Diet Pill Mentality

I want to give a shoutout to my good friend, Ryan, who is an avid reader of this newsletter. He recently gave me some ideas on finance topics he thought would get more people to click and read. Here were a few of his suggestions:

😮 How many 401ks would it take to reach the moon???

😎 5 secrets banks DON’T want you to know (tellers HATE #3).

🤢 Is your credit score giving your girlfriend the ick??? Take this simple test to find out.

I chuckled. These are pretty good. I would definitely be interested in getting answers to these questions.

But while he was proposing these topics jokingly, I couldn’t help but think about his underlying meaning a bit more seriously. Is there a way to make some of these personal finance subjects more exciting?

Possibly. There’s always room to make any type of content more engaging and entertaining.

But I also think that for most people, personal finance just isn’t super exciting. And that’s why so many people struggle with managing their own money.

When I talk with people about their money, I often sense an underlying hope for some magic financial strategy they can use that will propel them to wealth sooner than all of their friends and colleagues — some sort of financial fast pass that no one really knows about.

This mentality is fed by mainstream financial advice which is often premised on getting rich with a few simple tips. No one wants to hear that you need hard work, consistency, patience, and maybe a little bit of luck to build wealth. That doesn’t sell.

In this sense, I see a lot of parallels between getting physically fit and getting financially fit.

I am certainly not a personal trainer or a fitness guru, but I feel comfortable saying that the keys to getting and maintaining physical health are to eat and drink properly, get enough sleep, and exercise consistently.

Sounds simple enough, yet more than 40% of U.S. adults, including about 20% of children and teens, are considered obese.

Although the steps to living a healthier life are straightforward and well-known, doing them is anything but easy. They require large amounts of discipline and patience. And because it’s not easy, there’s a massive market for health and nutrition advice for people who are searching for a shortcut or a magic weight-loss pill.

The most recent example of this is the new Ozempic medication, originally used to treat diabetes, but is now gaining traction as a way to rapidly induce weight loss.

It’s celebrity award show season, and every time I watch one of these broadcasts and see someone who looks to be in really good shape, my wife is quick to comment, “They’re on Ozempic.”

“A pill that will make me lose a ton of weight without having to put in any work? Where do I sign up?”

As Derek Thompson reported in a recent article:

“Just months into this weight-loss-drug bonanza, a range of medical, cultural, and political challenges has materialized. Doctors are reporting rampant use of these new weight-loss drugs among the very rich. The surge of off-label use of Ozempic is already creating a shortage of the medication for people with type 2 diabetes. Now that celebrity skinniness is merely an injection away, online “thin culture” has returned, likely exacerbating Americans’ fraught relationship with body image. On paper, these drugs might be a miracle. In the real world, they’re also becoming a menace.”

This same sort of behavior happens with money as well. However, as far as I know, there is no Ozempic pill for personal finance that will magically make you rich.

Spending less than you make, diligently saving, and consistently investing for a long time is the foundation of becoming financially healthy. Yet, people seem eager to disregard the well-established solutions in search of a quick fix. Instead of becoming proficient in the basics, they would much prefer to speculate on a shiny new investment product, try out an extreme tax strategy, or buy into some exclusive real estate syndicate.

I’m reminded of one of my favorite insights from James Clear, author of the book Atomic Habits:

"The greatest threat to success is not failure but boredom. We get bored with habits because they stop delighting us. The outcome becomes expected. And as our habits become ordinary, we start derailing our progress to seek novelty."

It’s boredom that causes us to get caught in a never-ending cycle of jumping from one investment to the next, one workout to the next, one diet to the next, one business idea to the next. Whenever we lose motivation, we have a tendency to seek a new strategy — even if the old one was still working.

I’ve heard on more than a few occasions, someone say something along the lines of, “Sure, simple solutions are great for people getting started, but now that I've accumulated more wealth and am making more money, I feel like I need some more advanced strategies.”

Steph Curry holds the record for most three-pointers in NBA history. He’s a 2-time MVP, a 3-time NBA champion, and the greatest shooter in the history of the game. And yet, he still practices layups, dribbling, and shooting. He’s not trying to shoot between his legs now.

In his book, James Clear goes on to say the only way to become excellent is to be endlessly fascinated by doing the same thing over and over. You have to fall in love with boredom.

For some people, the monotonous process of building wealth will bore them to tears and feel like a waste of potential. They feel like they need to focus on more exciting things.

Which isn’t necessarily a bad thing. But if your focus on the exciting parts of finance comes at the expense of attention to the boring but important basics, it can be disastrous.

When making money decisions, it helps to periodically remind yourself that the purpose of investing is to maximize returns, not minimize boredom. Boring is perfectly fine. Boring is good. If you want to think about this as a strategy, keep in mind that opportunity lives where others aren’t, and others tend to stay away from what’s boring.

The secret is there are no secrets.

Don’t discount or overlook the impact that good saving and spending habits and consistent investing will have on your wealth because of its simplicity. While the process may be well-known, it’s certainly not well-practiced.

Thanks for reading!