Hey, guys.
It's Chelsea from The Financial Diet.
And this week's video is brought to you by FreshBooks.
And today, we are in a very new and exciting place.
And with a new person, Hank Green, who amongst many things,
is the executive producer of The Financial Diet,
and also makes many other awesome YouTube channels,
which you can see here.
And we will link them in the description.
And Hank is also actually in the Financial Diet book, which
we have briefly mentioned and we'll give you more information
about soon.
But in the meantime, la dee da, here it is.
And you can find it in the link in the description
for preorder.
So today, I thought it would be fun to ask Hank
just some sort of awkward and honesty
inducing money question that will get to the meat of what
he really thinks about money.
I think that we should be more honest about money.
I really do.
I've never thought that.
I actually disagree.
I think we should be more opaque about money.
Just never bring it up.
Never bring it up.
So first question, Hank.
Yeah.
Let's get right to it.
What is the worst money that you've ever
spent in the name of romance?
Well, it wasn't doesn't necessarily a lot of money.
But I've definitely spent some bad money
in the name of romance.
I had a girl-- not even a girlfriend.
A girl that I wanted to be my girlfriend who
was very into the band Rush.
And I now know a lot of words to Rush songs
because I was trying to impress her with my knowledge of Rush.
So you just bought a bunch of Rush CDs.
I did.
I bought the most recent one, and I
bought the two biggest ones.
And, yeah.
Because you wanted to get the deep cuts.
Correct.
Did you by any Rush merch?
No, I didn't want to be too out there with it.
I just wanted to sort of bring it up.
And I did.
And she was like, wait a second.
How do you-- why do you know about Rush.
And I was like, I don't know.
I just love the band Rush.
Let's go swimming.
I actually had a very similar thing
with a guy who was obsessed with the jam bands.
And I went to a lot of jam band concerts, which if you've never
been to one, you think the songs last 20 minutes, which
is already enough.
They actually last an hour and 20 minutes on stage.
Yeah, they just keep going.
But I feel like spending on wooing, to me, should only
be done when you already are to some level committed
to this person because anyone that you are required
to spend money on in order to get close to,
it's a big, big red flag.
Yeah.
Different people feel love different ways.
And a lot of people feel love financially.
And that's not a thing for me or for Catherine.
But I don't want to necessarily discount that.
Well, I think that a lot of people, especially
who grew up in numb financial precariously,
it's a really big deal for them to feel safe more than anything
else.
Yeah.
And that to me is like a whole other thing, right?
Because if you can provide safety and security for someone
that you love, yes, it's financial technically.
But it's also not about just being as flashy as possible.
Right.
Which is different.
And it's the different ways in which we understand value.
The ultimate manifestation of value
is money, which is really nice to get away from.
But it's what our culture says.
It is what our culture says.
And also, if you've not experienced that from someone
or experienced it in your own life,
it can seem like the ultimate expression of care,
particularly care even more so than love. , However a Rush CD,
never going to factor into that conversation.
I spent like $45 on Rush CDs.
What would the guy at the CD store think?
I was at the hip little CD store in downtown Winter Park.
I probably also bought like a third wave ska CD.
And this guy was like, I'm so confused.
Is it like when kids try to buy condoms at the grocery store,
and they get a bunch of other stuff too so its obscured.
I was just like, I got to buy some cool CDs so he
doesn't think I'm that weird.
So something we talk a lot about on TFD
is spending in the interest of making yourself
a better or different person.
You can sort of buy yourself and upgrade as a human.
Yeah.
What is a misguided purchase that you have made in order
to sort of upgrade yourself?
Well, every gym membership ever.
Says the man who just got back from Pilates.
Well, yeah, that I do because I do private sessions, which
are very expensive relatively.
But if I don't show up, then Allison
is like, where are you, my friend, Hank,
who has let me down?
A lot of people, in New York I think especially,
bigger cities where people work really long hours,
it's very popular to get a trainer.
And everyone says the same thing, which is, look,
otherwise I just won't show up to the gym.
Which honestly, I feel like at the end of the day,
it is much better to spend that money upfront on something
you will actually use than continually convince yourself
that you will go to something that you never end up doing.
Was there ever any specific item?
Yeah, I bought Heelys one time.
What better version of yourself did you
anticipate that that would create?
It just makes a more annoying version of yourself.
Hey, the picture in your head and the picture in real life
is not always the same thing.
This, but on wheels.
Just at the mall.
I was an adult human.
I was in my 20s.
No!
So what is a guilty pleasure that you spend money on, even
though you know you shouldn't?
Oh, so many things.
Business costs for sure.
Probably the most guiltiest, expensivest pleasure that I--
and it's not just the cost.
It's that airplanes are much more efficient per passenger
when they don't have a first class at all.
Right.
And so if people are buying those seats,
then airlines have bigger first class sections,
which fits fewer people for the same amount of fuel
being burned.
And so it's worse for the environment.
So I think about that every time I sit down in business class
and I'm just like, this is dope.
And I'm bad.
And you watch all the poor people shuffle by.
You know what?
I like to at least acknowledge that the people who
are going by.
That's worse.
Well, sometimes I have a baby, one.
And then it's like, hey, everybody is having a good day.
I actually think it would be worse if people in business
class just like waved.
Hello, proletariat.
How charming.
Hold up your glass of champagne.
So how do you then justify it to yourself?
What makes you keep spending?
I justify by saying, would I do this?
Would I go on this trip if I didn't have business class?
And I just wouldn't.
It I fly enough and it's unpleasant--
I'm 6' 1'' and I have a family.
And so I'm like, would I go on this trip in economy?
No.
Would I go if it were business class?
Yes.
So what is something you are very cheap about,
even though you know you should be spending more?
I don't know how to buy clothes.
I don't know how to buy more expensive clothes, nicer
clothes.
Just don't.
I don't know.
I've never had a tailored anything.
And I feel like maybe I should have some tailored things.
What about for events?
I went to--
Weddings?
Oh, Montana weddings.
You need a vest max.
You're in like a bolero tie and cowboy boots.
Yeah.
No, not kidding.
Oh, really?
I see lots of bolo ties at Montana weddings.
I don't wear one myself.
Oh, my god.
A leather vest is like the top of fashion.
A leather vest?
No sleeves?
No sleeves on a dress shirt.
Yeah.
No tie at all.
OK, so for all of the world that doesn't live in Montana
and sometimes goes to weddings or a business casual work
environment, it's unusual I think to not
know like how to get clothes.
I went to a Hugo Boss when I was in Australia just a week ago.
And I was amazed.
In a good way?
No.
Yeah.
I put on the well I put on the jacket
and I was like, that looks pretty nice.
And I looked.
And it was $900.
And I was like, you can't pay $900 for a jacket.
That's not a thing that happens.
You for sure can do.
You know what?
Here's the thing.
But you don't have to, right?
You totally do if you wear a suit every day for years.
But there's like $250 jackets.
If you get a cheap suit, it's threadbare within a year.
I did buy a suit coat at Zara, which I have worn,
I don't know, 20 times.
And it looks like crap.
And so this is why I say, I should probably
be spending more on clothes.
These shoes I found in an alley.
OK, so I think what we're getting out
of this conversation is that Hank lives a unique life that
has made it--
I think you live a unique life, miss New York City.
All right, poll time.
Everyone in the comment section who
has a job that requires them to look a certain way,
raise your hand.
Or type a hand.
Type your hands.
But I would say going back to-- as someone who generally
has to wear certain things for a lot of work events,
and has a partner who also does so, it's always been worth it
for us invest up front.
But if we didn't need to, we certainly
wouldn't be doing that.
A really easy rule of thumb is just break things
down by cost per use.
If it's something that you're going
to be using almost every day, probably an
indicator to spend a little more.
Now I'm going to out you here Hank.
You're someone with money.
It happened.
He's got, by most statistical standards, quite a lot of it.
And he didn't always.
Although he was never--
could we say he was never poor.
But he certainly wasn't at the place
financially that he is now, which
means he's sort of gotten to experience
a little bit of the financial spectrum,
from what is probably closer to the average
to what is very far away from it.
So as a result of this sort of shift,
can you tell us at least one thing
that wealthy people know about money
that not wealthy people do not?
First, I think that it is very easy to spend money.
And that's something that everybody knows.
But you think that it will become--
that it will start to be like, well,
I don't know what to spend all this money on.
That never happens.
Lifestyle inflation.
The money just keeps going away.
And so it remains important to have
a budget because the luxury of having money
isn't being able to indulge in luxuries,
it's being able to not worry about money.
Oh, 100%.
And if you continue to indulge in luxuries,
and you're like, well, I'm going to I'm
going to enjoy the fruits of my labor,
then you don't get that ultimate luxury.
I'm trying to keep my own spending in check
and my own sort of experience of the world in check.
Your lifestyle inflation-- to go back to it--
your increasingly expanding idea of what is normal
and what is a luxury.
And one thing that I will say in learning
a lot about rich people and how they
operate through making The Financial Diet
is I think rich people intentionally obscure
how easy it is for them to make more money,
and how little they pay on that money.
Yeah, and it's very strange fruit for me
to talk to some of my wealthy peers and have them be like,
well, I earned this.
And I worked for this.
And I'm like, you know how much easier it is to make money
once you have it, right?
It's so much easier.
But I think that that whole narrative, especially when it
comes to entrepreneurship, of you built this, you did this,
is just so dangerous.
And it's pretty easy to believe.
And people tell it to you.
Strangers will say, what a great thing you've built.
And you're like, I hear what you're saying
and it's a load of bull.
Totally.
The value that was added to this company
was added by all over the people who work here.
And there's 30 of them.
And so to say that I built this--
I maybe built a 30th of it.
I think that rich people think in terms of opportunity cost,
not in terms of cost cost.
Not everybody thinks of it this way.
But I think if you can get to that place, it's--
and it results in a lot of spending.
When you say, OK, well, how much is my time worth?
Because my time's worth--
according to what the economy is valuing it at--
enough that I probably shouldn't be mowing the lawn.
I should probably pay someone to do
this who has equipment, who can do this faster,
and has the skills to do it.
Well, it's really about money isn't valuable.
And it's on its own.
Right.
And understanding that.
And also that money in investment
is worth far more than just the money.
And so when I think about making $1 right now, I think,
is spending this dollar worth the $5 that it
will be by the time I retire?
And that's also I think a really healthy way for a lot of people
to think about money.
But it becomes easier when you have it
and when you've seen how investment functions.
And we try to encourage our audience because a lot of them
are very interested in investing,
but don't have a lot of money.
And a lot of them have the misconception
that there's a financial barrier to doing so.
There really isn't.
To the extent that perhaps with some big providers
of investment options and maybe a couple
hundred dollars a year.
But generally speaking, especially
if you have something like a 401K available to you,
we can all invest, even with a few dollars a month.
We can call it future you.
If you start thinking in terms of future you,
it's a lot easier to make these decisions.
Also, to echo what Hank said, rich people
tend to put an actual value on their time, which is something
that everyone can do.
And even if it comes down to something as simple as, hey,
I noticed I'm wasting a lot of time
on this thing that doesn't really enrich me in any way.
You can say, hey, my time's worth more than that
and cut it out.
What is something that 2017 Hank does with money
that 2007 Hank would not have thought possible?
I own a house.
I own it.
I don't have a mortgage.
Oh, wow.
Which is amazing.
That's nice.
Giving health insurance to a bunch of people.
That's the best thing I do with my money is I make it
so that my employees don't have to think about health insurance
because thinking about health care is the worst thing.
So I think that does it with Hank, who has taught us
quite a lot about what he thinks about money
and also being a business owner and starting your own things,
which if that is something that you are interested in doing,
I encourage you to check out FreshBooks.
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So as always, guys, thank you for watching.
And don't forget to subscribe and to come back every Tuesday
for new and awesome videos.
Bye!
Seriously, they're really good.
Thanks.