Speaker 1 00:00:08 What's up everyone. Welcome to the finance for physicians podcast. I'm your host, Daniel Rin. Join me as we dig into what it looks like for physicians to begin using their finances as a tool to live better lives. You can learn more about our
[email protected] let's. Jump into today's episode.
Speaker 1 00:00:26 Hello everyone for having a great day. I'm uh, excited as always to be chatting today. I wanted to start out, first of all, thank you guys for some of the reviews you've been leaving. That's that's always good to see. They're often motivational for me. It's also good to see that that, uh, some of you guys are benefiting, benefiting from this. And if you, if you guys have other people that, you know, might might benefit from this, definitely make sure to share this with them and, um, share the love. I wanted to talk a, about a couple of the reviews today and, uh, also clarify my goal for the podcast a little bit more, um, as a result of seeing some of those, hopefully kind of get that out in the open. There was a, a couple of reviews. One was in October, one was in November and this is on iTunes.
Speaker 1 00:01:21 You guys can go check that out if you want. Um, but these were, these were negative reviews. And so, you know, I guess the perfectionist in me, you know, I, I tend to take that a little hard. I'm I'm, I'm like, you know, I gotta change it's, you know, that's not perfect. So, and I, you know, of course like anyone, I care, what other people think. So, you know, seeing ne negative reviews is a little bit hard. So the first one in October, the gist of it was, they were saying, you know, the episodes early on were great, but it took a hard to hard turn towards religion and away from money. And then in November there was another review. Um, I guess they were agreeing with the October review and they added, why would the Bible be discussed on finance podcasts? No, thanks. You lost me.
Speaker 1 00:02:15 So I wanted to take a minute and, and talk through, you know, the goal here and where I stand on some of these biggies and kinda get that outta the way in regards to those reviews when I take a minute. So I mentioned as a prof, you know, acting as a perfectionist, you know, I'm gonna take it hard and want to change things and say, you know, I gotta, I gotta cut out some of this. Like I gotta leave my values out of the equation. I need to take this anything related to faith and religion. I need to take that out. You know, that's my kind of instantaneous reaction when I see that kind of thing. But if I take a minute, which I did, you know, if I take a minute to set and think about it and I say, you know, or do I really want to do that?
Speaker 1 00:02:52 If, if I give it a minute, I, I, I don't think so. And, and I think in fact, I think that that'd be the worst thing I could possibly do. Now, maybe if it was a review that mentioned something like, you know, the content sucks or, you know, whatever, and here's the reasons why, um, or the audio sucks or like you, we want to cover more of this thing or that thing or whatever, or your voice is terrible to listen to. I don't, I don't know what, um, I mean, that is a little more of a issue that can be fixed at least an issue that I would feel motivated to fix. But, uh, I think what we have here is more of like a conflict of, you know, underlying values and beliefs. And so maybe I didn't do as good of a job, like just, you know, sharing what those are and, you know, the purpose and the, uh, direction behind this.
Speaker 1 00:03:45 And so, you know, we'll get that out outta the way they, but really, I think for value when you get into values and beliefs, um, I think they're, non-negotiables, uh, so for me, you know, that's not gonna skew me one way or the other, if I get a negative review, if I take a minute to, you know, think about it, that that's, that's a non-negotiable for me. So, so I mentioned, I wanna take a second to clarify, clarify my values and beliefs and cuz you know, they're, they're gonna get sprinkled in here inevitably. In fact, it's it's I intend to sprinkle them and you know, as I do future shows, so I, you know, if you don't like 'em, you know, it's all good, but I don't want you to be surprised or, you know, put off, uh, when they, when they pop up and, and, and you know, you didn't expect it.
Speaker 1 00:04:33 So I'll just give you kind of quick summary of some of the biggies, as far as my beliefs, um, especially around money and, and finances, um, that I think are important to clarify. So I think money and finances are super important're. It's a big, huge topic. And I think how you manage your finances, says a whole lot about you as a person, um, you know, even more so just the dollars and cents. It says a lot about your values. It says a lot about your life. Um, I think, I think everybody at their core really, you know, just wants to live a good life. I mean, you know, all of us wanna have, uh, you know, have a great life and enjoy life and, and most people, I think also agree that, uh, money is, is a good tool to, that can help with that.
Speaker 1 00:05:26 Now the world, I think tends to say, you know, as far as how you do this, I think the world tells you having more money or getting rich or having more stuff is what translates to happiness or the good life or whatever, which I am, that's a big lie. So that, that that's an issue right there, you know, the world and, you know, that's kind of how it works with a lot of things like the culture or the world kind of pulls you oftentimes in, in the wrong direction. So my belief though, is that it's not all about getting rich. Um, and in fact that actually is in many cases the wrong direction, especially if it's the driving force. So it's not about building wealth first. I think the truth is it's more about, or the ideal is it's more about making, understanding your purpose and your values first.
Speaker 1 00:06:20 And I think money has to come after and, you know, ideally you're using that as a tool. Um, but it's a tool to help you live out those values and, you know, ideally your, your financial behaviors and actions are in very close alignment with those, those values. So back to the, um, the review I was mentioning about, um, Bible and religion and all that stuff. Well, first of all, I don't know. I don't think I've taken like a hard turn on religion. I mean, I sprinkle it in there. Um, if I, if I have taken a hard turn, let me know, cuz I did it doesn't feel like I've taken a hard turn towards religion, but I would definitely admit that I have sprinkled it in and covered it. And, and I feel like that's important and I, you know, I feel good about that.
Speaker 1 00:07:11 So when you peel back the layers of, you know, values and purpose, so I mentioned like, I think it's important to understand your values and purpose first and let that the primary and then money comes second. And ideally you're using money as a tool to follow those values and purpose. So typically when you peel back those layers and so if you're using that approach, I just mentioned, um, it requires peeling back the layers and understanding what's most important to you and your values and your purpose. Um, that's part of good, uh, personal finance hygiene or good personal finance planning to go through that exercise. So, and if you've done it or when you do it, when you peel back the layers enough, you're gonna get into like these like big, huge questions of like, you know, what's my purpose. Why do I exist? Like what, what's the source of truth?
Speaker 1 00:08:08 Like, you know, and you start to get into like, kinda like spirituality and, and, uh, you know, your old ultimate truth and you know, all that sort of all those sorts of questions. Um, you know, the big, big, old questions in life. If you peel back the layers enough, that's, that's typically where you go. Um, at least that's how it is for me. I mean, I don't know, uh, everybody's different, but I, I, that's how it is for me. And that's how a lot it is with a lot of people that we work with in our planning business. And so I believe, uh, you know, it's important to consult your faith and spirituality and, and your God and, and, and to help guide you through your personal finance decisions and choices and, and that thing. And so, you know, I have my faith, everybody has their own faith, uh, in, in my faith in particular.
Speaker 1 00:09:03 And so I'm a Christian in the Bible is, you know, has a lot of stuff in it, but what, uh, it happens to cover a ton is money and personal finance. So it's all over, uh, the Bible. Um, and so, I mean, even if you were completely like anti Christianity or, you know, whatever other faith, there's plenty of really solid personal finance lessons sprinkled in there also on top of all this, um, I forgot to mention, you know, I, another thing is just, I think the world in general says, we can't talk about this stuff. You know, we just, we need to leave it out of the equation. So I think that's also kind of an undercurrent. I'm not gonna do that. Like I just don't follow that, that rule. And I think that's actually a, a problem, uh, that exists is we're not peeling back the layers enough and you know, it's okay.
Speaker 1 00:09:58 I mean, everybody's got different beliefs. I'm not trying to tell you what to believe. I'm just peeling back the layers. If you're not doing that, I think you're, you're missing a huge slice of, you know, that underlying purpose and meaning behind money. So in the future, don't be surprised when I cover these sorts of topics, you know, digging deeper, getting into this, you know, even spirituality and faith and that sort of thing. And I'm gonna, you know, lean on my faith because that's what I know. I completely am not trying to push you or, you know, definitely not trying to preach. Um, that's not my thing I'm gonna, you know, I love either way, like you you're completely entitled to your beliefs. So I wanna get that out there, out there too. So what, so I, I just wanted to clarify all that before we jump in, I, this is taken a little bit longer than I expected, but you know, this is a big, big deal.
Speaker 1 00:10:48 I think that's important to get out what also was interesting as, as I was looking at this, uh, well, I guess I looked at this negative review and I saw it. And at first it was the, the first, the most recent review. So that was kind of crappy, but, uh, fortunately, you know, a few of you, you guys left some positive reviews after it, so thank you a ton for those. Um, and one in particular I wanted to mention, I know who you are. I'm not gonna mention your name. We worked together back in the day, and this was an especially positive review and I really appreciate it, but what was, what was cool about this review? Is it kind of like reinforced all this other stuff I'm talking about? So it was a little bit of a 180. Now the review didn't talk about faith and religion and Bible and all that stuff.
Speaker 1 00:11:36 But basically the re review said that they, you know, enjoyed this, uh, particularly because we focus on values and helping or using money as a tool to work for working towards happiness, uh, rather than just focus a focus on getting rich. So, so thank you for that. I appreciate the positive reviews. The negative ones, uh, hurt a little bit, but I appreciate those two. It's good to know. Um, you know, what's going well or not going well. And it helps me. That's the main reason I'm clarifying all this stuff. So keep 'em coming. Um, even if, uh, they're positive or negative. So, so that's, I wanted to cover that first, before we jump into the episode today. So what I wanted to cover today was, you know, kind of on a related topic and that is the secret to using money to become happier. So we will jump into that in just a few seconds.
Speaker 1 00:12:38 So we're gonna be talking about the secret to using money, to become happier. I, I kind of got into some of that in the intro. We talked about kind of like what the world tells us. And I think personally, uh, the world pulls us towards disbelief. That true happiness comes from like more money, wealth, more stuff, spending, you know, nice cars, whatever. Um, not to say those are bad in themselves, but I, I think it kind of, it's very easy to get to a place where your be belief is that that's the source of happiness. Uh, so what I wanted to talk about today, uh, was not only like what the world tells us, but I, I wanted to focus more on like what the science, uh, tells us. So there's been a fair amount of research on this particular topic, and that is, you know, using money to become happier, which I always enjoy digging into it.
Speaker 1 00:13:33 I'm, I'm kind of the type that likes to, I don't, I guess digging in is probably not the right word. I'm the type that will skim research studies. I do like research. Um, I'm not gonna probably read the book, uh, on the happiness study. I might skim the book, the research, I tend to like skim it and read the conclusions and get the high points. Uh, so, but these, these types of studies are always interesting to me. Um, there was a, a big one, uh, back in 2008, a Harvard study, I think it was done by Norton. Um, I'll link to the study in the show notes, but, um, the study, uh, first of all, they looked at, um, what people think will translate to more happiness. Um, and they basically ask people like, is it gonna, are you gonna be happier if you spend money or give money away?
Speaker 1 00:14:25 And so not a huge surprise, but, uh, you know, the people said they would be happier if they spent the money, which kind of ties in with what I just said, like with, you know, the world, the culture pulls us that direction. Most people, I think, believe that I think we all believe it to some extent, um, or it's kind of a pool, uh, on our, in it's an influence. So we're all kind of battling with that. So people were generally agreeing that spending more money is gonna translate to more happiness, but what so, what the study did is it, it, it actually tested, uh, you know, whether or not, uh, or how spending translated to happiness, and then also how giving translated to happiness and the results of that, uh, were that actually the reverses true, and that, uh, in terms of your like return on happiness, uh, giving provides more, uh, happiness than spending money on yourself.
Speaker 1 00:15:32 And so that's, that's actually not a surprise to me either. Um, I'm, you know, but it is, I think what's interesting is that, uh, they're kind of like, it's always good to see scientific evidence and research and to verify these sorts of things you think are properly true. And so it kind of goes along with this whole idea, like the world pulls us in the direction of wealth is happiness, money spending is happiness, but, um, in reality, like the science pretty overwhelmingly, uh, concludes that that giving money is gonna translate to more happiness. There's a lot of other studies on this topic, it's become a pretty big topic. I think the gist of, uh, the studies, some of the other studies look at like income and wealth and how those translate to happiness cause this, the Norton's Norton study from Harvard in 2008, that was looking at like the actual spending decision or the, uh, spend versus give decision.
Speaker 1 00:16:36 Uh, but there's a lot of other studies look at like income or increased income and increased wealth and how it affects your happiness. So I wanted to point out those. Um, what's interesting about those is they, they pretty overwhelmingly conclude that there is a good, uh, return on happiness for increased income, but it doesn't last for very long. So, you know, say it's like a $75,000 income or something like that in today's world. I don't know the exact numbers in there's lots of different studies on this, but like the gist of them is generally that a, you know, pretty modest income, you know, like a average income or maybe like a baseline earning enough to satisfy baseline needs, like going from like zero income or like poverty to earning enough to satisfy baseline needs has a really, really good positive effect on happiness, which that's, that's no surprise.
Speaker 1 00:17:39 I mean, that makes a lot of sense, but what happens beyond that? So when you're going from like the modest income to like high income and really high income, uh, there's very little incremental, uh, you know, very small difference in happiness, uh, going up from there. So, I mean, I think that that ties into what, you know, I was saying earlier, I think most people spend the majority of their money, which, uh, according to the Harvard study does not translate to as much happiness. And then on the, on the wealth, looking at wealth, same general sort of thing, like after a certain point, like more wealth does not translate to, uh, dramatic change in happiness. In fact, it's a small change. There is a baseline effect, like on, you know, a modest amount of wealth, um, you know, or having dead is, you know, worse, obviously quite a bit than having a baseline of wealth, but like I'm talking about same sort of thing, like going from like 3 million to 5 million or whatever, uh, has incremental effects.
Speaker 1 00:18:51 So it's not about more money. I think it's about what you do with the money that you have or where you direct it and how you manage it. So, you know, if I think the question I would ask is what if this was true, uh, for you maybe you're thinking, well, you know, that's a Stu that's like a general tendency or a general, or there's some exceptions or, or maybe, you know, you're thinking I'm not, <laugh>, that's not true for me. Like if I spend the more I spend on trips or whatever, that's gonna translate to more happiness than giving, but what, how do you, what if it wasn't that way? What if, what if it were, what if it were true that actually giving had a better return for you? So cuz this study studied people that all said that they thought it was gonna be better if they spent the money, but then when they tested it, they're like, oh actually, no, it's the reverse.
Speaker 1 00:19:46 So, you know, I think that's a good thought to, to think about or a thought exercise. Like, you know, what if that were true for you? You know, if that's the case, it's like, well, you know, if I have my baseline needs met, maybe I should try this giving thing out and see what it does or I think at minimum, like it would be worthwhile for everyone to try it out and see how it affects them. Uh, if you look at the science, I think that's what conclusion I would take away is like, you know, if you have your baseline needs met and maybe try this out, you know, giving instead of spending more, um, and see what it does, you know, you might be surprised by the results. And it's good to know. I mean, cuz that's what we're after, right? So like if we're after happy or happiness, um, you know, I think it's worthwhile to try some of the other things I, I wanted to mention, um, that some of the findings that have come out of the science and the research in terms of giving, uh, you know, it's especially true that it's gonna bring happiness.
Speaker 1 00:20:52 It's, it's especially true when you have a choice. Um, and when it's causes that you value and are involved with. So for example, if you are say you work somewhere and they like kind of require you to give to some cause like that doesn't count, like that's forced or even like some churches are very aggressive with their tithing requirements even. And so that's kind of like a forced giving, uh, and you may or may not, uh, value that. So like you're being forced to give to something you may or may not value that tends to not work quite like just giving to something it's not, it doesn't tend to translate to happiness. Um, so I think that's important to add because, um, you, I mean, it really has to be something you've sought out or you chose because it's something you value and ideally you're involved with it and uh, and the cause and have, you know, a passion around that cause and that sort of thing.
Speaker 1 00:21:59 So, um, those are kind of like precursors, I think, to, to allow this to work well, um, is you have to have, you know, ideally it's done by choice and it's ideally something you value. So I would challenge everybody to just give it a try. I mean, I I've found, um, I found giving is a lot like saving, at least the habit of giving, you know, it's kind of like most people, um, would agree. I think that it's, you know, pretty good to give, if you can, most people would agree that savings is good, but when you actually get to, uh, when you actually get to the point of deciding how much to give or to actually give or, or save, uh, it's kind of the same thing. It's, it's difficult, it's easy pro it's, it's easy to procrastinate. Um, it's easy to, you know, say I'll do it tomorrow and, or like I'll start out small and you know, whatever or forget about it and that kind of thing.
Speaker 1 00:22:56 So, but, but long term, same sort of thing as saving giving, I have found you gotta give it some time. So the longer you try to, the longer you do it, the better results you'll see in terms of life satisfaction, same thing with savings. Like you just save for a few few months and it's kind of like, uh, you know, it's a long term thing. You gotta let interest do its thing. And then when you're late stage in life, you're gonna gonna be like, wow, this was a game changer. So, um, I would challenge everybody to give it a try if you're not giving already, um, give it a try, um, seek out a cause, uh, or think about a cause that you value or involve with. And, you know, maybe start small if you're not doing it at all, start small. So like a little amount is better than none.
Speaker 1 00:23:48 So, you know, maybe find a, a cause, seek it out and, you know, whatever is a small amount that you can very easily commit to. That's not gonna affect your kind of baseline necessities, like start there and, you know, get that habit, work that muscle a little bit and you gotta start somewhere. And I think that's a fantastic step. Now, if you're already doing it, maybe you dial it up a little over time. I think similarly to saving giving is one of those things. It's like we set up the 401k at 10% of my pay and um, and you forget about it <laugh> and you, 10 years later, you're like, oh, I made more money. I, my income went up a lot and I started max the thing out and I actually was not increasing my savings incrementally as my income went up. So same sort of thing happens with giving.
Speaker 1 00:24:40 A lot of times it's like easy to kinda forget about it and not do, do a refresh or reassess. Um, so if you're already giving it's worthwhile, I think every so often to be like, eh, let's check the, you know, giving there and see, you know, maybe we could dial it up a little and start to kind look, look at that every so often and make tweaks. Um, and you know, eventually over time you can make a huge difference and, you know, get to a, you can get, get a long way when you take it in small steps over time. Uh, another thing to, uh, think about like in this realm, uh, we covered it in the episode a while back about charitable giving, but like there's a lot of good vehicles out there. So check out that episode, uh, we'll link to that episode in the show notes, uh, as far as like vehicles to potentially give through, but like the most common one we're typically seeing people use or recommending is a donor advised fund.
Speaker 1 00:25:39 It's just a fantastic way to have like a giving pool that you establish, like the Ren family donor advised fund. For example, for me, I think that's what our, our ours is actually called. Um, but anyway, you can kind of create this donor advised fund for your, uh, family and you give to the fund and then the fund then gives it to charitable organizations over time. So, um, you can let the money sit in the fund and invest it and let it build. So where the donor advised fund works really, really well is it allows you to have a pool of funds when you're not exactly sure where you want to give or how you wanna give yet. And you just want to get in that routine of giving money cuz once you give it to that donor advised fund, it has to, it gets out of your name and it has to give it has to go somewhere, uh, to a charitable organization.
Speaker 1 00:26:33 And so it gets you in that habit and maybe you're not ready to, to direct it, but you just want to get it out of your personal world and into this, uh, you know, charitable world. So donor advised fund can work really well for that. It also works, uh, well for, um, some tax planning, um, you know, it's a, you can transfer securities to it and there's a lot of tax benefits. I'll cover you. You all can check that out in the episode. I mentioned if you want to dig into that, but there's some, some nice tax benefits when you use a donor advised fund. So that, that might work well for a lot of you guys. Um, but I think the bigger thing is like starting with something and you know, the amount, uh, and even if it's like cash or, you know, uh, auto, automatic transfer or whatnot, uh, starting small and then working on it over time, maybe you're not sure like where to give.
Speaker 1 00:27:31 I think a lot of people we talked to are they have they get all this that I've talked about so far? And they're like, yeah, I agree. I think it makes sense every all this makes sense, but a lot of times they're just like, well, we haven't found that organization yet, or we're not, uh, sure where we want to give it yet. So like I mentioned before, you can use that donor advised fund to kind of have that pool there. That's building, as you start to seek out a organization, ask yourself, like, what are you passionate about? Um, get out, uh, it's, it's a good thing to like, say you're in training, it's hard to get out and about cuz just the time thing. But you know, as you get into practice, that's the time you can get out more and, you know, start to get involved and um, you, you can kind of seek out some, uh, organizations.
Speaker 1 00:28:22 So, um, so definitely I think it's a good thing to at least think about. I, I always find it interesting. Um, these, especially when, um, the scientists get involved and start to verify all the stuff that we kind of think is true. And so I think it's compelling evidence, uh, at minimum worthwhile something to try out and see, uh, how it affects things and um, you know, just give it a try, start small, um, and see where it goes. So I'm, I'm curious to see how it goes for you. Uh, let me know if you go down this route or if you are tweaking things or making changes, I'm curious to hear how it goes for you and you know, feedback on that front. So hope this has been helpful as always enjoyed chatting and look forward to talking next to him as always. Thank you so much for joining us today.
Speaker 1 00:29:15 If you found this valuable, please give us a review on iTunes and share with a friend. Also check out our
[email protected] for all sorts of additional content. See you next time. Finance for physicians is not an investment tax legal or financial advisor. All content included in this podcast is for informational purposes only and should not be considered financial tax or legal advice. Material presented is believed to be from reliable sources and no representations are made by finance for physicians as to another party's informational accuracy or completeness, all information or ideas provided should be discussed in detail with an advisor accountant or legal counsel prior to implementation. If you don't have an advisor or like a second opinion, feel free to check out our website for recommended advisors.
