How Does Money Change Your Life?

“Is it all worth it?”

It was one of the first emails I received after starting this site.

Someone had written a long message asking about the trade-offs of going into finance vs. joining a normal company vs. becoming a nomadic horseman in Mongolia, but that’s what his question came down to:

Does the money justify the long hours and the suffering you endure in demanding, high-intensity jobs like investment banking and private equity?

We spend a lot of time predicting and debating bonuses and compensation…

…but hardly anyone asks the underlying question: Does it matter?

In other words, how much of a real difference in your life does money make?

I’m going to break this one down today, and explain how money changes your life and your mindset – and I’ll tell you some stories of how my behavior has changed over the years.

Why Does This Question Matter?

First and foremost, you have to know what you’re getting into.

Is extra money worth the extra effort?

Or is it better to take a lower-paying, but a more rewarding job that gives you more free time?

But you also need to understand this topic because many of the people you interact with in fields like finance and technology will be wealthy themselves.

If you know how they think, what they’re looking for, and what their biggest frustrations are, your chances of winning offers and succeeding on the job increase exponentially.

Finally, if you want to become wealthy one day, you need to start thinking like people who have already done it.

If you dress like you’re successful, people will assume that you are successful (see: The ROI of Fashion).

And if you think the same way as people who have “made it,” people will assume that you’ve also made it… even if you’re not quite there yet.

You’re visualizing the outcome, which will make it easier to achieve the goal. Just ask Rocky.

My History: From Rags to… Almost Riches?

People who sell companies, ascend to C-level executive positions, or inherit trust funds rarely share what it’s like because it seems tacky and uncomfortable.

Sure, there are the Rich Kids of Instagram, but you won’t exactly find thoughtful discussion there.

If you’ve read my life story before, you know my history: my family never made more than $60-70K per year, and I graduated university with over $100K of debt.

As a result, I was very focused on making money – far more so than students without debt, and far more so than (most) students from wealthier backgrounds.

And it worked.

I got into a high-paying field (investment banking), and then quit and started this business, which has become quite successful.

I paid off all my debt, I saved up more than most retirees, I travel all the time, and I don’t pay much attention to my daily spending.

But I also work 65-70 hours per week, I haven’t taken a day off in the past eight years, and I run around frantically responding to messages and creating content every day.

So was it all worth it?

Narrowing Down a Very Broad Question

You have to narrow down this question a bit because the impact of money depends on:

• How you made the money – Did you sell your company? Did you become CEO of a major corporation and get a 7-figure bonus? Did you work at a hedge fund for 10-15 years? Or are you just a Rich Kid of Instagram?

• What your ongoing obligations are – Are you still in a demanding, high-intensity job, despite having made money? Or did you make a clean break and “retire”? Are you semi-retired?

• How much money you made – $1 billion USD buys you a very different lifestyle than $1 million USD, though both levels put you in a different bracket from 99% of humanity.

In this article, I’ll assume that:

• You made money from a demanding corporate job or from your own business; and

• You’re still in that position – because you cannot leave or because you want to stay; and

• You saved up between $1 and $10 million USD – not enough to buy a yacht, but enough to live comfortably and to avoid doing things out of pure financial obligation.

If you go into the finance industry and do reasonably well for 10-15 years, these three conditions represent the most likely outcome for you.

The One Change to Rule Them All: Time vs. Money

Your behavior will change in dozens of ways as you approach this level, but there’s one overarching change that explains everything else:

You start valuing time more than money.

Most people, however, do not value their time at all.

This mindset makes sense if you have a regular job or something that pays you a fixed salary: you earn the same amount regardless of how you use your time, and even if you work more, you won’t get paid more… so why bother?

If you’re outside that “normal job” bucket, though, and particularly if you’re in a role like entrepreneurship, sales, or investing, where there’s unlimited upside, your mindset is quite different.

You might think this mindset shift is 100% positive… but it’s not that simple.

There are both positive and negative changes, which I’ll detail below – along with Key Takeaways for each change that you can immediately apply.

Change #1: You Start Tracking and “Saving” Your Time Much More Closely

Imagine your most frugal friend: the one who can survive on $5 / day, or the one who buys tickets from the US to Europe for $100 by picking an ultra-low-cost carrier and packing only two shirts.

Now imagine this type of frugality, but with time rather than money.

I find ways to squeeze in work anywhere and everywhere: on the subway, in the taxi, and even on the ferry when everyone else is getting drunk.

More than anything, I hate waiting in line or having “dead time” where I can’t work, read, or do anything useful.

Since I’ve started valuing my time more, I’ve also done a better job of tracking it.

For example, I can tell you that in the past week I’ve spent 29 hours, 47 minutes, and 12 seconds on the new PowerPoint course we’re currently creating:

If you don’t track your time, you end up wasting it on low-leverage activities that are unlikely to result in higher income or better business outcomes.

For example, if I spend more time answering random emails than on content creation, something disastrous has happened: I’ve traded $100-$500 / hour work for $10 / hour work.

I now use toggl.com to track and categorize everything down to the minute – here’s a 14-hour segment (not the entire work day) from last week:

I often spend money to save time because the “the cheaper option” can result in wasted time , and therefore lost earnings, even if the sticker price is lower.

So if I see an itinerary from Seattle to Seoul that will cost me 2x less than a 12-hour itinerary but will take 18 hours, I’ll pay for the 12-hour one.

If I’m visiting Buenos Aires and I see a place that’s cheap but far from Palermo, I’ll pick a more expensive place in Palermo; I want to spend my time working or drinking wine, not commuting.

Key Takeaways: This point is why I encourage you to pitch yourself as offering time savings to bankers.

Seasoned professionals want free time, or at least time for higher-leverage activities, more than anything else.

So if you walk in and say, “I can immediately save you 2 hours per day on Tasks X, Y, and Z, which gives more time to win clients / find new investments,” you’ll get a far better reception than someone who walks in citing only his/her grades and previous internships.

Also, even if you’re still a university student, you should consider tracking your time.

You don’t have to be OCD about it as I am, but by tracking your time you immediately start valuing it more highly.

Change #2: You’re Willing to Turn Down Money Because It’s Not Worth as Much to You… or Because You Have Other Priorities

We get a lot of suggestions to offer courses in new areas, like sales & trading, Project Finance, mining, venture capital, etc.

Putting aside the practical issues – the difficulty of finding suitable reference materials, being locked into revamping and updating the courses into eternity, etc. – there is another reason I haven’t followed most of these suggestions:

I don’t care.

Or rather, I care more about improving and adding to what we already have.

So I spent ~5 months this year creating material on real estate private equity and private company and IPO analysis for our existing courses.

It’s also why there’s a night-and-day difference between the old Fundamentals course and the new one.

I would earn more money if I left the older courses in crappy shape and then focused 100% on creating courses in other areas with the bare minimum work required.

But “earning more” isn’t a great incentive for me anymore.

I’ve also made other tweaks over the past few years as a direct result of this changed mindset:

• We’ve started turning down more potential customers. If someone isn’t a good fit for our courses or services, I don’t want him/her to sign up. It’s not worth it to me anymore.

• A year or two ago we changed the money-back guarantee to 12 months rather than the usual 1-2 months. This one costs us money as well, but I don’t care: if someone tries the course and doesn’t like it for any reason, I don’t want his/her money.

These policies cost us money, but they preserve my sanity and also help our readers and potential customers.

Key Takeaways: Yes, if you need work experience and you’re a university student, take an unpaid internship if that’s your best option.

But as you progress, build contacts, and get real experience, you should become more discerning about the jobs and promotions you pursue.

If you always go after whatever pays the most, you’ll get diminishing returns from the money and you’ll end up short-changing yourself in other areas, like skill set development and networking.

Change #3: It Becomes Harder to Relate to Other People, Friends, and Family Members

In the past, I often went on trips with friends: Mt. Fuji, a cross-country trip over Golden Week in Japan, and even a cross-Asia trip when I first started this site.

Nowadays, though, I almost always travel alone because of the time vs. money issue.

Friends with regular jobs want to save money, even if it costs them time via indirect routing – whereas I will always spend more for the most direct path.

Other people also don’t really “get” how I can never completely disconnect from emails, questions, and so on. So tensions inevitably develop over why I’m “always working.”

Tensions have also developed between myself and family members, most of whom are middle-class workers in government jobs.

At family gatherings, I stay silent and do a lot of listening.

To a middle-class family raising four kids, I’m like an alien visitor from an Earth-like planet: we can breathe the same atmosphere, but it’s a bit awkward to be in the same room.

Besides the obvious negatives, there’s another significant downside to not relating to other people as well: it makes you worse at business.

For example, if you start a consumer-facing company and you’ve already been well off for quite some time, you will not understand the average person’s shopping and consumption habits that well.

There’s a reason so many successful startups came from the Founders’ personal problems: you understand yourself and your frustrations the best.

Sure, you could always start a luxury brand or target the higher end of the market, but you lose out on a lot of mass-market opportunities once you become disconnected.

Key Takeaways: Do you have a big frustration, or another problem that’s affecting you right now for which you can’t find a solution?

Act on it!

Don’t wait until “you have enough money,” or you might lose the motivation and empathy required to start whatever you’re going to start.

Change #4: It Makes Dating/Relationships Easier to Get Into, But Harder to Make Successful

If you made it through my life story, you saw the various bad experiences I had along the way: stupidly following one girl to Korea, dating another crazy one and then having to climb Mt. Doom to destroy Frodo’s Ring and defeat Sauron, and so on.

One underlying reason for those experiences is that money makes it easier to date and get into relationships, but harder to sustain them and make them successful.

When you earn a certain amount, it’s quite easy to “wine and dine” your way to success.

If you take someone out to nice places and do things that other people can’t afford or don’t want to pay for, you immediately stand out.

I’ve “tested” this all around the world, and it works surprisingly well.

But this same advantage also turns into a disadvantage in the long term because no relationship can survive on wining and dining alone.

It takes time, which is in short supply if you’re in a demanding, high-intensity job that requires you to be on call 24/7.

This requirement is why so many CEOs, serial entrepreneurs, and film directors have failed or non-existent personal lives (see: Martin Scorsese and his five marriages).

Then there are plenty of other issues that money cannot solve.

One of my problems, for example, is that my profession is perceived as unstable and therefore looks unappealing to older, more conservative people – and inevitably the other person’s family always has plenty of them.

Attempting to “prove” that I’ve earned and saved money just makes it worse: they accuse me of lying and say that I’m both unstable and dishonest.

And whatever I do or say, it will never be as good as being a doctor.

Key Takeaways: I don’t believe there is such a thing as “work-life balance”: pick one!

If you have a demanding job where you’re working 60-70+ hours per week, it will be tough, though not impossible, to make a long-term relationship successful, especially if the other person has more free time than you.

So if you value your social/family life highly, stay far away from (most of) the jobs featured on this site.

Change #5: You Have to Develop Non-Financial Goals to Motivate Yourself

Up through my first full-time job and the first few years of this business, I had simple goals:

1. Pay off my student loans as quickly as possible.
2. Save up enough cash to survive on for 2-3 years in case something disastrous happens.
3. And don’t die in the process (this was the hardest goal).

But then a few years ago, those goals stopped mattering because I achieved all of them.

When this happens to you, you’ll wake up one morning and ask the obvious question:

“What now?”

I view myself as an educator. The most valuable thing I can do is teach more effectively to help more students and professionals understand concepts.

I do that not strictly for money, but also because I enjoy the process: coming up with new ideas, researching new industries and case studies, and then figuring out how to break them down into step-by-step tutorials.

So my main goal now is to continue revamping all of our existing courses and make them as good as they possibly can be.

I wanted to go beyond the Excel formulas and present each concept as a case study where you have to advise a client or make an investment recommendation… and then write a memo or presentation on it.

This new approach takes about 5x as much time, and it has led to some “internal disagreements” at our company.

The marketers wanted me to dedicate 100% of my time to marketing; they thought everything was “good enough” as is.

I disagreed with them and felt the products had to be improved.

From a financial perspective, they were right: you can go a surprisingly long way with half-assed products and a big marketing budget.

But… that’s not my goal.

Key Takeaways: Yes, everyone cares a lot about money, bonuses, etc., but you should come up with non-financial goals for each internship/job/opportunity you pursue.

What skills do you want to gain? Which people do you want to network with? How can you leverage the experience in the future?

And always think about whether it’s time for you to earn or learn.

Change #6: You Realize That Money Does Not Solve All, or Even Most of, Your Problems

This one is not some hippy, save-the-Earth train of thought: I mean that there are specific business problems that you cannot solve with money.

If you run your own business and your employees are grossly underpaid, sure, you need to fix that…

…but if the work environment sucks or you’re a horrible boss, people won’t stick around for the long term no matter how much you pay them.

Sometimes it is also tough to find people with the right skills, regardless of how much money you’re offering.

For example, I still answer a ton of support questions personally because they are too technical or too detailed for others to reasonably respond to:

You might say, “Hire more people! Build the team! Pay people and they’ll do it!”

But if you think about the job for a second, the difficulty becomes apparent:

1. This person would need at least a few years of experience in IB, PE, or a related field.
2. This person would also need to be very familiar with our 300+ hours of training, and the new content added each year.
3. And… this person would need top-notch communication skills.
4. And… this person would have to be patient and not ridicule students for silly questions.
5. And… this person would also have to have 1-2 hours of free time per day, every day, to respond to questions.

There is a name for such a person: a unicorn.

If you find one, please catch it, study it, and let me know how to reproduce it.

Even if I found such a unicorn, he/she would not want to stay in this type of support role for a long time because it doesn’t lead to anything career-wise.

It’s okay for a part-time job if you’re in business school or you’re starting a new business and you need cash flow, but the same problems still exist with those (i.e., no long-term reason to stay).

People are motivated just as much by their work environment, purpose, and potential future opportunities as they are by money in the present day (see: Dan Ariely’s work).

Key Takeaways: You can endure a horrible work environment up to a certain point, but once it’s broken beyond the point of repair, quit.

Also, if you ever start your own firm / startup / venture of any kind, you should focus just as much on the work environment, culture, and morale as you do on compensation.

Oh, and don’t follow my example by creating a role for which it is impossible to actually hire someone.

Is It All Worth It?

So going back to our original question: Is it all worth it?

Does money change your life as much as you think it does?

I would say, “Yes… but only up to a certain point.”

Coming from a middle-class background, I never wanted to end up clipping coupons or watching my budget with hawk eyes to save $1.00 here and there.

And in exchange for that, I’ve gladly accepted longer hours, more stress, 5 AM calls, and no vacations/holidays… ever.

But I don’t think I’ll be working at this same intensity level forever.

Money solves some problems, but there are also diminishing returns after a point, and it creates other problems that you may not have considered yet.

So if you’re picking a career based on money, set a stop loss: an amount you need to save up to feel comfortable doing something else.

This is not “retirement money,” but merely what you need to feel comfortable taking bigger risks and setting non-financial goals.

For some people, this might be no debt and $100K… or $200K… or $500K… but whatever it is, make sure it’s a specific number.

When you get there, stick to your plan, quit, and start thinking about life outside your bank account.

And then it might all be worth it.