A few months ago, we published an article on 11 personal finance goals for your 20s. Today we take a look at 7 personal finance goals for your 30s. While many of the goals you should set during this decade of your life are simply a continuation of those you hopefully started on in the previous one, your thirties bring some unique personal finance challenges that didn’t exist when you were a relatively carefree 20-something. As a friend once put it, “In your 30s, you’re just running.” You’re likely married, have small children, and your career is starting to take off — everything’s launching and/or accelerating at once. And with these new responsibilities come new personal finance goals.

As you read the suggested personal finance goals for your 30s, keep in mind that everyone is in a different place, so naturally everyone is going to have different objectives. But if you’re feeling confused and overwhelmed about money, it’s sometimes helpful to see suggestions for milestones to hit at certain points in your life. You can then take those broad suggestions and refine them so they fit your personal circumstances.

(In your 40s? We also have a guide to finance goals for that decade of life.)

1. Save six months of income in your emergency fund. 

Hopefully by now you’ve started an emergency fund. In your 20s, the goal was to get at least $1,000 in your savings account before you started paying off your debt. This provided a small cushion to prevent your financial life from derailing in the face of unforeseen expenses. In your 30s, you likely have more on the line than you did in your 20s — like a wife and kids to take care of and a mortgage. While having $1,000 in savings will certainly help, you’ll want even more security than that in the event you lose your job due to a layoff or injury. To that end, make it a goal to save at least six months of income in your emergency fund while in your 30s. Why six months? Studies have shown that after you lose a job, it takes around that amount of time to get a new one. Having six months’ worth of income in your savings account will ensure that you can continue to support your family while you’re hitting the pavement looking for a job.

And besides protecting you from negative events, having six months of cash in the bank gives you a bit of freedom to take some risks. Maybe you finally want to start that business you’ve been dreaming about or perhaps an opportunity comes up to travel for three months. Your emergency fund can help you take advantage of those opportunities.

In short, six months of cash in the bank is one very effective way of becoming more antifragile.

For extra personal finance points, try to save one year’s worth of income by the time you turn 40.

2. Pay off all-non mortgage debt. 

In your 20s, you paid off all your credit card debt and started a debt repayment plan for your student loans. In your 30s, the goal is to stick to that plan — keeping credit card debt at bay and paying off all your non-mortgage debt. Be aggressive with it. Slash your expenses with frugal living, earn extra money through side hustles, and divert as much of your savings and income as possible towards eliminating your student loans and any other debt. If you don’t think it’s possible to pay off your debt while trying to support a family with an average income job, just read the experiences of folks who followed Dave Ramsey’s Total Money Makeover program. You’ll find several examples of families of five or six, where the husband was the sole full-time income earner, who still managed to pay down down six-figures of debt in just a few years. It just takes dedication and sacrifice.

3. Increase retirement savings to at least 15%. 

Hopefully by now you have some sort of retirement account set up and are making regular contributions to it; you won’t be one of the 40%(!) of Baby Boomers who have nothing saved for their golden years. As you pay off more of your debt, start shifting some of the money that’s no longer going to loans to your retirement account. Most personal finance experts agree that in your 30s you should be saving at least 15% of your income for retirement. If you want to make sure you have plenty, aim for 20%. Don’t know what to invest in? Check out our post on index funds — the best stock market investment option for just about everyone.

4. Get your estate planning in order. 

You’re going to die someday. Could be in 50 years or it could be tomorrow. Whenever it happens, your estate will have to be set in order and distributed to your survivors. If you want to control how your stuff gets doled out when you’re gone and make the process as hassle and conflict-free as possible for your loved ones, you’ll need to have a will or a trust in place. Wills and trusts are particularly important if you have children. If you and your wife both die, who do you want to take care of them? How do you want the money in your accounts spent to raise them? In addition to a will or trust, your estate plan should have documents like an advance directive and durable power of attorney. Instead of your family arguing about whether to pull the plug on you when you’re in a coma, make that decision yourself with a living will and a health care surrogate designation (the person who gets to call the shots when you’re incapable of doing so).

For more information, see our article on estate planning.

5. Consider term life insurance. 

When you’re in your 30s, you’re starting to build up a financial foundation that permits you to give your family comfort and security. But what would happen if you died tomorrow? Would your family still be able to live comfortably or would they be scrambling to figure out how to make ends meet because you’re no longer around to provide for them?

Take a step to ensure your family is taken care of by purchasing term life insurance.

It’s key that you make sure the life insurance policy you get is term life insurance. There’s another type of life insurance out there called cash value or whole life policies that are much more expensive and confusing; it lasts for your entire life, and you have to pay into it until you die. With term life insurance, on the other hand, you pay a monthly premium for a set term (could be 10, 20, or 30 years). If you die within the term, the insurance company will pay out a specified amount to your beneficiaries. So for example, if you bought a $500,000, 20-year term life insurance policy, if you kicked the bucket 10 years after purchasing the policy, your wife (or whoever you set as the beneficiary) will get $500,000 from the insurance company.

Most people don’t buy life insurance because they think it costs too much. But as financial planner Jeff Rose wrote in a previous post:

Not true! A healthy 35-year-old man can get $500,000 of term insurance for 20 years for the price of 6 Double-Doubles per month at In-N-Out Burger. While you won’t get the same immediate gratification when making the payment, you can rest assured that your family is taken care of.

And what if you outlive the term of the policy? Well, congratulations! You’re still alive. That’s great news. Hopefully, you’ve been saving enough during that time that you’ll have so much money that you won’t need another insurance policy to take care of your loved ones after you die of old age.

6. Start a 529 plan for your kids. 

I don’t know what the future of higher education is going to be. Perhaps in the next 15 years, people will be able to get a college education for free online, or maybe college tuition will keep increasing at a rate of 5% each year. I’m hoping for the former, but banking — quite literally — on the latter. As soon as each of my kids were born, I set up a 529 college savings account for them to which I now make regular monthly contributions. While you can’t write off the amount you contribute to a 529 on your taxes, the interest the account generates is tax free. So if Junior’s plan earns $10,000 in interest, you don’t have to pay taxes on that $10,000 when he starts withdrawing money to pay for school.

If your child decides not to go to college, you can re-assign the account to another child and pass along the tax-free earnings. If that’s not an option, you can cash the account out but pay a 10% penalty on the earnings accrued.

7. Get an accountant (if your finances are complex). 

When you were in your 20s, your finances were probably rather simple. You may have had just a checking and a savings account and maybe a few bills. When you get into your 30s, your finances start getting more complex — mortgages, homeowners insurance, multiple retirement accounts, college savings plans, maybe even a side-hustle business. All these additions to your financial picture will definitely make taxes more complicated. While you can use software to guide you through the process, a certified personal accountant can make sure you’re not paying more in taxes than you should be and will save you a ton of time — especially if your finances are a little more complex than the average joe’s.

Up until a few years ago, I did my own taxes with TurboTax. With expanding business and financial complexities, taxes took me forever, and I was definitely leaving money on the table. So I decided to hire an accountant, and it is easily one of the best decisions I’ve ever made. She quickly found places where I was overpaying on taxes. Best of all, I hardly spend any time on my taxes myself. Just a few minutes gathering forms for her and then reviewing them before I send them in.

Listen to our podcast with Nick Maggiulli about the 6 levels of wealth and how to reach them:

With our archives 4,000 articles deep, we’ve decided to republish a classic piece each Sunday to help our newer readers discover some of the best, evergreen gems from the past. This article was originally published in November 2015.

This article was originally published on The Art of Manliness.

You’ve heard the advice that to build wealth, you need to earn more, spend less, and invest consistently. But what if there was a clearer way to understand exactly where you stand financially — and what steps you should take to reach the next level?

My guest, Nick Maggiulli, offers just such a framework. Nick is the creator of the Of Dollars And Data blog, the Chief Operating Officer at Ritholtz Wealth Management, and the author of The Wealth Ladder. Today on the show, he unpacks the Wealth Ladder concept, taking the complex, often overwhelming concept of personal finance and distilling it into six easy-to-understand wealth levels, each tied to specific net-worth milestones and financial freedoms.

Nick walks us through each rung of the Wealth Ladder, from getting out of financial instability to achieving restaurant and travel freedom, and eventually reaching upper levels of significant financial independence. We discuss the distinct strategies you should utilize on each rung to make the most of that level and move on to the next. And we get into why your spending decisions should be based on your net worth rather than your income, how wealth allocation changes dramatically as you climb the ladder, and why increasing your earning potential becomes more important than penny-pinching as you progress.

Whether you’re just getting started or well on your financial journey, this episode provides actionable insights and practical wisdom for climbing the Wealth Ladder and securing a life of greater freedom and fulfillment.

Resources Related to the Podcast

• Nick‘s previous appearance on the AoM podcast: Episode #836 — Data-Backed Answers to Personal Finance Controversies
• Nick‘s previous book: Just Keep Buying: Proven Ways to Save Money and Build Your Wealth
• Nick‘s article: What is Coast FIRE? The Ultimate Guide to Semi-Retirement
• The Missing Billionaires: A Guide to Better Financial Decisions

Connect With Nick Maggiulli

• Of Dollars and Data blog
• Nick on X
• Nick on LinkedIn
• Nick on IG

Listen to the Podcast! (And don’t forget to leave us a review!)

Listen to the episode on a separate page.

Download this episode.

Subscribe to the podcast in the media player of your choice.

Read the Transcript

Brett McKay: Brett McKay here. And welcome to another edition of the Art of Manliness podcast. You’ve heard the advice that to build wealth, you need to earn more, spend less, and invest consistently. But what if there was a clear way to understand exactly where you stand financially and what steps you should take to reach the next level? My guest, Nick Magiulli, offers just such a framework. Nick is the creator of the Of Dollars and Data blog, the chief operating officer at Ritholtz Wealth Management, and author of the Wealth Ladder. Today on the show, he unpacks his wealth ladder concept, taking the complex, often overwhelming realm of personal finance and distilling it into six easy to understand wealth levels, each tied to specific net worth, milestones and financial freedoms. Nick walks us through each rung of the wealth ladder, from getting out of financial instability to achieving restaurant and travel freedom and eventually reaching upper levels of significant financial independence. We discuss the distinct strategies you should utilize in each rung to make the most of that level and move on to the next. And we get into why your spending decisions should be based on your net worth rather than your income, how wealth allocation changes dramatically as you climb the ladder, and why increasing your earning potential becomes more important than penny pinching as you progress.

Whether you’re just getting started or well on your financial journey, this episode provides actionable insights and practical wisdom for climbing the wealth ladder and securing a life of greater freedom and fulfillment. After the show is over, check out our shownotes at AOM/Wealthlad. All right, Nick Magiulli, welcome back to the show.

Nick Magiulli: Thanks for having me on, Brett. Appreciate it.

Brett McKay: So I had you on last time to talk about your book, Just Keep Buying, which is all about, you just got to keep buying and investing in the stock market. Don’t stop. You got a new book out called The Wealth Ladder, Proven Strategies for Every Step of Your Financial Life. Really good book. I really enjoyed it. Your book is based on this idea of the wealth ladder that you’ve created. What is the wealth ladder and how and why did you come up with it?

Nick Magiulli: Yeah, so Stuart Butterfield, who’s the founder of Slack, had this three levels of wealth framework. Level one was, I don’t stress about debt. Level two was, I don’t stress about how much things cost at restaurants. And level three was, I don’t stress about how much vacations cost. And so I heard about this, oh, that’s a cool idea. At the same time, Jay-Z, you know, that he had this lyric in one of these songs. I’m not going to say the full lyric because it curses and stuff, but he just basically said, what’s 50 grand to someone like me? Can you please remind me? At the time, he had a net worth of $500 million. And so, you know, 50,000 over 500 million is 0.01% of his wealth. And so I realized, hey, that’s like a trivial amount of money to someone. So given that, I kind of came up with this levels framework, which is based on Butterfield’s three levels, but I made six levels and I actually put net worth values to them. So I’ll just walk through those just briefly. So, and just for the record, your net worth, that’s all your assets, everything you own, your cash, your stocks, your house, et cetera, minus all your liabilities. That’s everything you owe to others.

So your mortgage debt, student loans, credit card debt, et cetera. And so once you know your net worth, you’re somewhere on the wealth ladder. Level one is a net worth of less than $10,000. Level two is a net worth of 10,000 to $100,000. Level three is 100,000 to $1 million. Level four is 1 million to $10 million. Level five is 10 million to $100 million. And then level six is over 100 million. Now, once you have these levels, it’s actually funny. It actually maps up with the data and for United States household wealth, it actually maps up decently. About 20% of households are level one. So that’s less than 10,000. 20% are level two. That’s 10,000 to 100,000 in wealth. 40% of households are level three. That’s 100,000 to a million. That’s what I would call your typical middle class. And 18% of households are level four. That’s one to 10 million. That’s like upper middle class. And then over 10 million, that’s like the top 2% of households. That’s level five and six. And the nice thing about these levels, I’ve heard a lot of people do levels of wealth and do all this before.

I like this because it’s a log scale. You know, you divide by 10 or multiply by 10 to move up and down the levels. So if you know one of the levels, you can figure out the rest. So I just tell everyone, memorize level three. That’s the middle, middle class. That’s 100,000 to a million. If you know that, you can back out all the rest. And then even within that, going back to Stuart Butterfield’s three levels framework, level one was not stressing about debt, et cetera. I’ve applied spending freedoms to each level. So in my case, I said, hey, I don’t worry about what it costs at the grocery store. That’s called grocery freedom. That’s level two. So level two is grocery freedom. Level three is restaurant freedom. You don’t worry about what it costs at a restaurant, which is 100,000 to a million dollars in net worth is level three, et cetera.

Brett McKay: You can get the appetizer. You can get the Southwest egg rolls at Chili’s.

Nick Magiulli: Yeah, exactly. You don’t have to worry about any of that stuff, right? And then by the time you get to one to 10 million, you can start to have travel freedom. That’s where you can like sit in the nicer seat on the airplane. You can, stay at a nicer hotel, et cetera. You can’t really fly private yet because that’s a little too expensive. Maybe if you got to the very end of level four, I think private or travel is really reserved for people in level five. But, putting this all together is a very long answer. But putting this all together, you get the wealth ladder, which is just a new framework for thinking about money and how you make various money decisions. You can help with spending decisions, income decisions, investment decisions and more.

Brett McKay: One of the interesting things you do with the wealth ladder is you argue that this is a better way to think about how you spend money. So I think typically when people think about how they spend money, they think about their income. Well, if I’m making more money this year, I can spend more money. You argue that we shouldn’t be doing that. Instead of spending money based on our income, you say we should spend based on our net worth, which you call wealth. Why is that? Why should we base our spending decisions on our net worth slash wealth?

Nick Magiulli: Well, I think the issue is that wealth is generally less fickle than income. I mean, you can lose your job at any moment. And now, okay, I’m assuming that’s how most people earn their income. So if you lose your job, your income basically goes to zero. It’s unlikely your wealth is just going to go to zero out of nowhere. Even during the financial crisis, as bad as it was, people were seeing their homes drop by 25%, their stock portfolio get cut by 50%, which is still bad at the worst moment, but it didn’t go to zero. So it’s a little bit more stable. As a result, I think your marginal spending decision should be based on your wealth, not your income. And then what we talked about, like just the example you gave, oh, I’m at Chili’s, I want to get these egg rolls. They’re going to cost me an extra 15 bucks. Can I buy those? And I say, yeah, if you’re in level three, which is anywhere from $100,000 to $1 million in net worth, you can afford that, quote, splurge or that marginal choice to spend the $15 on egg rolls.

I don’t think it’s a big deal. And so where does that come from? It comes from what I call the 0.01% rule. And that’s kind of comes from that Jay-Z thing where it’s like Jay-Z could drop 50 grand like nothing. Well, if you have a net worth of $100,000, you can drop 10 bucks like nothing. That’s the equivalent difference, right? Obviously, we’re not Jay-Z, so we can’t drop 50K, but he also had 500 million at the time. So that’s where I start thinking about this. Like, hey, how much can I just drop as like a, you know, this is trivial to me. And so that number goes up over time. And so I think a lot of personal finance experts tell you, oh, you can’t spend more money, you know, don’t allow lifestyle creep. And I don’t think that’s accurate. I think you should have some lifestyle creep, but it should be based on your wealth, not your income. Because you’re right, your income could go up. And if you start spending more of it, you’re not necessarily saving anything else. You’re not building wealth. So my whole idea with this rule, the 0.01% rule, which is 0.01% of your net worth, or take your net worth and divide by 10,000, it’s the same thing.

That’s how much you can spend every day and your wealth will stay stagnant, at least on that amount. And so I think thinking about that is very helpful because that’s where you can start to realize, oh, hey, I can spend more over time, but only after I’ve built the wealth. The wealth ladder framework plus the 0.01% rule allows you to spend more over time after you’ve demonstrated financial discipline. And I think that is very important because I want people to be able to spend more money. I want people to be able to enjoy their lives more. And this is a slower way of doing that. And it’s a much better framework, in my opinion.

Brett McKay: Yeah, I love the 0.01% rule. It completely changed how I think about how I spend my money.

Nick Magiulli: That’s great.

Brett McKay: Yeah. So when you say this 0.01% rule, you spend 0.01% of your net worth, you mentioned earlier net worth is your assets minus liabilities. But some assets, like your home, is not liquid. It’s not tied up in cash. So should you spend the 0.01% rule, like including the value of your home, or should it just be like liquid assets?

Nick Magiulli: Yeah, so I think in general it should be liquid assets. I just use, you know, when I talk about the wealth ladder in general, I use total net worth. But you’re right when we’re talking about spending decisions, like you can’t eat your home equity necessarily. Like, yes, you can get something called a HELOC, a home equity line of credit, and you can borrow against your home and do all that stuff. So technically you can pull some of that money out, but I don’t recommend it necessarily. So I think the thinking is, yeah, what’s my liquid net worth? That’s the more conservative thing. So if like, oh, if my liquid net worth, if I have like, let’s say, I don’t know, $100,000 on a brokerage account, then you’re in the beginning of level three. That doesn’t mean you can go and splurge everything at a restaurant, but you can start to spend a little bit more at a restaurant. And where that 0.01% comes from, it’s just, obviously I just came up with this as a trivial amount, but if we assume your wealth is earning 0.01% per day, over the course of a year, if you do that, 365 times, that’s 3.7% a year, which is a conservative return.

That’s basically the assumption. I’m assuming all wealth is growing at 3.7% after inflation, like on average. I don’t think it’s a crazy assumption. And because of that, I’m just assuming your wealth can throw that off just indefinitely.

Brett McKay: Yeah, what I love about the 0.01 rule about spending on your wealth is that it’s actually kind of encouraged me to spend a little bit more. I tend to be tight-fisted and very frugal. I still think I’m a law student, broke. And it’s a good paradigm for helping me loosen up a bit. So you have a chapter about how you earn your way up the wealth ladder. So in order to accumulate wealth, you have to make money. So what does that look like? I mean, what I love about your work too is on your blog, Dollars in Data, within your other books you’ve done as well, is you’re very data-intensive. So you’re looking at all these obscure economic reports. When you look at the data, how do people on the different rungs of the wealth ladder earn money to get to that point?

Nick Magiulli: Yeah, so in general, across the wealth ladder, people in levels one to three, so that’s anywhere from less than $10,000 all the way up to $100,000 to a million, they basically earn all of their money through work. That’s how most people earn their money, right? It’s through their labor. It’s once you start to get into level four, and that’s $1 million to $10 million, and obviously you have some money invested, but we start to see a shift where assets are producing more of their income. And then by levels five and six, it’s even higher and higher. People in levels five and six get most of their income from some sort of business or assets they own, not necessarily their actual labor that they do, like the work they do. And so I think that’s the big mindset shift, and it takes time too, by the way. Like, I’m going to, we can talk about this a little bit, but the median age of a household in level four, once again, level four is one to 10 million, the median age is 62. So if we put every household in America in a room that had one to 10 million, and we just took like the middle age, basically, they’d be 62 years old.

So this is not something that’s going to happen overnight. It takes a lot of time in general or a lot of work. You know, there’s a lot of other ways you can do it, but, less than 1% of households in level four or above are under 30. So that is not the case. That’s a very, very rare thing. So when you look at how people earn money, for most people, it’s just, you know, they work and they earn money and that’s it. But as you kind of move up the wealth ladder, you start to see that those people are earning money off of their assets and not just their labor. And so that’s the big kind of mindset shift I think you need to have. And it’s what I wrote about in Just Keep Buying, right? It’s the continual purchase of a diverse set of income producing assets. That’s the mantra, Just Keep Buying, and that’s kind of what I push for. But it gets even more extreme at the higher levels of wealth.

Brett McKay: Yeah, I think that’s a good point to make. Most people don’t make it to millionaire status until their 60s. I mean, I think the problem with social media is that bias, that recency bias where you see, oh, these people who are in their 30s and 40s, just tons of money. And like, well, that’s not me. And what’s wrong with me? It’s like, well, nothing’s wrong with you, actually. You’re probably doing just fine.

Nick Magiulli: Exactly. Yeah. I think the media does a really bad job of hiding. But then again, that’s the point, I guess, is they want to show exceptional stories. They don’t want to show the ordinary things. Like, oh, yeah, I worked for 30 years and saved my 401k and now I’m a millionaire. That’s not as exciting for people, even though that’s more realistic.

Brett McKay: Another point you make in this earning up the wealth ladder is, okay, we talked about wealth is more important than income, but you show the data that income is pretty correlated to wealth. You had that really interesting chart there. Can you walk us through that?

Nick Magiulli: Yeah, so basically the idea is that within each wealth level, the median income is just increasing across each wealth level to the point where it’s the strongest relationship in personal finance. And if you really think about it, it’s like a flywheel. Your income creates wealth, and then if you obviously save and invest that, that can create more income, and then it just keeps happening over and over. It’s like the snowball. And so if you just look at the median income within each wealth level, it just goes up. So in level four, $1 to $10 million in wealth, the median income is almost $200,000. And so that’s a big piece of this, right? And then by level five, I think it’s like $750,000 or something like that, something close to that. So it’s just like it goes up, and then level six is $4.3 million. So the people in level six that have $100 million in wealth, it’s just their incomes are just super high because they’re earning so much off their assets.

Brett McKay: Yeah, I think that’s an important point because I think oftentimes personal finance advice that you see out there, popular personal finance advice, it’s geared more towards reining in spending as opposed to increasing income. And we’ll talk about this later. I think we’re going to talk about each individual rung on the wealth ladder and your different strategies to take towards it. Early on, if your net worth is less than $10,000, then yeah, you need to be concerned about how much you spend. But once you reach a certain point, it’s not so much your frugality that’s going to get you to the next level. It’s just you got to increase the amount of money you’ve got coming in.

Nick Magiulli: Exactly. I think cutting spending is a short-term decision. It can help, but the long-term solution is to raise your income, and that’s what all of the data has shown me.

Brett McKay: Yeah, I often fall back to when I’m feeling like, oh, I need to do something. It’s like I want to cut spending. I think people fall back to that because it’s easy. It’s like I can do something right away. I can stop the streaming service. I can stop going out to eat. Trying to figure out how to make money, that can be intimidating for a lot of people.

Nick Magiulli: I agree. It’s much tougher. I mean, it’s a much longer-term process. You’re thinking about, oh, do I need to learn new skills? Do I need to start a side hustle? Do I need to get some sort of credentials or education? And those are much bigger lifestyle decisions than just, yeah, I cannot go out tonight or I can kill my Netflix.

Brett McKay: Okay, so to go up the wealth ladder, you need to earn more money, and there’s different ways you can do that. We’ll get into the specifics here in a bit. At a certain point in your wealth journey, hopefully you’ll be starting to save money. That’s how you build wealth, and you’re going to put that savings into assets that make money, like investments and stocks and things like that. Talk to us about the research that you did. That was really interesting. How asset allocation changes as you move up and down the wealth ladder. What does the research say there?

Nick Magiulli: Yeah, so the data suggests that those lower on the wealth ladder, so those in like let’s say levels one to three, tend to have more of their assets in cash, their vehicle, and their home. And those higher on the wealth ladder, so that’s like those in let’s say levels four to six, tend to have more of their total assets in income-producing assets, so that’s things like stocks, bonds, real estate, and their own businesses. And so, in other words, like those lower on the wealth ladder own fewer income-producing assets than those higher on the wealth ladder. And on average, it’s like, if I remember correctly, those in levels one to three have less than 25% of their assets in income-producing assets, but those in levels four to six have over half of their assets in income-producing assets. So that’s like the main difference between those lower and higher on the wealth ladder. Obviously like, there’s other factors that can be correlated with that, but once you have wealth, the people that have wealth tend to invest that in assets that produce more income for them, which allows them to have even more wealth, et cetera.

Brett McKay: Yeah, we can talk about your story a little bit. I mean, I know you grew up, I think like middle class, lower middle class, and you had kind of a rough childhood, but my experience dealing with people who, you know, are in that level one rung of the wealth ladder, you’d see that their assets are tied up in like physical stuff, like car, house, and in extreme cases, you see like a lot of hoarding. Like, why do you got like this like junker car, in your backyard? Like, just get rid of that. That’s what I would think. But like to them, it makes sense because it’s like, well, I don’t have cash. I don’t have any income-producing assets. I can use that junker car one day to pull a part off so I can fix my car. And you see this, they’ve done studies about this, about individuals who grew up during the Great Depression. They tend to hoard more stuff because like they grew up in a time of scarcity. I guess they couldn’t really shake that mentality, even though, they’re 80 years old and they might have a pretty substantial net worth. Like they still can’t shake that scarcity mindset.

Nick Magiulli: No, yeah, I completely get that.

Brett McKay: All right, so as you move up the wealth ladder, your assets typically should shift to income-producing assets, such as stocks, could be a business, et cetera. Let’s talk about the different, like the individual levels and talk about the strategies for it and then some of the pitfalls of these different rungs and then what you can do to, get up the next rung. Let’s start off with level one. Let’s say you’re on level one of the wealth ladder. What should be your focus in order to climb to the next rung?

Nick Magiulli: Yeah, I think you have to get to some form of safety. If we’re talking about financial safety, that either means an emergency fund. There’s other types of financial safety, like you could find people you can trust and rely on to help you get out of level one, whether that’s friends or family. So like wealth is not just financial. I think especially in level one, I think you’ve got to think about the other types of wealth you have and how you can use those to get out of level one. And the reason I say this is because, something’s amplified on every level of the wealth ladder. And I think in level one, the thing that’s amplified is bad luck. Like take someone who gets a flat tire, like for someone in level three or four, like that’s an annoyance. Oh, I have to go get my tire repaired. But for someone in level one, it could send them into a financial tailspin. If they don’t have, a way of getting to work, they could lose their job, then they have to take out debt, et cetera. Like all sorts of bad things can happen just from that one flat tire.

I mean, it’s funny you brought up the junker car. That junker car could actually be that emergency lifeline. Oh, my car broke down. I have a junker I can take for a week while that one gets repaired or while I have to wait to save money so that one could get repaired. So I actually, I understand the hoarding a little bit because it is a form of safety if you really think about it, right? And so I think if you actually look at the data, like just not getting into a financial tailspin, a hole, whatever you want to call it, is like the most important thing in level one. Because over, if you look at the data, over half of the financial distress events, like bankruptcies, delinquencies, et cetera, is committed by just 10% of the U.S. Households. So it’s a very small percentage of households that are getting caught up in the same financial problems over and over again, and it’s very difficult to get out once you’re in there. So the whole point is to avoid that as much as possible. So once again, goal in level one is to get to safety.

Brett McKay: Yeah, I’ve seen that play out in my church congregation. There’s a lot of individuals who’ve just got a hard time financially, and you see like a messed up car, it just disrupts their life completely because they can’t get to work, and then they end up getting fired. And then in order to fix the car, they got to take out a payday loan because they don’t have the emergency fund to pay for the repair. And so they’ve got this crazy loan with this insane interest rate that just puts them more and more into a hole. And you got this great quote about poverty from William Volman. It says, “Poverty is wretched subnormality of opportunity and circumstances. Like, man, that’s true.

Nick Magiulli: Exactly. No, I love that quote from him, and I just think, you know, I didn’t grow up in level one, I would say. Even though my parents declared bankruptcy like twice before I was 18, I think I was in level two. I mean, just from, we had family, we had people we could rely on and stuff, so I’ve never been in true poverty. But like, yeah, we just never had a lot of money going around. So I kind of know what it’s like to grow up like lower middle class to middle class depending on what time in my life.

Brett McKay: Okay, so level one, this also sounds like where you should think more about your spending. This is when cutting spending would be the most useful strategy if you’re in level one.

Nick Magiulli: Yeah, if you can’t, obviously, raise your income is the long-term solution. But like, when you’re in a, you know, I think the tagline for that chapter in the book is, atypical results require atypical actions. And when you’re in level one, that is not normal. And so you need to get out of that. Of course, everyone’s quote, default level. And if you have an education and you’re like, oh, I just graduated college, I’m making good money, you’re going to be out of level one before you know it. It’s just a matter of like time. So that’s what happens for most people. And I would argue you’re not even in level one if you already have a good education and everything. That’s why I said I’ve never been in level one, though my net worth obviously was zero dollars when I graduated college. So yeah, I think that’s the thing to think about there.

Brett McKay: All right. So I like that. When you’re level one, your mental framework, atypical results require atypical actions. You have to cut spending and then think about ways you can boost your income. I’m curious, like, what do you do? Let’s say you’re fine financially. Say you’re level three, level two, but you got friends and family members from that level one, you see them struggling. In your experience, what can other people, what can we do to help people get out of level one?

Nick Magiulli: I think you have to first make sure that the person wants to get out of that level, like they have a real desire. Because of course, like everyone wants more money. Like everyone like, oh, of course I’d want that. But like, if they’re not going to take any steps or actions to try and move in that direction, whether that’s like, oh, I’m trying to raise my income, I’m trying to learn, get an education, I’m trying to, if they’re not doing a lot of that stuff, then like what you can do to help is be supportive and say, “Hey, is there anything I can do to help you?” And of course, if they just, you know, oh, just give me a bunch of money, that’s not going to really solve the problem. Because if they don’t have the means to help themselves at all, they’re going to end up back in that spot eventually, right? You can give someone, you know, here’s five grand or 10 grand even, get them there. And if their income is not enough to support themselves, they’re just going to draw down on that 10 grand until they’re back at level one again, right?

So you have to, I think it’s more about thinking about finding ways to help them help themselves. But at the end of the day, they have to help themselves. You can’t force someone to try and better themselves. They have to want to do it for themselves. And so you’ll notice, I guess, when I, you know, I’ve, you know, family members, friends and stuff like this who have been in this position, and there’s a big difference between someone just asking for money and someone who’s like, I need money, but I need it because I’m trying to do all these things to try and improve my life. And you’ll know, it’s more of, you’ll know it through the relationship. So I think that’s the kind of the big thing there is to strike that balance as best you can.

Brett McKay: Yeah. All right. Let’s talk about level two. So this is, you’re making, your net worth is 10,000 to 100,000. This is grocery freedom. You can buy the Dunkaroos without worrying about it. What are the big challenges when you reach level two?

Nick Magiulli: Yeah, I think the thing to think about in level two is the trajectory you’re on and what level that’s going to get you to. Because there’s two groups of people in level two. There’s people in level two who are going to probably be there most of their life, or they might barely get into level three by the, you know, later in their life. And then there’s people in level two who are just there temporarily. They’re making good money and they’re kind of on their way to deep into level three or level four. And I think the big difference there is education and what skills you have. This is, you know, level two is the level where getting those skills can really kind of change that. You can imagine your trajectory is like a slope on a line, and that slope can be pushed upward and change your income, your career, et cetera, based on that. So it doesn’t always have to be a college degree, but I think you need something that allows you to grow your income in a big way, whether that’s, a skill that’s very useful. I think, for example, sales. If you’re a good sales person, you can make very good money, easily six 

Figures and, you know, there’s some sales people out there that make seven figures or more at the higher end, you know, they’re selling a luxury good, like high-end real estate, things like that. And so you can make really a lot of money in sales. And that’s something that AI is not going to be able to replace. I don’t think we’re going to have robot realtors or anything like that. So there are still skills out there that you can learn and you can make a lot of money that don’t necessarily require a degree, but they definitely require a lot of work.

Brett McKay: We’re going to take a quick break for a word from our sponsors. And now back to the show. Okay, so level two, your goal is just like figure out the education, the training, the skill acquisition you need in order to make more money so that you can accumulate more wealth. That’s the key there. All right, let’s talk about level three. So this is when you move to 100,000 to 1 million in your net worth. What are the big stressors there when you reach level three?

Nick Magiulli: I think the stressors are more about if you’re overspending. And the reason I say that because if you look at people and I did, there’s some data from the University of Michigan has something called the Panel Study of Income Dynamics, which just looks at the same set of households over time. So we can follow people’s career trajectory, their income, all their spending over time, we can follow it. And in that data, I said, okay, let’s look at people in level three today and look at those that made it to level four and compare it to the people that are in level three today that stayed in level three. And so what are the differences between those two groups? Like the people that went from three to four and the people that stayed in level three, let’s say over a decade. And so if you look at that information, the difference is income. That’s a big piece of it. So those that made it to level four generally earned more. But I think the bigger thing I noticed was the spending. The people that stayed in level three over time spent almost as much money as the people that made it to level four from level three.

So the people that made it to level four from level three did spend a little bit more, but not that much more than the people that stayed in level three over time and those people that made it to level four at a much higher income. So it’s like, I think the issue, the stressor in level three is that people are trying to do the keep up with the Joneses thing. They’re overspending on housing, cars, whatever to portray a certain lifestyle when they don’t necessarily have the money for it. And so they don’t have the income for it. So I think that’s the thing to focus on is like, hey, make sure I’m not overspending in this level. And then once again, I don’t think cutting spending is the way to build long-term wealth. I do think it can be something, especially on the big ticket items like housing in particular, I think is very important. You have to think about your spending there. And then in terms of what to focus on in level three, I think it’s really about your income and specifically your income from investments. That’s where as you start to invest, by the time you have a portfolio in the six figure range, that’s throwing off real money.

You know, if you have $10,000 invested and you get a 10% return, that’s a thousand bucks. That’s not really going to change your life. But by the time, you know, you have 100,000 invested or more, now it throws off that same 10% return throws off $10,000 is a much more significant change in wealth. And so I think that’s where you start to see, hey, the flywheel really starts to grow in level three and by level four, it gets even bigger. But I think that’s where you should focus, spend more time focusing on is investing in income producing assets in level three.

Brett McKay: In your research, what’s the average age for someone who’s in level three?

Nick Magiulli: So yeah, the median age in level three in the United States is 54 years old. So it’s still like, I say that’s middle class, but it’s also people who’ve been spending their life, buying their home, saving their retirement account, et cetera. It doesn’t happen overnight. And just for reference, the 25th percentile age is 40. So that means one in four households in level three are 40 or younger. So a lot of people can get to level three before 40, but it’s still rare. It’s only one in four people that get into that level are younger than 40. So something to keep in mind.

Brett McKay: Yeah. And so the tactic there is when you reach level three, your focus should start being spent towards how can I have more of my income come from income producing assets. So that’s investments. And the mental framework there is just keep buying. That’s from your first book, like just start socking away as much money as you can in your investments, because that’s going to add up over time.

Nick Magiulli: Yeah, exactly. And that’s why it’s the perfect book for someone in level three going to level four, or even kind of level two going into level three. But it’s really made to shift your mindset from just, oh, I go and I save money. I work and save money to, oh, I go and I save the money. I invest it in assets that then pay me money. And then that money can be reinvested. And it just goes from there.

Brett McKay: All right. So let’s move to level four. This is when you get to 1 million to 10 million. That’s a big range. But the point you made, though, is once you go higher and higher up the wealth ladder, an increase of just one isn’t going to be that big of a difference. If you have a million dollars and then you increase your net worth by another million, that’s a lot of money. But in the grand scheme of things, it’s not that big of a jump, really. One of the things you talk about in level four, this is the place where a lot of people, this is where they stop. This is where they stop the trek up the wealth ladder. And to remind people, meeting age for this is like 62. So this is like you’re end of your working career. And, you know, if you get to this range, like you’re probably, you’re good for retirement. Why do people get stuck on level four, though? Why don’t they continue to go up the wealth ladder?

Nick Magiulli: They get stuck in level four because the actions that get you into level four aren’t the ones that get you out of level four. There’s this Marshall Goldsmith book called What Got You Here Won’t Get You There. It’s a career book. It’s about career strategy. Now you have to change your career strategy over time to get promoted and stuff. But I think it’s the same idea. You need to change your strategy if you want to keep climbing the wealth ladder. And once again, getting stuck in level four is not a problem necessarily. I think there’s a lot of people that like, great, I’m never going to get out of level four. It’s not a problem. Realize that, accept it, be happy. The simplest way I can say it. But if you do have aspirations to go beyond that, you really are in why we can get into the psychology of that. But if you do, then you have to kind of change your strategy. And for most people that get into level four, you can get into level four with a few things. You have a decent job making a good money, you’re saving that money, you’re investing it and reinvesting all that income, and enough time.

 So like job, good job plus investing plus time, and you get to level four in the United States. But to get to level five, which is 10 million plus, it’s a whole nother thing. You’re going to basically have to either start a company and basically own all the equity and sell it for a decent amount of money. Or you join a startup early, get a good amount of equity, and that company sells for a lot of money, right? You either own a small piece of something that’s very big or a big piece of something that’s decently sized, let’s say. So that’s where I think the difference is. And we can even run the math on this. I do this in the book where I’m like, hey, let’s say today you made it to a million dollars. And let’s just say you have a portfolio, just to keep it very simple. You have a million dollar brokerage account that’s earning 5% a year, and you’re saving $100,000 a year after tax. That’s a considerable amount of money. Assuming that’s all true, how long would it take you to get to 10 million?

 The answer is 28 years. It’s crazy. So if you imagine the typical person gets there, let’s say it’s in their mid-50s or early 60s, do you want to grind it out for three more decades just to get to 10 million? No, you don’t want to. You’re not going to do that. No rational person would do that. They would say, hey, I’ve done enough, and they stop. Even if you’re saving $300,000 a year, which means you’re probably making close to a million bucks pre-tax and everything, you’re saving $300,000 a year earning 5%, you start with a million, it still takes you 17 years to get to 10 million. So the math is not friendly to you once you get into level four. That’s why I call it the no man’s land on the wealth ladder. Because once you get in there, it’s hard to get out. And then succession has that joke, five to 10, five to 10 is a nightmare, right? Because it’s true. There’s no real incentive to keep working because your income is not going to really move the needle anymore.

Your wealth is throwing off so much wealth on its own. So you’re in this weird spot where you’re like, hey, I don’t know what to do here. And I think for most people, the rational response is, hey, take your foot off the gas, enjoy life more, do like a type of coast fire thing, find work you just find enjoyable and not just for money and go from there and stop worrying about getting to level four.

Brett McKay: Yeah, be okay with level four. Level four sounds pretty awesome. You mentioned coast fire. What is that? You wrote an article about that. What is coast fire for those who aren’t familiar with that phrase? 

Nick Magiulli: Yeah, sorry. I try not to use so much semantics, but coast fire, I’m assuming most of your audience heard of fire, which financial independence, retire early. Coast fire, the idea there is you save up just enough for your retirement. We’re like, hey, I have enough money now where if we assume it grows at a conservative rate, let’s say you assume it grows at 4% a year. So you say between now and when I retire, let’s say you retire at 65. So I’m 35 now, I’ll just use myself as an example. So let’s say I have enough money now where if I assume it grows at 4% a year between now and when I’m 65, 30 years from now, I’m going to have X dollars. And then at that point, I can then pull from that money and use that money to live off in retirement. That means you’ve hit coast fire once you don’t need to save any more money for retirement. That’s the point where coast fire lives. And so does that mean you don’t have to work anymore? No, because you still need to cover your current consumption.

You’re not supposed to use your assets to cover your current consumption. You’re supposed to use any income you have to cover your current consumption, but it means you don’t have to save more for your future. That’s kind of the big difference in thinking here. And so I think coast fire is actually the exact place for it is level four, because people will get there and say, hey, and especially if you get there like relatively younger, like let’s say in your 40s or something, you might be like, hey, this is a time for me to like, I can take my foot off the gas, I can chill out a little, and I can work on something that’s maybe more meaningful to you or maybe doesn’t make you as much money. And you don’t have to worry about saving as much. You just need to cover your current expenses. And the rest will take care of itself, basically.  

Brett McKay: Yeah, or I mean, even if you get there when you’re in your 60s, so you have a long, productive working life, you save for retirement, and you don’t have to work full-time anymore. But you could still get a part-time job if you wanted in your 60s. My dad, he did that. He had a government job, forced retirement in his early 50s because he was in law enforcement. And he’s got a pension. He didn’t have to work, but he kept working. He took contract work, and he’s still working. He’s like 70. I think he’s like 75. Still works, and he enjoys it. But I think it covers my parents’ consumptive costs.

Nick Magiulli: Yeah, that’s great. That’s how I think a lot of people should do it. And I think we always look at work as like, oh, wouldn’t it be great if I never had to work again? People idealize that. At the same time, I think a life without any work or any… Work doesn’t necessarily have to mean paid work, by the way. But a life without any work, I think, is a difficult life if you do it for a very long time. I think it’s very tough mentally to do that. Of course, you may reach a point in your life where you’re like, you know what, I’m happy to do that, and some people are okay with it. But I think a lot of people want to have some sort of purpose or something they’re working on. And so I’ve looked at all the research and the data on this, and overwhelmingly, people do find a lot of positive benefits from work. Now, of course, if you’re in a job you hate, you want to get out of that as quickly as you can. But for most people, you want to do something you enjoy working on, whether that’s a creative endeavor, whether that’s volunteering. The options are very numerous.

And so it’s just figuring out what you want and then building your life backwards from that.

Brett McKay: Okay, and so level four, again, this is the 1 million to 10 million range. This is achievable through increasing your income, through acquiring new skills, increasing your education, asking for raises, investing, and then just time, like the time factor. 

Nick Magiulli: Time’s a big piece of this. Once again, the median age is 62.

Brett McKay: Yeah, I think that’s an important thing. If you’re in your 30s or 40s right now, you’re like, I’m not in level four. It’s like, okay, you’re fine. You’ve got 20 years to make that happen.

Nick Magiulli: Yeah, just for the record, less than 1% of households in their 20s are in level four. Less than 5% of households in the 30s are in level four. So only like 1 in 20 people in their 30s are in level four. 15% of people in their 40s are in level four, and et cetera. And this is in the book. It breaks down by age cohort, by decade, 2029, 3039, et cetera. It shows the percentage of people within that cohort that are in each wealth level.

Brett McKay: What are the biggest risks or stressors once you reach level four, you think?

Nick Magiulli: I think the money stressors in level four are similar to level five, and I think the stress is usually from a lack of diversification. It’s like concentration, that’s the issue. As really the only way to lose wealth quickly. Obviously, there’s divorce and other things, outside factors, but if we’re just talking pure monetary factors, it’s really going to be concentration. So it’s like, how is your wealth allocated, and how concentrated are you? Because the more concentrated you are, the more likely you could lose wealth quickly. Of course, that’s also how you can build wealth quickly, but it’s a double-edged sword. And I think realizing that it’s a double-edged sword is what’s important here.

Brett McKay: All right, so diversify 

Nick Magiulli: Yeah. Yeah.

Brett McKay: Is the key there. And then, yeah, move to level five. Like you said, what got you to level four is not going to get you to level five. You’re going to have to do something radically different. And for a lot of people, that might not be rational. What causes people to, like, they reach level four, they’ve got the vacation money, they can just take a nice vacation whenever they want, life’s good. Why would someone want to make that leap to level five based on your experience interacting with people who’ve made that leap? 

Nick Magiulli: There could be a lot of different reasons. One, some people want to create really big generational wealth for their families. Some people want to fly private. Some like the ego boost of being like, oh, I’m not just upper middle class, I’m upper class, right? I’m really wealthy. I can go and buy supercars and all these other things that you see the stereotypically rich people do, which, funny enough, most rich people don’t even own supercars, right? People with that level of wealth, they don’t spend money like that. So it’s only really the media’s depiction of it that makes it look like that. So why do people do it? I mean, in the book, I say, the most expensive thing some people own is their ego. So if the most expensive thing some people own is their ego, that’s why. You know, that’s the answer, the short answer for you.

Brett McKay: Yeah. So we talked about rungs one through five on the wealth ladder. Rung six is $100 million plus. And that’s going to apply to just a very small amount of people. There’s only 11,000 households in the U.S. Who are on rung six. And these are basically people who’ve sold their businesses for huge amounts of money or, you know, like athletes or entertainers. But even very few of those people reach that level. Let’s talk about mobility up and down the wealth ladder. Let’s talk about how often people fall down the wealth ladder. Let’s say someone gets to level four. How often do they stay there?

Nick Magiulli: It’s usually pretty rare how people fall down. So for example, over a 10-year period, 11% of households fell down one wealth level and 2% of households fell down two wealth levels. This is based on the historical data where I’m following the same set of households over time. We can actually control for by level, and it’s actually a little bit more interesting because you can say, okay, hey, if I started in this wealth level, what’s the probability I’m going to be in another wealth level in the future? So for example, going to what you just asked, if you start in level four, after 10 years, there’s a 23% chance you’ll be in level three and there’s less than a 1% chance you’ll be in level two or one. So it’s very unlikely. 72% of households that start in level four are still in level four after 10 years. And that’s like the highest out there. And we can look over 20 years and it’s roughly the same. That’s why after 20 years, if you start in level four, there’s a 64% of those households are still in level four after 20 years. Only 8% make it up the wealth ladder to level five.

So it’s very rare to see that kind of mobility switching, but it does happen.

Brett McKay: What about mobility going up on those lower rungs, like from one to two to threes? That’s still happening? You hear all this talk about like the American dream is dead. There’s no income mobility or wealth mobility. What does the research say about that?

Nick Magiulli: So this research is historical. So it’s going backward looking from like, 1980s when we first had the wealth data through 2021. So the question is, is it still happening now? And will it happen in the future remains to be seen. But in general, like there is mobility. So for example, let’s just look over 10 years. If you start in level one, after 10 years, there’s a 54% chance you will be out of level one. There’s a 30% chance you’re going to be in level two. There’s a 22% chance you’ll be in level three, et cetera. So there’s a decent chance that you can kind of get out of level one and get higher on the wealth ladder. 46% of households stay in level one after 10 years, but the rest don’t. So there is mobility and there’s some healthy mobility. And it’s just, I think a lot of it’s time as well, because people get older and so they save money and they age out.

Brett McKay: Let’s talk about mobility across generations. There’s that phrase, shirt sleeves to shirt sleeves in three generations. So there’s a generation that got a lot of wealth. And then by the third generation, that generation, like the money’s just gone. There’s actually, I think there was a book that came out a couple of years ago, like where are all the billionaires? 

These guys looked at the Vanderbilt family. So like Vanderbilt, he left an inheritance, I think it was like $100 million. It’s almost like $3 billion in today’s money. But if you look at the descendants, like there’s like no more billionaires in the Vanderbilt family. What goes on there? Like why is it so hard to maintain a family on a rung in the wealth ladder?

Nick Magiulli: Well, I think there’s a lot of reasons why this is, I mean, I can talk about the Vanderbilt specifically or just like level six wealth, let’s just call it, and then compare it to other wealth levels. But in level six, so most people that have that much wealth, it’s usually concentrated. And so unless they diversify, it’s very unlikely that that’s going to last. This is why I think Bill Gates and Warren Buffett are so smart because of all the billionaires out there, they may not be the richest on the list, but they’re the most diversified. They’re the ones that are least likely to see their wealth just, disappear or see a massive change in their wealth because they’re very diversified. Like Bill Gates is the largest private landowner in the United States. He owns more US land than any other individual. So he owns a lot of different assets and things that are going to allow him to have wealth for multiple generations. And I think if you’re like an Elon Musk, even though he’s richer on paper, if something happens to Tesla, that’s like the majority of his wealth. So he could easily fall below Gates at any moment.

And so that’s a piece of it. I think if you look at like the growth of families, like they’re growing faster than the wealth is. So like, let’s say you have two kids. Now they have two spouses. That’s now four people. And then each of them have two kids, right? And so now four people is now eight people. And then those kids get spouses and they have kids, right? You can just see how it’s growing at such a fast pace and your wealth is not keeping up. So it makes sense why the Vanderbilts couldn’t do it. At just some point, like the math doesn’t make sense, So that’s another piece of it. But I think just if we’re talking about lower wealth levels, like I think succeeding generations can find it difficult to stay in the same wealth levels or parents because like economic conditions change. They may not want to work as hard. Like, oh, I don’t want to work like my parents did to get to that level. I may just realize, I don’t need to work as hard because I know I’m gonna get an inheritance so I can just chill a little bit more.

They may have different feelings about money. Like all these are very case specific, but just a few reasons that make sense to me.

Brett McKay: So we’ve talked about the different rungs of the wealth ladder. They all have their opportunities and their risks. How do you figure out like where you’re fine at? What other things should you consider besides your net worth in deciding that, I’m okay where I am at financially? What are things you consider in order to figure out if you have a rich life or not?

Nick Magiulli: I think it really depends what you want out of life. I mean, this is the most difficult part of being a human in modern civilization is like, we’ve been debating this idea since the time of the ancient Greeks. You know, it’s like why, you know, know thyself is such an important concept. And it’s because you need to know what you really want. And so once you can solve for that, then it’s much easier to figure out, okay, well, how much wealth do I need to support that? Oh, I want to, I can imagine your dream life or whatever it is, like how much wealth do you need to support that? Because once you know what you want, then you can figure out all those things. And for most people, I think it’s lower than they think. I mean, it’s always easy to justify needing more, but yeah, you have to kind of get past that or figure out what’s the things that really matter. So it’s like your time, how much free time do you have or time you can use, time wealth is what we would call it. You can think of mental wealth. You can think of physical wealth. You can think of social wealth.

All these different things, right? Sahil Bloom has a book called The Five Types of Wealth where he talks about all these. And I use that as a framework in the wealth ladder to think about these types of, you know, a rich life and what does that mean? And it also depends where you live too. Like I said, you know, 1 million to 10 million is upper middle class. Well, it kind of depends where you live. You know, if you’ve got 8 million bucks and you’re in a low cost of living area, you’re upper class. You’re actually very upper class. But if you’re in New York City, maybe not So it really depends where you live, the type of lifestyle you want, et cetera. So those are the things I would say to take into account.

Brett McKay: Yeah. Whenever I go to San Francisco, like, man, this place is beautiful. I could see myself living here. And then you look at the cost of housing. You’re like, no, I can see why housing is so expensive because it’s so beautiful. But I’ll stay in Tulsa next to the Arkansas River and take the sunsets, I guess, in Oklahoma. Well, Nick, this has been a great conversation. Where can people go to learn more about the book and your work?

Nick Magiulli: Yeah, so you can find the book everywhere books are sold, Amazon, Barnes & Noble, bookshop.org, et cetera. And you can find out more about me. I write every week at ofdollarsanddata.com. You can also find me on Twitter/X at dollarsanddata. I’m on Instagram at Nick Magiulli, and then I’m on LinkedIn at Nick Magiulli. I answer every DM. So if you have any questions or anything, feel free to DM me.

Brett McKay: Yeah, and of dollars and data, plug for that. It’s one of my favorite financial blogs out there. It’s a lot of fun to read. Well, Nick, thanks so much for your time. It’s been a pleasure.

Nick Magiulli: Thanks for having me on again. Appreciate it, Brett.

Brett McKay: My guest here is Nick Magiulli. He’s the author of the book, The Wealth Ladder. It’s available on amazon.com and bookstores everywhere. You can find more information about his work at his website ofdollarsanddata.com. Also check out our show notes at aom.is slash wealth ladder. You can find links to resources and we delve deeper into this topic. Well, that wraps up another edition of the AOM Podcast. Make sure to check out our website at artofmanliness.com where you can find our podcast archives. And while you’re there, sign up for our newsletter. We got a free newsletter on Art of Manliness. There’s a daily and weekly version. It’s the best way to stay on top of what’s going on at AOM. And if you haven’t done so already, I’d appreciate it if you’d take one minute to give us a review on Apple Podcasts or Spotify. It helps out a lot. And if you’ve done that already, thank you. Please consider sharing the show with a friend or family member you think of something out of it. As always, thank you for the continued support. Until next time, it’s Brett McKay. Remind you not to listen to the AM1 Podcast, but put what you’ve heard into action.

This article was originally published on The Art of Manliness.

You’re hunched over the kitchen table, flipping through your job’s benefits packet. You see something about a Health Savings Account. Looks like a boring place to stash medical cash. You shrug and skim past.

That could be a big mistake — not marking that little checkbox could cost your future self a six-figure windfall.

If you’re looking for an easy way to maximize your money, allow me to introduce you to a stealth wealth builder: the health savings account or HSA.

I’ve had an HSA since Kate and I first got married. But it wasn’t until fairly recently that I started to realize what an underrated finance tool this thing is.

Today, I’m going to walk you through the benefits of a health savings account and why you might consider opening one up.

HSA Basics

A Health Savings Account is a special kind of savings account designed for medical expenses — but it does a lot more than that. An HSA lets you set aside money tax-free, grow it in the stock market tax-free, and use it for healthcare costs now or decades down the line (yes, tax-free!).

To qualify for an HSA, your health plan needs to have a high deductible — the amount you pay out of pocket before your insurance starts covering costs. As of 2025, the IRS defines a high deductible as at least $1,650 if you’re single or $3,300 for a family. The out-of-pocket max can’t exceed $8,300 or $16,600, respectively.

You can use HSA funds to pay the deductible and any other qualifying medical expenses your insurance doesn’t cover.

You can contribute up to $4,300 a year to your HSA as an individual or $8,550 for a family. If you’re 55 or older, tack on another $1,000. The IRS updates these numbers every year.

HSAs often get confused with FSAs. FSA stands for flexible spending account. FSAs let you set aside pre-tax money from your paycheck to cover qualified out-of-pocket healthcare costs, like copays, prescriptions, and medical supplies. Because the money isn’t taxed, it lowers your taxable income and saves you money. But here’s the catch with FSAs: most FSAs have a “use it or lose it” rule, so you need to spend the funds within the plan year or risk forfeiting what’s left.

This is a big difference between HSAs and FSAs: with HSAs, the money doesn’t vanish if you don’t spend it. It’s yours; it rolls over forever, and you can invest it in the stock market.

Why the HSA Is an Awesome Wealth-Building Tool

The tax savings are huge. The big reason the HSA is such an excellent wealth builder is that it functions like a legal tax shelter.

It offers three big tax benefits:

First, contributions you make to the account are deductible. When you put your money into an HSA, you lower your taxable income. So if you invest $8,550 into your HSA, you reduce your taxable income by $8,550 for the year.

Second, the investments you have in your HSA grow tax-free.

Third, if you use the funds in your HSA for medical expenses, the withdrawals aren’t taxed. So you can pay for braces, doctor appointments, and prescriptions tax-free with money that hasn’t ever been taxed.

All those tax savings really add up and keep money in your pocket where it belongs.

It is possible to use the money in your HSA for non-medical expenses, but that’s not an advisable move, as you’ll have to pay taxes on the amount you used and pay a 20 percent penalty. So, for example, it you withdrew $3,000 from your HSA to pay for a car repair, you’d have to pay income tax on that $3,000 plus an additional $600 (20% penalty). Don’t do that!

The HSA is an inflation-busting healthcare savings builder. An HSA can be a great tool to save on taxes on your immediate healthcare expenses. But where it becomes really powerful is in its ability to help you pay for healthcare expenses decades down the road, when they will likely be higher.

If you’re young and healthy, you probably won’t have to tap into your HSA all that much. This means the money invested in your HSA can take advantage of the power of compounding and grow tax-free for years. This allows you to build an inflation-proof (an HSA can be invested, and investments typically grow faster than inflation) healthcare war chest for the period in your life when medical expenses rise the most: elderhood. Fidelity estimates that a 65-year-old couple will spend $330,000 on medical costs in retirement. That doesn’t even count long-term care. An HSA gives you a way to prep for that monster bill using pre-tax dollars and tax-free market returns.

You can turn an HSA account into a stealth retirement account. An HSA can provide immediate tax savings and help you grow your money for long-term healthcare costs tax-free.

But here’s another cool thing about HSAs: you can turn them into a retirement account when you turn 65.

Once you reach that age, the 20 percent penalty that normally applies to non-medical HSA withdrawals disappears. At that point, you can tap the account for anything — travel, groceries, a new fly rod — and the distribution is simply added to your ordinary income for the year, just like pulling money from a traditional IRA.

The tax-free treatment for qualified medical expenses, however, still applies, so it’s usually smartest to keep using the HSA for healthcare and let other accounts fund your lifestyle. But it should give you some peace of mind knowing that you have another retirement account you can tap into in your golden years.

An HSA is portable and inheritable. You can’t lose your HSA if you change jobs or health insurance plans. It stays with you no matter where life takes you.

When you die, your spouse can take it over tax-free. If it goes to someone else (like a child or grandchild), it’s taxed but not penalized — same as an inherited IRA.

How to Get the Most Out of Your HSA

I hope by now you can see how awesome HSAs are. If it’s an option for you, I definitely recommend opening one up. You can do so through a provider like Fidelity or your employer’s chosen custodian and start contributing funds either directly or through payroll deductions.

Once you’ve got an HSA going, you can get the most out of it as a wealth-building tool by doing the following:

Invest the balance once you’ve cleared the provider’s cash threshold. Most HSAs require you to have a minimum amount in cash. Once you hit that minimum, invest the rest in index funds. This will help your money grow faster.

Do all that you can to leave the money in your HSA alone. That means paying for as many of your medical expenses as you can out-of-pocket. If you’re young and healthy, that likely won’t be too much of an issue. If you or a family member has a chronic health condition, it will be harder. Do what you can based on your situation.

The reason you want to leave the money in your HSA alone is that it allows your money to grow tax-free.

When you do pay for medical expenses out-of-pocket, hold on to those receipts. You can reimburse yourself (tax-free!) from your HSA decades later.

So if you paid $1,000 out-of-pocket for an ER visit in 2025, you can reimburse yourself that $1,000 expense from your HSA tax-free in 2045. During that time, the money in your HSA has been growing tax-free. That $1,000 you would have spent in 2025 from your HSA might be worth $3,000 in 2045 — letting you keep the investment gains and still get reimbursed, effectively turning a medical bill into a wealth-building opportunity.

Hopefully, by now, you can see that an HSA is more than just an account to pay for this year’s doctor’s visits. When used strategically, it’s a long-game wealth builder that saves you in taxes and gives you options down the road.

This article was originally published on The Art of Manliness.

What if the traits you’ve been taught to suppress your entire career are actually the very qualities that separate those who get what they want from those who stay stuck waiting for recognition that never comes?

Today on the show, Jenny Wood argues that most of us are living in what she calls “an invisible cage” created by an overabundance of caution, and that the biggest lie you’ve been told in your career is to keep your head down and let your work speak for itself.

Jenny is a former Google executive who developed a career development program used by 56,000 people in nearly 100 countries, and she’s the author of Wild Courage: Go After What You Want and Get It. In our conversation, Jenny explains how traits that have a negative rap can be used for positive ends that will advance your career. We discuss how being shameless, reckless, nosy, manipulative, obsessed, and more can help you overcome your success-hindering fears, take bolder action, and achieve your goals.

Connect With Jenny Wood

• Jenny’s website

Listen to the Podcast! (And don’t forget to leave us a review!)

Listen to the episode on a separate page.

Download this episode.

Subscribe to the podcast in the media player of your choice.

Read the Transcript 

Brett McKay: Brett McKay here, and welcome to another edition of the Art of Manliness Podcast. What if the traits you’ve been taught to suppress your entire career are actually the very qualities that separate those who get what they want, from those who stay stuck waiting for recognition that never comes? Today on the show, Jenny Wood argues that most of us are living in what she calls “an invisible cage” created by an overabundance of caution, and that the biggest lie you’ve been told in your career, is to keep your head down and let your work speak for itself. Jenny is a former Google executive who developed a career development program used by 56,000 people in nearly 100 countries. And she’s the author of “Wild Courage: Go After What You Want and Get It.” In our conversation, Jenny explains how traits that have a negative rap can be used for positive ends that will advance your career. We discuss how being shameless, reckless, nosy, manipulative, obsessed, and more can help you overcome your success-hindering fears, take bolder action, and achieve your goals. After the show’s over, check out our show notes at aom.is/wildcourage.

All right, Jenny Wood, welcome to the show.

Jenny Wood: Thanks so much for having me, Brett.

Brett McKay: So you were a successful Google executive. While you were there, you also developed a career development program that helped employees advance their careers by learning how to advocate for themselves, stand out for the crowd. So you’ve made a career for yourself by being unapologetically ambitious, like going after what you want. Have you always been like that? Were you like that as a kid, or was there a moment in adulthood where that switch finally flipped and you’re like, all right, I’m gonna start turning my ambition into action?

Jenny Wood: Ooh, there was a moment, Brett. There was a moment, and it was in 2011 on the New York City Subway, when I was riding the subway home from work, and about 20 feet away from me stands this really good-looking guy, gorgeous blue eyes, thick brown wavy hair, the whole works. And even though I wanted to talk to him, something held me back. The things you would normally think about some stranger on the subway. What if he’s a convicted felon? What if he’s married? What if 100 people stare at me on this packed train? So I sit there, I do nothing while the train passes stop after stop after stop, and his life, frankly, passes me by. But I’m so taken by him that I make a deal with the universe, and I say, if he gets off at my stop, then maybe I’ll try to strike up a conversation with him. And if not, c’est la vie. Well, he gets off at the next stop, which was not my stop, and just as the doors are about to close, I feel this wave of wild courage wash over me and push me out of my subway seat and off the train.

I chase to catch up with him, tap him on the shoulder. I say, excuse me, I’m sorry to bother you, but you were on my subway and I thought you were cute. You’re wearing gloves, so I can’t tell if you’re wearing a wedding ring, but in the event that you’re not married, any chance I could give you my business card? And then I wait for what feels like forever for him to take my card, thinking this was a terrible idea. But he does take the card. He calls the next day. We go on a date a week later, and we’ve now been married for 11 years with two small kids who are nine and seven.

Brett McKay: No, I love that story. I love how you started your book off with that story, ’cause that really captures the title of the book, Wild Courage. So what were you like before that moment? Were you sort of just someone who played it safe, tried to stay in the background?

Jenny Wood: Yeah, I was a confident Google employee on the outside, but scared and timid on the inside, always worried about what my boss was going to think about me walking out of our Tuesday one-on-one, always concerned that nobody would forget that one client presentation I flubbed, always nervous about when I eventually had direct reports and indirect reports as a Google exec, what they thought about me and how they were gonna score me as a leader at Google because there’s a lot of upward and sideways and downward feedback at Google. And it’s funny, just yesterday I gave a keynote to a Google team that happens to be led by the guy who hired me at Google almost two decades ago. And he’s like, Jenny, it’s so interesting and wonderful to see you come into your own because when you first started, you had a hard time having a perspective. You had a hard time sharing your thoughts. I knew that you had smart ideas, but you were too nervous and timid and held back to share those out loud for business impact. And I was like, wow, it’s so interesting because sometimes I think people push back on me and they’re like, it seems like you were just born this way, Jenny.

You seem really confident. You could sell ice to Eskimos. And it was such an interesting moment when I was doing this talk and getting this feedback from the guy at Google who hired me to realize like, yeah, I was not born this way. And you don’t have to be either. You might not be a subway chaser, but wherever you are sitting right now, there is something that you want. And wild courage is what closes the gap between what you want and what you get. And it’s this set of tools that help you go after those things and get them. And it can be learned. It is not an innate skill. It takes practice, it takes reps. It takes building the muscle of wild courage.

Brett McKay: And as you described yourself in the book before you made this jump to wild courage, you remind me of, I was like this in high school too. Correct me if I’m wrong. This sort of describes you how you were in high school and college. You worked hard, you were quietly ambitious, you kind of just like, I’m gonna work really hard, do my best, and then I’ll just wait for people to notice.

Jenny Wood: Yeah, exactly.

Brett McKay: And then if people notice me, then okay, that’s fine. But if they don’t, I’m just gonna stay in the background. I think there’s a lot of people like that. They’re really conscientious. They do good work, but they wait for people to notice before they actually put themselves out there.

Jenny Wood: Absolutely. I was like that. I would almost take it a step further and say that I was really hesitant to stand out, even to acknowledge my own ambitions or share them.

Brett McKay: Yeah, you have this great line in the book that says, “Most existential anxiety in life isn’t about a lack of ambition, but an overabundance of caution.” So the book’s called Wild Courage. What makes wild courage wild?

Jenny Wood: Well, wild courage consists of nine traits that create the bars of an invisible cage that keep you small, that keep you quiet, that keep you following instead of leading. And my goodness, do they raise eyebrows. They are weird, selfish, shameless, nosy, obsessed, manipulative, that’s a spicy one, brutal, reckless, and bossy. And those are not traits we typically think we want to aspire to. So that is the wild piece of it.

Brett McKay: Okay, so your traits of wild courage are weird, selfish, shameless, nosy, obsessed, manipulative, brutal, reckless, and bossy. And what you do in the book is you reclaim these words, which they typically have a bad rap, and you reframe them with new definitions and lay out how they can be used for positive ends. And you say people can use these traits to overcome the three fears you think hold people back. It’s the fear of failure, the fear of uncertainty, and the fear of judgment of others. So let’s talk about some of these traits. The first one is weird. This is all about standing out. Why is learning to stand out such an essential skill and trait to develop if you want success in life?

Jenny Wood: Yeah, well. The world is just too busy and competitive for you to be invisible and make a dent in your career or in your life. So weird is about having the courage to stand out and be authentic, because within your so-called weirdness lie your greatest strengths. So hone every ounce of weird you’ve got. And that might be what I call playing it hot, which is respectfully disagreeing with your boss in a one-on-one, or sitting in the front row of your VP’s presentation, or being the first person to raise your hand and ask them a question. Or actually, you referenced this program I started at Google called, Own Your Career. That was kind of weird. I played it hot. I did not ask for any permission. This was not my full-time job. I ran an operations team that sat between sales and engineering and helped drive billions of revenue for the company annually. But people would come to me for mentorship, and this guy came to me, and he was asking, he was one of the many people who came to me for mentorship, and was asking, hey, how do you navigate entry-level to executive here?

And I was like, okay, let me just scale this. Let me write down 10 tips that made me successful here, everything from navigating politics, to stakeholder management, to influence skills, to getting promoted. And I’ll just put together a quick training. I’m sure that maybe 30 people will come. Well, 2,000 people came to that first training, and that grew into Own Your Career, which was used by 56,000 people in nearly 100 countries. But here’s the thing. I was playing it hot. I was being weird. I was not in HR. I was not in people operations. I just decided to go for it without asking for permission from anybody, or running it up the flagpole, only for it to die in committee of approvals. I didn’t ask HR, I didn’t ask legal, I didn’t ask comms. And then all of a sudden, I was writing emails that went to 56,000 people at Google. So it’s ’cause I played it hot. I just went for it, and I begged forgiveness, not permission. And there are so many smart, talented people sitting on brilliant ideas that never see the light of day, because they’re waiting for permission or waiting for perfection, quite frankly. And they don’t just start and put something out there like 10 bullets on a document, hoping that maybe two dozen people will come, and then it ends up being a lot bigger than that.

Brett McKay: All right, so being weird is about embracing your quirks, sharpening them into strengths, standing out in a good way. It’s all about leaning into what makes you unique. And then playing it hot is a stance towards life where you show up with your weirdness, with boldness, and energy instead of trying to play it cool and blend in. There’s risk with this though, with playing it hot, ’cause people could just think you’re weird in an off-putting way, or you might step on some toes. But the benefits will typically outweigh the risk.

Jenny Wood: Yeah, let me touch on that for a moment, ’cause this is critically important. When I was launching this book, Kim Scott was a big mentor of mine. She’s like, “Jenny, this is your time to beg.” This might fall a little bit more into the selfish or shameless trait, but she’s like, “This is your time to beg.” I had built relationships with a lot of authors and influencers, and I asked maybe 100 of them to help promote the book, whether it was sharing it on social media or on their blog or if I could be on their podcast, or it was actually probably closer to 200, or whether they’d write a newsletter about it. And there was one very, very famous author, and if I said the name, I will not for their privacy, but if I said the name, every single one of you would know it. And this person not only said no, but also ended our friendship and our mentorship relationship, and man, did it sting. I lost sleep over it. This was just a couple of days before a pub date, and it was a time when I needed to not be losing sleep, and it stung.

But if I had used that rejection as an indication to just start playing it cool and not asking for help or not being weird or not shamelessly putting myself out there, then this book would not have been nearly as successful as it has been. And so, even though the outcome wasn’t what I would have wanted, and it really felt like a punch in the gut, and it still hurts to this day, it still hurts to be told no from someone you deeply respect and admire because you’ve played it too hot. But it doesn’t mean that the decision was bad. It was just the outcome that wasn’t ideal. And so, I still carry that play it hot mentality with me because, 80% of the other people said, “Yes, we’d be thrilled to help.” And then 20% said no respectfully. And this was like the one outlier who said no, in a way that was painful for me. But it’s okay, because we push past those painful moments and we keep doing great things.

Brett McKay: Besides playing it hot, another way you suggest you can be more weird is sharpening elbows. What do you mean by that?

Jenny Wood: Yeah. Well, this is an example of when I was at Google, and the most senior leadership team, kind of the equivalent of the C-suite of this org of Google, was meeting in London to decide a reorg and the fates of the people below them. Now, the people below them, myself included, were not invited to London for the actual meetings. But lo and behold, a bunch of us showed up in London to rub elbows. It’s like call, sharpen our elbows to be in the same proximity, to have coffee chats, to be present. And again, if you wanna be invisible, you can, but it’s not going to help your career because being in the same room, if you’re not invited, if you don’t have a seat at the table, bring a folding chair, as they say. But I think just showing up makes a big difference. It’s like the classic line, 80% is just showing up. And it was astonishing who decided to fly to London and who decided to not and what the outcomes looked like. Because politics are real, relationships are real. And again, it goes back to the biggest lie you’ve been told in your career is just keep your head down, your work will speak for itself. It won’t.

Brett McKay: At the end of each chapter, you have a section of what you call trait traps. And this is how the quality you’re talking about in that section can turn into a weakness. And for the weirdness section, you say the trait trap there is when you start thinking of weirdness as being rude, annoying, just obnoxious. So the takeaway for weird is that you wanna be weird in a good way. Just by doing the things that other people aren’t doing, doing things that might be unusual or unusually bold, just standing out from the crowd. But it’s in a good way. You’re not being obnoxious about it. Let’s talk about another trait, and that is selfish. Nobody wants to be known as selfish, but let’s talk about this first. How can selflessness be harmful? I think that’s a good way to start this question.

Jenny Wood: Yeah. Well if you give everybody a leg up at your own expense, you’ll end up getting trampled. So start showing up for yourself. I redefined this as the courage to be your own champion. And even when I was running the, Own Your Career program, I feel like I took my eye off the ball on my core job a little bit, and I was almost over-delegating to the leaders who reported to me. And then, I had one conversation with my manager who was basically like, Jenny, get your eye back on the ball on your core job. And then it even meant that I had to kind of reshift some of the priorities to either peers who I delegated to or direct reports because I had to look out for myself. I needed to maintain a good performance course that I could continue bringing this good work to the world. And it’s tough. It’s tough, especially as a leader, to be selfish and say, my career matters too. But at the end of the day, I deeply believe that as much as your manager is supporting you and your career, they’re gonna put their career first.

And they should, because if we’re not showing up for ourselves, then who is? And for the parents out there, you might say, oh, well, if I were to ask you the question, who’s more important than you? Start showing up for yourself. And if you were to say, oh, my child is more important than I am, but does your child need a martyr who’s exhausted and depleted and hungry and sleep deprived? No, go to that yoga class, go to that golf, Sunday regular session that you do with your buddies, and take the time that you need so that you can replenish and show up for the people in your life in a thoughtful and intentional way.

Brett McKay: So being selfish actually allows you to serve better?

Jenny Wood: Yeah.

Brett McKay: Yeah. So what does positive selfishness look like for you?

Jenny Wood: Well, it’s saying yes to the big and no to the small, at least in a work context, but also in a life context. So what’s big? The Q2 strategy project that your C-suite really cares about. What’s big? Improving customer satisfaction by 12% quarter over quarter. Again, in a work context, what’s small? Being the 18th person to reply all on the happy birthday Jimmy email. Give him a high five when you see him at the water fountain. What’s small? Attending every single meeting where you neither add value nor derive value. And how often do we do that? And what’s small? Being the person who always takes notes in the meeting or always raises your hand to lead the wellbeing pillar. Like, yes, these things are good for community, for culture building. Yes, it’s nice to occasionally plan the company picnic for the summer. But if you did it the last several times, if you took notes the last several meetings, then those small actions constitute what I call nap work, not actually promotable. So avoid more than 10% nap work. Because no one ever gets promoted for being responsive to email. And yes, do a little bit of it.

But if you notice that you’re dialing up to 30%, 40%, and granted this stuff can be easy, it can be simple. Sometimes it avoids the big scary projects of the customer satisfaction increase. But if you do too much of it, it’s just not gonna serve you well. So I say don’t nap at the office because you wanna do the big work that moves the business, because what moves the business is what moves your career. And same thing in your life at home also. Like, what are the things that you need to respond to on a given day and what are the small things you can avoid? And maybe it is not responding to every text that comes in, right?

Brett McKay: Yeah, that nap work, I can see that can be a trap for people in their career. ‘Cause often nap work, it’s easy and it’s concrete and it’s actionable. It’s like, oh, I’m doing something. But if you look at it, it doesn’t really move the bottom line on things. And so, I can see it can put someone in a position where like, I just do so much for the company. No one appreciates what I do, but you’re doing stuff that, it’s nice, but it’s like not necessary.

Jenny Wood: Yeah it invites more work, but it doesn’t invite more responsibility.

Brett McKay: Yeah, so say yes to the big, no to the small. But a lot of people have a hard time saying no. Any advice for people who have a hard time saying no to that sort of rinky-dink stuff because it makes them feel bad?

Jenny Wood: Yeah, so two tools are the agenda avenger and the power postpone. ‘Cause nobody wants to say no, and then feel like a jerk. But there are so many ways you can say no and not feel like a jerk. In fact, I do have a freebie if people wanted it. It’s @itsjennywood.com/sayno. It’s eight scripts tools, tricks to say no to meetings, projects and favors, because we get them all the time and we feel guilty. We don’t have the wild courage to say no. And then sometimes a yes turns into like 20 other yeses. It’s like, can you do this quick thing? Okay, cool. Now can you schedule this thing as a result of it? Oh, we’ve got to reschedule it. Now we’ve got to inform this one person. So one little yes can turn into 20 different yeses. But you can use the agenda avenger, which is, let’s say for example, someone asks you to hop on a call. You could say, I’d love to get a better sense of what you wanna cover. Could you send a quick agenda first?

If you push back, and that’s why it’s the avenger, the agenda avenger. If you ask them for an agenda, they’re gonna have to think real hard if you really need to have that meeting. And by the time they put together that three, five point agenda, they might just realize that can be solved over email. How many times have we been in a meeting that really should have been an email? And then, another one is the power postpone. So I’m planning to take a sabbatical coming up here for six weeks. And so, that’s a natural power postpone where I say, I can’t meet now, but I can meet in about eight weeks. And then, sometimes it just resolves itself. Or if they really, really wanna have that meeting or have you on that project, then they can wait. But oftentimes, it just disappears. And those are two of the eight very practical tools I share with people to thoughtfully say no without feeling like a jerk.

Brett McKay: Yeah, the asking for an agenda, I’ve used that a lot in my career. So I’ll get people who will email me like, “Hey, I got this thing. I’d love to hop on the phone to talk about how we can partner together.” And it’s like, what does that mean? Okay. So I send an email like, hey, this sounds great. What are some concrete ideas you have right now on how we can partner? And then they’re like, oh, I don’t know. Okay, well, once you have some ideas, maybe we can hop on the phone then. But when their ask is kind of vague, it’s like, well okay, I’m gonna have you be a little more specific so we can figure out if there’s actually something here for us to do.

Jenny Wood: Yeah, definitely. Or another version of it is, I’d get tons of people who’d reach out to me and say, “Hey, my nephew would love a job at Google. [laughter] It’s always someone’s nephew would love a job at Google. Another strategy here is yes, if, or yes, when. Yes, we can do that if you put together three job recs that look interesting to you. Or yes, we can do this when you send me your idea of the perfect job or something like that. So again, it’s similar to the agenda avenger. You’re not specifically asking for an agenda, but you’re saying, yes, we can do it if you do this or when you do that. So yes, if, or yes, when, to also see if that meeting really needs to happen.

Brett McKay: Another tactic you have for being more selfish in a positive way is winn. W-I-N-N. What’s that?

Jenny Wood: I love this one. I’m so glad you’re bringing it up. So this is play to winn. What I need now, W-I-N-N, as you said. And this is about being selfish about how circumstances might change. And there’s this wonderful story about a session singer for Pink Floyd named Clare Torry. A session singer is someone who is hired for a very small fee to come in and sing backup vocals or something as part of a track for one individual song for a band. So in London, Clare Torry came in and she was paid 30 pounds to sing these backup vocals for the great gig in the sky on a Pink Floyd album. And so, she collected her 30 pound fee and went home and didn’t even know that the song had made the album until it came out. Well, it turns out that album went 14 times platinum. A little bit more than, and her vocals are legendary. If you know the song, it makes the song. And so, she played to win. She said, what I need now is to sue Pink Floyd and ask for a much significant part of the royalties and a songwriting credit.

And then she was really smart and selfish to do that. And Pink Floyd was smart to settle out of court for an undisclosed sum. So what might that look like for you? Maybe your company has just gone through a reorg or layoffs and you’re now doing the job of two people and you’re overworked and overwhelmed and feel like you’re underpaid. Well, what I need now might be giving yourself the advice that you might give to a friend, which is put together three slides, go to your manager, explain the work that you’re doing, ask for a new title, ask for a raise. And we selflessly say things like, oh, but I’m just happy to have a job. Or, what about Alan and Sarah and Louisa? They’re doing hard work too. What about their raises? Well, being selfish is standing up for yourself. And sometimes what I need now is the permission we need to recognize that it’s okay to ask for something when the circumstances have changed.

Brett McKay: Yeah companies or CEOs, they play to win.

Jenny Wood: Heck yeah, they do. And that’s why they’re so successful.

Brett McKay: Yeah, if they never think, well, we promised this guy this job for a long time. It’s like, well, okay, the situation now is like, we’re losing money and we have to make cuts to keep this company afloat. That’s the situation now. So we got to make the cuts, I’m sorry. It’s not personal or anything. They’re playing to win.

Jenny Wood: Yeah, one of my best managers, Mike, said to me in a one-on-one when I was really being a workaholic and not taking any vacation, he’s like, “Jenny, you are capped out on vacation. When is your next vacation gonna be? I’m worried you’re gonna burn out.” And I said, I know, Mike, I’m just so passionate about this project and this new team. And I just, I love Google so much. And he was like, I think about my saying this and like what a ridiculous, it’s not that, Google’s an amazing company. Don’t get me wrong, but what a funny thing to say to justify me not taking vacation. And I will never forget his retort back. He said, “Jenny, that is great. But I want you to remember that Google doesn’t love you back.” And just like you said, Brett, they’re gonna be selfish. Any organization is gonna be smartly selfish if there’s a financial crisis and they have to have a RIF, a reduction in force, if they need to shift priorities and take a big project away from you, if they need to freeze hiring, if they need to pause promotions or give lower raises or bonuses, they will be selfish left, right, and center.

So you can be selfish too, but there’s this power imbalance. Where we look to our companies or we think that our boss’s boss has so much authority and that we can’t ask for what we want, but the best leaders, the future leaders are the ones who ask for what they want because you’re displaying future leadership skills.

Brett McKay: Are there any trade traps with selfishness?

Jenny Wood: Yeah you want to, with all these traits, be expanding the pie and not re-dividing the pie. So I do advise people to look for ways that are mutually beneficial as opposed to, for example, when I needed to be a little bit more selfish about my career and kind of get my eye back on the ball, if I was going to insert myself more in a project that I delegated to a peer or a direct report, I would think about something else that they could do that would bolster their profile as well.

Brett McKay: We’re going to take a quick break for a word from our sponsors. And now back to the show. All right, let’s talk about shameless and shameless. This is all about leaning into your strengths and not being afraid of showcasing them. It’s all about having some swagger.

Jenny Wood: Yeah.

Brett McKay: What do you think holds people back from promoting themselves?

Jenny Wood: I think that this is the biggest challenge with Wild Courage. I do. I think that people feel insecure. They feel rife with imposter syndrome. They feel like they don’t deserve it as much as somebody else. They feel like they don’t have the skills that somebody else has. But there was a moment in a meeting that I was leading where there were maybe 20 people in the room and this guy came in and he’s like, “This is a shameless plug, but I put together this spreadsheet that might help you.” And he shared it over the group chat. The emojis go flying. The chat explodes. Oh my gosh, this is gonna be so helpful. This is gonna save me 20, 30 minutes every time I need to create this project proposal for clients. And yet he led with, this is a shameless plug. And it’s like, what’s the shame in that? You’re sharing something useful and helpful and a time saver for people. And yet we hesitate to share our wins. And I think one of the most helpful tactics here, is to make it consistent, make it a system. If, for example, you shared every Monday what I call a shameless Monday email with your boss with four bullets, two things you’re proud of that you did last week and two things you’re excited about for this coming week, that is so powerful.

First of all, it makes it a lot easier to put together your performance review at the end of the quarter and your accomplishment bullets. But it also just systematizes talking about your wins and it becomes more natural. It becomes more of an update. There’s huge positive externality of then they might CC their boss. Or if you’re a leader, you could share this with your team and CC your own boss. And then you’re sharing with your team your priorities, which people love to know what their boss is up to that day. So the shameless Monday email can be really effective as you lean into your strengths and not be afraid to showcase them.

Brett McKay: Yeah, that’s a powerful idea ’cause your boss has no clue what you’re doing. He might have a little bit of a clue, but he probably doesn’t know everything. So this just makes it more explicit.

Jenny Wood: Yeah, definitely.

Brett McKay: You also have the power portfolio. What’s that?

Jenny Wood: Oh, I love the power portfolio. So the power portfolio is made up of your power assets. And just like a financial portfolio, you wanna have a mix of soft skills and hard skills or of business skills and people skills like you’d wanna have a mix in your financial portfolio of stocks and bonds. So these are the three strengths you have or the three things that you bring to the table that can move the business forward. So I had a coachee named Martina and she came to me with three power assets. She said, “Mine are communication, organization, and supporting others on launches.” And these were okay, but they needed tweaking because again, we want a mix of business and people skills. So yes, people skills matter, but managers and leaders want to know what business problems you’ll solve, because that’s what their boss is grading them on. So that’s why you wanna diversify your power portfolio and aim for a mix here. So we tweaked it. So communication became executive communication. Organization became project and program management, which she was phenomenal at. And supporting others on launches became go-to-market strategy.

Again, same ideas, different word choice, higher impact, shameless, right? But it’s just being more powerful in your language. And again, like organization versus project and program management does have a very different je ne sais quoi. To me, organization sounds weak. It sounds feminine. Not that that’s a bad thing, but in the context of wanting to show your leadership skills and show more of the value you bring to the customer, project and program management just sounds a lot more powerful. And so, we strengthened them by doing that exercise. But even aside from your specific language choice, a lot of people, don’t know their strengths at all or their talents and can’t articulate them in a bit of an elevator pitch. Like some people might just draw a blank if I say, what are the three things that, often I will say execs draw a blank when I say, what are the three things you bring to your team? And they really have to think about it. So it requires writing down maybe 20 things that you think you are pretty good at, things you’d love to do as a child, things that you’ve helped move the business forward on in the past. It might require bringing them to a coach or a mentor or a boss and triangulating it with other people think, and then you can whittle it down to three.

Brett McKay: And I imagine after you whittle it down to the three, you need to figure out what are some things that, like concrete things I can show, that showcases that I have these traits, be able to show that to people. Hey, I’m great at this thing. Here’s what I’ve done.

Jenny Wood: Oh, absolutely. If you’re talking about these in a resume or again, an accomplishment bullet, preparing for a performance review or promotion, you want to use what I call ROI, not the classic ROI return on investment, though this does give you return on career investment. It’s role, objective, and impact. What was your role in this go-to-market strategy? What was the objective? You wanted to launch the product with 10 million users in the first year. And what was the impact? You exceeded that goal and launched it to 11 million users in the first year. And also double your numbers. In any context, double your numbers. Or even going back to… When I say double your numbers, I mean in that example, I used 10 million. Maybe you could say 10 million by day 90. Use physical numbers. It is so much more powerful. They don’t have to be fancy, like revenue growth percentage or actual dollars. It could be, I cut this email sequence down for onboarding new clients from five emails to three, making it more efficient. Or I’m 70% of the way through the fall athleisure line competitive analysis.

Even just saying, I’m 70%, or I cut this down from five emails to three, has a big impact on showing the concrete, the tangible value that you bring to the table. So double your numbers anywhere you can, whether it’s in your shameless Monday email or a resume or accomplishment bullets or your power portfolio when you’re talking about your strengths in the specific situations with ROI where you demonstrated these power assets.

Brett McKay: How are you being shameless with the promotion of this book you’re doing?

Jenny Wood: Well, a big part of promoting the book is having companies buy the book in bulk. So there are books that are sold one at a time, and there are books that are sold 500 at a time. Because this book is so much about, it’s about wild courage in all areas of life, but there’s a bias toward professional wild courage and really thriving within your company, within your organization, and not saying, hey, go quit your job and be a solopreneur, be an entrepreneur. It’s really helping you feel engaged, feel happy, feel successful, feel motivated within your organization, which companies should love and want to buy. So I think this has the potential to be the kind of book that people buy 500 at a time. So how am I being shameless? I recognize that opportunity, and I sent about 300 emails to leaders, friends, acquaintances, secondary connections, subject line, are you interested in buying 200 copies of Wild Courage? And then I put a bunch of details. I’d happy to do a 20-minute complimentary fireside chat if you did. And I sent the first 100, and Brett, I thought that by the end of the day, those checks would just be rolling in for those bulk purchases.

But as it turns out, the budget is not always there. The timing’s not always right. There was a lot of ghosting, a lot of rejection. So shameless in this context is having the courage to just keep going despite all of that rejection. And this was different than the rejection of the one person who cut off our friendship. This was rejection at scale because there were so many people. I probably didn’t hear back from 90% of the people in that first 100. So what did I do? I tweaked the offering. Rather than 200 copies in the subject line, I put 50 copies. Rather than overwhelming them with too much information about the details of how this partnership could work and me coming to do a fireside chat, I whittled it down to just a few sentences. So you can use that rejection and tweak, dial your shamelessness up and down to what might better appeal to the audience.

Brett McKay: Well, this kind of ties in nicely to one of the other traits of being reckless. Like you’ve been reckless with your being shameless.

Jenny Wood: Yeah.

Brett McKay: Let’s talk about that. What does healthy recklessness look like?

Jenny Wood: Well, it’s the courage to err on the side of action, because better to learn from your mistakes than waste time predicting the consequences of every decision. Think fast and fearless. And if you’re on the fence, do it. And for all of you overthinkers out there, for all of you pro-con list makers and like me, left-brain thinkers who are in a lot of analysis paralysis, just thinking about like, what’s the worst that could happen. Even leaving Google for me took a lot of recklessness. And it was hard for me to get to the point where I knew I wanted to leave. And that was a moment where I felt my eyes fluttering closed when I was driving my son back home from choir practice because I had just taken on too much. I had my day job. I was running the, Own Your Career program. There was all this external interest that was budding about my work, including this book. And I was also trying to be a wife and a mom. It’s like five roles. And I was exhausted. I was struggling with lowercase a anxiety. I was oftentimes up between 2:00 and 5:00 AM. And I just was totally sleep deprived and physically, emotionally, and mentally unwell.

And so, I reached the moment where I felt my eyes closing as I was driving Ari home from choir, that it was probably time to go. But it took me about 12 to 18 months to muster the courage to do it. And that’s ’cause I wasn’t reckless enough. And so, I think I was caught in truths and tales. Truths are facts. They’re verifiable facts. This microphone I’m speaking into is black. I’m holding a piece of paper in my hand. But tales are the stories we tell ourselves to make sense of the facts. And so, part of recklessness is separating the truths from the tales.

And so, I really struggled with that leaving Google. The tales I told myself were, I’m gonna have no identity if I leave Google. Another tale, what if we run out of money and have to move out of our house in Boulder by all the trails that I love so dearly? Another tale I told myself is my parents are gonna be disappointed in me because I’m the breadwinner for my family. But then, when I broke it down to actual truths in that situation, a truth would be, yes, I’m not gonna get a paycheck every other week with the Google logo on it.

A truth would be, I can find other ways to have a new identity. A truth would be, my parents have always supported me and are supportive of me leaving Google as well. So that helps you be reckless when you separate the truths and the tales and really break it down to fact versus fiction.

Brett McKay: So another thing you talk about in this reckless section is this react framework. What’s that and how can that help you overcome failures so you can maintain that bias towards action?

Jenny Wood: Yeah, well, sometimes failures are not big colossal, I lost the project or I lost the deal. Sometimes a failure is just a moment that happens that’s cringeworthy during the day. And we’ve all had those. And one of mine was when I sent an email intended for six people to, I think it was 23,000 people at the time. That’s how big Own Your Career was at the time. And I sent it instead of to the volunteers working on Own Your Career, I sent it to the entire Own Your Career alias. And Brett, this was an unintelligible email. It was just a subject line that was three sentences long with nothing in the body. And it was a testimonial of someone who had said they loved the Own Your Career program and that they’d gotten promoted as a result of it. And so, the subject line was just TT: Atkinson Me, which is the person’s name, but it’s a really unusual name. And then I had typos in the subject line. And this went to 23,000 people, including many in the Google C-suite. So I was mortified. I pressed send and then I slowly dragged the mouse to the unsend only to not get there in time.

And here’s what happened. So React is how I overcame that horrible moment of mini failure. It stands for recognize, empower, apologize, celebrate, and trust. Recognize that not everything you do will be perfect. E, empower yourself to own it quickly and clean it up. Take a deep breath. It happens to everyone. And so, I really just had to put on my big girl pants and say, I can clean it up. I can recover from this. Then I did. A is for apologize. I directly apologized to TT. She was not intending for her feedback about Own Your Career to get broadcast to 23,000 people. C is for celebrate. Celebrate the unexpected goodness that comes out of a mistake. I got hundreds of pings and emails back, and not a single one of them said, you jerk, I can’t believe you distracted me with this nonsensical subject line. No, everybody was checking in on me. Everybody wanted to take care of me. Everybody wanted to help me and empathize with me. And they all said things like, Jenny, I promise nobody cares about this, like you do. Nobody’s paying attention. Everybody understands this. It happens to everyone.

They were so empathetic. So that’s celebrating the unexpected goodness that comes out of a mistake. And that’s also the T is trusting that your fellow employees will have your back. And by the way, the other part of C, celebrate the unexpected goodness is, I wrote up this react framework. I then shared it with the whole Own Your Career alias and said, here’s how I recovered from this mistake. And it ended up being the most popular tip of all time that I had ever sent. So it just goes to show you that you can make lemonade out of any lemon. And that’s the react framework.

Brett McKay: All right. So reckless, just take more action, have a bias towards action, and you can overcome those little setbacks and failure. It’s not a big deal. It’s not gonna be a career ender for you. Another trait is being nosy. And I love this section. ‘Cause you start off that section talking about how your grandmother was nosy and how that probably saved her life during World War II. What happened there?

Jenny Wood: Yeah. So my grandmother was in hiding during the Holocaust in Budapest, Hungary. And she left to get a bucket of water for the other people in hiding with her. And she walked down the street and somebody from the Arrow Cross Party, which was sort of the Nazi equivalent ruling party in Hungary, rounded up her and some fellow Jews at gunpoint. And they marched them to a building and they had them against a wall. And my Bubbie, my grandmother, I called her Bubbie, knew that there was no getting out of this. She was doomed. The options were, basically she was gonna get marched onto a train and taken to Auschwitz, like so many other people had, or she was gonna have a summary execution and get shot right there against the wall. And there were literally dead bodies in the street when this was happening, as she told the story to me, in Hollindale, Florida at the age of 93, when we were recording her Holocaust survival stories. And her only option, she told me, was to get nosy. And so, she asked the soldier, this scared, terrified, timid soldier, a question.

And she asked, what would happen if I were to step out of line? And she wasn’t necessarily looking for the answer. She was looking for his reaction. And he answered with the Hungarian idiom, which I will translate to English, which equals, is the mademoiselle so stupid or just pretending to be? And it was a little bit of a jokey answer. She saw a lightness in his voice. He almost cracked a smile. And she really saw his nervousness. And it made her realize that she had a small window here to step out of line, because he didn’t yell at her. He didn’t hit her with the gun. He didn’t cock the gun. And so, just by being nosy, having the wild courage to ask a question, it was the only way she was able to survive that scrape. So she stepped out of line and started walking down the cobblestone street. And she said she remembered hearing the click of her heels every time she took a step as she just kind of slowly breathed in and breathed out and hoped that nothing would happen. And it didn’t. And she returned back to the attic safely. And so, she really only survived because of her nosiness, because she had the courage to ask a question.

Brett McKay: So this is all about asking questions, what it means to be nosy. Why do you think people have a hard time asking questions in their career?

Jenny Wood: We think it makes us look stupid or uneducated or unknowledgeable. Or think about how many times, for those of you who work in an organization that has a ton of acronyms. You think, oh, well, it’s too late. I’m already in this role for four months. I can’t ask that basic question. I can’t ask that simple question again. But nosy is the courage to get insatiably curious because curiosity drowns out fear and pulls you toward what is most exciting to you. So use it as a compass. And curiosity shows leadership, it shows ambition. It’s a great way to overcome nerves at a networking event rather than feeling like you have to impress somebody. Go ask them a bunch of what and how questions like, what was the most interesting session for you so far? Or how long have you been in the industry and what brought you here? Or how have your peers been responding to these sessions? Or how are you using AI right now? What and how questions are so powerful and they take the pressure off of you in any kind of new relationship or networking situation or a meeting with a mentor where you feel like you’ve got to be all buttoned up and prove yourself.

Just start asking and start listening. And even the best leaders, going back to the person who’s a few months into the role and they’re like, oh, I’m too far in to ask what that three letter acronym stands for. But the leaders who we admire most are the ones who have the confidence, the shamelessness, the boldness, the recklessness to say, “Hey, what does PRT stand for on this slide? I just wanna make sure that for everybody in the room who’s new, we redefine that.” And everyone sighs a sigh of relief that somebody finally, had the boldness to redefine that acronym of the thousands that are used at the company. And when it’s a leader who does that, I really admire it.

Brett McKay: You also talk about how you can use nosiness or asking questions to turn envy into a springboard to success. What does that look like?

Jenny Wood: Well, we’ve all got those people in our life who we’re jealous of. It could be a friend, it could be a colleague. And I say use envy as your engine and steal their blueprint. So, there was someone named Molly who I just deeply admired. She was a peer of mine. We were always competing for promotions and I always thought she was three times as good as I was. But instead of being jealous and having it create a scarcity mindset for me, I thought of it as an abundance mindset where I could learn from her. I could get deeply nosy and I could kind of discover her recipe for X, Y, Z skills. So she was really good at project management. And anytime we were launching a new program, she would have this awesome Gantt chart, which had all of the dates and the accomplishments that needed to happen over a six-month period of time. She was really good at communicating next steps. She was really good at delegating. She would bold the person’s name in each email and put a deadline for what needed to happen next. She would thank everybody and be very positive and empathetic.

And so, rather than just be jealous and say, oh, why am I not good at Molly? Like I resent her. I just went to her and I said, Molly, could I do three 20-minute sessions with you where you review some of these project management skills with me and I can basically steal your blueprint? And I would write down these things on an index card and I would put them by my desk and I would use her strategies. Or I did this with another manager, Ted, who was just such a phenomenal presenter and never said, um, in his presentations. And so, then I would gamify it for myself and I’d say, I’m gonna count how many times Ted uses um, in a 10-minute presentation, and I’m gonna try to beat it. So again, rather than being jealous, I used envy as my engine and I would steal their blueprint. And that is rooted in being nosy. It’s being curious versus jealous.

Brett McKay: This reminded me of Plutarch, the famous Roman biographer, philosopher guy. He talks about two types of emotions. There’s envy, where you see someone who’s better than you and you just feel bad and you wanna bring them down. And then he says, “The opposite of that is zeal.” It’s where you admire someone’s excellence and then you wanna imitate it.

Jenny Wood: I love that.

Brett McKay: So curiosity, being nosy can lead to zeal instead of envy.

Jenny Wood: I love that.

Brett McKay: I really like that.

Jenny Wood: I love that.

Brett McKay: Let’s talk about being manipulative. You had an instance where you used manipulation on a past AOM guest, and that’s Vanessa Van Edwards. She talks about charisma. How did you manipulate Vanessa into helping you achieve one of your goals?

Jenny Wood: Yeah, well, I really wanted to meet Vanessa. We haven’t talked about obsessed, but I’m obsessed. I wanna meet the best people. I wanna do the best work. I wanna help people in the most high-impact way. And I knew that part of that was building those relationships with authors so that I could partner with them around time of book launch, and also just learn from each other and enjoy each other’s friendship and mutual value exchange. So I was headed to Austin for some work meetings. Someone had just introduced Vanessa and me over email. And so I said, I’m gonna be in Austin Thursday through Sunday. I would love to take you out for coffee. And she said, “Oh, what are the chances? I’m actually gonna be out of town those exact dates for a keynote.” And so, I think a lot of people would just take no for an answer and be like, okay, another time. And of course, another time never comes. But I wanted to capitalize on this opportunity. So I said, what time does your flight depart on Thursday?

And she said, “It departs at 3:00 PM. Well, my flight was scheduled to get in later than that. But a quick little switcheroo flight change and $60 to Delta Airlines had me coming in before her flight so I could meet her. And I said, what are the chances I get in at 1 O’clock? And so, what if we met right by your gate for coffee? So, did I lie? Yeah, sure. Liar, liar, pants on fire. But I will stand behind that lie all day long that I wasn’t actually originally getting in at 1:00 PM. And maybe I even said I was getting in at 1:00 to just make sure it worked for her before I made the flight change. So I think I actually did lie about the time my flight landed before I made the change. But I tell you, $60 to meet Vanessa Van Edwards in person, it’s a bargain at twice the price. And so, we feel like everything has to be coincidental or just has to work out or fate. But man, I just believe that serendipity isn’t found, it’s made. And manipulative reclaimed is the courage to build influence through empathy and to build lasting relationships.

Because whether you’re selling a product, an idea, or yourself, the ability to end friends, allies, and supporters is all about mutual benefit. So figure out what people want and go get it for them. In fact, something happened this morning where I got an email from the person who ran the PR campaign for the book. And she said, actually, I got an email a couple weeks ago, but I totally forgot to respond to this. It said, hey, would you be willing to write a testimonial for me on LinkedIn? So I would call that nosy, right? That’s great. And then I forgot to respond because I’ve had a lot going on. And then she followed up. I’d call this bossy. She said, “Hey, I hate to nudge you, but I’d really appreciate this review on LinkedIn. Any chance you could do that?” And so, what I think would have made it even more powerful, is if she’d been manipulative and said, “And by the way, I’ve drafted a couple sentences for you that you can tweak as you see fit.”

Because when I talk about manipulative and how it’s all about finding mutual benefit and figuring out what people want and getting it for them, what I want is time back. So I love doing favors for people, but they take time. And so, had she been manipulative and said, “I’ve already written it for you.” That gives me what I want, which is time back and makes it a lot easier for me to say yes. So I did say yes, but now I have to do the work. And it’s still something I have to add to my to-do list. So that’s where manipulative can be such a good thing and win-win and expand the pie, whether you’re changing your flight to meet somebody because relationships should be high reward, but also high investment, or asking someone to do a quick favor for you, like my PR person did today.

Brett McKay: Yeah, so being manipulative, it’s all about just being influential. That’s what it’s all about. And your definition of just being influential is like, thinking win-win, finding out how you can get what you want and need, and while at the same time delivering what someone else needs and wants. It reminds me of this famous quote from Dwight Eisenhower about leadership. And he said, “Leadership is the art of getting someone else to do something you want done, because he wants to do it.”

Jenny Wood: Oh my gosh, that’s so beautiful.

Brett McKay: Manipulative, but that’s just leadership. That’s being influential.

Jenny Wood: Yeah.

Brett McKay: Yeah. So last one, you talked about obsessed. You’re obsessed with meeting Vanessa Van Edwards. That’s another one of your traits of wild courage. What does positive obsession look like?

Jenny Wood: Well, it’s pushing, persisting, performing, because frankly, none of these traits will serve you if you don’t learn to deliver, not for some company, but to achieve your own ambitions. So obsessed for me was, I wanted a job at Google in 2006. I was bright-eyed and bushy-tailed and I submitted my application online having no clue what the job was that I submitted it for. But I discovered there was maybe sort of possibly a formatting funkiness when I uploaded my resume. And whether there was or wasn’t, when I didn’t hear back from Google, I used that as an opportunity to print out that resume on a piece of paper and hop in my mom’s 10-year-old Honda stick shift and drive to the Google office and sit there on the couch until someone came out and talked to me. And I remember the receptionist, it was a shared office space, was like, no, it’s not really protocol for Googlers to come out and talk to you. You can drop the resume here. And just like firm as a tree rooted to the ground, with my smile kind of like, cheeks quivering as I kept that smile on.

I was professionally persistent and said, oh, it’s okay, I’ll wait. I really do need to talk to somebody because there was a problem with my resume. There’s this study that says, people defer to because. It was a study about people standing in line to make Xerox copies and someone from the back went to the front and said, “I need to go to the front of the line because I need to make copies.” Just because they said the word because, they were more likely to be let into the line, even though of course, everyone was there to make copies. But the research suggests that people defer to the word because X, Y, Z. So I said, because there was a problem with my resume, I need to speak to someone. And eventually someone named Elizabeth came out, and I talked a little bit about how I had just come back from working abroad and backpacking through South America, which I understood were very googly skills or things that people did to be kind of well-rounded and global citizens. And then, then and only then, did I hear back from Google once I showed up.

Actually, not even then. I didn’t hear back. I didn’t get her business card. And then I tried every single permutation and combination of first initial, last name, first name, last name, just last name @google.com. Her name was Elizabeth Kelleher. So I emailed E. Kelleher, Elizabeth Kelleher, Liz Kelleher, Elizabeth@google.com. And then finally, I found the right combination. And when I followed up, then I heard back. So that is my flavor of obsessed. And it’s okay to be obsessed. It’s okay to stick your neck out. It’s okay to show that you want something deeply, because people like enthusiasm. People like energy, people like positivity. And that’s what I was trying to show, because it didn’t work just submitting my application online. Silly protocols and rules are there to deter the deterrable. But I just decided I was gonna be undeterred. And I got the job. And here we are almost 20 years later.

Brett McKay: Yeah. You got to play it hot. Don’t play it cool.

Jenny Wood: Yes. Definitely.

Brett McKay: So we’ve talked about these different traits. Is there one you think that people would get the most benefit from working on or like the one that people struggle with the most that if they started working on today, they’d see a lot of ROI? .

Jenny Wood: I think shameless. I think there’s just a lot of change in the world right now, a lot of economic uncertainty, a lot of change with, the onset of AI, a lot of layoffs, a lot of reorgs, and that’s hard. There’s this moment where my husband and I were living with my grandmother on her pullout couch in Manhattan while we were job hunting. And John shared some unfortunate news. We sat down to dinner. He said, “I’ve been part of a major company restructure and I got laid off today.” Well, I’m crushed as a newlywed, but I look across the table at Grandma Lila, who was like, a total spitfire at four foot 10 and 90 pounds. She was not just shameless. She was unstoppable. And she said, “John, no is just an opening offer. Don’t sign the paperwork.” And John and I look at each other trying to silently communicate what we’re thinking. And then finally, John sighs and says, uh, I think a layoff is like a one-sided thing, Grandma. They say, you don’t work here anymore. And I say, okay. And that’s when Grandma Lila sighs and says, “Well, sure, it would be more comfortable to take no for an answer, but don’t let fear shape your decision, don’t let shame shape your decision. You both want something, right? They wanna get stuff done, even though they can’t afford to pay you. And you want a job because it’s easier to get a job when you have a job.”

So finally, John relents. And the next day he goes to his VP and he half-heartedly offers to stay on for 10% time and pay, while he job hunts. And shockingly, they accept. Now, I’m not sharing this as some influence tactic per se. The point is Grandma Lila’s lesson. Don’t let fear, don’t let shame shape your decisions. Get shameless.

Brett McKay: Yeah, and it worked out for your husband, ’cause he got some time off. He had a little money to live on, kept his benefits. And then a few months later after this crisis that this company was going through, he kind of abated. The company hired him back full time. And it was all because he’s willing to do something we think of as a bad thing, to be shameless. He had to be uncomfortable and ask for something that apparently wasn’t an option. Well, Jenny, this has been a great conversation. Where can people go to learn more about you and your work?

Jenny Wood: Well, the book’s available anywhere. Electronic, e-book, audiobook, hardcover, Amazon, anywhere books are sold. And then you can find me on itsjennywood.com. And I love helping organizations with keynotes. I love helping execs through one-on-one coaching. I do some small group coaching. And I would love to be in touch and help you find your wild courage wherever you are and whatever you are chasing.

Brett McKay: Fantastic. Well, Jenny Wood, thanks for your time. It’s been a pleasure.

Jenny Wood: Thank you so much, Brett.

Brett McKay: My guest today was Jenny Wood. She’s the author of the book, “Wild Courage” It’s available on amazon.com and bookstores everywhere. You can find more information about her work at her website, itsjennywood.com. Also check out our show notes at aom.is/wildcourage, where you can find links to resources and we delve deeper into this topic.

Well, that wraps up another edition of the AOM Podcast. Make sure to check out our website at artofmanliness.com where you can find our podcast archives, as well as thousands of articles that we’ve written over the years about pretty much anything you can think of. And if you haven’t done so already, I’d appreciate it if you’d take one minute to give us a review on the podcast or Spotify. It helps out a lot. And if you’ve done that already, thank you. Please consider sharing the show with a friend or family member who you think would get something out of it. As always, thank you for the continued support. Until next time, it’s Brett McKay. Reminding you not just to listen to the AOM Podcast, but put what you’ve heard into action.

This article was originally published on The Art of Manliness.

Years ago, we published articles on personal finance goals to strive for in your 20s and in your 30s.

Now that I’m in my 40s, I decided to revisit this series to see if I needed to update my financial goals in my first decade of midlife.

Your 40s are an interesting time, money-wise. Many men enter their peak earning years during this decade. Yet their expenses often increase significantly at the same time. High-school-aged kids may need cars, and those same teenagers may subsequently need help paying for college. Your parents are retiring and aging into their 70s, and you’re starting to think about what financial support they may require in the last decades of their lives. Meanwhile, your own retirement shifts from a distant abstraction into an approaching reality.  

During this decade where you’re both starting to enjoy the fruits of your labors, but feeling the pressure of additional demands, you want to make moves to ensure you’re on stable ground now and in the future.

Below are 10 goals, backed by research and the advice of personal finance experts, that will help you not just survive your 40s, but thrive in that decade and in the decades to come:

1. Consider Consulting a Financial Advisor

With higher income and more responsibilities, your financial life is more complex in your 40s.

So consider hiring a fee-only financial advisor to help you navigate these complexities. Fee-only financial advisors don’t make money from selling financial products like insurance or mutual funds, reducing conflicts of interest.

You can pay a fee-only financial advisor by the hour to get advice on planning for retirement, paying for college and potential weddings, updating your estate plan, and reviewing insurance.

If you’re looking for more comprehensive guidance, you can set up an arrangement where the financial advisor gets a percentage of the assets they manage for you.

You can find fee-only financial advisors in your area by searching https://www.napfa.org/.

2. Maintain a Robust Emergency Fund (6–12 Months of Expenses)

By now, you should have a solid emergency fund. In your 40s, the goal is to increase its balance to match the expenses you likely have as a middle-aged man.

Aim for at least six months of essential expenses, or up to a year if you’re in a volatile industry or single-income household. Job hunts for people in their 40s often take longer than for those who are younger. If you were to lose your income, a six-month cash reserve ensures you can keep paying the mortgage and feeding the family while you find your next role. It also prevents you from raiding retirement accounts or going into debt.

Keep this fund in a liquid, low-risk account. Don’t touch it unless it’s a true emergency; replenish it as soon as possible if used.

3. Maximize Your Income

For many men, their 40s are the highest-earning decade of life. The median annual salary for men usually peaks between 45 and 54. Make it a goal to leverage these years as much as possible to set yourself up for true financial security.

To make the most of this decade, you’ll want to maximize your income.

Raises won’t usually fall into your lap. You’ll need to ask for them proactively.

If your boss won’t budge on giving you a raise, consider switching roles or even companies. Changing jobs mid-career can often substantially increase your salary, but so can moving up the ranks at your current job; be sure to check out our podcast on getting a promotion for some solid advice on how to continue to work your way toward the literal or metaphorical corner office.

Additionally, look into creating extra income streams through side businesses or freelancing. At this stage in your career, you probably have valuable expertise others will pay for. Consider moonlighting as a consultant. The extra income you earn now could even evolve into part-time work after you retire.

It’s worth noting that your 40s are not only peak earning years, but may be the last years you have your kids at home. You don’t want to be so focused on maximizing your income that you miss out on maximizing the time you spend with them before becoming an empty nester. It’s a tough line to walk, but strive to strike a balance between filling up your financial treasury, and your memory bank.

4. Avoid Lifestyle Creep

It’s natural to want to reward yourself as your income rises — to finally get that dream car, upgrade to a bigger house, or take more vacations. And you should allow yourself to start splurging a little more in your 40s; you’ve earned it by grinding through your 30s.

But don’t go overboard; every dollar spent on upgrading your lifestyle is one less dollar available for debt reduction or savings. Remember, too, that the cost of another car or a bigger house isn’t just the initial purchase price, but what it will cost you in maintenance, insurance, etc.

Start enjoying yourself more in your 40s, while saving enough to ensure that the next four to five decades are enjoyable as well.

5. Double-Down on Retirement Savings (Aim for 3X Your Salary)

In your 40s, retirement is no longer the abstract-seeming thing it was in your 20s. It will potentially be a concrete reality for you in twenty or so years.

Experts suggest having about three times your annual salary saved by age 40. Don’t worry if you’re not there yet — many aren’t — but use that benchmark to motivate you.

In your 40s, strive to save at least 15% of your income (ideally 20% or more) for retirement. As you save for retirement, take full advantage of tax-advantaged accounts like 401(k)s and IRAs.

How should you allocate your retirement savings in your 40s? When I put this question to personal finance expert Nick Maggiulli, he suggested that for many, it might mean reducing risk due to the increased liabilities they likely have in midlife: “In your 40s and 50s, you should consider reducing this risk to fit your liability profile better. For example, you could consider going from an 80/20 stock/bond portfolio to a 70/30 (or something similar). The key here is not maximizing your net worth, but maximizing your chance of long-term survival.”

6. Eliminate Non-Mortgage Debt and Work Toward Being Mortgage-Free

Ideally, you’ll have paid off all non-mortgage debt in your 30s. If you haven’t, make that a priority in your 40s. Aggressively tackle any lingering debts, like car loans and student loans.

Once you’ve eliminated all non-mortgage debt, start focusing on your mortgage. While you don’t necessarily need to pay it off during your 40s, you should have a clear plan for eliminating it as soon as financially feasible.

If you can swing it, start making extra principal payments. Even one extra payment a year (or adding, say, $200 extra each month) can knock years off a 30-year loan. Check with your lender that extra payments go toward the principal.

7. Bolster Kids’ College Funds (But Not at the Expense of Retirement)

In your 40s, your children may be in high school, and college costs are looming. Ideally, you started a 529 account for your kids in your 30s; if not, start one now. With 529 accounts, gains and distributions/withdrawals for education aren’t taxed.

As you save for your kids’ education, don’t do so at the expense of your retirement. Your retirement should always be the priority when saving. Your kids have options for education financing, but you don’t have one for retirement.

8. Plan for Aging Parents and Family Care Responsibilities

More than half of 40-somethings are either raising children under 18 or financially supporting adult children, and have at least one parent aged 65 or older. About a quarter of adults in their 40s and 50s actively provide financial assistance or regular care to their aging parents — a percentage that only increases as members of this “sandwich generation” and their parents grow older.

Prepare for a future with aging parents by talking to Mom and Dad about their financial health. Do they have sufficient retirement savings, a will, power of attorney, or healthcare directives? Knowing this upfront can prevent surprises during a crisis.

Second, discuss future care preferences. When their health declines, would your parents prefer living with family or moving into an assisted living facility? Clarifying this sets expectations and shapes future plans. If you have siblings, hold a meeting to define roles and discuss shared costs.

Finally, consider preparing financially by creating a “parent fund” for predictable expenses like medical bills or housing.

Check out the book Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances. I thought it had a lot of good advice.

9. Do an Insurance Check-up

If you bought term life insurance in your 30s (as we recommended), revisit your coverage. Major changes — like more kids, a bigger mortgage, or a higher income — might require additional coverage. A common guideline is 10–15X your annual salary, ensuring your family could replace your income if needed. Term policies are still affordable in your 40s (though premiums rise), so lock in coverage until kids graduate college and your mortgage is paid off.

Also consider umbrella insurance to protect accumulated wealth from liability lawsuits, and disability insurance to replace your income if you can’t work.

10. Do an Estate Plan Check-Up

You should have started your estate planning in your 30s; in your 40s, it’s time to do a check-up.

• Revisit and update your will to reflect current realities, like new assets or guardians for your kids.
• Double-check beneficiary designations on retirement accounts, insurance, and investments; these override your will, so accuracy is crucial.
• Ensure you have durable powers of attorney (for financial decisions) and healthcare proxies, naming people you trust.
• Explore advanced strategies like trusts or charitable giving if your estate is sizable.
• Communicate with your spouse and estate executor about your plans and where key documents are stored.

11. Plan Your Next Chapter of Life

Having a clear retirement vision guides your financial choices today. Outline your ideal retirement. When will you retire? Where will you live? How will you spend your time? Cruising? Volunteering? Working part-time? Answers to these big-picture questions will shape how you save in your 40s.

Next, calculate your retirement “number.” Most aim for savings that generate 70–80% of pre-retirement income annually. Use retirement calculators or a financial planner to check your progress, adjusting your savings or expectations if needed.

Finally, prepare for potential healthcare costs. You might live into your 90s, so your savings could need to last over 30 years after you retire.

Your 40s are a busy and sometimes stressful decade, but with thoughtful planning and strategic actions, you can balance today’s demands with tomorrow’s dreams. Use these goals as your financial roadmap, and you’ll enter your 50s with confidence and clarity, knowing you’ve laid a strong foundation for the years ahead. I’ll see you in 10 years with an article on financial goals for that decade of life!

Listen to our podcast with Nick Maggiulli about the 6 levels of wealth and how to reach them:

This article was originally published on The Art of Manliness.

The era of artificially intelligent large language models is upon us and isn’t going away. Rather, AI tools like ChatGPT are only going to get better and better and affect more and more areas of human life.

If you haven’t yet felt both amazed and unsettled by these technologies, you probably haven’t explored their true capabilities.

My guest today will explain why everyone should spend at least 10 hours experimenting with these chatbots, what it means to live in an age where AI can pass the bar exam, beat humans at complex tests, and even make us question our own creative abilities, what AI might mean for the future of work and education, and how to use these new tools to enhance rather than detract from your humanity.

Ethan Mollick is a professor at the Wharton business school and the author of Co-Intelligence: Living and Working with AI. Today on the show, Ethan explains the impact of the rise of AI and why we should learn to utilize tools like ChatGPT as a collaborator — a co-worker, co-teacher, co-researcher, and coach. He offers practical insights into harnessing AI to complement your own thinking, remove tedious tasks from your workday, and amplify your productivity. We’ll also explore how to craft effective prompts for large language models, maximize their potential, and thoughtfully navigate what may be the most profound technological shift of our lifetimes.

Connect With Ethan Mollick

This article was originally published on The Art of Manliness.

Think of all the texts, emails, and social media posts you’re inundated with each day. Sometimes you read them, and sometimes you swipe them away, telling yourself, perhaps not so honestly, that you’ll revisit them later.

If you’re the sender of such missives and memos or the creator of content, you hope the recipient has the first response, that, instead of deep-sixing your message, they take the time to engage and take action on it.

How do you increase the odds of that happening? Rather than just guessing at the answer, Todd Rogers has done empirical experiments to discover it. Todd is a behavioral scientist, a professor of public policy at the Harvard Kennedy School, and the author of Writing for Busy Readers: Communicate More Effectively in the Real World. Today on the show, Todd explains the four-stage process people use in deciding whether to engage with your writing, whether in a personal or business context, and how influencing these factors not only comes down to the style of your writing, but its overall design. Todd offers tips to improve both areas, so that you can effectively capture people’s attention.

Resources Related to the Podcast

• AoM Podcast #971: The 5 Factors for Crafting Simple (Read: Effective!) Messages
• AoM Podcast #666: The Power of Brevity in a Noisy World
• AoM Podcast #580: Why People Do (Or Don’t) Listen to You

Connect With Todd Rogers

• Todd on X
• Todd’s faculty page
• Writing for Busy Readers website

Listen to the Podcast! (And don’t forget to leave us a review!)

Listen to the episode on a separate page.

Download this episode.

Subscribe to the podcast in the media player of your choice.

Read the Transcript

Brett McKay: Brett McKay here, and welcome to another edition of The Art of Manliness podcast. Think of all the texts, emails, and social media posts you’re inundated with each day. Sometimes you read them and sometimes you swipe them away, telling yourself, perhaps not so honestly, that you’ll revisit them later. If you’re the sender of such missives and memos or the creator of content, you hope the recipient has the first response. That instead of deep six-ing your message, they take the time to engage and take action on it. How do you increase the odds of that happening? Rather than just guessing at the answer? Todd Rogers has done empirical experiments to discover it. Todd is a behavioral scientist, professor of public policy at the Harvard Kennedy School, and the author of Writing for Busy Readers, Communicate More Effectively in the Real World. Today on the show, Todd explains the four stage process people use in deciding whether to engage with your writing, whether in a personal or business context, and how influencing these factors not only comes down to the style of your writing, but its overall design. Todd offers tips to improve both areas so that you can effectively capture people’s attention. At the show’s over, check at our show notes at aom.is/busyreaders.

All right. Todd Rogers, welcome to the show.

Todd Rogers: Thanks for having me.

Brett McKay: So you are a professor of public policy and you recently co-authored a book about how to write for busy readers. What’s the connection between researching and writing about public policy and writing for harried people living in the TikTok age?

Todd Rogers: I’ve never been asked to actually defend why this is public policy. I guess it starts with I spent a decade working on how do we communicate to busy voters trying to mobilize voters to participate in elections, and then a decade working on how do we communicate with busy families from schools to get kids to go to school and kids to do better. And then five or six years before Jessica and I wrote this book, working with leaders across industries on how do we communicate to our employees, stakeholders, customers, constituents, and yeah, so I guess the common thread is across all these categories, across every domain of life, we are communicating to busy people. And if we wanna be effective at doing it, we have to understand that our readers are busy and we should write in a way that makes it easy for them.

Brett McKay: Yeah. With public policy, you’re trying to get people to do things, but in order for them to do the thing that you want them to do, you have to communicate that to them?

Todd Rogers: Yeah. I describe it as stage zero of every intervention we deliver. Is do we capture people’s attention long enough to deliver whatever we’re trying to communicate? So yeah. So if we are trying to have people sign up for a program or, you know, comply with the law or show up to court on a specific court date, we need to make sure we are communicating to them effectively.

Brett McKay: So you start off the book defining what effective communication is, what effective writing is, and you’ve developed this definition based on research as well as your own experience as a reader and writer. So what makes writing effective?

Todd Rogers: I think we probably start with the reader. So it’s funny, we talk about writing as if we are teaching writers, but the entire question of effectiveness is, do we succeed in communicating some thought from our head into the head of a reader? And so when we talk about this work, we’re like, okay, imagine you own a radical different take on writing. It’s not enough to have everything in there and then shift the responsibility to the reader. Imagine if it was always your fault if the reader did not read what you gave them. If it was always your fault, and so it’s your responsibility to make sure they read it and you don’t control their lives. All you control is what you put in front of them. Then just, it takes a whole new orientation. Effective writing is writing that we succeed in delivering the key content into someone else’s head at their leisure.

Brett McKay: And then at the beginning, I loved how you applied the things you write about in this book, in your book, and you lay out these sort of bullet points of what you found to be effective writing. Things like effective writing has a well-defined purpose. There’s a reason why you’re doing it, like, you know, and the reader can pick that up right away. It says, effective writing helps the writer as well as the reader. How does effective writing help the writer as well as the reader?

Todd Rogers: Writing often helps us clarify our own thinking, and I think we conflate that with the other use of writing, which is getting an idea from me to you. And they are two totally different functions. And often we write our first draft and then at the end it was clear what we think that the highest order goal is. But that’s actually stage one. Stage two is then we need to actually make it as easy for the reader as possible to get it. The way it makes it easier for the writer. Writing effectively helps writers because one, it helps us achieve our goals, which is Jessica and my objective with this book, helping writers be more effective in achieving their goals. But it also, and we’ve all experienced this, the haranguing and harassment of people who haven’t read or responded to what we sent them, ineffective writing becomes a huge burden on the writer because people aren’t showing up, people aren’t responding, people are asking you questions. So writing effectively helps writers because it saves us all the follow up and all the hassle that we are experiencing as a part of hassling other people to respond to us. It saves you from that irritation.

Brett McKay: Yeah. Another point you make, effective writing is not the same as beautiful writing. Flesh that out for us.

Todd Rogers: We are all taught how to write well. K through 12, K through college, we are taught these ideals of what good writing looks like, what beautiful sentences are, and using advanced vocabulary to be more precise. And I think that’s a critical stage on the road to becoming an effective person. But there’s a totally different project, which is not meeting some ideal, but actually communicating in the world to people who are not paid to read your writing and people who are most of the time trying to move on as quickly as possible. Like their goal is to hit delete or hit next as quickly as possible, often without even knowing what your point was. And so it’s like effective writing is writing for those people, not for people who are paid to give you feedback on your writing.

Brett McKay: Or it’s not for a novel for example. Like you might use some flowery language in a novel ’cause that’s what you’re trying to… You’re trying to do something. It’s basically beautiful writing and effective writing have two different goals.

Todd Rogers: Totally, yeah. A novel’s just a different function. We think of effective writing as being about professional practical writing where you’re texting a friend or you’re writing a web content or you’re writing an email to a coworker. All of it is like, it is not, you know, we’re not trying to layer in a third level of meaning with close reading about what adjective we used. We’re actually just trying to practically communicate something.

Brett McKay: Right. So effective writing is about getting stuff done, and you guys aren’t arguing in this book that we need to, you know, do sort of like an Orwellian news speak where all of our writing becomes effective writing. There’s still a place for New Yorker articles, there’s still a place for Tolstoy in writing like that. It’s just that you’re focused on how can we write so people get stuff done. That’s the focus.

Todd Rogers: Yeah, I like that. I mean, we probably could have incorporated that into the title. Yeah. There is a place for all that stuff, although that is a totally different function. It is leisure. You read the New Yorker Tolstoy because you are reading it recreationally to entertain yourself. And that is different than working your way through your text messages or your inbox.

Brett McKay: As a guy who’s on public policy, what have the consequences been of ineffective writing? Like real world consequences?

Todd Rogers: You could go across any domain for… It could be ineffective. Let’s say you’re a government and you’re communicating to the people who are delinquent in taxes, you’re mailing them and they’re not reading it. There’s all these studies on people are released from arrest and they’re given court summons. And if it is written in a way that is easy to read, they’re way more likely to actually show up to court and not have bench warrants issued for their arrest or signage in your public park asking you to pick up your dog’s poop written in pretty incomprehensible ways. Personally, like I have started two organizations. One is the Hub in Washington DC of using behavioral science and behavior change on public political communications and effective political communications, whether it’s Get Out the Vote or Fundraising or Volunteer Recruitment or Persuasion.

Another is a company that works with K12 school districts in communicating to families effectively, gets kids to go to school or not. And so writing in a way that makes it hard to understand, or just writing the way we sometimes do can undermine these important goals that organizations, campaigns, schools, companies have, which is trying to achieve some goal that is good for both the person who’s reading and the goal of the writer.

Brett McKay: Yeah. And I’m sure everyone’s seen examples of the bad consequences of ineffective writing at their own work. You know, the company sends out a memo trying to get you to do something, but it’s written in this convoluted way or there’s just too much going on in the memo that there’s hardly any compliance at all.

Todd Rogers: Yeah. There’s, I mean, there’s some great examples. So there’s like a sign, there is a center for plain language. It is an organization that gives an award every year called the WTF Award for just the worst signage that has been created that year. WTF means words that failed, obviously, and the sign, a real sign, getting people to pick up their dog’s poop was persons shall remove all excrement from pets. I am certain that that was an ineffective sign and that 90% of people didn’t read it and understand that the goal was to scoop your pet’s poop. So yeah, it’s comically bad, but it’s clear. I mean, I’m sure the lawyers understood it.

Brett McKay: Yeah. So before you start writing, the thing you say we need to do first is get inside your reader’s head. What do people need to understand about readers today so they understand like how a reader decides whether or not they’re gonna read something, whether they’re gonna read it all the way through, et cetera.

Todd Rogers: I think the TLDR of the whole thing, the too long didn’t read of the whole book or of this entire project that we’re doing is everyone is skimming everything, right? No one is spending as much time reading as we are writing and thinking about it. And so we need to write in a way that accommodates the reality that everyone’s skimming. So you get inside their head and know that they’re super busy and they have a long list of things to do and a lot of things they’d rather do than read whatever you’re sending them. And that includes text messages. We’ve run these experiments where even text messages, writing them so they’re easier to read makes people more likely to understand and respond to them. So if you’re gonna get in the reader’s head, it all starts with everyone’s busy and everyone’s skimming. And rarely do people care as much about what we’re writing as we do.

Brett McKay: And I love this too. You lay out a four stage process that readers go through when they’re deciding whether they’re going to engage with a piece of text, and this is whether it’s an email, a text, a Slack message, a social media post. The first part is you have to decide whether you’re gonna engage with it at all. So you just look at the thing and you kind of skim it and you’re like, well, am I even going to dig deeper into this? Second is, if you decide to engage, you must decide when to engage. Like what does that mean? Like sometimes you don’t read it right away?

Todd Rogers: Yeah, it’s a combination of the first and second. The second and third, which is the first most is the… I think the most important and kind of the most subtle, but everyone will relate to, which is if you have a long thing in front of you and a short thing in front of you, which are you gonna do first? Almost everyone is gonna do the short easy thing first. And so you look at it, it’s a wall of words and we call that deterrence. You are just deterred from reading it at all. And that’s like, I think that everyone should relate to. You open something, even a text message like, I can’t deal with that right now. Or you go to a webpage and it’s a long wall of words. The second and third are basically like, okay, so do I engage with it now or later?

And whenever I engage with it, how deeply do I read it? And I assume we actually have lots of evidence. What happens is the more difficult it is to read, the more you just sort of dart around, bounce around, see if you get the gist and eventually give up and move on. So those are the one through three. And the fourth one is deciding whether to respond or not, if you’re asking for some kind of response. And the easier the response, the more likely people are to do it. Just like the shorter the message, someone’s more likely to read that than a long one. If it looks like it’s gonna require a lot of research or it’s unclear what the question is, all these things make it just less likely people will deal with it at all, but definitely less likely they’ll deal with it now.

Brett McKay: Okay. So let’s talk about what we can do as writers to increase the odds that someone will want to engage with whatever we’re throwing at them. They’ll want to maybe act on it faster, sooner rather than later. And, you know, engage with all of it and as well as, you know, respond, get more of response so we can get stuff done. And you and your co-author lay out six principles that writers can use to make sure that their writing is effective. The first principle, and you just kind of referred to it just a minute ago, less is more. So how does more often get in the way of your readers engaging with your text?

Todd Rogers: This is my favorite. I don’t wanna speak for Jessica on this. I love this. Less is more. You could probably go back to there’s a quote that every clever person who’s ever been alive has been credited with this quote, which is, I would’ve written you a shorter letter if I’d had more time. And what I love about that is it is worthy of apology. I have wronged you by giving you this longer than it needed to be text. And second, it takes more time to write less. Both of those are sort of central to this less is more idea. And the idea is, and we’ve run randomized experiments, lots of them, where the more sentences you add, the more ideas you add, just the longer it is, the less likely people are to read and understand and respond. Whether it’s soliciting a response, getting people to fill out a survey, getting people to… We worked with the, I don’t know if we named the party, but one of the big political parties, Democrat or Republican on a big fundraising email with 700,000 donors and arbitrarily deleted every other sentence.

So it didn’t even make sense anymore. So we cut it in half by making it incoherent and still increased donations. We’ve done lots of versions of this, but the idea is just you need to know there’s a trade off. The more you add, the less likely someone is to read, understand, and respond. And the optimal length in content is not nothing or one sentence. It’s just a trade off. You just need to know, the more you add, the less effective it’ll be. But you gotta make those trade-offs.

Brett McKay: Yeah. So you lay out some rules to apply this less is more. First one, use fewer words. And I mean, if you went to college or even high school, they taught, you know, this whole elements of style, just eliminate, and that was one of the rules. Eliminate needless words. You know, have everyone seen these wordy phrases for the reason that instead of saying that, just say, because you know.

Todd Rogers: Right. In order to.

Brett McKay: Yeah.

Todd Rogers: Just say to.

Brett McKay: Just to. Whether or not, well, just weather.

Todd Rogers: Yeah, exactly.

Brett McKay: Personal opinion. Well, there’s only one type of opinion. I mean, so just things like that can go a long way. But I love this idea. Rule number two, to include fewer ideas. So we’re talking about, maybe it’s a memo or an email you’re trying to write. Oftentimes you wanna try to cram as many things as you can in that piece of text. But what your research shows is like the fewer, the better. The fewer ideas you have in your email or memo, the more likely people are going to read what you wrote.

Todd Rogers: Yeah. And that’s hard. I mean, it’s hard for people because it requires judgment and prioritizing. Like what’s the most important thing I’m saying here? And it would be good for you to know this, but it’s not necessary. And so there’s trade offs all the way, like there are workarounds, like if it’s a webpage, you could have a link to the more content, or if it’s an email, you could have it below the sign off or as an attachment. Or if it’s a report, it could be an appendix. You can keep the detail, but you just need the core thing to be the core thing. And what we have is all this experimental evidence showing that when you dilute it with more content, you just are less likely to achieve your goal. And it just requires judgements and trade-offs the whole way.

Brett McKay: Yeah. You gave this great example. This was like a text. Could be a text to get together with some friends for dinner. The original one is, I’m looking forward to our 6:30 dinner tonight. Let’s eat at Tina’s Italian restaurant at 651 Ocean Drive. Their breadsticks are awesome. I haven’t had their lasagna, but I’m ready. It’s supposed to be tasty. Let’s meet at my place 15 minutes early and we’ll walk from there. Sam and Joy, are gonna join us for dinner too. Man, if I got that text, I’d be like, oh, geez, I’m gonna just have to look at this later. But you know, you could have just said, Hey, we’re having dinner, it’s at 6:15, meet at my place. That’s all you needed.

Todd Rogers: Right. And there is information in the rest of it. It’s just you got… And if you’re aware that there’s a trade off, then you have to treat it differently. Since writing the book, I’ve worked with a guy who’s in the CIA on who writes intelligence assessments in this group, in this intelligence group, and there’s 70 pages and that’s the norm. And he was like, well, how do I write less? Because if I write 35 pages, they’re gonna think I didn’t do my job. ‘Cause the norm is the norm. The norm is 70 pages. And so I actually love that because the answer is you can’t. Like, you have to write for your audience and what your audience expects, it has to look like what your audience expects. I mean, Jessica and I wrote a 207 page book where one of the principles is write less. The book, expect the book to look like a book. And so you have an audience that has norms and expectations, it has to look like what they expect, but then within those constraints, the easier you make it for them, the better. And so with a text message, I don’t think anyone cares whether you are interested in the breadsticks or not. They’re just like, when do I show up and who’s gonna be there?

Brett McKay: Right. Okay. Let’s move on to the second principle. Make reading easy. How do we typically make reading more difficult for our audience?

Todd Rogers: We write in grammatically correct, complicated ways. And so whether it is a long sentence or using unfamiliar, uncommon words, or writing in a like grammatically complicated way, it just makes it more cognitively taxing. So like a different way of thinking about all this in length and also writing style is just how do you make it less cognitively effortful? The easier it is, the more likely people will be to do it. So even if they’re gonna work their way through it, it’s just unkind to write in a way that taxes them and burdens them. We ran one experiment with Vice President Harris when she was the Attorney General of California, where, and I mean, I don’t know, the listeners are not, I hope no one is writing like this, but the California State Legislature required that schools send families letters when their kids are late or absent. And it starts with California Education Code, section 48260 provides that a pupil, child, subject to compulsory, I mean, it’s not even written for humans, and it’s like being sent to hundreds of thousands of families so the idea is we just add a round of editing where we just ask how do I make it just easier to pull the key info out? Even if we are correct, complete, and grammatically accurate, we just make it easier.

Brett McKay: Yeah, so you apply some rules. Use shorten common words, so there’s that whole quote. I think it was Mark Twain. Don’t use a $5 word when a 50-cent word will do. So instead of saying acquiesce, you can just say agree. You know, you don’t have to get fancy. You can save the $50 words for your New Yorker article you’re writing for yourself.

Todd Rogers: Yeah, for yourself, exactly.

Brett McKay: Yeah, rule two, just use straightforward sentences. So this is, you’re not gonna do clauses and using semicolons and et cetera. Like, just really straightforward. Like, you can just glance at it, you know exactly what it says. Yeah, and then rule three, write shorter sentences. So, you know, just gotta edit, edit, edit, edit until you can get it down. You start writing like Hemingway, basically.

Todd Rogers: Yeah, that’s the idea, but no simpler than it needs to be. Right, like as simple as it can be, but no simpler.

Brett McKay: Yeah, so you give an example of a hard to read complex sentence and then editing it so it’s easier to read. Here’s the hard to read version. Often crafted from insidiously complicated language designed to abstract contentious details, ballot measures are propagated as a tool of direct democracy in 24 states in Washington, DC. So yeah, grammatically correct, but that was hard to read. Here’s the edited version. Ballot measures are used as a tool of direct democracy in 24 states and Washington, DC. They’re often written with deceptively complex language designed to hide controversial details. So yeah, that was a lot easier to read. We’re gonna take a quick break for a word from our sponsors. And now back to the show. Okay, second principle again, make reading easy. So we’re just gonna use fewer words, write shorter sentences and make sure your sentences aren’t hard to read with those parentheticals and semicolons and references back to things you said in a previous clause. Third principle is design for easy navigation.

Now, I’m sure a lot of people are listening to this. They probably learned in high school or in college, you know, some ideas or some rules about being concise with your writing. We’ve all probably read elements of style and that’s one of the rules. But I don’t remember being taught this. Well, actually I was taught this in law school, but I wasn’t taught this in undergrad or high school is thinking about the design of your writing so that it’s easy to read. So what does that look like? How can we lay out our writing so that it’s easier to navigate?

Todd Rogers: Yeah, I like this one. This is, I like all of them equally, but I like this and less is more the most. But the idea is it’s not even about writing, but realizing that people are gonna look at it and decide, do I read or not? Remember that stage of deterrence. Or once they’re reading, they’re just gonna dart around and see if they can get something out of it before they give up. And one metaphor or at least framework we use for thinking about it is that people may allocate like a fixed budget of time to reading your thing. And so then the question is just how do you make it easier for them to get what you want them to get out of it in that budget? And so that could be like adding headings. So it’s easy to know the structure. And when we actually do eye tracking, you see people jump around and read the headings first when they’re moving fast. Sometimes they just go first line, second line, but that’s when they’re anticipating reading the whole thing. But often they’ll just dart around and figure out what’s in here.

And we’ve actually run experiments where when you add headings in newsletters, you double the likelihood that people will read past the second paragraph and use anything in it past the second paragraph. The other one that people really like, and I really like, and I don’t know if you’re a veteran or how many of your listeners are veterans, but I work with a lot of active duty people in different branches of the military. One thing that they have in the US, started in the US Army and it spread across the militaries around the world is a thing called BLUF, bottom line up front, B-L-U-F, BLUF, bottom line up front. And it is a rule in the US Army, a rule that anything written to anybody, the first line has to be the bottom line. So there’s no long introduction, an enlisted person writing to a general, bottom line is the first line. And it makes it so much easier for readers and writers to know where’s the key info, where do I put the key info, where do I find the key info? But it especially helps people who are lower status, like an enlisted person writing to a general might have to say in the absence of that rule, like we ran into each other in Kandahar, you may not remember me, we chatted in the mess, I went to rival high school, we laughed about how the Philadelphia Eagles are gonna win the SuperBowl this year.

But I wanna ask you for a meeting. And so instead of the whole throat clearing, which would decrease the likelihood we get read at all, now they have this rule that doesn’t work everywhere, but having this rule in that environment and with that organization makes it just easier for everybody. And so another way to design for navigation is to have this kind of structure. So it’s easy to pull the key info out and jump around, but also when possible, make the bottom line super easy to pull out.

Brett McKay: Okay, so yeah, when you write an email, for example, just right at the very top, don’t you have to do the throat clearing stuff, just like here’s what this email is about.

Todd Rogers: Maybe, but it doesn’t work every, like it just depends on the expectations and norms, ’cause that can come off as too aggressive. I don’t do that. I still have a hope you’re well or good talking to you the other day. And I usually add that back. Like I’ll write my like all business part and then I’ll add some humanity to it because I don’t wanna come off as too aggressive. And so, but like within organizations, when we talk like the next step that Jessica and I are thinking and working on is like, so okay, so you’ve become more effective as a communicator. How do we get your team to be more effective? And it starts with just being intentional and explicit. Let’s just have a conversation. How do we write so we can all be on the same page instead of just letting these norms evolve without intention or guidance? Let’s be intentional about it. How do we write? Like the US Army decided BLUF so we can all be on the same page.

Brett McKay: Okay, I really like using headings. Like that’s something I learned in law school. When you write a memo, you break things up in headings so that the partner that you wrote the memo for can just glance at it and get to the information they might be particularly interested in. Another thing for easy navigation, add bullet points. Like using bullet points can help out a lot, especially if you’ve got more than two ideas or two requests in your communication.

Todd Rogers: Yeah, there’s a subtle one on the bullet points too where, which I think you were pointing to, is that if the bullet is kind of long, a skimmer still has to read the bullet to figure out what it’s about. And so one of the things that we have found is putting a title to the bullet, which may seem counter to fewer words. We’re just saying add a three-word title, which is extra words, makes it easier for a skimmer to know whether they should bother engaging with this bullet or whether they are free to move on. And so it’s a subtle thing, but the goal is just making it as easy for your reader to move on and get the key info that you want them to get. And then when we start talking about design, you can see that you want it to be aesthetically good-looking and consistent. And so you want the headings and titles to always look the same and things like that.

Brett McKay: Yeah, another rule you can apply for easy navigation, order your ideas by priority. That’s kind of that BLUF thing, maybe. But if you have more than one idea, like put the stuff that you care about the most right at the top, because the person’s gonna read that far and then they’re gonna start jumping around a lot after that point.

Todd Rogers: Yeah, yeah, exactly. And if they are gonna jump around, you wanna make it easy for them to jump around, which is why, like you said, you like to space it out with bullets or things, just making it visually easier.

Brett McKay: And then another rule, consider using visuals. Like don’t be afraid to put pictures in your communication. If that picture or visual can convey the message, what you’re trying to convey more efficiently.

Todd Rogers: Yeah, a colleague of mine and friend and mentor, Nancy Gibbs used to be the editor of Time Magazine. And I was really surprised to hear her say that a common feedback she would give to her reporters was does this have to be words? And I like, ’cause she’s a word person. And she said that that was a common challenge for writers, is like, is there an easier way to show this? Like, can it be a diagram instead of a full paragraph or two?

Brett McKay: And so the thing about designing for easy navigation, that takes time on your part as the writer. So it’s easy just to just crank out just a big block of text, maybe put a few paragraphs here and there. But thinking about headings, thinking about what could be bolded, thinking about the BLUF, that’s gonna take a bit more time than just cranking that thing out in just one fell swoop. You have to really be thoughtful about this. But the payoff is in the end. You invest that time upfront, so you save yourself some time and frustration on the back end.

Todd Rogers: Right, and if it’s really important for you, you wanna make it easy for the reader because you will be more effective. It’s also this kindness that I also think it’s kind of a subtle implication of all of it, is that it’s just nicer to your reader to make it easy in that way.

Brett McKay: All right, so the fourth principle is use enough formatting but no more. So I think one thing people do to help ensure that certain ideas stand out, they’ll use things like bold or underlines or all caps in a text message. How do people mess up formatting though when they’re trying to get their points across to the reader?

Todd Rogers: This has been the bigger surprise of writing this book for me. The biggest surprise has been people being really excited because they say, this has been a fight my entire career. And I have been saying, we need to write in a way that makes it easier. And people are like, this is just your taste and just your preference and has been dismissed. And now we bring to it all these randomized experiments and a lot of evidence from different ways of research. And it’s now actually a question of like scientific effectiveness. The other surprise has been when people email me, one, there’s a lot of anxiety I think that I’m gonna be judgmental and anyone who’s gonna email me, you do not have to worry. It turns out writing, reading and communicating are all hard. But the second thing is when I started saying use enough highlighting, but no more, it leads to people using different font colors, underline, bold, highlight, italics, all in the same thing. It was only eight sentences and there are six different kinds of stylistic formatting variants in the message. And the irony is that that actually is worse than nothing because it makes it harder for the reader to figure out what you think as the writer is the most important thing. Because if you only format, let’s say you bold one sentence, it is unambiguous to the reader. The writer thinks this is really important.

But if you do lots of different things, the six of the eight sentences, I have no idea as a reader what you think is most important and what any of the formatting even means. So use enough formatting. In surveys and experiments, we’ve seen that people jump to bold, underline and highlighted text. They jump to that and they think the writer is saying to them this is the most important content, get this. So it’s incredibly effective. It also licenses readers to not read anything else because they’ve gotten the key info and everyone’s goal is to move on. So you’ve got to use it carefully because it gets people to read that and also crowds out reading anything else. But then we use lots of kinds of formatting. It just confuses readers about what any of it means.

Brett McKay: Okay, so bolding, underlining, highlighting, it’s effective in getting the reader to think here’s what the writer thinks is important and to put their focus on that if that’s what you wanna do. And you see that a lot in online writing. Any formatting things that you see in online writing that aren’t effective?

Todd Rogers: I don’t like how links all get font color change and underlined because you actually, there is eye tracking research showing that people jump to that. And often the link is not the key info. The link is just the link. And so there’s this tension, there’s this norm. Everyone knows that’s what a link is, but it also kind of undermines the speed of consuming whatever we’re writing for people. And so actually the trade-off for me on that is like we wanna minimize the number of words that are linked if you can while still accurately describing whatever the link is. That’s sort of a small point, but one that aesthetically I don’t think we have a good solution to yet.

Brett McKay: All right, so use formatting, but don’t go crazy with it. You don’t have to use all the formatting options. Just pick one or two and then stick with that. And again, it’s gonna, the formatting use is gonna vary by context. Maybe in your organization you have a rule or a norm that you use in regards to formatting in order to show that this is important. So just follow that. The fifth principle is tell readers why they should care. But this is all about making sure that the reader actually engages with your content. So what can we do to show the reader like you should care about this and engage with this more than just a cursory glance?

Todd Rogers: Yeah, the way we thought about this is the obvious way to get a reader to read something is to write about something they care about. But we take it as given. The writer has the thing they wanna write about and the thing they’re trying to communicate. And it doesn’t really matter from the writer’s objectives whether this is the most interesting thing in the world for the reader, right? So we take as a given, you have your goal, your goal as a writer. Within that set of ideas or content, all we’re saying is you may as well emphasize the part of the things you’re going to say that they may value the most. So we report this experiment with Rock the Vote, which is like a voter registration organization that tries to target young people. And they were sending an email out to potential volunteers saying, will you volunteer to work at concerts to register concert goers to vote? And in one condition, the subject line was volunteer with Rock the Vote. And in the other condition, it was attend concerts for free. Maybe it was like volunteer and attend concerts for free. And so the subject line there is like drawing attention. The content is the same, exactly the same. You’re gonna volunteer at a concert and you’re gonna register voters. But we may as well emphasize the thing that people will value out of that set.

And so they ended up four X more effective, four times more effective, by just making the subject line focus within the set of ideas they’re gonna say in the message on the thing they think the recipient might care the most about. So that principle is just emphasize what the reader might care about within the bounds of what you’re already gonna say. We’re not saying you need to say something different. We’re just saying you may as well focus on the thing they may care about.

Brett McKay: Yeah, and then put that up front. Like don’t bury the lead on that. Don’t wait till the very end. Say, hey, this is why, you know, start off this like in the subject line. Here’s why you should care about this. And then put all the other information after that. And then another rule that you have for that for tell the readers why they should care is emphasize which readers should care. This is important ’cause sometimes you send out a message and it’s only going to a certain segment of the population. And if you make it too broad, you might end up causing the group of people you’re trying to communicate to just to ignore it completely.

Todd Rogers: Yeah, at minimum, it’s kind to your reader to let them loose. This is not for you, you’re free to go. But also in the intermediate term, as you communicate more, if you let people go when it’s not relevant to them, they’re gonna be more likely to attend when it is relevant to them.

Brett McKay: Yeah, you gave the example, like let’s say you have a grocery store and there’s been a recall on a product for safety. You know, the grocery store might put up a sign, notice important product safety recall information. Well, you know, if someone sees that and it’s like, well, I don’t know, maybe is it the product that I bought? I don’t, who knows, maybe I’ll just ignore this. And then you said, if you wanna have a reader’s perspective, the top line of that notice should say, if you bought soup XYZ in June, it has been recalled. And so like, oh, immediately the person seeing that, it’s like, well, did I buy that soup in June or not? And then they can make that decision whether they need to engage with it or not.

Todd Rogers: Right, well, Brett, also, I applaud you for getting, these are deep tracks in the book. You read it closely.

Brett McKay: I read the book.

Todd Rogers: Nice, yeah.

Brett McKay: And you make it easy to read. So it made me wanna keep reading it.

Todd Rogers: Yeah, we wrote it so it was skimmable. For anyone listening, it is easy to skim. But if you want the details on any topic, you can dive deep in it.

Brett McKay: You can dive deep. So the sixth principle is make responding easy. Not all communications require response, but a lot of the communications that we put out there to get stuff done, they require responses. So what can we do to make responding easier?

Todd Rogers: I know that there are other, that your listeners and you follow other behavioral scientists, like behavioral economists or social psychologists who work on behavior change, which is basically what my research has been on for the last 25 years. And all of that is this, which is the takeaway is, if you want someone to do something, we should make it easy for them. And so whether that means reducing the number of steps required to take the action or providing checklists or pre-populating forms, or even like, here’s something completely basic that we’ve all had, which is let’s schedule a meeting. There are four of us on an email thread. These six times work for me, which worked for you? And then if you reply in a paragraph, well, I can do the first time, but I’d have to move a couple meetings. The second time’s better for me, but the third doesn’t work. And the fourth could work if nothing else works. Like the amount of effort required to decipher which of the times you’re proposing actually work is, you know, you’re adding 35, 40 seconds to the next person to figure it out. If we actually wanted everyone to respond, you say, of those times…

These two work for me.

Brett McKay: Period.

Todd Rogers: Nobody cares whether it means you have to move a meeting. So the idea is if it’s important to you that someone get back to you you wanna make it as easy as possible. If it’s important for us we wanna make it easy for them. I’ll often ask students imagine you have a task that will take five minutes and a task that will take 30 seconds. Both of them are on your to-do list and you plan to do both eventually. Which are you gonna do first. Almost everybody’s gonna do the 30-second task first. And so the idea is you just wanna make it easy. As easy as possible.

Brett McKay: Right. And so that means maybe you have to do some decision structuring for the person. Like here I need you to make this decision. Just this one decision. And then after that you can maybe follow up if you need to make other decisions but just pick one thing you want them to respond to.

Todd Rogers: Yeah. In the less is more there’s fewer requests. If you ask someone to do two things you are less likely to get them to do any one of them than if you ask them to do just one. The idea is we’ve got to prioritize. We have our goals and we need to write in a way that makes it easy for the reader to help us achieve our goals. And that means simplifying the request. Like you’re saying if I asked you what do you think versus I’m going to submit this. Agree or disagree? Yes or no? Do you sign off? They end up being… It’s much easier to say yes agree submit than an open-ended what do I think? And so it’s just my prediction and some of the evidence is… All the evidence is consistent with. People are more likely to respond and more likely to respond sooner when it’s a yes no question than open-ended.

Brett McKay: Yeah. Another rule you have in this make responding easy is organizing key information that’s needed to take action. So let’s say you make a request for something at your work or something but then in order for the reader to answer that they have to start trolling through all this information or kind of doing this scavenger hunt to even start putting together a response. Well, if that’s the case they’re gonna drag their feet on that or they’re gonna take a long time. Instead if there’s an answer you need right away provide the reader with as much information as possible that they need in that communication so they can give you the response you need. Okay. So those are the six principles and I think if people had those in mind as they wrote they’d get a lot more done with their writing. At the end of the book beyond these six principles you talk about some other ideas that you’ve seen in your research and your own personal experience when it comes to communicating and getting people to respond to your writing and getting stuff done with writing. And one topic you talk about is frequency of communicating.

This is something I struggle with when it comes to communication in my business or in organizations that I belong to ’cause I worry about communicating too much. ‘Cause I don’t wanna bug people. But something I’ve noticed is that when I do communicate more I get more responses. I get more people showing up for things or doing things. So what’s the research say? How often should I hit people with the same information so that it’s effective?

Todd Rogers: There is not a single answer for this just like there’s not a single stable answer for when should you communicate because the equilibrium changes. If the answer is Thursday at 3:00 PM everyone is gonna communicate on Thursday at 3:00 PM making yours less effective and then the equilibrium moves around it’s an unstable equilibrium. Similarly for frequency of communication I think there isn’t a good answer but my first pass at it is if you think that your reader wants your communication and values it like your newsletter? If you think that they really want it then you wanna be consistent so they know when to expect it and have it look the same so they can recognize quickly what it is. In the intermediate term if we communicate all the time we will decrease people’s likelihood that they associate us with something they should read and they will start to view us as a pest and they will unsubscribe. And so I know there are a lot of organizations that have big lists. The balance that we’re always talking about is you can increase donation for example by sending more messages you also increase unsubscribes and so what’s the two, three-year horizon consequence is you may end up being worse off for having gotten more donations in this week by sending more messages.

But in the intermediate horizon you’re worse off. There isn’t a great answer. I don’t know. Do you have thoughts on this? It sounds like you wrestle with it.

Brett McKay: I wrestle with it. No. So it sounds like it’s the killing the goose that lays the golden egg problem.

Todd Rogers: Right. Yeah exactly.

Brett McKay: Right. You can extract a lot of value by doing a lot of frequency in the short term but in the long term you end up killing the thing that provides you value. So when it comes to let’s say you belong to I don’t know a sports league or I don’t know a church congregation there’s an event coming up. That’s the thing where I’ve found that more frequent communication helps up to a point. You can’t just do one and expect to get a response ’cause people might just miss that first email or they read it and then they forgot about it and then the event comes up two weeks later and they’re like I didn’t know about it. It’s like well I sent you that email. So I think something like that I need one email maybe two weeks out and then maybe a week out you send a reminder and then two days before you send a final reminder that could work. I mean, if you did a reminder every single day people are just gonna tune you out.

Todd Rogers: I think there’s consistency in that too Brett where it’s like I’m on a board where they send materials out a week in advance and then they send them the night before again. And so I know two weeks in advance I don’t need to deal with this ’cause I know it’s coming back right before. And so if they stopped doing that and they just did it occasionally I think I and the other members would all be less prepared because we’ve come to expect that oh this is just the forewarning before the real one. I think consistency is probably key there. People start to associate you with that pattern.

Brett McKay: Yeah. But I also think yeah frequency can be a tool to help a harried reader because people are just getting inundated with stuff and they’re gonna miss things. This can even happen with your friends with text messages, right? You send a friend a text and you don’t hear back from them and you think oh man they hate me. They don’t like me anymore. So now they… If their text inbox is anything like yours it’s just getting inundated with two-factor authentications, reminders about their kid’s doctor’s appointment. So maybe the friendly thing to do would be, Hey, follow up two days later if they haven’t gotten back to you because they needed that. So I think with frequency yeah there’s a balance but I think maybe don’t be afraid of nudging more than you think ’cause you’re probably not actually nudging ’cause the people probably didn’t see your initial message anyways.

Todd Rogers: Yeah, I like that. I also think when you talk about a friend or a coworker with whom you communicate a lot I do think the answer, and this is probably the answer for most questions is to communicate better and to actually have a discussion about it. And this is something that we stumbled into. Well, there isn’t a universal rule for this. Some people will view you pinging them again as like yeah man I read it. I got you. Stop harassing me. Others will be like Thank you. And so a different way if this is someone you communicate with a lot is to just ask. Would it be useful if I send follow-ups or not? I actually have all sorts of people that they have incredibly varied preferences and for people I communicate with a lot. I actually have started to learn what they are because I ask.

Brett McKay: I’m curious are there any AI tools that you’re seeing out there that are helping writers write more effectively?

Todd Rogers: Are you setting me up for… Did I show you mine?

Brett McKay: No.

Todd Rogers: Or is that…

Brett McKay: No.

Todd Rogers: So early on we trained GPT-4 or GPT-3.5 and then now GPT-4o the OpenAI’s latest LLM on the… With your listeners in the show notes I hope we’ll share the checklist. There’s a one-page checklist for how to write for busy readers and we trained the large language model on these principles and then we fed it what’s called Few-Shot Learning just three pre-post examples of emails an original and an edited. Original edited original edited. It’s incredible at editing emails so that they are skimmable and it now has hundreds of thousands of uses and I get emails all the time from people saying that they put any important message through it to just get suggestions. So it’s on our website. I’ll share it with you. It’s writingforbusyreaders.com but it’s very cool. The large language models you could think of as they learn inductively they consume all the way we’ve ever written and then they infer rules and predictions.

This is much more deductive top down. We’re like look there are these six principles. We should edit through the lens of these principles because this is actually what the science suggests people are more likely to read and respond to and it learns those and then it can revise in accordance with and we shouldn’t use words like in accordance. We shouldn’t use… It writes in ways that are consistent with that. So writingforbusyreaders.com but I love it. We’re trying to get it internalized by the other big large language model especially the ones who work in email clients.

Brett McKay: Well, Todd this has been a great conversation. Where can people go to learn more about the book? So I guess that one website?

Todd Rogers: Writingforbusyreaders.com writingforbusyreaders.com and the Too long didn’t read of this whole thing. If you made it to the end and you don’t know the big takeaway. The big takeaway is we should add a round of editing to everything we write where we ask ourselves how do I make it easier for the reader? How do I make it easier for the reader? Because the easier it is for the reader the more effective we are at achieving our goals and it’s just kinder.

Brett McKay: I love it. Well Todd Rogers thanks for your time. It’s been a pleasure.

Todd Rogers: Thanks Brett.

Brett McKay: My guest today’s Todd Rogers. He’s the author of the book Writing for Busy Readers. It’s available on amazon.com and bookstores everywhere. You can find more information about the book at the website writingforbusyreaders.com. Also check out our show notes at aom.is/busyreaders where you can find links to resources and we delve deeper into this topic.

Well, that wraps up another edition of the AOM Podcast. Make sure to check out our website at artofmanliness.com where you can find our podcast archives as well as thousands of articles that we’ve written over the years about pretty much anything you’d think of. And if you haven’t done so already I’d appreciate it if you’d take one minute to give us a review on Apple Podcast or Spotify, it helps out a lot. And if you’ve done that already. Thank you. Please consider sharing the show with a friend or family member who you think would get something out of it. As always. Thank you for the continued support. Until next time this is Brett McKay reminding you to not only to listen to AOM Podcast but put what you’ve heard into action.

This article was originally published on The Art of Manliness.

Many people think becoming wealthy is all about having the right job, inheritance, or just lucky breaks. And those things can certainly give you a leg up. But according to my guest, the biggest key to building wealth is your mindset, as research shows that even high earners can stay broke forever if they’re trapped in poor thinking patterns, while others can build lasting wealth on modest incomes by developing the right mental approach.

Dr. Brad Klontz is a financial psychologist, wealth manager, and professor, and the co-author of Start Thinking Rich: 21 Harsh Truths to Take You from Broke to Financial Freedom. Today on the show, Brad explains the critical difference between being broke and being poor, how learned helplessness keeps people financially stuck, and practical ways to develop an agentic, wealth-building mindset. We also tackle thorny issues like the role of homeownership in building wealth and how to handle relationships that might be holding back your financial future.

Resources Related to the Podcast

• Brad‘s previous appearance on the AoM podcast: Episode #529 — The Money Scripts That Are Holding Back Your Financial Future
• AoM Podcast #321: How to Think About Money
• AoM Podcast #536: How to Achieve a “Rich Life” With Your Finances
• AoM Article: Taking Control of Your Life
• AoM Article: Avoiding Learned Helplessness
• AoM Article: A Young Man’s Guide to Understanding Retirement Accounts — IRAs
• Compound Interest Calculator 

Connect With Brad Klontz

• Start Thinking Rich website 
• Brad‘s website

Listen to the Podcast! (And don’t forget to leave us a review!)

Listen to the episode on a separate page.

Download this episode.

Subscribe to the podcast in the media player of your choice.

Read the Transcript

Brett McKay: Brett McKay here, and welcome to another edition of the Art of Manliness podcast. Many people think becoming wealthy is all about having the right job, inheritance, or just lucky breaks. And those things can certainly give you a leg up. But according to my guest, the biggest key to building wealth is your mindset, as research shows that even high earners can stay broke forever if they’re trapped in poor thinking patterns. While others can build lasting wealth on modest incomes by developing the right mental approach. Brad Klontz is a financial psychologist, wealth manager, and professor, and the co-author of Start Thinking Rich: 21 Harsh Truths to Take You From Broke to Financial Freedom. Today on the show, Brad explains the critical difference between being broke and being poor, how learned helplessness keeps people financially stuck, and practical ways to develop an eugenic, wealth-building mindset. We also tackle thorny issues like the role of home ownership in building wealth. And how to handle relationships that might be holding back your financial future. After the show’s over, check out our show notes at awim.is/thinkrich.

All right. Brad Klontz, welcome back to the show.

Brad Klontz: Excited to be here.

Brett McKay: So you are a psychologist who specializes in helping people with their money issues. And we had you on the podcast way back in 2019 to talk about this idea of money scripts. And that’s episode number 529 for those who wanna check that out. You got a new book out called Start Thinking Rich: 21 Harsh Truths to Take You From Broke to Financial Freedom. This is a book you co-authored. And you start off the book in the introduction talking about the difference between being poor and being broke. What’s the difference between the two and why is it important?

Brad Klontz: So our chapter titles are very insulting to poor people. And we felt like it was important to make a distinction here, ’cause I see it as two very different things. So broke is when you don’t have any money. I’ve been broke. A lot of us have been broke. Poor is a mindset. And the problem with a poor mindset, it’ll keep you broke forever. And there’s a lot of people who are broke. For example, are very high earners, but they’re living paycheck to paycheck, it doesn’t really matter how much money you’re bringing in. You’re never really gonna get ahead in terms of your net worth and lowering your financial stress if you have that poor mindset. And so a lot of my work has been trying to identify what is the mindset of wealth? What do the mindset that ultra wealthy people, what do they have? And then what is the mindset of middle class and lower? And what can I glean from the research on the ultra wealthy? And how they got there to teach as many people as possible. And really, it started as a personal mission coming from a low-income family myself, trying to figure out why do all these hardworking, intelligent, God-fearing people that I’m around, why are they… Why have we been broke for generations?

Brett McKay: Okay, so being broke is just not having money. But being poor, it’s about a mindset. And it sounds like you can be poor even though you have a lot of cash flow. You can still be poor.

Brad Klontz: Absolutely. I think that many, many Americans are in that position right now.

Brett McKay: And something I think we need to say from the start is that you and your co-author aren’t saying that there aren’t systemic problems that work to keep people poor and that there aren’t injustices that may need to be addressed. What this book is about is, okay, even if there’s changes you’d like to see, and even if those changes may come in the future, you’ve gotta operate and figure out how to get ahead in the current system. So like, what do you need to understand to do that?

Brad Klontz: Right. And so looking at it like the system is, well, first of all, it’s obviously unfair. I mean, I hope that’s obvious to everybody. Like if you grow up lower income, it’s very unfair. You are not getting access to things that people who have higher income, live in better neighborhoods, better school districts are getting. It’s just absolutely unfair. And certainly I applaud efforts to, improve the system, make it better, whatever. And that’s really, really important. See, I’m a clinical psychologist, though. And so when people come into my office, I am trying to help them succeed in a very unfair world. We even talk about capitalism in the book. It’s like, we’re not, economists in that sense. We’re not out to change a system or whatever. Is capitalism good? Is it bad? I mean, you can go ahead and decide that. The bottom line is, it’s a game, and that’s the game we’re in.

And if we lived actually in a communist country, this book would be a survival guide for how to thrive in a communist country. That’s essentially what we’d be writing. So we’re pragmatic about it. We’re not taking a side here. It’s really, really powerful to look at it like it’s a game. And so how are you feeling about the game you’re playing? So first of all, recognize that it’s a game. We talk about multiple ways to approach, making money. You know, there’s the entrepreneur game. There’s the, corporate game. It’s like, just recognize that it’s a game. So if you’re not happy with the results you’re getting, you have to ask yourself, am I playing the right game? Maybe you need to shift up the games. And then also, do I know the rules? So if you want to grow your net worth, since that’s what we’re talking about here, find out how people are doing it and then go ahead and do what they’re doing.

Brett McKay: And as you mentioned earlier, you’re coming at this from the perspective of personal experience. Like you yourself grew up poor.

Brad Klontz: Yeah. Grew up low income. My parents divorced when I was two years old. And if you weren’t sort of low income before that happens, you’ll be afterwards. And so my mom was a part-time teacher and I grew up not having much money. And this was something that I faced all along my development and it really does suck.

Brett McKay: And your coauthor, he weaves his story in as well. His parents were immigrants and they were millionaires by the time they retired and they weren’t working like a Silicon Valley entrepreneur type thing. They were just doing workaday stuff that most people do. Like his dad started washing cars at a car dealership and then worked his way up to being the parts manager.

Brad Klontz: Yeah. Adrian’s is a fabulous story. His father immigrated from Mexico, had nothing, had to steal food in Mexico to even eat, experienced a level of poverty that I’ll never experience and Adrian certainly never experienced. And what I find fascinating about his family’s story and he really traces it to his grandma’s entrepreneurial nature and hustling and doing everything she could do to get her family in America. I sort of compare his family who his dad first generation and he became a millionaire and he was a radical saver. Right. So Adrian talks about the story, his dad and all the family pictures, his dad had a Toyota shirt on that was his work shirt. And in retrospect, he’s asking his dad, Hey, what’s going on? Why are you always wearing that shirt? And he’s like, well, I didn’t buy clothes for five years. That was his mindset. I’m gonna save every penny I possibly can. And I sort of compare his family to my family and no disrespect. I love my family. Some branches of my family, we’ve been in the United States since the Mayflower and both sets of my grandparents were living in trailer parks. And so they actually never were able to accumulate any money. And it’s just such a curious thing to examine. And we’ve really nailed it down to the mindset they had around money.

Brett McKay: So let’s talk about that mindset. What are the big differences between a poor mindset and a rich mindset?

Brad Klontz: Fairly simple and logical, but I’ll talk about the psychology behind it. So essentially, how do you become rich? Well, first of all, it’s really important to understand that most wealthy people in the United States are self-made. And this is a very empowering understanding. Like when I was growing up lower income, I thought the only way to get rich was to be born rich or you had to go to private school. I had all these myths about millionaires in the United States. And it’s really, really empowering to know that no, no, no, most of them are self-made, like upwards of 90%, in between 80 to 90%. So just understanding that they got it on their own, they didn’t inherit it. And then you have to ask yourself, well, what are they doing differently than people who aren’t able to climb the socioeconomic ladder? And there’s a few psychological elements. The financial elements are living below your means, saving a percentage of every dollar you make and investing it. Like this is probably the mindset that’s the most important. And if you have this mindset at an early age, you’ll be a millionaire, plain and simple.

You can work in fast food your entire life. I’ve actually done the numbers with a lot of young people over the years. The job actually doesn’t matter nearly as much as having this mindset. And so they’re looking to buy assets. They’re looking to invest. They’re not racking up credit card debt. They’re not buying stuff to try to impress other people, which is a real constant draw in our culture, especially if you’re on Instagram and social media, you’re always feeling less than. And they’re looking to invest for the long term. That’s the rich mindset. The poor mindset, conversely, people, they get money, they spend it. They’re buying labels instead of stocks. They’re trying to impress other people. They’re not investing at all. And so those are the like the behavioral patterns. But we’ve also found some really deep psychological beliefs that have a profound impact. And the one I that I think is the most important. And this is based on all the research in psychology related to success in education, success in relationships, financial success. And I have an 11-year-old and a seven-year-old, and this is the number one mindset that I’m trying to instill in them. And that is something called an internal locus of control. And so this is really the location in which you attribute control of the outcomes you’re getting in life. This is a rich mindset that if you have it, you will become unstoppable. And I would imagine you’d succeed in every area of your life.

Brett McKay: Okay, so if you don’t have an internal locus of control, you basically blame your external circumstances for your situation.

Brad Klontz: That’s exactly right. And so when something’s going bad in your life, you know, easy examples like when I walk in the door and my wife’s grouchy and she takes it out on me, it’s so tempting to just blame her for the fact that I’m not feeling understood. And does she really realize how hard I’m working? And an internal locus of control would say, so I wonder if there’s anything I can do to improve my relationship with my wife. It’s a powerful mindset shift because it’s so tempting to blame everybody else for your problems. And the problem with it is there’s a lot of people out there you can pin blame on. And a lot of these people are not very nice. And so you could get stuck in this never-ending cycle of every time something bad is happening in your life financially, you blame the stock market. You blame somebody at the bank loaned you money for a house you couldn’t afford. Why did they do that to me? And you can find people who are blameworthy, but that is gonna keep you stuck in a cycle of failure.

Brett McKay: And so having an internal or a strong sense of an internal locus of control, it’s all about developing your sense of agency that you’re able to act on the world and you’re not just acted upon.

Brad Klontz: Right. And that’s ultimately where this strength comes from. It’s not about belittling you or shaming you. It’s about actually getting quite excited that what’s happening in your life, you have an impact, you helped create it consciously or unconsciously. And if you can recognize that, that’s when you can make these shifts that are really, really important in terms of becoming wealthy.

Brett McKay: So related to this concept of an internal locus of control, it’s like the opposite of it. It’s something called learned helplessness. How does learned helplessness play into all this?

Brad Klontz: Yeah. So learned helplessness really does help explain why so many people are stuck in a poor mindset and can be there for generations and pass this poor mindset down to their kids. And really dates back to some horrific studies that psychologists did on dogs. And so what they would do is they would stick a dog in a cage and they would electrify the bottom of the cage and see what would happen. Well, you could probably imagine what would you do in that situation? The dogs try to escape. They’re yelping, they’re barking, they’re jumping up and down. And eventually they realize escape is impossible. And so they sort of shut down. And this is also an adaptive response. And they just lay down and they whimper. Okay. So they have learned that I cannot escape from this, and it’s entirely accurate. Now, the scary part about this, and I’ll say this too, if you grow up in poverty, if you grow up in an abusive home, this is a mindset you will learn.

It’s like, I can’t fight back. I can’t escape. I’m going to try to survive, and so I’m gonna get real small. I’m gonna stay in the corner. Escape is impossible. I have learned that I’m helpless. Now, this is the challenge. What they did with those dogs in the next experiment, they put them in a cage that had a barrier in the middle. Half the cage would get electrocuted, the other half, no electrocution. And then what they would notice is that they’d stick a dog in there who hadn’t been in the previous trial where they got traumatized and the dog would jump around and then find that, I jumped to the other side, there I’m safe, no more shock. But the dogs that were in that first condition who learned that escape is impossible, they wouldn’t even try. So literally all they had to do is hop over this barrier, no more pain, there’s escape. And you think about it metaphorically for us, there’s abundance, there’s the financial goals you want, there’s the happiness, it’s right there.

And as a psychologist working with people who are stuck in this learned helplessness, it’s so obvious to me that all they have to do is this, it’s right there. They don’t believe it. They don’t believe that it’s possible because they’ve been so beaten down earlier on in life where escape was indeed impossible. They developed this learned helplessness attitude. And so it’s so crippling. It’s so sad to see, but it makes sense how people end up there. And you’ll find that they will tell you all the reasons why they can’t get it, why it’s impossible for them. And it’s based in a real experience. Like these experiences they had were very, very real. What’s so fascinating and so should be inspiring is that there’s escape right there. They could do it. And if you have that learned helplessness mindset, you’ll hear things like, oh, nine out of 10 millionaires are self-made in the United States. And you’ll start to discount that. You’ll look for evidence to suggest that’s not true. And I get this on social media all the time. Self-made, you know. Somebody changed your diaper. So they’ll essentially redefine what the word self-made means to try to prove themselves right. And so that’s one of those instances of a poor mindset that just keeps people down.

Brett McKay: Well so how do you increase the size of your locus of control and overcome learned helplessness? I think this is like the base issue as a clinical psychologist that you’re dealing with. It’s like, what are the research-backed and then also experience-backed tactics that people can do to start increasing their sense of agency and decreasing the amount of learned helplessness.

Brad Klontz: Well, first of all, you have to be somewhat open-minded. So you have to want something better and you have to believe it’s possible to a degree, even if it’s like 1%. Do you have 1% agency over your life? I can work with that. We just need to get you to the 1%. I think you probably have like 99% ’cause there are certain things that are gonna happen that are outside of your control. But I’d love to talk to you about that ’cause maybe we can find some areas in which you do have control. But it’s just like opening the crack a little bit. And I think one of the things that helps the most. And it’s one of the reasons why in this book, I’m telling a lot about my personal story and Adrian’s telling a lot about his and he has such a incredible story. He’s most famous on social media for making $1.7 million in one year while living in a van, becoming a multimillionaire in his early 30s. What we’re trying to do there is tell stories because what we want you to do is find an example of somebody who came from a similar situation that you are in right now or that you came from and was able to find that success. Because I think that all you need to do is see somebody who is like you comes from an area you came from that you can relate to. And then all of a sudden the light bulb can switch on for you and be like, oh, you mean maybe I can do it.

Brett McKay: Okay. So it sounds like you got to have a little bit of hope, a little bit of faith in order to overcome these things.

Brad Klontz: I think so. And it’s one of the reasons why, I’m passionate about trying to spread that hope and healing around.

Brett McKay: Yeah. And then also just start off small with small things. Like Stephen Covey talks about in his book, The Seven Habits of Highly Effective People. He talks about the locus of control and he talks about just doing small things to increase your locus of control. So maybe you can’t become a millionaire in a year, but like, what can you do now within the range of possibilities that are in front of you? What are you able to do? And then do those things. And as you do those things, your sense of agency increases. So you can start doing bigger and bigger things.

Brad Klontz: I love it, Brad. And so one of the things we really encourage people to do is save and invest a dollar today. And, ideally I try, I shot for like 30% of my income that I saved and invested. And by the way, I did it immediately when I started making money. So I felt like I was rich, I was making like 25,000 a year. I was like, oh my gosh, I’m making so much money. Well, Luckily, I had had this mindset by then. I was in school forever, so I was in my late 20s. And I had read books about it. I’m like, okay, so I got to do this if I wanna become wealthy. And so that’s immediately what I did. And to tell people like, oh, you gotta save 30% of your income. And Adrian saved 95% of his income that year living in a van.

That’s like an impossible dream for most people. Find, catch it just before you get your first job, it’s very, very easy. But many of us have a life. And we have kids, and we have a mortgage, and we have car payments, whatever. So do 1%, like commit to investing 1%. And we have chapters in the book too, that sort of challenged this notion that you can’t afford to invest. I hope you had a chuckle with some of those. They’re very real examples with good math behind them, but you can’t afford to invest. Like I just wanna sort of push back a little bit on this, but just do 1% ’cause what it takes for you to invest 1% of your income, you gotta go open an account. You gotta look into, oh, should it be a Roth IRA? You got to figure out what I’m gonna invest in it. By the time you do that groundwork, that’s essentially most of the work it takes to become wealthy. So start with 1%.

Brett McKay: We’re gonna take a quick break for a word from our sponsors. And now back to the show. I wanna get into more specific tactics, personal finance tactics. So you have a chapter about investing early and investing, even if it’s just a dollar or just a percent of your income. And there’s some personal finance advice out there. I’m sure you see a lot of it ’cause you’re like in that. Personal finance TikTok Instagram world where there’s a whole bunch of talking heads giving out different bits of advice. And there’s this idea that, well, you shouldn’t invest until you have paid off your debt. But you say, no, you don’t need to wait until you pay off your debt to start investing.

Brad Klontz: Yeah, like as a psychologist, I think it’s a terrible idea for several reasons. First of all, I get it on the math side. You know, if you’ve got like a credit card that’s got 35% interest, here I am saying, well, you need to start investing. And you’re like, whoa, I’m gonna be shooting for an 8 or 10% return and this, yeah, I understand. I get it, I get it. I just want you to start investing right now. Now let’s say that you can put 10% of your income towards paying off debt investing, whatever, make it 1% and do the 9% over there. But the problem is for a lot of Americans is you’re never gonna be out of debt ever. You know, what’s gonna happen is you’re gonna pay off your credit card debt, then you’re gonna pay off your student loan.

Now you got a mortgage for 30 years, then there’s another car payment, but then your kids go to school. I mean, the idea that once I pay off my debt, then I’ll start investing. You are gonna lose the most important thing in the wealth formula. And that is time. Time is the most important thing. You want to have money invested for as long as possible because that’s where that magic of compound interest really starts to snowball. And that’s where these small amounts you’re putting in each month become worth millions. It’s that time factor. So invest as early as you can, and if you’re not doing it now, start as soon as you can.

Brett McKay: Okay. So for someone who’s listening to this and they’re feeling overwhelmed because they got student loans, I mean, they got a mortgage, they got a car loan, and they’re like, I just don’t, I don’t have room for investing. So what would that look like? I know it’s gonna vary from person to person, but broad strokes, how do you balance paying off debt and doing investing at the same time?

Brad Klontz: Yeah, I say don’t make it too complicated. I love the idea of identifying like three financial goals, getting really excited about them, we did a study on this where we had people visualize those goals and we saw a 73% increase in savings after just doing it that for an hour. So people went from about 10% to over 17% because they were so excited about it. So whatever that is, whatever that goal is for you, maybe it’s financial freedom at a certain age, maybe it’s a house someday. Like get a real exciting, clear vision of it and then just decide how much you can right now. Like maybe you have a goal, you want to save 10% of your income towards this goal or whatever. You can only do 1%. You just commit to doing it and, learning what it takes to do because it’s really not all that complicated.

Brett McKay: And then you, also recommend when people do start investing, don’t complicate your investments. You don’t have to do the whole penny stock, Robinhood, AMC stuff. Like just get an index fund and pile your money in that so you don’t have to think about it.

Brad Klontz: That’s exactly right. And I, as I mentioned, grew up low income and that was a huge mistake I made when I had $100,000 in student loan debt and I saw a buddy of mine make $100,000 in one year trading stock and he was trading stocks on margin. This guy knew nothing about what he was doing. ’cause I even asked him, I said, why are you buying that stock? He’s like, I have no idea. Click. And I was like, it’s really that easy. And, I got appalled. The reason I make TikTok videos is because I got appalled because a few years ago I’m like, oh my gosh, day trading’s back. I saw it on TikTok. And so now I’m a psychologist, but I also own an asset management company. So I actually manage money like close to a billion dollars for ultra wealthy people.

So I actually know what wealthy people do because I do it for them. And what they don’t do is any of the stuff that you’re seeing people sell you on get rich quick ideas. Whether it’s I’m gonna be a trading crypto, I’m gonna be trading stocks, this new NFT. To me, I put it in the same bucket as lottery and it’s a get rich quick scheme. I fell for it Coming from a lower income environment. You’ll hear stories about people who made it so big on this coin or that coin. It’s so seductive. It’s a poor mindset. It’s a poor mindset. Even on like day trading, like 97% of day traders lose money, 3% make money, but only one of those people make more than minimum wage. Their studies show that the longer you do it, the worse you do.

Even the pros on Wall Street can’t consistently beat the market. And so what makes you think you can do it? Some of that’s random error, it’s just not how people get rich, but it is how people stay poor because they have this idea, I’m gonna make it quick and I get why, I get why you have it, man, I had it. You know, it’s like being poor sucks. And so you don’t know how people become wealthy. So that’s what you’re very tempted to do. And so to your point, and I can’t give financial advice because I don’t know what, everyone’s circumstance is, but I’ll tell you that a lot of personal financial experts suggest as, starting out look at a Roth IRA. So just investigate that. And then when it comes to investing research, something called a target date fund. And what you’ll notice is it has a few key factors in there that are really important.

It’s diversified. So instead of like buying one stock, you own thousands of stocks. Instead of buying one size of stock like a small company, a large company, you got all of them across the world. It’s very diversified. It adjusts as you get older. So it’ll become more conservative as you get older. The point is you open that up and then you forget about it. And then you focus on what wealthy people focus on. Self-made. Wealthy people don’t focus on trading stocks. They don’t do that. They outsource it to these fund companies or in a financial advisor as we’re describing right now. And what they do is they focus on making more money so that they can invest more money. And that’s how they get there faster.

Brett McKay: Okay, so it sounds like becoming wealthy is pretty boring.

Brad Klontz: It’s pretty boring. And I know it sounds terrible and I know that many people aren’t believing me right now. And I just, a big part of our book too here is we don’t want you to make the same mistake. Save yourself some time. The poor mindset towards investing too is like, I’m gonna take this thousand bucks and I’m gonna turn it into 20,000 bucks this year. There are so many sharks out there waiting for you to do that. And they’re just gonna make money off you. Nobody does that. Who’s wealthy, nobody. And people who do that don’t become wealthy.

Brett McKay: So you got a chapter with another provocative title, get rid of your poor friends if you want to get rich. When I read that, I was like, man, this is harsh. What do you mean by that?

Brad Klontz: It is harsh. And I wish I could blame Adrian. I wish he was here. I like to blame the most offensive chapters on him. But if you’ve read any self-development books, you have probably heard something like you’re the average of your five closest friends. Like this is very common knowledge and in psychology it makes sense. So we have spent 99% of our time on earth in hunter gatherer tribes of about 100 to 150 people. And we’re very closely connected. You know, we ate what they ate, we wore what they wore. We were, we did what they did. Okay. And so that’s the way we’re wired. And so if you are hanging around a bunch of people who have a poor mindset, now remember we’re talking about a poor mindset. We’re not talking about being broke because I know a lot of broke people and I spend five minutes with them and I’m like, oh, oh, this kid’s gonna be a multimillionaire, like slam dunk.

Like I could just tell they have a rich mindset. I also know people who make six figure incomes, multiple six figure incomes. And I’m like, oh, they’re gonna be broke forever. Because they have a poor mindset. They just spend the money as soon as they get it. And so what we’re talking about here is if you want to climb the socioeconomic ladder, you are gonna have to distance yourself from people who have a poor mindset. ’cause they’re gonna suck you right into it. They’re gonna suck you into the spending. They’re gonna suck you into the competition around who can have the fanciest watch, who can have the most expensive car? And that mindset does keep you broke. It’ll keep you broke forever. And so what you wanna do is find people, first of all, if you don’t want to lose all your friends, immediately, try to convince them to come with you on this journey.

Let’s start there. And you’ll find a lot of them sort of refusing. What you want to do is be looking for people who have this rich mindset who are bragging about. It’s so cool too. I’ve met some communities. There’s this whole thing called the FIRE community, which is stands for Financial Independence, retire early. And I just went to one of the meetups over here in Colorado. These, people and, they’re crazy. They’re having conversations that are very different. They’re like bragging about what percentage of their income they’re investing. They’re having competitions on who’s paying the least amount for the best coverage for their auto insurance. If you rolled up with a Tesla or an expensive car at one of these things, they would look at you like you’re an idiot. I mean, they would just like look down on you.

Because that is a tribe that is focused on getting financial independence. And so they’re using all the tools even to the degree, which I don’t connect with, right? But because it’s so extreme, but they want it so bad, they’re willing to do that. So the general idea here is if there’s a goal you want to achieve, you should surround yourself with people who are moving in that direction or who are even a step or two ahead of you because you are going to, subconsciously you’re gonna drift towards what your closest friends are doing.

Brett McKay: Yeah. And you talk about your friends of the poor mindset. You can often be like crabs in a bucket, right? You’re trying to get, trying to improve yourself, but then like, ah, I don’t like that. And they’re gonna try to bring you back down. Did you experience that when you’re trying to work your way up in the world?

Brad Klontz: I did. I did. And it’s easy to look at those crabs as being nefarious. You know, they’re not, they love you. This is really what it comes down to. It’s that tribal mindset. It’s like all of a sudden they see you and you’re packing up your stuff and you’re about to leave the tribe and they love you and they don’t wanna lose you. And so they will try to sabotage you. They’ll try to keep you back in the tribe because they’re afraid you’re gonna drift away and you’re not gonna be a part of their life. And so that’s the way I look at it. It’s not like they’re trying to tear you down because they’re trying to be mean. They don’t wanna lose you. And so I would hear things like, oh, it must be nice and that could be like, must be nice that you have this car must be nice that you have some retirement savings, must be nice that you’re able to take a vacation or you’re able to work less.

And I’ve spent a lot of time too trying to teach the people closest to me how to make more money. And one of the things I love about collaborating with Adrian is that’s his deal. Like he teaches people how to make money online. And, just, just as an example too, I got an 11-year-old who’s making five grand this month by doing one of these side hustles that Adrian talks about in his book, that’s true too. I’ll show you the receipts. So I tried and I will continue to try to support and model, but the bottom line is there’s pressure and you feel guilty. And what I’ve noticed over time, not just in my life but many other people’s lives, there tends to be a bit of a drift because people start to feel bad around each other. And if you think about it as an example, let’s say that all of a sudden you’ve got 50 times the net worth of your best friend.

It’s like, when is it gonna start to be awkward? You know, is it like you pay for their dinner every time? You’ll say, of course I do. Well what about your trips? You’re gonna pay for the first class ticket or like in that movie bridesmaids, you’re gonna make them go and coach while you’re up in first class. It creates all these awkward situations and people don’t really want to talk about it. They don’t know how to deal with it and then they sort of drift apart. And so I think people know that on a visceral level. And so I see people come into money and then blow it all because they actually don’t wanna leave their tribe because of all that deep emotional connection and stress that ensues as you start to leave your tribe. And so that’s why I think it’s really important to make connections in, this tribe that you want to join someday, whatever tribe that is, whatever your, goal is in life.

Brett McKay: And you, also talk about you don’t have to cut off your friends completely or even family members. Like you just have to learn like it’s an issue. As you try to make yourself better and try to make a better life for your immediate family and for yourself, there’s gonna be that awkwardness. You’re just gonna, you’re have to learn how to deal with it and you might have to just learn how to live with that tension and be okay with it without having to resolve it.

Brad Klontz: Yeah. And maybe you don’t talk to them about some of the things you’re doing, you know? Maybe you’re just not as open about your income. You know, I talk about Adrian a lot because we’re buddies, but like when I call Adrian and I tell him about my net worth went up this or I got this business. He’s like, yeah, that’s awesome. And, there are people I wouldn’t call because I’d feel guilty and they’d be like, yeah, that’s great. You know, you’re talking about this business deal that you just signed. You know, that’s three years of my income, you know? And so you just have to be careful because that’s a terrible feeling and subconsciously you’re actually gonna probably try to sabotage yourself subconsciously because you feel terrible about it.

Brett McKay: Another observation you make and you write about this in the book is that poor people, people with a poor mindset, they don’t ask for help. How have you seen this manifest itself in your work as a clinical psychologist?

Brad Klontz: Yeah, so this is something that, came out in one of the studies I did on the ultra wealthy comparing them to, it was actually upper middle class, the ultra wealthy, We were much more likely to have professional help like financial advisors and CPAs and attorneys. And I’ve noticed this as a self-inflicted glass ceiling that a lot of lower income middle class people have. I call it do it yourself itis. ’cause I come from a family of do it yourself itis. And by the way, this is a survival technique when you don’t have much money. So I had an, one of my aunts did everybody’s taxes in the entire family ’cause she had a semester of taxes and getting an associate’s degree and she did it all for us. My dad grew up on a farm. You know, something breaks, you fix it yourself. You can’t afford to pay for it.

And so the challenge here, ’cause I get that, the challenge is that it can keep you stuck because, for example, with your taxes you could pay CPA hundreds of dollars. And the first time I did this, by the way, I outsourced my taxes immediately I had a 10x return. Like these people found some stuff I could write off and found some ways to do this or that. And all of a sudden I’m like up $1000 So I paid them a couple hundred and I’m, and then I just, I’ve seen this pattern repeatedly. So don’t be afraid to ask for help because the do-it-yourself itis that lower income middle class mindset’s gonna sort of shame you for doing it. And so the intervention there is only poor people are afraid to ask for help. That’s a poor mindset.

Rich people are actually, they’re actually, it’s easier for them to humble themselves and saying, look, I don’t know. I don’t know how to do this investing stuff. That’s sort of a tribe thing too. Like when you’re, as you become wealthier, you’re much more comfortable outsourcing some of that. And part of it is your social circles because you know, an accountant you know attorneys like when I was growing up, I didn’t know any of those people. So for me there were foreign outsiders and we didn’t trust them at all. So it was really hard to make that leap to asking for help. And so just to understand, most rich people in the US are self made and most of them have no problem asking for help. And so when I discover that in my own research, I’m like, oh, I started to look around. Are there areas of my life I could ask for more help? I mean, if that’s the rich mindset, I want it.

Brett McKay: So you have a chapter on building wealth about home ownership. And this is like in the personal finance world, it’s a very contentious topic and you and your co-author have divergent views on home ownership when it comes to becoming wealthy. So what’s your take on the role home ownership can play in developing wealth?

Brad Klontz: Yeah, so Adrian has a bunch of spreadsheets in the appendix if you want to nerd out on if you paid rent and then you invested the difference, how you would be better off 20, 25 years from now. And it’s, his math is really compelling. It’s like, okay, fine. The thing that tripped me up though is that nine out of 10 millionaires own their own homes and there’s a large percentage of people’s net worth is accounted for by home ownership. And so when you look into it a little bit deeper, you realize, first of all, nobody’s gonna go invest the difference in terms of how most people do it. And it so it becomes a forced savings for you. And so you’re gonna pay your mortgage, right? You’re gonna pay your mortgage before you go blow it at fancy dinners or on a car you can’t afford, you’re gonna pay your mortgage. And so I think that’s the association and there are other benefits to owning a home. But I think that’s the reason why you see that close correlation between wealth and home ownership. It’s because it’s a four savings that you’re gonna pay every day. It’s sort of forces you to pay yourself first, which is one of the main concepts in becoming wealthy.

Brett McKay: I’m curious, like what would you say to someone who you know, is listening to this podcast? I know a lot of our audience might be in their 40s, 50s and they feel like they’re behind on their financial goal timeline. Any advice for them? Like they feel like, ah, it’s just too late for me. And maybe that’s a like a learned helplessness or a lack of locus of control. What would you say to these guys who are in their 40s, 50s, 60s, who are just like, ah, it’s too late for me.

Brad Klontz: Yeah, I get it. And first of all, it’s not too late. I see this a lot too. Like, people are like, oh I’m in my 70s, I don’t wanna invest money because I’m afraid of losing it. I’m like, dude, you’re gonna live 30 more years. Like we need to have some money invested that’s gonna grow. We’ll put some in a more conservative area. But this isn’t an all or nothing thing. Like if you’re 40, 50 or even 60 you got 10, 15 more years to make more money, you can dramatically increase the quality of life you’re gonna have in retirement. Now you, might have some social security coming in. You could have an extra 1000 or 2000 a month even starting in your 60s. And just think about what that would be like for you. And so people underestimate the power of compound interest even under shorter time periods, 10, 20, 30 years.

We use 25 years as an example in our book on where people, if they cut down expenditures, how they can have millions more 25 years from now. But when, I’ve actually run the numbers with people who are in those age categories, they’re sort of blown away by looking at how much they could have. And I would just encourage listeners, if you don’t believe me, just find online something called a compound interest calculator. Just Google it, there’s a bunch of them and start putting in the numbers. So what if I invested 10,000 a year? What if I invested 1000 a year? And you play around and you say like, well I’ll just give you this number because this is the average return the US stock market for a hundred plus years. Just throw in there like what if it was an eight or 10% return a year? How much money would I have? And that type of calculator. I think if you do it, you are going to instantly realize that you could do a lot even starting out later.

Brett McKay: Do you have any advice for dads who want to help instill a rich mindset in their kids?

Brad Klontz: Yes. So first of all, talk about money with them. The biggest mistake parents make is they just don’t talk about it. And they don’t talk about it because they’re stressed or they feel like they’re not, they hadn’t done exactly what they wanted to do. Who am I to teach my kids? Your kids are learning, they’re learning all the time. That’s the first thing. Second is, I would encourage them if you’re doing allowance or if you’re helping them make money, model it for them, but then also make them invest it. You know, one of the things I hear parents complain about, oh, I give my kid the money and they just blow it. It’s like, well of course they just blow it. That’s what everybody does. You gotta train them. So my kids know they get a dollar, they’re investing right off the top. So half of it isn’t even theirs.

Half of it is their financial freedom, their future. And my kids are so into it. They asked me to show them their balances every day, their investing, their every dollar they get, they wanna invest it. I mean they’re fired up about it. And so funny, my 11-year-old, my wife is like, well, why don’t you spend some of that, Ethan? And he is like, why you guys, I don’t need anything. You guys give me food. You give me clothes. He goes, I’m gonna retire when I’m 40. That’s my 11-year-old. He’s fired up about it. So you, have to model it for them and put strings on it. So whatever values you want to teach, if you want to teach them that, oh, it’s important to be charitable, a third year allowance goes to spending a third goes to investing, a third goes to charity. And help them sharing your values, help them decide what charity to contribute to, and maybe even go down and hand the check over in person. So think about money is a huge reinforcer. It’s a huge part of their lives. And it always will be. What values are you wanting to pass down to them? And then figure out how can I structure that to show it?

Brett McKay: Yeah. Starting a Roth IRA account, I did that for my kids and it’s amazing like how fired up they get about it because you try to explain to them compound interest in the abstract and it’s, they might not get it ’cause they don’t like, wow. Doesn’t make any sense. But then when they get that vanguard statement every month, they’re like, oh wow, this is crazy. Like how much money I’ve made in the stock market for the past three years.

Brad Klontz: Absolutely. And it’s the pictures, it’s the emotion talking about why this matters. You can have a profound impact on your kids, and they’re hungry. They want to be taught by you. So make sure you do it around money.

Brett McKay: Well, Brad, this has been a great conversation. Where can people go to learn more about the book in your work?

Brad Klontz: Yeah, so the book is called Start Thinking Rich. And so go to startthinkingrich.com/artofmanliness. And so for any listeners of yours who go there, we’ll have some special bonuses for them, but, you’ll see the book and some other tools we have to help people really start thinking Rich.

Brett McKay: Fantastic. Well, Brad Klontz, thanks for your time. It’s Been a pleasure.

Brad Klontz: Thanks For having me.

Brett McKay: My guest today was Brad Klontz. He’s the co-author of the book Start Thinking Rich. It’s available on Amazon.com and bookstores everywhere. You can find more information about his work at his website, bradklontz.com. Also check out our show notes at aom.is/thinkrich. Where you find links to resources where we delve deeper into this topic.

Well, that wraps up another edition of the AOM podcast. Make sure to check out our website at artofmanliness.com where you find our podcast archives as well as thousands of articles that we’ve written over the years about pretty much anything you think of. And if you haven’t done so already, I’d appreciate it if you’d take one minute to give us a review on Apple podcast or Spotify. It helps out a lot. And if you’ve done that already, thank you. Please consider sharing the show with a friend or a family member who you think would get something out of it. As always, thank you for the continued support, Until next time, this is Brett McKay reminding you to not only listen to AOM podcast but put what you’ve heard into action.

This article was originally published on The Art of Manliness.

Money can’t buy happiness. It sounds good as a bumper sticker platitude.

But the truth is, money can buy happiness. At least sometimes. In certain circumstances. If we view it and use it in the right ways.

Here to unpack the conditions under which money can buy happiness and facilitate our flourishing is Dr. Daniel Crosby, a psychologist and behavioral finance expert and the author of The Soul of Wealth: 50 Reflections on Money and Meaning. Today on the show, Daniel shares the minimum income level at which money buys happiness, at least in the sense of avoiding pain. We talk about how to purchase material things in a way that increases happiness, while avoiding materialism, and the value of using your money to buy health and freedom. And we discuss the importance of finding an overarching why that guides the way you allocate your money and doing a values audit to see if your purpose and spending habits are aligned.

Resources Related to the Podcast

• Daniel’s previous appearances on the AoM podcast:
  • Episode #222: The Laws of Wealth
  • Episode #511: Mastering the Psychology of Investing
• AoM Podcast #659: Do You Want to Be Rich or Wealthy? (And Why the Difference Matters)
• AoM Podcast #321: How to Think About Money
• “Experiences Won’t Make You Happier Than Possessions”
• Die with Zero by Bill Perkins

Connect With Daniel Crosby

• Daniel on X
• Daniel’s podcast, Standard Deviations
• Daniel on LinkedIn

Listen to the Podcast! (And don’t forget to leave us a review!)

Listen to the episode on a separate page.

Download this episode.

Subscribe to the podcast in the media player of your choice.

Read the Transcript

Brett McKay: Brett McKay here and welcome to another edition of the Art of Manliness podcast. Money can’t buy happiness. It sounds good as a bumper sticker platitude, but the truth is money can buy happiness, at least sometimes, in certain circumstances, if we view it and use it in the right ways. Here to unpack the conditions under which money can buy happiness and facilitate our flourishing is Dr. Daniel Crosby, a psychologist and behavioral finance expert and the author of The Soul of Wealth, 50 Reflections on Money and Meaning. Today in the show, Daniel shares the minimum income level at which money buys happiness, at least in the sense of avoiding pain. We talk about how to purchase material things in a way that increases happiness while avoiding materialism and the value of using your money to buy health and freedom. And we discuss the importance of finding an overarching why that guides the way you allocate your money and doing a values audit to see if your purpose and spending habits are aligned. After the show’s over, check out our show notes at aom.is/soulofwealth. All right, Daniel Crosby, welcome back to the show.

Dr. Daniel Crosby: Man, thanks for having me back.

Brett McKay: So you are a behavioral financial expert who’s written books about how to leverage our psychology so we can invest better. We’ve had you on the podcast to discuss those books. But your latest book, you get a bit more philosophical with your approach to money. You’re trying to figure out how our relationship with money fits into the larger picture of the meaning of life. I’m curious, what caused this shift in focus?

Dr. Daniel Crosby: Yeah, it’s a great question. There’s really a micro and a macro response to this. At the micro personal level, I’m just getting old. I’m middle-aged now. I’m thinking about mortality. I’m thinking about legacy. And I think my first couple of books, I’m proud of them. I stand by everything I wrote there, but they were written in a very calculated, specific way. They were to get me where I needed to go in my career and to make me a subject matter expert in places where I wanted to be viewed as an expert. And mission accomplished, it did that. But now as I age, I’m sort of surrounded by people who have achieved some level of professional success, and I see that their personal lives aren’t always as successful as their professional lives.

And so yeah, a big piece of it is just getting older, considering my own legacy, my own contributions to the world, and seeing myself and my peers achieve some financial and professional success, but not always have the wellness to go along with it, the soul to go along with it. And then at the macro level, I’m just, this is the thing I think about more than anything. I’m a big Viktor Frankl devotee, and he has this great quote about ever more people have the means to live, but no meaning to live for. And I think you’d be hard-pressed to find a better descriptor of the world we find ourselves in. When the US was founded, 85% of the world was living in poverty, what would today be $2 a day adjusted for inflation. And today that number is about 8.5%, which I don’t wanna be insensitive, is still millions and millions of people too high. But the progress that we have made, there has never been a time of greater worldwide abundance than the time we find ourselves in today. Forever, war and disease and famine and all these things have made human life very hard. And while all those things still exist at some level, and we should remain vigilant in fighting against them, we have never been healthier, more peaceful, more prosperous.

And yet when you look in the US, I’m Gen X, Gen X and younger, every single one of those age cohorts describes themselves as very lonely and isolated and living sort of a meaningless life. And so we’ve got this weird problem where we have the means to live, but no meaning to live for. And I wanted to take that on directly.

Brett McKay: Yeah, that is interesting. It seems like it’s a paradox ’cause that prosperity comes with its own set of curses if you’re not careful.

Dr. Daniel Crosby: Certainly.

Brett McKay: Yeah. So what do you do in this book, The Soul of Wealth? You basically, it’s like a compilation of 50 different thoughts, reflections, essays about money and meaning. And in one of them, you talk about how money is a great tool that can fix a lot of problems in life, except for a few. First, let’s talk about the problems that money’s really good at solving. What are those problems that money that, hey, you can throw money at this and it can help you improve your life?

Dr. Daniel Crosby: Yeah. One of the greatest things about modern life that I don’t know is fully appreciated is just how much free time we have. And I know that we conceptualize of our lives as being full to the brim. And I would say the same thing, work and kids and all this stuff. But we have dramatically more leisure time than any previous generation. Now, what we do with that is a different conversation. All the research shows that all that excess free time has basically been directed at TV. But we have more leisure and more free time than we ever have in human history. And that’s a wonderful thing. Money’s also great at buying you wellness, right. It can buy you nutritious food. It can buy you good health care. It can get you a gym membership or a personal trainer. And all of that stuff has a material positive impact on your life. It can buy you self-improvement in education. College grads make over a million bucks more than people who graduate from high school. And they also enjoy lower rates of divorce and heart disease and sadness. So there’s a lot that money can do to help human flourishing that way.

The final thing that I’ll talk about, and one of the things that sort of buys us a great deal of joy, is novelty. Another thing that we’re uniquely positioned to do is just have new experiences. One of the things that’s true of humankind is that we quickly become habituated to our circumstances. Whatever our day-to-day is, that quickly becomes the norm. But going on a vacation, going to a new place, trying a new dish, all of these things introduce us to novel experiences that bring us a great deal of joy.

Brett McKay: Okay. So money can buy us time. It can help us get novelty. We can get healthcare with it. What are some of the problems that money can’t solve?

Dr. Daniel Crosby:Well, the part where it can’t solve problems, I think, is perhaps the more interesting conversation because it’s riddled with half-truths. Even among the things that I talked about money can buy you access to college, but it can’t take the test for you. Money can buy you a gym membership, but it can’t do the bench press for you. And so the things that it can’t help, there’s a lot of half-truths there as well. I think a lot of people treat money as an indent to itself, but money can’t buy you purpose. What it can do is give you the free time to think about your purpose. Gandhi, I’m misquoting him here, but he effectively said, to a poor man, bread is God. Because if you’re so mired in the struggle for those bottom two rungs of Maslow’s hierarchy, you don’t have a lot of time to think about God or self-actualization or love or friendship. And so money can’t buy us purpose, but it can buy us the bandwidth to think about and pursue purpose. Money can’t buy us love. The Beatles were right about that, but we do know that it can buy you chocolate and roses for a date, and it can make you more attractive to your potential mates, as the research shows.

So I think one of the reasons why people conflate money with just the good life itself is because it certainly facilitates the pursuit of many of these things, but ultimately it leaves off and we’re required to sort of take that first step in the dark.

Brett McKay: Okay. So money doesn’t directly buy us the good life, but it does give us access to the things that can make a good life if we avail ourselves to them. And this gets to the larger question the common question people debate, which is can money buy happiness? And the answer is yes, but as you’ve kind of been saying, it’s nuanced. So what does the research say about money’s ability to buy us happiness?

Dr. Daniel Crosby: The first conversation we have to have is, how are you measuring happiness? Because one measure of happiness is basically about needs reduction and sort of the absence of pain. And so I think animal behaviorists would say that even animals can experience happiness. They may not be able to experience purpose, but they can experience happiness, which is sort of the lack of a negative state. So one of the most famous studies is of course, this Kahneman study that people like me and others sort of shouted from the rooftops because it confirmed all of our prior assumptions, which is that happiness with money plateaus around $75,000 a year at the time of the study, which is almost perfectly $100,000 a year today adjusted for inflation.

And that is true of needs reduction because at about $100,000 per year you have enough food to eat. You have a warm place to lay your head. Your kids can go to a safe school. Sort of the basics of life are met and there’s not a whole lot of negative sort of physical moment to moment pain in terms of your needs. So the need reduction measure of happiness is met at a relatively low level of about $100,000 per year. But there’s a more philosophical, sort of more existential way to measure happiness as well, which is just self-appraisal of life. If I say as we did before we pressed record, just like, hey, Brett, how are you doing? Tell me how your life is. Like, how are you doing? And we find with this more qualitative, this more subjective life appraisal, happiness and money are basically up and to the right as far as the eye can see. I mean, they’ve measured it up to about half a million dollars a year in earning. There’s not a ton of people who make more than half a million dollars a year. And so that’s where they stop. But they find that at every income level, people’s life appraisal improves monotonically.

So in a stepwise fashion from zero to half a million dollars a year. So it really matters. Like, are we talking about moment to moment physical pain or are we talking about happiness with respect to how we sort of account for our lives? Another piece of nuance that I would add to this conversation is depending on the study, about 10 to 15% of folks, money doesn’t move the happiness needle at all. And these people it’s widely assumed are suffering from sort of a clinical depression or sort of an emotional state that keeps money from having any sort of impact. So if you’re making more money and it’s not moving the needle in any respect, I think there’s this idea of wherever you go, there you are. You may need to take a different approach to trying to achieve that happiness. And then the last thing that I would say that that I think is maybe the most interesting point of the whole thing is there’s newer research that shows how you spend money materially impacts your happiness.

My favorite piece of research around this has to do with cars. If I go out tomorrow and buy a Lambo to stunt on my neighbors and show everyone how rich I am, that doesn’t buy much happiness. There’s a very sort of high peak for the first couple of weeks, and then that habituation sets in. Quickly, that Lamborghini that was so nice and new, the door gets dinged you get bird poop on the window, you throw your gym clothes there, and suddenly it’s just not so hot anymore. You just kind of get used to it, and the happiness falls off rather precipitously. But there’s research that shows that people who buy a car to join a car club get massive happiness dividends, because really it’s a relational exercise. What they’ve done is, yeah, you spend a lot of money to get an antique Porsche or whatever you did, but now you’re part of the Atlanta Cars and Coffee Club, and you get to meet with your buddies and look at your engines on Saturdays, and you have a social cohort. So there are definitely examples where if you spend money, even splurge on something that gives you relational access or something that’s consistent with how you wanna be viewed as a human being and your personality, there’s a big happiness dividend there.

Brett McKay: Okay, so if you’re spending the money for those bigger things, it’s gonna bring you happiness.

Dr. Daniel Crosby: That’s right.

Brett McKay: Yeah. I’m sure people have seen that research a lot. It’s like, well, if you wanna be happy, you got to spend your money on experiences to maximize happiness. I think that’s true, but I’ve also, like you said, there’s things that I’ve bought in my life, I’ve splurged on that they brought me happiness and they still bring me happiness. I’ve got a few things in mind. Do you have anything, like some items that you bought that continue to bring joy to your life?

Dr. Daniel Crosby: Yeah, there’s a few. For me, I got a nice award from my alma mater last year. And to mark that event, I bought myself a watch. And so when I look at that watch, it’s not crazy, but certainly you could get the time for a lot less. And when I look at that watch though, I’m reminded of my hard work, my accomplishment, the recognition of a university that turned me away when I initially applied there, which was a pretty sweet thing. And I’m very proud of that. My guitars, I have some expensive guitars and I’m a decidedly mediocre guitarist, but having these nice guitars on the wall right here in my office where I’m talking to you encourages me to practice and try and grow and become better and test myself and struggle in new ways.

And then the last thing is something I’m in the midst of right now. You and I were talking before, I’ve lost a lot of weight this year and my clothes were falling off me. I had to get all new clothes. And I’ve really taken the time to try and put together a kind of classic American menswear vibe, really nice fitted stuff, high quality, fewer clothes, higher quality. And every time I see one of those shirts or jackets that wouldn’t have fit me six months ago, I go, Hey, you did it. And it’s a really nice feeling. So I think we have to move towards a more nuanced view of this and spending can really buy you happiness. I’d be curious, what are some of yours?

Brett McKay: First one I can think of, I bought a sauna a couple of years ago, a barrel sauna, and I’d been wanting, I love the sauna at the gym, but then I shifted to a home gym and I would still go, I still paid for like a 10 gym membership, $10. So I could just use their sauna, but it was always crowded. And they’re just gross people in there. They like pick their toenails and the teenagers blasting music while you’re in there trying to like just zone out. So after a couple of years, I finally decided to pull the trigger. I bought a barrel sauna and I love it. My wife loves it. I go in there, right now it’s perfect sauna season. It’s getting cold, starting to get cool at night and just sitting there in the heat for 30 minutes and you go out in the cold and it’s just, it feels good. I’ve had friends over and we’ve had some great conversations in the barrel sauna. So it’s a thing that facilitated relationships.

The other thing, a recent purchase that I made that’s brought a lot of happiness in my life, I bought a wood pellet smoker earlier this summer. And it’s been great ’cause I can grill on it. So do burgers, chicken, things like that. But then I can like smoke brisket, I’ve smoked tenderloins and I’m using that thing all the time. And I think one of the things that does, it facilitates relationships. Like I’ll smoke a brisket or something when I’ve got friends or family coming over. That’s one thing that’s brought me a lot of happiness. And with the cars, we bought a 96 Buick Roadmaster, the wagon a couple of years ago, where it’s got the backward facing seat.

Dr. Daniel Crosby: Oh nice.

Brett McKay: And we did that so we could carpool with our kids’ friends. And it’s been, yeah, I love that thing. Every time I get into it, it’s so fun to drive. We’ve made some good memories in there.

Dr. Daniel Crosby: See, I think all the things you just named are perfectly demonstrative of some of the stuff I’m talking about, right. It’s facilitating relationships.

Another thing we know about money and happiness is one reliable path to that is by getting out of stuff we hate. And I was cringing hard over here when you were talking about people picking their toes in the sauna. So if it frees us from people picking at their feet, that’s something you hate. That’s a good use of money. I joke that I will never mow my lawn again. I mean, I live in Georgia. It’s way too hot. I got a big yard. It brings me a great deal of joy to see that high school kid out there sweating it out instead of me. So getting out of stuff you hate is another big one.

Brett McKay: Yeah. And going to that idea that experiences, if you spend on experiences, that will bring you the most happiness. My experience, not necessarily so. There’s some experiences that I’ve gone on like that was actually, I did not enjoy that. And when I think about like, why did I go on this thing? It usually was ’cause like, oh, some person said you should do this thing. It wasn’t because I actually wanted to go there or do the thing. So yeah, I think if you buy the experience or spend money on experiences just because you wanna impress somebody or you saw somebody on the internet said, hey, this is the greatest thing in the world, you should do it too. And it’s not actually something you’re interested in. You’re not gonna get any joy out of that.

Dr. Daniel Crosby: Well, I think that’s worth commenting on because we live in a weird time, where it’s kind of become socially okay to brag about experiences in a way that it wouldn’t be okay to brag about more obvious material things. People will post pictures of a $25,000 vacation and it’s just, sort of gets filed under, oh, look how beautiful the world is or something.

Brett McKay: Right.

Dr. Daniel Crosby: And I think there’s a lot of mimetic desire around experiences now. And my family and I were talking about going on a trip in November, and I’m like, I don’t really wanna do this. I’m like, I travel all fall. I’m like, I don’t really wanna do this trip. I think I just wanted to show off. And so I think even experiences have been corrupted somewhat in our social media age.

Brett McKay: Okay. So, buying things can bring you happiness. It’s nuanced, this is not an excuse to go spend your money willy-nilly, but it can if you do it right. But one of the dangers of spending money on stuff to find happiness is that you could become materialistic. And there’s actually, the psychologists have studied this and they’ve actually figured out there’s three characteristics of a materialistic person. So, what are those three characteristics?

Dr. Daniel Crosby: Yeah. This was news to me. I was really excited to come across this research and happy to share it here, that the three characteristics, the first is possessiveness. So, this is just around an inclination to control both things and people. So, that possessiveness is sort of the first and perhaps the most dangerous of this trifecta. The second, understandably, is non-generosity. Sort of an unwillingness to share back to the happiness conversation. One of the most reliable paths to happiness with money is by giving it away.

And yet people misapprehend that dramatically, like better than 90% of people think they’ll be happier when they buy something for themselves versus give it away. And that’s flipped in terms of actuality. So possessiveness, non-generosity, and then finally, envy, and especially ugly piece of this envy, in addition to sort of the way we use it in everyday language, is anger at others’ success. Being unhappy when others people are successful. So possessiveness, a lack of generosity and envy at other success are the three. And I cited 259 studies in the book that show that it’s associated with lower wellbeing, lower life satisfaction. And this is true, and you can’t say this about many psychological phenomena, but this is true across demographic and cultural lines. So men, women, all over the world, people possessed of this materialistic triad, just don’t have great lives.

Brett McKay: Yeah. So, if you find yourself acting like a scrooge, that’s probably a warning sign. You need to do something…

Dr. Daniel Crosby: Yeah.

Brett McKay: To fix it. So, how do you stave off the materialism?

Dr. Daniel Crosby: You are visited by three ghosts in the night, no. There’s a couple of things you can do. The first is you gotta prioritize community. Community is sort of an antidote for this. Being other-centered is one of the most reliable paths to meaning when it comes to setting goals and measuring your own success. You’ve gotta run your own race and measure your own success. Again, it becomes very, very easy in our time to benchmark to the wrong stuff and to have a bad reference class. A zillion years ago, you would’ve known about 150 people and you would’ve benchmarked your life and your wealth to someone who lived probably within a mile of you. Now we have instant access through Instagram and everything else to the lifestyles of the rich and famous. And it becomes very easy for us to pick a poor reference class. And that is a recipe for misery.

Another tip is to ground yourself in the moment and really work on that presentness. Materialists are often focused on the future and do a lot to let the beauty of a moment slip by always sort of anticipating that next big dopamine hit. And then the final thing, which is just one of these simple but overlooked things, is to practice gratitude. My wife has a bullet journal, literally, two lines where she tries to write down something good that happened that day. And this simple practice has been shown to give about a 10% bump in wellbeing experimentally, which is equivalent to the bump that folks get from taking SSRIs, which is an insane thing, to say that hey, psych meds and writing what you’re thankful for in a journal have about the same sort of impact on happiness, but gratitude cannot be overlooked. It’s big piece.

Brett McKay: That idea of generosity and just spending your money on others. Going back to the Christmas Carol example, like, don’t be a Scrooge. The antithesis of that, I think is Fezziwig. Remember Fezziwig?

Dr. Daniel Crosby: I do, I read that book every year.

Brett McKay: Yeah. So, it’s like one of my favorite parts in the book where it’s the, it’s he’s doing the Ghost of Christmas Past and Scrooge goes back and he sees his old boss Fezziwig, and Fezziwig put on this big party. And it is just a great time. Everyone’s having a great time. It’s something that Kate and I, we do every year. We like, we just, it brings us so much joy is having a big holiday party we invite our friends too. And it’s just, it’s awesome. ’cause we always think we wanna be Fezziwig. Like Fezziwig was a baller. [laughter] We want to be Fezziwig. We want to provide like, those memories that people have when they’re, ’cause we have a lot of kids there. We want them to be like, Hey, we, this is a great thing that I had a lot of good memories.

Dr. Daniel Crosby: So, that’s one way you can counteract the materialism. Be Fezziwig.

I Love that.

Brett McKay: Don’t be Scrooge. Be generous with your hosting and hospitality. We’re gonna take a quick break for a word from our sponsors.

And now back to the show. So, one aspect of our lives that you recommend that we don’t skip on is our health. And you mentioned this earlier, but in this essay, you started off talking about your experience with a toothache, that really brought this principle home of spending money on your health. What happened there with your toothache?

Dr. Daniel Crosby: Yeah. So I began to have like bad migraines, sensitivity to light, just enormous pain in my head. And I assumed that it was a toothache. I had never had a cavity in my life. I had never had a single dental problem in my life, but I’m like, this feels for the life of me, like a toothache. So I went to my dentist, my dentist looked me over, and he is like, it’s not your teeth. And so the pain persisted. I mean, I could barely get up off the couch. I was like incapacitated by the pain. The headaches were so horrible, sensitivity to light and sound. And so I go on this multi-month, nearly a four month journey of trying to figure out what the heck was wrong with me. And I went to the hospital. I mean, I went to the emergency room once when the pain got so intense.

I went to psychiatrist and sinus doctors and got a CAT scan and got MRIs. I mean, just on and on and on, trying to figure out what this thing was. And it just wouldn’t go away. And the pain got so intense. One day I was just driving with my family and the pain was so bad and I just started crying. I mean, I just started crying in the car. ’cause I’m like, I’m gonna die. I’m gonna die. Like I have some mystery illness. And at this time, at that moment when I’m crying in the car, I would have given you every dollar I had for the reassurance that I was gonna be okay. And for relief from that pain. Well, about two weeks later, I was at a client event down in Atlanta, and we were breaking for lunch, and I bit into a sandwich and the whole side of my face swole up.

And sure enough, it had been my tooth the whole time. My dentist had missed it. I had a crack in my tooth. It was, I won’t go into gory details, but it was enormously abscessed once it broke. And the minute… So, I [laughter] my face starts swelling. I’m looking crazy. I excuse myself from my client engagement. I drive straight to an emergency dental place, get that tooth pulled. And immediately I felt incredible. I mean, I felt a relief that I had not felt in months, but it drove home this platitude. We all know that health is wealth, but a sick person only wants one thing. A healthy person has a million desires, but a sick person only wants one thing. And when you dig into the research around health and wellness and money, you see that there’s this incredibly powerful reciprocal relationship.

Brett McKay: Oh yeah. So, the takeaway there; it doesn’t matter how much money you have, if you don’t have your health, it’s all for naught, pretty much. So, how can people use their money to invest in their health?

Dr. Daniel Crosby: I think one of the most powerful things you can do is control the controllable. You find these statistics where people who are taking care of themselves just do a lot better financially than people who don’t. So, frequent exercisers make 10% more than their no exercise peers with similar educational and professional backgrounds. People who had a mentor make way more than people who don’t. Men who go to therapy make some astounding [laughter] some astounding double digit increase in their pay versus their same education peers who don’t go to therapy. So, there’s all these ways that we see that controlling the controllable, taking care of yourself just leads to not only better health, but better financial health as well. And then, just because of the soapbox I’m on right now with sort of this fitness journey that I’ve been on this year, one of the biggest things for me was to get current information.

The thing that really transformed my relationship to my body was just having daily input on what I weighed, how I was doing, what volume of exercise I was doing. We lie to ourselves in some really big ways. People under-report their calorie intake by between 25 and 50% a day. People overestimate their level of exertion and exercise by 47%. So, a lot of times I think just having information, just monitoring these things and keeping an eye on them, that that knowledge is real power that helps us to not sacrifice a replaceable thing like money with an irreplaceable thing like our health.

Brett McKay: So, it sounds like we should be thinking of investing in our health as more than just investing money. You can invest time in tracking things, and when you do invest money, you can motivate yourself to do so by remembering that it’s actually a good financial investment. It’s gonna pay off actual dividends eventually. And it’ll also improve your health. Going back to the material things that we’ve spent money on or splurged on that’s had a lot of ROI, I’d say my home gym, like over the past decade we’ve built up, there’s been a significant ROI on putting money there. Like, first off, I just enjoy exercise and training, but like the health benefits have, I’m sure been phenomenal.

Dr. Daniel Crosby: Yeah.

Brett McKay: Yeah. Okay. You have an essay that I really enjoyed, it’s entitled, You don’t really want to Be Rich, you want to Be Free. What do you mean by that?

Dr. Daniel Crosby: So in the book, [laughter] in the book, I don’t name this person by name, but I guess I will, on the podcast I’ll be impolitic and name the person on your podcast. I was reading a story about Elon Musk. And so Elon Musk was talking about this standing 9:00 PM Saturday meeting that he has. And he is like, yeah, I was in my standing 9:00 PM Saturday meeting, and I don’t know why [laughter] that piece of information hit me like a ton of bricks, because in that moment I was like, I am richer than this guy. I know that he has hundreds of billions of dollars, but at 9 o’clock on a Saturday, I’m having fun and he’s not. And that is true wealth. And so I think that’s sort of the point of this chapter. One of the things that I talked about in a previous book of mine, The Behavioral Investor, you can demonstrate this with brain scans and other things, is that people value money for its own sake, independent of what it buys, which is a very goofy, backward stance to take towards money.

Because you don’t want money for its own sake. You want what it can do for you. And one of the things that it can do for you is free you up from having to do things you hate or be around people you don’t wanna be around or do things that you don’t wanna do. So, this chapter is all about making money your servant and not your master, and not getting wrapped up in this idea of just more and more, and more. But what is it that I really want this money to do for me? And I think if we’re honest with ourselves, very often, for most people, the highest and best use of wealth is to buy back your life, to buy back your independence.

Brett McKay: Yeah. I mean, I’ve seen, I’m sure you’ve seen this too with your work, people who’ve gotten richer and richer and they’ve just become less and less free because they build those what gilded bird cages for themselves that they can’t get out of. They say, well, I can’t quit this job, or I can’t stop this business that’s I don’t enjoy. Because if I do, then I’m gonna lose everything that I have.

Dr. Daniel Crosby: Yeah. I have seen that again and again. That was a big impetus for writing the book. Just by virtue of my day job, I am proximal to lots of people with really, really, really big bank accounts like sent to millionaires, billionaires. And more often than not, I would say that these folks lack a sense of freedom. They are so wrapped up in the pursuit of more, even in cases where they have more money than they could ever serviceably spend in a lifetime, even in those cases, there is an inertia and a lack of freedom that makes them less free with people with a lot less money who’ve been more thoughtful about its deployment.

Brett McKay: All right. So, if you have an opportunity to buy freedom, do it. You’ll be happier. That might mean you take more vacation. You talk about that. A lot of Americans, I think Americans are really bad at vacation.

Dr. Daniel Crosby: Oh yeah.

Brett McKay: I think most of us don’t use all of our vacation time, but take it, like, take that. The other things too, if you have the means, buy a lawn care guy, buy an hour of babysitting so that you can go on a date with your wife, there’s all different little ways you can buy back some time.

Dr. Daniel Crosby: Yeah.

Brett McKay: Yeah. You also talk about finding a why for your money. This is kinda like the meta meta theme of your book. What does that look like? ’cause I don’t think most people, when they think about their money, they’re not thinking about the purpose of money or like their why. So, how do you go about figuring out your why for money?

Dr. Daniel Crosby: Yeah. I think you’re right. Most people aren’t thinking about this. And one of the things that I wanna do is encourage them to, because the power of tying your dollars to your purpose is so incredible. It almost sounds like science fiction when you read some of the research, but people who had named their dollars. So, not just, account A, B, C, 1, 2, 3, but Brett’s retired to The Bahamas Fund. Something that simple, just labeling it for purpose. One study found that in tough markets, they were 10 times less likely to bail on their investments and go to cash. Another study out of Canada found that when people looked at a picture of their kids before they logged into their bank account, they were twice as likely to save. Morningstar, big financial firm found that, that accounts that were labeled with a specific purpose had 15% more in them than their peers.

So, one reason to do this is just because it elicits a host of good financial behaviors. I mean, it really takes investing, saving, spending, out of the ether, and it ceases to become a video game, and it becomes this real thing that’s tied to life. But in some research that I’ve done since this book, I really have found that there’s sort of three facets to meaning. If we look back over the research, a life purpose has three legs to that stool. And I think if you apply it here, that the three are believing, belonging, and becoming. So, people with purposeful lives, first of all, believing they have a philosophy, a religion, or a moral framework that guides their life. You see this again and again and again and again. Religious people are reliably happier on average. And this is one of those reasons.

They have a moral framework to help them make sense of the good times and the bad times in life. Doesn’t have to be religion, but you need to have thought through your sort of personal philosophy of why things are the way that they are, and let that guide how you spend money. The second piece, the most powerful piece is belonging. Again, back to relationships. If you say you value relationships, are you spending money like, that’s the case?

And then the third piece that people with meaningful lives have is becoming, which is they are growing, they are learning, they’re progressing. So, you need a moral framework. You need a group of people to love and who love you back, and you need a vision of the kind of person you want to become. And if you’ve got those three things, you are on your way. And each one of those three things has a financial component to it. And if you value those things, it should show up in your budget.

Brett McKay: Yeah. You recommend if to people, I like this idea of doing like a values audit of your bank account. If you don’t know what you value or what’s the why of your money, just take a look at your statement from the last month and see where you’re spending your money. And then you can start kind of putting things in the categories like, oh, I spent a lot of money eating out with friends. Okay, well friends seems like friends are important, and saving time is important. But then you might see, well, I’m spending a lot of money on subscriptions that I don’t use. Maybe I can do something better with that money.

Dr. Daniel Crosby: Yeah. That’s exactly right. I love this idea. There’s sort of two things at work here. The first is that your money is your vote. And I mean, I had this conversation with my youngest kid the other day. We always go to the local farmer’s market on Saturdays, and we were buying some spaghetti sauce, and she was like, that’s a lot. That’s really expensive. Like, that’s a lot more than it is at the store. And I was like, yeah, that’s right. But I wanna live in a world where local entrepreneurs who are growing tomatoes in their backyard and working hard can make a living. So yes, it is twice as much as the Prego or whatever, but it brings about an outcome that I care about. And it’s just, it’s a powerful way to think about money is am I spending it in a way that brings about the kind of world that I wanna live in? And am I casting my vote wisely? And the flip side of that is, is the ultimate BS detector. We’ll say, oh, I value growth and spirituality and purpose and relationships. And then, I look at my budget and it’s all Netflix and Doritos, then maybe it’s time for a reckoning. And it just, it’s very easy to lie to yourself about what’s important to you. And money shines a very bright light on what you truly value.

Brett McKay: Yeah. What’s that saying on, I tangently very loosely follow like financial Twitter. And then you’ll see every now and then this big blow up when some financial guy gives a bit of advice and then someone will respond like, show us your books. Show us… What are you doing? ’cause they wanna make sure that like they got skin in the game, they’re actually putting into action what they’re encouraging people to do.

Dr. Daniel Crosby: Yeah. Yeah. And Nassim Taleb wrote about that, Never ask a person their opinion, just ask to see their portfolio. Like, I don’t care about your hypothesis. Like, what are you doing with your money?

Brett McKay: Yeah. Yeah. So, that’s something I do, once a month I go through the bank statement and see what I’m spending my money on. It has a couple purposes. One, it just helps me figure out, okay, my spending my money on anything dumb and can we cut back on that? Or am I spending too much on a certain area? So just you got your eye on the till basically.

Dr. Daniel Crosby: Yeah.

Brett McKay: Then also the same time I’m saying, well, is my spending matching up with our family’s values?

Dr. Daniel Crosby: Yeah.

Brett McKay: And if it’s not, then you can do some correction. I think once a month like that, I think that’s plenty of, you don’t have to do it every day or every week, but like, just do it once a month. It doesn’t take a lot of time. So, something else to talk about, and we’ve had conversations about this, there’s a temptation in some people, not everybody. There’s a certain segment of the population where they just want to keep squirreling away money for retirement. Like they’re aggressive, aggressive savers. And there can be some upsides to that. But the downside is like, you just don’t enjoy your life now and you can’t spend money on other people now. Are there any biases that might lead some people to excessive money hoarding?

Dr. Daniel Crosby: Yeah. There’s a host of them. So, I [laughter] I actually did some research at Orion, my employer, where we interviewed 425 couples. And we asked them, effectively, we did it more delicately than this, but effectively we asked them, what do you fight about when you fight about money? And the number one point of friction among couples was whether money was best used to enjoy today or to secure against an uncertain tomorrow. And it was almost 50/50. And if you think about it, the appropriate response is somewhere in the middle. I mean, both things are important. Like it is both important to use money to seize a moment, because tomorrow tomorrow’s not promised, and we need to be setting aside for that future self and that rainy day. But we found that people tended to be far more decamped into sort of extreme sides of this position.

And so there were a lot of moral judgments around this too. Like if, for folks who find themselves in the ‘save for tomorrow’ camp, they see the other folks as sort of frivolous and unserious. And for people who were in the, “enjoy the moment” camp, they see the savers as sort of fun haters and sticks in the mud. And so the behavioral biases that load onto this are, there’s a few of them. One of them would be loss aversion. We perceive spending as a present loss, and we are two and a half times as upset about a loss as we are happy about a comparably sized gain. So that a hundred dollars hurts worse coming out in retirement than it felt good to save it when we were in the accumulation phase. The other thing is uncertainty aversion. Uncertainty is perhaps the thing which humankind finds most distasteful.

Like we hate not knowing even more than we hate bad news. And then we also engage in anchoring, which is sort of benchmarking to a high watermark. So if we retire with a million dollars, we go, oh, I’m a millionaire. Like I did it. And then when you have to start drawing that down, it’s painful all the way down. So, there’s a couple of ways I think to overcome what is admittedly a pretty thorny problem.

The first is something called bucketing, which is kind of back to this naming it for purpose. There’s a psychological phenomenon known as mental accounting where the way that we label money materially impacts our willingness to save, spend and invest it. So something as simple as saying, here’s my principle, here’s my dividends, here’s my living money, here’s my vacation money, here’s my don’t touch it money, that can give us permission to spend it as we ought to.

Second powerful thing is to just automate the inflows and outflows so we don’t have to think about it. You wanna kind of minimize touches. And so if you can make a good decision once and kind of set it and forget it, that’s powerful. And then finally, kind of ripping off Stephen Covey here, he has this idea that effectively the only way that we can say no to something difficult is to have a bigger yes burning inside of us. And so we need that purpose again. We have to love our grandkids enough to spend that money on them, even though there’s some pain associated with taking it out, whatever the case may be. So, bucketing automation, purpose are all sort of powerful workarounds for what is a very complicated human tendency.

Brett McKay: Yeah. I think that’s, I mean, a lot of times the focus is on people who aren’t saving enough, which is a problem. That’s a problem. But then a lot of, I don’t think a lot of attention is given to people who save too much. ’cause that can become a problem. ’cause then you hit retirement or whatever. And like, as you said, there’s some people who have so much money saved away in retirement, they can’t even like draw it down by the time they…

Dr. Daniel Crosby: Yeah.

Brett McKay: So, they’re left over with a big chunk of money that yeah, they can pass on to their kids and grandkids, but then there’s gonna be like, it’s gonna be taxed. And it’s like, there’s all these other problems that come with that. So it’s, yeah, trying to figure out how to manage that nut you may have squirreled away during your working life. That can be tricky.

Dr. Daniel Crosby: It’s very tricky. And in a real sense, like every dollar that you die with, and look, I get it, you can’t probably, none of us knows when we’re gonna go specifically, but every dollar that you die with is a dollar that you weren’t able to spend in life on time with your kids, time with your loved ones, being generous, being kind, blessing the world. I mean, it’s in a real sense, it’s a missed opportunity. And there’s a great book called Die With Zero, which covers this very thing.

Brett McKay: Well, Daniel, this has been a great conversation. Where can people go and learn more about the book and your work?

Dr. Daniel Crosby: Yeah. The book is The Soul of Wealth. I hope people will go check it out. I’m active on Twitter at Daniel Crosby. I have my own podcast, Standard Deviations, and yeah, just Daniel Crosby, PhD on LinkedIn as well.

Brett McKay: Fantastic. Well, Daniel Crosby, thanks for your time. It’s been a pleasure.

Dr. Daniel Crosby: Thank you.

Brett McKay: My guest here is Dr. Daniel Crosby. He’s the author of the book, the Soul of Wealth. It’s available on amazon.com, at bookstores everywhere. Check out his podcast, standarddeviationspod.com where you get your podcast. Also, check out our show notes at aom.is/soulofwealth, where you find links to resources. We delve deeper into this topic.

Well, that wraps up another edition of the AOM podcast. Make sure to check out our website @artofmanliness.com, where you find our podcast archives. And while you’re there, sign up for our newsletter. We got a daily option and a weekly option. They’re both free. It’s the best way to stay on top of what’s going on at AOM. And if you haven’t done this already, I’d appreciate you take one minute to give review of the podcast on Spotify. It helps out a lot. If you’ve done that already, thank you. Please consider sharing the show with a friend or family member who you think will get something out of it. As always, thank you for the continued support. Until next time, is Brett McKay, podcast, but put what you’ve heard into action.

This article was originally published on The Art of Manliness.

Are leaders born or made? Judging by the 50 billion dollar leadership development industry, the answer is definitely the latter. From schools to workplaces, everyone is seen as a potential leader and expected to become one by undergoing leadership training.

My guest questions the assumptions underlying this phenomenon, which he calls “the leadership industrial complex,” and says that the cult of leadership, and its idea that everyone can and should become a leader, can create burnout and unhappiness.

Elias Aboujaoude is a Stanford professor of psychiatry and the author of A Leader’s Destiny: Why Psychology, Personality, and Character Make All the Difference. Today on the show, Elias describes the state of the leadership industrial complex, the mathematical impossibility it forwards that everyone can be a leader and no one is a follower, and the primary presumption it makes that leadership can be taught. Elias argues that, in fact, a lot of what makes for good leadership is innate and potentially unchangeable. We discuss the implications of this fact, and why it’s actually okay not to want to be a leader.

Resources Related to the Podcast

• AoM Podcast #838: Can Virtue Be Taught?
• AoM Podcast #923: Leadership Is Overrated
• AoM Article: Don’t Just Lead Well, Follow Well
• AoM Article: Are You a Strategist or an Operator?
• AoM Article: The Best Kind of Leader to Be

Connect With Elias Aboujaoude

• Elias’ website 
• Elias’ Stanford profile page

Listen to the Podcast! (And don’t forget to leave us a review!)

Listen to the episode on a separate page.

Download this episode.

Subscribe to the podcast in the media player of your choice.

Read the Transcript

Brett McKay: Brett McKay here, and welcome to another edition of the Art of Manliness podcast. Are leaders born or made? Judging by the $50 billion leadership development industry, the answer is definitely the latter. From schools to workplaces, everyone is seen as a potential leader and expected to become one by undergoing leadership training. My guest questions the assumptions underlying this phenomenon, which he calls the leadership industrial complex, and says that the cult of leadership and its idea that everyone can and should become a leader can create burnout and unhappiness. Elias Aboujaoude is a Stanford professor of psychiatry and the author of A Leader’s Destiny: Why Psychology, Personality, and Character Make All the Difference. Today on the show, Elias describes the state of the leadership industrial complex, mathematical impossibility [0:00:50.9] ____ that everyone can be a leader and known as a follower, and the primary presumption it makes that leadership can be taught.

Elias argues that, in fact, a lot of what makes for good leadership is innate and potentially unchangeable. We discuss the implications of this fact and why it’s actually okay not to want to be a leader. After the show is over, check out our show notes at aom.is/leadership. All right, Elias Aboujaoude, welcome to the show.

Elias Aboujaoude: Thank you very much.

Brett McKay: So you are a psychiatrist, and you’ve taken a deep dive into what could be called the cult of leadership in America. And what kickstarted this exploration of leadership development in the United States is you got a request to write a letter of recommendation for a medical student. So how did that request for a letter of recommendation lead you to exploring our country’s obsession with leadership and developing leaders?

Elias Aboujaoude: Indeed. So one of the best medical students I ever supervised, I’ll call him Tim, approached me for a letter of recommendation in support for his application to get into a skin cancer program. Tim had really shown exemplary performance on the wards where I supervised him.

So I wrote the most, probably the strongest letter of recommendation I had ever written. And in it, I praised his bedside manner, his clinical productivity, his conscientiousness, his research contributions, really the kinds of things that every program wants to see in an application and in a prospective applicant. To sort of make him feel better and hopefully less stressed out about this process, I shared the letter with him and I watched as he read it in my office. And I was surprised to see his facial expression sink into a deep depression and deep sadness. So for a second, I thought I had mistakenly given Tim another student’s evaluation, the evaluation of a student who had been failing the rotation, but it turned out I hadn’t. What was missing apparently from my letter is any mention of leadership qualities and leadership potential. And Tim was convinced that as strong and outstanding as the letter was, he wouldn’t get into any competitive program without a supervisor predicting a brilliant future for him as a leader.

So that got me thinking about how we’ve come to really prioritize leadership over any other quality in our medical field. But also as I started looking and exploring way beyond medicine, I started paying attention, for example, and noticing daycare centers with names like Future Leaders of America or Leadership Academy, the kinds of things that suggest that we’re planting this leadership seed and inculcating people into this cult of leadership, leadership literally with breast milk. And I started noticing also that college applicants now have an entire section where high school students are expected to talk about their leadership experience. Who wants a shy violinist or an introvert when you can get the president of five clubs kind of thing. So all this speaks to a real leadership obsession in our society, and it speaks to very high demand for all things leadership. Now, this demand is being met, met and then some, by what I’m calling in my book, a leadership industrial complex. There’s a $50 billion leadership industry that’s now available to really convince us that leadership is something that’s within reach for practically anyone.

All you have to do is take the right course or sign on the right executive coach. So it’s a very sort of unhealthy combination between this kind of demand and this kind of supply. And as I see it, it may explain the failures of leadership that we see every direction we look and on every front, whether political, corporate, academic, really everywhere and anywhere. We’ve created a system where we have so much product out there that the only way for leaders to stand out and actually make it to leadership positions is to be unscrupulous, to have traits that are closer to sort of the narcissistic or even the antisocial end of the spectrum. And we don’t want that in our leaders, but this is the system that we have created. And this is what this unhealthy balance between exuberant demand and exuberant supply has created.

Brett McKay: Yeah, that’s one of the big points you make in the book is there’s this paradox that we’re seeing in the past, maybe 50, 60 years, this emphasis on developing leaders. We’re going to develop leaders and very be systematic about it, take courses, but it seems like there’s a dearth of leadership despite all the leadership development we’re doing.

Elias Aboujaoude: Absolutely. This is the biggest, one of the biggest paradoxes of the leadership industry that there has never been more opportunities to develop and train leaders. And yet leaders have never performed worse than they are today. So, one way to look at this is to think, well, we need more training. We need the industry to be even bigger, but another way to look at it and the position that I take in my book is that the leadership industry and this approach to leadership is actually contributing to leadership failure.

Brett McKay: And another point you make too, is that this emphasis, overemphasis on leadership in college students, in your career, it could be leading to burnout and just feeling inadequate. Tim, he was disappointed that you didn’t talk about his leadership skills, but did Tim want to be a leader like personally?

Elias Aboujaoude: That’s the thing. Tim had no interest in being a leader. All he wanted to be is the best skin cancer doctor he could become. And that’s what he eventually became. But Tim was also convinced that without coming across as having leadership qualities, he had no chance of actually making it. When I touched base subsequently with Tim, a few years down the road, I found out that some leadership opportunities had actually come his way, but he was all too happy to ignore them and turn them down.

And yet in his application process, he felt forced to, if you will, pretend to be interested in leading. Otherwise, he wouldn’t have made it into the program that he was eventually accepted into.

Brett McKay: Yeah, I’ve encountered that too with letters of recommendation. So I mentor teenage boys at church and they’ll ask me sometimes to fill out letters of recommendations. And there’s always a thing on there about leadership, like what leadership skills does this person display? And some of these boys, they’re smart, they’re bright, but they’re not really leaders and they’re not really interested in leadership. But I feel like I got to come up with something because if I don’t, it’s not going to look good for them.

Elias Aboujaoude: It’s not going to look good. It’s going to count against them. And it speaks to a bigger problem in academia and in college and university life. Less than one in 10 students now major with a degree in the humanities. We’re shutting down English and history departments left and right. And yet there’s this curious rise of the leadership major and the leadership minor and leadership studies everywhere you look. So it’s a curious development and feeds into this cultural obsession and academic obsession with leadership that I was talking about.

Brett McKay: I want to talk about these courses, but before we do, when you’ve looked at the leadership industrial complex as a whole, what do they mean by leadership exactly? Because leadership can mean lots of different things. There’s lots of different definitions. So how is it described in the leadership industrial complex culture?

Elias Aboujaoude: What goes along with this leadership industrial complex, of course, is intense marketing. And to understand what leadership means to these programs, it’s interesting to look at the messaging and the marketing. So you’ll find words, really buzzwords like transformative, catalyst, a change driver, unleasher. You’ll be empowering people across many verticals and across many tipping points. You’ll almost certainly disrupt.

If I had the nickel for every time I came across the word disrupt in my leadership research, I’d be a very rich man. So these buzzwords add up to the leadership industrial complex’s definition of what a leader means today. And through these courses and through this coaching and through all this “development”, they sell the message that all these qualities and traits are perfectly teachable.

Brett McKay: So I mean, what skills or traits do they purport to teach would-be leaders?

Elias Aboujaoude: I don’t have a problem really with purporting to teach a skill. Where it becomes very problematic for me as a psychiatrist is where they start pretending or communicating that they can teach things like EQ, emotional intelligence, or even charisma, qualities and traits that are linked to personality. And if we know anything as mental health providers, as psychiatrists, as psychologists, is the difficulty changing people’s personalities.

People’s personality tends to be stubborn, not super malleable. If you want to make long lasting personality changes, it’s a long-term commitment that involves potentially years of psychotherapy. It’s not the kind of thing that you can pick up over a bootcamp or a weekend workshop. And yet this is the message that a lot of these trainings are selling. And this is the really misleading, no pun intended, notion that accompanies so much of the leadership industry’s offerings.

Brett McKay: Okay. So leadership in the leadership industrial complex, a lot of buzzwords, you’re a change maker, catalyst, disruptor. So it’s kind of an amorphous thing. It can kind of mean whatever and because it can mean anything you want, like you can create your content that you’re teaching however you want. Let’s dig into the actual content, these courses. I thought this was really interesting. You talk about what colleges and other businesses are doing to make money on leadership courses. You mentioned, I think you said a $50 billion industry overall?

Elias Aboujaoude: Yeah, it’s a $50 billion industry. And it’s an industry that’s been fully embraced by our top business schools, entities and institutions that know a thing or two about making money. And this has helped really transform this leadership development field into a full blown industrial complex. And when you check out something like Harvard’s program for leadership development, for example, you’ll be surprised to see that there’s an 800 number available for applicants to call. There’s an entire program advising team that’s waiting to take your call. You’ll also be, you might be surprised to see that really there’s no formal educational requirements to join. There’s this amorphous sort of leadership potential.

That’s pretty much the only requirement. The program is advertised to people at whatever role or career stage. Again, not really just meant for senior executives or folks already in the C-suite, but marketed as something that’s much more open and accessible than that. So the acceptance rate into it seems much higher than the 4.5% or so that undergraduates applying for Harvard usually face. What’s unquestionably exclusive though about the program is the price tag, $52,000 for the basic four modules of blended teaching. But if you want a lifelong Harvard email address, and if you want alumni status, then you can get that for an additional module and an additional $27,000. So strategies that to me feel very sort of marketing and business oriented in a way that to me fits uncomfortably within the educational model.

Another example that I talk about in the book is Wharton. Wharton is the premier, the oldest business school in the country. And I was checking out a program they have, a nine month, mostly self-based or largely self-based program called Global C-suite. And I read about it and then I wanted to close the window. And I had this very interesting pop-up show up offering me $1000 off the $20,000 tuition if I hurry up and apply in the next nine days. Again, marketing gimmicks and marketing strategies that have no place in education as I see it, yet this is what so much of the leadership industry and the leadership educational opportunities, this is the direction they take.

Brett McKay: Okay. So for $60,000, I could become a Harvard alum. I could put that on my CV. Yeah, that’s crazy. And then it’s not just colleges that are doing this. There’s also many businesses that offer leadership development courses as well.

Elias Aboujaoude: Oh, absolutely. If Harvard and Wharton are offering these kinds of opportunities, then you can imagine the Wild West out there and programs with names like Leadership Express Series or a workshop for $18.99 that promises to teach you how to become a charismatic leader. I mean, any number of such offerings that I review in my book.

Brett McKay: What’s the content of these courses? Like what exactly, when you sit down to through these modules, what are you learning?

Elias Aboujaoude: Well, a lot of the content is not research-based, certainly. There’s very little by way of long-term research results in terms of success that these programs can point to. There’s also a ton of mnemonics that I came across as I was researching. And this heavy reliance on mnemonics suggests that leadership is easy, literally as easy as ABC. One popular mnemonic is the so-called three Rs, three Rs.

But depending on which program or which professor of leadership or which coach you consult, the three Rs stand for different things. It could be reflections, resiliency, and relationships, but it could also be respect, recognize, and reward, and so on and so forth. So all this suggests a very sort of unscientific, make-it-up-as-you-go process that unfortunately takes up a lot of these offerings.

Brett McKay: Is there any research that’s been done on these leadership development programs that they actually work, like that people who go through them come out as better leaders? And how would you even measure that if you did research on that?

Elias Aboujaoude: Well, it’s not easy to measure, which highlights the need for good quality, large-scale, long-term research. And when you look for good quality, large-scale, long-term research that has assessed their success, there’s very, very little indeed that you can point to.

Brett McKay: Okay. And that’s interesting ’cause businesses are probably paying for their employees to go to these things. They don’t even know if it works or not.

Elias Aboujaoude: Oh, to the tune of $50 billion.

Brett McKay: Yeah. And what’s interesting too, you talk about how this is also creeping into middle schools and in high schools. I mean, I grew up in the ’90s, late ’90s. I was in high school then. And I saw that stuff. I was involved in student council, and we did this leadership development stuff. And typically, what it was like the school district was paying some organization to do the teaching.

Elias Aboujaoude: Yes. The leadership bug has fully infected our high school and college systems. And this is manifested in the place that leadership now takes up in college applications, but also it’s manifested in how so many schools seem to be changing their mission statements to emphasize leadership. Everybody wants to teach the future leaders of America. Nobody seems interested in teaching and informing the educated citizenry of the country.

And the downside, of course, of all this is the inferiority complex that it gives those who are not interested in leading, those who have the self-awareness to acknowledge that, so they’re not interested in pursuing leadership, who don’t succeed at leading. But there are real psychological consequences to that and a real inferiority complex that doesn’t get talked about as we send the message that all can be leaders and as we ignore the reality that the world also needs followers. And mathematically speaking, not everyone can be a leader.

Brett McKay: We’re going to take a quick break for a word from our sponsors.

And now back to the show. So the idea that everyone can and should be a leader and that everyone can develop into a leader with the right training is everywhere these days. And I think the big thing we need to talk about, and you mentioned this before, is that the whole idea and what the leadership development industry relies on is the assumption that leadership can be taught. And there are certain skills that can be taught and people can improve on a little bit body language, getting a little bit better with public speaking, getting better at strategy, but you talk about, if you actually look at the scientific research that’s been done on leadership, it suggests that a lot of leadership ability just comes down to inborn temperament. So what does the research say there about leadership ability and temperament?

Elias Aboujaoude: Yeah. So I talked earlier about how there’s very little long-term, long-term high quality research in terms of the success of leadership training. But there’s quite a bit long-term, high-quality research when it comes to people’s personalities and how people’s personalities evolve over time. And what this long-term, high quality research tells us is that personality is pretty sticky. I’ll just quickly mention a couple of studies. One involving a cohort of Harvard graduates who are assessed at age 22 and again at age 67, and you can imagine all the ups and downs and all the upheaval that can happen in a person’s life over the course of four decades or so.

And yet when this cohort was reassessed, the fundamental traits and their personalities were essentially unchanged. The fingerprint, their personality fingerprint was essentially the same. Another study looked at an even younger cohort, students aged 6 to 12 and assessed them on 39 personality traits and re-interviewed them again 40 years down the road. And what the researchers found was their personalities were essentially largely stable. So this is what a high quality long-term research from mental health and from psychology teaches us, and yet when you look at a lot of leadership offerings, there is this idea that we can teach you EQ and we can do it pretty easily. Now, nobody would dispute the importance of EQ in how leaders emerge and how leaders succeed. Up to 90% of leaders success has been attributed to EQ when other skills and when IQ is otherwise the same.

So the importance of EQ is pretty fundamental and pretty established. But the notion that you can teach EQ and transform EQ is highly problematic because EQ is pretty tightly linked to personality. And what the studies I mentioned about personality show is that it’s largely fixed over time.

Brett McKay: Okay. So yeah, when we typically think of a leader, with this idea, he’s charismatic, they take risk, they’re bold, they know how to manage people, they’re detail-orienting, and that kind of lines up with those big five personality traits, conscientiousness, extraversion, low on neuroticism. And let’s say you’re a person, you’re like, Okay, I’m kind of neurotic, I’m not very conscientious. I’m not a big risk taker. Can a course, a weekend course actually move the needle on that? And the answer looks like it’s probably not.

Elias Aboujaoude: The answer is probably not, because personality, again, is largely fixed and when psychoanalysis try to affect meaningful long-term personality changes, it was a year’s long endeavor, not for the commitment phobic. So to the extent that EQ is linked to personality and we know it is, it is not something that you can easily impart or teach.

Brett McKay: Yeah. And this idea of can leadership be taught, this reminds me, this goes back, this is like a couple of thousand year-old question. Like Plato is asking the same question. He was asking that can virtue be taught?

Elias Aboujaoude: Very interesting. Yes.

Brett McKay: Yeah. And he actually tried to figure it out. He actually had this theory that, yes, virtue can be taught. Like if you teach people about the good and they know the good, they’ll start conforming themselves to the good, then they’ll be good leaders. That was the idea. And then he had the chance to test it out. He got to go to Syracuse and be a teacher to this king guy who was having lots of problems and he was teaching him philosophy and teaching him about the forms and everything. And it ended in complete disaster. The guy did not change at all. And Plato was like, Okay, maybe this idea that I had that if you teach these philosopher kings to be good leaders, it’ll… Teach them the forms, they’ll become good leaders. It’ll work, and he actually had to take a step back and say, all right, that’s actually not gonna work. We have to try something else.

Elias Aboujaoude: Well, this is a vignette that clearly belongs in the book, Brett. Thank you for sharing that. You know what the Greeks were also interested in is charisma. In fact, the word charisma comes from a Greek root, that means a freely given gift like something that God endows you with or the gods endow you with. And again, it’s interesting how many people to this day when they try to define charisma will resort to religious sort of metaphors and religious terms. And yet this hasn’t stopped us from pretending we can easily teach it in a way that makes us look like we’re playing God.

Brett McKay: Okay. So a lot of these leadership attributes that we think of when it comes to a good leader, charisma, high EQ, lot of it is based in personality and a lot of that you can’t change. If you do change it, it’s gonna take a long time to do and you’re probably not gonna change it too much.

Elias Aboujaoude: Yes, indeed.

Brett McKay: So when companies or organizations are thinking about leadership, should it be less about leadership development and you know, this idea that you can develop anyone and everyone into a leader and more about leadership finding? Like is it better to focus on filtering for and selecting good leaders? Should that be the strategy?

Elias Aboujaoude: The subtitle of my book is Why Psychology Personality and Character Make All the Difference. And I think one shift that needs to happen for the health of our leadership culture is for us to start paying more attention to these things and ease up on the development, ease up on the steps and hacks and tips that supposedly guarantee good leadership. Basically go back to the basics and put psychology front and center where it belongs in leadership culture. And remember that there’s only so much planning and prepping and strategizing that one can do. And some of the most meaningful and significant leaderships that the world has seen, leadership found the leader not the other way around. So there’s a humbling message in this for leadership culture and it should be humbling for the leadership industry as well.

Brett McKay: Yeah. I think that’s a… Something that I’ve taken away as I’ve studied… I’ve read a lot of biographies of great leaders and one thing I have discovered is what made them great leaders is like, yeah, they rose up to the occasion, the leadership found them and they leaned into their unique personality. They weren’t trying to conform themselves to this ideal leader. That’s charismatic and bold and visionary. And even guys who weren’t that, like they were still good leaders. I mean, here’s an example. Patton and Eisenhower had kind of different personalities. Patton’s very bombastic, led from the front, was very flamboyant and that worked for him. He leaned into that. And Eisenhower was more of a like a people person. Like he did a lot of the, I’m gonna be in the background working on alliances. When you look at football coaches, I love watching how different football… American football coaches coach. You have some coaches who are very just high energy, just on the sidelines. Rah rah rah. And then you have those coaches who just arms folded, never say a word.

Elias Aboujaoude: Yes.

Brett McKay: And they’re winning football coaches.

Elias Aboujaoude: Yes, yes. I think you’re talking about people basically aligning with their psychology and leaning with their psychology and not pretending to be someone they’re not. Winston Churchill is another great example of a transformative, truly transformative and truly disruptive maybe figure who was found by leadership and rose to the occasion as opposed to self-consciously and deliberately in a step-by-step fashion strategized to reach the heights that he reached.

Brett McKay: Yeah. Another one, Abraham Lincoln. Like he was not your stereotypical leader. He had depression, he was severely depressed. He would just lay on the couch and read the book of Job and just be like, I’m the saddest guy in the whole world. But Lincoln was still one of the most eminent and effective leaders in history.

Elias Aboujaoude: Absolutely. Absolutely. So all this is to say that we lose by limiting the profile of who we support in rising to leadership positions the way we are doing right now.

Brett McKay: Well then, I wanna go back to this point you made that this everyone is a leader culture that we have can contribute to maybe burnout, depression, inferiority complex, amongst particularly young workers, young students. Flesh that out a bit more for them. How have you seen that manifest itself?

Elias Aboujaoude: When we live in a culture that only values leaders and when we are subjected to endless marketing that all that counts is leadership and that leadership is yours to have for just a little bit of training and little bit of development. Then those of us who don’t become leaders, either because they’re not interested or they’re not successful, can be left with an inferiority complex and be left thinking, well what is wrong with me when it should be so easy. Where did I go wrong? And that’s an unhealthy state psychologically speaking, and it’s totally unnecessary because the marketing itself that’s driving it and the leadership obsession that’s driving it are what’s faulty with society, not the individual who doesn’t become a leader or isn’t interested in pursuing leadership.

Brett McKay: Yeah. And it also sets people up if they do pursue leadership because they feel like they have to, to feel like, I actually hate this. I am not suited for this. I am miserable, but I gotta do this because I have to advance my career.

Elias Aboujaoude: Right. I got the position that supposedly is what matters in life, but I’m absolutely miserable leading.

Brett McKay: So I think the takeaways from what we’ve talked about are leadership development, probably not a thing. I mean there are certain skills you can develop a little, but as far as those ineffable qualities that we think of when it comes to leadership, that comes down to personality. And that’s either… It’s kind of either you’re born with it or you’re not. So maybe organizations of all kinds should focus more on leader finding, filtering and selecting instead of leader development. At the same time though, I think we can expand on our idea of what makes a good leader. It doesn’t have to be the stereotype. So maybe you don’t have those qualities of a stereotypical leader, but you can still be a good leader in your own way. But let’s say whether or not you do have potential for leadership, you’re just not interested in it. It’s not something you wanna do. What advice would you give someone who they’ve got the self-awareness to know that they’re not a good fit for leadership positions, but they still feel this pressure to get on that track to advance their career?

Elias Aboujaoude: Yeah. What I would tell them is to do what aligns with their psychology. Don’t tie your self-worth to leadership positions. It’s okay to be a leader, but it’s also okay not to be one. And certainly don’t look down on followers including yourself if you happen to be one.

Brett McKay: Okay. And that could be tough ’cause you’re just told from a young age, you gotta be a leader.

Elias Aboujaoude: It is tough and that’s why the change has to happen on many fronts. It has to happen at the level of parenting. It has to happen at the level of schools and universities and it has to happen at the corporate level. I mean, this is not an easy change to make, but it’s a necessary change to make to the extent that we need good leaders. And our approach to leadership today is almost guaranteed to leave us with unimpressive leaders.

Brett McKay: Yeah. But I feel like it just comes down to being okay with being a follower and that maybe will require reframing what it means to be a follower some, right? ‘Cause it has… The word has a lot of negative connotations and baggage. Being a follower doesn’t mean there’s something wrong with you or you’re deficient. You just have a different disposition or maybe you just different kinds of work. And actually this reminds me something we talked about on the site, this goes back to Patton and Eisenhower, is that some people are strategists and some people are operators, right? So like some people like to be the manager where they’re setting the agenda and other people they just like to be on the ground, in the field, doing the work. It’s like some people like to plan the action and some people just want to take the action. So it’s okay not to want to be a leader and just want to be an operator. That’s okay. Maybe you won’t get as much clout and money, but you’ll be happier.

Elias Aboujaoude: Absolutely. Leadership is not the only path to happiness and self-worth.

Brett McKay: I love it. Well, Elias, this has been a great conversation. Where can people go to learn more about the book and your work?

Elias Aboujaoude: Thank you very much. They can go to my personal website, eliasaboujaoude.com or find the book on Amazon or any of their favorite venues.

Brett McKay: Fantastic. Well, Elias Aboujaoude, thanks for your time. It’s been a pleasure.

Elias Aboujaoude: Thank you very much.

Brett McKay: My guest today was Dr. Elias Aboujaoude. He’s the author of the book, A Leaders Destiny. It’s available on amazon.com. You learn more information about his work at his website, eliasaboujaoude.com. Also, check out our show notes at AOM.is/leadership where you find links to resources we delve deeper into this topic.

Well, that wraps up another edition of the AOM podcast. Make sure to check out our website at artofmanliness.com where you find our podcast archives as well as thousands of articles that we’ve written over the years about pretty much anything you can think of. And if you haven’t done so already, I’d appreciate it if you take one minute to give us a review on Apple Podcast or Spotify. It helps out a lot. And if you’ve done that already, thank you. Please consider sharing the show with a friend or family member who you think will get something out of it. As always, thank you for the continued support. Until next time, it’s Brett McKay, reminding you to not only listen to AOM podcast, but put what you’ve heard into action.

This article was originally published on The Art of Manliness.