Why Material Things Won’t Make You Happy (and what will)

Kerry K. Taylor
– Hey, I’m Kerry, and welcome to SquawkfoxTV and the Cash and Kerry Podcast. Today we uncover why true wealth is not about how much you make, how to deal with FOMO and social media, and why more stuff won’t make you happy. My guest today is Andrew Hallam, he is the millionaire teacher. Hey, Andrew, it’s great to see you.

Andrew Hallam
– Thank you so much for the invite Kerry.

Kerry K. Taylor
– More stuff isn’t making us happier, is it?

Andrew Hallam
– No, it isn’t. And you know, you can really look at to the ancients when I look at Buddhism and we look at how simplicity really is key to happiness and relationships are key to happiness. And anything that draws us away from establishing and strengthening our relationships ends up making us less content overall with our lifestyle. But we pursue things, we pursue new cars, thinking that that’s gonna make us happy, but in the end, something like a new car is just like a sugar fix. And we have really interesting data on that where you buy a new car and the moment you’re test driving it, you feel like, wow, this is something amazing. Even when the first time you take it off the lot, you’re thinking, wow, I’m really feeling how it’s accelerating, how it’s handling, this is super, but then the moment everyday thoughts start coming into your head, which is, well, it doesn’t take very long, you’re driving to work, you’re thinking more about your workplace, you’re thinking more about your kids, you’re thinking more about the traffic, the moment you’re brought back into the real world, you might as well be driving something just super, super simple because driving the vehicle doesn’t add to your level of life satisfaction one bit, yet we pursue it when we often wanna upgrade the things that we have, and it’s called hedonic adaptation, we just get so quickly used to the things we have. And the sad part is, we often go into debt to buy these things that don’t augment our life satisfaction. And all kinds of studies show that debt equals a drag on our level of life satisfaction, it leads to things like depression, it drags our spirits down. We don’t even really recognize that it’s happening, we end up then wanting to buy more thinking we’ll get another sugar fix, and it becomes a lot like a drug, doesn’t it?

Kerry K. Taylor
– It does. I mean, I o ften think about, well, how to curb the spending and it’s like, I stop and think about how buying the last thing made me feel. So I reflect on my past purchases and I’m like, did that make me happy, right? And the answer is usually no, I usually felt kind of guilty about spending the money on this stuff, especially as you said, it’s a sugar fix, and then it’s gone, right? And a lot of us I guess kind of feel trapped by having all this stuff. Because if you start buying it, you need a bigger house in which to like keep it in as well.

Andrew Hallam
– Yeah, exactly, that’s a harsh part too when you move into a neighborhood. This is another fascinating thing when it comes to happiness as it relates to wealth, as it relates to where you live. When you live in an area where other people have more or you perceive that they have more, you ended up trying to keep up with them. So really, really interesting. I don’t know if you’ve seen studies on people who live in the same neighborhood as those that win let’s say lottery. If your neighbor wins a lottery, this leads to ultimate misery for you.

Kerry K. Taylor
– Oh, no.

Andrew Hallam
– It does.

Kerry K. Taylor
– Because I’m jealous of all their new money?

Andrew Hallam
– Well, it’s a weird thing ’cause subconsciously, first of all, you notice the things, oh, now they’ve got a new car, or now they’re upgrading their home or they’re building an extension on it. You’re noticing too, oh, so where did you go? I went to the Bahamas, they say, I flew there first class, like this five star resort. What starts to happen to people is that they start to live, in a subconscious way, they start to try and keep up with their neighbors, their freshly wealthy, lottery winning neighbors. The levels of bankruptcies are extremely high in neighborhoods where somebody has recently won the lottery. We are incredibly primitive in our sense that we feel like we need to keep up, but in doing so, we end up just completely sort of eradicating that very core that makes us content as human beings.

Kerry K. Taylor
– Interesting. I felt that draw a lot more when I lived in the city where I was actually surrounded by people, but strangely enough, I live in the middle of a forest right now and I have no one to compare myself to so I find I’m fairly content just living amongst the trees ’cause they don’t buy cars or have a fancier house. So maybe living in a different area and not next to a lottery winner was like the right choice for me.

Andrew Hallam
– Then I guess it’s too, like if you’re living within that city, many people don’t have that option, I’m gonna move off to the country because just this is killing me trying to keep up with the Jones. Whether you’re doing it consciously or subconsciously, it happens to most people. And I guess it’s just recognizing that and then trying to I guess metaphorically, symbolically surround yourself by a countryside, by your own little countryside, recognize that you know what, there goes the brand new Tesla down the road and it’s a beautiful looking car, but that person probably didn’t buy that outright with cash, they’re probably leasing it or they borrowed money to buy it. Debts lead to misery, we know that, we have statistical data, we have scientific behavioral evidence based data on this. And so when you can recognize that fact and then step back and say, hey, wait a second here, they’re not happier than me because they’ve got all of this fancy stuff, in fact, I have to recognize that and realize that perhaps simplifying my own life and isolating myself from these societal pressures of more, more, more will actually lead me to having a better life in the end.

Kerry K. Taylor
– Right. So, I mean at the beginning, we talked about I guess the lottery winner actually has some wealth. In “Millionaire Teacher”, let me grab it right here, one of the rules you mention is, well, you talk about the appearance of wealth now. So the Tesla owner who doesn’t actually own the car outright but has these monster payments. I wanna talk about the appearance of wealth. And one of the biggest traps you found in your travels is that people who look wealthy may not actually be wealthy and they are kind of miserable. So what’s going on, like, all these people look rich, but you’re finding they’re not.

Andrew Hallam
– Often they’re not, I’ll give you an example here. There was a guy who asked me to speak to his company in Dubai and he said to me, hey, look, he took me out for lunch first and he said, I’d like you to speak to my employees but don’t make the same mistakes that I’ve made. So we started chatting and I learned that this guy made millions of dollars a year, that was his income after tax. And I believe it was three, depending on the year, it was three to $8 million a year after tax because he lived in a tax free jurisdiction. And so he wasn’t an American and he wasn’t from Eritrea and residents in those two countries or citizens from those two countries are taxed on worldwide income. This guy was European so he live in Dubai and so he was netting three to $8 million a year. And I asked him, hey, how long could you live and sustain your lifestyle? His lifestyle looked unbelievable, I mean, he drove a Maserati, his company even paid for the place that he lived in so he didn’t even pay rent. So they paid his housing by the company. This guy would travel, he had just come back from, it was the middle of summer and he just came back from skiing on a glacier. But then when I asked him, like, I mean, he’s in Dubai. I asked him, how long could you live on your current savings. And it turned out that he could live just a couple of months. So in essence, this guy who’d been earning this money for about 12 years, this level of income, could survive for about two months on his savings. So he wasn’t rich, he looked rich, but he was quite poor. Because had he have lost his job if at any point, he loses that job, he’s got such a high burn rate, Kerry, his quest is insatiable. If you think about somebody that spends three to $8 million every year, that’s what they spend, and have really almost nothing left over at the end, their quest for stuff is huge, it’s like this massive addiction. And so when that salary dries up if that salary ever dried up, or if at some point, he wanted to retire, a guy like that would be in really big trouble. So, yeah, wealth is so fascinating because it’s not necessarily related to how much money you make, it’s really what you do with the money that you make.

Kerry K. Taylor
– Yeah, I feel like the rise of social media has also increased the appearance of wealth because we’re surrounded by everyone’s highlight reel 24 hours a day, seven days a week. And when I think back to before social media, our biggest comparison point where the Jones next door. And at least the Jones were kind of probably in our same bracket ’cause they owned property in the same neighborhood. And if we didn’t like the Jones and we didn’t like their new car, we could just close our front door and say, see you, enjoy those car payments. But now we’re being exposed to everyone’s appearance of wealth and highlight reel, and it’s not just the Jones that are posting online, it’s influencers and celebrities. And we’re really comparing ourselves to that lifestyle or that appearance of lifestyle. And the studies are showing that that level of comparison is making us miserable and it’s increasing our spending because when we see something, we get FOMO, right? We have the fear of missing out. And social media entices us to spend, it increases our spending by at least 25% ’cause we’re more likely to be tempted to buy something when we see someone else post it online. So it’s really becoming harder with social media I find to tease out who’s actually wealthy and who’s just posting a lot of stuff, giving us the appearance of this. So it’s really, really tough.

Andrew Hallam
– Yeah, I like that concept that you brought up where you suggested that you’re bringing them into your neighborhood, like that’s what you’re doing. And so the social media is, we are bringing these exposures right into our home. So not only living next door to us or across the street, they’re in our homes when they’re on social media and we’re looking at trying to then, obviously, it’s on a subconscious level. And I think it’s on a subconscious level. We don’t necessarily go, well, I want to live like the Kardashians, but it does something to us on a subconscious level.

Kerry K. Taylor
– It normalizes it, right?

Andrew Hallam
– That’s probably it, Kerry, you nailed it, you nailed it, it normalizes it.

Kerry K. Taylor
– It normalizes it, like I feel like, oh, I’m not normal, I don’t look like these people on social media, right? I don’t. Before I would just compare my modest lifestyle to the Jones next door, but it’s one thing to compare yourself to the Jones but another thing to compare yourself to like Beyonce. Like no one’s Beyonce, you can’t be Beyonce, but it just feels like that’s what we should be having because it’s just so normal, it’s everywhere. It’s just hard. The social media just is showing that and it’s making us spend more and it’s making us miserable.

Andrew Hallam
– Well, lets say, about that, well, what is success? And I guess we have this really warped definition of what success is. When we think success, we often think of money career, which is so one sided. It’s almost like a like a four legged table, where, okay, money, there’s a degree of money that you do need, that you do need a certain amount of money to be able to put a roof over your head, healthy food in your belly. Yeah, you need to have a certain amount of income or wealth. But then you also need your physical health and your mental health. You need strong relationships, you need what the Japanese call a sense of ikigai, which is a sense of purpose. And when we keep asking ourselves, why do we want things, often, it’s eventually when you continue to pester and ask why, the question why, why do you want that? Eventually, you’ll get down to, well, somebody will say, when they break, they’ll say, it makes me happy, I want it because it makes me happy. All the research in the world suggests that the only thing that will really make us happy are connections with other people, the relationships we have with the people that we love and respect. And if we’re going to spend money, spending money on experiences that we can share with people we love and respect are so so much more powerful. So we have such a warped definition of what success is and what leads us to happiness. When what we really need to do is we need to look at the evidence and the evidence is really suggesting that it’s all about relationships. And of course, the ancients knew that too, before we got into this whole consumer world, when you look at like Buddhist tacks are just so darn wise. When I started like delving into it, I think, oh my goodness, they’re so bang on. We’re living in this weird world of all kinds of crazy distractions which end up just eroding our levels of life satisfaction if we let it, if we let it.

Kerry K. Taylor
– So okay, so we need a sense of purpose, we need social connections, maybe we need to realize that comparison is the thief of joy so once we start making these comparisons with other people, we need to stop, think and reflect, because it’s like, well, that’s not gonna make us happy. I think increasing personal capital, so that’s your purpose. I find I’m happiest when I’m building on my skills or my knowledge because I feel like, oh, I did something with my day, I did something useful, like I learned a new thing, and that feels good.

Andrew Hallam
– It does feel good. And there’s another really important concept that you nailed there too, Kerry, in terms of life. So none of us know how much time we have left but one thing we do know is that typically, as we get older, time seems to accelerate. And it accelerates for two reasons, one, obviously, one year in the life of a 40 year old is a small percentage of time versus one year in the life of a 10 year old, there’s a really big difference in terms of a percentage there. So there’s that aspect. When you think back to when you were a kid and you were in high school, how it seemed like forever that you were in high school. And one of the reasons is that we measure time based on alternative stimuli. And when we get older, we often get into a routine that’s so darn predictable that time starts to accelerate, or at least our perception of time starts to accelerate. So now back to what you were talking about Kerry, if we continue to learn new things, it could be picking up guitar, it could be learning a new language, learning a new skill, that actually slows time down, we measure time based on alternative stimuli and that becomes the alternative stimuli. In some cases, there are little struggles that you’re trying to learn, but it starts to stretch the perception of time. Travel does much the same thing. So if you go to a new place and you’ve never been there before, and you have to learn all kinds of different aspects, like well, where am I gonna get the water? So for example, when Pele and I are traveling in our camper van and we get into a place like Guatemala–

Kerry K. Taylor
– Okay, you guys really travel around in the camper van, you’re a multimillionaire and you shack up in this little van, I just, really.

Andrew Hallam
– It is the best. So, in terms of the perception of time, here’s what it does, we get into a place, so we pull into place, we cross the border of Guatemala, we go Mexico, we go into Guatemala, we’ve never been here before. What’s this place like? How are the people? What do they think? What’s the culture all about? Where do I get water? How do I get propane for the van? Where can I sleep tonight? Where can we safely know that we can rest our heads and know that it’s gonna be okay?

Kerry K. Taylor
– That would stress me out.

Andrew Hallam
– Where do we go, like where are the really cool places? And often there’s fear in the unknown, there’s always fear in the unknown. Every time we wanted to go to a different country, we always feared that country until we got there and we spent some time and we realized, what was all the fear about. It was often fear is related to obviously the unknown and then, of course, media. But back to the perception of time. We’ll be in Guatemala let’s say for a week and we’ll think back and realize, wow, and most people can relate to this with specific holidays, especially if it’s very unique. You’ll think, was it just like last Friday that we arrived here, is it only been six days, because there’s just so much that we’ve packed into this experience. And now with COVID, Pele and I’ve been quite grounded. We’ve been here in Victoria and we’ve ended up getting into a routine, where, to be honest, I haven’t done a lot of learning and I probably should have picked up a guitar or learn another language or work to do something. But I haven’t done a lot of that. And it’s really interesting, Kerry, in that the last 10 months of my life have been the fastest 10 months that I’ve probably had in a couple of decades. Because they fell into such a routine and you don’t have to travel to a different country to experience this stretched perception of time or enriching your life. Like you say, it’s about learning new things, and you can learn new things right where you are.

Kerry K. Taylor
– Yeah.

Andrew Hallam
– That’s my favorite subject.

Kerry K. Taylor
– Well, I mean, you mentioned COVID and it’s like, okay, so we’ve almost spent a year doing the COVID thing, avoiding people, social distancing, complete life change. For me, it was more continuation of the same because as you know, I went through cancer treatment the year before so I have literally been stuck in my house since May 2019. So it’s like the experience I feel that I’ve missed bring me tremendous grief. Like, when I was in chemotherapy, I couldn’t go back to school shopping with my daughter, I couldn’t watch her at swim practice or take her to a play date. And I have more grief about that than anything you can imagine ’cause I feel like I’ve missed a year of my daughter’s life. And it’s the experience that I’ve missed and the time, that’s the hardest thing. And I’ve never felt more broke than when I was diagnosed with cancer because I have savings, but I never really thought about my health in terms of my wealth. And when they said, you have cancer, I was like, I’ve never felt more bankrupt in my life. So between the experiences that I’ve missed because of both COVID and treatment, and now dealing with health issues, it really brings into perspective for me what really matters in life and actually, what makes me much happier. But it was just such an eye opening experience that I’m still reeling from it because it’s just really difficult.

Andrew Hallam
– Yeah, and I guess too like, one of the things that we’re told we need to do when we look at behavioral research, it’s just recognizing, so now you’re in a position where you’re not going through that and it’s just recognizing all of the good things that you have right now, just being present and enjoying them versus looking back at the past. And so many people, we all tend to do that. It’s so interesting not that we have a year like you had, but we often tend to look back at the past and spend time in our heads in the past, and often than ruminating over the mistakes that we’ve made in the past, and so this can bring little pieces of shame into the present, something that you’ve done eight or 10 years ago or something you’ve experienced then, and we have to continue to draw ourselves back to the present moment to appreciate the things that we have now and look forward and not back.

Kerry K. Taylor
– Yeah, a friend of mine, she always says, Kerry, you gotta look forward ’cause that’s the direction you’re going.

Andrew Hallam
– Right.

Kerry K. Taylor
– Right. If you look back, you’re gonna get into a crash because that’s not where you’re headed.

Andrew Hallam
– And I think we can all relate to a part of that, like Kerry, like your past year was as traumatic as a year could ever be. But so often we do these things, whether we’ve made financial problems or we’ve made financial mistakes in the past, we often dwell on those. I’ve had so many people say to me, God, I only wish I knew this 10 years ago, I really wish I didn’t get into this consumption treadmill, I wish I got out of that earlier, I wish I did, I wish I did, I wish I did. That just leads to dissatisfaction ’cause you can’t control the past, you can only control your perception. And I think what you can control is obviously your perception and then recognizing that what you have in the moment, count all the blessings that you have and then look forward. I like that we were talking about this because the idea of money, you and I are both finance journalists, and I feel a little silly writing like article after article about how to make more money when we have to step back, and I do that all the time, the reason I feel silly about it is because I think it’s a bit seriously one sided. Because this is only a tiny component and the more we pursue any lopsided endeavor, we spend any time we pursue something that doesn’t bring us life satisfaction in the end, more money does not bring people more life satisfaction. When we start to pursue that too much, we take away from some of these other things that are far more important like the relationship time, the health time, it might be meditating, it might be exercising, it might be time spent with your family, those are the things that are most important. And then here I am writing as a finance journalist over and over and over about how to make more money. But ultimately, we’re here on this planet, it’s so cool to think about success as, let’s have the best possible experience that we can here on this planet. And in doing that, it’s not this fully one sided pursuit of more money or more stuff.

Kerry K. Taylor
– I feel so the same because it’s like I had to stop writing about finance because I felt like it was just the opposite of what I needed to focus on, right? Like it’s like, I know that more money isn’t gonna bring me more happiness or more health, it’s really the work you have to do with your relationships and yourself in order to find that joy in life. And I felt like such a hypocrite ’cause I’m like, this is how you save money on buying a car, this is how you save money on buying a house, this is all these rules of thumb you need to have. And it’s just like, oh, come off it, I just wanna yell like, love your people, your health is your wealth. And this was kind of like the shot of reality I had last year and it was just like, I’d spent my life saving all this money. So before cancer, I was like save, save, save, save, save. When I was diagnosed, I was like, spend, spend it all, you can’t take it with you. Like in that moment, I just felt I had it so wrong, right? I just wanted more time, I wanted more time with my daughter, my husband, my friends. And now that I’m kind of been spat out the other end of it, I’m kind of much more balanced. But I mean, you need to have money, money’s a housekeeping item, without it, you can’t keep your house, but it just hit me in that moment how wrong I had been all those years and that all that scrimping and saving probably wasn’t the right approach to begin with. And it’s so hard to say that ’cause I mean, I wrote the book on saving money. So I just felt like such a hypocrite and I’m like, I need to stop writing about finance for a while and do something else because it wasn’t feeding my soul.

Andrew Hallam
– Yeah, it’s interesting, isn’t it? I saw recently a Purdue University-based study on income, happiness and what they refer to as a satiation point. And we all know, you look at something like the Easterlin paradox which was, Richard Easterlin did an interesting study on happiness as it related to income and found that, yeah, happiness increased with income up to a certain point. And that study was replicated by Daniel Kahneman in 2006. He and a team of researchers did the same thing and figured that in the United States, it would seem like wealth or at least income, or happiness did increase with income but only to a certain point and beyond the point of let’s say, an inflation adjusted level of $90,000 a year, no real added level of additional contentment with people that earned more than that. But I saw this fascinating Purdue-based study that was done in 2018, which went a little bit further and took another level. So it took levels of income above $160,000 a year and were they happier than people that earned say $105,000 a year? There is a satiation point which meant that happiness increased with income to a point and then not only did that level, Kerry, but it actually started to slightly drop after $160,000 a year. And the study was done through a variety of different countries, Eastern Europe, Western Europe, Southeast Asia. And of course, that level of satiation was different, it’s only relative to the levels of relative income within that specific region. So in Thailand, of course, that satiation point’s far lower than it would be in the United States ’cause the cost of living is so much lower and of course, people earn so much less. But it was so fascinating to see the downward curve in Eastern Europe, Western Europe, Southeast Asia, Africa, South America, Central America, where they would hit their satiation point and beyond that point, their drop was significant in terms of contentment and happiness. So more income beyond a certain point meant more misery. And the researchers figured that it probably had to do not so much with the money itself, that the money didn’t make them miserable, but it was the fact that people that pursue those sorts of positions, people that earn those sorts of salaries tend to work really, really hard. And as a result of that, they often spend less time with their friends and family, they spend less time just being present, they’re working long, hard hours. And as a result of that, it ends up making them miserable. So there’s a sweet spot here, there really is, and I think it’s that idea that, okay, if we recognize that material things don’t give us added levels of satisfaction, we recognize that working our asses off to double our income or triple our income is gonna do jack for our well being, we have to sort of recognize that hang on a second, let’s build a balance into this and let’s see if we can be effective with the resources we have, the money that we do have, not get wrapped up into this pursuit of more and more and more, whether it’s income or whether it’s stuff, and then invest the income that we do have and spend the income that we do have such that we’re able to spend it on experiences with people we love and respect, we’re able to buy ourselves time, as time is key, because of course, time, experiences, time spent with people we love and respect, it all boils down to maximizing relationships, that’s it. So you need balance in order to do that. So the investment aspect is still important, but the pursuit of more and more and more is really lopsided.

Kerry K. Taylor
– Yeah, I mean, it so is. So then, do you have tools that you use to help stay present? ‘Cause I could certainly use some help because I’m still looking in the rear view mirror some of these days. I’m like, I need to look in the here and now and then a little bit into the future. So how do you do this?

Andrew Hallam
– I mean, when we look at research, one thing, and you might just laugh at me, but one thing it’s really–

Kerry K. Taylor
– I always laugh at you, Andrew but I love you.

Andrew Hallam
– You can laugh at me, you can laugh at me. And I’m not as good at this as I want to be, but it’s meditation. And I’ve gone through periods in my life where I’ve done more of it and it tends to ground me really nicely, I tend to sleep better when I’m in my meditation kick, I tend to be much more just content and calm, and it doesn’t take a lot. According to studies, it could be as little as two minutes a day. But the key is to do it regularly. Do you do it?

Kerry K. Taylor
– Oh, I keep starting up and it’s like, it’s so hard because my mind is always racing, I’m like, are the three minutes up yet? Are the two minutes up yet? Are we there, are we there? Can I like go off and do something else? I find it really hard which means I need to keep working on it, but I have a couple apps that I definitely play with when I lay in bed and I try and get there. But it’s practice, isn’t it?

Andrew Hallam
– I think it is practice, I have some friends that do it just religiously and they are quite good, as they explain to me, they’re really quite good at completely emptying their minds. To show a challenge, it means I’ve been doing it to different levels on and off for years and I’m right now on a kick again, I’m like, you know what, I’ve got to do this, I’ve gotta write this down, I wanna be able to do this. And so one of the really simple things I do, and I guess this just shows too how hard it is to empty the mind is I will breathe in my nose and I will imagine the breath coming in and then the breath going out and I actually count number one as it comes in and number one as it goes out, number two as it comes in, number two as it goes out. And it is so hard to get to 10 without an errant thought going into your head. And the idea is that once that happens, you have to be kind to yourself, you have to gently push that thought aside and then get back into the breathing in and the breathing out. Sometimes I go back to one. So if that errant thought enters when I’m breathing in for the number four, fourth breath, and I get some thought about, like it could be stupid television show I watched earlier in the day, like character in the show, it’s always something dumb.

Kerry K. Taylor
– It always is.

Andrew Hallam
– Go back to number one.

Kerry K. Taylor
– Okay, I’m gonna have to work harder on that, but I’m always aiming to be more present ’cause it’s definitely much more relaxing and it definitely puts life into bigger perspective and it definitely brings me more joy. So okay, I’m gonna ask you because in “Millionaire Teacher”, let’s shift gears a little bit, let’s meditate on your book.

Andrew Hallam
– That’s an old version you have there.

Kerry K. Taylor
– I have the original.

Andrew Hallam
– Yeah.

Kerry K. Taylor
– I’ve probably bought over 25 copies for my friends over the years so yeah, just because you say things so well and I don’t feel preachy when I say you guys should listen to this guy, Andrew Hallam because they can’t hate me if they read your words and it’s like what I’m thinking but I want them to understand what true wealth is and how to invest smarter. But I wanna know what, we’ve talked about the appearance of wealth and social media jacking up our expectations of what wealthy really is. I’m wondering, you have a definition of what true wealth is, definitely its health, its perspective, its relationships, it’s personal capital, increasing your knowledge base, but we need money too. And so I’m wondering what your unusual definition of wealth really is because it’s not the large house or a luxury car.

Andrew Hallam
– So I guess by wealth, we’ll define financial wealth so one of those four pillars of success, right?

Kerry K. Taylor
– Yeah, I mean, you talk about it some, it’s what your portfolio builds for you without touching it, right?

Andrew Hallam
– Right, right.

Kerry K. Taylor
– It’s kind of like the 4%, yeah.

Andrew Hallam
– And it’s not that– Yeah, no, it’s not that everybody needs to be wealthy but I define to the definition of financial wealth this way, I said, people are financially wealthy if they could be in a position whereby they don’t need to work ever again for the rest of their lives. That’s their choice, doesn’t mean that they’ve decided they’re gonna not work at all, but they’re in a position whereby if they chose to, they could not work for the rest of their lives and their income portfolio, whatever that might be from their real estate portfolio or their stock and bond market portfolio, that it provides them enough income whereby they could spend twice the median household income of the country that they live in without having to work at all. So let’s just say that the median household income in Canada is, I don’t know so I’m gonna make it up, $65,000 a year, let’s just say that. My definition of wealth is somebody who can spend $130,000 a year, every year of their life indexed to inflation, so they can continue to spend a little bit more than $130,000 every single year for the rest of their lives and never have to work. That’s my definition of wealth. So my definition of wealth is not someone who makes a million dollars a year because if they spend a million dollars a year, they’re not rich, they’re poor. My definition of wealth is not someone who necessarily drives that Ferrari and lives in that mansion for much the same reason. Can they live without an income? Can they live well without an income? And if they can, then that was my definition of what it meant to be wealthy.

Kerry K. Taylor
– See, and I think that, essentially, if you can build a portfolio that allows you to live that way, you’re essentially buying more time, right? You don’t have to sit in traffic to get to work, you don’t have to work for the boss that makes you grumpy, you can spend more time with your kids and your family. So basically, that portfolio building and growing in that way, it affords you the time to live your life in a way you otherwise wouldn’t have.

Andrew Hallam
– Yeah, and I’m a strong proponent of continuing to do something part time even when you get older. But to know that you don’t need that income is great, it just gives you that extra bit of and it gives you that time to spend with people that you love. Yeah, I think it’s key, the Japanese call it ikigai, a sense of purpose. So the idea that when you retire, you don’t necessarily go and flop around on a beach or a golf course for the rest of your life. Studies show that you’ll live longer if you actually keep your hand in something, keep doing something. And it might be volunteer work, it might be part time, a part time job somewhere where you’re actually earning an income. There’s several reasons that Japanese live far longer than Canadians and Americans and one of them has to do with this concept of ikigai, the sense of purpose, that a really high percentage of people in their 70s and 80s in Japan continue to actually work. And they are working not because they need the money, but they’re working to serve their community and it fulfills them with a sense of purpose. And so there’s that other interesting aspect of this pursuit of money and pursuit of early financial independence too, Kerry, which is interesting. I like the idea of becoming financially independent so that you’re in a position whereby you don’t necessarily need to work, and then when you do, it’s just a bit of icing and keeps you in the community and gives you that sense of purpose.

Kerry K. Taylor
– Amazing. So, before we go, I wanna know what we should definitely avoid if we wanna increase our health, our wealth and our happiness. What activities, what thought processes, what’s the definite don’t ever do this if you wanna pursue a healthier and happier life?

Andrew Hallam
– Whoa, tough question. So, what not to do.

Kerry K. Taylor
– What not to do.

Andrew Hallam
– If we want to pursue a healthier, happier life?

Kerry K. Taylor
– Yeah.

Andrew Hallam
– Wow, that is super tough question. Let’s say unhealthy addictions, there’s one. So an unhealthy addiction could be a consumer addiction.

Kerry K. Taylor
– Right.

Andrew Hallam
– It could be a chemical addiction. So I would probably say avoiding that, yeah, and avoiding unhealthy addictions.

Kerry K. Taylor
– Fair enough.

Andrew Hallam
– What would you say, what would you say? That was an interesting question. What’s the one thing you would avoid? It’s like well, I would avoid sugar, I would avoid sitting on the sofa too much, like there’s so many things I’d wanna avoid.

Kerry K. Taylor
– I think the first thing that comes to my mind is debt because debt, I’ve been in debt once in my life when I had student debt, and I never felt more miserable having that weight over my head. And I think because I’ve always been, being a financial writer, I’ve always been thoughtful and sensitive about money and I just felt like such a huge failure by having debt and it felt bad. So I think the first thing in my mind would be for me, I was always looking at how not to owe anyone anything, I think that was kind of my prime directive for so many years, you know.

Andrew Hallam
– Yeah.

Kerry K. Taylor
– And the consumerism comes into that. I mean, so many people have student debt and it’s largely unavoidable if you wanna get an education with the cost of tuition nowadays, but for me, that was just paying that off really quickly was just something that increased my happiness ’cause it literally felt like a weight off my shoulders. So I would say, I like unhealthy addictions, okay, sugar. I think for me, definitely increasing exercise and increasing the time with my family and friends. And definitely during this time of COVID, I just miss hugs, I miss such simple things, I miss hugging my friends, hanging out with them for coffee, and it’s those experiences that have just, I’ve just felt their absence in my life so strongly.

Andrew Hallam
– Your listeners are gonna be like, this guy Hallam is not, he’s not inspiring at all, sugar, what’s wrong with this guy, he’s talking about avoiding sugar. This guy’s got a serious problem, you can’t enjoy life. And maybe I should, yeah, I’m gonna talk about the sugar thing, it’s just super quick if I have time Kerry.

Kerry K. Taylor
– Okay.

Andrew Hallam
– All right.

Kerry K. Taylor
– You don’t drink pop or soda pop for any of these things, do you? I can just tell.

Andrew Hallam
– Your listeners are gonna think I’m completely psychotic but here we go, here we go. And it hasn’t always been like this but this is the truth. If you had a can of Coke and you said, Andrew, I’ll give you $1,000 if you drink this kind of Coke, I wouldn’t do it, I wouldn’t do it. Here’s why. Again, you’re gonna think this guy’s completely nuts. And I’m not saying sugar is really, really like bad for everybody, but for me, for whatever crazy reason, I ended up getting cancer in my late 30s and I did some research to figure out, what is cancer like the most? What does cancer love? Well, I learned that cancer loves sugar. Therefore, if Andrew wants to live a reasonable life, one of the best things for him to do to kick cancer’s ass is to say, to hell with sugar. So, not that I had a lot of sugar to begin with, but I completely cut it out of my diet. And so yeah, Kerry, if you said to me, Andrew, here is a can of Coca Cola, 1000 bucks if you drink it. I know I’m super extreme, but I want the most out of life, I really do. So I have some cells that are right on the tipping point and if I end up in the hospital at some point, I don’t wanna be the guy looking back and going, I did drink that can of Coke.

Kerry K. Taylor
– It’s all about Coke. Oh, see, we have so much in common ’cause we’ve both gone through cancer, we’re both financial writers, we both have money in the bank, we’re both athletic too, I know, like you’ve done sports your whole life, I was an Ironman athlete so I was like, I don’t know where this cancer comes from. So yours likes your bones, my like my boob. So it’s really crazy. Okay, let’s switch gears again since neither of us own a luxury car. And let’s end this quest for happiness because I’m just happier just talking to you today. But let’s pause here and regroup for part two of our talk because I know people are gonna wanna learn how on earth we managed on a writer’s salary, and in your case, a teacher’s salary, to have independence and grow our wealth without having like a huge income. So let’s talk about how to invest small incomes into large portfolios. But first, where can we find you online, andrewhallam.com?

Andrew Hallam
– That’ll do it.

Kerry K. Taylor
– That’ll do it? Okay, thank you, Andrew, and I’ll talk to you again for part two.

Andrew Hallam
– Thank you, Kerry.

Kerry K. Taylor
– And now I wanna hear from you, are you surprised about what makes us truly happy, has social media and FOMO ever encouraged you to spend, or were there other insights you’ve got from this interview because I wanna hear about it in the comments. Now, the best conversations happen over at squawkfox.com so head over there and leave a comment right now. And if you’re not already, please subscribe to my email list to become a Squawk Fox insider. You’ll get my free budget bundle and priority access to all my stuff once a week in your inbox. Thank you so much for tuning into SquawkfoxTV and the Cash and Kerry Podcast, and I’ll catch you next time.