The New Diligence - Blog

How Anyone from Poor to Rich Can Use Money to Buy Happiness

Tue, 08 Sep 2026 07:00:00 GMT

Article Highlights

The Satiation Myth: New research shows life satisfaction continues to rise past six figures, with multi-millionaires ($3M–$8M+) reporting significantly higher life satisfaction than middle-income earners.
The Brain Thinks Logarithmically: Percentages matter more than dollars. Doubling your net worth from $2M to $4M delivers the same psychological boost as jumping from $50k to $100k.
Evaluative Satisfaction vs. Daily Mood: Climbing the wealth ladder results in higher life satisfaction (eudaimonic happiness), as opposed to increases in daily mood (hedonic happiness).
Conquering the "Logarithmic Wall": Exponential growth in net worth is very difficult during the accumulation stage of life. To extract more happiness as a member of the middle class, you must build a foundation of ownership/equity, or use the money you have to fund relational and psychological wealth.
The 20% Amplifier: For the bottom 20% of baseline emotional health, general well-being hits a complete wall around the $100,000 threshold. For the top 20%, however, money typically amplifies happiness.

Money can’t buy happiness. How many times have we all heard this?

I understand why we use this phrase. We are really trying to say that money isn’t everything -- that if you pour your heart and soul into making more money, sacrificing your relationships and time along the way, you will be miserable. And that is undeniably true!

But to claim that money can’t buy happiness is simply incorrect. Money can buy happiness, whether you are poor, rich, or anywhere in between.

Money generates well-being differently depending on where you stand financially and emotionally. To extract the maximum satisfaction from our dollars, we have to understand how money interacts with psychology at every level of the wealth spectrum.

Here is how anyone, at any level of wealth, can utilize money to buy a happier and more satisfying life.

Low Income? Buy Relief

If you are struggling to make ends meet, the debate over whether "money buys happiness" is virtually irrelevant to your situation. At lower income levels, any extra cash operates under one very simple idea: it solves immediate problems.

In a 2010 research study, Nobel laureates Daniel Kahneman and Angus Deaton observed that emotional well-being improved dramatically as income rose toward roughly $75,000 (around $100,000 in today’s dollars).¹ At this tier, money buys:

More Security: Reliable food, safe housing, and healthcare.
A Way Out of Adverse Circumstances: Repairing the car before it breaks down; paying the utility bill without worrying about your checking account balance.
Cognitive Bandwidth: Poverty imposes a massive mental tax. Eliminating financial panic frees up focus, sleep, and emotional bandwidth.

Whether you are unemployed or escaping a volatile situation, every additional dollar you make goes directly to improving your financial or emotional wellbeing. Money spent on emergency reserves, debt elimination, and basic health yields a higher psychological return on investment than at any other stage in life.

Multi-Millionaire? Buy Autonomy

For years, I have operated under the assumption that happiness mostly plateaus after crossing the six-figure threshold. I mostly assumed that beyond a certain income level, happiness is almost entirely related to emotional and social forces than linked to any sort of financial status.

And while it is true that the immediate joy of an extra dollar slows down as net worth climbs, that does not mean there isn’t happiness to be unlocked if you are financially successful.

Enter Wharton researcher Matthew Killingsworth. In 2024, he studied how actual multimillionaires ($3M to $8M+) report happiness, plotting the resulting data on a logarithmic scale. He discovered that every time wealth doubled, life satisfaction moved up by the exact same incremental step.

Because jumping from $2M to $4M or $4M to $8M requires massive absolute sums of money, people on the outside assume diminishing returns have kicked in. But to the person experiencing it, that $4 million jump registers just as meaningful as the jump from $75k to $150k felt in their early career.

His research went even further: the results showed multimillionaires were significantly happier and more satisfied with their lives than six-figure earners. In fact, the satisfaction gap between middle-income earners and multimillionaires was nearly three times larger than the gap between low- and middle-income groups -- completely bucking the narrative that money doesn’t buy happiness beyond $100K.²

Why? Because wealth scales with life evaluation. Even if an individual's hour-by-hour or day-by-day mood doesn't drastically shift (hedonic happiness), when reflecting on their life as a whole, people with a high net worth maintain an undeniable sense of agency, security, and accomplishment (eudaimonic happiness).

Reaching High-net-worth status can move you into a new realm of emotional wellbeing. Just look at the examples below:

Moving from "I have a great job" to "I never have to work for a boss again."
Saying “my family is completely insulated from healthcare related ruin" as opposed to “I can afford to go to the doctor”
From "I can manage my time" to "I can do virtually anything I want at any time for the rest of my life."

As we move up the wealth scale, logarithmically, we not only unlock the freedom to write our own life narrative, but the ability protect that freedom from harm’s way.

Are there still determining factors contributing to better life satisfaction that I am not mentioning here? Of course. I’ll even allude to some of them in the following sections. Still, Killlingsworth’s research makes a clear connection between greater wealth and life satisfaction.

Somewhere In Between? You Have Two Options

This category is where most of us live: people who have achieved baseline financial stability and at least some calendar freedom. This tier of wealth is precisely where the "money can’t buy happiness" myth hits the hardest, because this is where earners run straight into the logarithmic wall I mentioned above.

Early in your career, doubling your income from $50,000 to $100,000 is a life-changing event, but it is often achievable through career advancement, acquiring skills, or a strategic job switch.

Now imagine what it takes to double your income from $250,000 to $500,000. Unless you are an anesthesiologist or a senior engineer at Meta, that is no simple feat.

For most professionals, compounding net worth on an exponential scale is exceptionally difficult. Peak earning years often coincide with peak expenses (mortgages, children, lifestyle creep, etc.), making repeated doublings of your wealth highly unlikely. If it were easy, multi-millionaires wouldn't be a statistical minority.

As your net worth grows, every new dollar represents a smaller percentage increase of the total pie. The result? The psychological yield on each additional dollar begins to feel noticeably smaller.

When people work 50% harder for a raise that only shifts their net worth by 5%, they naturally conclude that extra money isn’t worth the sacrifice.

For those who are firmly in this tier, extra money can still transform your well-being. The key is once again how you use that money to extract more happiness.

You can either A) deploy it in a way that allows you to cross the logarithmic threshold and launch into the multi-million level of wealth, or B) deploy it in a way that creates life satisfaction without growing your net worth.

Option A) Reaching the High-Net-Worth tier

If you want your wealth to leap across logarithmic tiers, like moving from six-figure stability to multi-million-dollar autonomy, you cannot rely on trading hours for dollars. Salaried compensation operates on a linear curve; true wealth creation requires equity, leverage, and ownership.

Making the leap from upper middle class to high-net-worth (HNW) means that money should be used as seed capital for exponentially growing assets. Here are some examples of what that means:

Building Up Equity: Transitioning from a high-earning employee to an owner. This means launching a firm, buying into a practice, acquiring cash-flowing businesses, or taking concentrated equity positions in high-growth ventures.
Funding the "Right to Fail Safely": The real power of more capital is that it buys you runway and gives you the financial buffer to take calculated professional risks (such as leaving a comfortable corporate role to build a scalable enterprise) without putting your family’s baseline security at risk.
Buying Optionality: Every dollar invested in high-yielding, equity-based assets can shorten your timeline to total independence. It buys the option value of retiring many years earlier or pivoting into work on your own terms.

Option B) Creating life satisfaction without growing your net worth

Maybe reaching multi-millionaire status isn't your primary goal. Maybe you just want to enjoy life’s journey without worrying about what it takes to double your wealth in 3 years instead of 10.

But you still want to be happy!

If this is you, money can still yield immediate, high-impact happiness. The solution is to buy relational and psychological wealth instead of buying material goods or status symbols.
Here’s what I mean:

Invest in Experiences: A trip with old friends, learning a skill, an adventurous milestone… all examples of use your money to compound happiness in the form of memories.
Buy Back Time: Trading money for "time affluence" is one of the most underutilized happiness hacks in the middle and upper tiers. Hiring help for routine chores, living closer to work, or paying for convenience buys back autonomy and reduces burnout.
Buy Small, Somewhat Frequent Pleasures: Frequency of positive emotion beats intensity. A dozen modest, joyful moments (like a weekly coffee ritual) produces a higher baseline happiness than a single annual splurges.
Spend Money on Others: Research consistently shows that spending money on others triggers a far higher dopamine and satisfaction response than self-directed consumption. Find a way to support family, fund a community project, or back a cause you care about.

These are just some examples of how to use money to extract more happiness out of life. There are many more. The point I’m trying to make is that intentional behavioral spending allows us to achieve greater happiness than using money to simply buy more stuff.

Important Caveat: The Happiest 20% vs. The Unhappiest 20%

In 2023, previously mentioned researchers Daniel Kahneman and Matthew Killingsworth joined forces in a rare "adversarial collaboration" to reconcile their conflicting data.³ The conclusion: money’s power to buy happiness depends entirely on your baseline emotional health.

For the Happiest 20%: The happiness returns on extra wealth actually accelerate past six figures. When your internal state is healthy, any increase in net worth acts as fuel for joy and self-actualization.
For the Least Happy 20%: Happiness increases with income up to ~$100,000, and then hits a brick wall. If you suffer from clinical depression, unresolved grief, toxic relationship dynamics, or deep existential emptiness, an extra $500,000 or $5,000,000 accomplishes nothing.

My point: money can buy you more happiness, but it isn't the secret to happiness. If your goal is to buy your way out of an unhappy life, more of it will only compound the emptiness.

Conclusion

The main takeaway from this article: money can most definitely buy happiness if you understand how to use it to your advantage.

At lower levels, use it to buy relief from scarcity.
At higher levels, use it to buy autonomy over your life and generate life satisfaction.
At middle levels, use it to buy experiences and social connection, or use it to invest in high-yielding assets that will grow on an exponential scale.

Above all, remember that money is an amplifier. It expands your leverage over the financial world, but it doesn't change who you are individually. As you climb the wealth ladder, make sure to invest in your inner self, so that by the time you reach financial autonomy, you have built something truly worth amplifying.

More Reading:
When Ownership Outpaces Effort
The Health and Wealth Equivalence: Why Knowing What to Do Is Never Enough
The Bank of Mom and Dad: Supporting Adult Children Without Endangering Your Golden Years

Back to Blog

References
1. Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. Proceedings of the National Academy of Sciences, 107(38), 16489–16493.
2. Killingsworth, M. A. (2024). Money and happiness: Extended evidence against satiation. Happiness Science.
3. Killingsworth, M. A., Kahneman, D., & Mellers, B. (2023). Income and emotional well-being: A conflict resolved. Proceedings of the National Academy of Sciences, 120(10), e2208661120.

When Ownership Outpaces Effort

Tue, 01 Sep 2026 07:00:00 GMT

Policy, demographics, and tax code broke the steady link between labor and wealth. Here's what happens if and when that regime shifts.

In This Article:

Part 1: How tax policy, housing scarcity, and equity ownership widened the gap between capital and W-2 labor.
Part 2: The structural limits of the current bull run in assets and why many voters and interest rates complicate the unwind.
Part 3: Potential roadmaps for what happens when the asset party slows down, from market reversion to the "rolling squeeze."

For most of U.S. economic history, the primary path to financial freedom was relatively straightforward: acquire skills, get a productive job, and convert hard work into a rising wage. Today, however, that playbook feels increasingly outdated.

Now, we essentially have two unequal economies. On one side of the coin, you have those whose primary income and livelihood stem from their job; on the other are those who tied their wealth to owning as many productive assets as possible (stocks, real estate, closely held corporations, concentrated capital, etc.).

The share of wealth held by the asset-owners has grown significantly in recent years, while average workers’ slice of the pie shrinks. The fundamental question is no longer just how to accumulate assets, but how long an economy built on this stark divide can continue to prosper. The reality of our current framework is clear, and the consequences will be profound if and when its underlying mechanics reverse.

Part 1: The Asset Class Is Thriving

There are two primary ways to increase your wealth in this country. You can earn more from your job, or you can own something that appreciates.

For the majority of the last century, these two paths moved together closely enough that the distinction didn't matter much to your typical household. That's no longer true.

Labor's share of national income has fallen from about 58% in 1980 to roughly 51% today, while corporate profits' share of the economy has expanded from around 7% to nearly 12% over the same stretch.¹ While single-digit percentages sound subtle, on a macro scale this translates to trillions of dollars shifting annually from W-2 paychecks to corporate balance sheets and equity holders.

When productivity gains accrue primarily to capital rather than a paycheck, nonwage income (capital gains, qualified dividends, business distributions, and real estate appreciation) becomes the primary engine of wealth compounding. Wages may pay your bills, but ownership creates scale.

The Tax Arbitrage Engine

The structural shift in wealth creation toward asset-ownership is only amplified by tax policy. Nonwage income benefits that are unavailable to standard W-2 earnings:

Section 199A: Allows eligible pass-through entities (S-corps, partnerships) a deduction of up to 20% on qualified business income.²
Capital Gains Preferred Rates: Long-term capital gains top out at 20%, well below the 37% top marginal rate on wage income, before even accounting for payroll taxes that apply to wages but not investment income.³
Step-Up in Basis & Borrowing: When someone dies holding appreciated assets, stocks, a business, real estate, their heirs inherit them at current market value, not at what was originally paid. Every dollar of unrealized gain built up over a lifetime simply disappears for tax purposes.

Combine that with "buy, borrow, die," the strategy of borrowing against appreciated assets to fund spending rather than selling them, and you get a structure where large asset holders can spend against their wealth for decades, pay relatively little income tax while doing it, and then pass the whole position to heirs with the embedded gains erased.

The Retirement Generation & Demographic Wealth Concentration

The concentration of this asset explosion is heavily age-skewed. Data from the Federal Reserve's Survey of Consumer Finances (SCF) highlights that Americans aged 55 and older hold nearly 74% of total U.S. net worth, up from around 50% in 1989. Meanwhile, the under-40 cohort holds under 7%.⁴

The 70+ demographic, representing roughly 12% of the population, holds over 32% of total net worth. This comes as a direct result of the compounding output of a multi-decade tailwind in financial assets.⁴

I'm not saying that this set up is wrong or unusual (they've had the longest time-horizon for their investments after all), I'm merely just pointing out the concentration of wealth in this demographic.

The Business Owner's Edge

Public equities get a lot of the attention in the media, but there's still a huge share of economic activity in privately held assets. The Minneapolis Fed's research on nonwage income found that after capital gains, the largest component of nonwage income for the top 1% is S-corporation income, the profit that flows through a closely held business directly to its owner's tax return.⁵

Combine that with the permanent 20% Section 199A deduction described above, and business ownership functions as a great wealth-building engine that operates on a different set of rules than the wage system. A successful small or mid-sized business owner in 2026 is taxed more favorably on that income than an employee earning a comparable salary at the same company.

The Real Estate Premium

Housing has also contributed significantly to this divided economy -- driven by artificial scarcity, historical low borrowing costs, and tax policy. The median U.S. home now costs roughly five times median household income, up from about 3.5 times in 1984.⁶ While construction costs play a role, a meaningful share of that stretch reflects strict limits on new supply in high-demand areas. The legal right to occupy scarce land becomes more valuable every year supply fails to keep pace with demand.

Furthermore, millions of existing homeowners saw their home equity surge during the COVID era when mortgage rates dropped below 3%. Because selling means forfeiting those historic rates, existing inventory remains locked up.⁷ Combined with structural tax incentives for real estate owners, it is no surprise that prospective home owners face an unprecedented barrier to entry.

The Equity-Owning Employee
Even within the workforce, the divide persists between those receiving fixed compensation and those receiving equity. Research from Schwab Stock Plan Services found that employees with company stock hold an average of 29% of their net worth in employer shares, a figure that climbs as high as 42% for millennials specifically. Both Schwab and Fidelity generally flag any single position above 10% to 20% of a portfolio as a meaningful concentration risk, a threshold plenty of equity-compensated employees quietly exceed.⁸

Comparing IBM in 1985 (then the market's most valuable company, employing ~400,000 workers) to modern megacap tech giants reveals the shift: today's market leaders generate exponentially higher market valuations with a fraction of the headcount.⁹ The wealth generated by these wildly successful corporations is concentrated among a much smaller group of equity-compensated employees.

Part 2: How Long Can This Keep Up?

What History Says About Long Runs

The current bull run for asset-holders stands out against long-term historical norms. Historical stock market data shows that bull runs driven by valuation expansion rather than underlying earnings growth eventually face structural limits. When Shiller CAPE ratios sit well above long-term averages (~17x historical mean), future expected 10-year real returns drop significantly.¹⁰

Elevated valuations are not, on their own, a guarantee of an imminent crash. Market cycles have no fixed shelf life, and stretched multiples can persist far longer than rational models suggest. However, economic history is consistent on one point: a return to earth eventually arrives.

The question I want to know: how much stress will it actually take for this capex fueled market to finally tire out?

Debt Off the Books: The AI Capex Structure

A key driver of current valuation premiums is massive capital expenditure in technology and infrastructure. However, an increasing portion of this capex (like data center buildouts, specialized hardware leases, and private energy grid infrastructure) is being financed increasingly through off-balance-sheet vehicles, SPVs, and private credit leases.¹¹ Growth that relies on complex debt structures becomes much more sensitive to interest rate spikes.

Counterpoint: We All Know Who Controls the Wheel

One of the main reasons that the ownership class has done so well over the last decade is because the political economy is incentivized to defend asset values. Here’s what I mean:

Voter demographics: The median voter age sits around 52, and over half of major political donations originate from individuals aged 66+.¹²
Fiscal priorities skew older as well: According to Penn Wharton Budget Model analysis, federal outlays favor older cohorts significantly through entitlement programs (~11%+ of GDP projected trajectory for elderly spending) relative to younger generations.¹³
Homeowner self-interest: Roughly two-thirds of Americans own their home, and homeownership doesn't just predict how often someone votes, it also shapes how they vote. Research tracking two decades of voter records in Ohio and North Carolina found that buying a home substantially increases local election turnout, with the effect nearly doubling when zoning measures are on the ballot. Separately, homeowners now account for roughly 58% of voter registrations despite making up only about 41% of the voting-age population, giving a group with a direct stake in rising asset values outsized say over the very policies that keep those values rising.²⁰

Because asset-owning voters dominate the political landscape and participate at high rates, policymakers face immense political pressure to substantially protect asset prices through fiscal and monetary policy.

This creates a counterintuitive interest-income loop. When the Federal Reserve raises interest rates to curb inflation, higher yields translate directly into billions in risk-free income for asset-rich people holding Treasuries, CDs, and money market accounts.

Rather than cooling demand, elevated rates expand the spending power of those with liquid capital and help sustain demand in travel, healthcare, and leisure services. Meanwhile, younger workers and asset-light households bear the full burden of high borrowing costs from mortgages to student loans, widening the wealth gap from both sides.

Part 3: What Happens When the Music Eventually Stops?

To be clear, I’m not predicting the current bull run in assets ends in flames, or in the near future, or really in any specific way at all. Rather, I'm giving an honest look at what's happened in the past when asset-driven growth has slowed or reversed.

If current trends can't compound indefinitely, how does the system adjust? Here are five potential scenarios that illustrate how the current asset-fueled regime might unwind or evolve:

Scenario One: Reversion (Valuation Normalization)

The classic story of market adjustment: equity valuations compress rapidly back toward historical averages. We saw it in the housing market in the 2008 crisis: households in the bottom 80% of the wealth distribution lost nearly 39% of their net worth between 2007 and 2010, compared to a 14% loss for the top 20%. Median household net worth fell 38.8% over roughly that same period, erasing nearly two decades of accumulated gains.¹⁴ Contrary to some young Americans' beliefs, a market crash does not fix inequality; it often consolidates assets into stronger hands.

Scenario Two: Policy Reversal

Since much of the current advantage for asset owners was built through the tax code, it can also be unbuilt through the tax code. Capital gains rates, the Section 199A deduction, and the new $15 million estate exemption are all legislative choices rather than economic laws.¹⁵ Albeit unlikely, a future Congress with a much different agenda could reverse any of them.

Scenario Three: The Sellers' Market

As baby-boomers transition fully into the decumulation stage of life, millions of retirees shift from net buyers of financial assets to net sellers to fund daily living and healthcare. If secondary market buyers (like younger domestic workers or international investment) lack the income to absorb this supply at current prices, assets may adjust downward to match buyer purchasing power.

Scenario Four: The Release Valve (The Great Wealth Transfer)

Not every version of "the music stops" is a full-blown crisis. Cerulli Associates projects that roughly $124 trillion in wealth will change hands in the U.S. through 2048, with about $105 trillion going to heirs and the rest to charity, and roughly 81% of that total originating from baby boomers and older generations.¹⁶ Annual transfer activity is projected to climb from around $4 trillion currently toward a peak near $6 trillion in the mid-2030s, as the largest boomer birth cohorts reach their late seventies.

It's worth noting this is a projected figure, not an exact science. A competing estimate from Visa puts the realistic inheritable total closer to $36 trillion, a difference that mostly reflects how much of boomer wealth actually survives retirement itself.¹⁷

Either way, a meaningful share of the current concentration gets redistributed across generations over the coming two decades whether or not any market correction happens at all.

Scenario Five: The Rolling Squeeze

This, in my opinion, would be the most uncomfortable of the five scenarios. By rolling squeeze, I mean a very long stretch of low real returns. Japan's lost decades, of course, being a prime example.

After its 1989 peak, the Nikkei 225 took 34 years and two months to reclaim that nominal high, finally doing so in February 2024.¹⁸ Combined with a multi-decade collapse in commercial land values, an entire generation experienced firsthand what happens when core risk assets fail to compound.¹⁹

There's an important caveat, though: Japan's lost decades were driven by deflation, not inflation, which makes it an imperfect analogy for a U.S. economy currently dealing with the opposite problem. Still, the lesson applies.

The American version of this scenario wouldn't need a deflationary economic environment to feel similar. Instead, it would need asset prices to grow slowly enough, for long enough, that they stop outpacing the specific costs retirees actually face, healthcare and long-term care chief among them.

This is less a scenario about markets crashing and more a scenario about markets going sideways in a way that erodes purchasing power for asset-holders. It's arguably the hardest of these five scenarios to plan around precisely because nothing about it would feel like an emergency while it's happening.

Conclusion

There is growing conviction amongst the American public that asset ownership is the only reliable path to financial security, a takeaway that is driving more and more public frustration, especially for those who can’t participate in all the fun.

The reality is that our current economic system compounds wealth based on capital position rather than labor input. What makes the sustainability of this dynamic so compelling is not just the concentration of wealth today, but how the broader economy will respond if and when the structural incentives shift.

Public sentiment tends to follow incentives rather than the other way around, which means the fix for a lot of the unease people feel requires shifting economic motivation back in favor of hard work and wage accumulation as opposed to simply owning/holding assets (easier said than done, of course). The goal is not to punish capital or disincentivize asset ownership, which remains a premier facilitator of individual wealth creation, but to restore an equilibrium where wage-earners can actually reach that table.

I believe that change will arrive eventually, whether legislated by voters, forced by market correction, or dictated by the plain demographic math of a generation decumulating its assets.

The asset boom has been an extraordinary time for those already seated at the ownership table, there's no denying that. But this country's prosperity was built on an economic promise that rewards a productive workforce alongside capital ownership. Bringing that balance back will require a shift in the incentives currently driving it.

More Reading:
The Health and Wealth Equivalence: Why Knowing What to Do Is Never Enough
$500 Energy Bill: Non-Discretionary Inflation is Outrunning the American Household
The Bank of Mom and Dad: Supporting Adult Children Without Endangering Your Golden Years

Back to Blog

References
1. Bureau of Economic Analysis, National Income and Product Accounts, labor share of gross domestic income and corporate profit share, 1980–present.
2. Larry Brant and Steven Nofziger, "One Big Beautiful Bill Act, H.R. 1: Part IV, The Qualified Business Income Deduction / Code Section 199A," Foster Garvey, July 2025.
3. Internal Revenue Service, 2026 federal income tax brackets and long-term capital gains rate schedule.
4. Idrees Kahloon, "The Gerontocracy," The Atlantic. Underlying wealth-by-age data: Federal Reserve Survey of Consumer Finances.
5. Federal Reserve Bank of Minneapolis, "Beyond the Paycheck: The Rise of Nonwage Income," research note.
6. Idrees Kahloon, "The Gerontocracy," The Atlantic.
7. Ross M. Batzer, Jonah R. Coste, William M. Doerner, and Michael J. Seiler, "The Lock-In Effect of Rising Mortgage Rates," FHFA Working Paper 24-03, 2024–2025; Federal Reserve Board, "Locked In: Mobility, Market Tightness, and House Prices," FEDS working paper.
8. Charles Schwab, "The Risk of Holding Too Much Company Stock," Schwab Stock Plan Services study; Fidelity, "Stock options: Managing risk and strategy," Fidelity Investments.
9. Greg Ip, The Wall Street Journal, IBM (1985) vs. modern megacap valuation/headcount comparison.
10. Robert Shiller, Online Data (Yale University), CAPE ratio dataset; GuruFocus, "S&P 500 Shiller CAPE Ratio," August 2026.
11. Bank for International Settlements, "Financing the AI Infrastructure Boom: On- and Off-Balance Sheet Borrowing," BIS Quarterly Review, March 2026; Carson Group, "The AI Buildout Needs a Lot of Money: Enter Debt (and Financial Engineering)," Wealth Management, 2026.
12. Idrees Kahloon, "The Gerontocracy," The Atlantic (median voter age and donor-age split).
13. Penn Wharton Budget Model, government benefit spending by age cohort.
14. Federal Reserve Board, "A Wealthless Recovery? Asset Ownership and the Uneven Recovery from the Great Recession," FEDS Notes, September 2018; Federal Reserve Survey of Consumer Finances, 2010.
15. Pierce Atwood, "The One Big Beautiful Bill Act and Estate Planning: What You Need to Know," 2025; Carr, Riggs & Ingram, "Estate Tax Planning After the OBBBA," 2026.
16. Cerulli Associates, "Cerulli Anticipates $124 Trillion in Wealth Will Transfer Through 2048," press release, 2024–2026 update.
17. Visa Business and Economic Insights, great wealth transfer estimate, reported via CNBC, July 2026.
18. Nippon.com, "Nikkei Index Sets First Record High Since 1989"; Bloomberg, "Japan's Nikkei Closes at All-Time High, Surging Past 1989 Record," February 2024.
19. Kunio Okina, Masaaki Shirakawa, and Shigenori Shiratsuka, "The Asset Price Bubble and Monetary Policy: Japan's Experience in the Late 1980s and the Lessons," Bank for International Settlements / Bank of Japan Institute for Monetary and Economic Studies, 2001.
20. U.S. Census Bureau, Housing Vacancies and Homeownership survey, 2026; Andrew B. Hall and Jesse Yoder, "Does Homeownership Influence Political Behavior? Evidence from Administrative Data," Stanford Graduate School of Business working paper.

The Health and Wealth Equivalence: Why Knowing What to Do Is Never Enough

Tue, 25 Aug 2026 07:00:00 GMT

We All Know We Need to Save More and Exercise More. Here’s How to Close the Gap Between Good Intentions and Sustainable Execution

In this article:

The Behavioral Similarities: Why managing money and staying fit rely on the exact same psychological mechanics (and why willpower fails at both).
Environment vs. Motivation: How to utilize friction (like automated savings and removing temptations) to make good habits more achievable.
Closing the Execution Gap: Practical ways to build systems, embrace "enjoyable enough" habits, and protect the co-dependent assets of health and wealth.

I’ve never really had issues with keeping good financial habits (as you'd hope, given my career in financial planning). I contribute to retirement accounts on autopilot, keep my fixed expenses comfortably below my income, and rarely feel the need to spend impulsively. I was fortunate to inherit the saving gene early on in my life.

When it comes to physical health, however, the story is much different.

My eating habits are thoroughly average -- too much fast casual, too many sugary sodas, and admittedly nowhere near as many fruits and vegetables as I’d like. While I love active sports like tennis and beach volleyball, finding the time and logistically coordinating them in my busy schedule is tough. And going to the gym...? It always feels like an absolute chore.

I know what I’m supposed to do. I know what good nutrition and physical activity do for the body, just like I know what three decades of compound interest does for an investment account. Yet, putting in the daily work for physical longevity feels less like a smooth habit and more like dragging an anchor.

My natural resistance to frequent exercise and healthy eating helps me better understand why building long-term financial health is such a battle for so many people.

Physical health and financial health aren't just similar, they’re symbiotic. They operate on the exact same behavioral mechanics, yielding wildly different long-term results depending on our inputs. Understanding how they mirror each other can be the key to fixing both.

The Behavioral Mirror

Why is it so difficult to eat well and save money, even when we fully understand the benefits? The answer lies in our psychology. I’ll illustrate with a couple key drivers:

1. Hyperbolic Discounting (Present Self vs. Future Self)

Our brains are wired to prioritize immediate rewards over distant outcomes. A fast-food meal or an impulse online purchase triggers an immediate dopamine hit. A lower risk of heart disease or a slightly more comfortable retirement rewards a "stranger" living in our body 30 years from today.

When forced to choose between satisfying Present You or protecting Future You, Present You wins almost every time.

2. The Illusion of Small Exceptions

One missed workout won't make you out of shape. One $40 DoorDash order won't break your long-term finances. Because the negative consequences of small slip-ups are delayed and compound very subtly, it’s dangerously easy to rationalize them daily. We don’t really notice until those small exceptions become your default lifestyle.

3. The "Punishment" Trap

When healthy habits feel coerced (like forcing yourself onto a treadmill or adhering to a suffocatingly strict budget), your willpower eventually runs out. Relying on sheer discipline is a failing strategy for both fitness and finance.

The Shared Blueprint

When you examine basic financial habits alongside basic health habits, the structural parallels become obvious:

The Shared Blueprint

Financial Habit Physical Health Equivalent Shared Principle

Financial Habit

Automated Investments

Physical Health Equivalent

Meal Prep / Stocked Fridge

Shared Principle

Removes real-time willpower from the equation by making the right choice automatic.

Financial Habit

Emergency Reserve

Physical Health Equivalent

Cardiovascular Baseline

Shared Principle

Builds resilience against unexpected shocks — job loss on one side, acute illness on the other.

Financial Habit

Compound Interest

Physical Health Equivalent

Muscle Mass & Mobility

Shared Principle

Small, boring deposits made early pay exponential dividends in quality of life later.

Financial Habit

Diversified Portfolio

Physical Health Equivalent

Balanced Routine (Strength, Sleep, Diet)

Shared Principle

Over-indexing on one area while neglecting others creates systemic failure.

Building Systems Over Willpower

If you want to make lasting progress in either domain, you simply cannot rely on motivation alone. You have to change the environment in which decisions are made.

Lower the Friction for the Right Choice. In financial terms, this means setting up automatic transfers on payday so money is saved before you ever have a chance to spend it. In health, it means keeping healthy options front-and-center while making bad habits logistically annoying to access.

For example, if you have a soft spot for ice cream, stop keeping pints in the freezer. Forcing yourself to get dressed and leave the house just to satisfy a craving creates some friction between impulse and action.
Optimize for "Enjoyable Enough" Over "Perfect". If you hate running, don't force yourself onto a treadmill. Take a long walk, go for a swim, or play a sport. Similarly, if keeping a budget makes you miserable, ditch the spreadsheet and adopt a simple "pay yourself first" model.

Perfect is the enemy of sustainability.
Engineer External Accountability. When internal willpower fails, external structure steps in. Gamifying your goals works wonders. I just started wearing an Apple Watch and competing with friends on Apple Fitness -- a form of social feedback loop.

On the financial side, if you struggle with discipline, hiring a financial planner or coach can create structured accountability. While professional guidance has a cost, it is infinitely cheaper than the compounding cost of years of unforced financial mistakes.

Whatever system you build, the objective remains the same: design a lifestyle where your default options will slowly compound into the freedom and vitality your future self deserves.

Conclusion: Protecting the Ultimate Currency

At the end of the day, we need to recognize that physical health and financial health are co-dependent assets.

Money without health leads to a retirement spent in doctor's waiting rooms, unable to enjoy the freedom you worked so hard to build. Health without money creates chronic financial anxiety that degrades your physical well-being. You cannot sacrifice one to optimize the other without bankrupting your quality of life.

I may never naturally truly look forward to a routine gym workout, just as many people will never be interested in analyzing their cash flow. But we don't build these habits for the immediate process; we build them for the freedom they allow our future selves.

Remember, you don’t have to be flawless every day. All it takes is enough small, consistent life decisions to ensure the person we become 20 years from now has the health and independence they truly merit.

More Reading:
$500 Energy Bill: Non-Discretionary Inflation is Outrunning the American Household
The Bank of Mom and Dad: Supporting Adult Children Without Endangering Your Golden Years
Why Retirement Readiness Is About Much More Than Money

Back to Blog

The $500 Energy Bill: Non-Discretionary Inflation is Outrunning the American Household

Tue, 18 Aug 2026 07:00:00 GMT

In This Article:

The Core Diagnosis: Budget stress is drive by fixed-cost inflation in mandatory overhead like insurance, utilities, healthcare, and housing.
The Behavioral Reality: "Expert" budgeting help templates underperform. Studies show people cut spending when they author their own spending strategies.
The Inverted Playbook: To fix cash flow, flip the standard advice upside down. Stop obsessing over daily micro-decisions and start auditing your largest, automated monthly liabilities first.

I’ve never heard people talk about their energy bills as much as they have this summer.

“$350.”

“$460.”

“$1,300! I never should have put in that damn pool.”

It’s top of mind because people genuinely can’t believe what they’re seeing. They’re running to their neighbors just for sanity checks: “This can’t be right... right!?”

Granted, it’s been a hot summer and running the A/C has never been cheap. Still, the sticker shock on energy bills is a worrisome subject for virtually everybody.

From utilities to home and auto insurance, structural living costs have skyrocketed over the last several years with little relief in sight. So far, people have mostly managed to stay afloat -- propped up by record asset prices and an exorbitant amount of debt.

Beneath the surface, though, American households are starting to run on fumes. Cash flows are stretched thin, and budgets are breaking under the weight of bills people never explicitly chose to increase.

The Anatomy of the Squeeze

The main culprit behind modern budget stress is fixed-cost inflation.

Over the last few years, the line items rising fastest are mandatory and structural: housing, groceries, transportation, insurance, schooling, healthcare... If it's something you need, it's going to cost a premium.

You don't get to "choose" to pay your higher homeowners insurance rate this year. You either pay it or you lapse on your policy.

These fixed commitments also scale directly with life stages. As households purchase homes, raise children, and acquire assets, their baseline obligations grow. The result is that even high-earning, highly disciplined households are watching their monthly cash flow flexibility evaporate.

When even the most diligent budgeters are running on fumes, it’s a clear sign that the financial goalposts have moved.

Budgeting as a Diagnostic, Not Punishment

When cash flow feels tight, people often instinctually double down on discipline and jump straight to financial austerity. They think that cancelling a streaming service, cooking at home, and tracking every dollar with religious fervor will help save their budget.

Treating a budget as a moral instrument designed to enforce restraint or spark shame almost always fails. The real value of tracking your money is the ability to diagnose your spending habits.

Regardless of how analytical or responsible you are, most people consistently fail at accounting for where their money goes -- until they actually track it.

Why You Must Author Your Own Spending Plan

In a study on consumer behavior, researchers Johanna Peetz and Mariya Davydenko looked at what happens when people try to cut spending. They compared two groups: those handed "expert advice" and pre-packaged budgeting rules, versus those guided to generate their own spending strategies.

The results: people who authored their own strategies cut spending by roughly $228 more per month than those who simply followed expert advice.¹

Broken down more directly: budgeting strategies do work, but generic templates consistently underperform self-authored plans.

This cuts directly against the natural instinct to get advice on how to rein in spending. The goal is to facilitate a diagnostic process where households uncover their own levers and construct constraints they actually care to keep.

A spending plan sticks when it belongs to the person executing it. Creating customized rules for your specific spending situations results in making fewer tempting, impulsive decisions.

Need Some Direction? Start Here

So here’s what it boils down to: if you truly want to fix your spending problems, you’re going to have to do it yourself. Nobody else knows which sacrifices you’re actually willing to make, or which trade-offs you can stick to when the initial motivation fades.

However, the least I can do is hand you a map.

If fixed-cost inflation is what’s draining your cash flow, your strategy needs to invert the standard playbook. You start at the top: the largest, least-examined fixed bills that clear your account automatically every month, and work your way down.

1. Insurance: Annual Audit, Not "Set and Forget"

Insurance is typically a household’s largest unexamined recurring expense. Premiums creep up every renewal cycle, benefiting from lack of customer motivation to make a change (myself included). In reality, this is a great place to get some immediate relief.

Shop Annually: Loyalty doesn't pay. Shopping auto and homeowners policies across multiple carriers routinely yields substantial savings, and bundling both under one roof typically saves around 30%.²
Adjust Your Risk Retention: Raising an auto or home deductible from $1,000 to $2,500 saves an average of roughly 10-25% on annual premiums.³ If you’ve built up liquid emergency reserves, taking on a higher deductible shifts risk off the insurer's balance sheet and instantly lowers your fixed monthly baseline.

2. Debt Structure (Mortgages, Credit Cards, etc.)

Borrowing costs vary wildly across institutions, yet many people just accept that their debt structures are permanent once the ink is dry.

Tackling High-Interest Debt: If you are holding a variable-rate HELOC or high-interest credit card debt, interest swings can quietly cannibalize your monthly cash flow. Auditing lender margins, utilizing 0% APR balance transfer cards as a temporary structural bridge, or consolidating multiple high-payment, short-term liabilities into a single structured loan can buy immediate, crucial cash-flow breathing room.
Mortgage Recasting (No Refi Required): If you're holding a low fixed interest rate, refinancing makes zero sense. However, if you apply a lump-sum principal payment (from a bonus, asset sale, or accumulated savings), most lenders offer a mortgage recast for a nominal fee ($250–$500). They recalculate your monthly payment based on the new, smaller balance while preserving your original low rate and loan term.
Rate Shopping on New Credit: If you are shopping for a new mortgage or major loan, do not accept the first sheet you're handed. Obtaining five rate quotes instead of one saves an average of $1,200 over the life of a loan.⁴

3. Recurring Service Infrastructure (Cell Phone Plans, Internet, etc.)

Utilities, internet, and mobile carriers operate on legacy pricing models that penalize loyal customers while subsidizing new ones.

The Annual Retention Call: Set a yearly calendar reminder to call provider retention departments. A 15-minute phone call to negotiate internet, phone, or home security plans routinely can cut those individual line items substantially without changing the underlying service.

4. Discretionary Awareness: The Final Layer

Only after the major structural leaks are plugged does variable spending come into play.
Subscription creep is real. A $15 streaming app or gym membership isn't a "big bill," but stack ten of them together and it becomes a severe, steady drain. The purpose of auditing discretionary spending is to install intentional friction (i.e., separating your bill-pay accounts from your spending accounts).

Discretionary awareness is a valuable behavioral habit, but it won’t help much if you are already a responsible spender to begin with.

Conclusion

The cash-flow crisis facing American households today has almost nothing to do with how many times someone bought an afternoon coffee or ordered takeout on a Tuesday.

It is the direct result of non-discretionary inflation (energy, insurance, health coverage, and core infrastructure) ratcheting up the baseline cost of living.

Instead of policing the small decisions you make every day, start questioning the massive, automated invoices you pay every month. The bills that pose the greatest threat to your financial stability are usually more flexible than you think, if you're willing to go fix them.

More Reading:
The Bank of Mom and Dad: Supporting Adult Children Without Endangering Your Golden Years
The Intangible Portfolio: Why Retirement Readiness Is About Much More Than Money
A 401(k) Is a Savings Tool, Not a Retirement Plan

Back to Blog

References

Peetz, J., & Davydenko, M. (2021). Financial self-control strategy use: Generating personal strategies reduces spending more than learning expert strategies. Journal of Experimental Social Psychology, 97, 104189.
Consumer Reports. "Why Home Insurance Costs So Much — and How to Pay Less." Consumer Reports, 2024.
Kiplinger. "How to Save on Homeowners Insurance: Boost Your Deductible." Citing Insurance Information Institute (III).
Freddie Mac rate-shopping data, as reported in: Better.com. "How to Shop Around for Mortgage Rates."

The Bank of Mom and Dad: Supporting Adult Children Without Endangering Your Golden Years

Tue, 11 Aug 2026 07:00:00 GMT

When supporting an adult child crosses the line into enabling, and how to offer targeted support to build true independence while also protecting your future.

For decades, the financial blueprint of parenting was clear: you build a solid foundation, watch your kids step onto it, and eventually hand over the keys to their own independence.

Today, that blueprint is getting turned on its head. It is now more common than ever for an adult child to need a helping hand in life. According to a recent survey by Northwestern Mutual¹, a huge chunk of the population says they rely on their parents for money, including:

• 72% of Gen Z (29 and younger)
• 53% of millennials
• 33% of Generation X

Every parent wants to set their kids up for success. But as you balance that instinct with your own life goals (retirement, supporting parents, increasing standard of living, etc…), one question becomes incredibly important: is my support building an independent foundation or masking a developmental deficit?

After a lifetime of employment, you’ve earned the financial freedom you worked so hard for. Protecting your financial independence is the foundation that keeps the whole family secure.

Why Parents Keep Helping: The Psychology of Intergenerational Support

For parents, supporting children after they’ve grown up is a bit of an emotional vice. As your children grow up, the nature of parenting undergoes a dramatic shift.

When kids are young, problems are often straightforward and directly fixable: scraped knees, homework assignments, class projects, etc… But as children enter adulthood, their challenges grow infinitely more complex -- navigating volatile career paths, managing relationships, and confronting life on their own.

In this new stage, parents are forced to transition from solving to trusting. Yet there remains one domain where parents can still step in and exert tangible control: money. Giving your kid(s) financial support often feels like the one actionable way to protect them from life’s more difficult problems. After all, today’s young adults are navigating an economic landscape defined by skyrocketing housing costs, high student debt loads, and entry-level wages that have failed to keep pace with basic living expenses.²

Stepping in to assist with these real, structural hurdles? That’s an act of love much more than generational laziness.

The Ambivalence of Modern Parenting

One consequence of financial support, however, can be the conflicting emotions that naturally arise in parent-adult child relationships.

Developmental psychologist Karen Fingerman calls this concept intergenerational ambivalence [the simultaneous existence of both positive (love, closeness, support) and negative (frustration, conflict, obligation) feelings in relationships across generations].³

Adulthood today lacks a standardized, visible signal of competence. The path to financial self-sufficiency is full of starts and stops. So, parents often feel torn between two competing instincts:

The desire to protect and nurture their child.
The urge to foster their kids’ independence and protect their own financial future.

This ambivalence creates a perpetual tug-of-war. You want to ease their burden, but every time you give an adult child more financial support, the anxiety sets in: Am I helping them get ahead, or am I keeping them stuck?

Drawing the Line: Financial Enabling vs. Building a Foundation of Independence

The goal, therefore is to ensure your generosity truly serves your child’s growth without causing harm to your own financial goals.

Wanting to support your child through a tough economic climate is natural, but a line is crossed when that financial support becomes a permanent fixture of the parent-child dynamic.

Financial Enabling

To determine whether your generosity is serving its intended purpose, it helps to move past vague notions of "setting boundaries" and look at the clinical framework established by financial psychologist Dr. Brad Klontz: Financial Enabling.⁴

Financial Enabling occurs when a parent continually gives money to an adult child even when doing so hurts the parent financially or actively stifles a child’s motivation, maturity, and drive toward self-sufficiency. Enabling is characterized by a parent’s inability to say "no," driven by deep-seated guilt, fear of conflict, or a need to feel needed, regardless of whether the money actually improves the child’s long-term situation.

This level of dependency can also cause a child to resent their parents over the prospect of being cut off, and a pervasive sense of helplessness when facing adult responsibilities.⁵
If you’ve reached a level where giving your child money leaves you feeling drained, resentful, or anxious about your own financial security, you are likely caught in a full blown cycle of enablement.

Building a Foundation of Independence

To break or prevent this cycle, parents must fundamentally reframe how support is delivered. Here’s what you need to ask yourself:

“Is this money just acting as an unrestricted subsidy for their consumption, or does it build a foundation of future independence?”

An unrestricted subsidy is when a parent routinely absorbs an adult child's ongoing, daily operational deficits.

Examples:
- Paying off monthly credit card balances
- Covering grocery or subscription bills indefinitely
- Sending regular cash transfers to bridge rent shortfalls without addressing the underlying living costs

There are no clear behavioral milestones or expiration dates. Instead of encouraging your child to adjust their lifestyle, seek higher income, or build a budget, subsidies create a false baseline of comfort that requires continuous capital to maintain.

A targeted gift that inspires permanent capability, on the other hand, is a temporary framework designed to support an adult child while they gain their own integrity.

Examples:
- Matching dollar-for-dollar what a child saves toward a home down payment
- Covering tuition for a professional certification
- Funding a Roth IRA contribution

- Agreeing to pay health insurance for a strict six-month window during a career transition.
The key here is the explicit intention of being taken down once the building can stand on its own.

CAUTION

Unrestricted Subsidy

Structural Feature

Open-ended, recurring, covers lifestyle consumption

Outcome

Fosters dependency, strains retirement, masks budget deficits

BUILDS TOWARD

Targeted Support

Structural Feature

Earmarked, time-bound, tied to clear milestones

Outcome

Builds equity/skills, protects retirement runway, fosters autonomy

The Myth of Self-Made Independence

When we talk about adult children receiving financial support from their parents, it is easy for conversations to slip into subtle social shaming. We applaud the "self-made" young adult who owns a home at twenty-eight and scoff at the one receiving a monthly cash transfer from their parents.

However, a closer look at the data reveals the truth: it is increasingly rare for younger adults to navigate life without any assistance from parents.⁶ The difference between adult children who appear entirely independent and those who seem to struggle isn't necessarily grit or work ethic, it is often simply when and how parental support arrived.

Wealthier families typically frontload assistance invisibly. They pay for debt-free degrees, cover unpaid internships, or fund home down payments.⁷ Because this capital arrives early, these adult children appear entirely self-made.

Conversely, families who don’t frontload capital often end up providing reactive support, like sending $300 here and there for help with groceries or making a debt payment. Reactive support is hyper-visible, feels like a constant drain on the parent's retirement budget, and carries a social stigma.

Yet both styles flow from the exact same parental instinct -- just as co-signing a lease, hosting a boomerang child, or providing free childcare does. It’s all intergenerational support. I’m not telling you to stop helping the people you love; it’s more important to learn how to make that help count without draining your own future.

Closing

Supporting an adult child doesn't have to be an all-or-nothing choice between parental devotion and financial solvency. Love does not require a blank check with an indefinite expiration date.

By shifting your perspective -- away from fostering dependency and toward building independence -- you protect both your child's long-term potential and your hard-earned financial freedom.

If you are a parent that is struggling with ongoing financial support for an adult child, remember this: securing your own financial independence is not selfish.

By maintaining a clear, resilient financial foundation for yourself, you hand your children something far more valuable than a series of monthly checks: you give them the permanent freedom to build their own lives.

More Reading:
The Intangible Portfolio: Why Retirement Readiness Is About Much More Than Money
A 401(k) Is a Savings Tool, Not a Retirement Plan
Your Budget Shows Your Priorities. Your Calendar Proves Them.
The American Dream Is for Anyone, Not Everyone

Back to Blog

References:
1. Northwestern Mutual. (2026, June 1). America's Declaration of In-Dependence: More Than Half of Millennials and One Third of Gen X Still Feel Financially Dependent on Their Parents, According to Northwestern Mutual 2026 Planning & Progress Study [Press release].
2. de Visé, D. (2026, June 13). Gen X, millennials still get money help from parents. USA Today.
3. Fingerman, K. L., Chen, P. C., Hay, E., Cichy, K. E., & Lefkowitz, E. S. (2006). Ambivalent reactions in the parent and offspring relationship. Journals of Gerontology: Series B, 61(3), P152–P160.
4. Klontz, B., & Klontz, T. (2009). Mind Over Money: Overcoming the Money Disorders That Threaten Our Financial Health. Broadway Business.
5. Klontz, B. T., Britt, S. L., Archuleta, K. L., & Klontz, T. (2012). Disordered money behaviors: Development of the Klontz Money Behavior Inventory. Journal of Financial Therapy, 3(1), 17–42.
6. Perron, R. (2025, November). Parenting Longer. AARP Research.
7. U.S. Government Accountability Office. (2012, December 12). Higher Education: A Small Percentage of Families Save in 529 Plans (GAO-13-64).

The Intangible Portfolio: Why Retirement Readiness Is About Much More Than Money

Tue, 04 Aug 2026 07:00:00 GMT

Why stressing over ‘Do I Have Enough’ leaves retirees vulnerable on health, identity, and social connection.

When I ask people if they’re ready for retirement, they almost always assume I’m asking about money. They tell me about reaching 'their number,' shifting to a conservative asset allocation, or refining their withdrawal strategy.

What I actually want to know is whether they are truly ready for the life waiting on the other side of work. That question is usually much harder for them to answer.

In a survey of 9,000 adults across the US and Canada, Edward Jones and Age Wave examined what actually makes for a successful and happy retirement. They landed on a four-part framework: health, family, purpose, and finances.¹

Money is just one pillar out of four, yet it absorbs nearly all our retirement planning energy -- even though close to a third of new retirees in that same study reported struggling to find a sense of purpose once their job disappeared.

"Can I retire?" is really two separate questions hiding under one umbrella:

The Math Problem: Do I have enough capital structured to support my spending outlook for the rest of my life?
The Identity Problem: Who am I, what fills my days, and who fills them with me once the structure of work is gone?

The math problem is solvable with technology. The identity problem isn't.

We treat financial readiness as the whole equation because dollars are countable, neat, and predictable. Identity and connection don't get reported on a monthly statement, so they get put off. Yet people are continuously blindsided when the very things they ignored turn out to be what stings the hardest.

Why We Over-Stress About the Money Aspect

Psychologists have a name for what's happening between the two questions outlined above: attribute substitution. When a question is too difficult or uncomfortable to answer directly, the mind quietly swaps in an easier, adjacent question and answers that instead, often without us noticing the swap.²

"Will my life be fulfilling once I stop going into the office?" is an ambiguous and difficult question to sit with.

"Do I have enough saved?" is also hard, but it's the kind of hard we can find a definitive answer.

Part of the pull is that the financial question comes with levers to pull: contribution rates, asset allocations, withdrawal strategies, and target dates. Psychologist Ellen Langer terms this the illusion of control, our tendency to overestimate how much influence we have when a situation involves choice or active involvement, even when the real mechanics are closer to chance.³

A financial model hands a retiree dials to adjust; rebuilding a social circle hands them unstructured time and emotional vulnerability.

The financial side of retirement frequently becomes a security blanket, a quantitative retreat when we don't know how to architect a life beyond work. Running the numbers feels like progress, but too often, it’s just how smart people avoid the harder questions underneath.

Predicting a Good Life After Work

A longitudinal study from City University of Hong Kong tracked retirees across three critical milestones: six months before retirement, and then six and twelve months after.⁴ Researchers Dannii Yeung and Xiaoyu Zhou wanted to know which kinds of pre-retirement planning, financial, health, social, or psychological, actually predicted a better transition.

Financial planning remained an essential baseline, but not in the way most people assume. Social resources, the depth of a retiree's support network and their ties to family and friends, explained the gains in psychological well-being and life satisfaction a year into retirement. Financial resources alone never reached statistical significance as a predictor of post-retirement well-being.

These findings mirror the famous Harvard Study of Adult Development, the longest-running study of adult life ever conducted. Its director, Robert Waldinger, summed up eight decades of data with blunt clarity: the strength of a person's relationships predicts long-term health and happiness far better than social class, IQ, or wealth.⁵

Does this mean money is irrelevant? Of course not.

A 2023 reanalysis by Killingsworth, Kahneman, and Mellers, found emotional well-being does keep climbing with income for most people, with no hard ceiling.⁶ However, it climbs with diminishing returns -- each additional dollar buys a little less daily happiness than the last. And for a meaningful minority of people, higher income didn't move the emotional needle at all.

Financial security is an indispensable foundation. Without it, the freedom to pursue health, connection, and purpose simply isn't accessible. On its own, however, a million dollar portfolio won’t help you build a good life.

The Three Intangibles You Can't Buy When You Retire

If you want to perform real due diligence on your retirement, you have to audit three non-financial assets before you step down:

1. Identity Capital

The Default at Work

Identity is auto-generated by job title, authority, and company prestige.

The Retirement Reality

Strips the title overnight, leaving an identity vacuum if unaddressed.

The New Diligence

Decouple personal self-worth from professional output years before stepping down.

2. Social Infrastructure

The Default at Work

Frictionless, passive social interaction with colleagues by default.

The Retirement Reality

Social friction spikes; every relationship now requires explicit effort.

The New Diligence

Establish non-work "third places" (clubs, groups, networks) 5 years in advance.

3. Daily Rhythm

The Default at Work

External structure enforces wake times, movement, and mental stimulation.

The Retirement Reality

Momentum evaporates, risking sedentary and aimless daily routines.

The New Diligence

Design a self-directed weekly schedule balancing exercise, learning, and rest.

V. Redefining "Retirement Readiness"

Due diligence means auditing what an asset before you commit to it. There's no real reason that discipline should stop at a retirement account balance. Our health, our identity, and our relationships are all assets that deserve our attention.

The New Diligence applies the same rigor to what numbers can’t fully capture: where your identity lives outside your job title, who you get coffee with on a random Tuesday, or what an empty Thursday afternoon looks like eighteen months from now.

If you find yourself repeatedly checking your portfolio to soothe your anxiety about the future, recognize what’s actually happening: you are trying to solve an existential question with financial arithmetic. Looking at your account balance for the thousandth time won't help you find a purpose in retirement.

Take a fraction of that analytical energy and use it to stress-test the intangible assets in your life today, while you still have the security of a paycheck if the experiment fails.

In the end, money is just a tool. It can fund a good life, but it can’t design one for you. If you don't take the time to audit your life with the same discipline you bring to your portfolio, no amount of financial security will buy you life satisfaction on other side.

More Reading:
A 401(k) Is a Savings Tool, Not a Retirement Plan
Your Budget Shows Your Priorities. Your Calendar Proves Them.
The American Dream Is for Anyone, Not Everyone

Back to Blog

References:
1. Edward Jones & Age Wave. (2020). The Four Pillars of the New Retirement [Research report]. Age Wave.
2. Kahneman, D., & Frederick, S. (2002). Representativeness revisited: Attribute substitution in intuitive judgment. In T. Gilovich, D. Griffin, & D. Kahneman (Eds.), Heuristics and Biases: The Psychology of Intuitive Judgment (pp. 49–81). Cambridge University Press.
3. Langer, E. J. (1975). The illusion of control. Journal of Personality and Social Psychology, 32(2), 311–328.
4. Yeung, D. Y., & Zhou, X. (2017). Planning for retirement: Longitudinal effect on retirement resources and post-retirement well-being. Frontiers in Psychology, 8, 1300.
5. Waldinger, R., & Schulz, M. (2023). The Good Life: Lessons from the World's Longest Scientific Study of Happiness. Simon & Schuster.
6. Killingsworth, M. A., Kahneman, D., & Mellers, B. (2023). Income and emotional well-being: A conflict resolved. Proceedings of the National Academy of Sciences, 120(10), e2208661120.

A 401(k) Is a Savings Tool, Not a Retirement Plan

Tue, 28 Jul 2026 07:00:00 GMT

Having A Plan Means Knowing What To Do When the Paychecks Stop.

Article Highlights

Early retirement usually isn't a choice. 76% of Americans who retired earlier than planned in 2025 did so because of a health problem or a corporate restructuring, not because they hit their number.
The three-year gap in retirement expectations. The median worker expects to retire at 65; the median retiree actually leaves at 62, three fewer years of contributions stacked against three more years of drawdown.
A balance and a plan aren't the same thing. 58% of Americans think simply having a 401(k) is enough, and 48% don't have a written financial plan at all.
Social Security covers less than most people assume. It's built to replace roughly 30-40% of pre-retirement income, well short of the 70-80% most retirees actually need.
Fear of running out of money now outranks fear of dying. 67% of Americans say so, up from 57% just four years ago.
The bill nobody budgets for. Retiring before 65 can mean $8,600 or more a year in health premiums before Medicare eligibility kicks in.

I'd say retiring early, in some fashion, is a widespread goal of the American labor force. Hell, it's mine too: coffee in hand, the scent of pine, a sunrise morning somewhere in the mountains, sometime before 60 I hope.

That's the dream, financial freedom, the ability to do whatever you want whenever you want. Who wouldn't take that?

But for the millions of Americans chasing it, success in retirement is impossible without a good plan. So many hinge that plan on a 401(k), an IRA, and Social Security, when in reality, they aren’t enough.

To tell you the truth, odds are slim that any of us actually gets to choose our own retirement date. And if we don't get to choose, we're being forced out of the workforce for exogenous reasons, not because we decided the time was right.

So what happens on the day the paychecks actually stop?

The 401(k), the IRA, Social Security: these are real answers to a real question, which is how did you save. They don't answer the question that decides whether your retirement works or not.

How much of that money you can safely spend, in what order you draw it down, and what happens if you don't get to pick when it starts are the much more important retirement questions.

A Million in a 401(k) Doesn’t Mean You’re Ready

Steve Vernon, a research scholar at Stanford's Center on Longevity, has spent years studying this question. His argument, stripped down: 401(k) plans were built to help people save, not to tell anyone whether the saving adds up to enough or how to turn a balance into an actual paycheck once the real one disappears.¹

Saving and spending down are two entirely different disciplines. Saving comes first because without capital, a decumulation strategy is irrelevant. But once a foundation is built, spending down becomes the true test of whether a retirement survives.

Why is this phase discussed so much less? Because it requires answering a much harder question.

Psychologists Daniel Kahneman and Shane Frederick described a mental habit called attribute substitution, where a hard question gets quietly swapped for an easier one whenever the hard version doesn't have a ready answer.²

"Do I have enough money to generate sufficient income for the next 25 years?" is a much harder question to answer than "Do I have a retirement account?"

A 2026 Allianz survey found that 58% of Americans believe simply having a 401(k), 403(b), or IRA is enough, and 48% don't have a written financial plan of any kind.³ Most people answer the easy question and walk away believing they've answered the hard one.

Also, the Social Security part of the equation is weaker than most people understand as well. It's designed to replace about 30-40% of pre-retirement earnings, not to be a primary income source.⁴

Most planning benchmarks put the actual need closer to 70-80% of pre-retirement income to hold a lifestyle steady. That's a 30-to-50 point gap that has to come from somewhere, and "somewhere" is exactly the part of the plan that is complex and difficult to answer.

"Slim Odds" Undersells It

EBRI's 2026 Retirement Confidence Survey, the 36th year they've run it and the longest continuously running measure of retirement sentiment in the country, found that 46% of people who retired in 2025 left the workforce earlier than they'd planned to.⁵ The median worker still expects to retire at 65. The median retiree actually left at 62.

And for the people who make up that 46%, "exogenous reasons" is putting it mildly…
Seventy-six percent of early retirements in 2025 were attributed to something outside the person's control, split almost evenly between a health problem or disability (41%) and a corporate change like downsizing, closure, or reorganization (35%).

That means roughly only one in four early retirees left the workforce simply because they wanted to or could afford to. Only a quarter of early retirees get the version everyone pictures when they hear the phrase "early retirement," the victory lap, the story people tell at dinner parties.

And the backup plan of working longer flies out the window. What then?

This plan is essentially a bet on your health cooperating, on your employer not restructuring, on the option still being there when you go to use it. Three out of four early retirements in 2025 say that bet didn't pay off.⁵ A plan that only works if you get to choose your own exit date is not a sound plan.

So Many Are Ignoring Proper Financial Planning

Seventy-six percent of working Americans say saving for retirement is important, a number close to universal, and yet only 39% of that same group actually have a plan in place that would let them retire when they want to.⁶

A separate survey of people close to retirement found something almost identical approached from the other direction: 60% said they were very confident they'd retire on schedule, but only 27% felt financially confident about it, more than double the confidence in the outcome than in the math underneath it.⁷

This is present bias at work. We tend to keep pushing the harder version of a decision onto a future self who's assumed to have more time, more clarity, and more motivation than the person making the decision today ever actually has.⁸

The iron clad retirement plan doesn't get built this year because there's still time to build it next year, and next year runs into the same excuse, until finally the paychecks stop and you’re left with way more questions than answers.

When the Income Cliff Arrives Early

As I mentioned earlier, involuntary retirements are much more common than voluntary retirements. And involuntary retirements compress the value that we can extract from our saved dollars. This is why preparation for numerous outcomes is paramount.

For someone without a real withdrawal strategy, an early, forced exit tends to produce one of two opposite overcorrections: panic selling into a downturn because there's no plan telling them which accounts to draw from instead, or the reverse, holding too much in cash and losing ground to inflation because doing nothing feels safer than doing something wrong. Either way, the fear of running out of money is too strong of force to ensure a proper, diversified allocation.

67% of Americans now say they worry more about running out of money than about dying, up from 57% just four years earlier.³

That's not a number describing people who haven't saved. Plenty of people have more than enough stashed away. What they don't have is a solid plan that tells them, in advance, how to properly spend down their assets once the work paychecks stopped coming in.

Planning as Insurance, Not Ambition

Whether you hope to retire early or plan to work well into your sixties, building a strategy solely around the assumption that you get to pick your exit date isn't just optimistic -- it's dangerous.

A sound retirement plan functions like an insurance policy: it accounts for adverse events, including the very real possibility that your career ends sooner than you intended.

When you shift your mindset from hoping for an exit to insuring against an abrupt one, a quality plan can be summarized by three concrete mechanics:

Run an actual cash-flow projection. Calculate what your combined accounts will reliably generate in monthly net income under various market conditions.

Build a healthcare bridge plan even if you fully intend to work until 65. Someone pushed out at 61 or 62 can face annual premiums north of $8,600 even with access to employer retiree coverage. Marketplace premiums at that age can run more than four times what Medicare itself costs.⁹ Map out precisely how you will cover medical expenses for those gap years.

Stress-test the plan against an exit five years earlier than expected: Model what happens to your portfolio, cash reserves, and withdrawal rates if your income stops five years earlier than planned. If the math fails, adjust your asset location and liquidity buffers now while you still have leverage.

What Decides Whether That Morning Is Yours

When I picture my retirement, I think of slow mornings, a quality cup of coffee, and the freedom to spend the day on my own terms, completely unburdened by financial anxiety.

Whether that morning arrives at 58, 62, or 67, the ultimate goal is lasting peace of mind. Achieving that clarity means doing the uncomfortable work years in advance: building a resilient, adaptable framework that holds steady even when life doesn't go according to script.

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References
1. Vernon, S., Stanford Center on Longevity, research on 401(k) plans and retirement income adequacy.
2. Kahneman, D., and Frederick, S. (2002). "Representativeness Revisited: Attribute Substitution in Intuitive Judgment." In T. Gilovich, D. Griffin, and D. Kahneman (Eds.), Heuristics and Biases: The Psychology of Intuitive Judgment (pp. 49-81). Cambridge University Press.
3. Allianz Life, 2026 Annual Retirement Study.
4. Social Security Administration, Retirement Ready fact sheet (2025).
5. Employee Benefit Research Institute & Greenwald Research, 2026 Retirement Confidence Survey (April 2026).
6. Bipartisan Policy Center, retirement savings and planning survey findings.
7. Asset Preservation Wealth & Tax / PLANADVISER, retirement confidence survey findings.
8. O'Donoghue, T., and Rabin, M. (1999). "Procrastination in Preparing for Retirement." In H. Aaron (Ed.), Behavioral Dimensions of Retirement Economics (pp. 125-160). Brookings Institution Press and Russell Sage Foundation.
9. Vanguard / Mercer, retiree healthcare cost and Medicare bridge research.

Your Budget Shows Your Priorities. Your Calendar Proves Them.

Tue, 21 Jul 2026 07:00:00 GMT

We judge ourselves by our intentions and everyone else by their actions. To find out what you truly value, look no further than the intersection of money and time.

Ask me who I am and I'll talk about a list of intentions. I value my physical health. I love being in the mountains. I like giving back to my community.

These are some all true things about me. But this describes the person I want to become more than the person I actually am.

I rarely make it to the gym these days (although having a 5-month old may have something to do with that). The closest mountains are hours away and I don't have the time to visit them. I spend a lot more time helping retirees who have built up a significant nest egg than with pro bono clients who could seriously use my help.

There is a name for the mechanism behind this divergence. It's called the fundamental attribution error: a cognitive bias that says we judge other people by their actions and ourselves by our intentions.

If a coworker misses a deadline, it’s because they’re disorganized. But if you miss one, it’s because the week got away from you when you truly meant to finish. We extend ourselves a courtesy pass based on our good intentions while judging everyone else strictly on their results.

But what happens when you judge yourself strictly on your results? The question gets uncomfortable: Do you actually value what you think you value?

What the Money Catches

Dr. Daniel Crosby takes a swing at that question in his book The Soul of Wealth, and his prescription costs very little but may be slightly painful.¹ Pull out your credit card or bank statement.

Value healthy habits? The statement shows $200 of fast food last month. Value your kids' future? $0 in 529 contributions over the last year proves otherwise.

A credit card statement doesn't care about your intentions. It's a record of what you did with real money under real constraints, and it will contradict your self-image without a hitch.

Economists have trusted this kind of evidence for nearly a century, ever since Paul Samuelson formalized it in 1938 as revealed preference: watch what people choose when resources are scarce, because talk is free and spending is not.²

If you've never done this exercise, do it today. Most people I've walked through it find at least one line item that they’re embarrassed by, and that’s the point!

Dr. Crosby is right about using a credit card statement to audit your values. But I want to push his idea one step further, because only evaluating financials creates a blind spot.

What The Credit Card Statement Misses

Some purchases are intentions wearing a costume.

Picture the $5,000 mountain bike hanging in someone’s garage. An auditor reading only the credit card statement would write this person up as a committed cyclist. Whether the bike has touched dirt since January is a question the statement cannot answer.

This pattern is so common that economists have measured it. In a 2006 study titled "Paying Not to Go to the Gym," Stefano DellaVigna and Ulrike Malmendier tracked 7,752 health club members across three years of contracts and daily attendance.³ What they found:

Members who chose a flat monthly fee of over $70 attended an average of 4.3 times per month.
That works out to more than $17 per visit, when the same clubs sold a ten-visit pass for $10 per visit.
The average member in that group forfeited about $600 in savings over the life of their membership.

Their budget said "values fitness" twelve times a year, on autopay. The gym check-ins say otherwise. The dollar figures are from decades ago, but the ratio isn't. People often pay dearly for the privilege of not showing up to the gym.

Why do we do this to ourselves? Because buying the equipment feels like progress.

Psychologists Robert Wicklund and Peter Gollwitzer called the mechanism symbolic self-completion: when we commit to an identity we haven't earned yet, we acquire its symbols instead.⁴

Commit to an Identity ➔ Try to Buy It ➔ Feel Real Progress ➔ Skip the Actual Work

The purchase discharges the psychological tension of the unmet goal without requiring any of the actual work, and then it shows up on your bank statement as evidence of virtue.

So, the audit designed to catch the intention vs. action gap can itself be fooled. Sometimes it just represents a down payment on who you meant to become.

Time Can't Be Gamed

There is a second record, and it closes the loophole left by the credit card statement.
It’s your time.

Time is the one resource that cannot be spent aspirationally. Every hour gets used on something, whether or not you chose it deliberately, and the record of those hours is pure behavior.

This is where the two records stop competing and start working together. The bank statement shows what you funded. The calendar shows what you did. Your actual values live where the two records agree.

The bike purchase plus the Saturday morning rides is a value. The bike purchase alone is a hope.
It runs the other way, too, though. The hours reading to your kid or a casual walk in the park cost exactly zero dollars and will never appear in any financial audit, which is why time plays such an important role in our values.

To be clear, this isn't an anti-spending sermon. I've written before about research showing that money spent to buy back time is some of the best money you'll ever spend.⁵ But even that purchase has to survive the calendar audit: if the Saturday you bought back went to the couch and the phone, you just bought another bike for the garage.

The Double-Barrel Audit

Here's a good exercise to evaluate your values vs. intentions on yourself.

Step 1: Audit the Money. Pull last month's credit card/bank statement and find your top three non-essential spending categories. For each one, ask a simple question: Did I choose this, or did it just keep happening?

Step 2: Audit the Time. Take last week and estimate, honestly, where your non-working, non-sleeping hours went (round numbers work just fine). This half of the exercise stings more than the money version, because you can always earn more money but you can’t buy back time.

Step 3: Cross-Examine. Find out what you truly value by examining where your time and money collide.

Takeaways

Every value you claim is a hypothesis about yourself. The credit card statement and the calendar are how you test it.

High Money + Low Time = Aspiration. This is the gym membership you don't use or the books sitting unread on your shelf.
Low Money + High Time = Hidden Value. This is the time you spend scrolling social media, talking to a friend, or tinkering with a hobby. It shows what your brain naturally defaults to when constraints are removed.
High Money + High Time = Executed Value. You pay for the groceries, and you cook the meals. You bought the bike, and you ride it every weekend.

As for me, completing this audit came back with some findings:

Exercise has lived in the aspiration quadrant since my daughter was born: I still pay my membership fees, but the attendance doesn't follow. It moves to the calendar next month, three weekdays and a weekend day.
The mountains may be hours away, but I plan on spending most of my vacation time there.
I've started accepting pro bono clients because I want to give back to my community more.

Ask me in a month whether those were values or intentions. The records will answer either way.

Back to Blog

References

Daniel Crosby, The Soul of Wealth: 50 Reflections on Money and Meaning (Harriman House, 2024).
Paul Samuelson, "A Note on the Pure Theory of Consumer's Behaviour," Economica 5, no. 17 (1938): 61-71.
Stefano DellaVigna and Ulrike Malmendier, "Paying Not to Go to the Gym," American Economic Review 96, no. 3 (2006): 694-719.
Robert A. Wicklund and Peter M. Gollwitzer, Symbolic Self-Completion (Lawrence Erlbaum, 1982).
Ashley Whillans et al., "Buying Time Promotes Happiness," PNAS 114, no. 32 (2017): 8523-8527.

The American Dream Is for Anyone, Not Everyone

Tue, 14 Jul 2026 07:00:00 GMT

Economic mobility has fallen from a near-certainty to a coin flip, and half the country says the American Dream is out of reach. Is the path to prosperity still open?

Ratatouille is one of my favorite Pixar films. Never mind the masterpiece of a plot, I want to focus on the film's ultimate thesis: "anyone can cook," a line the culinary world treated as a punchline.

Ultimately, bitter critic Anton Ego, who originally sneered at Chef Gusteau for this proclamation, concludes that he finally understands what Gusteau meant: not everyone can become a great artist, but a great artist can come from anywhere. [scene]

In the same fashion, people have spent nearly a century misinterpreting "the American Dream" motto.

When historian James Truslow Adams coined the phrase in 1931, he described "that dream of a land in which life should be better and richer and fuller for every man..."

People who quote Adams often stop there, and by that impossible standard, the promise of the American Dream fails spectacularly across every generation. But Adams's sentence kept going:

"…with opportunity for each according to his ability or achievement," open to all "regardless of the fortuitous circumstances of birth or position."

The American Dream is not a structural warranty that every citizen ends up wealthy. Its promise is far narrower in nature: that eligibility is not limited before you apply. Today, many people view the American Dream as completely out of reach, and for some of them it will be. But that was always the deal.

It is for anyone, not everyone.

This leaves us with two critical questions: Is the American Dream still reachable for anyone? Or are the structural barriers for some too massive to overcome?

To find out, we have to look at the data.

The Sentiment vs. Reality Gap
In a comprehensive poll, CNBC and SurveyMonkey asked 4,130 adults about the current state of the American Dream. The sentiment was overwhelmingly bleak:

51% said the Dream is completely out of reach for most people right now.
45% said it is achievable only for some.
Just 6% believed it remains within reach for everyone.

Read strictly as a verdict on accessibility, public sentiment declares that the door to the American Dream is essentially shut.

The actual reality, however, tells a completely different story.

While a massive majority declared the Dream dead for other people, 44% of respondents stated they have personally achieved it already. This includes 68% of Boomers and 84% of the Silent Generation. Even 22% of Gen Z (the youngest cohort in the workforce) claims they have already arrived.

We have become a nation of individuals who have mostly made it, collectively mourning a country where we assume nobody can.

A nation that made it, mourning a country where nobody can

Perception of the American Dream vs. reported personal achievement of it

Source: CNBC/SurveyMonkey American Dream Pulse Survey, May 2026 (n = 4,130 U.S. adults).

This massive divergence between current personal achievement (44%) and national outlook (51% out-of-reach) is a documented psychological phenomenon.

In his 1998 book The Optimism Gap, journalist David Whitman detailed what he called the "I'm OK, They're Not" syndrome. Across almost every major indicator (local vs. national schools, to neighborhood vs. national crime, to personal vs. national finances), Americans consistently rate their own situations as stable or improving, while declaring the nation at large to be collapsing.

The underlying mechanics of this gap come down to a basic cognitive bias: we judge reality by how easily examples come to mind.

You know your personal financial health by checking your own bank or investment account.
You judge everyone else's financial health by looking at headlines.

And in the modern media landscape, grim headlines are the ones that get the most engagement. Because negative news drives clicks, algorithms cycle those doom-and-gloom news stories continuously. We are left measuring our own personal progress against a loud, highly amplified flood of national financial despair.

Economic Mobility Across Generations

To test the American Dream in its purest, most basic economic form, Harvard economist Raj Chetty asked a simple question: Do children grow up to earn more than their parents?

By linking millions of anonymized tax records and census files across generations, Chetty’s team mapped absolute upward mobility in a 2017 study published in Opportunity Insights. They gave the paper a title that tragically spoiled its own ending: "The Fading American Dream."

The headline numbers: of Americans born in 1940, about 90% grew up to out-earn their parents. Of Americans born in the 1980s, about 50% did.

The Dream faded most for the middle

Share of children who grew up to out-earn their parents, by birth cohort

Source: Chetty, Grusky, Hendren, Hell, Manduca & Narang, “The Fading American Dream,” Science (2017). Incomes measured at age 30, inflation-adjusted.

In four decades, the core promise of our country’s headline motto went from a near-certainty to a coin flip.

This data shows us that the widespread public frustration regarding economic stagnation is not just a collective bad mood. Children born today face structurally different odds than previous generations, and that mobility gap has only tightened since this research came out in 2017. Anyone selling the American Dream without acknowledging the realities of a harsh macroeconomic environment is choosing to ignore the data.

The public has absolutely noticed a change:

The Opportunity Poll: Since 2001, Gallup has asked Americans each January whether they're satisfied with "the opportunity for a person in this nation to get ahead by working hard." The measure has always moved with the economy, but it started at 76% and never fell below 53%, even after the Great Recession. This year it broke the floor: just 49% are satisfied, the lowest reading in the survey's history.
The Structural Barriers: In the CNBC survey, 81% of respondents named the soaring cost of living as the primary barrier standing between them and the American Dream, with 60% highlighting the cost of housing specifically.

The pessimists have brought their receipts. The data shows the road to economic mobility has objectively gotten steeper, which is why the survey sentiment is so grim.

Where the pessimists go wrong, however, is the ultimate verdict they draw from these facts. Yes, the odds of an average citizen achieving the American Dream sit at roughly 50/50.

But an economic coin flip is more statistical hurdle than permanently locked door.

Dice Roll or Grit?

One major, recurring objection to the achievability of the American Dream is the idea that personal effort matters far less than random luck.

This theory has serious academic backing. Cornell economist Robert Frank, author of Success and Luck, argues that while talent and hard work are absolutely necessary for success, they are rarely sufficient on their own. In a highly competitive world, something outside of your control almost always has to break your way to put you over the finish line.

The perspective that luck is more important than effort is rapidly gaining mainstream popularity, driven largely by a generational divide:

The Effort Camp: In the CNBC survey, 53% of Americans still believe hard work matters more than luck. However, Ipsos polling shows this group is rapidly aging. Older adults overwhelmingly credit success to personal grit.
The Luck Camp: Millennials and Gen Z are increasingly pointing to macroeconomic factors completely beyond an individual’s control.

This shift toward what some call "financial nihilism" among younger Americans is not entirely unreasonable. Soaring tuition debt, skyrocketing home prices, and a volatile white-collar job market have made these milestones much more difficult to reach for Gen Z and Millennials.

But this group is really only factoring good luck, and failing to account for bad luck. Where does luck do inflict the most damage? When there is little to no financial cushion.

Consider an untimely $200 car repair. For a household with healthy savings, it is a minor, annoying inconvenience. But for someone barely scraping by, that same $200 expense can trigger a brutal domino effect:

Car Breakdown ➔ Missed Shift ➔ Smaller Paycheck ➔ Missed Rent

Each domino falls heavier than the last. No amount of hard work can prevent a mechanical part from randomly failing. The people who weigh "luck" as more important than hard work are discounting how fragile life is without a financial buffer.

The luck camp is right about the complexity and uncertainty that comes with climbing the wealth latter. Where their argument breaks down, however, is the conclusion they draw from it: that luck matters more than hard work.

Luck decides the outcome of any single, isolated event. Effort shapes the statistical odds across hundreds of them.

You cannot control or practice being lucky. But by focusing on effort, you tilt the odds of a successful life in your favor.

The Optimists Strike Back

If access to the American Dream is deeply influenced by your financial starting point, we have to return to our baseline questions: Is the Dream still reachable for anyone? Or have the barriers become an impassable ceiling?

For those facing severe economic hardship, moving to the higher end of the wealth latter is increasingly complex, but not impossible.

The primary mechanism for breaking through those restraints? Education and specialized skills.

The Georgetown University Center on Education and the Workforce tracks the median lifetime earnings premium across different educational milestones:

The labor market posts its prices

Median lifetime earnings by education level; premium shown vs. high school diploma

Source: Georgetown University Center on Education and the Workforce, The College Payoff (2021). Medians; individual results vary by field of study and completion.

At the median, a bachelor's degree holder earns 75% more over a working life than a high school graduate.*

Correlation, causation, whatever it is, this massive gap in lifetime earnings cannot be hand-waved away as mere luck. Year after year, the labor market predictably rewards a credential.

To be clear, this isn't a glossy college brochure. For the purposes of this article, "education" does not exclusively mean a four-year university. The full menu applies: an electrician’s license, a plumbing apprenticeship, or a nursing certification are highly efficient conversions of effort into income. Sometimes they even yield a far better return on investment than a generic college degree.

The claim I’m instead making is that the mechanism for converting effort into income still runs through education and skills acquisition. And while high-quality education is undeniably easier to access for wealthier families, it’s one of the few doors left that is firmly open to anyone willing to strongly pursue it.

To prove my point, here is some data to back me up from the Chetty research: for children born at the 10th percentile -- the poorest American kids -- the probability of out-earning their parents was 70%.

While that is down from 94% in 1940, 70% is significantly higher than the 50/50 national coin flip. The children with the least amount of inherited advantage actually retain the best statistical odds in the entire dataset of outperforming the generation before them. Yes, it may indeed be a low bar to clear, but it is still improvement.

The roadmap exists. For a tangible look at what it looks like to follow it, we can look at the life of Ursula Burns.

[*The fine print: education earnings premium is a median, not a guarantee. Roughly a quarter of workers with a high school diploma out-earn half of associate's degree holders. Field of study moves the number enormously; so does finishing.]

The Roadmap

Ursula Burns grew up in the Baruch Houses, a public housing project on Manhattan's Lower East Side, raised by a single mother who took in ironing and ran a daycare out of the apartment to keep three kids in Catholic school.

Burns discovered early on that she was good at math. Understanding that an engineering would pay well, she decided to major in mechanical engineering at NYU's polytechnic school. She followed this up with a master’s degree at Columbia while working as a summer intern at Xerox.

She stayed at Xerox long-term: intern to engineer, engineer to executive assistant to the president, then up through the operations side.

In 2009, Xerox named her CEO, the first Black woman to run a Fortune 500 company. She later titled her memoir Where You Are Is Not Who You Are, which is an eight-word description that perfectly compresses the thesis of this entire article.

It is vital not to misinterpret her story, however. Ursula Burns is not definitive proof that we can all become a Fortune 500 chief executive. She is the lottery outcome who worked tremendously hard to accomplish her goals. And building an argument on lottery outcomes is how I end up writing the bootstrap sermon this piece is not meant to be.

Instead, look past the exceptional ceiling of her career and focus on the reproducible sequence:

Acquire Educational Skill ➔ Convert Effort to Income ➔ Build Lifetime Options ➔ Unlock Financial Stability

The peak of Ursula Burns’ story is exceptional, but the staircase itself is entirely commonplace. It is simply the educational premium climbed one single step at a time, executed by someone the American economy had no special plans for.

Takeaways

We do a profound disservice to the next generation when we present the American Dream as either a flawless guarantee or a total myth. The data is not so black and white.

When we look past the reactionary media headlines and look closely at the research, this is what remains:

The Danger of the Self-Fulfilling Prophecy: The ultimate danger of uncontrolled pessimism toward the American Dream is motivational paralysis. When the youth buy into the narrative that the system is entirely rigged, that effort matters zero percent and luck matters one hundred percent, the result is self-fulfilling.

If younger generations believe the door to financial prosperity is permanently locked, they won't even bother to try the handle. They will skip the certification, half-finish the degree, and discount their own effort before the market ever gets a chance to truly price their value. This cultural nihilism essentially closes the economic mobility door from the inside.
Eligibility Is Not an Outcome: The American Dream was never a promise that everyone would finish the race wealthy. It is an institutional pact ensuring that your starting line does not legally bar you from competing.
The Hill Is Steeper, But the Steps Work: Absolute economic mobility has shifted from a 90% certainty to a 50% coin flip over the last couple generations. The barriers of housing and living costs are very real. However, the mechanism to tilt those odds in your favor has not changed: acquiring market-rewarding skills through education and trades remains the most reliable engine for achieving the American Dream of financial stability.
Control the Odds, Not the Dice: Random bad luck can destroy a life built without a financial buffer, but you cannot practice being lucky. Effort is not a guarantee of success, but it is the only variable you truly own.

Chef Gusteau's motto that “Anyone Can Cook” survived its harshest critic because he finally understood the correct interpretation. The American Dream deserves the same.

Not everyone will achieve it, but anyone still can.

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Marriage Math: Why Young Women Are Cooling on Marriage and Kids Faster Than Young Men

Tue, 07 Jul 2026 07:00:00 GMT

Article Highlights:

A Widening Gap: Why young women are pulling away from marriage and children at nearly twice the rate of young men. Why the usual explanations miss the point.
The Mommy Effect: How previous generations of women systematically underestimated the career cost of motherhood, and only discovered the real price after the decision was made.
The Price Tag: Modern earnings data reveals a six-figure motherhood penalty on one side of the ledger, a fatherhood premium on the other.
The Other Half of the Math: Why the most visible costs of marriage and family are also the shortest-lived, and what the forty-year household ledger pays back.

In May, CNBC and SurveyMonkey asked 4,130 American adults about the American Dream.¹ Within the data lies a gender gap that I feel deserves more attention than it has received.

Among Gen Z respondents who haven't married, 38% of men say getting married is completely within reach. Among women, 24%. Asked whether they even want to marry, 22% of Gen Z women say no, double the rate of the men. On children, the distance widens: 29% of women say they're not interested, against 17% of men.

The harsh explanations and broad generalizations always arrive quickly whenever news outlets discuss the deteriorating popularity of marriage. "Dating apps broke everyone." "Nobody is socializing and meeting each other anymore." " Modern culture toxicized men." "The economy broke everything." The list goes on…

I have no real interest in relitigating any of the above statements. Instead, the result I find much more compelling is the consistent, double-digit gap between young men and young women on the topic of marriage and family.

I think there is a simple but fascinating explanation: the two groups are looking at the same marriage decision and seeing wildly different future outcomes.

The price tag associated with getting married and starting a family is inherently different for men and women -- and this new generation of women may be the first in history to calculate the cost accurately before deciding to pay it.

Underestimating the Effects of Motherhood

In 2018, economists Ilyana Kuziemko, Jessica Pan, Jenny Shen, and Ebonya Washington published a working paper with a title that gives away the finding: "The Mommy Effect: Do Women Anticipate the Employment Effects of Motherhood?"² Using decades of data from the United States and Britain, then end result was no.

The research found that women entering motherhood consistently underestimated what it would do to their professional lives. They struggled to keep working at rates they did before having a child. The biggest surprise, however, showed up in their own survey responses: attitudes about work and family shifted sharply after the first child, in a way that attitudes about almost nothing else shift in adulthood.

For decades, the average American woman walking into motherhood has had an overly optimistic projection of her own career prospects after having children. And this high cost only became apparent after the decision was already made.

So the question begs: what information is visible now that wasn't visible in previous generations of women?

The Gender Split in the Earnings Data

The answer to the previous questions comes from research that simply did not exist when today's 55-year-old women were marrying.

Economist Henrik Kleven has tracked American men's and women's earnings around the birth of a first child using data going back to 1968.³ Although there is a gender gap in wages, the two lines run almost perfectly parallel before starting a family.

Then they split. Sharply.

Fatherhood registers as a financial non-event. In fact, some research even points to fathers advancing professionally after getting married and starting a family (more in next section). Compare that with motherhood -- where women's earnings are reduced by roughly a third relative to men's, and this gap does not close.

A 2023 study in PNAS by Douglas Almond, Yi Cheng, and Cecilia Machado highlighted an even more stark reality. Instead of survey data, they used administrative earnings records from 811,000 American workers, a sample about a hundred times larger than anything before it.⁴

Mothers' incomes fell by roughly half after a first child and stayed depressed for years.

The key detail from this research: the penalty held even for women who out-earned their partners before the birth. Those women took a 60 percent hit relative to their lower-earning husbands, the largest drop of any group in the study.

The theory that couples rationally hand the career sacrifice to whichever partner earns less is disproven by this data. Simply put, in American households, the sacrifice goes typically to the mother, even if she is the breadwinner.

What Waiting Is Worth

Amalia Miller, using the government's long-running survey of American women, found that each year of delayed motherhood raised career earnings by about 10 percent.⁵ When you project that compounding difference over a standard 30-year career window, the math becomes staggering. For a college-educated professional, delaying motherhood by about 5 years can result in an additional $495,000 to $556,000 in lifetime earnings -- a financial premium that holds true even when controlling for education, total hours worked, and marital status.

On the men’s side a ledger, there were some ~slightly~ different results.

As 2025 Bankrate analysis of Census data found that full-time working fathers earn about 25 percent more than full-time working men without children, with no detectable parenthood penalty anywhere in the data.⁶ Sociologists have documented the fatherhood premium for decades.⁷

For a young men (like myself), family and money point the same direction. For us, these things come bundled with prosperity, which is a big reason why many men view marriage and family as a prerequisite for the American Dream.

For women, though, the survey demonstrates a mirror image. Gen Z women were much more likely than the men to name financial stability, the freedom to pursue their passions, and getting their dream job as requirements of the American Dream.

It's also very notable that women's disinterest in children exceeds their disinterest in marriage. If respondents were solely pricing the financial cost factor, that is exactly the pattern you would expect. The research says the penalty attaches to the stroller more than the altar, but we all know the two often go hand-in-hand.

Why This Generation Views Marriage & Family

With the gender pay gap closing (women ages 25 to 34 now earn about 95 cents for every dollar earned by men their age, down from a 26-cent gap in the early 1980s), opportunity for women to succeed in their careers is greater than ever.⁸ This is an extremely constructive trend.

One de facto externality of this trend, however, is that the financial costs associated with motherhood hamper a woman’s career trajectory more acutely than previous generations.

Millennial and Gen Z women have become much more public about this tradeoff, openly documenting the collision of career and caregiving. The financial penalty of leaving your career to raise children is now a topic that shows up in group chat or on Tik Tok. Clearly, this visibility is powerful enough to reshape how young women map out the entire trajectory of their lives.

The Other Side of the Story

[One acknowledgment before going further: this article deliberately stays on the financial side of the marriage equation. The emotional side has its own body of research, and it generally favors marriage. Married people report higher life satisfaction on average, especially those who describe their spouse as their best friend.⁹ I'm setting this research aside because it isn't the variable that changed. What’s changed between generations is the visibility of the financial math, so that's where this article lives]

If the story ended here, this would be a demographics article. But this article is about more than just demographics. It's about using psychology and financial awareness to improve our decision-making in life.

All of the data I have provided thus far concerns costs that are individual, near-term, and easy to see: the paycheck, the promotion, the professional sacrifice over next five years…
Regular readers will recognize the footprint of present bias all over this demographical trend.

As humans, we naturally over-weight what is vivid and immediate, while discounting outcomes that are diffuse and distant -- even when the distant rewards are significantly larger. In this case, the career penalty of early motherhood is highly visible and front-of-mind. The compounding, long-term wealth benefits of a shared household are not.

Two people sharing one roof and one set of fixed costs builds wealth much faster than two people running parallel lives. Jay Zagorsky's long-run tracking of American households found married people accumulating substantially more per-person wealth than their single counterparts, with the gap widening over the length of the marriage.¹⁰

The largest financial risk inside marriage, divorce, has itself been falling for decades, and economist Dana Rotz has shown that later marriage is a major reason why.¹¹ The very delay that protects a woman's earnings also appears to protect the marriage she eventually enters.

In my opinion, this is exactly why college-educated women marry at the highest rates of any group in the country and divorce at the lowest.¹² They face the largest earnings incentive to delay getting married and starting a family, so they delay. But they also very much understand that there is significant incentive to marry in today's America -- so eventually they do!

It's more of a societal scheduling problem rather than an official verdict. Intelligent women are seeing the career penalty for having children and responding accordingly.

The Takeaway

If you are a woman in your 20s or 30s, I want you to know that your caution is justified. The economics of getting married and starting a family at a young age just don’t make much sense for accomplishing your immediate goals.

The question is which window you are pricing on. The child penalty hits hardest in the first five to ten years; the joint household benefits run for forty years. Both equations deserve to be factored in, but only one of them is loudly discussed online.

For the older generations: if you are watching your adult daughter/son or granddaughter/grandson cooling on marriage, it's important to understand why that may be. Their knowledge of the economics of marriage is built on better database than yours ever was.

If you really want to help, the conversation worth having with this age group is about the emotional and financial experiences they can't immediately see at their age (and shouldn't be expected to). Tell them about why the positive effects of building a life together over the long run outweigh the negatives of the near future.

Finally, marriage requires a partner, timing, and luck, and the right financial answer varies enormously with your career, your field, your family support, and what you actually want from your life.

But if you find yourself firmly planted on one side of the fence, it's worth understanding more about the other side of the equation.

If you're certain marriage is an obvious move, ask whether you've priced the penalty that lands on one partner's career, and whose career that will be. If you're certain it's a bad deal, ask whether you're pricing a five-year window or a forty-year one. Strong certainty in either direction usually means you’re not evaluating the full picture.

Previous generations of women underestimated what motherhood would cost them. This one may underestimate what the benefits of a collective household may eventually pay back.

More Reading:
A 3-Step Formula for Combating Market Anxiety
Why Women Outperform Men in the Market but Worry More About Retirement
The Deferral Decade: The Hidden Price of 'Surviving' Middle Age

Back to Blog

References
1. CNBC/SurveyMonkey American Dream Pulse Survey, conducted May 6–11, 2026, n=4,130 U.S. adults.
2. Kuziemko, I., Pan, J., Shen, J., & Washington, E. (2018). "The Mommy Effect: Do Women Anticipate the Employment Effects of Motherhood?" NBER Working Paper 24740.
3. Kleven, H. (2022). "Child Penalties and Gender Inequality," NBER Reporter, No. 1.
4. Almond, D., Cheng, Y., & Machado, C. (2023). "Large motherhood penalties in US administrative microdata." Proceedings of the National Academy of Sciences (PNAS), 120(29).
5. Miller, A. (2011). "The effects of motherhood timing on career path." Journal of Population Economics, 24(3), 1071–1100. (Lifetime figures modeled across a 30-year career window based on Miller's baseline 10% annual delay premium.)
6. Bankrate analysis of U.S. Census Bureau Current Population Survey data (2025).
7. Killewald, A. (2013). "A Reconsideration of the Fatherhood Premium." American Sociological Review, 78(1), 96–116.
8. Pew Research Center analysis of Current Population Survey data (Published March 2025).
9. Grover, S., & Helliwell, J. (2019). "How's Life at Home? New Evidence on Marriage and the Set Point for Happiness." Journal of Happiness Studies, 20(2), 373–390.
10. Zagorsky, J. L. (2005). "Marriage and divorce's impact on wealth." Research on Aging, 27(6), 637–654.
11. Rotz, D. (2016). "Why Have Divorce Rates Fallen? The Role of Women's Age at Marriage." Journal of Human Resources, 51(4), 961–1002.
12. Wang, W. (2018). "The Marriage Divide: How and Why Education Matters for Family Stability." Institute for Family Studies Research Brief.

A 3-Step Formula for Combating Market Anxiety

Tue, 30 Jun 2026 07:00:00 GMT

Article Summary:
Financial media always tells us to "stay the course" when we're nervous about our money, but it doesn't always help ease our anxiety. This article walks through a three-step framework -- borrowed from a surprising source in child psychology -- for talking yourself through market anxiety: anchor to what hasn't changed, name what's actually making you nervous, then return to the plan that was built for exactly this moment.

Psychology professionals lay out a surprisingly useful roadmap for parents to follow when their children become anxious and fearful in life.

Start with what you know. Acknowledge what's uncertain. Return to what you know.

This 3-step framework was designed to help parents keep their kids emotionally regulated when things are falling apart, but the mechanics translate to investor anxiety almost perfectly.

A conversation with yourself that follows this same sequence has a much better shot at calming your nerves about the market than one that skips straight to reassurance alone.

Step 1: Start with What Hasn't Changed

Start with this question: what do you already know that no headline can change? Before you check the news, before you log into your brokerage account.

Let's say you're 60 years old, with a 20-30 year time horizon in front of you for your investments. You (or your financial advisor) have built your investment portfolio to stay afloat over that period, no matter the storm ahead. You also know that every major market crash in U.S. history has ended in a recovery. A bear market is inevitable -- that's why you're positioned the way you are. Eventually, something bad is going to happen, and that is okay.

This all sounds obvious when markets are doing well. It's so so much harder to remember when anxiety is climbing. When you're anxious, your brain loses its grip on common sense. Grounding yourself in boring but true facts can help calm your nervous system down.

Step 2: Name What's Scaring You

Every piece of financial advice online tells you to "stay the course." But when you're genuinely worried, that feels a lot more like a brush-off of your feelings than an acknowledgment, as if you're being irrational for stressing out.

Instead of pretending everything is fine, name exactly what is making you nervous.
Say something like: "I don't know how long inflation will continue to eat away at my grocery budget." Or: "I don't know if the market will perform poorly right after I retire."

Vague dread causes the highest levels of anxiety. A specific, bounded fear is much more manageable. Acknowledging exactly what you don't know proves you aren't losing your mind, you're just dealing with an uncertain and stressful situation.

More importantly, naming your fears typically stops you from hitting the refresh button on your media feeds every minute. This is exactly the kind of behavior to avoid when you're stressed out.

Step 3: Trust the Plan

Anxiety about financial outcomes runs on two things, and most people only address one.

The first is the downside scenario: realistically, how bad could this get?

The second is self-efficacy: do you actually believe you can get through it?

Research on financial stress consistently finds that people underestimate their own coping capacity. You run the loss scenarios down to every detail. But the part about how you would respond and adapt? A routine afterthought.

Step 3 is where you model the response.

"Here's what I do know: I am carrying two years of cash reserves for when s__t hits the fan. I've been through 2000, 2008, and 2020, and come out the other side okay. My plan has a proven track record."

There's no hard recovery date or market prediction in that statement. It redirects attention to what's actually within reach: the cash buffer, the process, and the plan's design. The plan exists precisely because bad years in the market were anticipated.

Why the Formula Works

A well-designed investment portfolio is built to prevent behavioral capitulation in a bad market, not to capture every percentage point of upside in a good one.

The threat that most damages long-term financial outcomes isn't any single risk in isolation; it can be one reason or a converging list of them.

Combine that anxiety with a headline-focused media cycle that amplifies the worst news available, and it's no wonder why people turn temporary market drops into permanent financial scars.

Running through this 3-step formula doesn’t make your anxiety about the market magically disappear. It will, however, keep you level-headed enough to let your plan do its job.

More Reading:
Why Women Outperform Men in the Market but Worry More About Retirement
The Deferral Decade: The Hidden Price of 'Surviving' Middle Age
Americans Are Spending Less on People and More on Screens. Here's What That's Costing Us.

Back to Blog

Why Women Outperform Men in the Market but Worry More About Retirement

Tue, 23 Jun 2026 07:00:00 GMT

Article Summary:

Despite a statistically better long-term performance record than men, women tend to worry about money more. That combination sounds contradictory until you look at what women are actually up against: a longer lifespan to fund, more career interruptions, lower lifetime earnings, and a wealth management industry built around someone else's financial life. The anxiety starts to make a lot more sense once you do the math.

If you look at the cold, hard data, women make great long-term investors. Multiple massive datasets confirm it: they trade less, follow the plan, and routinely outperform men over the long run.

Yet, when surveying a general audience of women about how they feel about their financial future, the answers rarely invoke confidence. Instead, women report significantly higher financial anxiety, worry more about outliving their savings, and are far less likely to even call themselves "investors."¹

Why does this paradox exist?

The answer: women aren't "lacking confidence"; instead, they are accurately calculating a much more difficult economic problem.

To bridge this gap, we have to look past standard industry narratives and examine exactly why superior performance and heightened anxiety coexist -- and why acknowledging this paradox is the key to fixing the system.

Behind the Numbers

Fidelity's 2021 analysis of 5.2 million customer accounts found women outperformed men by 40 basis points annually over ten years.² Wells Fargo's analysis of more than 50,000 accounts from 2018 through 2024 found female-led accounts posted the highest risk-adjusted returns in the sample, while taking on 13% less volatility.³ Warwick Business School put the outperformance gap at 1.8%.⁴

The performance gap between women and men can be traced back to a specific set of behaviors that long-term investing happens to reward.

Women often trade less. They're much more likely to build a plan and stick with it.

When markets fall, only 8% of women liquidate retirement holdings, compared to 15% of men.⁵ They're less likely to chase a new hot trend.

In 2021, 41% of female investors said they weren't interested in cryptocurrency, versus 24% of men.⁶ In a Merrill Lynch study of 35,000 households, married women outperformed men by at least one percentage point, single women by one and a half.⁷

Re-evaluating the "Confidence" Metric

In behavioral finance, the cost of overconfidence is well-documented. Brad Barber and Terrance Odean's seminal study on overconfidence and gender found that men traded 45% more than women, reducing their risk-adjusted returns by 1.4% as a result. For single men versus single women, that performance gap widened to 2.3%.⁸

The data suggests a profound irony: the traditional financial world has long treated the male relationship with risk as the default standard. Yet modern hyper-transactional platforms -- from gamified trading apps like Robinhood to prediction markets like Polymarket and Kalshi -- where user bases skew overwhelmingly young and male, frequently reward recklessness over strategy.

A recent Morning Consult study found that 71% of prediction market users are men under 45,⁹ and just over a quarter of American men aged 18–24 reported using a prediction market or gambling app in the past six months.¹⁰

When a 2025 eToro analysis reviewed more than 80 women-focused reports from the financial industry, it found that more than half portrayed women's investing habits in patronizing terms: "too nervous," "unsure where to start," or "too scared of losing money." Only one in five acknowledged that the caution the industry called a flaw is the exact variable driving women's superior returns.¹¹

The industry spent decades trying to fix a confidence problem women didn't have, rather than studying the strengths they already possessed.

Why Financial Anxiety Is a Rational Response

To truly validate the differences in financial experience between men and women, we must decouple investment capability from financial anxiety. The outsized anxiety for women in personal finance is not a symptom of under-confidence, but an entirely accurate reading of a complex, structural retirement problem.

The retirement risk women face is objectively larger and defined by variables men rarely have to calculate:

The Longevity Gap: Women live five to seven years longer than men on average, meaning their capital must stretch much further.¹² Because they are far more likely to navigate the final years of life solo, future healthcare and long-term care needs must be proactively funded ahead of time.
The Wealth Gap: Women earn less over their lifetimes (around 81 cents for every dollar men make) -- a gap that widens significantly with age.¹³
The Caregiving Tax: Women are disproportionately more likely to take career breaks for caregiving. Each year out of the workforce reduces lifelong income, retirement contributions, and Social Security credits.¹⁴

Because of these compounding dynamics, the National Institute on Retirement Security found that women aged 65 and older are 80% more likely than men of the same age to live in poverty.¹⁵

Given these statistics, it's no wonder women's financial fears are more pointed than their male counterparts. They are navigating a system where the baseline margin for error is simply much narrower.

Designing a System That Fits

Women seek professional financial guidance at higher rates than men. Half of women report working with a financial advisor, compared to just 37% of men,¹⁶ and 86% say professional management actively reduces their stress.¹⁷ By every behavioral measure, women are the ideal long-term clients.

However, the wealth management infrastructure hasn't fully caught up to their capacity for financial growth. Only 23% of U.S. financial advisors are women.¹⁸ More importantly, the industry's standard framework, which is built around short-term benchmark comparisons and asset accumulation, was originally designed around a linear, uninterrupted career path.

In reality, a woman’s financial trajectory is uniquely shaped by variables the traditional model treats as afterthoughts: career gaps for caregiving, a significantly longer lifespan, and the stark economic realities of widowhood. And when this framework fails to fit, women don't typically push back; they often disengage. Avoidance becomes the path of least resistance, inadvertently reinforcing the anxiety the system was supposed to solve.¹⁹

The discipline that makes women terrific long-term investors can stall into paralysis when the surrounding infrastructure fails to meet their actual needs.

Moving Forward

Good financial planning for women starts with a wealth management industry that treats their unique structural realities as a feature.

That means building portfolios that prioritize longevity over generic age-based rules. It means navigating income decisions through the lens of a longer lifespan. And it means factoring caregiving timelines directly into the mathematical model.

For a woman building wealth, the anxiety is real because the stakes are so high. A financial plan tailored specifically to these variables converts that protective worry into structured action.

Women controlled roughly $18 trillion in U.S. assets in 2023, a figure projected to nearly double by 2030 as a massive spousal wealth transfer takes place.²⁰ That capital is already being managed by people with sound instincts and a clear-eyed read on their own risk. It's time for the advice industry to catch up.

More Reading:
The Deferral Decade: The Hidden Price of 'Surviving' Middle Age
Americans Are Spending Less on People and More on Screens. Here's What That's Costing Us.
Why the Best Way to Spend Money on Yourself is to Spend It on Someone Else

Back to Blog

References:
1. Nationwide Financial. Women and Retirement Survey. nationwide.com
2. Fidelity Investments. (2021). Women and Investing Study. Analysis of 5.2 million customer accounts, 2011–2020.
3. Wells Fargo. (2024). Gender and Investing: Risk-Adjusted Returns Analysis. Internal study of 50,000+ accounts, 2018–2024.
4. Warwick Business School. (2018). Do Women Make Better Investors Than Men? Study of 2,800 investors over three years.
5. Nationwide Financial. Women and Retirement Survey. nationwide.com
6. Fidelity Investments Canada / MassMutual. (2021). Women and Cryptocurrency Survey.
7. Merrill Lynch / Age Wave. (2018). Women and Financial Wellness: Beyond the Bottom Line. Study of 35,000 households.
8. Barber, B. M., & Odean, T. (2001). Boys will be boys: Gender, overconfidence, and common stock investment. Quarterly Journal of Economics, 116(1), 261–292.
9. Morning Consult. (2025). Prediction Markets User Demographics Study. 71% of current prediction market users are men under the age of 45.
10. American Institute for Boys and Men (AIBM) & Ipsos. (2025). Poll on prediction market and gambling app usage among American men aged 18–24.
11. eToro. (2025). Women and Investing: A Review of 80+ Financial Industry Reports.
12. CDC / Social Security Administration actuarial data on gender longevity gap.
13. U.S. Census Bureau / Bureau of Labor Statistics. Current Population Survey. Women earn approximately $0.81 for every dollar earned by men.
14. Center for American Progress. The Women's Leadership Gap: Women's Leadership by the Numbers.
15. National Institute on Retirement Security. (2020). Retirement Insecurity 2021: Americans' Views of Retirement. Women 65+ are 80% more likely than men to be in poverty.
16. Wells Fargo. (2021). Women and Financial Wellness Study.
17. Fidelity Investments. (2021). Women and Investing Study.
18. CFP Board / Financial Planning Association. 2023 Adviser Demographics Report. 23% of U.S. financial advisors are women.
19. Kiplinger / Journal of Financial Planning research on financial anxiety and engagement avoidance behavior.
20. McKinsey Global Institute. (2023). Women and Wealth: The $18 Trillion Opportunity.

The Deferral Decade: The Hidden Price of 'Surviving' Middle Age

Tue, 16 Jun 2026 07:00:00 GMT

In This Article:

The Mid-Life Crunch: Why the simultaneous demands of a career, growing children, and aging parents drive happiness to a lifetime low around ages 40-50.
Deferral Bias : How sustained cognitive overload forces our brains to constantly postpone crucial, non-urgent decisions regarding our wealth, health, and relationships.
The Cost of "Autopilot": Why treating life as a series of logistics can lead to permanent drift, stagnant careers, and the modern phenomenon of "gray divorce."
Reclaiming Control: Actionable habit formation to protect your future self before "later" becomes "never."

Somewhere in your early-to-mid 40s, a particular kind of exhaustion hits. You've been running at full capacity for so long that the tiredness makes you numb. Not only numb to the pace, but somewhere along the way, numb to the decisions you stopped making for yourself.

Often, days start to look something like this: you handle a work crisis before 9am, field a call from your kid's school, schedule a follow-up for your dad's latest medical issue, have a quick text exchange with your mutually hardworking spouse about who's covering pickup, get back to the work crisis, and then realize it's 4pm and you haven't eaten.

You fix one problem and three more surface. You get through the week and the next week is identical. There's no slow period coming, this is just the pace of life now.

What makes it all so genuinely hard -- harder than anyone can understand until they experience it -- is that it's not optional and none of it is exaggerated. Demands are simultaneous and all legitimate. You can't triage a sick parent the way you'd push back a project deadline. The weight doesn't lift between crises, it just gets shifted around.

Kids are in their expensive years: sports, extracurriculars, overnight camps, school costs that expand faster than income does. Parents are aging on their own timeline, not yours, and starting to need substantial help navigating confusing medical bills, housing decisions, financial situations that are often more complicated than anyone expected. Not to mention a career that doesn't pause for any of this and a partner who is carrying an equal burden and needs you to be there, both physically and emotionally.

Then, somewhere so far down the list that it barely registers: yourself.

Dartmouth economist David Blanchflower studied hundreds of thousands of people across 132 countries and found that happiness follows a U-shaped curve over a lifetime: relatively high in youth (although I’m sure that’s arguable in today’s social media landscape), declining through early adulthood, hitting bottom right around age 47, then gradually climbing back.¹

The happiness curve tracks almost exactly with the structural demands of this life stage: when responsibilities are most significant.

Although I haven't lived through this era just yet, I do understand the consequential nature of living life on autopilot during the middle-age years. And I wanted to write about what it means to defer important decision-making over the course of this pivotal decade or so.

When the Urgent Outvotes the Important

Behavioral economists have a name for what happens to decisions under sustained cognitive load: deferral bias. When the brain is overwhelmed, it pushes aside anything that doesn't feel immediately urgent.

Sure, the mortgage/rent gets paid, the kids get fed, and the parent's doctor appointment gets scheduled, but the retirement contribution that’s much lower than what it should be? Still on the list. The career conversation you've been meaning to address? Next quarter. The couple’s weekend you’ve been talking about eventually taking? When the schedule calms down.

But we all know that’s just not how life works; things don't ever calm down.

The middle years aren't a temporary crunch with a clear exit. This is a decade-plus of sustained pressure, and the decisions that keep getting deferred have a way of becoming permanent.

Life on Autopilot

The major problem with deferral bias running for too long is that it doesn't stay contained to individual decisions. Rather, it becomes posture. People often stop actively managing the important things and start just getting through. The savings run on fumes, the relationship runs on logistics, the career gets put on the back-burner.

Life narrows down to the urgent, and the important gets left on a neglected list that never comes due -- until it does.

The evidence of this shows up in some predictable places. Gray divorce (couples splitting after 50) have roughly doubled since 1990.² These are often people who made it through the hard years more or less intact and their kids launched, only to find the relationship had been running on scheduling and obligation for so long that there wasn't much substance underneath it anymore.

Robert Waldinger's Harvard Study of Adult Development, which has tracked the same group of people for over 80 years, finds that the quality of close relationships is the single strongest predictor of late-life health and happiness (even more than wealth or career achievement).³

Relationships need sustained attention, which is exactly what the middle-age years make so difficult to give.

The career version of this issue is more subtle but just as common. People in this life stage frequently describe having made little to no upward progress for multi-year stretches. The investment and time it can take to rise in a career is just too much, and those decisions keep losing to everything else life has in store.

The decisions with the most leverage during this period (i.e. the ones that separate people who arrive at the other side with something intact from those who are starting over), are less about resources and more about attention.

They're about whether you treated a small number of important things as protected, or whether you let everything become equally negotiable.

Reclaiming Some Control

Look, I get it. Doing everything a financial planner and a therapist would recommend during this stretch of life is impossible. Sacrifices have to be made. There are just not enough resources available to support the exponentially growing list of responsibilities.

HOWEVER… it’s critical to prevent the kind of permanent drift that becomes very hard to reverse if we let the numbness take control. So here are some areas that need to be sorted out and maintained before entering this life phase:

On the financial side, the most useful move is getting as many decisions as possible automated or out of your own hands. If bumping a retirement contribution requires a conscious annual decision, it won't happen most years. There are forty other things with more immediate pressure. Automating the increase takes the decision out of a queue it will keep losing.

If your income streams and assets are getting complicated enough that tracking them is eating real time, hire the accountant. Your time has genuine economic value right now, and the tasks that consume the most of it for the least return are worth outsourcing first.

Your relationships need attention. They won't maintain themselves on goodwill and shared calendars. So hold that promise for the weekend away with your spouse. Codify that week-long excursion with friends. Make intentional time available with your children. Do what it takes to cultivate the relationships that will keep you anchored until the dust finally settles.

Career Growth is not worth neglecting. Have periodic, honest conversations with yourself and your partner (or a neutral third party) about what some realistic goals are and how to achieve them despite limited time. Don’t be someone that avoids this conversation until the kids are gone and the chaos dissipates, or until a job loss or health event forces the issue. Write down where things actually stand and what, realistically, still has runway.

The people who navigate this period best tend to have made parts of their life non-negotiable, because they decided much earlier that "I’ll do this when things calm down" is not a good action plan.

Conclusion

Be honest with yourself: are you actually putting life on a temporary hold, or are you letting it drift away? Because for many people experiencing this part of life, priorities tabbed as "later" are quickly becoming "never."

Not addressing your career, your relationships, and your own development is the same thing as neglecting them. And the payment for ignoring them costs us happiness in our final stage of life.

The version of yourself waiting at other side of this era depends on what you managed to protect during the years of chaos. It won’t be everything; nobody navigates this period without any loss.

But the financial position you held, the relationships you kept feeding, the career and sense of self you didn't let go entirely null? These are the things that will compound your joy once pressure lifts.

The time to tend to them is while you're still in the middle of it, which is the worst possible time, and also the only time that's available.

More Reading:
Hidden Fees, Anyone? High-Deductible Health Plans and the Shifting Burden of American Healthcare
Americans Are Spending Less on People and More on Screens. Here's What That's Costing Us.
Why the Best Way to Spend Money on Yourself is to Spend It on Someone Else

Back to Blog

References
¹ Blanchflower, D.G. (2020). Is happiness U-shaped everywhere? Age and subjective well-being in 145 countries. Journal of Population Economics, 34, 575–624.
² Stepler, R. (2017, March 9). Led by Baby Boomers, divorce rates climb for America's 50+ population. Pew Research Center.
³ Waldinger, R., & Schulz, M. (2023). The Good Life: Lessons from the World's Longest Scientific Study of Happiness. Simon & Schuster.

Hidden Fees, Anyone? High-Deductible Health Plans and the Shifting Burden of American Healthcare

Tue, 09 Jun 2026 07:00:00 GMT

Article Highlights:

The Healthcare Shift: Nearly 4 in 10 Americans on the ACA marketplace are now enrolled in high-deductible health plans (HDHPs).
The Reality: While HDHPs offer powerful tax advantages through HSAs for healthy, wealthy individuals, they function as a "hidden fee" system for everyone else.
The Risk: Decades of data show that high out-of-pocket exposure drives patients to delay doctor visits for both preventative care and life-saving medical care.

We are living through a slow-motion shift in how Americans pay for healthcare. More and more people are choosing high-deductible health plans (HDHP) as the source of their health insurance. Nearly 4 in 10 people on the ACA marketplace are in one now, up from 3 in 10 just a year ago.¹ In the employer market, over 40 million people are enrolled, a share that has nearly quadrupled in two decades.²

Many congressional representatives want to push that number higher under the guise of the following pitch: lower your monthly premium, put the savings into a tax-advantaged Health Savings Account (HSA), and take back control of your own healthcare spending. It’s not an entirely unreasonable proposition, especially for those who are healthy. Introducing some price pressure in the healthcare marketplace via increased competition is a positive. For many Americans, however, it’s a bad deal dressed up in the language of empowerment.

The source of our health insurance problem runs much deeper than just which level of health plan you choose (bronze, gold, etc.) -- the entire system is designed to make your true cost of care unknowable at the point of purchase. The deductible is the most egregious example of a broader architecture of opacity (coinsurance, out-of-network surprise bills, prior authorization denials, formulary tiers).

The shiny number, the monthly premium, is the one number that's clean and comparable, while everything else is muddy on purpose. But basing our healthcare decisions on paying the lowest premium is simply the wrong way to go about this process.

Clear As Mud

We all know what a hidden fee is: it is the cost that is technically disclosed but structured so that you will not think about it at the point of purchase.

Here’s some popular examples:

The airline ticket that becomes $80 more expensive at checkout.
The gym membership with a cancellation fee buried in paragraph nine.
The savings account with a monthly maintenance charge that only kicks in if your balance drops below a threshold nobody told you about.

Your health insurance deductible works the same way. It is right there in the summary of benefits that you agreed to. You know, the one you almost certainly did not factor it into your decision the way you should have.

There is a reason we rarely pay attention to the fine print of our health insurance plans. The monthly premium is right in front of our faces, and it's what insurers and policymakers compete on.

The deductible is different -- it is conditional, it is future-facing, and it only becomes real when you are already sick, scared, and financially exposed. Hidden fees persist in competitive markets because the architecture of the product makes the fee easy to ignore.³ The health insurance industry has perfected this.

The murkiness is not incidental. A KFF survey found that only 51% of Americans could correctly calculate what they would owe for a four-day hospital stay given a specific deductible and copay. Only 16% could correctly calculate their costs for an out-of-network lab test.⁴

In my opinion, this is not a public education problem. This is the direct result of a financial product that is more complicated than it needs to be.

High-Deductible Plans: Who benefits?

I want to be very direct about this. High-deductible plans work well for a specific profile: people who are generally healthy, with no chronic conditions and enough liquid savings to cover the full deductible without stress. Not to mention an income high enough that the HSA tax advantage is actually meaningful.

If that is you, and you are willing to do the active work these plans require, I can certainly make a strong case for enrolling in an HDHP.

The HSA is the key factor for these plans. The money goes in pre-tax, grows tax-free, and comes out tax-free for medical expenses. If you invest it rather than treating it as a healthcare checking account, it functions as an extremely powerful long-term wealth vehicle.

Arguably, the HSA is the best tax-advantaged account in our financial system, since it is the only one with a triple tax benefit. When you turn 65, you can use the balance for anything, paying only ordinary income tax on withdrawals, which makes it function like a secondary IRA.

Unfortunately, this is not how HSAs are often used. The Employee Benefit Research Institute, which tracks over 14 million HSA accounts, found that the average end-of-year balance in 2023 was $4,747 — less than the out-of-pocket maximum for individual coverage.⁵ Only 15% of account holders invest their HSA assets in anything beyond cash.⁵ One-third withdrew more than they contributed in 2023.⁵ People are mostly using these accounts to pay bills, not build wealth.

What Happens in a Health System Reliant on High-Deductible Health Plans

The RAND Health Insurance Experiment, still the most rigorous study of cost-sharing in healthcare, found that when people have more downside exposure, they reduce their use of medical care. Interestingly, people cut back on high-value care and low-value care in roughly equal proportions.⁶

That means that under an HDHP-like system, where the cost burden shifts from premium to out-of-pocket costs, people do not becoming savvier consumers. Instead, they just going to the doctor less. For healthy people who rarely need care, this doesn't matter much. For anyone managing a chronic condition, it’s a huge deal!

Research published in JAMA Network Open in 2026 found that cancer survivors enrolled in high-deductible plans had worse cancer-specific and overall survival than those with traditional plans. Delayed care and treatment nonadherence each accounted for roughly 30 to 70% of that gap.⁷ A separate study of over 150,000 patients found that those with high cost-sharing plans were 35% less likely to present with early, uncomplicated disease for surgical emergencies like appendicitis — and that the delays resulted in worse outcomes and higher total costs.⁸

Essentially, patients delayed care to avoid costs, but ended up sicker, and spent more anyway.

If You Opt For a High-Deductible Plan, Here is What You Must Do

If your plan qualifies and you are not maxing your HSA, you are leaving money on the table. The 2026 contribution limits are $4,400 for individuals and $8,750 for families. Contribute the maximum if you can, invest it, and try not to touch it. Pay current medical bills from your regular checking account if at all possible. The HSA balance that sits untouched for years is the one that builds into something of extreme use later on.

Learn your out-of-pocket maximum. This is the only number that tells you the true worst-case exposure in a given year. For most high-deductible plans it sits at $8,500 for individuals and $17,000 for families in 2026. That is your ceiling. You have to be ready to cover that amount in the event of an emergency. Seeing as many Americans can hardly cover a $1,000 surprise bill, I highly doubt HDHP enrollees are prepared for an unexpected trip to the emergency room.

Use price transparency tools before you need care. Federally mandated hospital price transparency has been in effect since 2021, and most major insurers now have cost estimator tools in their apps and member portals. A cash-pay price at a freestanding imaging center can be a fraction of what your in-network insurer would bill. This is the consumer-directed healthcare theory in practice, and it is genuinely useful if you do the legwork before you are sick.

When a High-Deductible Plan is Not Right For You

If you have a chronic condition, take regular prescriptions, or can’t cover a $5,000 unexpected bill, a high-deductible plan is likely not saving you money. In reality, it is just shifting when you pay more and making the total harder to predict.

On mid-tier plans like silver, the number to interrogate is not the deductible but the coinsurance. After you hit your deductible, you often owe a percentage of each subsequent bill (commonly 20 to 30%) until you reach your out-of-pocket maximum. On a $50,000 hospital stay, 20% coinsurance is $10,000 on top of your deductible. I’ve seen this blindside people who assumed hitting the deductible meant they were done paying.

On more comprehensive plans, the variable most people underestimate is network. A gold plan with a narrow network can cost more than a silver plan with a broad one, because a single out-of-network bill resets your cost-sharing exposure entirely. Before you enroll, verify that your primary care doctor and any specialists you see regularly. Don’t just assume!

The Big Picture

Agree or not, the direction we are headed in healthcare policy is pretty clear: more people in high-deductible plans, more responsibility shifted to patients, more reliance on consumer behavior to discipline healthcare prices.

There could be some positives from this shift, like steeper provider competition and increased price transparency. But healthcare is a really whacky market. Since we don’t really shop around for medical services, traditional rules of price competition are much less relevant.

The evidence from decades of research says that when people face higher out-of-pocket costs, they opt for less care.⁶ Some of that forgone care may be unnecessary, but a lot of it is critical.

I am not going to sit here and tell you to pay more for your health insurance if you don’t need to. I just want to point out the fact that our current healthcare system is purposefully designed to make your true cost of care incredibly murky. The least I can do is add some clarity to the problem.

All in all, make sure to take a moment to really understand what you are buying when you enroll in a health plan. Don’t let the premium be the only number you look at, it’s much more complicated than that.

More Reading:
Americans Are Spending Less on People and More on Screens. Here's What That's Costing Us.
Why the Best Way to Spend Money on Yourself is to Spend It on Someone Else
Why Travel and Experiences are a Triple-Threat Investment

Back to Blog

References
1. Politico, "Republicans See High-Risk Plans as the Future of Health Insurance," May 3, 2026.
2. Ibid.
3. Xavier Gabaix and David Laibson, "Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets," Quarterly Journal of Economics, 2006.
4. KFF, "Assessing Americans' Familiarity With Health Insurance Terms and Concepts."
5. Employee Benefit Research Institute, "Health Savings Account Balances, Contributions, Distributions, and Other Vital Statistics, 2023," June 2025.
6. RAND Corporation, "The Health Insurance Experiment," 40th Anniversary Summary, 2016.
7. JAMA Network Open, January 2026 (Oncology Nursing Society coverage, May 2026).
8. JAMA Health Forum, cited in Managed Healthcare Executive, March 2026.

Americans Are Spending Less on People and More on Screens. Here's What That's Costing Us.

Tue, 02 Jun 2026 07:00:00 GMT

Normal financial advice tells us that skipping the bar tab saves money, but it may be costing us in mental health over the long run.

A new survey from the American Psychiatric Association found that 54% of adults cope with loneliness by watching TV, movies, or online videos. Another 54% listen to music. Thirty-eight percent turn to social media. All of these come under a thread of emotional regulation, ways of numbing discomfort without confronting it.¹

While Americans continue to retreat from social life, they're also paying for the privilege of doing so. Many households are pushing past $100 a month in digital media subscriptions. Meanwhile, the number of adults who say they drink alcohol has fallen to 54%, the lowest rate in nearly 90 years according to a 2025 Gallup poll.² Gen Z drinks roughly 20% less than millennials did at the same age.³

Honestly, on paper, this looks like progress. Less money on alcohol and nights out = more money in the bank. But the trend is signaling something far more worrisome: the migration from social spending to isolation spending costs an enormous amount in mental health.

Two Budget Lines Moving in Opposite Directions

The decline in alcohol spending among younger generations is certainly real, but the explanations go far deeper than a sudden burst of Gen Z health-consciousness. The real culprit is a dramatic collapse in shared time. Data from the U.S. Surgeon General's advisory shows that the average American spent 30 hours per month with friends in 2003. By 2020, that number had fallen to 10 hours, with the sharpest drop among people aged 15 to 24.⁴

Less time with friends means less spending on the social activities that accompany them -- bars, restaurants, concerts, events. Researchers at Goliath Consulting note that Gen Z isn't inherently averse to drinking; they're spending the same proportion of after-tax income on alcohol as millennials did at the same age. They simply have fewer social occasions that call for it.⁵
So where is the money going?

Into subscriptions. Into streaming platforms. Into the exact services designed to fill the void once occupied by spending time with other people.

The result is a budget that has simply rebalanced itself according to these new generational rules. The line labeled "going out" has shrunk while the line labeled "me time" has grown. The problem is when too much "me time" leads to a deterioration in mental health.

The Mental Health Part of the Equation

Back in the day, personal finance didn't extend beyond dollars and cents. But today, things have changed; we have to evaluate saving and spending from not only a monetary perspective, but also from a happiness and wellness perspective.

Loneliness has a real, measurable economic cost that accrues to you, not just to society.
A 2025 systematic review published in the journal Pharmacoeconomics found that the economic costs of loneliness and social isolation range from $2 billion to $25.2 billion per year, driven primarily by healthcare utilization and lost productivity.⁶ A separate analysis from Deloitte and the Meharry School of Global Health found that mental health conditions generated $477.5 billion in excess costs in 2024 alone.⁷

I understand that these are macro figures, but they compound from individual decisions. Lonely people are more likely to seek medical attention, more likely to experience depression and anxiety, more likely to miss work. Every $15 streaming subscription that replaces a $30 dinner with a friend isn't necessarily a $15 saving. There's a possibility that it accumulates before resulting in a much larger bill down the line.

Even more interesting is the return on investment for loneliness reduction programs. Social return on investment studies consistently find that programs designed to reduce loneliness return between $2.28 and $13.72 for every dollar spent, primarily through reduced healthcare costs.⁸ Spending money on your social life is both good for personal happiness and for return-on-investment.

The Substitution Problem

As socializing has migrated online, the spending has migrated too. Streaming platforms, gaming subscriptions, and social media (free to use, expensive in other ways) have absorbed the hours and, increasingly, the dollars that used to go to physical presence with other people.

Of course, it's not all bad -- there are many genuine friendships formed online. However, the research on in-person connection versus mediated connection consistently finds that physical presence has mental health effects that screens don't replicate.

And, if you really study the numbers, the screens really aren't that much cheaper.
A Prime subscription costs $18/month. A night out can run $80–$150. Staying home and watching a movie on Amazon wins, right? But that comparison only works if you're substituting one for the other cleanly, which we all know is not how it works.

These platforms you're spending time on are specifically engineered to extract money from you in ways that are much harder to track than a restaurant tab. As I've covered before (here and here), these platforms don't just charge a subscription fee, they generate spending in various other ways.

Social media and online streaming fill the hours once spent with friends, simulating the feeling of social connection through notifications, reactions, and the sense that someone is always there. Meanwhile, our algorithms are serving us targeted ads, surfacing influencer recommendations that don't look like ads, and routing us toward frictionless in-app checkout. The lonelier we are, the more time we spend scrolling. The more time we spend scrolling, the more we buy. It's a vicious business model that runs on social disconnection.

You see, we have a problem: the money saved on avoiding the extra bar tabs isn't being redirected into other forms of genuine social investment. It's being absorbed, often invisibly, by the very platforms filling the void.

How to Budget for Social Connection Deliberately

Here's my suggestion: treat social spending as a wellness budget line (similar to a gym membership), not a discretionary one. Here's what that looks like in practice.

1. Audit the substitution trade-off. List what you're currently paying for isolation (streaming services, gaming, delivery apps for solo meals) and what you're spending on genuine social connection. The average American household now spends $52/month on streaming alone, up 22% from the prior year.⁹ If you're spending substantially more per month on subscriptions than on social activities, it could be time for a change.

2. Set a Social Connection Floor. Just as you'd set a minimum contribution to savings, set a minimum for social spending. No, it doesn't have to be a bar or pub, just anything that involves physical presence with people you care about. Maybe a routine trivia night, or a hike with friends, or a weekend trip.

3. Watch the streaming creep. Each new platform added incrementally costs less than a night out (exactly why it's easy to say yes to) and provides more options for spending your night in isolation.

4. Treat loneliness prevention like health & wellness. We all budget for gym memberships without needing to justify the ROI in detail. Social connection deserves the same treatment. The surgeon general of the United States declared loneliness a public health epidemic.¹⁰ Your budget likely isn't reflecting that.

Conclusion

Standard personal finance advice treats social spending as a luxury -- the first category to be slashed when times get tight. But looking at the data, cutting out human connection to save a buck is a textbook example of being penny-wise and pound-foolish.

The next time you review your monthly budget, look past the dollar signs. True financial health is just as much about maximizing your well-being as it is minimizing expenses. Spending less on alcohol is a great health choice, but spending less on people is a bankrupt strategy. If we want to solve the loneliness epidemic, we have to stop funding our own isolation and start investing in each other again.

More Reading:
Why the Best Way to Spend Money on Yourself is to Spend It on Someone Else
Buying Back Time: The High-ROI Purchase We Don’t Usually Make
Why Travel and Experiences are a Triple-Threat Investment

Back to Blog

References
¹ American Psychiatric Association, 2026 Annual Mental Health Poll, May 2026. psychiatry.org/news-room/news-releases/2026-annual-mental-health-poll
² Gallup, U.S. Drinking Rate at New Low as Alcohol Concerns Surge, August 2025. news.gallup.com/poll/693362/drinking-rate-new-low-alcohol-concerns-surge.aspx
³ International Alliance for Responsible Drinking / Fortune, Gen Z is drinking 20% less than Millennials, December 2025. fortune.com/2025/12/13/gen-z-drinking-20-percent-less-than-millennials-alcohol-productivity/
⁴ U.S. Surgeon General, Our Epidemic of Loneliness and Isolation, 2023. hhs.gov/surgeongeneral/reports-and-publications/connection/index.html
⁵ Goliath Consulting Group, The Sober Shift: Why Gen Z is Redefining Bars and How to Respond, August 2025. goliathconsulting.com/the-sober-shift-why-gen-z-is-redefining-bars-and-how-to-respond
⁶ Engel L, et al., "An Updated Systematic Literature Review of the Economic Costs of Loneliness and Social Isolation and the Cost Effectiveness of Interventions," PharmacoEconomics, September 2025. pubmed.ncbi.nlm.nih.gov/40524124/
⁷ Deloitte and Meharry School of Global Health, Mental Health Inequities Cost the US More Than $477 Billion, May 2024. meharryglobal.org/mental-health-inequities-cost-the-us-more-than-477-billion
⁸ Engel L, et al., PharmacoEconomics, September 2025. (See footnote 6.)
⁹ Reviews.org, The State of Consumer Media Spending Report, November 2025. einpresswire.com/article/866688605/report-streaming-price-hikes-push-annual-u-s-media-spending-to-3-350
¹⁰ U.S. Surgeon General, Our Epidemic of Loneliness and Isolation, 2023.

Why the Best Way to Spend Money on Yourself is to Spend It on Someone Else

Tue, 26 May 2026 15:36:34 GMT

Happy Money Series Part 4 | How to Spend Well and Enjoy Your Money More

"First round's on me!"

It is one of the most universal phrases in adult life. It represents a small celebration, a way of saying I am glad we are here. Often, it's a fight between friends to put a card down for a round.

Typically, our brains flinch at an $80 charge. In this scenario however, it feels like the money is well spent. Why?

Because that bill carries much more weight than just the $80 paper value.

The Happy Money Series So Far

This is the fourth and final piece in the Happy Money Series. The first three were all about how to spend money on yourself in ways that make us feel happier.

Turning life's little treasures into treats. Valuing travel and experiences over material purchases. Paying to get your time back. All very useful. All very true. But they are also all about spending on ourselves.

Part 4 is different; part 4 is about others. It's about why investing in other people and our relationships elicits positive feedback from our minds and is massively important for our social lives.

The Body of Research

In 2008, Elizabeth Dunn, Lara Aknin, and Michael Norton ran one of the most cited experiments in happiness research.¹ They handed people on a university campus either $5 or $20, and told half of them to spend it on themselves by the end of the day and half of them to spend it on someone else. That evening, the people who had spent the money on someone else reported being noticeably happier than the people who had spent it on themselves.

The dollar amount didn't make a difference ($5 or $20) -- as long as the participants spent the money on others, it made them happier.

When they asked a separate group of people to predict which group would have ended up happier, most guessed it would be the people who spent the money on themselves. They were wrong.

In 2013, Aknin and her collaborators studied prosocial spending in 136 countries.² The pattern showed up almost everywhere: rich countries, poor countries, market economies, subsistence economies. People who recalled spending money on someone else reported greater happiness than people who recalled spending it on themselves. It applies just as much to the people of rural Uganda as much as it does to citizens of the United States.

The data on workplace bonuses tells a similar story. In a study of Canadian employees who received a profit-sharing windfall, the amount of the bonus did not predict their happiness six to eight weeks later. The percentage they spent on others did.³

The amount you give does not seem to matter very much. Whether you give at all seems to matter quite a bit.

Why Generosity Facilitates Happiness

The instinct to share shows up in toddlers before they can fully talk. Studies of children under the age of two find they smile more when handing a treat to someone else than when receiving one themselves.⁴ It shows up in cultures with no concept of discretionary income. It shows up in rural societies where there is no market economy to speak of.⁵

Generosity was a survival mechanism long before it was a virtue. Humans who shared got included, and humans who got included survived. The concept is much older than money; money just happens to be the latest thing we have figured out how to share.

Dan Ariely, author of Predictably Irrational, discusses this important distinction. His thesis: humans operate inside two parallel sets of rules. One is the world of market norms, where an exchange is transactional and value gets measured in dollars. The other is the world of social norms, where the exchange is relational and value gets measured in connection, trust, and reciprocity over time.⁶

Generosity only produces a strong happiness response when the act stays on the social side of that line. Interestingly, Ariely's experiments found that the mere mention of money is enough to shift people out of the social frame and into the market frame, at which point they become more self-reliant and less inclined to help others.⁷

What does this mean for the purpose of this article and our daily lives? It means the dollars being spent on buying a round of drinks isn't really about the money at all. It's about investing in friendship through a form of social currency, and the brain rewards us most when we stop thinking about the dollars and stay in the moment.

An Irreplaceable Asset Class

Let me explain why this isn't just a behavioral curiosity and instead serves as a financial planning question.

The Harvard Study of Adult Development has been running since 1938. It is the longest study of adult happiness ever conducted. It has tracked the same set of men, and later their families, for more than eighty years, across multiple generations of researchers.

What does it keep finding? The single strongest predictor of late-life happiness and physical health is not wealth. It is not exercise. It is not career success. It is the quality of your relationships.⁸

Robert Waldinger, the study's current director, put it ever-so bluntly: people who are more connected to family, friends, and community are happier, physically healthier, and live longer than people who are less connected.

If a single variable predicts how the rest of your life is going to feel, you'd think we'd put more emphasis on it.

Spending on other people is one of the most direct ways to do that. It is a deposit into the relationship-based asset class that evidence points to mattering the most.

How to Reframe Your Mind Based on This Knowledge

When spending money on others, we need to think of money in terms of social norms, not market norms.

Okay, so what do I mean by that…

Think of it this way: let's say you're hosting a big Sunday barbecue for your family. Do you charge a $30 entry fee to each family member as a cost of doing business? Of course not! That would be wildly inappropriate, and no one would ever show up at your house again.

The barbecue is a social transaction, not a market transaction. The money spent on food and supplies for that Sunday dinner is an investment in our relationships. Sure, it shows up as a negative value on our bank statements, but the return on the investment represents a deposit into our social ledger.

Another example: when you give to a cause you actually care about, the research consistently shows the giving that produces the biggest happiness lift is the giving where you can feel the impact.

Recurring donations to an organization you have visited. A check written for a friend going through medical bills. A scholarship for a kid you know by name. Giving to causes important to us is where the brain lights up the most.⁹

Where to Draw the Line

There is one thing the research is very clear about. The happiness lift comes from genuine connection to the recipient, not from the act of giving itself.

Performative acts of "generosity" don't work. Our brains know the difference, and the research bears it out.¹⁰ When the motivation is being seen as generous rather than being actually generous, the happiness response shrinks or disappears entirely.

Tying It All Together

The Happy Money Series has been about one question. How do spend our money well to enjoy it more?

Three of the four answers turned out to be about you. The fourth one turned out to be about others -- and it may be the one that matters the most.

Taking care of ourselves financially is already a concept many of us struggle to fully grasp. The harder move, and the one most people do not make until it is too late, is realizing that money pointed at the people you care about does more for your happiness than the same money pointed at yourself.

The data makes this very clear. "First Round's on me!" was never about the money. It never is.

More Reading:
Buying Back Time: The High-ROI Purchase We Don’t Usually Make
Why Travel and Experiences are a Triple-Threat Investment
Want to Enjoy Your Coffee More? Don’t Buy It Every Day

Back to Blog

References
¹ Dunn, E. W., Aknin, L. B., & Norton, M. I. (2008). Spending Money on Others Promotes Happiness. Science, 319(5870), 1687–1688.
² Aknin, L. B., Barrington-Leigh, C. P., Dunn, E. W., Helliwell, J. F., Burns, J., Biswas-Diener, R., et al. (2013). Prosocial spending and well-being: Cross-cultural evidence for a psychological universal. Journal of Personality and Social Psychology, 104(4), 635–652.
³ Aknin, L. B., Norton, M. I., & Dunn, E. W. (2009). From wealth to well-being? Money matters, but less than people think. Journal of Positive Psychology, 4(6), 523–527.
⁴ Aknin, L. B., Hamlin, J. K., & Dunn, E. W. (2012). Giving leads to happiness in young children. PLOS ONE, 7(6), e39211.
⁵ Aknin, L. B., Broesch, T., Hamlin, J. K., & Van de Vondervoort, J. W. (2015). Prosocial behavior leads to happiness in a small-scale rural society. Journal of Experimental Psychology: General, 144(4), 788–795.
⁶ Ariely, D. (2008). Predictably Irrational: The Hidden Forces That Shape Our Decisions. HarperCollins. Chapter 4: The Cost of Social Norms.
⁷ Vohs, K. D., Mead, N. L., & Goode, M. R. (2006). The psychological consequences of money. Science, 314(5802), 1154–1156. Discussed at length in Ariely (2008).
⁸ Harvard Study of Adult Development. Findings summarized in Waldinger, R., & Schulz, M. (2023). The Good Life: Lessons from the World's Longest Scientific Study of Happiness. Simon & Schuster.
⁹ Aknin, L. B., Dunn, E. W., Whillans, A. V., Grant, A. M., & Norton, M. I. (2013). Making a difference matters: Impact unlocks the emotional benefits of charitable giving. Journal of Economic Behavior & Organization, 88, 90–95.
¹⁰ Aknin, L. B., Dunn, E. W., Sandstrom, G. M., & Norton, M. I. (2013). Does social connection turn good deeds into good feelings? On the value of putting the "social" into prosocial spending. International Journal of Happiness and Development, 1(2), 155–171.

Buying Back Time: The High-ROI Purchase We Don’t Usually Make

Tue, 19 May 2026 07:00:00 GMT

Happy Money Series | How to Spend Well and Enjoy Your Money More

Every Saturday afternoon through my high school years, I mowed the lawn at my childhood home. Week after week, I'd push that mower around in the SoCal heat, across the multiple grass areas in the front and back yard. All in all, the job took a grueling hour and a half.

Now I live in a house with a much smaller, but still reasonably sized, patch of grass. Ask me if I mow it myself. Heck no.

The way I see it, I pay for lawn care one way or another. I either a) pay money for someone else to do it, or b) pay with my time and suffer through the dread of a chore I can't stand.

For most people, option b) is the default. We grind through the chores we can't stand because outsourcing them feels lazy, or because we figure the money is better spent on almost anything else. It rarely registers as a financial decision at all. As it turns out, behavioral finance research says otherwise.

Time Is the One Asset You Can't Get More Of

I'm now the father of a three-month-old girl, so it’s no shocker that my free time is rather limited these days -- and that's with one kid. People with two or three are operating on a different plane of scarcity entirely.

It’s not just a parenting thing, either. Time collapses for all kinds of reasons: a brutal stretch at work, a parent who gets sick and suddenly needs you, a move, a health scare, a relationship that needs to be more nurtured. Life routinely reaches in and quietly garnishes your hours, and unlike money, there's no version of time you can save up or recover later.

Yet we keep telling ourselves we'll have more time later than we do now. So we white-knuckle through the present and promise ourselves relief down the road. The future arrives, the time still isn't there, and we make the same trade over again.

Researcher Ashley Whillans, who has spent her career studying this exact trade-off, has a name for what this adds up to at a population level: time famine. When her team analyzed a Gallup survey of 2.5 million Americans, 80% said they didn't have the time to do everything they wanted in a day.¹ People who feel time-poor are less happy, more anxious, and more stressed. In her data, time stress dragged on happiness more than unemployment did.

Now I have my doubts over the validity of a packed calendar representing more of a weight on someone’s life than being jobless; however, I am certainly on board with the notion that humans don’t fully comprehend the magnitude of unhappiness that can come from lack of time.

More Money Often Means Even Less Time

You'd expect wealthier people to feel the most time rich. Afterall, they can hire the cleaner, take the cab, or pay for the shortcut. But research suggest the opposite: across studies in Europe, Asia, and North America, people who earn more report feeling more pressed for time, not less.²

When a resource is valuable, we perceive it as scarce. The more you're paid, the more value you attach to your time. Thus, those who make more can feel the loss of time more acutely.

Removing The Negative

There's a popular rule in happiness literature: spend on experiences, not things. I even wrote about it just last week! However, there’s another missing piece to this equation: we can spend money to outsource jobs we don't like or simplify our lives.

Previously mentioned researcher Ashley Whillans and her frequent collaborator Elizabeth Dunn studied what happens when people spend money specifically to offload tasks they hate (cleaning, yard work, errands, sitting in traffic). The conclusion was that not enough attention goes to buying your way out of unpleasant tasks.

Think of it this way: nearly all discretionary budgeting is built around adding a positive: the vacation, the nice dinner, the concert. Very little is built around removing a negative. But the utility of each is asymmetrically weighted. Eliminating a recurring source of dread often does more for your weekly baseline than stacking one nicer thing on top of a week that still contains the dreaded thing. It’s hard to enjoy an experience as much if you know the house needs deep cleaning.

The Millionaire Who Still Mows His Own Lawn

Whillans and her colleagues surveyed 818 millionaires. Nearly half said they spent nothing outsourcing tasks they disliked.³ In separate studies, 99% of people could instantly name a chore they'd love to pay someone else to do, yet only 17% actually spent money to make that happen.
What does this mean? It means that the barrier isn't really money at all. As Whillans found, paying someone to do tasks we don't like can make us feel lazy or wasteful, so we opt out just to avoid that feeling.

In other words, it’s more of a permission problem than a capital problem.

So consider this your permission slip. As a personal finance specialist, I'm telling you it is a sound, defensible use of money to pay someone to take a chore you hate off your plate. Not a guilty splurge, not a luxury you have to justify, but a reasonable line item.

To be clear, this isn't a mandate to outsource every laborious task. If you genuinely don't mind mowing your own lawn, keep mowing it and bank the money. My point isn't that chores are beneath anyone, but rather that the dread you feel toward a specific task has a real cost, and you're allowed to spend money to make it go away.

Spending the Time Well Once You've Got It

One more note about buying time: it only pays off if you don't immediately squander what you bought back.

In a study comparing millionaires to people of average net worth, the wealthier group was happier in part because they spent roughly 30 more minutes a day on active leisure and 40 fewer minutes on passive leisure.⁴ Reclaiming two hours from a chore and pouring all of it back into scrolling Instagram doesn't move the needle. Spend it on people, movement, or something you actually find absorbing, and it does.

The Reframe: Keeping Tabs On Your Happiness Dollars

Want to put this into practice? Here's a simple way to start.

For one month, sort your discretionary spending into two buckets: money spent buying into a good mood (the retail therapy, the dinner, the ball game) versus money spent buying out of a bad one (the house cleaner, the grocery delivery, the express lane on your commute). Whillans' work suggests spending as little as $40 to save time can buy more happiness than spending that same $40 on stuff.⁵

You don't need to outsource everything. Just find the one or two recurring tasks that hang over your whole week and pay for somebody else to take care of it. You'll be surprised how much lighter the week feels once the dreaded thing is simply gone.

Frame it that way and hiring that house cleaner might not seem like such a splurge. Instead, it starts looking like an undervalued asset, especially in a season of life when the hours simply aren't there to be had at any price.

Back to Blog

References
¹ Whillans, A. (2019, January 24). Time for happiness. Harvard Business Review.
² Ibid
³ Whillans, A. (2019, January 24). Time for happiness. Harvard Business Review. See also Whillans, A.V., Dunn, E.W., Smeets, P., Bekkers, R., & Norton, M.I. (2017). Buying time promotes happiness. Proceedings of the National Academy of Sciences, 114(32), 8523–8527.
⁴ Whillans, A. (2019, January 24). Time for happiness. Harvard Business Review.
⁵ Ibid

Why Travel and Experiences are a Triple-Threat Investment

Tue, 12 May 2026 07:00:00 GMT

Happy Money Series | How to Spend Well and Enjoy Your Money More

In the winter of 2025, after five years of 'we should really do this,' my friends and I boarded a flight to Hokkaido, Japan. We were going to experience "Japow", the legendary powder snow that has made Hokkaido one of the most coveted ski destinations on the planet.

If you're not familiar, many ski resorts in Hokkaido (the north island in Japan) receive well over 500 inches of snowfall in any given winter. It's one of the snowiest places in the world, and we had been waiting years to finally ski it firsthand.

The planning phase of this trip alone was a rewarding process; locking down the tour company, mapping out resorts, researching restaurants, building a loose itinerary for Tokyo and Kyoto. Months of excitement and anticipation materialized on a shared google doc, building toward our January departure date.

Then, in the week before we left, a dry spell appeared in the forecast. We weren't too worried… a few days without fresh snow wouldn’t completely ruin the trip.

But it was not a just few days…

This dry stretch lasted our entire 10-day ski touring trip; not a single inch of fresh snow fell while we were in Hokkaido — one of the snowiest places in the world — during a winter where most of the resorts we visited recorded 400-600” snowfall totals. Not an inch.

I’d being lying if I said this didn’t crush our collective spirits. Yes, we were in Japan, one of the most incredible countries I've ever visited. Yes, we were all skiing blue-bird days together, eating amazing food, and exploring somewhere none of us had ever been. Yes, we still laughed the entire trip. We also spent several days in Tokyo and Kyoto before flying home, and those days were nothing short of spectacular.

But if you had asked me to rate my ‘Japow’ experience in real time? I would have given it a 7 out of 10. I came in expecting knee-deep powder, and the reality didn't match. When you build something up for so long, the gap between expectation and experience can be a gut punch.

Looking back on that trip today, though, I wouldn’t trade it for anything. I'd go back tomorrow if I could.

I was with some of my closest friends, who, on any given day are scattered across the country and are seldom all in the same city at the same time. We spent two weeks together exploring a country we had never seen. We skied nine days in a row, ate incredibly well, and laughed constantly, even at our own terrible snow fortune.

In hindsight? That trip is a 10/10. Easily.

That gap between a 7 in the moment and a 10 in the rearview is exactly what this article is about.

Memories don't just sit in some drawer in the back of our brains. Memories appreciate. When you understand the psychology behind why that happens, experiences (like my trip to Japan) stop feeling like a splurge and start looking like one of the best investments you can make with your money.

Memories Don't Depreciate, They Appreciate

There is a reason you remember your best trips more fondly than you experienced them in real time. It isn't selective memory or wishful thinking.

Through a process researchers call the Fading Affect Bias, the emotional weight of negative experiences fades significantly faster than the emotional weight of positive ones. The long airport lines, the bad weather, the flight delay; all details that lose their sting over time. The peaks survive.¹

A 2023 study out of Cornell illustrated this as cleanly as any: participants consistently rated past experiences more positively months later than they did in real time, and their satisfaction continued to climb the more they retold the stories.²

This is the opposite of what happens with material goods.

Buy a new car, and the thrill peaks somewhere around the first week. From there, hedonic adaptation kicks in and the brain recategorizes it from "exciting new thing" to "background of normal life." Your brain just stops registering the new car almost right away.³

Experiences work differently because memories are not static recordings. Every time you recall a trip, your brain reconstructs it. In the process of that reconstruction, the hippocampus and amygdala work together to give a higher emotional weighting to the positive moments. The result is a memory that improves with age.

The Three Phases of Experience Value

Material purchases have one moment of peak value: the day you buy them. Experiences are different; they pay you back in three separate ways.

Phase 1: Anticipatory Utility
The return on a great trip starts long before you board the plane. Behavioral economists call this anticipatory utility, and research suggests it can be the highest-joy phase of the entire experience.

A Cornell study found that people derive more positive emotion from anticipating an upcoming experience than from anticipating an upcoming purchase. The planning itself becomes part of the product.⁴ For our Japan trip, that meant five years of conversation, a shared Google doc, resort and hotel research, and restaurant lists. The trip hadn't even happened yet, and it was already delivering.

Phase 2: Experiential Utility
This is the phase we tend to over-weigh when deciding whether a trip was "worth it." It is also the most volatile. Weather, logistics, illness, and unmet expectations can all drag the real-time rating down. As my Japan trip demonstrated, a 7 in the moment is not the final score.
The experience is significant, but it is just one chapter of a three-chapter story.

Phase 3: Memory Utility
This is where the real return lives. Every time you recall the trip, share a story from it, or laugh about what went wrong, you are collecting a memory dividend. Unlike a stock that pays out once a quarter, this dividend has no dividend schedule and no expiration date. The more you retell it, the more embedded it becomes in your identity.

Economists and psychologists describe this as residual utility, and here’s what makes it genuinely remarkable from a financial perspective: the ROI on a memory technically increases every year you hold it, at zero additional cost.⁵

A $2,000 trip we revisit mentally and socially for the next 20 years is a completely different purchase than a $2,000 Peloton bike collecting dust in the garage. The price tag may be the same, but the return we receive is not even close.

The Social Dividend

There is one more dimension to the return on experiences that anyone who has sat around a dinner table with good friends understands:

Experiences are socially rich in a way that material goods simply are not.

Talking about a material purchase tends to trigger social comparison, while talking about an experience tends to trigger social connection. When you mention a new house or new car, people start benchmarking. When you tell the story about a trip you took, people tend to lean in and contribute to the conversation.⁶

My Japan story is a perfect example. Every time we tell someone about that trip, they ask about the food I ate, cities I visited, and places I saw. This is the social fungibility of experiences. They open conversations, build connections, and become part of a shared narrative between the people who’ve experienced something similar. Material goods typically fail to accomplish this same social value.

The Investment Reframe

The three-phase framework also undersells one of the best parts about investing in experiences: even the disasters can pay off.

Take a Europe trip I went on in 2017. My wallet got stolen in the airport right before I got on the plane to leave, which left me cash-strapped and credit card-less on a foreign continent (this was the pre-apple pay era). I had to get really creative just to move between cities, constantly asking strangers for help, and at one point, missing a flight from London to Germany because a train kiosk wouldn’t accept anything other than credit cards.

In finance terms, this was a total portfolio collapse. It was stressful and downright frustrating at times. But in the rearview mirror, that disaster is now one of my highest-growth assets. My pain made for a hilarious post-mortem breakdown of my travels. I get to share the story of my wallet-less, struggle-filled, solo Europe experience again and again.

When we spend on experiences, we are essentially diversifying our lives. We are moving numbers from our bank account into a permanent, inflation-proof residency in our own identity. Most material goods we buy end up in a landfill, but even an experience that registers as a "market meltdown" becomes a good story to tell forever.

So, stop looking at experiences as a "line-item expense." It’s a capital allocation toward the only version of wealth that actually appreciates as you age.

Conclusion

Travel, concerts, sporting events, festivals, beach days, holiday events, family dinners… these aren't frivolous line items to be justified after the "real" financial decisions are made. They ARE the real financial decisions, at least when it comes to where discretionary dollars generate the most lasting return.

The three-phase return on our experiences (anticipation, the event itself, and years of memory dividends) makes a genuinely compelling case for how we should spend our discretionary money.

Your financial plan should reflect that. Not in a reckless manner or at the expense of the fundamentals (emergency expenses, retirement saving, etc). However, if the choice is between another material purchase that flatlines in value and an experience that compounds in your memory for the next twenty years, the math skews toward the latter.

And for those approaching retirement: the window for some of these experiences is finite in a way that a bank account balance is not. Spend accordingly.

More Reading:
Want to Enjoy Your Coffee More? Don’t Buy It Every Day
Why Americans Are Still Grieving Over High Prices
Retirement Calculators Give You One Number. Reality Gives You a Range.

Return to Blog

References
¹ Walker, W.R., Skowronski, J.J., & Thompson, C.P. (2003). Life is pleasant and memory helps to keep it that way. Review of General Psychology, 7, 203–210.
² Kumar, A., Killingsworth, M.A., & Gilovich, T. (2014). Waiting for Merlot: Anticipatory consumption of experiential and material purchases. Psychological Science, 25(10), 1924–1931.
³ Frederick, S., & Loewenstein, G. (1999). Hedonic Adaptation. In D. Kahneman, E. Diener, & N. Schwarz (Eds.), Well-Being: The Foundations of Hedonic Psychology. Russell Sage Foundation.
⁴ Kumar, A., Killingsworth, M.A., & Gilovich, T. (2014). Waiting for Merlot: Anticipatory consumption of experiential and material purchases. Psychological Science, 25(10), 1924–1931.
⁵ Van Boven, L., & Gilovich, T. (2003). To do or to have? That is the question. Journal of Personality and Social Psychology, 85(6), 1193–1202.
⁶ Gilovich, T., Kumar, A., & Jampol, L. (2015). A wonderful life: Experiential consumption and the pursuit of happiness. Journal of Consumer Psychology, 25(1), 152–165.

Want to Enjoy Your Coffee More? Don’t Buy It Every Day

Tue, 05 May 2026 07:00:00 GMT

Happy Money Series | How to Spend Well and Enjoy Your Money More

There's a personal finance cliché that has been running for decades: stop buying lattes, invest the money instead, and you'll retire with an extra $170,000. David Bach, a renowned financial author who coined "The Latte Factor," was not wrong in pointing out the massive effect of compound interest over a long period.

Skipping the morning coffee run can indeed save us thousands over the long run, but the argument fails to address an even larger problem. Buying a latte every single day costs more than a few dollars — it costs us the enjoyment of the treat itself! When that $6 coffee becomes an everyday habit, we slowly kill the dopamine boost that made it worth buying in the first place.

Your Brain Is Tuning You Out

Our brains tend to return to a stable emotional baseline regardless of what's happening in your life. This is known as hedonic adaptation.¹

Research suggests that within a year of winning the lottery (yes, literally winning the jackpot) people's reported happiness typically reverts to where it started.

Coffee runs can be categorized by this same mechanism. I’ll elaborate:

My favorite coffee shop is San Francisco-originated Philz Coffee. As the father of a 3-month-old, in the mornings I crave a Mission Cold Brew from Philz more than sleep itself. But even in the sleep-deprived trenches, I’ve realized that if I let my favorite drink become a daily reflex, it loses its power to rescue my morning.

Our brains are mighty efficient at adapting. Once something occurs on a daily basis, our minds stop registering it as a meaningful event. That cold brew, ordered every morning without thinking, stops being a treat the moment it becomes a default.

Many Small Pleasures Trump A Few Big Ones

One of the most striking insights from the research paper 'If money doesn't make you happy, then you probably aren't spending it right' is the hidden power of adaptation: our brains possess a relentless ability to get used to whatever surrounds us, no matter how exciting the shift feels at the beginning.²

A new iPhone feels miraculous for all of two weeks, then reveals itself to be just a phone. The brain adapts to its best features and stops noticing them. But that weekend coffee shop visit you've been looking forward to all week long? That's still a big deal for the brain.

Small, somewhat frequent rituals resist adaptation better than big-ticket purchases. Because no two experiences are exactly the same, the brain stays curious rather than settling into a rut. The secret is finding the 'Goldilocks zone': frequent enough to sustain happiness, but rare enough to remain a treat.

Take A Page from European Coffee Culture

If you’ve ever been to Paris, Rome, or really any European city, you’ll notice that people treat coffee (espresso) a little differently. They order at the counter, pay with cash, actually converse with the employees, and then sit down to enjoy their drink.

Sure, they may be desperately lacking in the iced coffee category (in the summer especially), but they easily make up for it in coffee culture.

The entire experience is intentionally slow and deliberate. It has been like this for generations, which means European citizens purposefully don’t let the process of buying an espresso become mundane.

Stateside, it’s the complete opposite: loyalty apps, mobile orders, DoorDash, and coffee on the run. Our desire for convenience and easy access facilitates emotionless consumption of our coffee.

Our pivot to impersonal consumption is really just an act of sensory deprivation. You’ve removed the anticipation, the scent of the coffee beans, and the human interaction — all things that tell our brain something special is happening. We’ve removed any and all friction from basically everything we enjoy, yet wonder why that enjoyment starts to feel flat.

Friction, it turns out, is the secret ingredient to joy. Our brain needs contrast in order to register an experience as an event instead of a default.

The Latte Factor Got the Villain Wrong

David Bach had the right idea in villainizing auto-pilot spending; however, he misdiagnosed the symptom. Purchasing coffee is a joyous experience for those who truly savor that specific, $6 sensory experience. Why would we villainize something that brings us joy? That’s like, the whole point of money.

Still, buying coffee should be a decision, not a reflex.

Daily purchase should certainly be addressed but not eliminated in its entirety. Depriving yourself of these small rituals creates frugality fatigue, a kind of pressure that builds until it releases as "revenge spending" on something much larger and less considered.³ The goal is intention, not elimination.

Fun Coffee Friday Works Like a Charm

Here's how I like the reframe the coffee argument: we want to protect the things we enjoy from becoming joyless habits.

Try something like this: make coffee at home four days a week, and save your favorite drink for Friday (or Thursday if it’s been a long week!). It’s not a punishment for poor spending habits. Instead, you are just building up anticipation for the ultimate payoff of having that delicious treat.

When “Fun Coffee Friday” comes around 52 times a year, take your time and order it at the counter. You are now intentionally present for the experience of buying a coffee.

Neuroscience backs this up. Stanford neuroscientist Robert Sapolsky found that when monkeys received a food reward every time they completed a task, dopamine spiked in anticipation. But when the reward came only half the time (unpredictably), their brains released twice as much dopamine. The guaranteed daily treat produced less pleasure than the occasional one.⁴
The same applies to buying coffee.

Same $6 treat, completely new perspective!

This is what I mean by intentionally using friction to prevent the brain from tuning out pleasure. You're designing your week around a small, reliable reward and protecting it from the adaptation that would otherwise kill it.

This obviously isn’t unique to coffee, either. Maybe it’s your favorite take-out restaurant. Maybe it’s a glass of wine or a cup of ice cream. Whatever it is, the key is not to ruin through overexposure.

When the Finance Nerds Are Right

A caveat worth making: if your rent, debt, or car payment is crushing you financially, optimizing the frequency of your coffee purchases isn’t worth much thought. Shrinking a car payment by $400 a month is the equivalent of cutting 80 lattes. It's not even the same playing field. Don't major in the minors.

The "Make it a Treat" principle works best when your fundamentals are in reasonable shape and you're trying to figure out how to actually enjoy the money you spend. It's a quality-of-life tool, not a financial rescue plan.

Conclusion

Instead of heeding the advice of the unnecessarily frugal, try spending less often on things you love for the purpose of loving them more.

This frame of mind protects small, pleasurable experiences from your brain's tendency to render them routinely mundane. It turns a habit back into a treat and it only costs a little patience.

This week, try picking one thing you consume on autopilot and put a few days between yourself and it. No need to eliminate it; just make it wait. See how your brain reacts when the payoff finally arrives.

Next in the Happy Money Series: The Secret to Maximizing The Joy We Derive From Travelling

More Reading:
Why Americans Are Still Grieving Over High Prices
Retirement Calculators Give You One Number. Reality Gives You a Range.
The Scarcity Mindset Is Costing You the Best Years of Your Retirement

References
¹ Frederick, S., & Loewenstein, G. (1999). Hedonic Adaptation. In D. Kahneman, E. Diener, & N. Schwarz (Eds.), Well-Being: The Foundations of Hedonic Psychology. Russell Sage Foundation.
² Dunn, E.W., Gilbert, D.T., & Wilson, T.D. (2011). If money doesn't make you happy, then you probably aren't spending it right. Journal of Consumer Psychology, 21, 115–125.
³ Sharma, E., & Alter, A.L. (2012). Financial deprivation selectively shifts moral standards and compromises moral decisions. Organizational Behavior and Human Decision Processes, 119(2), 201–212.
⁴ Sapolsky, R.M. (2017). Behave: The Biology of Humans at Our Best and Worst. Penguin Press.

Why Americans Are Still Grieving Over High Prices

Tue, 28 Apr 2026 07:00:00 GMT

From denial to acceptance: A guide to moving through the five stages of grief during an inflation shock.

I recently walk into a Chase Bank branch, which, yes, is still a sentence in 2026. The teller I was talking with has a family of 4. While discussing the astronomical cost of raising kids in this day and age, he jokingly said “Every time I leave the house, it costs me $200”. While I'm sure he was embellishing a bit, the statement rings true for a lot of Americans.

Gas is $5/gallon. A casual dinner out for two means $100 with tip. Movie theatre tickets are $20 each (before concessions), and you can forget getting a decent seat at a live sporting event.

I mean I just bought a $30 polo from Target for goodness’ sake. What on earth happened?

Sadly...the prices we knew are gone.

The consumer price index has risen roughly 26% over the course of this decade¹. That's cumulative, and it's permanent. 5% inflation for services and healthcare. 3% inflation on goods. The sub 2% inflation of the 2010s is long gone.

Around 46% of Americans in a recent Politico survey said the cost of living is worse than ever². YouGov has tracked inflation as Americans' most important issue every year since 2022³.

What makes this dynamic even stranger: the economy, by most measures, is holding up. GDP grew 2% in 2025 despite everything thrown at it⁴. Unemployment has stayed near 4%. Private sector wages grew close to 4% year over year⁵. Leisure travel is booming. Many asset classes are hitting record highs. From a pure data standpoint, we should mostly feel better.

But that’s just not the case. Americans are still intensely grieving the prices of the past, and unable to fully move on.

The Five Stages of Inflation

In 1969, psychiatrist Elisabeth Kübler-Ross outlined the five stages of grief as a way to understand how people process loss⁶. Denial, anger, bargaining, depression, acceptance. She may have been writing about mortality, but the framework maps cleanly onto microeconomics.

We’re mourning the version of our financial lives that thrived in the low inflation, high employment era that existed before 2021. The prices, the affordability, and the budgeting plans built around these assumptions, are gone. We’ve been moving through these stages of grief ever since, some faster than others, most of us stuck somewhere in the middle.

Stage 1: Denial

"This is temporary. Prices will come back down."

In 2021 and early 2022, denial was the dominant narrative among economists, policymakers, and every day citizens. Inflation was "transitory” and supply chains would sort themselves out. The Fed would tweak rates and things would normalize. “Just wait and see”.

This is optimism bias at work — our tendency to believe that negative conditions won’t apply to us. We often expect a reversion to the mean, especially when the mean has been stable for a long time. After nearly two decades of 2% inflation following the 2008 financial crisis, our brains could hardly imagine a world where that wasn't still the baseline.

Chipotle Menu Board from 2017

Stage 2: Anger

"Why does my Chipotle burrito cost $13? This is insane!"

By mid-2022, denial had given way to anger. Grocery hauls that used to cost $100 were coming out at $150. Restaurant checks felt genuinely insulting. Discretionary dollars got squeezed to the margin. Shrinkflation went mainstream.

The behavioral concept here is loss aversion. Research from Daniel Kahneman and Amos Tversky found that losses register in the brain with roughly twice the emotional intensity of equivalent gains⁷.

This is why wage growth, even if it technically keeps pace with prices at the aggregate level, fails to fully register in our brains. The pay raise does register as a gain, but price increases register as an asymmetrically larger loss.

Stage 3: Bargaining

"I’ll shop at Aldi instead of whole foods. I’ll cut some subscriptions. I’ll cook more at home."

This is where many still lie on the grief spectrum. Bargaining can be productive, up to a point. You may find real savings by trading down on brands and renegotiating bills, but the deterioration in quality can wear on you after a while.

At some point, the mental gymnastics and constant problem-solving are just a way to feel in control without confronting the bigger picture. If your saving habits were built around a cost of living that no longer exists, no amount of budgeting optimization is going to let you catch up.

Stage 4: Depression

"Everything costs too much and my paycheck doesn't go far enough. Who do I blame for this?"

This is where a meaningful share of Americans are sitting right now as evidenced by these YouGov and Gallup Surveys.

Financial stress can lead to a kind of financial despondency, a sense that the game has changed in ways that can't be fixed and can't be adapted to.

The behavioral concept here is learned helplessness, a term from psychology that describes what happens when repeated exposure to uncontrollable negative outcomes causes people to stop trying to improve their situation, even when they could⁸.

After years of watching prices rise, watching the "temporary" narrative collapse, watching wages struggle to play catch-up, some have simply disengaged.

Retirement contributions get paused, planning conversations get deferred, and the future feels too expensive to think about clearly.

This stage is where money illusion does the most damage. We anchor hard to nominal prices (the dollar amounts we remember paying, like in the chipotle photo example) and every new price gets measured against that anchor.

The old price feels like the correct price, and everything since feels like being overcharged. That anchoring causes exhaustion and financial depression. With every new purchase comes financial fatigue.

Stage 5: Acceptance

"This is the world now. How can I adjust my plan to take advantage of it?"

This is where you want to end up, and where relatively few Americans have landed. Don’t mistake acceptance for resignation — this is much different than giving up. Instead, it’s just a brain update where you ditch the anchor that’s weighing you down to match a new reality and begin to think constructively.

The $12 lunch is now $17. Are we unhappy about it? Of course! But this is what lunch costs now. Whether that means earning more, spending differently, or rethinking the plan entirely — something has to give, and waiting for the price to come back down isn't an option.

This is obviously much easier said than done. Anchoring is one of the most persistent cognitive biases in behavioral finance⁹. Reference points are extremely stubborn, and the brain doesn't release them just because you decide it should.

Establishing a new anchor takes discipline in the same fashion that nostalgia can weigh us down whether we want it to or not. In some cases, it takes working through the many stages of grief rather than skipping to acceptance through willpower alone.

The practical version of acceptance looks like this: not waiting for prices to fall before making a financial decision, not deferring the retirement conversation until inflation “cools off more," not sitting on cash waiting for an economy that feels more comfortable.

Your financial plan either works in a 3-4% inflation environment or it doesn't. If not, it's time to make a change.

Most of Us Are Still Somewhere in the Middle

My honest diagnosis is that most Americans are somewhere between the anger and depression stage, often oscillating between the two depending on the week. It's a very reasonable response to a period of significant economic disruption that hit fast, has lasted longer than expected, and left a permanent mark on our wallets.

Acknowledging this grief is the first step toward actually moving on from it.

So What Do You Do Now?

Practically speaking, two things

1. Be aware of the stage you're actually in. If you're still angry, that's fine; but anger isn't a financial strategy. If you're in bargaining mode, it's worth asking whether the optimizations you're making are addressing the real structural issues in your financial plan or just creating the feeling of control. If you've gone quiet, if you've stopped making decisions because the whole thing feels pointless, that's the depression stage, and financial paralysis has a cost.

2. It’s time to update your anchors. This is something I still heavily struggle with…The prices we remember from 2017 are not a useful benchmark anymore. All they do is create bitterness.

Every time you catch yourself thinking "this used to cost X," that's the anchoring bias talking, and it keeps us stuck in the mud. Evaluate decisions based on what things cost now, not what you wish they cost.

Acceptance is building a plan that works in the world as it is. That's always been the job in personal finance.

The cost of living is now permanently higher and it sure. The question now: What are you going to do about it?

More Reading:
Retirement Calculators Give You One Number. Reality Gives You a Range.
The Scarcity Mindset Is Costing You the Best Years of Your Retirement
Your Body Has a Retirement Plan. It Probably Doesn’t Match Your Financial One

Return to Blog

References
¹ U.S. Bureau of Labor Statistics, Consumer Price Index Summary.
² Politico/Morning Consult Poll, Cost of Living Survey, 2025.
³ YouGov, The Economist/YouGov Poll: Most Important Issues Facing the Country, 2022–2025.
⁴ IMF Executive Board, 2026 Article IV Consultation with the United States, April 2026.
⁵ Deloitte Insights, US Economic Forecast Q1 2026.
⁶ Kübler-Ross, E. (1969). On Death and Dying. Macmillan.
⁷ Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision Under Risk. Econometrica, 47(2), 263–291.
⁸ Seligman, M.E.P. (1972). Learned Helplessness. Annual Review of Medicine, 23(1), 407–412.
⁹ Tversky, A., & Kahneman, D. (1974). Judgment Under Uncertainty: Heuristics and Biases. Science, 185(4157), 1124–1131.