Kevin and Mike debate lifestyle creep beyond spending: Kevin questions every purchase while Mike argues high-earners deserve enjoyment. They introduce the 30% rule for cutting activities and the "who is it for?" test, agreeing the real problem is over-commitment, not money spent.
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Hey everybody. Welcome to another episode of The Inner Circle with myself, Kevin Dahlstrom, my good friend and member of my inner circle, Mike Brown. The idea of this show is it's Mike and I having the conversations we have anyway, except we hit the record button. Today's topic is one that every single person listening to this episode will relate to, which is lifestyle creep and Mike and I got engaged in a bit of a conversation about this topic online. And you know, we're all familiar with what we're talking about, right? It's like, I call it the hamster wheel. It's like no matter how much money you make, the cost of living seems to keep pace with that, if not grow at a faster pace. And you know, the conventional viewpoint here is, which I think I'm going to end up sort of more defending, is that, you know, lifestyle creep is bad, that you should Um, you know, even if you make more money, you should live a simpler, more frugal life. Mike has actually, uh, sort of a contrarian take on this that I like because I think it stimulates a really interesting discussion. You know, you sort of said, and I'm going to paraphrase, you know, the whole freaking point of making money is that you, so you can enjoy a great lifestyle. So I'll, I'll stop there and let you riff for a bit and then let's just talk about it.
Yeah, I mean, look, first of all, I am not advocating for irresponsibility, going into debt, you know, living outside of your means. That's not what I'm talking about here. Right. And that is, that is certainly a problem. If your expenses are outstripping your income, it's not going to be a good time at the end of that road. But in my coaching, I actually see this, the other side of the coin quite often. Is people actually don't even give themselves permission to live the lifestyle that they've earned. I was recently talking to a young, very intelligent, high-performing tech bro. And, you know, he's in his early to mid-20s. He's making like half a million dollars a year at a big tech company. But he's still living exactly like he did right out of college. He lives in a crappy apartment. He drives a crappy car. And he was telling me like his friends just took a ski vacation and he actually felt like it was too expensive to go on. Like he didn't, he didn't allow himself to go with his friends. And we ran the math, like this guy is going to hit financial freedom, like by 30. He is, he is, he's already saved a tremendous amount of money. He's earning a tremendous amount of money. And beyond that, he's at the beginning of his career, like he's going to earn a whole lot more money over his career. And my point to him was whether you hit financial freedom at 30 or 32 or 35, like you're a brilliant dude. You're not going to stop earning. So it actually, you're making a bad trade. You're denying yourself having fun in your 20s when this is one of the objectively greatest times in your life to be rich. Like being rich in your 20s is the shit. I wish I would have been rich in my 20s.
Yeah.
Winning, and he's pulling this outcome forward. Um, like, yes, you should be thinking about financial freedom, but he doesn't need financial freedom at 30. Like, he could push that off a few more years and live his life right now. And objectively, I think it's a bad trade.
So I'll put a little bit different spin on it. So I think, you know, first of all, to Mike's initial point, we can all agree that rule number one is don't do dumb things with your money. Like, and I think, you know, we all know what that is like, you know, going, you know, up to your eye, being up to your eyeballs in debt is not good. Like Mike said, it doesn't end well from beyond, you know, if you stop doing dumb things, then it becomes like about degrees of lifestyle creep and balance. And, you know, I preach a lot about minimalism. I'm a big advocate of minimalism. And what I always say about minimalism is it's not what most people think. People think minimalism. Is like having a monk-like existence, being like a miser, um, denying yourself of everything. And it's not that at all. Minimalism is simply interrogating yourself and asking of everything, does this bring me joy? And if it does bring you joy, then by all means, go for it. If it doesn't, cut it out and make room for the things that do bring you joy. And so one of the examples I always like to use is For me, one indulgence that makes a ton of sense is flying first class, right? Like I travel a lot and I'm a big guy and air travel has become such a miserable experience anyway. That's a great use of my money. It doesn't make sense for everybody. You know, I certainly wouldn't buy first class seats if I had to do it, you know, ring it up and add it to my credit card balance that I'm revolving every month. But I can afford to do it. And it's one of those things that's asymmetric for me because it brings, it makes the experience so much more pleasant. But there's other things that absolutely don't bring me joy that society would say are things you should do or have, whatever, that don't make sense. And so, I think it's really about understanding, you know, where the leverage is in money. Like, where are the, the leverage points for getting a lot of joy out of money, not spending for just the sake of spending.
Yeah. And I think that really is the point, is understanding your inner landscape. Like, what are the things that actually bring me joy and don't? And that also requires a little bit of testing, right? Like, and this is something I always tell people is like, hey, if you think you might enjoy something, buy the ticket and take the ride. If you grew up with a car poster on your wall, like, Go get the car and see how it feels. And again, don't go, don't go way into debt. Like there is, there is a reasonable means test here that you have to apply to this thing. But if you're, if you're the, the young dude making a bunch of money, go test out those experiences. Go, go, you know, on some international vacations, buy a watch, buy a car, whatever the thing is that you think might bring you amount of, uh, an outsized amount of joy. But the second step in the process is. Actually evaluating, did this make me feel the way I thought it would make me feel? A lot of times that answer is going to be no. Now, you know, and it turns out you can sell the thing. You don't have to do it again. You don't have to get on the hamster wheel, but you know, I know plenty of people, um, with watch collections or whatever it brings them. It's like the reason they get out of bed in the morning to earn money is so that they can fund their hobby. Dude, I think that's a, I think that's a great way to live is like you have to continually ask like, what is the money for? And in many cases, like living in a nice place, I think is the ultimate best way people can spend their money. And that doesn't mean you have to live in a house that looks like mine, right? My, this is the coolest place I've ever lived. I built my dream home from scratch. You know, I designed every inch of it. I absolutely love this house. My second favorite place that I ever lived was a 1,200-square-foot condo in San Diego by the beach on Sunset Cliffs when I was in the Navy. But it was equally my own and I, and I loved it. And, um, you know, both of those things can be true. So it's not about necessarily luxury and extravagance, but it's about getting really clear on what the things are and what are the leverage points.
Yeah. And I'm going to challenge this a little bit because I think the danger here is it's very easy to say, well, my watch collection brings me a ton of joy. I'm really into watches. And therefore that does make sense as part of my lifestyle. And I actually believe in the vast majority of cases, that's not true. Like there is such a thing as a true watch collector who really geeks out on it the way that I geek out on rock climbing. That's the 5% of people who have expensive watches, not the 95%. And I think that that's the thing you have to watch is the question that I like to, to ask of everything is, who's it for? Like, um, and a great way to interrogate that is to say, okay, if you're really into watches, would you, um, own the same watch collection if nobody could ever see you wearing it? Right? And it's good to ask, you know, to challenge yourself when you, when you think something, uh, brings you joy, ask that question like, well, who's it really for? Is it for me or is it for others? And use that as part of your decision-making process. The other thing I, I want to mention is I had a similar discussion the other day with a friend, and he mentioned something that really resonated with me. He said, I get a bigger dopamine hit sometimes from not spending money than spending money. And I think that really is true. And I think, um, a lot of people have maybe not even experienced that so much, but like, it's the feeling, I think, of making a good decision and really interrogating yourself. In the way that I mentioned. I have a, and, and when he said that, I gave him a really, like, the silliest example in the world, but it's a real world example for me. And that, like, I go through, um, I climb outside a lot. I go through the, and it wears out clothes very quickly. And so a lot of my, my shorts are in pretty bad disrepair, my climbing shorts. So I was online the other day and I was looking at these new shorts and like, there's a bunch of cool ones. What colors do I wanna wear? And then I realized, I thought to myself, you know, I have a stack of 12 pairs of climbing shorts and yeah, they're, they're frayed, they're a little worn, but they're great. Like they're fine. I don't need, and that decision actually, like, even though it's like not even a rounding error, like I could buy all the shorts I want, to be honest, it felt really, really good. So I think there is, I guess what I'm getting at is there's a component of minimalism and living simply that actually transcends the money. I truly believe whether you're a billionaire or you're broke, living a simpler life is just a better life. So tell me, I'm gonna pause there. Tell me how you react to that.
All right. Well, there, there's a lot to unpack there. I'm gonna go back to the first point you made, which is if nobody could see it, where you still wear it, would you still want the thing? Uh, I actually think that's forcing a binary that, that, uh, that, that maybe is a little bit myopic. And here's, here's why I say that, because everything exists on a spectrum. It's not ones or zeros, right? And the reality is like, how do I know that I like Lamborghinis, right? If other people didn't like Lamborghinis, would I like Lamborghinis? Like, we actually can't extricate ourselves from like what society likes and what we like. At some point. You have to recognize that like my tastes and, uh, and, you know, desires and wants were somehow shaped by society, right? Like I wasn't raised with blinders on. Uh, at some point somebody else thought a Lamborghini was cool and I started thinking it was cool. At some point you have to let yourself want what you want. Like, can you give yourself permission to want what you want? And, um, I love, I love cars. I grew up You know, with cars on my wall, some of the things I love about cars are taking it to the track, driving by myself on a weekend. Like that stuff's really cool. You know what else is cool is pulling up to valet and having your doors go up in the McLaren and everybody looking at you. Yeah, it's cool. And I can actually allow myself to like that feeling. I can admit that out loud, like, and it's okay actually to say that's a part of it that I like. And if, if that is fun for you. Um, I don't know. I think, I think there's a place where you can drop that judgment and go, hey man, I like what I like. I want to feel the way I want to feel. And that could be cool too.
Absolutely. I actually agree with you. And the way you connect what I said to what you said is all I'm saying is don't bullshit yourself. Go into it with eyes wide open. I, I will tell you right now, my wife and I just became empty nesters. And we're thinking about downsizing from our, our big, really nice house to a small, uh, smaller condo. Um, because we want to travel more. We want, maybe want to have multiple places, you know, throughout the year. And, um, the thought has entered my mind multiple times of like, well, when I have people over, they're not going to be impressed anymore. A good friend of mine from college stayed with us last night, and I got to admit, when he, when he's like, wow, you guys have an amazing house, that makes me feel a certain way that I, I kind of like. And I think this is the point though, to me, and this is a, this is like, to me, if I get one thing across in this episode, it's this is like, whatever you do, do it with eyes wide open. Question, I think it's helpful to ask, like, who am I doing this for? And, and the answer may be, I'm doing it because I want to look like a badass when I pull up to the valet for dinner.
Great. Totally.
Now you may evolve out of that over time. but why not? Just don't pretend that, like, you know, you're doing it for other reasons that are, that are like more pure or whatever. Like, just, you know, own it is what I'm saying, man. Yeah. Right.
I mean, it's, it's really fun to, to, to drive a cool car around.
And how do you feel about the second part?
Yeah.
Which I could see you, you, you, your mind turning when I was saying this about, I do have a belief that. All things being equal, like whether you're rich or poor, less complexity, a simpler life is fundamentally better. That has been my personal experience. That may be me. I don't know, but I get joy out of like just simplicity, like less, less, less.
Yes, fundamentally. Uh, but, but I think it applies to, to so much more than just stuff, right? I mean, almost everybody I know. Is overextended on commitments. They're overextended on all kinds of things. And so a general life edit is a really good idea to apply. You know, when I came back from my silent meditation retreat last year, I applied what I call the 30% rule. And that is doing 30% less of everything, 30% less dinner parties, 30% less travel, 30% less work. Uh, like, and actually 30% less talking. Like, I tried to completely dial back across every area of my life, and I found, yeah, simpler was better. Like, like, as I let go of stuff, the space that that created in my soul was totally life-giving. And so, um, I totally agree with you on the surface, like, uh, and at a fundamental level, less complex life Whether it be across commitments, whether it be, I mean, how many people do you know, Kevin, that, that are like, oh man, I have 7 businesses and I'm still overwhelmed. Like, what would it, what would happen if you just had one business that you were all in on? Like, do you think you might actually grow that one business more because of all the space that you opened up for the, because by definition, some of those 7 businesses are going to be underperforming the main one.
Yeah. Well, I think you raised a a few good points, but, um, one, one that really resonates is stuff is only one aspect of it. And actually maybe the less interesting aspect. What are the other aspects of, of like, you know, living a simpler life that we can all relate to? Like certainly, uh, personal commitments, um, friendships, right? Like having, you know, a million surface-level friendships that take up all your time rather than a few deep ones. I think hobbies, uh, and pursuits, like, you know, spreading yourself way too thin, um, using your money to accomplish, like, whether it's charitable giving or whatever. Um, I think there's like a lot to be said for, you know, it's like base, I guess in a way it's, I'm talking about like focus, like having open space and being able, having the luxury of focusing on things. Is, um, like the ultimate luxury in some ways.
Yeah. I mean, I mean, I, as you say that, I'm going to, I'm going to plant a flag on this. I think, I think the actual worst lifestyle creep is the commitment lifestyle creep that we make. We become so overcommitted. We don't have any time for ourselves. We don't have time for our partner. We don't have time for our kids. I actually think that's probably way worse than spending a little bit of extra money to make your life more comfortable.
Dude, that's, that's to me is the banger of this episode is like Maybe our title should be like Lifestyle Creep. It's not even about the money. Like, because yeah, I think financial lifestyle creep does exist, but I do generally agree with you that like, if you can afford it, that's actually the lesser. I would actually be in favor of spending money to simplify the rest of the stuff in your life. I got to tell this quick story. Um, so one, uh, I haven't had many mentors in my life, but one of them, uh, for a period of time was a guy who was the, um, basically the founding CMO of one of America's most beloved brands, like a huge, you know, $100 billion company. And, um, I had coffee with him one time and, you know, I sat down, it was like the normal, like, hey, how you doing? And of course my, I said the same thing everybody always says, which is, oh my gosh, like so busy. My, um, you know, kids are doing this and I've got all this stuff going on at work and my personal. And I said, how about you, Dave? And he's like, I'm not busy at all. And I was like, that really stopped me in my tracks. And like, here's a guy who is more successful than me in business, has, I knew he has an incredible marriage, incredible family life. He's, he's like on the boards of 5 different, you know, charitable organizations. And yet he's not busy at all. I thought that was quite a flex.
I think, I mean, I really think it's the ultimate flex and I actually try to never answer busy when someone asks me how I'm doing. We've sort of forged it into this bad, like merit badge of honor in our society to say busy. I actually think that means you lack focus or you lack prioritization or you lack intentionality about the way that you spend your time. I'm doing a lot in life right now. I'm actually having one of the busier seasons that I've had in quite some time, but I am ruthlessly intentional about the things that I want to do. And right now it makes sense to have a little more committed season in my life. You know, I've been retired. I've done the do-nothing plan for a while. And it was awesome. Like, I, everyone, everyone loves to be like, oh, I could never retire. Like, I'd go crazy. Like, bro, that, that means that you're not good enough with coming up with stuff to do. I was not bored. I was having a blast in my retirement. And I've got bigger goals now. There's things that I want to contribute to the world. Like my work is really impactful and meaningful to me. I feel deeply aligned to my purpose. That means I'm doing more than, than maybe I was a few years ago. But I've chosen those commitments and I'm not busy. I'm just, I'm just doing a lot and I'm doing it by choice.
Well, I think what we've done here in the course of this, uh, what, 19 minutes so far is redefined, um, lifestyle creep in a way that I think we both mostly agree on. Like, I probably still would say, like, be super careful about the financial side of lifestyle creep. Really question yourself when you're making big purchases. Who's it for? And you're never going to regret being out of debt and having a low burn rate. That's all it— I can tell you, like, that's something I've been hardcore about, uh, more than most. And it feels freaking great to be debt-free and have a low burn rate. But I also believe that you're better off spending money if you can buy back your time and simplify your life so that you're not busy because the, the worst form of lifestyle creep, and I think this is kind of the point we're going to arrive at here, is this busyness trap.
Yeah, I love it. And I'll caveat my piece with, I've kind of lived the opposite of Kevin. I've been out over my skis many times and it's always a lot of fun until it's not. And it's a lesson that I can, that I continue to learn over and over.
Well, Mike's a fighter pilot and he comes by that honestly.
Yeah, exactly. And so, you know, highway to the danger zone, baby.
Yeah.
And here's what I'll say. You know, if you're listening to Kevin or I, you probably resonate with one of us on this topic more than the other. Be careful who you listen to. So if you're a big spender and you tend to live high risk, high reward, listen to Kevin. If you are skipping vacations and not allowing yourself to enjoy your money, listen to me.
Well, just to kind of wrap on that, because It's a great wrap because that is the entire point of this show. This is how inner circles work. If we were violently in agreement on everything and we lived exactly the same life, this would be the world's worst friendship.
Yeah, totally. Right. I mean, iron, iron sharpens iron. And in this case, we'll probably continue to agree to disagree until our death. And, uh, that's what makes it fun.
Yep. Sweet.
Good show, man. All right. We'll see you guys next time.
