We’ve officially started the process of writing our Lifestyle/Spending book (will be released in December). One thing we learned from our last 2 products (over the past 7 years now!), is that most people won’t take action. Originally, we thought we’d see numerous people come forward with how straight forward everything became but instead we calculated that only 5% of people actually follow through. With this in mind, we’re going to give out every single trick we can think of in the spending/lifestyle book. Yes. This will include “performance enhancers” and how to use them properly. Since no one will listen (likely do everything incorrectly), we don’t have a problem giving away our formulas.
Spending Group Snapshot: The front of the book will be the least detailed. It’ll essentially explain what you should be spending on if you are making next to nothing $50,000 a year or less and scale all the way up to ~$500,000/year. If you end up making substantially more than this, you’ll see that there isn’t a big change (all details in the book). Some of it will feel redundant as we drive in a few key points on how to think about spending at a high level. This is done by design. People have different tastes/objectives and live in different cities. Therefore, by providing a high level overview up front people can make decisions faster. Without being forced to ask a question, they can simply refer to the main ideas at the front of the book. As a note, at the very end of the first section we’ll provide the order in which people should spend (again driving home the right way to use money).
Groups Covered: The main sections are split up as follows: 1) housing, 2) food, 3) clothing, 4) investment percentages, 5) performance enhancing (after age ~27 or so) and 6) standard partying/travel. Unsurprisingly, a lot of the ideas in the book are extreme (otherwise this blog wouldn’t be niche) as the goal is to get rich early enough to enjoy the money. We’ll cover the rough spending split into each of the six categories based on assumed annual income. After that we’ll give out more details on how each group should scale up (if you’re more interested in spending on performance vs. food for example). As a note, it’ll be no surprise to anyone reading this, if you’re making next to nothing the “partying” category is a complete zero.
Housing: This is always a debated category. The summary section up front is going to assume you live in a high cost of living area. This is the easiest way to start since we assume readers of this blog are looking to enter high paying careers: Tech/Finance/Enterprise Sales. After this assumption we provide alternative “lifestyles” that we’ve seen work in various cities. Luckily we’ve already provided the way to invest in real estate (as a third form of income) in triangle investing so we won’t have to cover that. Instead it’ll give out ideas to maximize your lifestyle without levering up to the point where you’re “house rich”.
Food: When you’re 21 everything tastes the same. Seriously. You can go to spring break and drink cheap beer/tequila without a blink. Anyone in that age bracket is going to think we’re “lying” when we say it’ll change. This is exactly what we thought when we were 21 as well and it turned out to be completely wrong (come to think of it maybe this is why no one ever takes action or listens). Either way. We’ll scale this category up and it becomes an important item to focus on if you’re serious about living a long and healthy life. The right diet will be the difference between “Oh my god you’re 35 no way!” and “Oh yeah you look 35”. No one wants the second reaction.
Clothing: We’ve already made people upset by announcing that we’ve flipped to purchasing luxury goods here and there. This is just how it works if you really move up the ladder. We have enough experience reading reactions to know that they work. That said, we’re not foolish and would never recommend luxury goods to someone making $200,000 a year for example. It just doesn’t add that much value. It may be surprising to many but clothing is probably one of the most important skills to master (not joking at all). There is a time and place to dress extremely well and there is a time and place to wear more middle of the road items. The most obvious example is an entry level interview (leave the Cartier at home) vs. when you’re 35 years old going to a deca-millionaires house party (better dress to impress).
Investment Percentages: Our best guess is that this section will be the third most debated piece. The performance enhancing piece and the clothing piece will likely make people the most upset. Why? 95% of men don’t know anything about either of them so they get insecure and complain about it. That said, investment percentages will actually unveil how conservative we were in the beginning. We’ve seen far too much. Your industry could go to zero, your business could go to zero, your health could take a massive set back etc. We lean very conservative your first 3-6 years. It just isn’t worth the risk and from what we’ve seen it is the best “risk reward decision”. If you do make it to $1M by thirty (which is certainly doable) then you can begin to take more risk. As a final note, we’re guessing that people will also be surprised by our “bar-bell” approach to saving once you’ve got a million or so to your name.
Performance Enhancing: Wow. Quite a large topic. We’ve tried everything from grey market products to black market products. The vast majority do not work and on top of that the vast majority take them way too early. That last part is so important we have to say it twice: the vast majority take them way too early diluting the value. If people are forced to use Adderall and other performance enhancers to pass college exams… That’s a bad move. At such a young age you only need coffee and maybe a couple of energy drinks for the final exam period. Being an “edgy” blog people assume we started using black market products at a young age. This couldn’t be further from the truth since it actually dilutes the value. This is explained in detail in our book and is not a recommendation, but more of a “personal experience” journal. This prevents readers from claiming we’re recommending them.
Standard Partying and Travel: We scale this one up pretty dramatically. It starts extremely low where we recommend simply being in shape and going to cheaper places that have a “post college vibe”. Why? Well there is no point in trying to act like a big shot when the girls are just as attractive and you don’t have to spend as much. It just doesn’t make much sense to drop $500 at PHD or Le Bain when you’re just starting out. That said, when you’re 35 you do not want to spend your time in places where the floor is sticky. For those that believe the women are “older” we have nothing but laughs for them since it just isn’t true. The only people who believe this are the ones who never made it.
On the traveling side we also give our view on when to spend up and when to spend down. As an upfront observation, most young people 20-25, end up going to third world countries and date women who would be out of their league in the USA. This is because they are leveraging their status abroad. This causes them to “believe” the USA is terrible and they give up everything to earn $5-7K a month overseas. Unsurprisingly, this is a life changing decision (in the wrong direction) as they can’t scale anything meaningful. A smarter way to think about this is “if I make it in the USA I can be rich and date girls of the same quality anywhere I go”. Unfortunately, the human brain is trained to take the path of least resistance which is to uproot everything and leave. On the positive side, this decreases competition for you and when you’re worth a few million it’ll be easy to party and have fun in any city in the world (except San Francisco, San Jose and Seattle since the supply of attractive people is so limited).
While it sounds like this will be a short product, we’re wagering that it’ll be longer than either of our prior products (likely very long). Why? We’ll spell out each section in extreme detail. By way of example we’re going to cover every single performance enhancing item we’ve tried which includes: Modifinil, LSD, Mushrooms, Coffee, Energy Drinks, Healthy Juices, Fish Oil and a lot more. As another example we’ll also include detailed information on how to spend on clothing which scales up from: cheap $10 shirts to custom made suits and designer shoes. The more we think about this the more we realize how much information will be in here since most people get “capped” at around $150-200K a year or so (peak earnings for most).
Since we can’t give away everything here we’ll highlight a lot of the main questions covered: 1) when to begin buying custom suits vs. made to measure, 2) what occasions are best for maximizing your high end clothing and when to “play dumb” and dress down, 3) the optimal time frame to dabble in performance enhancing items – based on our experience not a recommendation, 4) how much you should be throwing into an investment account per year as a percentage of income, 5) calculating the amount of “downside” you have, ie. If you actually have enough resources to step up spending, 6) how to tell what type of person you’re talking to without asking how much they make, 7) when to use hotels vs. AirBnB set ups, 8) what type of things you should think about when scaling your housing – which is also a form of “displayed wealth” that doesn’t lose significant value, 9) how to leverage your income in a way that leads to results vs. typical boring rich people who complain that it “doesn’t work” and 10) why you don’t “act as if” when it comes to money – hint your personality won’t match it.
That’s the high level overview for now. Importantly, please leave any questions/topics in the comments. We plan on making this quite a large project as it’ll be differentiated from a lot of the information we’ve provided in the past. As a final note, this will likely be the one major project for the year as we go back to hibernation for another 2 years due to time constraints. Enjoy the holiday!