Live Below Your Means Is Terrible Money Advice
By: Rocco Pendola
Tags: Self Improvement, Money, Budget, Personal Finance, Self

Live Below Your Means Is Terrible Money Advice

Source: Author (Photo taken by author’s daughter)

I cringe at most writing on money.

More often than not, it’s self-serving.

Hey, look at me! I’m super enlightened. I’m wealthy even though I don’t own a fancy house or car. I’m rich even though I don’t have millions of dollars. Being wealthy and rich is a feeling. Like when you’ve reached a state where material things don’t make you happy. Um, like, being rich is, like, totally a choice!

Personal finance and self-help gurus blather like this all of the time. They have figured out what the rest of us still feebly struggle with. Look at what they did. Now, go do it.

If only.

Good intentions fuel many personal finance and self-help writers. They get something out of sharing their mistakes, experiences, conclusions, and resultant strategies. They present their ideas with humility, not as prescriptive advice. I wake up each day, hoping you will receive my writing through this lens. My favorite writers — most of them on Medium and many of them in Making of a Millionaire — write this way, irrespective of subject matter.

Being grouped with the stuff that makes me (and maybe you) cringe frightens me. It’s the type of self-help that helps exactly one person — the author who seeks ongoing ego validation by setting expectations so high only he (it’s usually a straight, white “he”) can attain and maintain them. In a psychologically-warped twist, he gets off on his “followers” not achieving his level of success. This is why he sets the bar so high. You and I will never reach his well-crafted and expertly-marketed reality, which makes it all the more extraordinary.

Granted, there’s a fine line between the two styles. I aim for:

Here’s my experience, here’s what I learned, here’s what I’m doing now. I hope something I said can be of some small help as we navigate the plight of doing life.

Or, as I noted in a recent Making of a Millionaire article:

Some general, catch-all psychological approach to personal finance doesn’t work. You’ve gotta individualize it. You’ve gotta craft your psychological approach to personal finance in the image of your unique quirks and eccentricities.

That’s the key.

Anything I tell you about myself and my experience with money is little more than information. Given how much content we consume most minutes of most days, I can only realistically hope the information I put in front of you about myself and my experience with money resonates enough to matter at least a tiny bit more than the swaths of information you discard most minutes of most days.

I start from the general: I have come to learn that I suck with credit cards.

I move to the specific: So I no longer use credit cards. I do this instead.

There’s no answer there. Just my general and my specific. Within seconds of reading something, you probably determine if the general applies to you. If it does, you consider and assess my specific. If you choose to act, you create your own specific.

The psychology around money is a complicated thing.

You can’t possibly do what I do, the way I do it, and for the reasons I do it. If you did, I’d humbly suggest you stop. That’s no way to experience life vicariously through some person who writes articles on the internet. I came to virtually every conclusion I write about via personal experience. As I experience more, those conclusions adapt, evolve, and sometimes completely change.

When I riff on living below my means, it comes from a decade-plus of living above my means and getting into trouble as a result. In a perfect world, you’d be like, “damn, I don’t want that to happen to me,” and you’d never spend more than you make. You’d rent a $1,350 a month studio apartment in a gritty Los Angeles neighborhood and drive a Hyundai Elantra like I do and call it a day. Sounds incredible, except this isn’t how the human experience works — especially with money.

So it actually would not be perfect world type of stuff if you took what I write as a warning — as Say No to Drugs dogma — and bypassed your own lived experience to blindly follow what keeps me sane and helps make me tick.

The beauty of the relationship we have (can we take the next step and call it a partnership!?) is that you’ll make your own mistakes. You’ll fail as miserably as I have. Or you’ll never make mistakes and humbly share your success stories with the rest of us. Or maybe what actually happens between all of us falls somewhere in the middle of these two extremes.

You bring your experience to the conversation. You test your own solutions. Some work, some don’t. Some endure; others come in fleeting fits and starts. Sometimes you’ll do likewise. Sometimes you’ll do something in the ballpark of likewise. Sometimes you’ll do the complete opposite — $4,000 a month mortgage, badass Lexus in the three-car garage next to the vintage Porsche you never drive. You don’t want to get it dirty.

We need all of these experiences to coalesce into meaningful conversations where we compare and contrast our unique experiences (mistakes, regrets, failures, successes) and what they taught us, theoretically and practically.

It’s not about ego validation or getting likes. This isn’t social media.

I stopped posting on Instagram for a while because I got tired of going through a series of photographs my daughter took of me during one of the photoshoots I help her with and picking the one I predicted would secure the most likes (e.g., the image that fronts this article).

In personal finance and investing prose, there should be no such thing as advice. It almost always ends up self-serving and unhelpful.

Writing about money is all about experiences — mine and yours. It’s not as much about how one person favors and then executes, say, a low cost of living. It’s about asking large numbers of people to consider the notion of a low cost of living (or something else) and one or more ways to attain it (or something else). From there, subsets emerge from these “large numbers of people,” and myriad perspectives, emotions, ideas, qualifiers, and strategies flow from the conversation.

This is the goal. This is what I aim for every day, with every article. This is the approach to writing and talking about money I intend to take to the next level with you as we head into 2021.