The Real Problem with Lifestyle Creep

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Automatic transcript, lightly corrected for names, with profanity masked. Some passages may contain transcription errors.

Hey, everybody. Welcome to another episode of The Inner Circle with myself, Kevin Dahlstrom, my good friend and member of my Inner Circle, Mike Brown. The idea of this show is it's Mike and I having the conversations we have anyway, except we hit the record button. Today's topic is one that every single person listening to this episode will relate to, which is lifestyle creep. Mike and I got engaged in a, a bit of a conversation about this topic online. And, you know, we're all familiar with what we're talking about, right? It's like the hamster wheel. It's like, no matter how much money you make, the cost of living seems to keep pace with that, if not grow at a faster pace. And, you know, the conventional viewpoint here is, which I think I'm going to end up sort of

defending is that, lifestyle creep is bad, that you should, even if you make more money, kon, you know, even if you make more money, you should live a simpler, more frugal life. Mike has actually sort of a contrarian take sort of a contrarian take on this that I like because I think it stimulates a really interesting discussion. You know, you sort of said, I will parap, I'm going to paraphrase, you know, the whole freaking point of making money is you can enjoy a great lifestyle. I will stop there and let you riff for a bit and let's just talk about about it. Yeah, I mean, look, first of all, I am not advocating for irresponsibility going into debt, you know, living outside of your means. That's not what I'm talking about here, right? And that is certainly a problem.

If your expenses are outstripping your income, it's not going to be a good time at the end of that road. and it's not going to be a good time at the end of the road. So, you know, it's not going to be a good time at the end of the road. It's not going to be and he actually felt like it was too expensive to go on. He didn't allow himself to go with his friends and we ran the math. Like this guy is going to hit financial freedom by 30. He's already saved a

tremendous amount of money. He's earning a tremendous amount of money. And beyond that, he's at the beginning of his career. Like he's going to earn a whole lot more money over his career. And my point to him was whether you hit financial freedom at 30 or 32 or 35, like you're a brilliant dude, you're not going to stop earning. So actually, you're like you should be thinking about financial freedom, but he doesn't need financial freedom at 30.

Like he could push that off a few more years and live his life right now. And objectively, I think it's a bad trade. So I'll put a little bit different spin on it. So I think, you know, first of all, to Mike's initial point, we can all agree that rule number one is don't do dumb things with your money. Like, and I think, you know, we all know what that is. Like, going, you know, up to your eye, being up to your eyeballs and debt is not good. Like Mike said, it doesn't end well from beyond, you know, if you stop doing dumb things and it becomes like about degrees of lifestyle creep and balance. And, you know, I preach a lot about minimalism. I'm a big advocate of minimalism. And what I always say about minimalism is, it's not what most people think. People think minimalism is like having a monk like existence,

being like a miser, denying yourself of everything. And it's not that at all. Minimalism is simply interrogating yourself and asking of everything, does this bring me joy? And if it does bring you joy, then by all means go for it. If it doesn't cut it out and make room for the things that do bring you joy. And so one of the examples I was like to use is for me, one indulgence that makes a ton of sense is flying first class, right? Like I travel a lot and I'm a big guy and, you know, air travel has become such a miserable experience anyway. That's a great use of my money. It doesn't make sense for everybody. You know, I, I, I,

, you know, I bring it, bring it up at renowned? in you know, the the The the the uh, that I think that is really about understanding, you know, where the leverage is in money, like, where are the leverage points for a lot of joy out of money, not spending for just the sake of spending. Yeah. And I think that really is the point and understanding your inner landscape.

Like what are the things that actually bring you joy and don't? And that also requires a little bit of testing, right? Like, and this is something I always tell people is like, hey, if you think you might enjoy something, buy the ticket and take the ride. If you grew up with a car poster on your wall, like go get the car and see how it feels. And again, don't go way into debt. Like there is a reasonable means test here that you have to apply to this thing. But if you're the young dude making a bunch of money, go test out those experience. Go on some international vacations. Buy a watch, buy a car, whatever the thing is that you think might bring you an outs size amount of joy. But the second step in the process is actually evaluating did this make me feel the way I thought it would make me feel?

A lot of times that answer is going to be no. Now you know. And it turns out you can sell the thing. You don't have to do it again. You don't have to get on the hamster wheel. But I know plenty of people with watch collections or whatever it brings them. It's like the reason they get outaves in the morning to earn money is so that they can fund their hobby. I think,... I think that's a great way to live is like, you have to continually ask like, what is the money for? And in many cases, living in a nice place I think is the ultimate best way people can spend their money. And that doesn't mean you want to buy something from scratch. You know, I designed every inch of it. I absolutely love this house. My second favorite place that I ever lived

was a 1200 square foot cond, condo in San Diego by the beach on Sunset Cliffs when I was in the Navy. But it was equally my own, and I loved it. And you know both of those things can be true. inevit, so it's not about necessarily luxury and extravagance. . But it's about getting really clear on what the things are and what are the leverage points. Yeah, and I'm gonna challenge this a little bit because I think the danger here is, it's very easy to say, well, my watch collection brings me a ton of joy. I'm really into watches, and therefore that does make sense as part of my lifestyle. And I actually believe in the vast majority of cases that's not true. Like, there is such a thing as a true watch collector who really geeks out on it the way that I geek out on rock climbing.

That's the 5% of people who have expensive watches, not the 95%. I think that that's the thing you have to watch is the question that I like to ask of everything is, who's it for? Like, in a great way to interrogate that is to say, okay, if you're really into watches, would you own the same watch collection if nobody could ever see you wearing it, right? And it's good to ask, to challenge yourself슷 when you think something brings you joy, ask that question like, well, who's it really for? Is it for me? Or is it for others? And use that as part of your decision-making process. The other thing I wanna mention is, I had as similar discussion the other day with a friend and he mentioned something

that really resonated with me. He said, I get a bigger dopamine hit sometimes from not spending money, than spending, spending money. And I think that really is true. I think a lot of people have maybe not even experienced that so much, but it's the feeling I think of making a good decision and really interrogating yourself in the way that I mentioned. And when he said that, I gave him a really, like the silliest example in the world, but it's a real world example for me. And that like, I go through, I climb outside a lot. I go through and it wears out clothes very quickly. And so a lot of of my shorts are in pretty bad disrepair, my climbing shorts. So I was online the other day and I was looking at these new shorts and like there's a bunch of cool ones, what colors I wanted to wear.

And then I realized, I thought to myself, you know, I have a stack of 12 pairs of climbing shorts. And yeah, they're frayed, they're a little worn, but they're great, like they're fine. I don't need, and that decision actually like, even though it's like not even a rounding error, like I could buy all the shorts I want, to be honest, it felt really, really good. But I think there is, I guess what I'm getting at is there's a component of minimalism and living simply, that actually transcends the money. I truly believe whether you're a billionaire or you're broke, living a simpler life is just a better life. So tell me, I'm gonna pause there. Tell me how you react to that. All right, well, there's a lot to unpack here.

I'm gonna go back to the first point you made which is if nobody could see it where you still wear it, would you still want the thing? I actually think that's forcing a binary that maybe is a little bit myopic. And here's why I say of that, because everything exists on a spectrum. It's not ones or zeros, right? And the reality is like, how do I know that I like Lamborghinis, right? If other people didn't like Lamborghinis, would I like Lamborghinis? We actually can't extricate ourselves from like what society likes and what we like. At some point, you have to recognize that like my tastes and desires and wants were somehow shaped by society, right? Like I wasn't raised with blinders on.

At some point, somebody else thought of Lamborghini At some point you have to let yourself want what you want. Like can you give yourself permission to want what you want? And I love cars, I grew up with cars on my wall. Some of the things I love about cars the cars are taking it to the track, driving by myself on a weekend. Like that stuff is really cool. You know what else is cool is pulling up to valet and having your doors go up in McLaren and everybody looking at you. It's cool. And I can allow myself to like that feeling. I can admit that out loud like hey actually to say that's a part of it that I like. And if that is fun for you, I don't know, I think there's a place where you can drop that judgment and go hey man, I like what I like.

I want to feel the way I want to feel and that could be cool too. Absolutely. I actually agree with you and the way you connect what I said to what you said is all I'm saying is don't b******* yourself. Go into it with eyes wide open. I will tell you right now my wife and I just became empty nesters and we're thinking about downsizing from our big really nice house to a smaller condo because we want to travel more. Maybe we want to have multiple places throughout the year. And the thought has entered my mind multiple times of like, well, when I have people over, they're not going to be impressed anymore. A good friend friend of mine from college stayed with us last night and I got to admit when he's like, wow, you guys have an amazing house.

That makes me feel a certain way that I kind of like. And I think this is the point, though, to me and this is like to me. If I get one thing across in this episode is this is like whatever you do, do it with eyes wide open question. I think it's helpful to ask, like, who am I doing this for? And and the answer may be I'm doing it because I want to look like a badass when I pull up to the valet for dinner. Great. Totally. Now, you may evolve out of that over time. But why not? Just don't pretend that like, you know, you're doing it for other reasons that are that are like more pure or whatever. Like just, you know, own it, is what I say it, man. Yeah. Right. I mean, it's it's really fun to to drive a cool car around.

And I just feel about the which I could see you, you your mind turning when I was saying this about I do have a belief that all things being equal, like whether you're rich or poor, less complexity, a simpler life is fundamentally better. That has been my personal experience. That may be me. I don't know. But I get joy out of like just simplicity, like less, less, less. Yes, fundamentally. But but I think it applies to to so much more than just stuff, right? I mean, almost. everybody I know is overextended on commitments. Commitments. They're they're overextended on on all kinds of things.

And so a general life edit is is a really good idea to apply. You know, when I came back, from my silent meditation retreat last year, I applied what I call the 30 percent rule. And that is that is doing 30 percent less of everything. 30 percent less dinner parties. 30 percent less travel. 30 percent less work. Like in actually 30 percent less work. like I tried to completely dial back across every area of my life. And I found, yeah, simpler was better. Like like as I let go of stuff, the space that that created And my soul was totally life giving. And so I totally agree with you on the surface. Like and at a fundamental level, less complex. Like whether it be across commitments, whether it be, I mean,

how many people do you know, Kevin, that that are like, oh, man, I have seven businesses and I'm still overwhelmed. Like what would what would happen if you just had one business that you were all in on? Like, do you think you might actually grow that one business or because of all the space that you opened up with the because by definition, some of those seven businesses are going to be underperforming the main one. . Yeah. Well, I think you raised a few good points. But one one that really resonates is stuff is only one aspect of it. And, actually, maybe the less interesting aspect. What are the other aspects of of like, you know, living a simpler life that we can all relate to? Like, certainly personal commitments, friendships, right? Like having, you know, a million surface level friendships

that take up all your time rather than a few deep ones. I think hobbies and pursuits like, you know, spreading yourself way too thin, using your money to accomplish whether it's charitable giving or whatever., I think there's like a lot to be said for, you know, I guess in a way, it's I'm talking about like focus, like having open space and having the luxury of focusing on things is like the ultimate luxury in some ways. Yeah, I mean, as you say that, I'm going to plan a flag on this. I think the actual worst lifestyle creep is the commitment lifestyle creep that we make, we become so over committed, we don't have time for ourselves, we don't have time for our partner, we don't have time for our

partner, we don't have time for our kids. I actually think that's probably way worse than spending a little bit of extra money to make your life more comfortable. Dude, that's to me is the banger of this episode. Maybe our title should be like lifestyle creep. It's not even about the money. Yeah, I think financial lifestyle creep does exist, but I do generally agree with you that if you can afford it, that's the lesser I would be in favor of spending money to simplify the rest of the stuff in your life. I got to tell this quick story. So what I haven't had many mentors in my life, but one of them for a period of time was a guy who was the basically the founding CMO of one of America, his most beloved brands,

like a huge, you know, $100 billion company. And I had coffee within one time. And you know, I sat down, it was like the normal, normal like, Hey, how you doing? And of course, my, I said the same thing everybody always says, which is, Oh my gosh, like, so busy, my, you know, kids are doing this, and I've got all this stuff going on at work and my personals. And I said, How about you, Dave? He's like, I'm not busy at all. And I was like, that really stopped me in my tracks. And like, here's a guy who is more successful than me in business has, I knew he has an incredible marriage, incredible family life. He's like on the boards of five different, you know, charitable organizations. And yet he's not busy at all. I thought that was quite a flex.

I think I mean, I really think it's the ultimate flex. And I actually tried to never answer busy when someone asked me how I'm doing, we've sort of forged into this bad like merit badge of honor in our society to say busy. I used to that means you lack focus or you lack prioritization or where you lack intentionality about the way that you spend your time. I'm doing a lot in life right now. I'm actually having one of the busier seasons that I've had in quite some time,

there's things that I want to contribute to the world, like my work is really impactful and meaningful to me, I I feel deeply align to my purpose. That means I I'm not busy. I'm just I'm just doing a lot and I'm doing it by choice. , I think what we've done here in the course of this 19 minutes so far is redefined lifestyle creep in a way that I think we both mostly agree on. Like I probably still would say like be super careful with the financial side of lifestyle creep really question yourself when you're making big purchases, who's it for? You're never going to regret being out of debt and having a low burn rate. That's all I can I can tell you like that's something I've been hardcore

about more than most and it feels freaking great to be debt free and have a low burn rate. But I also believe that you're better off spending money if you can buy back your time and and simplify your life so that you're not busy because the the the worst form of lifestyle creep and I think this is the the point we're going to arrive at here is this busyness trap. Yeah, I love it. And I'll and I'll caveat my piece with I've kind of lived the opposite of Kevin. I've been out over my skis many times. And it's always a lot of fun until it's not. And it's a lesson that I can that I continue to learn over and over. Well, Mike's a fighter pilot and he comes by that honestly.

Yeah, exactly. And so I wait to the danger zone, baby. Yeah. And here's here's what I'll say, you know, if you're listening to Kevin or I you probably resonate with one of us on this topic more than the other. Be careful who you listen to. So if you if you're a big spender and you tend to live high risk, high reward, listen to Kevin, if you are, skipping vacations and not allowing yourself to enjoy your money, listen to me. Well, you can wrap on that because it's a great rap because that is the entire point of this show. This is how inner circles work. If we were a violently in agreement on everything and we lived exactly the same life, this would be the world's worst friendship. Yeah, totally right. I mean, iron sharpens iron. And in this

case, we'll probably continue to agree to disagree until our death. And that's what makes it fun. Yep. Sweet. Good show man. All right, we'll see you guys next time.