261 The Trouble With Getting Rich, And How To Plan Ahead

Let's have a quick little check in on our relationship with money. Because everywhere I look, when people talk about like their career trajectory and how they set goals and stuff like that, it's anchored in this ambiguous ambition of like pursuing more. When all the rich people always tell us more is not the option, there's actually nothing to be found there. So few things I've read recently that pull together kind of thoughts from the people with the privilege to be on the other side and how they may end up inform our decision making. Now, when you're not rich and you're just trying to figure this stuff all out and like, find a way to, I don't know, do something that you enjoy and is going to be fulfilling, I'll run you through some notes I've got from those things I've read recently. And the most common traps I see here, both for accountants and folks running firms. Come on in. You're gonna be rich someday. So let's start planning for it today. You may not be rich someday, you may have no ambition to be rich. But tell you what, we make a lot of decisions day to day as if we do want to be rich. And we sure like to glorify those who are recommended. Bit of reading here. That's really good link to it in the show notes. It's by David Hannemeyer Hansen. He's one of the, one of the base camp guys. A blog post the Day I Became a Millionaire talks about sort of his humble upbringing when they didn't have much but but how he ultimately learned I don't know. As is kind of the common thing that you hear that like marginal happiness is only vaguely impacted by material wealth beyond your basic needs being met. So there's definitely a threshold below which money has a big impact on happiness. But most of us are a long ways past that, yet we still behave as if, oh, that next little bit is going to be the tipping point that will lead to eternal satisfaction, right? Like that's how we treat like that next little, little bit of money, as if that is finally the bit of money that's going to give us, get us over the hump. And this is all a very like a lesson that has always passed down from the people who are super rich and you're like, good for you. Means a whole lot coming from you now that you're loaded and we're still on the other side of that golden fence. But in this blog post he shared how he'd always play that game with his friends growing up. Like, what Would you do if you had a million dollars sort of thing? And it was always like, oh, man, I could finally buy the Atari. I could finally buy a better computer. But then one day he sold a small stake of his company to Jeff Bezos and took some cash out of that and had a million bucks in the bank overnight for the first time and went through all of those things that are like, you know, that you always say you would do, or that a million dollars or however much money would unlock for you. And the first one he grappled with was, I'll never have to work again. And when he got there and one day that money hit his account and it came down to, am I never going to work again? You run into things like, what about all the people that I still have commitments to? What about all the people that work for me? What are they going to do? What about all the people I would be letting down in the course of never working again? And what the heck would I even do? Even if you stopped doing what you were doing today, in a few years time, would you find yourself coming back around to kind of the same things? This is actually what he found when he got this money. He spent virtually none of it until the end of the year. He bought a yellow Lamborghini and was like, it was fun for a couple days and then it didn't really do anything for me. Ultimately, what he settled into were all the exact same things that he was doing before because he liked doing them. He said, quote, flow and tranquility were the true sources of happiness for him all along. And he eventually found that the things on the other side of being a billionaire that made him happy were all the same things that he already had. The reassuring part of this is one that it can't be taken from you, that whether you have money now or you don't, or you don't have money down the road, once you know what it is that makes you happy, gaining wealth or losing wealth, can't take it away from you. But then two, that thing that made him happy ultimately, like, was not an expensive thing, but he wasn't able to really see what those things were until he was kind of on the other side and unlocked this, I don't know, different level of wealth, and then gone full circle straight back to like, oh, here's what I actually want to do, and it's not very expensive. And obviously wrapped up in this are a lot of, like, very privileged sort of things from being beyond that base level of wealth where it, it really does have a, a big impact on quality of life. And he did say, you know, there is, there is a, a value and satisfaction in things as simple as not having to look at the price of a menu item again, things, things like that that you encounter every day. But I brought them ultimately full circle to what are the things that make me happy? Did those change? Not really. So for those of you who are pre rich, we got some rich people that listen to this. But for those of you who are pre rich, what are the things that make you happy right now? For me, it is going on walks. I don't like saying it out loud, man. Walks have been so good for me lately. And I don't know if that makes me feel old or lame. I just know any other aged version of me would make fun of me for saying that. But walks have been so good for my brain one on one time with my kids, where they're not all just freaking each other out. I have this theory that every kid you add to a group exponentially increases just the collective madness that's happening in that group of kids. But if I get one of my kids out one on one, like, man, it's super chill. We can hang, we can talk. Doing stuff with my hands, like making a thing, really enjoy that, or making music, because it's just so foreign to like how I do my work. And then meeting new people, I've learned I super enjoy whenever I go to conferences. I'm pretty sure I'm an introvert, but I do still love going to conferences and meeting new folks and hearing their stories. And that's always very energizing. But as I was reading this blog post, it was actually this compared in addition to a podcast I heard the other day where they said, as dumb as it sounds, and going through the exercise of outlining, how much money do I need to make for like, what is currently sort of my dream life setup where you got this like nice house or this or that or whatever it is you think you quote, unquote, need or want actually backing into, what is the money that I need to make to be there at this level that, you know, I think will make me happy. And obviously this doesn't need to be absurd. You don't need to have a mansion and all these ridiculous things. But if you actually go through the exercise of outlining, what are those different things that you want within reason, and then backing into, how much money do I need to make to get there? For most people, you're actually pretty darn close to that. And you'll probably be there in a couple few years. So why can't we just stick to that? You know, like, why does there always have to be that next thing, that next target? I was talking with someone at Engage. It's like, maybe this is most clear in home buying. Homes always feel expensive. I mean, homes are expensive, but homes always feel expensive because we always want the home that's just beyond our means, right? Like it is the human condition. And for some reason this is a really hard thing to unlearn. This episode is brought to you in part by Live Flow. You know a really wild way that some people are using Live Flow. So Live Flow connects all of your QuickBooks data to excel or Google Sheets. There's just a little button in Excel or in Google Sheets and you get a dropdown of every company you have access to in QBO and all the reports. And you can pull that stuff into Excel one time, make it, keep updating all that really wild way people are using. This is for month end closes for their clients. So you have basically this, this spreadsheet or set of sheets in like a workbook that is a template you've created and all you got to do is connect it to a company and it'll pull all the different sheets in. You need to do the review from balance sheet P and L GL reports, all that in a templatized way that you can do the exact same way for every single client. And it creates this really like rich standardized work paper instead of having to dump out like a whole bunch of PDF reports or something to put together those work paper. That was how we did it. We had like a standardized file structure and you would run various different PDF reports for all these things and then annotate them. But that was all a manual process rather than creating like a big old Google Sheet or Excel workbook that has all of the reports that you want and it's a single template so you can do it the exact same way for all of your month end closes for all of your clients and it pulls that stuff instantly. Pretty darn cool. We normally talk about the client facing ways to use Live Flow, but I know some pretty smart firm runners that are using it just for like closing clients books. 2 Turns out when you can liberate your data from QuickBooks and get it into a spreadsheet, there's some handy things you can do with it that's lifelong. More about that one. Check out the link in the show notes. This episode is sponsored in part by cloud accountant staffing you ever had a problem finding staff? No. Okay, keep going, skip ahead, move along if you have had any issues finding staff. Cloud account staffing is a great way to find talented folks in the Philippines to join your team. I've talked about it many a time. I was doing this four or five years ago. I came into it with all the spooky scaries you would expect. Hiring offshore folks for the same time, for the same time for the first time. Is there a stroke in here? I can't talk. Today we started pulling Philippines hires into our team and it completely changed how we approach hiring. Cloud account staffing makes that super easy for you to find talented folks. In fact, I got a resume right here along with a video intro of a real person. Cloud accountant staffing's recruiters pulled for a firm person. Got their bachelor's in accounting in 2018, went straight into audit. Good for them for getting out of that. Spent the last four years doing accounting. Month end close stuff. Full cycle for western Companies selected among 30 staff for exceptional performance. Wow. ARAP management payroll month end close financial statement prep 1099s. Bless their heart. Finding resumes like this in the States is like pulling teeth. And as soon as you find one, it is hungry hippos for every single person that can get their hands on them. Like I said, we got away from this by hiring folks in the Philippines. We, we still needed people onshore, but we went from exclusively hiring onshore to like one to one onshore and offshore. You're gonna have a whole bunch of embarrassing questions. It will feel unattainable, confusing. That's totally normal. You do it just by getting started and learning. Learn more about cloud accountant staffing. Check out the link in the show notes. Examples of this over glorification of wealth that I see very commonly in the accounting profession. One just advancement in general. Trying to get to manager, trying to get to partner. I was on somebody else's podcast today and they're like, what's your best bit of advice for young accountants who are trying to figure out, like, where do they want to go from here? And I'm like, look and see if your boss's job is a job that actually is one that you would want, right? And most of the time, if you look at your manager, if you look at the partner, they're working every bit as hard as you, if not harder. Like, do they have a fundamentally better quality of life than you? If not, why are we striving to get from A to B to get there if the only Difference is pay. Is it great to have more money? Sure. But oftentimes those people are worked to the bone even harder. They have even less flexibility because of the demands of that job. But otherwise the only difference is they're making more money. And so we think by getting there we're somehow going to unlock this level of freedom that we don't have today. That to me is, is an example of like over glorifying, getting rich and thinking that money will solve problems that it won't ultimately solve. I did this. When it came to owning a firm, I'm like, okay, this is honestly, it was the default path in the game I was playing. I was in a small firm. What does success look like as defined by everybody within that small firm? Well, it looks like becoming the boss and then being the owner. That's as high and as successful as you can get in that little game. Right? But if I had looked at the people running that firm, I wouldn't say that their lives were any better than mine. Like if I looked at their jobs, in fact, they oftentimes got stuck with the worst jobs of like having to do those brutal phone calls with clients and a lot of the things that I was very happy to not have to do, yet still I was playing, playing the game as hard as I could on that default path, you know, as the game was defined by everyone else around me. And the only rationale for why I think we all do this is it's money. I guess it's also like if you read the book the Elephant in the Brain, it is status for sure. Also like modern day western culture, we like to act like there's not just a ton of virtue signaling and, and status seeking that we all do, but man, we are all creatures that are so driven by status. Another book I went through recently, somewhat related, the Psychology of Money. Not it's not specifically about this point, but interesting from the standpoint that we all have very, very different relationships with money. And while you think money would be a very rational thing, the way we spend money is anything but. It is driven by envy and greed and optimism and risk tolerance. And these things are embedded in people in very different ways. They actually said folks who their likelihood to invest money down the road is heavily driven by things as simple as what did the market do when they were a young adult? Like you look generationally at different people. That's that experience of what it looked like when they were a young adult is embedded in them. You look at things like less wealthy households spending more on lottery tickets. It's not rational, but it's not illogical. Because to those people, some shot is better than having no shot at having money. It argues that from an evolutionary standpoint, humans just like are not made to handle money because this is such a new thing for us. Like if it takes millennia for dogs being domesticated to overcome like the primal urge of chasing a squirrel when it runs by then. What makes you think when humans have been dealing with money for 200 years, that we're going to like have this all nailed down? Even concepts like retirement, which is largely something that wasn't accessible for Most until the 80s, of course we're going to suck at this stuff. The two biggest takeaways I had from that book that are relevant to this one, how envy can make you reckless. It made the argument there's nothing morally wrong with envy, but there are practical problems to it. It raised the question, do you want what you want because of someone else? Oh boy, A lot of examples of that every day, right? Whether that's building, building a successful firm to prove a point to that last firm who didn't believe in you, or finding success in order to prove a point to that person in your personal life that said you never could, or that teacher who said you would never amount to anything. So many examples of that in our daily life. Do you want what you want because of someone else? That's a bad reason to want something. Other main takeaway I had from this amassing a fortune for many people is easier than keeping it. Amassing it versus keeping it. Actually two entirely different skill sets. Whereas many of the folks who are who have bad luck, we will assign negative traits to them just because the outcome wasn't positive. Did you know on the subject of psychology of money, it was an interesting, interesting read. I would say it's. It's an interesting audio book. 2x er or book summary service. I probably wouldn't sit down and read that one on paper unless you really geek on that on more the psychological sides of that. So how to plan ahead for getting rich. Five practical takeaways. Stuff that's hopefully actionable. 1. Explicitly define what makes you happy today because it's probably gonna be the same thing that makes you happy when you are rich. So for me that is time spent with family. That is getting to go see new places. If I can do that with family, that's even better. It's a lot of things that are not frankly expensive. And if I think about the most expensive things I do and the things I burn money on, they definitely pale in comparison to that short list of what are the things that make me happy. Number two, I've been trying hard on this. Make gratitude a practice for me. The best way to get to a more grateful mindset is to spend 20 or 30 minutes journaling. It is so transformative for me. If I'm feeling overwhelmed or annoyed or mad, sitting down and doing a bit of journaling for me, by the end, for whatever reason, I get about midway through that and I've kind of processed all of my feelings and the things that I haven't fully thought through. Midway through that, it's like I process that stuff and then I turn to the things I actually care about. Inevitably it comes back to my kids and, you know, personal relationships that are front of mind and how fortunate I am to have the flexibility that I have and all that. And by the end of journaling, man, I'm. I'm just in such a better frame of mind and I don't always make time for it. And it wasn't really until I found that thing that for me, took me to a totally different place of gratitude that I even realized that was a real thing. I've always, like, exercise and stuff like that and that. That's really helpful for me to. To kind of clear my head and stay organized. But for whatever reason, journaling gets me to this place of gratitude that made me realize, yeah, gratitude's actually kind of work in some ways, and you have to make space for it and do the work to, I don't know, feel that. Which is kind of weird and not something I realized until the last few years. Number three, just determine what you need financially. That exercise, as dumb as it is, working backwards from what you. What you maybe aspire to have within reason. And it is. I mean, it's dumb to think that you even actually have to do that. Like, we're accountants. I can do all that in my head. No, actually writing it down. If you have a partner, like, going through it with your partner and agreeing on like, yeah, this and that, usually it's less than you think it will be and it's more attainable than you had expected. And so if you look at that and you're like, yeah, I'm probably going to be there in like, one to three years, like, then what? You know, like, what am I working so hard over stressing so much about? Number four, avoid lifestyle bloat. Optimize for number one. That is what makes you happy today. Don't get sucked into playing other people's games. If your lifestyle keeps getting bigger and more expensive and that monthly nut just starts getting more massive, is it is are the things that are getting bigger there feeding into number one, what makes you happy? I would argue there are some expensive things that can bring you back to what makes you happy. The best example is, you know, spending money to get time back. We start our career trading our own time for money and then you get to a spot where you have more leverage and you have people working for you and all those things. And oftentimes we still aren't willing to to give up our own time to do the opposite of that, to give up our own money to get time back. And if you're not willing to do that, then what was the point of all of that wealth building? So in general, avoid that lifestyle bloat, keep things lean and don't get sucked into other people's games. Guy I went through graduate school with. As part of graduate school, we spent a week in Beijing and a week in Vietnam and Saigon. Saigon was just awesome. Such a cool place. Guy I went through school with. Five years later retired there. Because he could do it so cheaply and he's just like, he absolutely loves it. And he's able to do that because, like, he's got that whole lifestyle bloat totally under control. This week's episode is sponsored in part by Maker's Hub. Maker's Hub is one of the coolest examples I've seen so far of awesome new AI tech, like making your life way easier, which we're all ready for, right? Stop telling me about AI stuff, tell me how it can save me a pile of time. So they're a bill pay platform that is using AI vision models to take ocr like so much further than traditional OCR ever took us. It feels like for about the last decade we've been being told fully automated bill extraction. So it's removing human manual entry. Haven't people been saying that like forever? Makers Hub set out literally to be like, could we actually do this now with vision models? Now I did a demo day video on the main channel a week or two ago demoing like some crazy complex use cases super hairy invoices that makers have just gobbled up and spit out without breaking a sweat. Now they are exceptionally good at big ugly invoices. So like I used to work with some retail flooring stores where you have these super hairy detailed invoices and you had to do the receiving just right to make sure you had the right quantities of all the items Going into inventory. Maker's Hub can process this stuff to like every little like granular level of detail that you need. Not just the invoice amount, like all of the detail in that video. Actually we chucked 68 pages of like 64 Home Depot invoices, all with like multiple line item detailed all these various different inventory items. It processed that thing in like less than 30 seconds. It is the sort of thing that my clients would have. Like people just sat in a chair doing all day long and right now like we could come in and be like, we're going to take that off your hands. We'll actually do the receiving part now. I just helped him with the bill payment part. We never got into the ugly receiving stuff. These days I would grab a tool like makershub, come in and offer that service and honestly like automate 85% of it. Super cool. You want to learn more about Makers Hub? Check out the link in the show notes or head over to my YouTube main channel or just search Jason Stats. Makers Hub. Super cool. One of the best new AI things that I've seen. This episode is brought to you in part by Team up, helping you recruit top Filipino accountants without any ongoing monthly fees. The difference between teamup and all the other offshoring options is that Team up helps you hire staff directly. No middleman. You work directly with your new hire in the Philippines. Hire the person, not the company. Guys, gals, gang. Here's just a few reasons to hire directly. You have access to higher level talent. Makes sense. You have complete control over team culture and training. They keep 100% of what you pay them and it's a lot more affordable for you. So you can retain your team for the long term. Team up can source accountants with experience working at US or Australian firms familiar with tools like Zero, QBO and DeX. Also recruit specialist roles, team leaders, tax specialists, administrative assistants, thought experiment. What if you had an executive assistant for the first time this tax season? Just. Just throwing it out there. What would they do? Start at that email video I did on the main channel recently. Get help with that stanky ol inbox. I digress. Team up recruits these talented folks for a flat one time fee of 4,000 US American dollars. That's it. 4K one time. Somebody at Robert Half just did a spit take. Robert Half reference. We ever gonna get Robert Half to sponsor this pod? Not anymore. And they can connect you with an affordable employer of record if you need help with payroll and compliance. Once you hire that person. Big fan of hiring. In the Philippines, you Know, I did a bunch of that. Check out the link in the description to learn more about team up. Last one, number five, pursue passion over perfection. Stop worrying about trying to be the best and instead focus on what are the things that you're pumped about, the things you don't, that don't feel like work. Your personal interests I hold are a competitive advantage that you have that other people don't have. Shaun White, the snowboarder guy, he was also a skateboarder guy. There's a documentary that I've seen. Most of. It's a bit of a puff piece. I feel like people are having documentaries made about themselves that just make them look great. Like, Schwarzenegger is probably the biggest example of this. They had a doc come out when his book released and it was, it was just like showing off all the amazing, incredible things that he's done. But this whole Shaun White doc is like, about his journey of realizing that no amount of winning was ultimately going to make him happy. And then when his career ends, he's like, well, what am I? Like what have I got left and how am I going to be happy? I no longer have sport and competition, but even that didn't make me happy in the moment. Like, even winning, like that was all fleeting. So pursue passion over perfection. Bill Belichick, Patriots coach about to become the losingest coach of all time. In order to win a lot, you're probably going to need to lose a lot. And the way you make that okay with yourself is by doing what you're passionate about. So it's all good. Like the thing that you're chasing is the journey itself playing, you know, the infinite game. It's been framed. Journey before destination is the nerdy framing. But if you find what your passion is, you find the things that make you happy. Like what are the, the, I don't know, it comes to spending money, make sure that that's connected to your passion. Like, what brings you back to that? Now we have, we have an exercise to go through. This will either be a great idea or an awful idea. I've used AI to imagine, Imagine like in a movie where you do like that sequence where like you go to heaven and you see this person and they teach you some kind of lesson. And it's like this, ah, this like existential, ethereal like realization. A moment of sort of personal self discovery. I've asked AI to imagine a scenario like this for us that will now journey through together to really bake in these, these important learnings about the dangers of money. Today. Okay, Take my hand.

You'll find yourself in a vibrant, lush forest, bathed in the warm golden light of a perpetual sunset. The air is filled with the sweet scent of blooming flowers and the gentle hum of life surrounds you. At the center of this tranquil scene stands a large smooth rock upon which sits a peculiar creature. The guide.

The guide.

My name is Sir Boggleberry. A jolly plump toad adorned with a tiny top hat and a monocle. I hold a golden cane that I occasionally use to shoo away the curious dragonflies that hover too close. My skin is a bright emerald green and my wide friendly eyes seem to twinkle with mischief and wisdom. Sir Boggleberry. Ah, welcome traveler. Come sit with me on this fine rock. Have you seen any delicious bugs on your way here?

No.

Pity. But we have more important matters to discuss, don't we? Tell me what troubles your heart today.

I asked it for like a. Like a movie scene. Like where you go to heaven and you talk with some like ethereal being about what ails you. And it gave me a frog in a swamp, Mr. Boggleberry. I want to avoid the trap of thinking of that wealth will solve all of my problems and learn how I can truly be complete and satisfied today, rather than chasing something that will never make me happy. What's a frog and swamp gonna know.

About this, Sir Bockleberry? Ah, a noble quest indeed. Wealth can be as slippery as a well boded beetle. But come, let's walk and talk. Sir Boggleberry hops off the rock and leads you through the forest. Sir Boggleberry. See these trees? They don't chase the sun. They grow content in their roots. How do you reach for happiness without chasing it?

I was kind of hoping that was something you could tell me there, Boggleberry.

Ah, indeed. Think of happiness like this stream here. The fish don't hoard the water, they swim and enjoy it. Let happiness flow through your life like water, sharing and savoring moments rather than grasping for more. What small joys can you embrace today?

What small joys can I embrace today? I went for a walk earlier. Super nice. It's finally sunny. I got some big projects done. That's nice. That's more of a work thing though. My youngest kid doesn't sleep in a crib anymore. He just rolls out of bed when his nightlight changes. So he came walking out of his room this morning feeling like an absolute. Just total badass. Getting himself yourself out of bed. Do those count? Am I on the right track? Are those buttered beetles?

Oh, splendid. Those are indeed the buttered beetles. The sweet, small joys of life. A sunny walk, a job well done. And your little one's proud moment. All treasures that enrich your life. Embrace these moments, my friend. They are the true wealth. How do you feel when you focus on these joys?

I feel like I want to work less.

A wise man realization. Balance, dear traveler, is key. Less work, more joy. Like the fish in the stream swimming freely, how might you shift your time to savor more of these buttered beetles?

Listen, I don't need this to turn into a lecture on delegation. But probably just not. Trying to do so many things all at the same time.

Ah, yes. Focusing on fewer things can bring more peace and joy. Simplify. Like a ton toad savoring one delicious bug at a time, the forest begins to shimmer. The golden light intensifying as the scene starts to fade.

That's it.

Remember, traveler, true wealth lies in the moments you cherish and the balance you create. Until we meet again. May your days be filled with buttered beetles and gentle streams. With a final wink, Sir Bogleberry tips his tiny top hat and the dreamlike forest fades.

He's got a top hat.

With a sense of clarity and calm as you return to your waking life.

Okay, thanks, Boggleberry. See you tomorrow. Go find your own buttered beetle.