How to Optimize Your Money to Buy You Time (and Experiences) | with Laura Vanderkam

About Episode

My guest today is Laura Vanderkam who is the author of several books about time management & productivity. She first appeared on this show to talk about her latest book, Tranquility by Tuesday: 9 Ways to Calm the Chaos and Make Time for What Matters, which I highly recommend you listen to if you haven’t yet. Today, she’s back because of a book she wrote more than 10 years ago, All the Money in the World: What the Happiest People Know About Wealth.

Now, before you dismiss this as just another financial advice episode with a self-proclaimed ‘financial guru,’ hold on. Laura and I delve deep into the psychology of wealth, where money, happiness, and fulfillment intersect. In our conversation, we talk about the real reason people struggle to find fulfillment regardless of their financial standing. More importantly, Laura reveals how some happiness can be bought and it might not be as expensive as you think.

I have no doubt that Laura’s unique perspective on money is still so relevant today as it was when she wrote it, it will help you make better choices and find fulfillment no matter where you stand financially.

Transcript

Zack Arnold: I am here today with Laura Vanderkam who is a writer, an author and a speaker, and she helps people spend more time on what matters and less on what doesn't. Now, Laura, you have written multiple books on time management and productivity, including your most recent book tranquillity by Tuesday, which shameless self promotion you and I have already talked about. And I'll make sure to put a link in the show notes so people can listen to that conversation. You've also written for the New York Times The Wall Street Journal, USA Today in fortune to name a small, select few. And you also have a TED talk on how to gain control of your free time. And it's been viewed by more than 10 million people. However, despite all of that, the reason that you and I are actually talking again today is we're going more than a decade back in the archives, because I'm fascinated by your book, all the money in the world, what the happiest people know about wealth. So as I mentioned off the record before, it means a ton to me, that you're here to publicize a decade's old book and maybe sell four new copies. So I really appreciate your time today. Thank you.

Laura Vanderkam: Well, thank you for having me. I'm excited to talk about money, even if it's been a while since I wrote a book about it. I still love the topic, and I'm always down for a conversation on it.

Zack Arnold: Yeah. And I love talking about money when I don't actually have to talk about money. And what I mean by that is, if it comes down to numbers on a spreadsheet, percentages, asset allocations, like that stuff just makes my head spin. But I love understanding the psychology and the emotion behind money, and our behaviors. And some of the big existential questions, and I'm going to at least make an attempt to try and answer today are defining the word enough, how do we define what enough actually means for us, which is something that you write about a lot, this concept of whether or not money can actually make us happier, and you literally say word for word, this book is about how to buy happiness, big assertion, and also discussing what are some of the mindsets or the approaches to money that we might need to reevaluate when we approach the concept of money, but there's actually an area that I want to start, and it's we're gonna get to all of those, but where I want to start really has nothing to do with this book specifically, or your other books. Specifically, it's my hypothesis that I believe that there's a tremendous amount of intersection between time management and money management. And very, very, very, very few people are at the intersection of both, and you're one of them. So throughout your entire career of writing about both of these, would you agree that there's a lot of intersection and similarities between time and money management? And if so, how are they similar?

Laura Vanderkam: Yeah, absolutely, there are a lot of overlaps between the two in that both are scarce resources that we would do well to optimize, right that we are trying to employ these scarce resources in the best way possible, in order to achieve the lives we want. Now, there are obvious differences between the two as well in that every human being has 24 hours in a day, every human being has 168 hours in a week. Whereas people have vastly different amounts of monetary resources, of course, and so one of the things that I found, you know, somewhat challenging to write about money from that perspective is because people do have such different amounts. So the opportunity cost for someone of doing x rather than Y is entirely different from all of us with time, right? Like, you know, we have 24 hours a day, once they're gone, they're gone, all the money in the world cannot buy you a second back. And if Jeff Bezos decides to spend an hour on something, it's he's lost as much time as you and I spending an hour on something. Whereas, you know, Jeff Bezos throwing a million dollars into something, there's no real opportunity cost that doesn't in any way less than his ability to do anything. Whereas just guessing maybe your podcast is more successful in mind. But it's, you know, it'd be a little bit more.

Zack Arnold: I would guess, it probably isn't, but thank you.

Laura Vanderkam: It would be a little bit more meaningful for you or me to devote a million dollars to something so you know, that those are the differences. But be that as it may, I do believe that a lot of people listening to this podcast, a lot of people who might be you know, reading a book about how to buy happiness with money, probably have enough resources, that they can start approaching it from a perspective, more abundance, which is also how I encourage people to approach time. Like if we're constantly thinking, I don't have enough time, I don't have time to do anything, then you don't really think about what you do with your time. I mean, why bother? You don't have any so you know, you do whatever is right in front of you. And it's the same thing with time with money. When we assume that we are always operating from this scarcity mindset. We don't think about how we might, you know, use money as a tool to build the lives we want. Whereas if we believe that we have enough and also so that we are capable of bringing in even more into our lives if we wish to, then we start making very different choices.

Zack Arnold: Yeah, there's a whole lot that I want to dig into the first of which being that I agree that when it comes to one of the similarities is the abundance mentality versus the scarcity mentality, where in all the conversations that I've had with my coaching clients, and my students over the years, with time, it's always I have to find it, where is it, I've lost it, it's never how to either create it, which of course, we can't create more time, per se. But there are ways that we can rearrange our lives and our priorities and our values to create it. And language is very important when it's a matter of Oh, I couldn't find the time you change the language to I chose not to prioritize it. world of difference to me, you can ascribe almost all the same mindsets in the language to money, why don't have the money versus like, you know, I, you talk about this idea of what you can afford, can you earn more. And one of the things that I love about your take on this, which is very similar to some of my other kind of financial mentors, or just business mentors in general, one of which the most influential being roommates at he's, you know, now famous for saying, it's not just about cutting lattes, right, you can't just cut, you have to look at what you can earn, and what your earning potential is just beyond scarcity, scarcity, spend less spend less spend less, right. So, um, one of the questions that you brought up that to be honest, even I'm having a hard time answering, and it kind of goes, it's going to help us get closer to how we define the word enough. One of the questions that you posed, and I want to learn more about the results that you got, because similar to your, your contemporary Gretchen Rubin, you love talking to your audience and getting survey data and compiling that into results. And you asked the following question. If you had all the money in the world, not literally, but all that you ever wanted, what would you change about your life? Even I have a hard time answering this question, what are some of the answers that you found in compiling this data? And why do I have such a hard time answering this?

Laura Vanderkam: Yeah, I mean, it's, well, I think it's because probably, in many cases, many of us have built lives that we're pretty happy with. And there may be certain things that you change. But many of those changes might not lend themselves to money, per se, right. And so this is where it comes back to time. Because even the people who are, you know, fabulously wealthy, because they still have 24 hours in a day, because they still have a temporal body, because they have relationships with people that involve a certain amount of time and effort. There are certain things that even money itself cannot actually change. Like all the money in the world, you still have to exercise no one else can do that for you, all the money in the world, you cannot pay somebody to sleep for you. You can't pay somebody to take on the responsibility of being a loving spouse or partner. Right? I mean, you know, one would hope you wouldn't do that.

Zack Arnold: We see, we see that a lot with the billionaires, that's a problem, they can't fix with money.

Laura Vanderkam: But it's not necessarily a wise choice, if you would like a, you know, long term satisfying, hopefully monogamous relationship with somebody. So, you know, with that in mind, like you can take your spouse out for better date nights than a normal person, but you are still having to invest that time and effort in building the relationship. So it's a challenging question. And I really feel like many of the things that more money would do for me, are, I have to think twice about, right, because I started going like, oh, well, you know, maybe I'd like a vacation house somewhere ritzy. And then I'm like, but then I'd be spending my time dealing with it. And I like Well, I'd have to hire people to manage the house. And I'm like, what, then I'm managing those people. It just, it keeps coming back to time being this limited thing. And so I think we're always trying to trade off between the resources we have and where we put our time. And once you have enough resources, that a lot of stuff, you know, you're certainly not suffering in any way shape or form, you can get a lot of the stuff that you would, you know, like or need on a daily basis, it becomes a much more challenging question.

Zack Arnold: Yeah, it's a very challenging question. And I think that it's, it would be a lot easier for somebody to answer if they hated everything about their life. And I think the at least what I found from my own personal experience, and you may have found it like you said, from some of your responses, the happier or let me take away the word happy. The more satisfied slash fulfilled you are with your life choices. I think the harder that becomes. The first thing that I thought of immediately was personal chefs. Like Don, I just I want somebody to cook my food to make my food because I have two very important values. I value my health, but I value my time with my family, and me having to cook and deal with food management and groceries and Anything else takes time away from my family. So I've been able to tell the story not Oh, I would like to be able to spend on this. It's here's how my spending is in alignment with my values. And I feel like the way that you teach Time management is the way that I teach time. And Financial Management, which is asking the question is how I spend my time? And or how do I spend my money in alignment with my values? And I feel like this question is really a values question more than anything.

Laura Vanderkam: It is. And the upside is when you identify something specific like that, that you would change, you quickly see that it does not take all the money in the world to hire somebody to cook for you. It was just a question of like, okay, if I was going to pay somebody to do this for a couple meals a week, what would that look like? And, you know, many people come into a very solution that somebody comes for, I don't know, a couple hours on Monday cooks, a couple of meals, puts them in the fridge, you heat them up on Tuesday, Wednesday, Thursday, and there you go, I mean, you are having healthy meals through the week, you are not doing it, it is a limited amount of money. So you know, that is something that people then see like, Okay, if that is a actual pain point in my life, I could solve that with a lot less than all the money in the world. And then, you know, start looking, is there anything else that you might wish to do? And how can I command the resources that are at my disposal to make that happen?

Zack Arnold: So given all of that, I want to dig a little bit deeper into this assertion where you say that this book is about how to buy happiness. And I want to talk about a study that has talked about ad nauseam, in the intersection of finances and money and happiness and fulfillment, which is that Daniel Kahneman study back from 2010, where everybody kind of lands on the $75,000 a year number, but if we dig a little bit deeper into it, and there's much more info in the book itself, but essentially, it says that of more than 450,000 US residents, so large sample size, that the effects of income on individuals and their life evaluations, that shows no satisfaction once you get well over $120,000 a year. And most of these measures once you get past about $75,000, a year at all levels out. So what have you found as far as like this idea of once you hit a certain number, money's not going to make you happy? Because I think there are some people that argue against that, and I agree with our arguments. But what's your argument that past 75 or 120, whatever the magic number is for you, money no longer equals happiness or fulfillment?

Laura Vanderkam: Yeah, I mean, I think that it wouldn't automatically, because many people don't spend money in ways that increase the happiness in their lives. And so that's, that's why you might not see that, right. Like, if you, there's some evidence that people spend about the same percentage of their income on housing and transportation, regardless of what they make, right. So regardless of what you think, like I need to spend a third of my income on housing and you know, whether you're earning $100,000 a year, you know, 50 million, whatever like that people think they should spend a third on on housing, and more housing does not automatically make people happier, and partly because it's more to maintain, and nobody really likes doing yard work, or housework, or they're, you know, hiring people to do it. But it's still there's always that, that inefficiency is like that, you know, involved with managing that and, you know, so it's, it's not automatic, that people would have more money and spend it on ways that actually increases their day to day happiness. That's it. I mean, they're the way it was the study I read it is that, you know, sort of our by our experience, happiness wasn't rising. But overall life satisfaction did keep going up with income as it rises. And the problem with a big survey, even if you have a lot of people is that there aren't that many very wealthy people who are going to be answering that survey. Right. So, you know, do we really even know? I don't know, did he do a look at people with net worth north of let's say $20 million? And ask them? Are you happy with your life? What do they answer? I don't know. It's hard to do that survey because there aren't that many people. So you know, we can't necessarily do it.

Zack Arnold: I think that probably the most important data point that would help me better assess this is where and Maslow's hierarchy of needs were the people that were responding to the survey, which is another way of saying what you did, which is if I'm barely getting by, in a, you know, a studio apartment, trying to raise three kids all in the same room, and I can't do anything other than be in survival mode than $75,000 a year can literally change your entire life, or even going from 75 to 120. But there's so much more nuanced and I've experienced this myself, having grown up not poor, but kind of lower middle class in a very rural area of Northern Wisconsin, too. By the time I was 24 years old, making more money than my parents ever made in any given year. And explore Read seem like there's just like with the studies that you read about people that win the lottery. At first, it's like euphoric, like, there are things that I have access to that I would never have had access to in my entire life. But then it all kind of levels out and you kind of go back to reaching a baseline level of happiness. So I'm trying to dig deeper into your assertion that money can buy happiness, given there's a lot of data that suggests the opposite.

Laura Vanderkam: Well, people do have sort of a baseline level of happiness. And then any human has some chunk that you can affect, right. And I think there's different measurements and different ways people have looked at this, but some is just your baseline, you are who you are. Some is circumstance, like if you've just been, you know, left by your partner lost your job, you know, you're injured your back like, yeah, and things are going to feel worse than that if everything's going hunky dory, but then past that, there's also certain practices and certain habits people have that then affect their day to day moods. So you know, that's questions of like, are you getting enough sleep? Are you moving your body? Are you putting healthy things into your body versus, you know, things that things that aren't? Are you spending time with friends are you in, you know, spending time devoting time to a hobby, like something that is not just work or caring for family members, it's something that you're doing for the sheer sake of the pleasure of doing it. And you know, adopting those sorts of habits can make life feel very different. Now, most of those don't necessarily require additional resources to do. Sometimes having more resources can make it easier to do it like you know, if your favorite thing on earth is to go scuba diving, obviously, it helps to have more money, so you can fly off to Fiji. Versus if you are trying to scuba dive and like a, you know, reservoir lake up here in Pennsylvania, that may be a little bit less exciting. But you know, you're still scuba diving, I guess. So I you know, that's where the resources come in, like, are you spending them on getting together with friends and other pro social activities? Are you spending them on building time into your life for a hobby? Are you spending your resources and ways of reducing pain points, I mean, you know, one thing for me that I was talking about is getting some childcare on the weekends, because I have a lot of children, I have five children, and they are all spread out in age. So if I'm going to something for the older kids, and I want to like watch a game and not be chasing a toddler around on the sidelines, hey, you know, pay somebody to take care of the toddler for a couple hours. So I can go actually pay attention and enjoy myself and enjoy this time with my big kids. You know, that is a way to invest resources in solving a pain point.

Zack Arnold: Yeah, and that's where I think the the nuance of how we define happiness, versus fulfillment versus satisfaction versus well being that's where there's so much more nuance because happiness is such a ethereal word to define. Let's go back to the the idea of like, training, for example. He said, like, you know, paying for exercise training resources. So for me, for example, I decided about it's been about five and a half years now. I was in pretty poor health could have won could have easily won DadBod competitions. And I watched television with my kids one day watching American Ninja Warrior, and I said, Yep, I'm gonna do that. That's for me. And it cost me a lot of money to be able to do the training, get the trainers go to the classes, like there's travel involved, there's been a lot of cost that's gone towards that. What I say that wearing them now versus six years ago, I'm significantly happier. Maybe not I've kind of say I have the same general baseline level of happiness. And my personality hasn't changed. But my well being is leaps and bounds forwards because I was able to spend that money on the training and the classes and the travel and building the network, etc, etc. Versus Well, I just want to sit around and do nothing and save money and scrimp, right, it cost me a good amount of money to do this, like, at least proportionally, it's a pretty embarrassingly large amount of money that I've dedicated to everything necessary to achieve this goal. So it hasn't changed happiness, but level of fulfillment and well being skyrocketed, which to me continues to bring the conversation back to how do you define your spending in alignment with your values? To me, it always becomes a value driven conversation. So if we go back to your example of I want to hire somebody to watch the toddler for a couple of hours, what value is that in alignment for you? If we're going to really distill it, what is your value that you're paying to enhance in your life?

Laura Vanderkam: Connection with my kids, which isn't that funny that, you know, paying for childcare is actually creating a connection with the kids. But when you have a larger family, the little ones by the nature of being little, will always take more time and attention. And so if you want to devote some of that time and attention to building a relationship with older children, then you need to have somebody else taking care of the little ones and You know, there's various ways to do it. I mean, people trade off with their spouses or other relatives or whatever. But if that's, you know, not going to happen, or both spouses want to be with the big kids or whatever, then you know, it comes down to resources. So yeah, that's where that value comes in.

Zack Arnold: Yeah, so that's an example of where if I were, let's say that you were just going to show me a spreadsheet budget. And the budget line item said, child care on Saturdays for three hours, one could look at that and say, It's the opposite of family value, but you go into the story of your money, it is actually enhancing the value of family and you with five kids, you have to make trade offs of where does my attention go at any given time, I've only got two, and I can understand that with five can't even comprehend. One of the things that I learned about having kids is that everything we were taught about math is wrong. Because when I went from one kid to two, it's not twice as hard. You're gonna It's one plus one is not equal to one plus one equals like eight. You're like, Oh, my God, this is so much harder. I can't even comprehend it. Is there a point at which to versus three versus four versus five? You're like, it's just a bunch of kids? Or do you feel that there was an increase every time?

Laura Vanderkam: Yeah, it's I don't think there's an increase every time. I mean, I feel like you know, by the time you're infants are always hard. So it's hard to answer that question, because you're adding an infant, right? Like, I mean, if you were adding like a four year old, maybe that would be entirely different. But because you, you know, generally most people are adding a baby. And babies are hard, it feels harder, but it's not because you know, the number of kids is harder, it's because you just added a baby. Yeah, I say that zero to one is the lifestyle change. Everything else is just adding, adding more people so little, you know, you start managed once you can juggle a couple balls, like throwing another ball in there, it's not a different order of magnitude, it's just a little bit of a tweak on the same skill.

Zack Arnold: Sure. And I can understand that in most respects, there's one that I literally wrote this in all caps in the margins of the book, I don't have the page in front of me, and I don't remember the exact stats. But it was about this idea that you alluded to a little bit earlier of like proportionality, right? Like when you're your household budget is 30 to 50% of expenses, etc. And you were talking about groceries, and all caps in the margins. Yeah. But how much do you spend on groceries? Because you've got five kids? That's an example of where you have to learn, I would guess, start to make certain sacrifices based on your values. Because if you value having five kids, my guess is you've got a pretty high grocery bill.

Laura Vanderkam: Well, we do but we have a relatively low going out to eat bill because it's just total chaos. If you attempt to bring seven people to a restaurant like nobody even wants to seat you. And then it's not pleasant, because the little ones running around getting into trouble. So yes, we eat at home all the time. But that probably evens out then with you know, somebody who's eating out a lot more cooking at home. So yeah, I mean, now my grocery bill is not small.

Zack Arnold: Yeah, no, I only have two but that both of them are now they're not technically both teenagers, but they're both teenagers. And they both eat like teenagers. And every month, I'm like, You gotta be kidding me. Like, this is just the food bill. And plus, in Los Angeles, food costs are astronomically high. So if there's anything that I'm a grumpy old man about, it's, it costs How much for a gallon of milk. But that's a whole other conversation. But again, it's about spending in alignment with values. And if we're going to tie it back to that, I look at what we spend on food. But if it were a matter of just scrimping, I could probably cut our budget in half. And we could eat real crap, we could eat real processed garbage. But because I know that my spending isn't in alignment with values, I have to find room in the budget to make sure that my kids aren't eating all garbage. They eat some garbage because they're kids, because they're, I try to offer them those options. But when I'm looking at line item budgets, it isn't just as simple as I got to cut, cut, cut, cut, cut, cut, cut, especially given that at least as of recording this. And I'm hoping that people can listen to this for years, but it's been a really tough year economically, especially for those that work in the entertainment industry. Like it's been an entire year of strikes, no work, huge amounts of unemployment. But when you're looking at a line on a budget, trying to figure out what are all the things I can cut, if you're not clear about what your values are, it's a lot harder to figure out how to rearrange the numbers. Absolutely. So having said that, what I want to dig into a little bit further now is this idea of scrimping versus generating more income right because this is an area where I feel that so many of the financial pundits and the the money bloggers and everyone else like it's all about the coupons, and oh, you can get 4.38% instead of 4.1% on this you know high yield savings account. And to me focusing your time and energy so much more on your earnings potential. That's the lever that yields results. So just kind of paraphrase or talked about talk a little bit more and in summarize what you learned from digging into people that literally have made an obsession over coupons and saving, saving, saving.

Laura Vanderkam: Yeah, the coupon thing is funny. I feel like it's become a little bit less of a thing now that so much shopping is online and you know Just people are using like apps and stores instead of actually clipping the coupons. I think a lot of the couponing game has changed since back in the day when I first started studying this. But I mean, there were some real like scams going on with people like duplicating coupons and whatever else. But there were people going dumpster diving to get multiple copies of the same circular. So they could go into a store with, you know, 40 coupons for Cheerios, or certain stores didn't have limits on how many you could use, or whatever. I mean, it's it, and then people would stockpile right like, because obviously, you can't eat 40 boxes of Cheerios in a small amount of time. So you have this stockpile. And then the question is, well, what's going on with the stockpile? If it is not properly stored, or if you never shot from the stockpile, then your grocery budget will not be nearly as low as one might imagine. But I think what it all comes down to is there's it's the scarcity mindset, it's the idea that your income is what it is. And I have certainly seen it put that way that most people can't change their income substantially. Ergo, you, you know, have to focus on cutting. And there's certainly, you know, things in anybody's budget that probably could be cut, I'm sure many of us are spending things, spending amounts of money on things that we don't really care about, I've certainly had that experience. And I go through my credit card bill. And like, yeah, I probably didn't need that I didn't want that. Or if it's a recurring fee, I might, you know, go get that nudge to call and cancel it. But that said, I don't think it's a given that people can't earn more. And especially as the economy sort of changes, the number of extra things that are available for people to do is, even since I wrote this book, I was when I wrote this book, like, you know, you want to earn extra money, you probably need to figure out a way to start a business, right? And it can be a low, low cost sort of business. I mean, you get like freelance, right, you could, you know, do whatever. But now, of course, there's all the gig apps that you know, people start driving for Uber or, you know, doing Instacart, like, you truly do not need a business model to just if you need some extra money, and you happen to have some extra time on a particular day, like you can turn time into money in a way that was just not available 15 years ago. So with that, it is certainly possible for people to at least slightly increase their income. And so then it becomes more a question of, well, what would bring me more satisfaction would I prefer to, you know, drive for Uber for four hours on the weekend, and then, you know, not have to Bri storebrand cereal, or what I prefer to not drive and do whatever else I was going to do on my weekend in this time that I've had, but I don't want to devote to that. And then I'm going to choose the storebrand groceries, because that's my trade off. But it becomes more of a choice, as opposed to like, well, the only thing I can do is cut my grocery budget. And the only thing I can do is is cut back the cutting back though, I thought it was it because it's only the variable expenses that people then look at, and a lot of financial literature, you know, and so it's like, I will shop around for your car insurance and use coupons on your groceries or you know, cancel Netflix, as opposed to like, Okay, move to a different house, like, yes, it's terrible for like you having to do it once, but then it's done. And if you move somewhere cheaper, all of a sudden, this space is opened up in your budget, that, you know, you don't necessarily have to eat rice and beans. For years, in order to get out of this financial problem, you take the hit once and then you adjust, you know, as we talked about human beings kind of go back to their happiness setpoint in many ways. So it might be worth looking at that as an idea. Just take one big hit, as opposed to little cuts over and over and over again. Yeah,

Zack Arnold: Yeah, I actually ran into this relatively recently, because over the course of this year, income for my business has been shrinking, because all of the students that are in my program that are in my industry, nobody's working. So I've gotten the email 150 times really looking forward to working with you and joining the program when I've got a job again, nobody's worked for an entire year. So the first thought is, alright, let's look at the budget. What are all the things we can cut? Well, I've got a $10 subscription here a $15 subscription there. And I totaled up literally all the subscriptions, all the fees, all the SAS, you know, all the different pieces of software, like when you're running a podcast and an online education, business, hundreds, if not 1000s of dollars of digital duct tape to hold it all together behind the scenes that nobody ever sees, right? So I looked at that number. And then I looked at the amount that I spent on people. And I'm like, I mean, it's not even a comparison, like over 80% of the money that I spent on any given month is the people in my business, not the software so I can cut $17 A month here and $40 a month here barely moves the needle, I lose one person on the team, and that more than covers every single subscription that I've got, which then again, I'm gonna bring it back to values. If what I valued short term was saving money, it's easy you unfortunately, I have to lay you off. But the value is building a team and building a culture that will survive long term, which means I have to solve the problem differently, which like we said, is how can I generate more income in a more creative way, because I value the team and I want to build the team, not I need to cut and scrim otherwise, I would just cancel a bunch of services, it just doesn't move the needle at all. And in the personal world, it feels exactly the same way. And one of the things that I wanted to bring up that I think is so so important, is asking, asking the questions that we're all asking in a very different way through the lens of opportunity cost. So the the example that everybody brings up, count up how much you spend on Starbucks, and you spend on your lattes, and it's, you know, $4, after every let's make the math easy, right, you spend four or five bucks every afternoon to get your afternoon coffee five days a week, let's say it's $100 a month in Starbucks, how you're responsible, right? So you take that $100 A month over the course of 30 years, you put it in an IRA or you put it in an investment account, compound interest, yada, yada, yada, look, what you've got, nobody's paying attention to the opportunity cost of losing what that latte in the afternoon does for you for the quality of your life. So speak more to this idea of opportunity cost when we look at what we're not spending.

Laura Vanderkam: Yeah, I mean, that's the obviously the the financial trope of of, you know, give you give up your Starbucks, and you'll have whatever, hundreds of 1000s of dollars in 40 years, I actually just wrote a blog post this week on this. Which Yeah, if you are spending $1,500 a year on on Starbucks and put it away at 7% interest, and you keep doing this every year, for 40 years, you have $322,000. And I guess at that point, you can spend that on lattes, or if you want, although a latte will probably cost $20 By that point. And 322,000 will be worth a lot less than 40 years. So you can, you know, pick your poison there. But to me what the coffee shop is representing, because I go to Starbucks, probably four times a week at this point. And it's not for my caffeine needs at all. I make my coffee at home in the morning, and I'm perfectly happy with it. I like it better than anyone else's coffee. But I have teenagers who love Starbucks. And if I take my 16 year old and he drives now, but I'm with him, you know, we drive to Starbucks together, we pick it up drive home, that's 30 minutes that he is spending with mom, that he is talking with mom, telling mom about the day about what's going on in his life. And that strikes me as a pretty good use of Starbucks money. We often pick up one for his little sister who doesn't really come with us, but she likes it. And then she'll sit at the kitchen table and talk with me while she's drinking it. So that's another one, you know, I get double kid time out of the Starbucks experience. So I feel like you know, is a good relationship with my kids going to be worth more than $322,000 in 40 years? I'd say yeah.

Zack Arnold: Yeah, I would agree with that. And the way that I want to help people reframe this, it's a very simple question. But it can really change the way you look at something. And the way I would frame it in this specific instance. And it sounds so paradoxical, and it almost doesn't make sense. And maybe you can help me refine this if necessary. But if somebody says, imagine what I can save by not spending on Starbucks, my question would be, what is it costing you to save all of that money? It'd be I don't understand, what do you mean, what is it costing? Like the fees are like, no, what does it actually cost you to save all this money? And it sounds like your answer is it costs me at least in part, building a quality relationship with my kids. Now, the equations easy, like you just said, is $322,000 Worth costing me to a certain respect, the relationship and the quality of the relationship I can build with my kids. That to me makes it so much easier to know whether or not this is something I would spend money on or not.

Laura Vanderkam: And I mean, you know, to be honest, it's not like, Starbucks is standing between me and living on the streets here, too. I mean, I am saving for my future. I have plenty of money saved for the future. I guess I could save an extra 322,000 on top of it. But that's where, you know, it comes down to the idea of trying to earn enough that these aren't hard choices, right? That I don't have to make a hard choice. I can say yeah, okay. I do want to Starbucks and because it's helping me build this relationship with my teenage children. I am also saving for the future too, because there's enough for both and So, you know, one of the reasons I always encourage people to think about how they might bring in money into their lives and to be serious about their earning capacity, is that it does mean that the trade offs aren't necessarily quite so stark, as you know, time with kids or money for retirement like, Whoa, that doesn't sound like a good trade off. How about how about, we get both and you know, if you have enough money in your life, then yeah, you can have both.

Zack Arnold: Yeah, and I want to get back to the the earning side of it, because there's a lot of really good mindsets and ideas about the earning side of it. But I'm going to push that aside for a second. Because what we've done in this one conversation has gone from the micro to the macro, which is we're talking about lattes, and all of a sudden you're throwing around this word, that's incredibly hard to define. Enough. And like you said, there's a big difference between I have no money saved for the future, I'm not putting anything into the college funds, we can barely afford X, Y, and Z. So $322,000.40 years, could mean a lot. But you've defined what enough is, and you've got a financial system, that's making sure that all of the boxes that you define as enough are checked. So then the equation of $322,000.40 years versus Starbucks with my kids. Now, it's a very different equation. So how for you personally, have you defined what enough is? Because there isn't a definition? It's different for everybody? But how do we define it for ourselves?

Laura Vanderkam: So enough money to me means that you don't have to think about money first. And that is, you know, you can see how that plays out in all kinds of ways. Do I want to do this job as opposed to what does it pay? Do I want to take this trip as opposed to, you know, what does it cost? Do I want to go to Starbucks versus Do I have the, you know, $17, or whatever it is that I'm spending on the kids drinks? To do it? So, yeah, I think I think that's what I define as enough. And it doesn't have to be, you know, all the money in the world, I think you can get to a place where you have enough that you don't have to think about money first. Well, before we're reaching the, you know, Jeff Bezos level of of wealth. Yeah. And

Zack Arnold: we can see what money has done for his happiness. From what we can see in the outside, right, or the quality of marriage

Laura Vanderkam: He might be happy. I think he's Yeah, he's probably pretty happy. But yeah, but yeah, we all have various people have various disasters that happen in their lives in one way or another. Yeah. That may or may not have anything to do with how much how much money you have, you can be dirt poor, and have various disasters happen as well.

Zack Arnold: Yeah. And there were plenty of studies that have shown that the levels of happiness are often much, much higher, across entire villages, countries, where there you'd somebody would even call it abject poverty. But it's all about mindset and association, as opposed to actual numbers in the cow. That's another conversation I don't want to get too deeply into right now. Because I want to dig deeper into this conversation about enough. So you knew exactly what your definition was of enough. And you said it very clearly. And very succinctly, it's when I don't have to think about money first, let me go backwards. What are all the criteria on your list that because they're checked, you don't think about money first. And if they were not taken care of, you do have to think about money first.

Laura Vanderkam: Um, well enough money, you know, in savings in wealth that, you know, the bills can be paid for quite a while. And that has always been a value for me, even when I was very young, and didn't have a lot. I remember, I was, uh, you know, moved to New York City when I was I was I like 23. I was just writing for a living for various places that would would have me right. And, you know, I had a certain amount of money that I had to spend per month for my rent, and my health insurance and food and all that stuff. And I focused very quickly on making sure I had, at least, you know, I think it was within, because I had some savings from before to is like I needed to have at least 6x, right? So six months, six months of expenses, before I'm feel remotely comfortable. And even that was not really comfortable. Like it needed to be a year, two years. And so by the time I met my husband, like a year, you know, a couple months after this, we got married, you know, year after that, and combined our resources. I had built up like two years of living expenses or more at that point, you know, because I was still living pretty cheaply was like, actually, I think about it may have been like three or four years worth of living expenses, and I'm like 24 years old. So that should give you a heads to my mindset about this. That I was focused on earning as much as I could And I was focused on living cheaply, because of the freedom, it would then buy me to not have to worry about it. Because you know, like, even if nobody would hire me for months for a year, I'd be okay. And I'm sure that in a couple years, I could figure out something.

Zack Arnold: And I guess is the made drastically different career choices? Because you had that freedom as opposed to well, I gotta pay the bills. And I really don't want to write for this company. I don't believe in their philosophies, or they're asking me about a right a topic I don't care about, but I got to pay the bills. So I need a paycheck job. My guess is you could make much better career decisions and craft your path. Because you had the freedom to say no to projects you didn't want to work on and people you didn't want to work with.

Laura Vanderkam: Yeah, and I'm not saying that I wound up, you know, making all great choices. There were probably some people I worked with that were maybe not the best to work with. And they're probably projects I took on, that just seemed like they would be interesting, or seemed like they would, you know, pay a lot for the amount of time they would take or whatever. But it didn't have to be, you know, I didn't have to do it. Right.

Zack Arnold: Yeah. So it's not to say that having the money automatically made you great at making choices. Yeah, it gave you the freedom to make better choices. To learn, right, and to think about Yeah, exactly. And this digs much, much deeper into again, this hypothesis that I have about just the crazy amount of alignment between financial management and time management, where one of the the exercises that I take my students through, we build like, extravagant flowcharts. And here's the story of my money, and I want to automate it. So this goes here. And they're like, I want financial management to be at an absolute minimum for them. But I want to very clearly have the money tell a story that is in alignment with their values, but the exercise that I take them through relatively early, and I first just want to get your thoughts because I value your opinions, but also how you would do this exercise. My belief is that money itself has absolutely no value, especially nowadays, that we're not even handing physical money back and forth. Money is literal, literally a concept. That's ones and zeros, where somebody says, do this thing for me, I'm going to take my ones and zeros over here, and I'm gonna move the ones and zeros over to you, right, like, When is the last time that you got paid for writing something in gold bars? Probably been a while if ever, right? And if you're thinking about what's the actual value of cash, the only real value of cash is that if you need to heat your home, you can burn it and stay warm. It's all psychological. So it's all about asking the question, what is the money represent to me, and for you what all of that extra income meant to 24 is buying myself the freedom to have yours, to be able to say no to the wrong things. So I guess my the follow up to this is, do you also believe or agree with or disagree with the idea that I believe money actually has no value?

Laura Vanderkam: Well, this is where we come to, I mean, you know, the constructs we come up with, as human beings, because they make life easier, right? And so, you know, yes, we could all barter. But like, that doesn't work very well, like even places that have relied on barter, then eventually get some sort of currency. Because currency makes all bartering transactions easier. Like, you know, you don't necessarily want my sheep for your cows. But if we both want salt, and we trade it back and forth at a certain unit, we wind up with a much more efficient way to transfer goods between people. And so I because I get this with time two people say, Well, time is just a construct. I'm I'm okay. Yes, time is just a construct. But, you know, somebody has to pick up my kid for 20. Today. It's like, it's a useful construct. Like the future is unknown. Yes, the future is unknown. But like the camp, we want to, you know, send the kids to the summer they open for enrollment on November 24. So maybe we should assume that summer will happen, right? Like it just, you know, yes, these are all constructs that don't really have real meaning. But life is just so much easier if we all agree to subscribe to them. And so that's the whole concept of fiat money, right? Like that. We all agreed to subscribe to it, and therefore it works.

Zack Arnold: Yeah. So what I'm not arguing is let's just eradicate the concepts of time and money because that would be a bit of a disaster. But at least for me, personally, just having the awareness of Oh, that's interesting, and never actually occurred to me that money doesn't have a real value, and it is this construct in this show social agreement, it has allowed me to better ask very specific questions again, about the value of money to me. And an example like for me, if if there were one value that money equals is time beyond the shadow of a doubt with other students or like, time isn't as interesting to me, but money equals experiences. I love going on vacations or I love seeing new countries. That's not something that I value at my core. It sounds nice, it would be fun. But to me, my core value is time time equals money in the More money I can amass, the more time I can buy, and the more freedom I can buy, right? So then I can ask myself the question, if I know the equation, like you said, we're talking about the amount of money in an account per month or per year, to be able to pay the bills, just for the sake of simple math, if I need if I need $10,000 A month, all in to be able to cover all expenses for my family. And I'm looking at something that I want to buy for $2,500 in cash, it's not do I want to spend $2,500, it's is this thing worth a week of my time, because I have to give a week of my time to earn this thing, and it changes the relationship between me and material goods? So I'm curious if you if you think in similar equations, given the you also kind of understand the construct of time and money?

Laura Vanderkam: Yeah, I mean, although I think of it more as like using money to buy time, more like, what can I do to spend more of my, you know, are there things I could spend money on that would allow me to spend more of my time in enjoyable ways, right. So, you know, if I don't want to spend all my time vacuuming my floors, then I need to have somebody else vacuum my floors. And so that's, you know, bought me back time. In that way. I sort of like with you with the personal chef, right? Like if you know, we can spend money on ways to buy you time, I guess I'm a pretty cheap person in general, I don't, I guess I don't have a whole lot of things I'm looking to buy much at the time. So I guess I don't think of it that much in terms of this is, you know, a week of my labor to purchase this thing. Because you know it, I don't know it? It doesn't, because I guess it. My labor, like vary so much, and what it brings in time with it's, you know, businesses go up, businesses go down. So it's harder to say whatever that amount of money is. But you know, if I'm buying something, it's usually because I've thought long and hard about doing it. So it's it's less about this is a week of my time.

Zack Arnold: Yeah. And I'm not saying that that should be everybody's lens. But my lens, at least right now, is that this thing that I want whatever it costs, what is it equal in my labor, or the time that I have to exchange for dollars, because for me for years has been how do we get out of the endless cycle of I'm exchanging my time for dollars, and I don't want to give my time for dollars. Therefore, that's why I've been building this business and the podcasts and other multiple forms of streams of income. Passive forms of income, which passive income is largely a myth, but it can happen if you put the time in it.

Laura Vanderkam: The only form of passive income is like dividends. So.

Zack Arnold: Yeah, exactly. I've I've always said that passive income is when you work 20 hours a day, so you can make money while you don't sleep. That's, that's the world of passive income. And that the there's a word that you said that I wasn't going to go here, but because you brought it up, I at least want to dig into it for a couple of minutes. Because I think language is really important. And you call yourself cheap. And I would argue you're you're probably anything but cheap. Because cheap has, at least in my interpretation, and everybody's is different. Cheap, has a very negative connotation. I felt like, I was gonna say other frugal, there's another one that I like, even better, is responsible, you're very responsible of your choices. But once you've assigned the fact that I'm cheap, there's no amount of money that's going to change that, right. And I've learned a lot about this side of the psychology from my mentor roommates at, especially on his podcast, where he'll talk to people that make seven figures in income, and they're shopping the cost of blueberries. That's cheap, right. But well, you're talking about as you're making much more thoughtful, responsible choices that you might call frugal to me, there's a difference between those.

Laura Vanderkam: I've shoved the cost of blueberries. Okay, so there's a little bit of that. And that's like, I'm basically not allowed to go to the grocery store for my family anymore.

Zack Arnold: Yeah, and it's funny, because based on my background, and my habit, and that's the thing, it's about habit. And it's about behavior and emotion. It's not just about numbers, because the numbers do not dictate, I should spend an hour researching, which is the most, which is the best unit cost for blueberries. And if we're like going back to the the coupon example, and you actually broke down the math in your book, if you spend 60 hours a week, going through your coupons, and you figure out the hourly rate of what you saved, you're making minimum wage at best with the money that you save. Same thing with, if I spend an hour figuring out what's the best unit cost of blueberries, I'm losing money by doing that one, I could be doing something else for that hour. And that's again, it's habit. And it's behavior and it's emotion. It's not actual numbers and spreadsheets.

Laura Vanderkam: Yeah, but the upside though, of having we'll call it frugal habits and behaviors is that sometimes you can feel completely extravagant, by like small things. So every time I go to the grocery store and I'm buying peppers, I look like oh, the green peppers are cheaper than the red peppers. I should get the green peppers. And then I'm like whoo I'm gonna live a little, I guess I'm gonna splurge and then I feel, you know, like, like, I'm you know, I don't know, what is it Scrooge McDuck? Like rolling in the money? Yeah, it's the little thing sometimes. But then I, you know, yeah, it was was like my husband prefers to go grocery shopping for us because I sometimes make choices that would not make anyone happy. And why? Why do we have the store brand Cheerios?

Zack Arnold: It's funny because I use the Scrooge McDuck swimming and money analogy a lot like everybody else does. I've now replaced that image with Scrooge McDuck swimming in red peppers. That's a new mental image that I've never had before

Laura Vanderkam: Red peppers, it says yeah, exact makes me feel rich.

Zack Arnold: So having said all that, I now want to transition back to this idea of earning more, because there's there are a lot of mindsets that you talked about that I think are really, really important. The one that I want to zoom in to next, which, with your permission, I'm going to all but blatantly steal for the course materials that I'm building, which is something I call the 1099 mindset. So I want you to talk about what is what does it even mean to have a W2 mindset versus a 1099? mindset? So then we can dig deeper into the psychology of earning more?

Laura Vanderkam: Yeah, well, for any international listeners who are like what they saw American tax forms, and people who are W2's are getting paid a regular salary from somewhere either by the hour or they're, they're salaried. But it is a paycheck, right. So it is an agreed upon amount that you get as as your income. And, you know, obviously, it's some places it is variable, like you can work more or less hours, some places, you get bonuses based on performance. But you know, generally, the idea is that you have a salary, this is what you earn. The 1099 mindset is more for those of us who are earning from lots of different places. You know, you have different clients, you have different projects you do, your income is not set your income is what you bring in in terms of the various projects you do. And because I've been operating under that mindset, since I mean, literally since I was 23 years old, like I have not had a real job in ages, you just approach the world differently. Because it's not like, Okay, if I need $2,000 for x, you know, once again, as we talked about cheap, I put stuff away and put the money away, like I have the money for that. But if for some reason I needed to get it for something extra, my mindset wouldn't be like, Well, how could I cut this from x, y? Or Z? I'd be like, Okay, well, I need to go find something I can do for $2,000. Like, who out there would pay me $2,000 To do this. And, you know, there are various ways you can do it. I'm I'm not writing for many places anymore. But in the past, I certainly was. And so you know, I just, you could email your editors and be like, Hey, I'm available. Got anything. And you know, if they enjoyed working with you in the past, like they may have been had something in mind that they just had an assignment or like, yeah, you Yes, you. And so it, it's not a, like you have ways to earn more, if you wish to drum up more. And so I always thought that was interesting, because there's like, this financial question that's out there that survey people use as a way to see how financially stressed people are, which is like, if you needed to come up with $2,000 I think that basically is the question, if you needed to come up with the $2,000, you know, without like putting it on, could you do it without like putting it on your credit card? And you know, it's getting at do people have savings? And that's one thing. But in the 1099 mindset is also like, Okay, well, I may have savings, but I also if I need to bring in 2000 more dollars, okay, like, I'll go figure out a way to do that. And you're not always optimizing for income, because obviously, if you could bring in 2000 more dollars, like why aren't you doing it all the time? It's like, well, cuz you know, you have other things you want to do, and you have enough at any given moment of what you're bringing in some other things, but it's just a different mindset entirely.

Zack Arnold: Yeah. And I like this mindset, because again, it's more about the abundance rather than it is about the scarcity. So for any and I love, by the way that you brought up this idea that anybody that's not in the US are like, what's a W2 and a 1099? I thank you for that, because I overlooked as it's very smart. But if I consider myself, you know, salaried versus freelance, or I consider myself, I've got a fixed income versus I have all the freedom in the world to grow it because I'm a 1099. Or that, to me is scarcity versus abundance and I can generate it, knowing that at least for me, it has to be in alignment with my values of work life balance, and I'm not going to work 90 hours a week for people I hate just because I can consistently generate more income, but it buys me more freedom. And one of the things you said that really, really stood out to me it's so simple. It's it's so simple, it's stupid. But I want to point out how important it is for people to think this way that you kind of put together a list of ways that you can generate income. And to quote you, you said that a more straightforward way to boost your income is by doing whatever parts of your day job you actually like. Like, it just seems so simple. Why don't people approach it this way?

Laura Vanderkam: I don't know. But you know, I mean, if you like, yeah, if you were a teacher, you know, someplace, you maybe you could tutor online somewhere else. You know, if you like numbers, obviously, you could do bookkeeping for places. Now, obviously, there's some jobs where you're not allowed to work and other side gigs, which, you know, hopefully, if that you're in some job like that you are getting paid enough to, you know, have that restriction on you. But, yeah, I mean, if you're looking for a way to boost your income, you can definitely start with, what would I do on the side that I'd actually want to spend more time doing, as opposed to something I don't? But you know, that's an issue. Can we go to this topic? Because I was thinking of something a few minutes ago, when you were talking about like, do I want to trade my time for money? Like, do I want to work for a week to earn this thing? So this gets complicated, because work is not defined as stuff you don't want to do? Right?

Zack Arnold: It is, for a lot of people, especially the ones listening, but you're right. It's not defined that way.

Laura Vanderkam: Things, it's always sort of bugged me about the like, financial independence, retire early movement. Because I'm big into financial independence. I love the idea of financial independence. That's what I you know, that's why I was building up all the money, right? Like, I want to not have to do anything. But that doesn't mean I want to retire. Because I love what I do. And you know, I very lucky that I would do, I guess what I would do for free, but I don't have to, like people pay me well for it, which is awesome. But what always struck me as funny as so many of these people who are, you know, the fire evangelists. They're like, I was able to retire, I built up enough money so I can retire. And I'm retired. And they are hosting podcasts, writing books, teaching courses, giving talks for money, which is exactly what I do. Like, I don't consider myself retired. I just like to that's like what I like to do. And people pay me for it. And they're doing the same thing. So one might say, you know, yes, you switch careers. And that's great. Like I love I love this as a career, but you're not retired. And so let's like acknowledge that work is not defined as what you don't want to do. Work can be stuff you don't want to do. But work can also be stuff you do have to do. And if you are in the labor force, you are getting paid to do stuff whether you'd like to do it or not. So I don't know, I, I just want to put that out there. So sometimes when people like what are you, you know, you're trading your life for money. So is this thing you're bringing in worth that money? And it's like, well, except I'm not trading my life for money, because this is what I would do as a hobby.

Zack Arnold: Yeah, I'm glad you brought that up. And I almost I'm a little concerned right now that you must have backdoor access to my notes, because I literally was going to get to the concept of rethinking retirement, because that is such a huge aha moment in the book. So I agree with everything that you said, I want to put a pin in it for a second. And I do want to go deeper. But I don't want to lose this thread about pursuing things that you actually enjoy the abundance mentality versus the scarcity mentality. And here's the reason why. Because I think that one of the biggest barriers that a lot of people can run into with this abundance mentality is actually much deeper and has to do with self worth. So it's one thing, let's say, the worst salaried employee for the second, right. And I make $100,000 a year because that's simple math, there's a difference between I earn $100,000 a year, and I am the kind of person that only earns $100,000 a year. So the mere thought of, I'm going to pursue pursue things to earn more money, and maybe it'll generate significantly more income, oh, but I'm not that kind of person. I could never build a million dollar business. Right? So this is so much deeper than just here, the practical ways to earn $2,000 or $10,000, or build a side hustle or build a business. So how do we start to dig into how our income and our finances are assigned to our own self worth?

Laura Vanderkam: Yeah, it's an interesting question. Because I mean, some people I think, you know, grow up with the mindset that earning more means you're worth more, which is not you know, your net worth maybe more your your personal worth as as a human being is not changed, regardless of what you are, what your net worth is. But then I think other people grow up with the idea that money makes you a bad person, right like that. You must have done something wrong. I don't know you stole it from somebody. I got a question for this on one of my podcasts from a lady who had built to, you know, reasonably successful business and she was earning a good amount of money doing consulting with a school system. So I think she must have been like a former teacher who was going in consulting with school systems, and she was earning a good amount doing it. And of course, she felt very guilty, because all the hard working teachers she's working with are earning significantly less than she is. And I said, Well, you know, I get it, I get it, that that might be a mindset that you, as a former teacher, yourself are coming into this with, however, we're optimizing on different things, like your business could disappear tomorrow, right, like school systems could decide that they are no longer paying for pricey consultants, like, that's not what they're going to spend their money on, like their, you know, state allocation of money might change entirely, that you're no longer allowed to do that your business has gone overnight. Whereas for the most part, you know, unionized teachers and big districts after a certain number of years, it's, it's harder for them to lose their jobs overnight, there's a whole process to it, you know, obviously, things can happen. But, you know, there's security with it. And so maybe they are trading off income for more security, you have decided to offer a service that people are willing to pay for, but it's a little bit less certain. So you know, I don't know, I think people just have mindsets about stuff that you know, what, what income represents. And especially since, I mean, I'm sure you have lots of different people of all different demographics, listening to your your stuff, but I find that for whatever reason, the majority of my listeners and readers are women. And the questions of women and earning are very different. Because many young men grow up with the assumption that they will always work for pay. And not only that, they will, that they need to be able to support a family with whatever they are bringing in. Whereas I feel like a lot of women still do not grow up with that mindset, they certainly grew up thinking that they need to choose a profession, and that they probably will be working for most of their adult life. However, many don't have that mindset of like, I should make sure that whatever I'm doing is enough, both to support me and an entire family, you know, in the lifestyle that I would wish for that entire family, a lot of women assume there will be something else beyond them. And for many women, that is the case, but then for many women, it isn't the case at some point or another in their lives. And so I'm always on a mission to make women really think seriously about what it would mean to earn a family supporting income, and why they might want to think about it and why your choice shouldn't just be like, Oh, well, you know, I should scale back because I want to family, it should might more be like how can I make sure that I could support a family with my professional choices?

Zack Arnold: And my guess is that and I certainly can't speak for the female mind, because I have don't have the female mind. And I see it from my own perspective. But I would think that the idea of your self worth being wrapped up in your income, I would think of anything that would be more prevalent in that sense, in certain respects. When you hit it's, you're familiar with Gay Hendricks psychologist Gay Hendricks. He there's this psychological concept that he calls the upper limit problem, where you have this image of yourself, whether it's your career, how much you earn your relationships, where you kind of hit this glass ceiling psychologically, where all of a sudden, if you surpass it, there's a whole bunch of self sabotage because you don't actually believe you deserve, you've earned that thing. Which is why we see so many celebrities or people that are a quote unquote, overnight success, just completely implode. Because deep down inside there, like, I didn't actually earn this, I don't deserve all of this. So I think that that's a barrier for some people with Well, yeah, I could have this abundance mindset. But I'm, I'm not sure actually deserve it. Or I've never actually extravagantly spent on something. So who do I think that I can even earn the money to go on a trip to Fiji and go scuba diving? I'm not the kind of person that does that.

Laura Vanderkam: Yeah, no, I'm certainly that that can that can happen. And, um, you know, it's good to examine all our financial stories, like where these come from? Because certainly, you know, you can grow up with solid financial things of like, spending less and being frugal, but it doesn't translate into the idea of how do you aggressively earn more, right, like that part didn't go into it. Or maybe you learn about putting money in the bank and spending less on interest rates for a mortgage or whatever, but you don't learn about investing. And so that's a piece of the puzzle that you didn't have the stories around as a young person either. So, you know, we all it's worth looking at our money stories and what we grow up with. And as with any stories, they'll say, Well, is this serving me? Do I truly believe this? Is there a way that I need to rewrite this to be more productive with my life as it exists now? And you know, those are useful questions to ask.

Zack Arnold: Yeah, I love those questions. I'm going to make sure that we even add them to the show notes because there are so applicable to any voice or script or limiting belief. And they're especially applicable here, right is, is this image serving me? Well, one thing, I shared this with my class before, I don't think I've ever actually talked about it on the podcast. So my dad, when this happened way back in my childhood probably never thought, Oh, gee, maybe I shouldn't do this. Because someday my son's going to talk about on on podcast, what's a podcast? What's the internet, right? But one of the if we're going to talk about financial stories in the image has been burned in my brain my entire life. I don't remember exactly when it was I was give or take 11 or 12 years old, and we had to go grocery shopping. And before my left, my dad said, can you go check all the couch cushions for change? That was it. That drives so many of my financial decisions and the financial stories. And the emotional attachment that I have to money was that we were in a position where it's like, if we want to get everything on the list, let's make sure we haven't left any change in the couch cushions. Right. We lived in I lived in a house that had heat, like it was but things were really tight for a while. And that's a script that I've never been able to completely get rid of which again, which when I look at the cost of a gallon of milk, I'm like, how much is a gallon of milk? That story is in there, right? It's buried deep in the recesses of my emotional brain.

Laura Vanderkam: Yep. I probably don't have that much change in your couch cushions anymore. Since we're not using cash

Zack Arnold: I was gonna say what's change? My younger listeners are like what does he mean by change?

Laura Vanderkam: Dad, I don't know. I haven't seen a quarter at ages.

Zack Arnold: Yeah, I'll put I'll put a Wikipedia link in a mid journey image of what change used to look like. How about that?

Laura Vanderkam: I was trying to find Tanger my babysitter was picking up one of my kids at a art class today and she's gonna have to park the van on the street for this. I'm like, Oh, God, I gotta do I have quarters. She's like, Laura. I'll just put it on the app. I'll put it on the app like, oh, yeah, that's how people pay for parking.

Zack Arnold: Yeah, don't don't even get me started on paying for parking with QR codes and digital apps and tipping valets, like, I've become an old man yelling at clouds. I remember. And I used to give him $1. And it works, right. But that's a whole other conversation. So what one last question to dig into these limiting beliefs and scripts, then I want to get to this idea of retirement before we wrap up. Because there's a lot to be said about that. That could easily be an entire episode. But let's say that we've identified some of these scripts or these voices, or these images or beliefs about money, once we know that they're there. How do we start to overcome any of them to start making these better choices? I know that I'm not talking to you know, like a, bonafide psychologists, psychiatrists, and we're all trying to figure this out. But from your perspective, with your experience, what's the step between I've now identified the story now I want to overcome it so I can begin to earn more?

Laura Vanderkam: Yeah, no, I'm not a psychologist. So take anything I say with a grain of salt. You know, I think you can figure out what other stories also resonate with you that you can then try substituting that. So if you're like, Well, I'm not worth that. That seems like a ton of money. I can't believe anyone would pay me that. Maybe it's like I am visioning like the life I want my family to have. And me earning a significant amount of money for what I bring to the table is part of that. And so you go in with that mindset that is not just about like, ooh, me wanting more, I'm greedy. It's that No, no, I am supporting all these people and need them to have a good life. Right, like, so that's something that people can go in with. And that's actually an interesting, I did some research on this at one point that women are often very good at arguing for things for other people. And so if you are going to go in to negotiate more money for yourself, having in your mind that you're doing it for something else, is often very helpful, like when women are incredible, like real estate agents, and, you know, talent agents and things like that, because getting more money for somebody else. You are all over that. Right? Often, it's a little bit harder for ourselves. But if you go into any sort of negotiation with the idea that no, no, I'm the real estate agent here. I'm the talent agent, negotiating this for something else, you can often push a little bit harder. So you know, figure out if there's a different story that could get out what you are going for. That also rings true for you. And if you keep telling yourself that, then then often you can you can sort of move beyond the first story. It's not that the first story isn't true for you. It's just it's not the whole story.

Zack Arnold: Yeah, I like to add in this idea of replacing it with a different story that's bigger than you and it's not just about you. I think that's a really helpful one. I want to get back to what we had said I was going to put a pin in earlier because from my perspective, knowing what I wanted to talk about today, if we don't talk about retirement, I have failed miserably to get what I wanted to this conversation because your views on retirement are so much in alignment with mine and just like trying Define enough is hard. Defining what retirement means is really hard. For individuals as far as our collective society, it's really simple. You go to school, you're in this very specific track, you're specialized, you choose a ladder, you start on the bottom, you climb the ladder to the top while you're climbing the ladder, you're putting money in a 401k, maybe your company's matching, and then there's magic number 57 and a half, or 62, or 65. Yay, you've worked for the best years of your life. But now you get to enjoy the spoils of your labor, and it's so bass ackwards. It just makes no sense to me whatsoever. And the definition of retirement that I've come up with, which is very personal, is that retirement to me, like true Retirement means that I never have to work again. But I get to work on whatever I want. And the I use the word retirement fairly recently, and it kind of threw somebody off, where they said, Well, what are you doing now? I said, Well, I'm a retired editor. I've retired from editing and I'm out doing this other thing. They're like, retired, what do you mean, you retired? How did you make that happen? I'm like, Oh, they were thinking like, I pulled into my retirement and my pension from the editors guild. It's like, no, no, no, it's totally different. I've retired from this identity. And from this line of work, and I'm pursuing a new one. I'm not financially independent. I'm not financially retired, like you said, I'm podcasting. I'm writing, I'm teaching, I'm coaching, I'm speaking. That's what I have to do to make a living. When I consider myself truly retired, I never have to work on anything. I never have to earn money. But there I know myself, I'm a recovering workaholic borderlines. Like, remove the word recovering. Like, I'm very much a workaholic, I know I'm going to work pretty much until the point I'm not capable of it. I just want choices. I don't want to have to work. So that's my definition of retirement. How do we help other people rethink retirement?

Laura Vanderkam: Yeah, I mean, I think that the idea of, you know, a good golden years is that you were doing things that you want to with your time, and now there's a whole different thing I get I get letters from people who are newly retired, they're like, oh, Laura, what do I do with myself? And it's like, well, you know, there's ways to think about this. I mean, I could encourage people to take like a gap year, when they retire, do all the things that you didn't do, because you were working full time. But my guess is for most people, if you're still within good, if you're good health, within a year or two, you're like, Okay, I've done those things. I'm a little tired of it. Now I need some sort of purpose. And smart retirees then have something, whatever that is, maybe they're taking care of their grandchildren, they're volunteering somewhere, maybe they're running a little hobby business that, you know, they didn't have enough time to fully develop when they were working full time. And now they're doing, they could be doing what we're doing there. They're speaking podcasting, teaching courses and writing books. But you need some sort of purpose as a human being to keep you moving forward. You know, leisure in and of itself is great. But if it's not purposeful leisure, it gets old pretty quickly. Right? Most people are not going to want to just sit around for 30 years watching TV. So yeah, I think that's but given that that's the case, you know, that you'd spend a year or two doing the stuff you didn't do, and then you'd want some sort of purpose, it might behoove you to figure out well, what is that purpose? Now? You know, like, maybe that's something that you'd like to be doing in an income producing way.

Zack Arnold: The last thing that I want to do is be figuring out my life's purpose, when I'm 65. I would much rather find it now. Or even better, I'd much rather find it 20 years ago. So to me, this idea of I'm just I'm going to work for the man, the proverbial man for 30 plus years, put in my time, build my nest egg, and then I get to start living my life, just the concept of this alone. It's just it's such a bill of goods that we have been sold so that we can be a part of the labor force and the thing that really clinched it for me, because I'm the for me, the other thing that I value in addition to being able to buy my time is having the money to be able to buy physical experiences like American Ninja Warrior has led to so many different friendships and relationships and life experiences and amazing stories. One very specific example A friend of mine just a couple of weeks ago, he said hey, I just went and hiked Half Dome. It's basically that the big giant rocket Yosemite that's in the documentary free solo. Right? So the version of me 10 years ago before I learned all this was that's going to be on the bucket list. Once I've got the money and I can take the time away. Maybe when I'm 6065. I'm going to hike Half Dome, but then you think, do I really want to do that with my 65 year old body? I'd much rather do it with this body.

Laura Vanderkam: My 40 something body feels bad enough about that.

Zack Arnold: Exactly. It already scares my 40 something body but why would I wait until 65 For the best years of my life when my body's gonna see I really wish you had done all these things 20 30 40 years ago.

Laura Vanderkam: Yeah. Yeah, well, I say I'm definitely trying to put in the the travel experiences now. But yeah, and you know, I I definitely think that people should try to, you know, balance between future self and current self If we can't put it all in the future self trusting that future self will do it because like you said, you don't know your your health may deteriorate. Many people like to be closer to home as they get older. And so then they're not gonna be able to have these experiences that they they thought they would. So maybe you want to do some of them. Now, that doesn't mean, don't put anything away for the future, like there always has to be a balance between the two, you want some security, some, you know, wealth building for the future. But you also don't want to only think about the future. And the idea of you know, only taking, you know, two weeks off a year and doing things for many hours a day that you're not happy about is yet I think if that's the case, then it might be worth thinking about what what your purpose could be what you're called to do. And if there's a way to switch careers to that.

Zack Arnold: Yeah. And basically, this just led to exactly where I wanted to close this, which isn't so much as a question and you can just kind of cap this off. But this is coming right out of your book. And it's all about this kind of intersection of retirement and finding your calling. And you said, what if instead of figuring out when you'd have enough capital to retire, you spent that same energy finding a calling that you'd liked so much, you didn't want to stop doing it. That to me is the root of how you buy happiness. So.

Laura Vanderkam: There we go, I guess I wrote that.

Zack Arnold: You certainly did. Those are your words, but they were over 10 years ago. So I figured maybe I'll help you out. And I'll quote them right. But having said that, is there anything that we haven't covered about these topics, knowing that we're kind of resurrecting this from the archives, although given that you just wrote a blog post about it this week, I find that interesting. Anything else that we haven't covered that you feel is really vital for anybody that's trying to wrap their head around this idea of finding enough and the ability to actually buy happiness?

Laura Vanderkam: Yeah, well, I mean, I just think that, you know, if you think of money as a tool, right, it is something you can use to achieve certain things, whether that's experiences you want to have, whether it's freedom, whether it's used in ways to bring you closer to other people, as we were talking about the Starbucks trips, it is best used in that regard, instead of having some sort of existential power in and of itself, because there's just that it's just a concept. It's a very useful concept. It's just a concept. So we want to use it in a way. Like we would use a hammer and a wrench right? Like, you know, they use it to build a house and the same thing, you can use money as a tool to build the life you want.

Zack Arnold: I love it. I couldn't have finished it off better myself. So having said that, I want to be very conscious of your time. But before we wrap up, shameless self promotion portion of the program for anybody that wants to learn more about either this book, all of your other books, watch your TED Talks connect with you. What's the one simplest place we can send people to get started?

Laura Vanderkam: Come to my website, lauravanderkam.com. You'll learn about All the Money in the World. You'll learn about my various other books, links to my podcasts, all that good stuff.

Zack Arnold: I love it. Once again, just going to reiterate where we started the fact you came back to publicize and talk about a book that's 10 years old, means a lot really means a lot to you. We're willing to take this, this call today and I can't wait to sell at least four or five more books for you.

Laura Vanderkam: Let's hope. Fingers crossed.

Zack Arnold: On that note, thank you so much. I really appreciate it.

Laura Vanderkam: Thanks for having me.

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