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1:00

This. Is Optimal Finance Daily Episode

1:02

Twenty Five Seventy Four. What

1:04

his portfolio rebalancing and how to

1:06

do it? By. Sara Sharkey

1:08

with The College investor.com. And.

1:11

On your Host and personal finance

1:13

enthusiasts Diana, Miriam, Welcome.

1:16

Back to Optimal Finance Daily where every

1:18

day I read the best personal finance

1:20

bugs on the web with permission from

1:22

the authors of course, So.

1:24

With that, let's get right to our next

1:26

article as we optimize your life. The.

1:32

Goldilocks Zone of Personal Finance

1:35

by Nick Much julie of

1:37

of Dollars and data.com. Being.

1:40

At the bottom sucks. I. Know the

1:42

feeling, Growing. Up as a small

1:45

kid with no athletic abilities, I got

1:47

used to getting picked last or near

1:49

last for any team sport. The.

1:51

Experience was always stressful for me.

1:54

As. Roberts a Polsky explains and why

1:56

Zebra as don't get ulcers. quote

2:00

For a subordinate animal, life is

2:02

filled with a disproportionate share not

2:04

only of physical stressors, but of

2:07

psychological stressors as well. Lack

2:10

of control, of predictability, of

2:12

outlets for frustration." End

2:14

quote. In the sports

2:16

world, I was a subordinate animal. I

2:19

didn't feel like I could control the outcome

2:21

or get better, so I focused all of

2:23

my efforts on improving in the classroom. And

2:26

it worked. From elementary school onward,

2:28

I was always near the top of my

2:30

class academically. However, riding

2:32

high in the world of academics has

2:34

its own pressures. Anytime

2:37

I had to prove myself to a

2:39

new teacher or perform well on a

2:41

standardized test, it was like being picked

2:43

last for kickball all over again. Why

2:46

did I experience moments of acute stress even

2:48

when I was doing well? I

2:51

recently found my answer in an

2:53

experiment done by Jay Kaplan on

2:55

stress and social hierarchies among monkeys.

2:58

Like prior researchers, Kaplan demonstrated that

3:00

those monkeys near the bottom of

3:02

the social hierarchy experienced lots of

3:04

stress and had worse health outcomes

3:06

than those higher up. No

3:09

surprises there. But Kaplan

3:11

also found that under a particular set

3:13

of circumstances, those at the top of

3:15

the hierarchy also experienced

3:18

profound stress. Sapolsky

3:20

summarizes it well. Quote,

3:23

Suppose you keep the dominant system

3:25

unstable by shifting the monkeys into

3:27

new groups every month so that

3:29

all the animals are perpetually in

3:32

the tense, uncertain stage of figuring

3:34

out where they stand with respect

3:36

to everyone else. Under

3:38

those circumstances, it's generally the animals

3:40

precariously holding on to their places

3:43

at the top of the shifting

3:45

dominance hierarchy who do the most

3:47

fighting and show the most behavioral

3:50

and hormonal indices of stress. End

3:53

quote. Whether I was

3:55

competing to stay at the top, academics,

3:57

or feeling useless at the bottom, sports.

4:00

Stress followed. Personal

4:03

finance isn't all that different. Those

4:05

people near the bottom experience lots of

4:07

chronic daily stress around money that impacts

4:10

their whole lives. For

4:12

example, the famed Whitehall study

4:14

found that even when you

4:16

control for smoking, level of

4:18

exercise, and other factors, lower

4:20

socioeconomic status is still associated

4:23

with higher cardiovascular mortality. However,

4:25

people near the top have their own set

4:28

of money problems. Tyrone

4:30

Ross highlighted some of these difficulties in

4:32

a video he recently posted on Twitter.

4:36

And the same people that were born

4:38

into wealth, born into privilege, they shouldn't

4:41

be chastised either. Because guess

4:43

what? Imagine being the son or

4:45

daughter of someone who's a billionaire or worth

4:48

a hundred million dollars and you got that

4:50

on your back. Listen, if

4:52

I could trade it, I absolutely would. I would

4:54

trade it for where I came from. But

4:57

I don't think that there's nothing hard about that either.

5:00

Trying to live up to mommy and daddy's

5:02

standard when you don't want to go to

5:04

Harvard? End quote. As

5:07

I've written before, there are hidden costs

5:09

associated with being wealthy, such as figuring

5:11

out who you can trust and dealing

5:13

with the expectations of friends and family.

5:16

On a podcast episode with Russ

5:18

Roberts, David Owen, author of the

5:20

first National Bank of Dad, echoed

5:22

this sentiment when discussing the difficulty

5:24

of teaching kids about money. Props

5:27

to Ben Carson for sharing this. Quote,

5:30

I think it should be said that it's easiest

5:32

to teach kids about money, obviously, when there's money

5:34

in the family. But not when there's too

5:37

much and not when there's too little. I think

5:39

money is the hardest where money is very tight

5:42

and in situations where money is essentially

5:44

boundless. I think it's hardest for

5:46

the poor and the rich to teach their

5:48

kids about money. The first,

5:50

because poverty is not much of a

5:53

teacher. There's not much to learn. It's

5:55

all necessity. And at the rich

5:57

end, it's hard to create the kind of

5:59

artificial scarcity. that you need to make

6:01

decisions seem as though they mean anything.

6:04

It's easier in the middle." End

6:06

quote. Owen's point goes

6:08

beyond just teaching your children about money, though.

6:11

It also applies to what level of wealth you should

6:13

strive for, or what I call

6:16

the Goldilocks Zone of Personal Finance. Enough

6:19

money to have comfort, security, and motivation,

6:21

but not so much that you

6:23

add guilt, stress, or existential longing.

6:26

It's not too little, and it's not too much. It's

6:28

just right. My challenge to

6:31

you is to find and stay in your

6:33

Goldilocks Zone. I can't define

6:35

exactly how much that is, since it varies

6:37

from person to person, but I would

6:39

wager that the amount is less than you think. Why

6:42

do I recommend this? Because it

6:45

provides the base level of security that the

6:47

bottom doesn't have while avoiding the

6:49

conflicts that are common to those at the top.

6:52

It's the best of both worlds, and a privilege

6:54

that many of you will attain in your lifetime.

6:57

The sad thing is that some of you

6:59

are already in the Goldilocks Zone, but you

7:01

continue to crave more and don't realize it.

7:05

You might disagree with my logic and say

7:07

that there is no such thing as being

7:09

too rich. If so, please consider

7:11

the warning given by Felix Dennis

7:13

in How to Get Rich. Quote.

7:17

Still, let me repeat it one more time.

7:19

Becoming rich does not guarantee happiness. In

7:22

fact, it's almost certain to impose the

7:24

opposite condition. If not

7:26

from the stresses and strains of

7:28

protecting wealth, then from the guilt

7:31

that inevitably accompanies its arrival. End

7:33

quote. The upside to

7:35

having more. Despite

7:37

the difficulties associated with being rich,

7:39

the one upside to having immense

7:41

wealth is that you can improve

7:43

lives through charity and private enterprise.

7:46

So if you do decide to go beyond the Goldilocks

7:48

Zone, make sure you know

7:50

why, and ask yourself whether that reason will satisfy

7:53

your soul. You just listen to the

7:56

post. titled

8:00

The Goldilocks Zone of Personal

8:02

Finance by Nick Majulie

8:05

of ofdollarsanddata.com and I'll

8:07

be right back with my commentary. If

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9:29

figuring out how much is enough. I

9:32

used to think it was a number

9:35

such as the baseline formula for reaching

9:37

financial independence, an investment portfolio worth 25

9:39

times your yearly expenses,

9:42

or a level of achievement such

9:44

as a yearly salary goal, number

9:47

of social media followers, or selling

9:49

out my event the Economy Conference.

9:52

But now I realize that enough is

9:54

not a destination or goal to be

9:56

reached. It's a state of mind to

9:58

be cultivated. The reality

10:01

is, I already have enough. I

10:03

have enough money, friends, and achievement, but

10:06

until I developed an abundance mindset

10:08

rooted in gratitude for what I

10:10

already have, it was never

10:12

going to feel like enough. As

10:15

one reaches higher and higher levels

10:17

of success, there's a tendency to

10:19

move the goalpost of enough so

10:21

that nothing ever feels like enough.

10:24

This is why there are

10:26

multi-millionaires in the world with

10:28

countless awards, accolades, and professional

10:30

successes that are still miserable.

10:34

Without peace of mind and the

10:36

capacity to enjoy the abundance they've

10:38

created, what's all that success even

10:40

worth? If you'd like

10:42

to explore this concept of enough further,

10:44

I recommend you check

10:47

out the speech titled, The Journey

10:49

to Enough by Rose Lunsbury on

10:51

the Economy Conference YouTube channel. And

10:54

that's another edition of Optimal Finance Daily. Thank

10:56

you for listening, and I'll be back tomorrow

10:59

as usual. So I'll see you there, where

11:01

your optimal life awaits.