Latest / The Curve / RTC83: The Psychology of Money: Earn by day, sleep like a baby by night.

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RTC83: The Psychology of Money: Earn by day, sleep like a baby by night. · The Curve

0:00
Welcome to Raising the Curve, a podcast designed to teach you everything you need to know
0:05
to be better with your money.
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And the wise words of Amy Shurma were slipping carrots into the brownie recipe.
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I don't really get the saying.
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It's kind of like eating vegetables that actually taste good.
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You know, I'm like, still not ready to eat.
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Are you on the script?
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It's basically like saying investing in finance can be boring, but it totally doesn't
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need to be.
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OK, OK, so we're making it fun by putting the carrot.
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OK, the vegetables are just good for you.
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It's the brownie recipe.
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OK, we got there, we got there.
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OK, OK, well, you've really got a finance brain.
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Yeah, one of us has to.
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This is a joke.
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OK, come and learn alongside me from Vick Harris, ex-fun manager,
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where I'm going to ask all the questions that you wish you could.
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And I'm going to be eating all the brownie you wish you could.
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It's so not the joke, Vick.
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OK, just come and talk and learn and laugh with us
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because together we really can raise the curve.
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So if you had a look at my bookshelf,
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be very different to your bookshelf.
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Vick starting a library, she's decided.
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I wanted to have a library.
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Oh, I went into this club, one of these really old geno ones club,
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which was like, me, not stoked to be there.
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And they had the most beautiful library, floor to ceiling,
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with the stairs, you know, the letters that go around.
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And I was just like, this is what I want in my house.
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I want a house big enough to put in a massive library.
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Anyway, so I'm starting my library collection.
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But what are you planning on doing?
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Because you're buying books like card cover,
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like you're not doing Kindle, we're doing actual books.
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And personally, I just like reading books so do I.
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But at my point is, are you starting the library in the UK or in New Zealand?
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Because you're going to have to cart all these books.
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Yes, it's a price I'm willing to pay for my library.
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OK.
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I've just seen a book back with each friend
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that I know going back to New Zealand for the next two years.
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I'm a financial expert, but I'll buy the books for this amount,
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the, and then send them that.
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No, it's an investment in knowledge and aesthetics.
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Yes, thank you, Sophie.
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Anyway, my book collection looks very different to Sophie's book collection.
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Do you know what I used to all non-fiction?
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I used to read autobiographies.
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I used to read, you know, spirituality, things I used to...
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Things?
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Do you know what I mean?
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I used to, like, the alchemist or Brunei Brown dare to lead
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or Brunei Brown, you know, all that kind of stuff.
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Quite self-help-focused.
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Yes.
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And I also hate the term self-help, self-development.
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Yeah.
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I mean, both are very self-indulgent, but the point is, I would get into bed
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and I'd be like, oh, I've got to read something that's going to educate me again.
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So, ever since, and I just would read like a snail,
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I'd get one or two pages thrown full of sleep.
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And I was, I never had that excited feeling of like, oh, I'm reading a book.
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Yeah, I'm going to escape to like, hold on or something.
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Anyway, so I started reading more fiction, and I have been a love thing.
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And you know that they're coming out with a new movie that Blake Live is going to be the main star.
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And it's called It Ends With Us, and it starts with us.
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It's a book series by, I think it's Colleen Hoover, is the writer.
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I probably read both books in two days.
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They were proper love stories.
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I loved it.
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But anyway, yes.
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The bookshelves.
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Where is this going?
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Sorry.
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The point was just that our bookshelves would look, one would have like fairies and rainbows,
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and one would have famous investors' faces on them.
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Yes, exactly.
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Are we about to talk about another book of yours?
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Yes.
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Yeah.
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So, it doesn't have a famous investor's face on it, but it has money on it.
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And it's fine.
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Yeah.
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I can work with that.
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Do I have to read it?
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I think everybody listening to this podcast and you, yes, should read this book.
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And before everyone's like, oh, boring.
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This is honestly, it was such an easy read.
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And I just think it's so vital to anyone that is a human being in this world today.
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Anyway, it's called The Psychology of Money.
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This is not a book club series that we're now doing.
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We're going to review a book.
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I just thought this one was so spot on, hit the nail on the head, just everything.
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I was like, oh, yes.
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Got to share that with the curved community.
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Love this.
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Yeah.
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Some people like scribble in their books.
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I don't, because I don't want my library books to all be full of scribbles.
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Good to know.
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So, if I borrow this book, I won't run.
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Yes.
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Yeah.
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No coffee stains, no tear drops.
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Am I allowed to, like, doggie the pages, or do I have to use a book?
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I think you should buy your own.
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I'll give it to you for Christmas.
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Yeah, because it's so good.
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Not because I don't think that you're going to take care of it.
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I mean, because it's so good.
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A lot of budget, mate.
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Like, help a girl out.
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My whole family is going to get a copy of this book.
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Anyway, it's called The Psychology of Money.
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Timeless, lessons on wealth, greed, and happiness.
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So, it is, and it's by Morgan Housel.
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And he is a partner at a bench capital firm.
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So, it's called The Collaborative Fund.
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So, he provides funding, which capital just means they provide funding to early stage
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technology companies.
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So, I think it's one that everyone should read.
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It's very, very easy.
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And I've got eight key takeaways here that I'm going to run through.
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So, we don't have to read the book.
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Yeah.
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So, but you should read the book.
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Okay.
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You're like, we've got to fake.
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We should read the book.
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So, this is a blur.
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This is, you're basically giving us the top eight takeaways that even if you don't read
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it, you should pay attention to.
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And for those of you who hate reading or don't have time to read, I got you.
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Also, surely there's an audio book.
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You'll be able to listen to it somewhere, yeah, definitely.
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So, firstly, manage your money in a way that helps you sleep better at night.
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And I think this is really, really important because it's different from saying you should
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aim for the highest return possible or save a specific percentage of your income each
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month and be stressing over that.
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You know, if you're investing and you're investing something super high risk that you're not
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familiar with, that you don't understand, you're going to be freaking out all night
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about your investments.
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Or if you're stressing out about, oh my gosh, I'm supposed to be saving more each month,
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but I can't afford to because everything's so expensive, don't stress.
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It's almost just saying everyone's different and invest in a way that's, or manage your
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money in a way that's best for you.
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So, what I'm taking from this is, yes, of course you're trying to get towards your 20
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year holiday and yes, of course you want to be putting as much as you can towards your
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investments to grow that money.
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But if that means that you cannot sleep because you are so stressed about getting day to
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day, it's not worth it.
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And for some people getting the highest possible return is what they want, and that's great.
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And that's what will help them sleep better.
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Totally, knowing that their money is working hard for them and others, if they just want
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to invest conservatively because they're a bit risk averse, totally get that as well.
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That's fine for them, each to their own everyone is different.
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But with every financial decision you should be asking, does this help me sleep better
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at night?
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Gosh, I can do that one on board.
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Yes, yes.
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Sleep with a really clinchy jaw.
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Do you grind your teeth?
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Yeah, I need to get a new mouth plate, which is so sick.
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I had a friend of mine who ate in her sleep.
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Oh, that's so weird.
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So weird.
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You know, I was like, do you realize you fake eat in your sleep?
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She was like, no, I don't.
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I was like, oh my gosh, you're definitely, but it was also like, are you going to just
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roll over and just like, too many?
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Too many.
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Oh my god, the days of sleep over.
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I know.
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I miss that.
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Yeah.
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Okay, can you take away two?
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If you want to do better as an investor, the single most powerful thing you can do is increase
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your time horizon.
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Oh.
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Yeah.
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So just don't take the money out for longer is basically the key takeaway.
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Yes.
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So leave it in there as long as you possibly can.
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If you were thinking, I'm going to invest for the next 30 years.
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Yep.
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You could make it 35 or 40.
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Just yeah, the single most powerful thing you can do is increase your time horizon.
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So start now.
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I see.
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Yeah.
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The other day, it was like, I worst money mistake being a nursery in the 1950s or something.
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It's not a big set.
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And not buying a house.
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Yeah.
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That's right.
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So true.
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So we've said this before, that time is your friend.
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It's your investing best friend.
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It's your cheerleader.
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And that's all because of compound interest.
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And there's this one phrase that they said in relation to this, which I love, which I'm
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actually going to stick on some posters around my room.
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Time makes little things grow bigger and bigger mistakes fade away.
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And it's so true.
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If you're investing, time will make that money grow more and more.
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And you'll forget about the day-to-day volatility, the movements of the stock market, the fact
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that it was down 10% that month or that year.
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But if you're investing for the long term, or the longer that you're investing for,
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the better your money will be.
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Yeah.
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So.
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And it kind of comes back to Warren Buffett.
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I mean, bear.
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Famous investor.
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Famous investor.
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Yes.
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Warren Buffett.
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He's not the best investor in the world.
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He didn't get rich quick.
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He was just consistent and held his investments for a very, very, very long time.
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And that's why he has now got some of the greatest wealth in the world.
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But it wasn't because he got the highest returns every year.
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It was literally just because he had the time.
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And now that he is 65, I don't actually know.
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I feel like he's older than that.
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Probably 90.
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He's very large on the top of his 90s.
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Sorry.
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He's very large on the top of his 90s.
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He now has created this humongous amount of wealth because of that consistency and having
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that long time horizon for his investments.
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I think as well what you're doing for your niece, what I'm doing for my God daughter,
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and investing on their behalf from their younger baby.
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Can you imagine how unparalleled you would be if you got to an age where you understood
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money enough to see a number on a screen at each year see that growth.
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You're just setting them up to be aware of how competitors work, of how consistent and
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regular investments make such a huge difference.
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I just wish I'd had that.
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Yeah.
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And we noticed it.
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When you log into the other day and so I've logged into a quiz, I was like, whoa, it's
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grown so much.
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Imagine that.
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But seeing that as a kid being like, we put in this much and now it's this much, or checking
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with them each year and going, yeah, it's gone from here to here to here, or expanding.
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Oh, this year hasn't done very well.
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You start, it could be like a birthday ritual.
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Yeah, yeah, quite cool, quite a cool thing to do.
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So on our Friday night, just as a side note, rather than going out in the town, thinking
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I'm sorry.
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What?
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Light.
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And checked my kiwi saver.
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And we logged in, I actually hadn't logged in in so long and I thought I had $10,000,
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which I thought might have gone to like $12,000 and it was over $30,000.
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It was so funny.
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It was like 7.30 at night and so I've seen it.
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I was kidding, Terry.
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I was so proud.
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And we were doing calculations, trying to get so, you know, a deposit to my house.
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Yeah, I really want to be able to buy a property, which I was like, oh, look at us.
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7.30 at night, doing calculations that are spreadsheet.
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I know.
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But, please, that's hard.
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We got a little spreadsheet up.
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That's the way I'd like to spend my Friday night, starting in all the amounts.
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It was just like, and what if we had $15,000 here?
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And what if we all took this?
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Anyway, number three, use money to gain control of your time.
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Again, this is something that you've kind of had an epiphany about in the last few
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years.
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And I think one of the biggest drags on happiness is not having control of your time because
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I think it's so powerful and it's just a universal drag on happiness.
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Well, let's list a few things that you can do if you have money and you don't just
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spend the time doing it.
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Let's list it.
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Cleaner.
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Cleaner.
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Cleaner.
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Cleaner.
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Cleaner.
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Cleaner.
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Cleaner.
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Cleaner.
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Cleaner.
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Cleaner.
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Cleaner.
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So much.
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I'll try to make a one.
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If you can afford help if you've got kids, then you can spend more time, like quality time,
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but then rather than just doing the admin stuff, like getting them changed, all that kind
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of stuff, amazing.
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If I'm lucky enough to have kids one day, I will want to be in a position where I can
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get help so I can have more time with them.
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All retiring early because they are such a big portfolio and you can spend time with grand
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kids rather than having to work that extra 10 years or five years.
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Amazing.
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Amazing.
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Even small stuff, like getting an Uber somewhere rather than spending 2,000 on public
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transport. If you think about what you could achieve in that time wise for a work perspective.
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Yeah. I mean, that's one of mine. I went through and I was like, what do I spend money on?
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That brings me more happiness. Because it frees your time. Yeah. And one of them was
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obers. Yeah. Like also, if I'm running late and I can jump in an Uber rather than
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going to meet friends for dinner and I'm like, oh gosh, I'm running late. That's the only
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student running late. But also, I remember when I was buying my car and I was like, do I go
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for a more expensive car that has hands free where I can actually make calls and catch up with
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friends and do meetings in my car. You know little things like that. That's a really good example.
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Yeah. So it's little things like that. So having a laptop that doesn't take forever to load
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means more productivity. I can actually do more stuff, which then frees up my time to do more
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leisurely activities. Yeah. I think spending, it's almost like spending money. I was about to say
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it's spending money, make money, but that's not even it. But the other night, if we were to use
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obers as an example, we'd finished really late. I was like 10 pm and I had to edit a podcast that
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was meant to be going out the next day. And rather than sitting on public transport for an hour
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where I don't have internet and I don't have access to edit, I got an Uber so that I could do it
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in the back of the car. And even that, I remember thinking, I'm so grateful that I can spend the money
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on a note that all the curve can spend the money on a note. And I don't have to say up an extra
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hour when I get home. I watch them and eats into your well-being. And then like money is just like
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the core of everything. I hate to say it and people might think I sound like an absolute
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yeah, but it's so true. Yeah, it just gives you the ability to do what you want when you want
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who you want to do it for for as long as you want. So I think this is kind of this third point is
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just financial freedom, it's core really. And probably one of the we always talk about dividends,
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I think this is one of the biggest dividends about biggest dividends for investing is you get time,
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you get time back. You don't necessarily get a monetary dividend, but you get time.
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That was a real open moment, wasn't it? Yeah, I just came up with that myself. That wasn't even
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in the book. That wasn't in the book. No, well, the dividend was, but that was the best part.
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I was like, don't want to be done with plagiarism. Anyway, sorry. Number four, be nicer and less
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flashy. So no one is as impressed with your positions as you are. And it's so true. Can you
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elaborate on that one a little bit more? So no one is as impressed with your positions as you are.
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No, no, I need you to repeat it. I need some more context. It's like my mum, my mum always used to be like,
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oh, do you know, you know that lady, mural? She was the one when the reddress came up with
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a dinner 15 years ago. I was like, my mum, I don't know. She said, no, and she had the cat in the,
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my mum, I don't know. And the reddress, the reddress, it was mural. I was like, I don't,
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like, honestly, anyway, sorry. Put off topic. Yeah, what was the back? I mean, I get it and I agree
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with it, but how is that such an important thing in the book? What else they talk about with
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relations? So it's like, you might think that you want a fancy car or a nice necklace or whatever,
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but it's actually what you want is respect and admiration. So it's kind of people, I guess humility
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and kindness are much more vital in today's world than flashy things. And it's kind of all around
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the less ego you have, the more wealthy you'll be, because you don't care about what people think.
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Warren Buffett, again, another example, he lives in the, like, most basic house in his hometown in
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Nevada and Oklahoma. Like, he could have so much wealth. He tries like a Toyota. Do you know what I
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mean? It's like, because he's just like, I don't need any other car or it just gets him ready to be.
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And it's kind of that perception that the more flesh you are, it's almost like the less wealth
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that you are, if that makes sense. It's funny that he, it kind of surprises me that he is
16:42
in a industry of building wealth. And yet, it almost feels like he doesn't value money
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as like a wealthy asset. It's more, yeah, it's more the knowledge thing. But it's kind of,
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if you want to grow your wealth, remember what's important. Yeah, you need to spend money to buy
17:02
those positions. So therefore, you're not investing that money to grow it. So the less that you can
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spend on those flashy things or those things that you think people want to see, that you think
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bring you respect and admiration, then yeah, don't. Okay. And it's kind of hard with like
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Instagram and everything, because everyone wants to be like out there portraying that they're
17:22
living this wealthy luxury as lifestyle when probably the most wealthy people are the ones that
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aren't spending their money to show others. So yeah. Well, I remember someone saying to me,
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it was all around the idea of leasing cars. And I know there's different ways you can do it,
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and it can be quite clever in some situations and others and not. But I think it comes back to
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the motivation, like what, why do you need the newest model of the iPhone or your laptop or a car
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or a nicer house? Like, is it for function and does it free up time or make things easy for you,
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or is it is it purely a status thing? That's totally really not cool. And it's kind of like the
18:02
lifestyle creep, which I don't know if we've spoken about on the podcast before. Not for a while.
18:06
But it's kind of, it's the idea that you expand what you spend based on earning more rather than
18:12
actually. So as you get a pay rise, then you start spending more and spending money on more things.
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And it's like a house, more food, going out more rather than investing that money. Yeah. Yeah.
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I remember when I got my first job out of university, and I remember seeing how much I was getting
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paid. And I was like, oh my gosh, and see to my mom, I say, mom, I'm still going to try and live my
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student lifestyle on the salary. And I'm going to save so much. And she just rolled her eyes at me.
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She was like, kind of good luck. And we just, the fact that you even thought that as a fresh working
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person is so much money. And I was like, oh my god, I'm going to pay this. And if I keep
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spending this low amount, I'm going to have so much savings. But it's just amazing that this.
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But I didn't do it. Okay. No. Yeah. I've very quickly had life so crew. Oh, okay. Yeah. But
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that's a good example. The intention is still on purpose. Yes. True. Yeah. Anyway, number five.
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Save, just save. You don't need a specific reason to save, which is quite interesting because
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it's kind of contradicts what we've been saying at the curve. You know, save for your dream car,
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save for your waiting. You have different time horizons, different bank accounts, different
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investment accounts, whatever for a specific thing. And after reading this, I was like, we can have
19:24
to go back and change all our podcasts. So it can explain it a little more. Yeah. So most people
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do need like a tangible goal of, I need $10,000 for my waiting, or I want a million dollars
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at a time, or $5,000 in my emergency fund. And if you're that kind of person, that's fine.
19:41
You know, whatever makes you save me. Yeah. But saving for things that are impossible to predict
19:48
is one of the best reasons to save. So the world is so unpredictable. You have no idea what's
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going to happen. You don't know when you're going to retire. You don't know what the world's
19:59
going to look like when you retire. This is why we have emergency funds because we don't know
20:04
what the world's going to hold. But you know, you don't know if you're going to lose your job
20:08
tomorrow. You don't know. So you can only save for what you can predict for the world's
20:13
unpredictable. So it is a bit, everyone's life is one continuous chain of surprises. And it's so
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true. I don't know what the day's going to look like today, tomorrow, the next day. So if you
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save for saving sake and just save as much as you can, you're going to be much better off
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than saving for specific things. And then something else happens. Do you know what I mean?
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Oh, yeah. You're like, no, man. So in most cases, you should just be saving as much as you can
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all the time. You're like, no, no, it's not not. I think I just, and one of those people that
20:52
really likes to control things, and I like to know what the outcome is. I've struggled with
20:57
the vulnerability sitting in the place of not knowing. See, I would have thought you were
21:01
the different. And I would have thought, you're quite goal-oriented though. Yeah, massively.
21:06
Like, if I have something that I'm working towards or something that I know is happening,
21:10
I can make that happen. Yeah. The idea of not having any idea or control over something kind of
21:15
panics me. So, but doesn't that, this gives you control because there is no control in the world.
21:22
I know. Well, I mean, that's kind of the, like, the idea is that you can't control it anyway.
21:26
So you can just accept it and make a plan, which is just save and do your best for whatever
21:31
your life throws in your face. Well, maybe you should have multiple goals that therefore
21:37
you end up saving as much as you can, but it is goal-based. But yeah, I guess what he's saying is
21:43
don't be like, oh, cool. I've saved $5,000 for this. I don't need to save anymore. Or I've hit this
21:48
target. I don't need to save anymore because who knows what will happen and yet life is unpredictable.
21:55
So, and when I say save, I'm meaning anything above your kind of emergency fund, you should
22:00
be investing. When we talk about saving and investing, I'm not meaning savings in the bank.
22:05
I'm meaning. Yeah. Oh, yeah. That's a really good thing to say. To a certain point,
22:09
until you have enough that would be for a rainy day and then invest the rest because
22:14
I don't want, we don't want people having lots and lots of money in the bank. This is also
22:17
another really good quote from the book, which there's just so many. I think I found my new
22:22
favourite book. So the quote is, savings are a hedge against life's inevitable ability
22:27
to surprise the hell out of you at the worst possible moment.
22:30
Well, there's a fucking tragic quote. Yeah, I know. How would that be your favourite?
22:34
Because if you've got savings, it's just a great safety net that you can use at the worst
22:41
possible moment, which will happen. And I've actually, I remember having this. It's kind of,
22:47
key takeaway number five is really about emergency funds, you know, having savings for savings
22:52
sake and actually having savings where if something does go, tits up, you can use that money.
22:58
And I remember one day, this is the thing was last year, you know, popped a tire and I pulled
23:03
over on the side of the road and started crying because that morning my washing machine had also
23:08
just stopped working. And I was just like, oh my goodness. Was that because I fell on the washing
23:13
machine? Oh, no, that was another time.
23:17
Totally forgot about that. I'm surprised you got that fix. I was like, this is the oldest washing
23:23
machine. You're not going to find a new door for anyway. This was my 30th birthday. It was
23:29
literally my 30th. That was that day, yeah. Yeah, yeah. And I ran into Vicks bathroom. I was
23:34
nude and I slipped on something and I fell over and I landed on her washing machine door
23:40
and it fully broke off. And I screamed and I was like, fake. And I came running in and she was
23:46
stark naked on the ground and my washing machine door was broken. And I was like, I couldn't,
23:52
it's like when you see a car crash and you're like, how did the car from there get across the
23:56
air? And why is that involved? And I was like, were you like sitting on my? I think there was also
24:01
maybe a spill or something. It was kind of like what needs my interest. There was clothes or there
24:04
was towels. It was just a lot of happening. There was something broken. I don't know. Yeah,
24:09
anyway, it was and I came in and I was like trying to defuse it. You're kind of trying to be like,
24:13
I think I was crying as well because of that's right because it really hurt. You're kind of crying
24:17
yeah, but it really hurt. And then you were naked so I couldn't really help you. So I was like,
24:22
uh, put some clothes on and then I'll come but oh no, but you saw it was it was quite a weird
24:27
moment. It was quite hilarious. It was quite funny. Anyway, she fixed my washing machine and I'm
24:31
yeah, resourceful. If there's something I am that's resourceful. Yes.
24:36
Number six, define the cost of success and be ready to pay for it. Now this just means that nothing
24:43
worthwhile is free. And what what about sunshine? Nothing worthwhile is free. It's
24:51
sunshine. No, yes, but it's what it's saying is that most financial costs, they don't really
24:56
have a visible price tag. And I'm going to dig into this in a bit because I thought this was
25:01
a really good way. We never we talk about risk and we talk about volatility and we talk about
25:05
the movement up and down in the stock market. What he explained that as was that is a fee that you
25:13
are paying to get those higher returns. And it was kind of an interesting way. We kind of view
25:20
it as a penalty or a fine because you end up losing money or whatever. But if that's just the
25:27
fee that you have to pay. And if you change your mentality around investing to that volatility or
25:33
that point where I'm like, oh god, it's going up. Oh gosh, it's going down. Oh gosh, you know,
25:37
that you mean like the term oil? I've gotten up and down. Yeah. How does the movement of it going
25:42
up and down is just the fee you pay. The kind of I guess the stress is the fee you pay for those
25:48
really good returns over the long term. And hey, if you don't want to pay that fee, that's fine.
25:52
There's other things that you can invest in, things that don't really move around. But then they don't
25:57
go up as much either. So it's kind of using that mentality of this is just a fee I pay.
26:03
This is not a fine or a penalty. And it was just the way he explained it was really, really interesting.
26:08
Well, it's almost like taking it back to one of the first, maybe it was even number one. The idea
26:12
of make sure you can sleep at night. And if you can't sleep at night based on the idea of your
26:17
money going up and down, then you need to maybe divest into a different title of investing. And
26:24
if you're like going to sleep at night. And if you're like, I can manage a little bit of it,
26:27
but not too much, then you can split across both. But it's saying, this is the price that you
26:31
have to pay to achieve those high returns is that you have to get comfortable with this uncertainty
26:37
in the short term. And so it's kind of looking at that, looking at that volatility and that movement
26:44
up and down the gyrations. I think a great way to look at it is if you are going for the super
26:50
risky ones, investments, whatever they are, that are going to hopefully have a high return,
26:56
your paying high fee. If you're going for the moderate risk as in, and it's going to give you
27:01
moderate returns, then you have a slightly less stress fee. And if you're going for the low risk
27:07
and low return and blah, blah, blah, blah, then you've got a pretty low or minimal fee.
27:12
Yes, because it's not scary. It's high to the stress fee. I like that.
27:15
Yeah. So it's like the uncertainty, the doubt, the regret, all those feelings you have when
27:21
things are going up and down, up and down, up and down. It's an emotional fee. That's the cost
27:25
that you're paying for those investments. And that's the risk you take when you're investing.
27:30
But the reward and the payoff and the success is a lot more. So it's kind of figuring out what you
27:39
can stomach or what you're willing to pay as a fee in terms of those things. So that's what
27:43
he's saying by saying that most financial costs don't have a price tag because you can't quantify
27:49
that. You can't put a figure on it. It's looking at risk as the price worth paying to get something
27:54
really nice and exchange, which is that return rather than a fine or a penalty that you should
27:59
avoid. So there was just an interesting way in some people might be like, oh no, I get it when you
28:04
talk about risk and volatility and yeah. So maybe you could like the stress fee or stress fee.
28:10
Yeah. I like that. Number seven, worship room for error. So this just means that again,
28:18
it's kind of coming back to what you think will happen, probably won't happen or the world's
28:23
unpredictable. So if you're figuring out I need a million dollars for retirement and you don't
28:30
have any room for error in that, then maybe you should be aiming for, say, 1.2 million dollars
28:35
for retirement. It's almost been the opposite of being conservative. You want to aim high because
28:40
you might come in low or something might not go to plan or if you needed $3,000 you thought for
28:47
your emergency fund, maybe make it $5,000 just in case. Those kind of things.
28:51
I think that's a really good one. Yeah. Because again, it's that gold driven brain that I have.
28:58
If I have $7,000 in my emergency fund, maybe have 10 just so that you have just because let's be
29:03
honest, I'll probably fall over and do something stupid. Yes, exactly. And it's all around the fact
29:07
that we're saying for that the world is unpredictable. And we always talk about it in finance
29:11
is having that room for error, what we call margin of error. So if we are modeling out, you know,
29:17
what we think company is going to grow at and what it's going to deliver in terms of profit,
29:20
it's like, this is the best case, this is the worst case. Do they still both look good?
29:24
That's why you're so negative. Like when it comes to, you know, like quite, you do have like,
29:29
not negative, sorry, negative, actually, there's a really bad way to put it. It's more of a,
29:33
it's like a, we've got a real realistic, yeah, view to things. So it's not, you don't take the best
29:38
case scenario and think it's definitely going to work out. You always look for what could go wrong.
29:44
I guess I'm a small portion. Yeah, that's so. But he phrases it, it's so room for errors, a gap
29:49
between what could happen in the future and what you need to happen in the future in order to do
29:55
well. And it's what gives you endurance and endurance is what makes compounding magic over time.
30:01
So it's kind of, yeah, what is that gap? And then overshoot it. I like to shoot it. Yeah. And
30:06
because I guess that makes sense. If you're having to take money out of your emergency fund or draw
30:10
money out of your investments because you haven't predicted it and you, you know, like your, your budgets
30:14
out of whack or it's too tight or whatever, then you are, you could be pulling out your dividends,
30:19
you could be pulling out your, and that's what. And that's when you start to spy on, you're like,
30:23
oh, now I've just completely screwed it up. It's really hard to get back on the bandwagon. Whereas
30:28
if you're like, no, no, I have room for this era. It's just right. Yeah. Eating a bag of chips if
30:34
you're trying to eat healthy, rather than saying, oh, God, all right. Well, I might as well just
30:39
eat chips for the next week, you know, it's always to that. Yeah, so do I. But it's not doing that.
30:43
It's not letting a tiny slit derail the entire plan. Yes. Yeah. Love that one. Or it's just
30:49
buying a small bag of chips. Yeah. Because you can have a small era. Yeah. Yeah. Yeah. Yeah. Exactly.
30:53
Yeah. So, oh, there's just, there's just these quotes are just great. The most important part of
31:00
every plan is planning on your plan, not going according to plan. Okay. It's kind of the same thing.
31:06
It's always just over. No, no, that's, sorry, this is part of the same. This need just, I was like,
31:10
there's a very similar. This is just rounding out. But I think this is great. And I actually
31:13
sent, no, I didn't know. I was about to send it to the rest of our team is that the most
31:19
important part of every plan is planning on your plan, not going according to plan. And it's so true
31:23
if you think of life like that. Oh, well, that didn't go to plan. That's all right. Because my
31:27
effort is not to go to plan. Exactly. I think, I mean, take that with a grain of salt because I can
31:34
see people were going, oh, well, my financial plan isn't going to plan. But it's more just not
31:39
beating yourself up with things that go to plan because you plan it that way. Yeah. And also,
31:43
it's kind of expected that shit's going to happen. Totally. So just plan for that by having a buffer.
31:48
Yeah. Yeah. Yeah. But I think that's really great. And again, another little poster I'm going to
31:53
put on my, go on, my bedroom's going to be covered with posters. Last one. Number eight,
31:58
define the game you're playing and don't be influenced by people playing a different game.
32:02
Oh, I feel that one on my toes. Yeah. I mean, you need to say loyalty. I don't know,
32:07
no, loin sounds weirder. Loins like your life. No, loins. I feel it in my loins. You're actually
32:16
flaring your nostrils. I think no one sees that. Really? No, they do. I think it's a male thing.
32:20
I feel it in my fingers. That's what they say. I like that one because it hit, yeah, that one
32:26
just hits hard. It's also everyone's financial journey is different. You know, again, it comes out
32:31
to the first one. If someone can invest in really high risk things because that is what they want,
32:36
they want the highest possible return. It makes them sleep well at night. That might be a
32:40
different game to you. You might not want to play that game. And that's fine. So it's, yeah,
32:45
define the game you're playing and don't be influenced by people playing a different game.
32:50
Because I feel like every single person that invests is playing a different game literally.
32:55
Well, it's, I mean, if you look at the way you've built your life, what's important to you,
32:59
the things that you buy, the people you spend time with, like, we're such good friends and
33:04
our lives are completely different. I don't think there'd be anyone on this planet that would
33:07
have been playing the same game as me. It's kind of everyone is different. And so if you start
33:12
comparing yourselves or wanting to play the same game as everyone, you're not going to play any
33:15
game. You're going to be left on the sidelines. It's, it's, it's, it's almost the analogy of
33:21
be yourself because no one else can be you. Exactly. You can't emulate Victoria Harris.
33:27
So if you're alright, so you may as well be as true to yourself as possible and that relates
33:31
to your finances as well as your personal life. And we've said this before, but yeah,
33:34
everyone's financial journey is different. Everyone has different expenses, different incomes,
33:38
different investing goals or things they want to save for or things they have to pay for everything.
33:44
Everything is so different. So don't be influenced by people playing different game to you.
33:49
Yeah, that's a really good one. Because I think it's easy to say, everyone wants to
33:54
invest in different things, but it's actually kind of annoying because you don't really understand
33:58
it because you're like, don't we all just want to grow our money, but not necessarily in the same
34:02
way. And that's actually a real positive. Yeah. And I remember when you used to say,
34:06
are being a female in the investing industry for me was actually a positive. Like it was a real
34:10
pro because I spotted things like IVF is a trend or the visa jewelry company or whatever,
34:17
something that, you know, a guy in your team wouldn't have spotted. Yeah. And it's, I think,
34:22
everyone has that ability because we all see life through our own lens. Yes. So what do
34:27
the UC, whether that's for investing, saving or how you want to build your life, that's a positive.
34:33
Definitely. We shouldn't be wanting to be cookie cutters a bit, each other. No, definitely not.
34:38
So yeah, the first one was manage your money in a way that helps you sleep better at night.
34:43
Number two, if you want to do better as an investor, the single most powerful thing you can do
34:47
is increase your time horizon. Number three, use money to gain control over your time.
34:54
Four, be nicer and less flashy. Number five, save, just save. You don't need a specific reason
35:00
to save. Number six, define the cost of success and be ready to pay for it. Number seven,
35:07
worship room for error. And number eight, define the game you're playing and don't be influenced by
35:12
people playing a different game. I really enjoyed that episode and I didn't get to read the book.
35:19
Yeah. I think I would enjoy it. It's an easy read. It's not like your typical finance book,
35:22
where you're going to be like, oh my gosh, like honestly, like you were saying at the beginning,
35:26
how you'd pick up those books and you'd just be like, oh, that's fine. I was literally
35:30
with all that story then. Yeah. And it brings in real-world examples and like talks about things
35:36
which are relatable. So it's, it is really good. And there's short chapters which I love.
35:41
I love it. I love it. I'd love to get the author on that be such cool interviews. Morgan
35:46
Housel. Morgan. Morgan. Morgan Housel. Yeah. Thanks for reading it and sharing those insights. I think
35:52
that it'll be helpful for a lot of imagination. Lots of people have written those down in the notes.
35:56
Yes. Did I just slow? Here's a note. And you note. And I'm going to go home and write some
36:03
post-its. Could you make me then? Sure. Thank you so much for listening to Raising the Curve.
36:09
These conversations are designed to teach you everything that you need to know to be
36:12
better with your money. From saving, to investing, to talking to your friends about your salaries.
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