The Marginal Utility of Money & When to Stop Chasing It

Hey everybody, welcome to the Inner Circle. Mike Brown joined by my dear friend and member of my Inner Circle, Kevin Dahlstrom. I'm coming to you from Winter Park today. I'm 7 days deep in a 10-day writing retreat, living my best life. And Kevin sent me something this morning from X. It's my friends Sam and Shawn on My First Million talking about the definition of wealth. And essentially what Shawn says is when you're broke, more money changes your life. That part makes sense. But the rich keep chasing it too, trading time they'll never get back for money they don't even need. This is such an interesting concept, Kevin. Why don't, why don't we dive in and yeah, share your thoughts.

Yeah. And what we're talking about here is the utility of money. And depending on where you are in life, the utility of money can vary widely. And Shawn actually makes a great point in that My First Million episode, where he says like most people think of financial independence as the ability to buy whatever you want. And he defines financial independence as freedom from money. In other words, the, the ability to make your decisions not based on money. And that I, I agree with. Um, and what you and I were sort of joking about before we hit record is like, it's one thing to intellectualize that. It's another thing to live it. And I'm gonna share something that, uh, I wasn't going to share, but you, you bullied me into it. Uh, because I think it is gonna make a powerful point. You know, I, uh, 8 weeks ago I had surgery on my arm. So I've been sort of out of commission and I gained back the 30 hours a week that I spend rock climbing. And, um, I was telling Mike before we hit the record button that, you know, I've been focusing more on my work stuff, which I love my work stuff too, but it turns out if you put more focus on work, good things happen. And so my little LLC, um, my little solo business, which has like, I think I counted it. It's like 6 different revenue streams from things I'm involved in. I'm gonna do over $100,000 in profit next month. And I share that not to brag. In fact, I don't like sharing it. It kind of makes me feel weird. But the, the funny thing is, as soon as I can climb again, I'm gonna go back to climbing and not make the $100,000 a month. And, you know, I jokingly say, you know, it's because I'm lazy, but the truth is, It's because I already live the life I want. And so, you know, I'm in a very privileged position of saying that more money has very little utility for me. I've already got enough assets to fuel the lifestyle that I want to live forever. And am I still interested in work stuff? Absolutely. I'm, I'm actually busier than ever and having more fun than ever, especially since I, I can't do my normal climbing stuff. I'm kind of focused on it, but, um, it's not for the money. The utility of that money is so low. So I'll pause there and give me your take on that, because I don't want to— Mike, I don't want to miss out on the fact that, like, when you're broke, the utility of money is really high.

Yeah. And look, I think that, that you and I, uh, both are acutely aware of the irony of two rich guys talking about not needing any more money. Right. I mean, and, and, um, and so I think we'll, we'll foot stomp that again. It's like, hey, when you're on the come up, you, you have to go get money and there's nothing wrong with that. In fact, it's, it's sort of a necessity, necessity. And, you know, you could choose van life and be, you know, the dirtbag climber that you always talk about, but that, that takes, uh, my friend Hunter on my, my other podcast Money Stories a while back said being poor is a calling. Yeah, exactly. Like, like there, it only, it takes a certain disposition, a commitment, commitment. Yeah. And, um, And so yes, like up to a certain point, go get, go get money, go get your bag. Uh, and it's important, but as we start to hit middle age, you know, our friends, entrepreneurs, they become more successful. There are still a lot of folks that are trapped. Uh, many of my clients are trapped in the pursuit of more. And the whole thing is it does come down to this marginal utility of another dollar. And the way I put it in my book is, is the shift comes when you start, when you stop asking, how do I make another dollar? And start asking, is this worth trading my life force for? Right. And so, you know, at some point we're all trading time for money. Now, as you get more money and you can invest in things that, that, you know, pay you without your direct involvement. Okay. That, that equation changes. But at some point we're all trading time for money.. And yes, on the lower end of the spectrum, trading that time is worth it. You got to eat, you got to pay your mortgage, you got to pay your bills and build yourself a better life. But for me, here's a great example. I, you know, I often joke, like, I don't want one more dollar than I need to cover my ideal lifestyle. And my ideal lifestyle is lavish. It's not extravagant, but like, I have, you know, I have a beautiful home in Morrison. I have a beautiful home in here in Winter Park. Like, You know, it's not austere by any means, but I don't want an extra dollar if I have to trade my life force for it above and beyond covering that exact life that I've put so much intention into designing. And here's the example I love to give is like flying private, right? It would take me between half a million and a million extra dollars a year to fly private. Well, let's just say I'm flying twice a month, right? So, so that's 2 days a month. I would have to work 300 days a year exponentially harder than I'm working right now to afford to be more comfortable 2 days a month. Like, that math doesn't math for me.

I think flying private is a great example where, you know, um, the, the trade-off between life force and, um, and the joy or the, the pleasure or the benefit of flying private doesn't make sense. And it's, it's different for everybody, but I, I think you, um, You hit the nail on the head. And something I talk about a lot is, um, hard as it may be to believe, you know, um, money is not finite. And I mean, I'm just stating that as a fact, like you can late in life, you can go make a lot of money. You can make more money at any time. Um, what is absolutely finite and zero-sum game is time. And even more than that is energy or life force, because I I would argue that even if you have the time to do something, you don't always have the life force to do it. Energy is finite. And so the whole ball game, as you said, go get your bag, make sure, like work your ass off, put your head down so that you can cover your living expenses and then some. So you're getting ahead a little bit, but like you said, every dollar beyond that has very little marginal benefit. And by the way, this is one area where we might have slightly different views. I think for most people, the easiest way to get to that point where you're covering your bag is to choose simplicity. Um, and because I happen to believe, cause I've kind of lived all sides of this, that, you know, whether you're rich or poor, less is more like living a simpler lifestyle because everything you own owns a piece of you. And so I'm actually in a phase of life right now, as you and I have discussed at length. Became an empty nester recently. We're considering some pretty radical simplification to our life for that exact reason. It's not even about the money. It's about just like treading lightly. I know it's, again, we can't emphasize this enough. It's like hard to embrace that when you're young and you're just trying to get ahead. But I think it is useful as, um, as a framework and a planning tool to say, look, no, I don't need $50 million. To have a great life. When I give my talk, uh, How to Build a Kick-Ass Life, I actually ask people like, what's their definition of F.U. money? And, um, the numbers are usually huge, like $10 million, $50 million, $100 million, like these crazy numbers that frankly most people will never reach. And I think it's very liberating to recognize that maybe I don't need $50 million or even $5 million to live my best life.

Yeah. And this is, you know, this is, this is something that is, is near and dear to my heart. And I think about it, you know, again, uh, from a normal high earner perspective, right? Like let's, let's say, you know, $250,000, $300,000 a year, right? Someone who has a really comfortable job, but they're not on the path to $50 million. Like, like at what point does, do you reach this, this marginal utility curve? And, and, you know, I was, I was very fortunate to, to build a business that did really well when I was young and sold that when I was 39. Hit some bumps along the way after that. And it did force me to get actually clear on what was important. And, you know, we've talked about selling my supercars on the show before.

Yeah.

I am also, as I get older and perhaps a little bit wiser, trending towards simplicity because again, it is really like a trade-off literacy problem, right? Like, I do love supercars and like I reserve the right to own one at another point in my life. But for me, the math was no longer mathing. Like, keeping, keeping half a million dollars worth of cars in my garage that I was driving occasionally didn't pencil. Like, yes, they, they actually did bring me joy. They just didn't bring me so much joy that I was willing to keep that nut, uh, on the ledger.

Yeah, I, I, um, I'm writing a piece right now that's related to this, and, um, in that piece, I say the people I want to emulate, um, are A, crystal clear on the few things that bring them joy, and then they do those things over and over and over at the exclusion of everything else. So I think in, in many ways, it's like you talk about that trade, those trade-offs, like core to that is figuring out what your best life looks like, which we've talked about ad nauseam on this podcast.

Right.

Um, but really it's, it's like such a powerful exercise that most people simply haven't done is really searching your soul, figuring out what things really bring you joy. What does that life look like? And then, um, to use your phrase, how much fuel do I need to live that lifestyle?

Yeah. And it, it really is often, uh, less than you think. And, and, you know, I, I've run this exercise with hundreds of people. I mean, probably 500 people at this point. And, and again, I, you know, my clients are a higher earning crowd, a lot of entrepreneurs, a lot of executives. So, uh, the data is skewing toward a high earner, but the shocking realization most of them come to is that they already are within striking distance or beyond what they need to live their ideal life, and the changes they need to make are free. And, and this week for me is, is a perfect example of that. I mean, I've, I've been here for 7 days. I wake up without an alarm. I meditate for 42 minutes, I go ride my bike for 2 or 3 hours, and I come back and I write until I'm tired. And I feel more free and more happy and more expansive than I have felt in a really long time, um, because of the simplicity, right? Like, I know exactly what I'm going to do every day. And look, if I did this for years on end, it might— I might start to shift and it might get boring. But for right now, like, I can't imagine anything better than what I'm doing right now. And, and yes, like it took, it takes money to have a second home. That's really cool that I get to do that. Um, but it's not $50 million.

Well, I think what you've done during this writing retreat is you've distilled your life down to the essence of what makes you feel alive. And I think an interesting question to think about is what you mentioned earlier, like right now, like this week, you've had the luxury of like ignoring a lot of like day-to-day mundane life stuff. Um, so you can't do that forever, obviously, but how close could you get to that, that essence, that distilled down essence of your best life? And I think that's a valuable, like, number one, I think it's really interesting that you're sort of doing this and you're kind of trying it on for size. Like you're living a simple life, like a monk this week. And, and there's probably some things you love about it and some things that would get old pretty quickly., but then it's worth like evaluating and saying, hey, um, you know, how close do I want to be to this? And what does that look like?

Yeah, I mean, I, I can tell you that, uh, we sort of on the backside of this last week have rearranged our summer schedule and we're tacking on a few more weeks up here and, and basically trying to stay here as many nights as we can until school starts, uh, because It's addicting. I mean, it really is amazing. And for whatever reason, nothing physically about my life has changed except for driving over the pass and coming to Winter Park. But I feel this like I feel sort of this wall. I feel unreachable right now, even though my phone's on, I'm responding to texts and stuff. But like, I just feel like I've entered another world and the solitude and the peace is— it's addicting, right? And I think what happens is We don't realize how important and how much we, we love space until we actually start to create it. Um, and, and that's what I'm, you know, I, I live a pretty slow life as it is, but, um, man, this week has just turned it up to 11 and it is, it is just absolutely, uh, it's, it's addicting.

Well, we've talked before about how Slowly and imperceptibly, we accumulate these little obligations and individually you don't even notice them, but they do start to add up. And I think it is worth sort of occasionally stepping back and asking yourself like, hey, can I, can I shed some of these obligations and, and live a simpler life again? Uh, I'm reminded of the, there's a quote from the advertising legend, David Ogilvy, where he says, simplicity is the ultimate luxury. And I really do believe that. I mean, I'm in a phase of life where I'm being ruthless about this and really trying to strip my life down to the essence of the few simple things that I enjoy. And I have to tell a quick story because, um, you know, as you mentioned earlier, like, I think a lot of guys listening to this might have trouble relating to two rich guys, uh, you know, talking about, you know, how the unimportance of money. But I will say, um, a few years ago when I was at the peak of my corporate career, you know, I was, I was in the sweet C-suite of a multi-billion dollar company. I was, you know, well into 7-figure compensation. And, um, I was, I was a climber at the time too. And I met this guy named Tom who is now a dear friend of mine. He's a climbing guide. He lives in Vegas. He guides at Red Rock Canyon. About 6 months a year, travels the world the rest of the year. He's ex-military, no college degree. He told me that he's never made more than $70,000 in a year, which kind of blew me away because from observing his life, he had— he has such a kick-ass life. Like, he does work he enjoys, he has a ton of freedom, he has zero debt, pays cash for everything. He has a tricked-out Sprinter van, he has a '71 Mustang that he's restored. He's got a work truck. He rents a nice house in a suburb of Vegas. He's got a nest egg of savings. He has awesome friends and an awesome partner. And I literally asked him one time, and it was a rhetorical question, and I said, how in the hell do you have a better life than me? I'm literally— he told me he lives on less than $4,000 a month. And I said, I was at the time, I was making 20 times that. And yet I felt like he had a better life than me. And the point of this story is these principles we're talking about apply at all levels, right? So Thomas was super deliberate. He actually told me, he said, I recognize that I will never have high income. So I've chosen a simple life. And I thought, wow, that is profound. And in fact, I adopted that for my own life, just at a different level, but That's what ultimately played a role in my reboot in 2018 was really stripping down to the essence. And my point here is, you know, Thomas can do it on $4,000 a month, um, have a great life. It is possible to thread that needle at lots of income levels.

Yeah. And, you know, we've spent some time, you know, maybe, maybe talking to the person who can't relate, but I think we should also you know, talk to a lot of our peers and, uh, and friends that are, you know, building these massive companies. And the real question is like, for what? And look, I, you know, I'll caveat that by saying like, I do know a handful of people, but I want to— like, it's handful who are so mission-driven, they can't imagine doing anything else. They truly think they're, you know, creating world-changing technology. I'm going to set that aside for a minute, sort of the Elon Musk syndrome, right? Like, he's, he's actually willing to live a miserable life so that he can bring his technology to the world. And I do think that is a certain stance. It's not you and I's stance. But, you know, there are a lot of people, let's just say, um, I'm going to make one up out of thin air, but like, you know, running a $50 million, uh, home services company or something along those lines. Like, look, you can do mental gymnastics and convince yourself that you know, you like helping people and that you care about your team. And these are things that we hear people say, but like, it's stressful. Like running an 8-figure company is stressful, right? And if you have surpassed this threshold, like, I think there is an opportunity to step back and go like, what am I actually doing here? Like, what am I doing it for?

I'm so glad you brought this up because this is the I love my work crowd. And there are, you, as you mentioned, there are the Elon Musks of the world who are so incredibly mission-driven. It transcends money. It transcends everything. But two things. Number one, Elon Musk himself has referred to his life as a tortured existence. I don't think that's what most of us want. I, I don't wanna live a tortured existence. And number two, most people are not Elon Musk. What I've found over the past 30 years is that most people who say they love their work, it's a cop out. They, they actually don't know any different, or it's all they know. They're, they've built a one-dimensional life. And that's a sad situation is when you can't even recognize that you've, you've, you've covered your bag. Like you're there now, you have earned the luxury of deciding how you invest your life force. And To be honest, if the best thing you can think of to do with your life force is to go into an office every day, that's pretty sad. Right. And again, there are the few exceptions who are truly mission-driven. That is not most people, even in the upper echelons of the business world. That is not most people.

Yeah. You know, and I think the phrase, you know, if you love what you do, you'll never work a day in your life. I mean, Just please, everybody know that is absolute and total bullshit. I love what I like. I can't imagine loving what I do more. And there are many days where it still feels like work. There are still aspects of what I do that I don't love, right? There's admin, there's, you know, all kinds of stuff that doesn't light me up. So, you know, again, I am I am kind of living at this pinnacle of alignment, I think, as far as loving my work. But I'm working exactly as hard as I want to be. And I know I am leaving upside on the table, not just financial, but like, audience growth, fame, whatever it is, like, like, I could triple down right now. And, and look, there are days when I wake up and go, man, you know, should I do that? Like, this is not a solved ongoing thing, right? And, you know, I have a very dear friend who has a massive personal brand, and he's always jabbing me to, you know, go all in on this. And I like the idea until I look at my life this week and I go, dude, I am doing exactly what I want to be doing, and I'm going to leave that upside on the table. Like, it's just—

that's honestly That's what makes you special. And I like to think that's what makes both you and I sort of unique. And the reason that I think this podcast is important is that message is not out there. And I think you're gonna tell that, you're gonna, uh, communicate that message in your book. Um, and so, so maybe we can end right where we started. You know, I talked about how for my work, the stars are all aligning. Like I was just doing the accounting and like July is gonna be an amazing month for my work financially. And I'm also like, everything I'm working on on like 6 different projects. They're all sort of interesting in their own way. And the instant I can get back on the rock and climb instead of work, you can rest assured that's what I'll be doing. Yeah.

And, and, and fair enough. Right. Like, uh, and I, I think that there's ultimately, they're like, there's no right answers. And, um, you know, one of the principles that I hold in my, in my coaching is like, I don't know what the answers are for you. I can just help you ask really good questions. And I think that's what we're doing here. Like I said, on this show is like, look, man, I don't know what the answer is for your best life. Maybe you do want to work harder than I do like that and like, go for it. Like, totally fair. But be sure you're actually choosing that intentionally and not just accepting the default.

I'm not as quite as, as unbiased as you are, maybe because I do feel like that there are things that make life better and things that make life worse. And some of those are absolutes. I, you know, and I think part of the, the benefit of the, uh, what, 50-plus years of combined experience that you and I have doing a lot of stuff is that we've seen kind of some things that work and some things that don't. And yes, there are exceptions and there are nuances. Um, but, um, but I think in general, You know, humans are human and we all yearn for freedom and control and purpose. And, um, there's more to life and there's purpose beyond earning dollars.

I love it, man. We'll, we'll, uh, we'll close it. We could, we could probably talk for 6 more hours on this topic and both get pretty damn fired up.

Like a mega livestream.

Absolutely. Just, just rant, uh, against the marginal utility of dollars. Uh, Unironically as we possibly can.

Yes.

Ironically. Uh, great discussion, Kevin. Uh, and thanks for joining as always.

Awesome.