The #1 thing most people get wrong about money

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Transcript

00:00You talk a lot about the right ways to spend money.

00:04So tell us, what are the smartest ways to spend money that will actually make you happier?

00:09I think there's two big things to keep in mind.

00:11One is that everybody is so different that there is no universal formula on how to do it.

00:16Even when people come up with ideas of spend money on experiences, not on things,

00:19that can be right for one person in the right way and wrong for the other.

00:23People get into a lot of trouble with money, whether it is how they earn it, save it, invest it, or spend it,

00:27when they follow advice that is right for somebody and not for them.

00:31It's one of the biggest problems that we have with money, where there is no one single right answer.

00:35We want to pretend there is, but there isn't.

00:37Some of the biggest advice is spend more time looking in the mirror, so to speak,

00:40to figure out who you are, what you want, what works for you.

00:42We're all a little bit different.

00:44The other is that there are really two ways to use money.

00:47One is as a tool to live a better life.

00:49The other is as a yardstick of status to measure yourself against others by,

00:52to insert yourself in the social hierarchy.

00:54And what a lot of people actually want is not a big house or nice clothes.

00:58They want a bigger house than their neighbor and nicer clothes than their friends.

01:01And realizing that at some level can be okay and is unavoidable.

01:05But if you are always chasing, particularly for the attention of strangers who are not even paying attention to you,

01:10that can be a big trap that's hard to get off of.

01:11How do we even figure out what we want out of money?

01:15I think that's a very important question because people are very good at knowing what they need.

01:19They're good at knowing what they don't want.

01:21Knowing what you want is very difficult.

01:23We are not wired to really know what we want.

01:25And part of it is because we will change over the course of our own lives.

01:28What I want today is not what I wanted 10 years ago.

01:30It probably won't be what I want 10 years from now.

01:32So it's always a moving target on this.

01:34One of the things that I think you should do to try to figure out what actually you find a lot of joy in

01:38is just the most diverse amount of spending that you can.

01:41You have to try a million different things to find the one thing that works for you.

01:45Some people love travel.

01:45Some people love wine.

01:46Some people love whatever it might be.

01:48Whatever your thing is, clothes, cars, doesn't matter what it is,

01:50it's going to be different from person to person.

01:52And you have to experiment with those things because they're usually not intuitive for what it is for you.

01:57Little experiments here and there of spending a little bit more money on food, on travel, on clothes,

02:00whatever it is to figure out your thing.