My Problem Spending Money

What's up, you graham? It's guys here, and today we're going to be talking about why I save so much money. Because over the last few years, I've been called quite a few things, ranging anywhere from stingy, cheap, thrifty, frugal, economical, a penny pincher, and my personal favorite, financially minimalist.

See, most of the time when people hear how much I make compared with how much I spend, I get this bewildered response, as though they've just seen an alien recite the alphabet backwards. And that then prompts the question: What's the point of saving so much money if you don't spend it? Or when are you finally going to go and enjoy your money?

Honestly, that's a really good question. So when it comes to this, here's the answer, and these are my philosophies and beliefs when it comes to saving and spending money. Because as extreme as I could be with personal finance, I like to think that there's a bit of a method to the madness and that really at the end of the day, everything has a carefully crafted purpose beyond just saving for the sake of saving money.

But really quick, before I give you the answer, I want to say a huge thank you to our video sponsor today: they're called smashing the like button for the YouTube algorithm. Of course, you might be wondering, this sounds too good to be true, how much does it cost to help the algorithm? It sounds expensive.

Well, I have good news for you because this video is about saving money. The first unlimited people get to smash the like button for the low cost of only zero dollars, and it takes only a second. So thank you so much for doing that; it really helps me out a lot.

And with that said, let's begin the video. Here, now when it comes to saving money, I tend to see things from the perspective of how I was raised. It's given me a really unique perspective to see both sides of the coin in the sense that growing up, my family never had extra money lying around. We never lived large, and even though I had an amazing childhood, it wasn't as though I didn't see my parents worry about money or go through some really tough times.

On the other hand, now I've been wildly fortunate to have become financially independent by my late 20s, to the point where I could pursue nearly anything that I wanted to, within reason of course. But what really stands out the most, that has the biggest impact on my psychology of saving money, wasn't so much my upbringing; instead, it was a really horrible job that I took just as I was finishing up high school.

At the time, I thought for sure I wanted to be an investment banker, even though I had terrible grades, horrible SAT scores, and no acceptance letter to any colleges. But that didn't stop me from scoring a job doing really basic data entry for near minimum wage at a precious metals investment firm because I thought to myself that that would get my foot in the door to one day making a lot of money and doing something that I loved.

Well, I guess no surprise there, but I found out very quickly that data entry was not for me. Every single day I went in there, I wanted to quit. I couldn't stand it. I felt stuck, and every single day I would go into the office and see everyone act like a zombie until 5 PM on a Friday when they had the weekend off.

On top of that, I don't know how many of you have worked minimum wage full-time, but once you do that, it pays an entirely new perspective for the value of money and how hard you need to work to pay for something. When my take-home pay after tax was about eight dollars an hour, there's no way I'm going to buy a Starbucks for four dollars, because that equates to me working 30 minutes at a job I really dislike.

Or going out to a fancy dinner could easily be an entire day's worth of work, or going and buying a new wardrobe could easily be a week's worth of a paycheck. But it did serve as a very intense motivation to reevaluate what I wanted to do and how I wanted to spend my time and what was important to me and where my priorities aligned.

That's when I realized that deep down, I was never just after money per se, but instead I really just wanted the challenge, the creativity, and the freedom to pursue what I wanted to do and what I felt was best, whatever that might be. And for me, money really became a brand new purpose, and that was options.

And no, I'm not talking about trading options on Robinhood; I'm talking about options, a noun, a thing that is or may be chosen. Here's what I've realized: money is at its core just a tool, and that's it. And really, just like any tool, there are effective ways of using it and ineffective ways of using it.

For example, you wouldn't be changing a light bulb with a hammer, because that makes no sense. So along that same line of thinking, why would you use money for anything other than what it's really good at? Well, what it is really good at is giving you options. It's about having the option to pursue what you enjoy the most.

It's also about having the option to smash the like button and get three free stocks down below in the description when you deposit 100 on Webull, because those stocks could be worth all the way up to 1,600. Anyway, for me, it was about not taking work that I didn't thoroughly enjoy, and oddly enough, once that happened, I ended up making more money as a byproduct of just enjoying what I do.

From there on out, I viewed every purchase as either getting me closer to the goal of having more options or pulling me away from it. And once that clicked, everything changed. Today, that allows me to only do the work I'm the most passionate about, and I could take more career risks without the worry of not making money.

I'm totally okay turning down offers that don't align with what I believe in, without money being a factor in that decision. That never would have been possible had I built a lifestyle of high overhead, excessive spending, and luxury that I never needed to begin with.

From my experience, the real enjoyment doesn't come from buying things; it's just having the option to buy them if you want to. I think that once you get to a point where you can afford pretty much anything you reasonably want to, the desire to own a lot of things just goes away.

The second, for me, I've noticed that the more overhead and financial obligation I have, the more stress they tend to be. I guess it's a little bit like spinning plates; even though it might be easy to handle one or two of them at a time, start spinning five or six and keeping track of all of them takes up a lot of mental energy that might be better spent elsewhere.

I compare this to the overhead of having a huge car payment, or some enormous mortgage payment, or any other costly obligation that just becomes another thing that you need to work for to maintain. Like, what's the point of owning a really expensive house with a fancy car parked out front if the only way you could afford it is to obligate yourself toward working 80 hours a week for the next 30 years just to pay for it?

I've just never understood that mentality, and I'd much rather not have the extravagances but have the freedom with how I spend my time. That's always been the reason of why I prefer to save what I earn. I enjoy having less financial responsibility and overhead, because that gives me in return more creativity, more freedom, and less stress, which really leads me to working in more creative and fulfilling ventures, which just happen as a byproduct to make more money without clouding my judgment on needing to make more money.

Like this YouTube channel would absolutely not be where it is today if I had high overhead five years ago that I needed to support. Back then, I worked full-time as a real estate agent, and if I was spending ten thousand dollars a month on useless stuff, I couldn't have risked that career to pursue this, which quickly became my new passion.

And it worked out better than I ever imagined. And no, that's not to say don't spend money on anything because obviously that's not the case. I treat myself to sushi twice a month, but that's why I only try to spend the money my investments make. Because if there's something I want one day, I'll make sure I have enough invested to completely pay for it; otherwise, I'll just continue saving.

That's how over time I've gradually started spending more money and increasing my lifestyle. I'll buy the type of home that my investments can cover or the type of home that will make me money without me coming out of pocket, and then I'm able to continue my current lifestyle of reinvesting everything so that that way, over time, that will support any other future endeavors I decide to embark on.

Because I totally believe it's okay to spend more money and do nicer things and to accumulate more stuff if that spending is sustainable. So for me, that's the reason why I saved so much money.

Now in terms of how I spend my money lately, my mindset has begun to shift, and I never thought this would happen, but just hear me out. If you had asked me this a few years ago, I would have told you that I enjoy doing everything myself because it's cheaper for me to do it myself than pay someone else to do it, and I found that as an economical way to save more money.

I would manage my own properties, I would do my own accounting, I would clean my own house, I would wash my own car, I would do my own groceries, I'd cook my own food at home, and I would even go house to house as a real estate agent dropping off my own mailers, because I saw that as me saving money that otherwise would have been spent.

And I gotta say, that worked really well for a long time, but now I've begun to realize that doing everything myself doesn't make as much sense as it once did, because having the ability to save has given me something I wasn't expecting before, and that would be time.

For the first time ever in my entire life, I've begun to prioritize buying back my time in the sense that now I could hire an editor on the Graham Stephan Show to edit those reaction videos, so that now I have more time to spend back on here. I was also very happy to pay him as a driver so that way I could edit more videos while I’m on the go.

If you would have told me a few years ago that I would be doing this, I never would have believed it. But now I've begun to realize that there's only so much I could do on my own, and I really need to prioritize my time.

And by outsourcing some of the work, I have my time back to focus on growing and expanding in ways that just weren't possible before. Now, as a result of that, I had more free time during the day while simultaneously taking on more work than I was before.

And when you're doing everything yourself, there just begins to get to a point of diminishing returns, where all of a sudden your time is starting to be better spent elsewhere. And now that's where I've been spending more money in shifting my priorities.

Not to mention, psychologically there are examples of how money could be spent to increase your quality of life and happiness. And according to the Journal of Consumer Psychology, the best ways to spend your money are as follows:

First, spend your money on experiences and not things. It was found that the effects of buying material things fade rather quickly once we get used to them, but experiences could be something that our mind continually gets to look back on, bringing us more positive emotion.

The second, it also helps to spend money with people. There was a study in which people were given money and then tracked as to how they spent it, either on themselves or with others. The group that spent money with others reported, on average, a much higher level of satisfaction than the group that spent the money on themselves.

That means that anything we do to improve our connections with others is also going to improve our own happiness as well. The third, you should spend money frequently on small things but very infrequently on large things. Our minds have the ability to quickly adapt to even the best things that money could buy, and once that newness fades away, it's going to require even more to get that same hit.

However, it was found that our minds are less likely to adapt to a variety of small things because it's less likely that the experience is going to be the exact same every single time. For example, going out to the movies or going out to dinner is not going to be the exact same experience time and time again, but going and buying a new Gucci belt is going to be the exact same every single time you wear it.

And fourth, it's really important to enjoy the process along the way. Research shows that people actually enjoy the process of anticipating something happening usually more so than the actual event itself. It's kind of like going on a one-day vacation today with no advance notice versus going on a one-day vacation next week.

Except on the next week's vacation, you have the entire week to look forward to it. That's why for me, I've always prioritized saving because at the end of the day, what I'm really buying is freedom and the choice to work on the things I'm most excited about.

I think there's a hugely under-appreciated advantage of doing this, in that by working on the things you really want to work on—not because you have to work on them—you'll tend to produce better results. And from that, making more money becomes a byproduct of just enjoying what you do.

The same thing also applies with YouTube. For the first two years of making three videos a week, I was earning substantially less on YouTube than I was as a real estate agent. However, I just loved doing this, and I was happy to sacrifice earnings for the sake of doing something I really enjoyed. Lo and behold, financially, that ended up paying off really well.

But getting to that point to begin with all started with saving. It's all about spending money on things that really add value to your life and saving with the intention of building a lifestyle that supports that. So that's why I save pretty much everything, and I only spend whatever my investments make, because that's what gives me the most choice day to day.

And today, my choice is to remind you again for a second time to smash the like button for the YouTube algorithm. So with that said, thank you so much for watching. I really appreciate it. As always, make sure to destroy the subscribe button and the notification bell.

Also, feel free to add me on Instagram; I post pretty much daily, so if you want to be a part of it there, feel free to add me there. As in the second channel, The Graham Stephan Show, I post there every single day I'm not posting here. So if you want to see a brand new video from me every single day, make sure to add yourself to that.