"What next?" -- Getting ahead when you're financially set

This is a good question for both of us.

What next?

And this person is addressing me. Your book was great, but other than improving some automation, I was already doing what you recommend. I'm married, we make $200,000 a year, we have no debt or children. We've hit the limit for most recommendations and we don't want to buy a house. What should I do? Well, let's talk about money and then let's talk about lifestyle as well. So on the money side, this is a great question. In one of the chapters of my book, I Don't Remember which, we talk about the ten year plan. So you've done everything you need to do. You're doing it all right. So what do you do? Talk to people who are 10 years older than you and ask them what are the things that you are thinking about, what's worrying you on a day to day basis?

You'll find things that you would never think.

So for example, I'm 26. If I ask a 36 year old, they're going to tell me things that I haven't even heard the words of. Diapers, life insurance, homeowners insurance. These are things that I don't think about because it's just not in my cohort. Ask someone 10 years ahead and then get a 10 year leg up on them by starting a plan for those. Right now I will say that if you've got extra cash, that's a good problem to have. You can invest it aggressively. You don't have to only invest in an ira. You can do investing in a taxable account. You can also do some people if they have extra cash. I encourage them. If they want to take a couple of individual stocks for fun, do that. Tim and I have started doing angel investing. You're much more involved. That's certainly something you could do. But. Or remember that rich is not just about money. Point of money is to spend it, to enrich yourself in whatever way that could be investing. That could also be experiences. So I'll kind of turn it over to you for the experience side. But just remember this is a good problem to have. But run some calculators to see how much you'll actually have going forward and make sure that you're protecting yourself on the downside with an emergency fund and all that. But don't forget you can always do more with your money in terms of investing.

So my thoughts, I'll take a slightly philosophical angle which I think is also inherently practical because it forces you to define what finances mean to you and also Brings into perspective income as one currency of several. So I for myself struggled for a very long time with defining investing because you can always find something with a potential for higher ROI return on investment than what you're currently doing. But they become more and more speculative and the downside risk becomes greater and greater. So what is good investing? Well, for me, I ended up determining that investing was allocating resources to improve your quality of life. That's it. And if you have, if you've invested, let's say Warren Buffett calls you on your cell phone and says, hey, I have this hot tip. This is going to be our next big play. And you are given the opportunity to invest in that. If it's going to keep you up every night for the next 10 years with sweaty palms and 140 beat per minute heart rate, it's not a good investment. It doesn't matter what their financial return is. So what I would encourage people to do is first and foremost really define your TMI or target monthly income. So for the things that you want to do, for the possessions you want to have, for the experiences you want to have, what is the cost per month to obtain those things? And certainly with financing you can spread it out over 12 months. There are many different ways to do it once you exceed that number. $200,000 a year is a lot of money. If you have no children, no no dependents, what do you say? No mortgage, that is a lot of money. I have a very, very low cost lifestyle, which you wouldn't know by looking at it. It seems like I'm jet setting around doing all this stuff. It does not cost that much. So once you hit a certain threshold, you have to ask yourself, what other resources am I underutilizing? Where do I feel strained? What are the 20% of activities, people who create 80% of my stress? How do I start removing things? And I think what next? A great what next step is what can I eliminate? So forget about addition for a moment and focus on elimination. For me, part of giving, part of tithing or donating to charities, helping charities is reducing my reducing self validation through accumulation of income. Okay, so I'll put that in different words. What that means is I don't want the value, my self esteem, my self confidence to be linked to indefinitely increasing the amount of money I have. Because there are factors outside of my control that can really affect that. This last market crash is a very good example, even though I moved everything to cash equivalents in July. But there are things outside of your control. So I give away money so that I reduce my dependency on that to validate me. It's the same reason that I give away a lot of my clothing. I give away, I would say, 20% of my clothing every six months or so to Goodwill and other charities. And that is so that I don't tie my value, my success, to accumulating more. And once you reduce your dependency on those things, it is very, very liberating. Very liberating. And I think that the more you develop golden fetters, or as Seneca would say, or golden handcuffs, just like in.

Fight Club, they say the things you.

Own end up owning you. And it's very important psychologically for me to avoid that. And I do that by giving things away. So focus on eliminating certain things.

I like that. I like that. It's a great framework of, you can we always think of doing more?

Which is fine.

We're pretty good at doing more. Sometimes you should do nothing and just.

Wait to see what happens.

That's an equally valid approach sometimes. And I like your approach, because I don't usually think of doing less, actively doing less, rather than just kind of waiting for the world to go on.