We all have an area of life we love spending money on.
For me, it’s relationships. For you, it could be travel, food, wellness or something else.
This is called your “money dial.”
Once you figure out your money dial, you can spend intentionally on that rather than spending lots of money on everything.
For this 5-Minute Friday, I revisited a conversation I had with Ramit Sethi where he shared about his concept of “money dials” and how to spend money on the things that bring you joy.
Ramit says that we should cut back spending on things we don’t care about but spend without apology on the area that makes us the happiest.
We can also stop judging other people for having different money dials than us.
Learn how to identify your money dial and how it can take your life to the next level in Episode 798.
Lewis: This is 5-Minute Friday!!
We’ve got my man Ramith Sethi who’s a New York Times best-selling author of the book on personal finance called ‘I will teach you to be rich’ and the founder of growthlab.com. He’s also got the site Iwillteachyoutoberich.com which is information helped me get out of debt many years ago when I read his book. He’s been a good friend of mine for 10 years and just had some incredible times with him
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Ramith: What you just said is extremely revealing. I will be willing to bet is relationships. So, I friend Nick Ray, Nick Ray loves hosting people at his house. Every day he’s trying different party he’s testing stuff and invites people over, he does all kind of crazy stuff. He loves relationships that’s his money dial.
The reason I say it’s money dial is you start off maybe a couple of people out to dinner and as you start to get more money and more success you turn that dial until you’re totally dialed in. You have the perfect appetizers, you have the perfect ice breakers you’re really turning that up. There’s other money dials the most common one is frugality. Most people actually focus on cost above all else and you can tell because when they buy something what’s the first thing they say?
Lewis: They look at the price.
Ramith: They look at the price and they tell everyone else. So, that’s frugality.
Lewis: They brag about how discounted they got it.
Ramith: It’s a part of their identity whereas for you, dude I see you photos and conference your identity is about relationships. Now there’s a few others there’s wellness which is more and more common. And you’ll see people they have the perfect diet and they have a chef, I’m talking when they really dial it in.
Lewis: They have a full time trainer.
Ramith: This is a point of advance personal finance which is you don’t have to have a trainer when you start of right? But when you search for 5 hours you found the perfect program, but as you have more money you start to say ‘I want better results, I want faster results and I have money I’m gonna throw it to problem.’
My money dial is convenience. So, I love convenience and I wake up.
Lewis: Everything is delivered to you.
Ramith: Everything is delivered I have a chef. When I leave to travel I have this thing called the travel protocol that gets activated with my assistant and my plants get watered, my emails gets handled differently I mean it’s I’ve been thinking about this for the last 15 years, but that’s my money dial and I love it.
Lewis: So you pay a premium for that money dial to have convenience?
Ramith: Exactly. I could not care less about certain other money dials. Other common ones that a lot of people probably watching probably have or listening is travel. So, at a basic level people say ‘I like to travel’ but imagine you’ve truly become more advance and you become more successful and you want to throw a lot of money at the problem because you value it and suddenly maybe you’re going 3 months a year, maybe you are leading excursions. You can just expand your mind as to what you can possibly do beyond the typical 8 days of vacation a year. So, I share this with everyone because I like to challenge people to do something. Take a look at your spending for the last 2 to 3 months and ask yourself ‘what is my money dial?’ And the money dial is the thing that you love to spend money on, it’s the thing that give you joy and it’s the thing you can spend endless amounts of time optimizing.
Lewis: And feel good about it.
Ramith: So the reason once you know your money dial then it enables you to do really cool things: 1 is you can cut back on stuff you don’t care about. Okay, so if you just don’t care about wellness or if you just don’t care about travel that’s okay you can cut the spend to that, but I think the cool thing is that it allows you to take that money and spend it on extravagantly on the thing you love which is your money dial. So, if you Lewis suddenly you don’t mind throwing a lavish dinner for your friends with a performer and all kinds of crazy stuff because that’s your money dial, no need to apologize for it. So, for everyone especially the advance folks who have money you got to think now you are at a different level, you’re not just trying to cut your debt, you’re not just trying to cut back you actually can spend on the things you love and that to me is really exciting.
Lewis: So figure out your money dial and spend more intentionally on those things as opposed to spending to lots on everything?
Lewis: I hope you guys enjoyed this 5-Minute Friday with Ramith Sethi and make sure to get his book. The 10 year anniversary expanded in new chapters teaching you how to be rich. Lewis: if you enjoyed this inspirational clip from a past episode of the show then you’ll love the free book I’m giving away right now It’s called the millionaire morning and it includes some of my best tips for starting off your day with a millionaire mindset. Get your free copy at the millionairemorning.com and just pay shipping, again check it out right now the millionairemorning.com