INSIGHT OF THE WEEK
“I’ve noticed that people who are financially stable only splurge on what they’re passionate about.”
The #1 Habit of People who are Financially Stable
Benoit Poliquin is the CEO and Lead Portfolio Manager of Exponent Investment Management Inc. Listen as he and host Kim Ades discuss how people who are financially stable manage their money.
In this episode of Resilience Radio, we discuss:
- The #1 habit of people who are financially stable.
- How to start feeling great now.
- Limiting your kids’ use of electronics.
- Motivating team members with low self-esteem.
- Managing high achievers that don’t fit the company culture.
Take a Listen!
How People who are Financially Stable Manage Their Money
Here is a super interesting snippet of our conversation! See transcription (08:26 – 14:58):
Kim: Do you recommend that in terms of building wealth, we really consider where we’re spending our money and ask ourselves, “Do we need that big fancy thing?” Or do you think, “We only live once. Life has luxury to offer us, why not tap into that?” What’s your philosophy?
Benoit: I’ve noticed that people who are financially stable only splurge on what they’re passionate about. I’ll give you an example. A corporate executive I know loves Porsches, has three of them, but lives in the first house he ever bought. He loves motorcycles, cars and big engines, but he doesn’t live or dress ostentatiously. He works all of the time and his passion is literally buffing his Porsches and his Harley-Davidson.
Other areas of his life, like housing, travel or clothing, are very understated. Overall, he under-spends, and he doesn’t feel that he goes without because he gets to spend the money he wants to on his passion.
Kim: So you’re saying to use your money in ways that fuel your passion, your excitement, and your interests. Don’t just spend money on everything just because.
Benoit: Exactly. I’ll give you another example. My wife loves clothes. She’s a sharp dresser. Even when we had no money, she still reserved time and money for that. She doesn’t care what kind of car she drives or what the neighbors think of the house, but she truly loves fashion. That’s her passion. It’s a terrible investment, but she makes up for it in other ways. She brings her own lunch to work, for example.
Kim: Is feeling good a terrible investment? It sounds like she not only loves fashion, but she loves feeling good. She loves to look at herself in the mirror and say, “Man, I look sharp today.” Is that a bad idea?
Benoit: It’s not a bad idea, but most very financially successful people hold out on feeling good to feel great. And at the end of the day, will your 10 or 12-year-old child notice the difference between a five-year-old Honda Accord and an $80,000 Mercedes-Benz? Do they care about that? No.
Kim: This is an important conversation and I want to pause here for a minute. I love this conversation, so thank you for having it with me. Do super wealthy people hold out on feeling good in order to feel great? It’s such an important question. Theoretically, if they hold out on feeling good, that means they only feel so-so. Can you get to feeling great from feeling so-so? In the coaching world, that’s really hard to do.
You have a Honda, but that doesn’t make you feel so-so. That actually makes you feel pretty proud, because in your mind, you’re saying, “This is not that important to me. I’m making smart decisions and I’m proud of those decisions.” So actually, you feel good. Does that make sense?
Benoit: That’s a fair assessment because I am trying to reach my goals and grow my business, and each dollar I take out of my company is a dollar that I can’t grow my company with. You can’t have it all in life. So do I feel neglected or do I feel like I’m skimping? No.
When I started out, having the car I have today would have been awesome. As you move forward in life, things that were important to you 10, 15 years ago aren’t as important. My goal used to be to get a fast, fancy German car, and once I got it, I was unimpressed by it three months later because my life hadn’t changed.
And financially, I kept having to pay for this car that had a depreciating fun factor to it. At first it was new, but a year later, everyone had that car and I didn’t feel so special anymore.
Kim: You’re alluding to a basic principle that we teach in coaching. We often want something out there because we imagine that it’s going to make us feel better. It could be a car, a house, a vacation, a relationship, etc. We say, “When I have that thing, I’m going to feel a lot better.” But what people don’t seem to understand is that the way they feel has nothing to do with what they have. It has to do with the way they think.
Kim: It has to do with how they think about what they have or don’t have. So if you think, “Oh, man, I’m driving a Honda Accord. I’m embarrassed and I’m uncomfortable,” you don’t feel good. It’s your thinking about the car that makes you feel bad, not the car itself. But if you think, “Man, I’m smart. I’m not driving some dumb, fancy car and wasting my money just to look good. I’m being responsible. I’m really proud of myself,” that causes you to feel good.
It’s the dialogue that you have in your brain about everything that causes the way you feel, not the item itself. This is a real change in perspective that we help our clients acquire.
It’s the way you think that causes the way you feel. It has nothing to do with the circumstance or the thing you want or the goal itself. Everyone’s job is to feel a little bit better. Why? Because from a better feeling place, you’re able to reach your goals more easily.
Would you like to learn more about how we can help you get to a better feeling place?