August 21, 2025 • 17 mins
What if the “financially optimal” choice doesn’t actually lead to your best life?
This conversation explores the balance between optimizing money and optimizing happiness. We break down the Five Types of Wealth—financial, time, social, mental, and physical—and show why sometimes the decision that looks inefficient on paper may actually be the smartest for your overall wellbeing.
From real-life examples like paying for time-saving conveniences or investing in health, to reflections on why peace of mind often matters more than perfect numbers, this episode reframes what true optimization looks like.
Because at the end of the day, wealth isn’t just about money. It’s about building a life you don’t want to retire from.
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Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation.
The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.
Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements
Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.
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Ari Taublieb, CFP ®, MBA is the Chief Growth Officer of Root Financial Partners and a Fiduciary Financial Planner specializing in helping clients retire early with confidence.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hey, james, we talk a lot about optimizing and you
might be aware of this, but manyof our team members actually
make fun of me.
They'll say we know Ari'sweekend wasn't fine, it was
optimized.
Now it's a silly joke, but thereality is we want you to
optimize what you've worked sohard for.
But sometimes it actually makessense not to optimize because
your life would actually bebetter.
So what we're going to talkabout today is okay.
(00:23):
What could we do in our lifethat might not make financial
sense?
That would really add to ourquality of life.
So my first question for you,james, is when you personally go
buy a car, do you like to get aloan?
Do you pay all cash?
What do you do?
Speaker 2 (00:38):
I've done both, so I guess I've optimized and I've
not optimized, or I guess Iwould think about it differently
.
I've optimized for differentthings in different cases.
Speaker 1 (00:48):
I like that.
Now why did you pay all in cash?
Speaker 2 (00:52):
The first couple of cars I purchased, it was all
cash.
Part of this was just evengrowing up the Dave Ramsey
mentality of you buy things incash, you stay out of debt, you
live within your means, whichall great things, and so there's
this sense of buying somethingin cash.
You're not having any debt.
In some ways you're optimizingfor that, but there's other
arguments to be made of.
(01:12):
Then you're tying up somecashflow or you are losing some
liquidity.
So in other instances, when Ihave not paid all cash, I was
optimizing for preservingliquidity, I was optimizing
cashflow, I was optimizing forsome other things.
So I think it's less at leastthe way I think about it less
about optimizing versusnon-optimizing, more about what
are you optimizing for andtaking that approach.
Speaker 1 (01:33):
I like that because you do not go to the grocery
store.
For those who are unaware, whydon't you go to the grocery
store?
I don't like it and your lifeis better not going.
Speaker 2 (01:45):
My life is better not going.
So yeah, this is just like afun, funny example, I guess.
But yeah, there's somethingabout the grocery store that I
it's like going to the DMV forme.
I walk in, my wife will ask meto go pick up something in the
grocery store.
I just don't even know where togo.
It's hey, can you go getshredded cheese?
And I walk through every aisletwice before I can find the
shredded cheese, which is alwaysin the deli section in the back
.
It just takes me, for whateverreason, so long because I don't
(02:07):
like being there that I wouldrather pay for delivery and just
have that hour, that 30 minutes, that two hours, whatever it is
of my life, back to dosomething else with my family,
with my friends, with work,whatever it might be.
Speaker 1 (02:21):
Now we're being lighthearted today talking about
cars and grocery stores, butthis is real life stuff and I'm
going to tell you what promptedthis episode today.
So in our free community, theroot collective, we go through
and we look at what topics do wethink might apply to all of you
.
Watching slash listening, andthis is a common one.
This comes from Steve, andSteve says I've struggled with
the idea of paying off mymortgage.
(02:42):
I had planned on paying it offbefore retirement.
I've not really started workingtowards that.
I understand the concept of notpaying it off at a lower rate
to potentially make a higherreturn with investments.
However, what about my budget?
What about the fact that maybeI just sleep better at night by
not having that mortgage?
I don't know.
(03:02):
What do you guys think?
So do you see this a lot, James?
Speaker 2 (03:06):
Yeah, all the time, and I think that it comes down
to what are we keeping score of,what is the thing that we're
tracking?
And so I see what Steve'ssaying and I even want to take
it one step further of return beversus what does cash flow look
(03:32):
like, versus optimizing forpeace of mind, of being debt
free, not being debt free.
So there's certainlyoptimizations conversations.
In that I look at it a littlebit differently and it's a
little bit different than evenSteve's question.
But what points?
What do you think about whenyou see Steve's comment?
Speaker 1 (03:44):
there, ari, I'm wondering if Steve is beating
himself up with calculations.
But for asking himself what hewould really like, let's dive in
, if it's okay with you.
James, you even brought up afew moments ago the unoptimizing
versus optimizing and thenkeeping score.
I would love to hear that kindof concept of keeping score.
(04:04):
How do you view that?
Speaker 2 (04:06):
Yeah, and I hope I'm not derailing our conversation
too much.
I'll take Steve as an example.
Let's say Steve along with this.
He says hope I'm not derailingour conversation too much.
I'll take Steve as an example.
Let's say Steve along with this.
He says I'm not actually goingto retire until I have my
mortgage paid off, even though Icould.
I have enough liquid assets, Ihave enough income, I could
totally retire, have thatmortgage.
But I'm trying to optimize forthe perfect retirement.
So I'm going to push off myretirement four or five years
(04:27):
until the mortgage is gone so Ican have a more optimized
retirement.
And you look at that and themath is sound, the logic is
sound if you're just thinkingabout optimizing for the
financial component of whatyou're doing.
And there's this great bookthat I've read that I think
summarizes this real nicely.
It's called the Five Types ofWealth and it talks about or the
way I relate this concept towhat we do as advisors is there
(04:52):
is financial wealth, but that'sonly one component.
That's only one way that weshould be looking at things.
There's also time wealth,social wealth, mental wealth,
physical wealth, and so people,when they are optimizing, you
see this all the time,specifically, maybe in the FIRE
community.
I'm keeping my costs super,super low, I'm keeping my
savings rate super high, I wantto retire super early, and they
(05:12):
have optimized for thisincredible financial wealth.
But in doing so, what did yousacrifice in terms of social
wealth, mental wealth, physicalwealth, time, wealth, time maybe
not so much there.
But if I go back to Steve,steve time is we talk about this
a lot the only non-renewablecurrency.
You work four or five moreyears.
I know he didn't actually saythat, but if I'm extrapolating
(05:33):
this to use as an example a verywell financially optimized
retirement, no more mortgage Inthose four or five years he
saved even more.
He has a great balance sheet,great income sources, but what
did you lose in time, wealth, inother words, what was the
marginal gain?
You got on the financial sideof things, but compare that to
(05:53):
the marginal loss or themarginal detriment or what you
sacrificed in your time wealth,knowing that those are four or
five more years that, assumingyou don't like what you do for
work and assuming you want toretire, you're not going to get
those back.
What about social wealth?
What about that scorecard?
Well, what could you have donein those four or five years with
your family, with yourgrandchildren, with your friends
, with whoever that now youdon't get to get.
What about your mental wealth?
(06:14):
What about your physical wealth?
We see this a lot that people inthose final years of retirement
or final years of work, Ishould say before retirement
their bodies are at this pointthat every successive year gets
more and more, takes more andmore of a toll on your body,
because it's these years ofdealing with this stress,
managing this job, putting offyour health, saying you'll take
care of it when you have moretime, when you have more,
(06:37):
whatever, less demands, and sothat compound effect.
In the same way, we talk aboutthe positive compound benefits
of interest or of growth.
Well, there's the same thing tothe negative.
What about those negativecompound effects of not taking
care of your health, your mentalhealth, your physical wealth?
Well, the final few years, inthe same way, the final few
years before retirement,assuming the market's doing well
(06:59):
, you see extraordinary gains inyour portfolio.
The final few years beforeretirement, if you've neglected
your health, you might seeextraordinary deterioration in
your physical health, yourmental health.
And so I talk about thescorecard, because if I'm
putting words in Stephen's mouth, or putting words in Stephen's
comment, if all we're focused onis here an optimized retirement
(07:20):
, which he has, my questionwould be how much?
Marginally better is that?
Maybe slightly, especially ifwe're making the assumption
you're already good to go withretiring now A marginal
improvement in one financialscorecard, but a major detractor
and for other types of wealththat we also have to think about
, types of things that we haveto account for.
(07:41):
So the question isn't shouldyou optimize or shouldn't you
optimize?
You should absolutely optimize,but make sure you're optimizing
by looking at the right scorecard.
This is plural, not just onesingle score card, which is the
financial one.
Speaker 1 (07:56):
I love that.
There's one more I want to addon which I don't think they
talked about in the book, and ifthey did, I'll be impressed
because I just came up with itjust now.
The final one missing might beand I'm going to give credit to
one of our clients here who Iwill not say their name for
security reasons health, wealth,and here's what I mean by that.
We have a client that said AriJames, it would have been really
(08:18):
hard for me to buy food at theairport, especially Chick-fil-A,
because it just costs so muchmoney, and I would have beat
myself up.
But he bought it.
He felt great about it andimagine he didn't buy it.
He would have been cranky.
Maybe his partner would havesaid hey, why are you acting so
weird?
I know I get hangry for thosewho are unfamiliar hungry and
angry a very dangerouscombination for an individual
(08:41):
and our client was so gratefulthey did it.
Normally it would have justeaten them up inside.
So I love that reframing ofwhat you basically said.
James was opportunity cost.
You just put it in a way thatallows people to digest it.
So, steve, we're not ignoringyour question here.
Steve's wondering about thebudget and retirement and hey,
(09:02):
why wouldn't I potentiallyconsider maybe paying off my
mortgage or not?
Well, steve, the way we wouldlook at it is we would first
give you a very clear financialanswer and say, steve, if you
were to, let's say, have a 3%mortgage rate and you felt
confidently you could invest andget 10%, then the reality is
that's the financial answer andit doesn't mean you have to do
(09:24):
it, because even if you paid offthat mortgage, the reality is
you'd still be in a good spot toaccomplish your goals, assuming
that's the case here.
Now maybe Steve does pay offthe mortgage and sleeps better,
and you can't quantify thatimpact on your health.
And now maybe his partner feelsmore comfortable spending more
money to go out to eat.
Maybe they can pay for friendsto go on trips with them all,
(09:46):
because they made the notfinancially optimal decision but
was better for their scorecard.
Speaker 2 (09:52):
Yeah, yes, and again, going back to, I would say they
optimized for something in thatit just maybe wasn't the
typical thing.
Every decision we should beasking and you can take this to
an extreme, even like thefinancial one I mentioned time.
I mentioned financial, Imentioned physical, like
physical health.
I remember like in high schoolplayed football and college
(10:14):
played rugby, and there was likethis I can't skip a workout, I
have to eat healthy.
I think you get in that intothe point that's like okay,
james, at some point that's done, miss the freaking workout and
go hang out with your friends atthe beach.
Don't be afraid, like, enjoy apizza.
If it means you're hanging outwith your like it's.
You can over-index orover-optimize for all of these
(10:35):
things and that might be totallyappropriate in a certain season
.
If you're trying to be the bestyou possibly can be, you want
to be in the best possiblephysical shape.
Because the most importantthing to Ari is being the best
soccer player that he canpossibly be, the best thing to
me Awesome.
But understand the why that'sconnected to that.
If it's like, okay, you're justdoing this and now it's just
because of that's become who youare and your identity and you
have.
Is that really who you want tobe?
(10:57):
Do you really want to be theperson that over indexes to or
goes is maybe super extreme inone of those categories, but in
doing so you're underindexingindexing, you're
under-investing in the othercomponents of wealth.
So, when we think about wealthas not just money, but when we
think about it as our ability tospend time with people we love,
(11:19):
our ability to have a healthybody that allows us to do the
things we want to do, theability to have a healthy mind,
a healthy spirit, all thesedifferent things, that's really,
and this isn't trying to get,this, really isn't.
I think people are like oh,money, it's just, it's a
portfolio.
That portfolio means nothing ifyou don't have relationships.
Portfolio means nothing if youdon't have your health.
(11:40):
That portfolio means nothing ifyou don't have your time
because you worked until youlife passed you by and it's okay
.
I'm at the final months andyears of my life.
What good is this multimilliondollar portfolio?
The answer is it's not, unlessyour legacy goals were the
number one thing to you.
So the portfolio enables thesethings, but that doesn't mean we
(12:01):
can sacrifice those otherthings, those things being
health, time, relationships, etcetera.
We have to have this moreintegrated approach of how we
look at it if we want to be ableto get the most out of life
with our money Amazing.
Speaker 1 (12:13):
I have an example that goes deep on being a
steward of money, which Ilargely learned from you, james,
and from all of you who haveleft comments in the collective
on YouTube through podcasts,just to say, hey, here's
something I did that I'm reallyglad I did that.
If someone else looked at mybudget they would go what are
you nuts?
So I currently pay $220 everyweek for a session with a
(12:36):
physical therapist whospecializes in soccer, and even
my fiance will say Ari, I knowyou love soccer, but that seems
a bit excessive.
And I'll say I thought it wasexcessive when I started as well
.
I just really was comforted bythe fact that the exercises are
so tailored to my game.
And she said I get that, but isthat really necessary?
And I was thinking more aboutit.
And a few months ago I was at agame and I was having a ton of
(12:59):
fun, as I always do, and I gotinvited to another game, which
normally I would love to do, butI try to think I want to play
almost every day of the week.
It's going to be tough on mybody, but I went.
You know what?
If I were to get hurt in thisnext game.
I don't really care because Iknow I have an awesome person
who's going to take care of me.
Before I would have had a bitof hesitation and I would have
(13:21):
thought maybe I shouldn't playthat next game, because if
something does happen and I'minjured, I don't know where I'm
going to go.
It's going to be a hassle.
We'll often use that phrase headtrash of hey, maybe that's just
something I shouldn't worryabout.
Well, it turns out, I playedfor that one team.
I had a great game and I metfriends that I would have never
met, who I now play consistentlywith every single Sunday, all
(13:44):
potentially because I pay $220every single week.
Now, it's not that clear of atranslation, but these are
things that, if you're goodabout your money and I don't do
many other things that a lot ofpeople do I don't enjoy drinking
because I don't feel better, sosome might say, well, that's a
cost that a lot of people dothat you don't do, so you can do
that.
I don't even think that's theway of looking at it.
(14:04):
I think you should look at whatyou have coming in the door and
ask yourself what do you wantyour scorecard to look like?
Because I think that is, onceagain, the best way to optimize.
Speaker 2 (14:15):
Yeah, let's actually play this out as an example,
because you'll see on LinkedInor you'll see in videos, people,
hey, what if you never got thatextra guac and Chipotle and
invested that?
Do you know how much moneythat's worth for you?
Or what if you didn't buy thatnicer card and invested?
Do you know how much money thatis?
And it's, yeah, all right.
What if you didn't pay 200bucks a week to this therapist
and you invested that?
That's a lot of money.
When you add that up everymonth, every year you're young
(14:37):
that money could compound foryou over time.
It's like what?
What if that truly is a milliondollar decision that you're
making and someone could runwith that and say a million
dollars at the beginning ofretirement, by the end of your
retirement, that's, that's 2million.
Like what are you thinkingspending $2 million doing this?
Two million?
Like what are you thinkingspending $2 million doing this?
And you would say, okay, well,let's play that out.
(14:58):
When you are in your 60s and70s and 80s and you've got an
extra couple million dollars,what do you want to do with it?
Well, I would have wanted tohave played soccer.
I would have wanted to extendmy time to be able to do what I
love.
Charlie Munger, shortly beforehe died, a guy worth well over a
billion dollars hey, what's onething you wish you could have
done or would have done?
(15:19):
He said I really wish I couldgo back and catch a 200-pound
tuna right now.
Billion and a half dollars orwhatever it was when he passed
didn't change the fact that whathe wishes he could have done
was to have the health and thevitality and the ability to go
do what you are spending moneyto do today.
(15:41):
And that's not to say he didn'tlive a wonderful life.
It sounds like a very eventfullife, lots of fun things that he
did.
But it's that sense that if youover optimize for the financial,
you're going to under optimizefor everything else.
And I don't think that's aconscious thing that most people
realize that money by itselfmeans nothing.
It is only a medium of exchangethat allows us to use it for
(16:02):
the things that actually do meansomething.
And we have to look at it.
We have to look at thescorecard.
We have to look at the thingsthat we're actually trying to do
and be and say what is theimpact on each of these
components of our life, eachcomponent of our scorecard, to
make a more well-roundeddecision.
Speaker 1 (16:16):
Powerful example with the tuna there, james.
Now, if this episode resonated,check out the episode.
How many different firms shouldI split my money between?
Because we give more examplesin that episode specifically
around is there a benefit ofhaving my money at Vanguard and
Schwab and Fidelity and Empower?
And what we find is oftentimespeople don't understand that
there's not always a benefit ofhaving my money at Vanguard and
Schwab and Fidelity and Empower,and what we find is oftentimes
people don't understand thatthere's not always a benefit to
(16:39):
it.
Not only is there not a benefit, but it creates so much
unnecessary complexity that yourlife it's not about
optimization, it's aboutsimplicity and actually
understanding okay, what can wedo to make your life better?
So check out that episode.
If you're unfamiliar, james andmyself we both have our own
individual channels, so you cancheck out James Canole or Ari
(17:01):
Taublieb on YouTube, as well asour own podcast, ready for
Retirement and Early Retirement.
And, once again, this is RootTalks.
If you guys want to potentiallyhave your question addressed in
a future episode, make sure tojoin our free community, the
root collective, in thedescription.
Thank you, everyone and we'llsee you next time.
Thank you.
Hey, james, we talk a lot about optimizing and you
might be aware of this, but manyof our team members actually
make fun of me.
They'll say we know Ari'sweekend wasn't fine, it was
optimized.
Now it's a silly joke, but thereality is we want you to
optimize what you've worked sohard for.
But sometimes it actually makessense not to optimize because
your life would actually bebetter.
So what we're going to talkabout today is okay.
(00:23):
What could we do in our lifethat might not make financial
sense?
That would really add to ourquality of life.
So my first question for you,james, is when you personally go
buy a car, do you like to get aloan?
Do you pay all cash?
What do you do?
Speaker 2 (00:38):
I've done both, so I guess I've optimized and I've
not optimized, or I guess Iwould think about it differently
.
I've optimized for differentthings in different cases.
Speaker 1 (00:48):
I like that.
Now why did you pay all in cash?
Speaker 2 (00:52):
The first couple of cars I purchased, it was all
cash.
Part of this was just evengrowing up the Dave Ramsey
mentality of you buy things incash, you stay out of debt, you
live within your means, whichall great things, and so there's
this sense of buying somethingin cash.
You're not having any debt.
In some ways you're optimizingfor that, but there's other
arguments to be made of.
(01:12):
Then you're tying up somecashflow or you are losing some
liquidity.
So in other instances, when Ihave not paid all cash, I was
optimizing for preservingliquidity, I was optimizing
cashflow, I was optimizing forsome other things.
So I think it's less at leastthe way I think about it less
about optimizing versusnon-optimizing, more about what
are you optimizing for andtaking that approach.
Speaker 1 (01:33):
I like that because you do not go to the grocery
store.
For those who are unaware, whydon't you go to the grocery
store?
I don't like it and your lifeis better not going.
Speaker 2 (01:45):
My life is better not going.
So yeah, this is just like afun, funny example, I guess.
But yeah, there's somethingabout the grocery store that I
it's like going to the DMV forme.
I walk in, my wife will ask meto go pick up something in the
grocery store.
I just don't even know where togo.
It's hey, can you go getshredded cheese?
And I walk through every aisletwice before I can find the
shredded cheese, which is alwaysin the deli section in the back
.
It just takes me, for whateverreason, so long because I don't
(02:07):
like being there that I wouldrather pay for delivery and just
have that hour, that 30 minutes, that two hours, whatever it is
of my life, back to dosomething else with my family,
with my friends, with work,whatever it might be.
Speaker 1 (02:21):
Now we're being lighthearted today talking about
cars and grocery stores, butthis is real life stuff and I'm
going to tell you what promptedthis episode today.
So in our free community, theroot collective, we go through
and we look at what topics do wethink might apply to all of you
.
Watching slash listening, andthis is a common one.
This comes from Steve, andSteve says I've struggled with
the idea of paying off mymortgage.
(02:42):
I had planned on paying it offbefore retirement.
I've not really started workingtowards that.
I understand the concept of notpaying it off at a lower rate
to potentially make a higherreturn with investments.
However, what about my budget?
What about the fact that maybeI just sleep better at night by
not having that mortgage?
I don't know.
(03:02):
What do you guys think?
So do you see this a lot, James?
Speaker 2 (03:06):
Yeah, all the time, and I think that it comes down
to what are we keeping score of,what is the thing that we're
tracking?
And so I see what Steve'ssaying and I even want to take
it one step further of return beversus what does cash flow look
(03:32):
like, versus optimizing forpeace of mind, of being debt
free, not being debt free.
So there's certainlyoptimizations conversations.
In that I look at it a littlebit differently and it's a
little bit different than evenSteve's question.
But what points?
What do you think about whenyou see Steve's comment?
Speaker 1 (03:44):
there, ari, I'm wondering if Steve is beating
himself up with calculations.
But for asking himself what hewould really like, let's dive in
, if it's okay with you.
James, you even brought up afew moments ago the unoptimizing
versus optimizing and thenkeeping score.
I would love to hear that kindof concept of keeping score.
(04:04):
How do you view that?
Speaker 2 (04:06):
Yeah, and I hope I'm not derailing our conversation
too much.
I'll take Steve as an example.
Let's say Steve along with this.
He says hope I'm not derailingour conversation too much.
I'll take Steve as an example.
Let's say Steve along with this.
He says I'm not actually goingto retire until I have my
mortgage paid off, even though Icould.
I have enough liquid assets, Ihave enough income, I could
totally retire, have thatmortgage.
But I'm trying to optimize forthe perfect retirement.
So I'm going to push off myretirement four or five years
(04:27):
until the mortgage is gone so Ican have a more optimized
retirement.
And you look at that and themath is sound, the logic is
sound if you're just thinkingabout optimizing for the
financial component of whatyou're doing.
And there's this great bookthat I've read that I think
summarizes this real nicely.
It's called the Five Types ofWealth and it talks about or the
way I relate this concept towhat we do as advisors is there
(04:52):
is financial wealth, but that'sonly one component.
That's only one way that weshould be looking at things.
There's also time wealth,social wealth, mental wealth,
physical wealth, and so people,when they are optimizing, you
see this all the time,specifically, maybe in the FIRE
community.
I'm keeping my costs super,super low, I'm keeping my
savings rate super high, I wantto retire super early, and they
(05:12):
have optimized for thisincredible financial wealth.
But in doing so, what did yousacrifice in terms of social
wealth, mental wealth, physicalwealth, time, wealth, time maybe
not so much there.
But if I go back to Steve,steve time is we talk about this
a lot the only non-renewablecurrency.
You work four or five moreyears.
I know he didn't actually saythat, but if I'm extrapolating
(05:33):
this to use as an example a verywell financially optimized
retirement, no more mortgage Inthose four or five years he
saved even more.
He has a great balance sheet,great income sources, but what
did you lose in time, wealth, inother words, what was the
marginal gain?
You got on the financial sideof things, but compare that to
(05:53):
the marginal loss or themarginal detriment or what you
sacrificed in your time wealth,knowing that those are four or
five more years that, assumingyou don't like what you do for
work and assuming you want toretire, you're not going to get
those back.
What about social wealth?
What about that scorecard?
Well, what could you have donein those four or five years with
your family, with yourgrandchildren, with your friends
, with whoever that now youdon't get to get.
What about your mental wealth?
(06:14):
What about your physical wealth?
We see this a lot that people inthose final years of retirement
or final years of work, Ishould say before retirement
their bodies are at this pointthat every successive year gets
more and more, takes more andmore of a toll on your body,
because it's these years ofdealing with this stress,
managing this job, putting offyour health, saying you'll take
care of it when you have moretime, when you have more,
(06:37):
whatever, less demands, and sothat compound effect.
In the same way, we talk aboutthe positive compound benefits
of interest or of growth.
Well, there's the same thing tothe negative.
What about those negativecompound effects of not taking
care of your health, your mentalhealth, your physical wealth?
Well, the final few years, inthe same way, the final few
years before retirement,assuming the market's doing well
(06:59):
, you see extraordinary gains inyour portfolio.
The final few years beforeretirement, if you've neglected
your health, you might seeextraordinary deterioration in
your physical health, yourmental health.
And so I talk about thescorecard, because if I'm
putting words in Stephen's mouth, or putting words in Stephen's
comment, if all we're focused onis here an optimized retirement
(07:20):
, which he has, my questionwould be how much?
Marginally better is that?
Maybe slightly, especially ifwe're making the assumption
you're already good to go withretiring now A marginal
improvement in one financialscorecard, but a major detractor
and for other types of wealththat we also have to think about
, types of things that we haveto account for.
(07:41):
So the question isn't shouldyou optimize or shouldn't you
optimize?
You should absolutely optimize,but make sure you're optimizing
by looking at the right scorecard.
This is plural, not just onesingle score card, which is the
financial one.
Speaker 1 (07:56):
I love that.
There's one more I want to addon which I don't think they
talked about in the book, and ifthey did, I'll be impressed
because I just came up with itjust now.
The final one missing might beand I'm going to give credit to
one of our clients here who Iwill not say their name for
security reasons health, wealth,and here's what I mean by that.
We have a client that said AriJames, it would have been really
(08:18):
hard for me to buy food at theairport, especially Chick-fil-A,
because it just costs so muchmoney, and I would have beat
myself up.
But he bought it.
He felt great about it andimagine he didn't buy it.
He would have been cranky.
Maybe his partner would havesaid hey, why are you acting so
weird?
I know I get hangry for thosewho are unfamiliar hungry and
angry a very dangerouscombination for an individual
(08:41):
and our client was so gratefulthey did it.
Normally it would have justeaten them up inside.
So I love that reframing ofwhat you basically said.
James was opportunity cost.
You just put it in a way thatallows people to digest it.
So, steve, we're not ignoringyour question here.
Steve's wondering about thebudget and retirement and hey,
(09:02):
why wouldn't I potentiallyconsider maybe paying off my
mortgage or not?
Well, steve, the way we wouldlook at it is we would first
give you a very clear financialanswer and say, steve, if you
were to, let's say, have a 3%mortgage rate and you felt
confidently you could invest andget 10%, then the reality is
that's the financial answer andit doesn't mean you have to do
(09:24):
it, because even if you paid offthat mortgage, the reality is
you'd still be in a good spot toaccomplish your goals, assuming
that's the case here.
Now maybe Steve does pay offthe mortgage and sleeps better,
and you can't quantify thatimpact on your health.
And now maybe his partner feelsmore comfortable spending more
money to go out to eat.
Maybe they can pay for friendsto go on trips with them all,
(09:46):
because they made the notfinancially optimal decision but
was better for their scorecard.
Speaker 2 (09:52):
Yeah, yes, and again, going back to, I would say they
optimized for something in thatit just maybe wasn't the
typical thing.
Every decision we should beasking and you can take this to
an extreme, even like thefinancial one I mentioned time.
I mentioned financial, Imentioned physical, like
physical health.
I remember like in high schoolplayed football and college
(10:14):
played rugby, and there was likethis I can't skip a workout, I
have to eat healthy.
I think you get in that intothe point that's like okay,
james, at some point that's done, miss the freaking workout and
go hang out with your friends atthe beach.
Don't be afraid, like, enjoy apizza.
If it means you're hanging outwith your like it's.
You can over-index orover-optimize for all of these
(10:35):
things and that might be totallyappropriate in a certain season
.
If you're trying to be the bestyou possibly can be, you want
to be in the best possiblephysical shape.
Because the most importantthing to Ari is being the best
soccer player that he canpossibly be, the best thing to
me Awesome.
But understand the why that'sconnected to that.
If it's like, okay, you're justdoing this and now it's just
because of that's become who youare and your identity and you
have.
Is that really who you want tobe?
(10:57):
Do you really want to be theperson that over indexes to or
goes is maybe super extreme inone of those categories, but in
doing so you're underindexingindexing, you're
under-investing in the othercomponents of wealth.
So, when we think about wealthas not just money, but when we
think about it as our ability tospend time with people we love,
(11:19):
our ability to have a healthybody that allows us to do the
things we want to do, theability to have a healthy mind,
a healthy spirit, all thesedifferent things, that's really,
and this isn't trying to get,this, really isn't.
I think people are like oh,money, it's just, it's a
portfolio.
That portfolio means nothing ifyou don't have relationships.
Portfolio means nothing if youdon't have your health.
(11:40):
That portfolio means nothing ifyou don't have your time
because you worked until youlife passed you by and it's okay
.
I'm at the final months andyears of my life.
What good is this multimilliondollar portfolio?
The answer is it's not, unlessyour legacy goals were the
number one thing to you.
So the portfolio enables thesethings, but that doesn't mean we
(12:01):
can sacrifice those otherthings, those things being
health, time, relationships, etcetera.
We have to have this moreintegrated approach of how we
look at it if we want to be ableto get the most out of life
with our money Amazing.
Speaker 1 (12:13):
I have an example that goes deep on being a
steward of money, which Ilargely learned from you, james,
and from all of you who haveleft comments in the collective
on YouTube through podcasts,just to say, hey, here's
something I did that I'm reallyglad I did that.
If someone else looked at mybudget they would go what are
you nuts?
So I currently pay $220 everyweek for a session with a
(12:36):
physical therapist whospecializes in soccer, and even
my fiance will say Ari, I knowyou love soccer, but that seems
a bit excessive.
And I'll say I thought it wasexcessive when I started as well
.
I just really was comforted bythe fact that the exercises are
so tailored to my game.
And she said I get that, but isthat really necessary?
And I was thinking more aboutit.
And a few months ago I was at agame and I was having a ton of
(12:59):
fun, as I always do, and I gotinvited to another game, which
normally I would love to do, butI try to think I want to play
almost every day of the week.
It's going to be tough on mybody, but I went.
You know what?
If I were to get hurt in thisnext game.
I don't really care because Iknow I have an awesome person
who's going to take care of me.
Before I would have had a bitof hesitation and I would have
(13:21):
thought maybe I shouldn't playthat next game, because if
something does happen and I'minjured, I don't know where I'm
going to go.
It's going to be a hassle.
We'll often use that phrase headtrash of hey, maybe that's just
something I shouldn't worryabout.
Well, it turns out, I playedfor that one team.
I had a great game and I metfriends that I would have never
met, who I now play consistentlywith every single Sunday, all
(13:44):
potentially because I pay $220every single week.
Now, it's not that clear of atranslation, but these are
things that, if you're goodabout your money and I don't do
many other things that a lot ofpeople do I don't enjoy drinking
because I don't feel better, sosome might say, well, that's a
cost that a lot of people dothat you don't do, so you can do
that.
I don't even think that's theway of looking at it.
(14:04):
I think you should look at whatyou have coming in the door and
ask yourself what do you wantyour scorecard to look like?
Because I think that is, onceagain, the best way to optimize.
Speaker 2 (14:15):
Yeah, let's actually play this out as an example,
because you'll see on LinkedInor you'll see in videos, people,
hey, what if you never got thatextra guac and Chipotle and
invested that?
Do you know how much moneythat's worth for you?
Or what if you didn't buy thatnicer card and invested?
Do you know how much money thatis?
And it's, yeah, all right.
What if you didn't pay 200bucks a week to this therapist
and you invested that?
That's a lot of money.
When you add that up everymonth, every year you're young
(14:37):
that money could compound foryou over time.
It's like what?
What if that truly is a milliondollar decision that you're
making and someone could runwith that and say a million
dollars at the beginning ofretirement, by the end of your
retirement, that's, that's 2million.
Like what are you thinkingspending $2 million doing this?
Two million?
Like what are you thinkingspending $2 million doing this?
And you would say, okay, well,let's play that out.
(14:58):
When you are in your 60s and70s and 80s and you've got an
extra couple million dollars,what do you want to do with it?
Well, I would have wanted tohave played soccer.
I would have wanted to extendmy time to be able to do what I
love.
Charlie Munger, shortly beforehe died, a guy worth well over a
billion dollars hey, what's onething you wish you could have
done or would have done?
(15:19):
He said I really wish I couldgo back and catch a 200-pound
tuna right now.
Billion and a half dollars orwhatever it was when he passed
didn't change the fact that whathe wishes he could have done
was to have the health and thevitality and the ability to go
do what you are spending moneyto do today.
(15:41):
And that's not to say he didn'tlive a wonderful life.
It sounds like a very eventfullife, lots of fun things that he
did.
But it's that sense that if youover optimize for the financial,
you're going to under optimizefor everything else.
And I don't think that's aconscious thing that most people
realize that money by itselfmeans nothing.
It is only a medium of exchangethat allows us to use it for
(16:02):
the things that actually do meansomething.
And we have to look at it.
We have to look at thescorecard.
We have to look at the thingsthat we're actually trying to do
and be and say what is theimpact on each of these
components of our life, eachcomponent of our scorecard, to
make a more well-roundeddecision.
Speaker 1 (16:16):
Powerful example with the tuna there, james.
Now, if this episode resonated,check out the episode.
How many different firms shouldI split my money between?
Because we give more examplesin that episode specifically
around is there a benefit ofhaving my money at Vanguard and
Schwab and Fidelity and Empower?
And what we find is oftentimespeople don't understand that
there's not always a benefit ofhaving my money at Vanguard and
Schwab and Fidelity and Empower,and what we find is oftentimes
people don't understand thatthere's not always a benefit to
(16:39):
it.
Not only is there not a benefit, but it creates so much
unnecessary complexity that yourlife it's not about
optimization, it's aboutsimplicity and actually
understanding okay, what can wedo to make your life better?
So check out that episode.
If you're unfamiliar, james andmyself we both have our own
individual channels, so you cancheck out James Canole or Ari
(17:01):
Taublieb on YouTube, as well asour own podcast, ready for
Retirement and Early Retirement.
And, once again, this is RootTalks.
If you guys want to potentiallyhave your question addressed in
a future episode, make sure tojoin our free community, the
root collective, in thedescription.
Thank you, everyone and we'llsee you next time.
Thank you.
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