fun to talk about this, but what is your defensive strategy? What is your plan? Because, yes, you could get hit by a bus. You could do all of your health things, and you can get hit by a bus. What happens, though? How quickly do you recover from that injury? Are you killed completely? Because, if you look at bus accidents, most people who get hit by a bus aren't killed, they're injured. So how quickly?
John Proper:are you recovering from that?
Justin Gaines:injury. Now, if you're physically fit and in good health, you're going to recover a lot quicker than somebody who's overweight, not in good health and hasn't been taking care of themselves. So it's because we took a little bit of a sacrifice here, had a defensive strategy that allows us to get back in the game stronger, faster, quicker.
John Proper:It's the same as true in finance, it's run with the same analogy you get hit by a bus and you're out of work.
Justin Gaines:Well, now you have loss of income. But did you have a defensive strategy for loss of income? Did you have a disability policy in place? Did you have any of the other protective strategies? Say, you did get killed. Did you have a life insurance policy in place so that now your kids and spouse don't have to take on the financial burden of not having your income coming into the household? All these things cost you a little bit of money. On paper, set you back, or put it so that you can't put things into investments aggressively. But at the end of the day, if you look at it from a holistic viewpoint, it's these defensive strategies that allow you to be able to stay in the game longer, get back in the game when things go south and just not be able to get knocked out when you get punched, but instead get knocked down and be able to get up much faster.
John Proper:Yeah, I don't know why it's, I don't know if it's a cultural thing or what, but the ability to have the deeper, harder conversations not just about finances, but almost all topics seem like so many people shy away from it. Even when you Like, even when we say in this conversation it does kill you, it still gives you that feeling of like oh, is this too dark to talk about?
Justin Gaines:But it's like Well, the other reaction that most of us will have is that's not going to happen to me Right right. You know that might happen to somebody else, not going to happen to me.
John Proper:We all from a lot of. That's a bold statement.
Justin Gaines:But psychologically, that's what our brains are required to think is it.
Justin Gaines:We are doing things to prevent that from happening. Therefore, it won't happen. That's not reality. But I think that's what it is, and I think part of it too is we had a female's perspective in on this conversation. Their female clients typically get these things much faster than male clients do, and I think that has to do with the psychology of it. There's the psychology of the female brain.
Justin Gaines:From an evolutionary standpoint, is the protector or not? The protector is the one who's going to maintain order, maintain the family structure and protect from inside, whereas the male dominant structure is go out, kill and protect from the outside and protect from an aggressive standpoint. So we are more likely as males to want to go do the risky, dangerous things. Our female counterparts want to do the opposite. They want to be more conservative, more firmly planted, stable. So they're going to understand these topics much faster, much easier, because they're more risk averse.
Justin Gaines:There's a reason why there's all those jokes of like you want to do something dumb, go hang out with the guys. You want to find a smart way to do it? Go see how the girls do it. It's because one's taking on a ton of risk and the other one's not taking on a ton of risk. There's reasons why you can make those generalized statements and, generally speaking, they tend to be accurate, and it's because of the psychology, what it has to do with the hormones and the chemicals released in your brain that just make you more likely to have a higher or lower appetite for risk.
Justin Gaines:And that's even you go outside of the gender roles, my appetite for risk and your appetite for risk are very different.
John Proper:Yeah.
Justin Gaines:Very different. And that's not to say that your appetite for risk is more feminine. That's not what I'm saying at all. It's the case of what you're willing to take on for risk is very different than mine, and I also tell people I'm willing to take on a ton of risk, but it's calculated risk. I'm not just willy-nilly shooting from the hip. And that's where the psychology of money starts to play in is.
Justin Gaines:I wasn't taught these things at a young age. I taught myself them over a longer period of time, and so as I grow, as I get older, I am continuing to increase what I call my stress capacity and my risk capacity, and that's what I try to do with clients is. Well, a lot of times, when we're talking in our podcast about what's optimal, what's suboptimal, we have to start at suboptimal in order for you to build your risk tolerance and your stress load of capabilities, so that then you can move into this higher risk situation. Higher risk isn't necessarily a bad thing if it's calculated. If you have a defensive and an offensive strategy working together, that's managed risk. If you have just an offensive strategy with no defensive strategy, that's just high risk. With no management of it, it's all or nothing.
John Proper:I think it's always important We've said this probably before too is suboptimal doesn't mean bad either, because if you're doing nothing, suboptimal is better than nothing.
Justin Gaines:So we always talk about that, but realistically, you're always doing suboptimal because to achieve perfect efficiency and perfect performance, you would have to have the perfect balance of stress load and stress capacity. You'd have to know the most amount of information. And then you'd also have to be in a position to actually take action on all of those things. And it's very rare for you to be in a position where you'd have all three lows.
John Proper:It's on your working towards it always. I don't know if you're ever achieving that problem.
Justin Gaines:Right. You're constantly working towards increasing those capacities, increasing your strongholds, and that's where I think this black and white viewpoint of I'm either there or I'm not, it's just really, it's not realistic.
John Proper:Yeah, you run into that in both of our worlds. So much of it's either this or that it's hard to get out of. I mean, I've been in that thinking a lot, especially for health stuff, and it's easy to get into, I think probably because even what we talked about before, there's so many options, there's so much middle ground that I think it's just easy to be like I need a belief to hold on to and maybe that's something you grasp on, cause it's like it's yes or no. That's much easier than it's maybe, cause there's a million maybes and I know I'm taking it a little too far. But yeah, it's hard to get out of black and white thinking sometimes.
Justin Gaines:Well, and it's because of, I'll run us through an exercise that I do with my clients and I'll use you like you're the client, and then I'll explain why you're having the reactions you are. But to not get like super deep and not take up a ton of time, I'll kind of broad brush stroke it. But how do you feel about your financial position?
John Proper:Are we doing like a one to 10? We'll see easier.
Justin Gaines:If you're comfortable with a one to 10, we can do it that way. I do a. You know 10 is optimal, perfect, one is. I'm struggling and like there needs to be major changes because I just can't live day to day like this. Where on that range do you fall?
John Proper:She like a 4.999 repeating of like almost neutral.
Justin Gaines:Okay.
John Proper:What are you?
Justin Gaines:ranking that against.
John Proper:What do you mean? Like what's causing it?
Justin Gaines:Yeah, why 4.99? You're comparing it to something. What are you comparing it to?
John Proper:I guess just the feelings I have of like I have a good savings but I feel like I'm at that next step of you can either use it well or you can use it poorly. So there's a little of that extra stress. I guess there of you have it right now, but it seems like a point in my life where it could branch very quickly.
Justin Gaines:Define good and poorly of using it.
John Proper:Using it towards something that will gain me more or using it towards something that will stop the game, because we're talking money or experience. I could use it in a way that gains me more experience, but I lose all the money and that's technically good.
Justin Gaines:So you don't even like that. Like technically good means that you're trying to justify.
John Proper:Yeah, because I hate the feeling of you know, when you've worked. So my biggest thing that probably ties into what you're looking for is when you've worked so long and so hard to say, pay off debts, get past zero. It's almost more paralyzing when you have the money than when you actually don't. For me, it's you don't lose Well, just because you don't want to, you're almost more scared to lose it. If I had nothing and I don't know, because I, when I was in the position before, I just worked, that was the answer. But now, when I have it, it's kind of like a you know, I want to use it wisely, I don't want to go back to where I've been. Those things start coming into play. Versus if you just had nothing, you'd be like well, I have no choice, but better just go make Right.
Justin Gaines:So you're between a rock and a hard spot, so you can only move forward on that other one versus right now you have a lot of fear and excitement kind of playing in.
Justin Gaines:It's not like we're fear driving you.
Justin Gaines:Definitely I don't want to make the mistakes, and it's interesting you said something too of the answer I'm looking for which is not uncommon for clients to say, but I'm not looking for an answer Like.
Justin Gaines:The answers that I'm looking for is what you genuinely feel, because if I don't know how you feel about money and how you feel about your position, then I don't know how to coach you to then make the next step and make the forward progress, because a lot of times, what you're doing is you're in your mind, you have constructed a model of what you are capable of and where you should be today, and that model is always not where you are today. That model is always in the future. Now, the problem with that is you're constantly judging yourself against. Does this model what I am today? We always push that model to be greater than where we are today, but we always look at it as a today metric, not where is this model going to put me in a year versus where I am today? The model is based off whatever we think is normal, whether that's from a societal standpoint from a family standpoint, a relational standpoint.
Justin Gaines:Where are my friends?
Justin Gaines:we're constantly benchmarking ourselves. The problem is we're benchmarking ourselves against things that have thousands of outside variables that have nothing to do with what we are or who we are or what we're doing, but we use that as a benchmark. The number one thing that's going to hold you down is if the benchmark you're using you eventually obtain. You're now going to have another problem where your benchmark is actually holding you back because you've met your benchmark. You've met whatever the average is or whatever you're trying to achieve. But a lot of times this happens with people. Most people will end up in that situation because the lower the starting point as far as net worth goes or budgeting goes. Say, if you're at a negative budget, you're constantly living paycheck to paycheck where you want to get to and what the model is that you want to move towards. Typically, there's only a few steps ahead of where you are. You want to get to it.
Justin Gaines:If you're living paycheck to paycheck, clients typically want to get to a spot where they're not living paycheck to paycheck and there's a little bit of breathing room there.
Justin Gaines:But when you reach that point, now you take a break and then you reassess and you're like okay, now I want more breathing room. I want more, I want more, I want more. It's because you're constantly building a model that you're reaching after, instead of stepping back and saying where am I today, where do I want to be in six months, in a year, then celebrating that win when you actually achieve it, and then moving on and saying, okay, now let me be honest where I am today and where do I want to be in six months a year? I have on my board. I'm constantly benchmarking where am I today, where do I want to be in a year, and, based off these growth metrics, where am I going to be in three and five years? Three and five years really don't matter, because that's all extrapolation, based off where I get From the different- what you're doing to the other day to day.
Justin Gaines:It allows you to have something you're striving towards, but that is benchmarked, based off of the reality of your situation and what you actually want to achieve. Because when I'm asking those one to 10 scale questions, it's not from a perspective okay, this is where I am, this is where I want to be. The one to 10 at the beginning just says okay, where do you think you are? Do you think you're really good financially? Do you think you're not so good?
Justin Gaines:You were right in the middle, which is a good spot to be, because it means that you realize you've overcome things. But you also realize there's things for you still to obtain Realistically. On that one to 10 scale, you want somebody to say that they're in a five or close to it, because that means that they recognize they've overcome things and they're better off than where they were and that they have more room to go somewhere. The people are in the ones and the people are in the tens. The ones are over critical of themselves, the one to three. They're over critical of themselves and they're not celebrating their wins. If you take somebody who's living paycheck to paycheck and doesn't have money left over, there are still wins because the reason they're in that position is because of some sort of situation. It's holding them back and holding them down, but that they've actually overcome portions of that because they still wake up, they still get out of bed, they still I mean you're living paycheck to paycheck, but you're not in deficit.
Justin Gaines:You're still showing up to work, you still have a paycheck, you still have an income. You need to celebrate that. Then you have the person who's making, say they're making six figures and they think they're on top of the world and typically they're super arrogant and just buy all these lavish things and they're like I've made it In five years. They're going to be dealing with depression, anxiety and they're going to feel like they're a one or two because the lifestyle creep is going to catch up to them and they're going to be living paycheck to paycheck, even though they're making six figures and had a big buffer in their budget.
Justin Gaines:It's because they didn't recognize that there are still opportunities for me to grow and I've overcome a ton of stuff. You have to celebrate the wins and you have to be honest with yourself and recognize that there's still opportunities for you to go after and to achieve. If we stop benchmarking ourselves against other people and we start benchmarking against ourselves and what our reality position is, that's what's going to allow you to just be honest with yourself, recognize it, accept it and then work towards actually growing your financial strongholds.
Justin Gaines:I think all too often in a society where we can scroll on Facebook, we can scroll on TikTok, instagram, all these social media platforms and just get any endorphin rush that we want, and also be able to measure ourselves against other people. I'm not doing that, I'm not achieving this. I'm not at that level. Work benchmarking ourselves against the wrong things.
John Proper:Yeah, well, that was one thing that you brought up really to. That stood out to me also is whether you're comparing it to your close friends, your parents, peers around you. But then you have this fake world of fake money online. That kids I think I saw one this morning. It was a 14-year-old entrepreneur, 170,000 followers, and you're just looking at it. You're just thinking, man, I would have never seen this, and good for him. Nothing, obviously, against that, but it definitely affects you in terms of just sit there looking at it. You're like half my age. I'm almost like what am I doing?
Justin Gaines:But you're also boiling that person down to one number.
John Proper:Definitely. That's why it's fake.
Justin Gaines:You're boiling it down to one number. Their entire life, their entire person, who they are, is boiled down to one number. How many followers do they have? Because you know that number, you're then extrapolating. Okay, with that number of followers you generate this kind of revenue and it's not taking into account the whole person. Psychology has shown that once you break $60,000 of income per year per person, your level of happiness does not increase beyond that point. So, from $0 of income a year to $60,000 of revenue of income, your happiness increases as your pay increases. But once you break $60,000, there is no increased level of happiness achieved by pay raises as a result of that increase in income.
John Proper:Did you know why that is? Was it because or not?
Justin Gaines:From an investment financial, person standpoint, risk management standpoint, I think it's because at $60,000 a year per person, you can cover your personal needs. Without you can't go and buy all the lavish stuff. You might be able to go on a vacation once a year, but it's not going to be the craziest of vacations, but it's a case of once you break that threshold. Yes, you can go buy more stuff, you can go do more things, but you can't buy the important things in life.
John Proper:Yeah, you can't buy family. What actually bring happiness?
Justin Gaines:You can't buy emotional connection with people. But below $60,000, you have a lot of stress from being able to cover your rent, your car payment if you need a car your budget for food all of those things that are bare bones, basic needs. You're struggling to cover those. Once you hit $60,000, you're able to cover those and you're able to have some fun stuff. Yeah, over $60,000, you're just increasing the amount of fun stuff you have. But you can also buy things to comfort yourself for not having the things that actually matter.
John Proper:That matter. Yeah, I was just going to say so. I think we've obviously gone a lot and great information about the psychology behind it. But what are some tips then? I know you kind of mentioned obviously starting at suboptimal working up. Do you have anything else then? How do you get kind of a better view on money?
Justin Gaines:It's less about the money and it's more about just being real with yourself, focusing on the mental component and recognizing. This is where I am today. This is who I am. Strip off the emotion. Strip off all of the ancillary details. Strip off the benchmarking and the comparing that you're doing. Write down on paper. Who are you actually from a strictly number standpoint? Where are you today? Who are you from a number standpoint today?
Justin Gaines:And then accept it. It doesn't matter what it is. It doesn't matter if your net worth is negative. It doesn't matter if your balance, your income statement, is negative. That does not matter. What matters is that you actually accept that that is the reality. Don't make an excuse for it. Don't do any of that stuff. Strip it all off.
Justin Gaines:Break it down to just numbers that are very black and white, because it's either going to be a positive or a negative number, and that's strictly from the fact that numbers are plus or minus. In front of it, it's just because it's a deficit. Don't say that that's a negative thing. Don't say that it's a positive thing if you have a positive as well. Accept what it is and then ask yourself what are the action plans to take going forward, and that's what I do with my clients is we strip you down to just what are the numbers. What are the numbers? And then we say, okay, where do we want to be? Because once we have the numbers and we've accepted that, we can set that aside. That is who we are today. There's no changing that. That is who we are. Where do we want to be? Now let's talk about the emotions. Now let's talk about what we want to get to and let's make that the target.
Justin Gaines:And then we're going to cancel out all the outside noise, we're not going to worry about what our friends want. And that's the other tough part Is that conversation about what we want Takes a while. It's a long conversation Because I have to ask you you're going to tell me what you want and I'm going to challenge it why do you want that? One of the best conversations I ever had was my cousin was going to college and we were talking about what he wanted to do, what his interests were, and he said you know, I'm really interested in this one thing, that there's no money in that there's no money in that
Justin Gaines:field I can't make a lot of income. I go OK, I said how much money do you want to have? How much money do you want to make? I mean, throughout a number of whatever, I said OK, let's flash forward, let's just play in the hypothetical world. Right now, I'm going to write you a check for a million dollars. It's not that I could actually do this in this situation, but I'm going to write you a check for a million dollars. You get to put it in your bank account, but you cannot spend a single penny of it. Are you satisfied? Well, no, I'm not satisfied. Ok, it's not the money you want. What are the first things you're going to buy with it?
Justin Gaines:And this is a lot of times when I ask the questions, for you know, I've even done it once with a client who was being very stubborn with me, as I took a check out and I wrote it. You know I made sure that it would never actually be able to be cashed. You know, I marked it all up, scratched a whole bunch of stuff up, but I wrote it in the check for a million dollars and I handed it to him. I said here you go. I said you can cash it. You can put it in the bank, but you can't do anything else with it. You cannot touch it Just since they're in the bank.
Justin Gaines:The only thing you can do is you can point to it, you can show your friends you have a million dollars in the bank. You cannot spend it, you cannot do anything with it. Are you satisfied? Most people will say no. Most people say no, I'm not satisfied.
John Proper:What good is it?
Justin Gaines:I can't do anything with it, exactly Because the money is not what you want. You want what the money gets you. So now let's talk about that. And so in this situation it was you know I'd love to have a yacht one day.
Justin Gaines:I'd love to go. I'd love to be able to have a helicopter that I could ride around on and I'd love all these things. Okay, okay, to rent a yacht. And you know, go out with your friends and go in the Mediterranean Sea with a rented yacht for three or four days for 15 grand. Do you know that you can go on a helicopter ride for 80 bucks down the Carolinas?
John Proper:Cheap.
Justin Gaines:You know, and he was like, yeah, but I want to own it. I go, okay, well, that's a pride thing If the issue there is yeah, okay, I could do that, I could have that experience, but I want to own it. Okay, now we have a pride thing that we need to talk about versus understanding that okay, I want to do these things and I don't have to. There's a cheaper, more efficient way that I can do this. And recognizing that money is not what actually makes me happy. I'm trying to get to achieve and be able to do something that I wasn't able to do previously, and then figuring out okay, so if that's what I actually want to do now, how can we get there and how can we use where we want to get as our rewards along the way, if we know we're in this financial position?
John Proper:and you know, say we're at a death center budget we're living paycheck to paycheck.
Justin Gaines:we don't have any money in there, and so we need to cut expenses and we need to increase revenue.
Justin Gaines:So we're going to sit down, we're going to look at that and then in six months we're going to look at it again and say, okay, did I increase my revenue and did I cut expenses? Where does my budget sit? And then, once you have, and we'll define what a surplus you need is you know it's $20 a paycheck, $100 a paycheck, whatever the case may be and then once we get there, we're going to take the first time you do that, we're going to take that surplus and we're going to go celebrate.
John Proper:We're going to go out to dinner Because if you're planning a deficit, you're not going out to eat, or you shouldn't be, and that's where we're going to cut the money from we're going to make it so you can't eat out at all.
Justin Gaines:You're buying all your groceries. You're cooking all your meals.
Justin Gaines:But then the celebratory thing that you're going to do is you're going to buy that back because you just bought, you just got the surplus in your budget to then celebrate, because that's the key component here is celebrating. If you're not celebrating, you will burn yourself up because you're not giving your caveman brain, your limbic brain, you're not teaching it that when I achieve these things, when I put myself through this pain, there's a reward at the end. If you just go through and you make these adjustments, you go from a deficit to break even and you don't celebrate that and you don't have to spend money to celebrate. Celebrating could be okay. We're going to go for a family picnic in the park and so you're still going to cook your meals.
Justin Gaines:you're going to do all this stuff but, instead of eating at home, you're going to go for a hike and do it at the park you can do that for free. You can do these things that you don't have to spend money to have a celebration. But being able to celebrate your wins is what's going to allow your brain to continue to be hungry to do these things, and you cannot reward yourself with the reward unless you actually do it.
John Proper:Yeah, I think it's always crazy to how it seems almost everything boils down to the same answer, Because what you were talking about before, you need to accept where you are and I think part one is self-acceptance. Overall. We're talking health, we're talking finances, anything and then know what you want. And I look at both of those as now one is not more important than the other. You need both to be strong, and it would almost be great to have someone weekly be like what do you want in life, say finances goals, because that gives you so many answers of. You can't work towards something if you don't know what you want. And it's very hard to know what you want. And even in the case of your cousin, does he want to own those things because he wants it or does he want to own those things because it makes him look good?
Justin Gaines:So that's such an important to differentiate and that's the key, like what you're talking about there is first take a time waiting to go into it deeper, but it was again okay. Now you own the yacht, but you can't bring any friends on it.
Justin Gaines:You're the only one who can use it. It ends up being that you want the things that are that you can't buy. You want more time with your friends. You want more time with your family. You want more free time to do nothing. You want all these things. It's like that's what you actually want.
John Proper:Thanks for listening to our podcast.
Justin Gaines:We hope this helps you on your balance freedom journey.
John Proper:Please share your thoughts in the comments section below. Until next time, stay balanced.