14 Money Mistakes Ep 485



In this insightful episode, the host of "The Game" podcast, who is building Acquisition.com, shares 14 financial pitfalls to avoid in your 20s, emphasizing the importance of investing in oneself over frivolous spending. He advocates for prioritizing education and skill development over status symbols that fail to impress the truly successful. The host also stresses the significance of choosing jobs for learning opportunities rather than immediate financial gain and underscores the value of reinvesting savings into personal growth rather than traditional saving methods. He encourages automating investment in self-improvement and adding friction to unnecessary spending, while also highlighting the importance of living with like-minded individuals, choosing the right environment to foster growth, and learning from the correct life stages of role models. Lastly, he suggests that while frugality is key, it is also essential to invest in one-of-a-kind life experiences that contribute to personal fulfillment.

Summary Notes

Automation of Investing and Manual Spending

  • Emphasize the importance of making investing easy and spending difficult.
  • Investing in oneself should be facilitated, while spending on non-essential items should be resisted.
  • The concept is to prevent wasteful expenditures and encourage financial growth through self-investment.

"You want to automate the investing and you want to manualize the spending. So in other words, you want to lubricate how easy it is for you to invest in yourself, and you want to make it harder to spend on shit that never comes back to you."

The quote emphasizes the strategy of making investment processes automatic to ensure consistent financial growth, while making spending a more deliberate action to avoid unnecessary expenses.

Building a Business and Documenting the Journey

  • The host discusses their aim to build a billion-dollar enterprise with Acquisition.com.
  • Expresses a desire that influential entrepreneurs like Bezos, Musk, and Buffett had documented their journeys.
  • The host is documenting their own journey for educational purposes.

"I'm trying to build a billion dollar thing with Acquisition.com. I always wish Bezos, Musk, and Buffett had documented their journey. So I'm doing it for the rest of us."

The quote reveals the host's entrepreneurial ambitions and the regret that past successful entrepreneurs did not document their growth, leading to the host's decision to share their own experiences.

Common Financial Mistakes

  • Discusses the 14 massive money mistakes that can have long-term negative effects.
  • Highlights the importance of avoiding these mistakes for financial health.
  • Stresses that these are not trivial tips but significant errors to avoid.

"There are 14 massive money mistakes that people make in their do not want to repeat... These are the actual things that if you make these mistakes early, you will have to pay for them for years."

The quote introduces the topic of critical financial mistakes that can impact one's financial future for years and underscores the importance of avoiding these errors.

Underspending on Education vs. Overspending on Status

  • Critiques the tendency to spend on status symbols rather than investing in education.
  • Points out that true respect from successful people comes from hard work and learning, not from flaunting wealth.
  • Emphasizes investing in oneself to gain skills and respect rather than spending to impress.

"Underspending on education and overspending on status... the only people who can help you, you're actually actively pushing them away."

The quote criticizes the common mistake of prioritizing status symbols over educational investment and how it can repel those who could genuinely assist in one's growth.

Taking Jobs for Earning Instead of Learning

  • Stresses the importance of choosing jobs for learning opportunities rather than immediate financial gain.
  • Shares a story about a job applicant negotiating for a higher salary without recognizing the learning opportunity.
  • Encourages viewing one's twenties as a time to learn and build skills, which will lead to greater earning potential in the future.

"Taking jobs to earn rather than to learn... when you're in that environment, the people who are going to pay that premium are paying the premium for everything you know and have nothing to add to you."

The quote advises against taking jobs solely for the salary, emphasizing the value of positions that contribute to personal growth and skill development.

Saving Money as a Mistake

  • Challenges the traditional notion of saving money in one's twenties.
  • Suggests that instead of saving, one should invest in themselves to build wealth.
  • Argues that investing in oneself has a higher potential for wealth creation than traditional saving methods.

"You save money. That is a mistake. Hear me out... You want to invest that money into you and your e."

The quote suggests that traditional saving is less effective than investing in oneself, especially for those aiming to achieve significant wealth. It encourages redirecting funds that would be saved into personal development and business opportunities.

Importance of Investing in Self Over Traditional Assets

  • Investing in personal development can dramatically increase earning potential.
  • Traditional investments often don't factor in inflation and can limit skill set growth.
  • Prioritizing investment in oneself can lead to substantial future financial gains.

"Instead of saving money to invest in assets, invest in the number one asset, which is you, and increasing your earning potential."

This quote emphasizes the concept of prioritizing self-improvement and skill development over traditional forms of investment, suggesting that the latter may cap one's potential for income growth.

Strategic Financial Allocation for Personal Development

  • Allocate the first portion of income to personal development before other expenses.
  • Prioritization of funds should reflect the importance of learning and skill acquisition.
  • Accumulate funds specifically for opportunities to invest in personal growth.

"You take the money off the top first and then whatever you have left that you can spend, right? Because now we've already allocated for our future."

This quote outlines a method of budgeting where money for personal development is set aside before any other expenses, ensuring consistent investment in oneself.

Automation and Manual Spending

  • Automate investments in self to make the process seamless and consistent.
  • Introduce friction to unnecessary spending to discourage wasteful purchases.
  • Separate accounts for different purposes can aid in financial organization.

"Automate the thing that you want to have happen. Manualize and add friction. The things that you don't want to have happen."

The quote suggests a strategy for financial discipline by making desirable actions easy and automatic, while making undesirable actions difficult and manual, to encourage wise spending.

Prudent Shopping Habits

  • Stick to a pre-approved shopping list to avoid impulse purchases.
  • Consistent habits can save money and simplify life during "grind time."
  • Rejecting unnecessary purchases can have long-term financial benefits.

"Stick with the list that you already have pre-approved in terms of your budget, of the money that I have left over. This is my list. These are my groceries. This is whatever. And if it's not on the list, you don't buy it."

This quote advises on maintaining discipline in shopping by sticking to a predetermined list that aligns with one's budget, avoiding unnecessary spending.

Cost-Benefit Analysis of Time vs. Money

  • Evaluate the trade-off between time spent on tasks like cooking and potential earnings.
  • Outsourcing tasks like meal preparation may be financially sensible for higher earners.
  • Big-picture thinking should guide financial decisions rather than short-term savings.

"As soon as you make more than $15 an hour, it makes more sense for you to work that day and get the takeout food and get the time back."

The quote presents a contrarian view on the value of time versus money, suggesting that for individuals earning sufficiently, it may be more cost-effective to buy takeout than to spend time cooking.

Impact of Living Environment on Personal Growth

  • The people you live with can significantly affect your ability to focus on your goals.
  • Bad roommates can be a source of distraction and stress.
  • Even responsible roommates may hold you back if they do not share your aspirations.
  • It is important to surround yourself with individuals who have similar goals and a supportive mindset.
  • This shared environment can shape your worldview and reinforce your determination.

"People live with the wrong people. All right? So the people that are around you, one, they have terrible roommates who break things, who go out drinking, who are late on rent."

  • This quote highlights the negative impact of living with roommates who have bad habits and are irresponsible.

"And so making sure that you're living with the type of people who are trying to do the same thing as you are in your life will encourage one another."

  • This quote emphasizes the importance of living with like-minded individuals who support and motivate each other towards common goals.

Formative Years and Worldview Development

  • The time period between 25 to 27 years old is crucial for solidifying worldviews.
  • After this age, significant changes in worldview are often triggered by traumatic events.
  • The content of the podcast is targeted at listeners who are still shaping their perspectives on life.

"After this period, it's about 25 to 27. It's significantly harder to change your worldviews. It only comes from trauma."

  • The quote suggests that as people age, their worldviews become more rigid unless altered by significant life events.

"But most times there's no other reason that people learn after that. And so that's why I make this content this way."

  • This quote explains the purpose behind the podcast's content, aiming to reach and influence listeners before their worldviews become less malleable.

The Value of Word of Mouth for Podcast Growth

  • The podcast relies on listeners sharing it with others as it does not utilize ads or sponsorships.
  • The speaker encourages the audience to pay it forward and continue the chain of recommendations.

"The only way this grows is through word of mouth. And so I don't run ads, I don't do sponsorships."

  • The quote reveals the organic growth strategy of the podcast, which depends on listeners spreading the word.

"My only ask is that you continue to pay it forward to whoever showed you or however you found out about this podcast, that you do the exact same thing."

  • This quote is a direct request from the speaker to the listeners to help grow the podcast by sharing it with others.

Importance of Micro Community and Convenience

  • Living with multiple people in your 20s can alleviate loneliness and reduce living expenses.
  • Being part of a supportive micro community is crucial for personal development.
  • Convenience in location can save time and money, which is why the speaker advocates for paying a premium for a better location.

"I lived in a house with seven people in California, and I was able to only pay $400 a month in, like, a nice area."

  • This quote illustrates the financial benefits of communal living in a strategic location.

"I would live with more people in a better area than fewer people in a shitty area."

  • The speaker expresses a preference for living in a more desirable area, even if it means having more roommates, to take advantage of the benefits of a good location.

Modeling the Correct Season of Life

  • Young people often try to emulate the current lifestyle of successful individuals without considering the journey that led there.
  • Reputation is built on a track record of achievements and fulfilling promises.
  • It is crucial to model the behavior that led to someone's success, not their current lifestyle.

"The thing that builds the reputation is not modeling what I'm doing now, but modeling what I did before, right."

  • This quote advises listeners to focus on the foundational actions that successful people took early in their careers, rather than their current status.

Financial Awareness and Spending Habits

  • Understanding the true cost of purchases in terms of hours worked can lead to more mindful spending.
  • Adding friction to the spending process helps in valuing money and avoiding wasteful expenditures.

"Measure money in how long it took you to earn it."

  • The quote suggests a method for assessing the value of money by equating it to the time and effort required to earn it.

"So if someone said, I want you to work all day and I'll give you this shirt, would I do it? Probably not."

  • This quote encourages listeners to consider the work equivalent of their spending, which may deter unnecessary purchases.

Valuing Money in Terms of Time

  • Assess the cost of purchases by calculating the hours of work required to afford them.
  • Reevaluating spending decisions based on time-value can lead to purchasing less unnecessary items.
  • The speaker observed coworkers spending a significant portion of their daily earnings on lunch, prompting a reflection on the true cost of their spending habits.

"I would see the same guy do it. I was like, so you have $36 after taxes for living here, for coming to work today. I was like, and 15 of that is you going to lunch next door."

The quote illustrates the speaker's realization that coworkers were spending a large fraction of their daily earnings on lunch, which prompted a critical view on the value of money in relation to time spent earning it.

Saving vs. Earning

  • Emphasize savings and investment over income as a measure of financial success.
  • Compete against oneself to increase savings and investments rather than just focusing on earning more.
  • The speaker knows individuals with high incomes but little savings, highlighting the importance of saving over earning.

"Get competitive with money around what you're saving, not what you're making."

This quote emphasizes the importance of focusing on savings as a metric for financial competitiveness rather than just income.

Budgeting for Personal Investment

  • Budgeting should be directed towards personal investment, not just expenses.
  • Setting personal records for savings can motivate financial growth and personal investment.
  • The speaker encourages viewing savings as a personal profit, rather than just breaking even each month.

"Say I am saving $2,500 this month to invest in me. And so make your pr, your personal records around what you're able to put into that bank account every month."

The quote suggests that one should budget with an emphasis on saving and investing in oneself, setting personal savings goals to track financial progress.

Monitoring Financial Accounts

  • Checking bank accounts daily is a habit that can lead to better financial awareness and wealth accumulation.
  • Understanding the flow of money, including automated expenses, helps in managing finances effectively.
  • The speaker stopped checking accounts daily after a certain wealth threshold, but believes the habit is crucial for financial growth.

"Check your account every single morning. All right, I think this is a habit. I stopped checking my account when I crossed 20 million."

This quote highlights the speaker's habit of daily account checks as a key factor in their financial success, although they stopped once their wealth reached a certain level.

Spending on Experiences

  • Spending on unique, one-time experiences can be valuable, especially when they are age or time-specific.
  • These experiences should be meaningful and memorable, not frivolous.
  • The speaker expresses regret for not spending on certain experiences, acknowledging that some opportunities are lost with time.

"I could have spent money on one time experiences...there are times when going to Europe and doing sleeping in hostels for three months, that's a cool experience that you're not going to be able to do when you're 40."

The quote reflects the speaker's belief in the value of spending on meaningful experiences that may not be possible later in life, suggesting a balance between financial prudence and enjoying life's unique moments.

Money Mistakes in One's 20s

  • The speaker summarizes the common financial mistakes people make in their 20s, emphasizing the importance of saving, investing in oneself, and choosing experiences wisely.
  • The overarching message is to manage money intelligently to avoid regrets and to maximize both wealth and life experiences.

"So anyways, those are the money mistakes people make in their 20s."

This concluding statement encapsulates the speaker's advice on avoiding typical financial missteps in one's 20s, focusing on the broader theme of financial literacy and personal growth.

What others are sharing

Go To Library

Want to Deciphr in private?
- It's completely free

Deciphr Now
Footer background
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon

© 2024 Deciphr

Terms and ConditionsPrivacy Policy