Badass vs Dumbass
Master your Financial Kung Fu to be one and not the other.
Go to Sifu’s Notebook for 4 Expert Spending Tips & 3 Deadly Mistakes You’re Making
Primer: Who are Sifu & Ronin
Episode 25: Ronin is a Boss
Sifu: Ronin, we’re going to have a deeper dive into your spending habits. We’ll find out if you’re spending like a badass or drifting back to being a financial dumbass. A bit of a test.
Ronin: Doh. This is going to get ugly, isn’t it?
Sifu: All depends on you, #1.
Ronin: Why is this so important? If I make enough coin to get me to FIRE, isn’t that enough?
Sifu: Income is definitely a huge component to FIRE, but so is spending. How you spend will dictate what type of life you have in front of you. Ideally, you want to be financially free and feel that your life is fulfilling.
Ronin: Roger that, boss. Def want both! Don’t want to end up rich AF but unhappy in life. However, if you give me all that cash, I’m willing to work on the fulfillment and happiness part!
Sifu: Pffft. I bet you would.
Ronin: Ok boss. You’ve given me some great lessons already, so I’m thinking I can pass this one today. I’m ready – let the test begin!
Spend Like a Financial Boss
1. Spending on Education and Self-Improvement
Sifu: A true financial boss invests in education. Not just formal schooling but learning that improves oneself—books, courses, skills.
Ronin: Hey Sifu – you know I have a degree right? All good, no?
Sifu: Sure, but outside of that and what I’ve been teaching you, what have you done?
Ronin: Oh! I did start that cooking class we spoke about. It’s so cool – learning how to make delicious and healthy meals is a lot of fun.
Sifu: And I bet you’re saving your cash by eating out less now, yes?
Ronin: No question. Saving the cash for bigger and better things!
Sifu: Good good. I’ll have to try your cooking sometime – is it safe?
Ronin: Haha! Yeah man – you’ll love it. Done and done!
2. Spending on Health and Wellness
Sifu: Next, prioritize your health. A wise person spends on quality food, exercise, and preventive care.
Ronin: Ah, other than the occasional 2 a.m. pizza, I’m doing ok in that department. I even ask for extra veggies on it – you see, always thinking about my health, boss!
Sifu: Ya right, good one.
Ronin: Ok ok, not perfect. I am still hitting the gym – 3 times a week, as always. Gotta stay lean and mean, bro.
Sifu: Without a doubt. Staying healthy will serve you well now and into your retirement.
Ronin: Aye aye, cap! To me, FIRE means rolling in the green, but also being healthy enough to enjoy the fruits of all that labor. Otherwise, what’s the point, right boss?
Sifu: Couldn’t agree more, #1. It is impossible to enjoy your money without health, energy and full mobility. It’s true: “Health = Wealth”.
Ronin: Dropping truth bombs, bossman! Yeah boy!
3. Spending on Relationships
Sifu: Now, relationships are another wise investment. Time, gifts, shared experiences—they all build bonds that enrich your life.
Ronin: So buying my bud that round of drinks when we were bar hopping last weekend counts as ‘investing’ in our friendship, yes?
Sifu: Always skirting the line, eh Ronin? Too clever is not clever boy – be careful! True investment in relationships isn’t about material gifts but about time, energy, and thoughtfulness.
Ronin: Hmmm. So, instead of throwing benjamins at fancy dinners, I should just show up with a bag of Doritos and some genuine conversation?
Sifu: If that’s what they value, absolutely. Strong relationships support you emotionally and financially, indirectly benefiting your wealth. You can bank on that, #1.
Ronin: Brilliant!
4. Spending on Time-Saving Services
Sifu: Lastly, spend to save time. Time is a finite resource, and freeing yourself from mundane tasks can create opportunities for higher-value activities.
Ronin: Like how I’m paying someone to mow the lawn while I sit inside playing on my Xbox? I think I’m getting the hang of this ‘boss spending’ thing.
Sifu: Ha! Close, but think bigger. Use that freed-up time to focus on goals that enhance your career, finances, or personal growth. Unless you’re the Xbox Master – then go ahead and monetize that sucker!
Ronin: Oh, I get it. Less ‘Call of Duty,’ more ‘calls of duty’.
Sifu: Yes sir. Time is money, so don’t waste it.
Ronin: Roger that, boss.
Sifu: We’ve gone over the ways to spend wisely. Let’s see how you’re faring on the other end of the scale. Spending like a donkey is way too easy – I want to see how you’re doing there.
Ronin: Yikes! Ok … I think …
Spend Like a Financial Dumbass
1. The Trap of Lifestyle Inflation
Sifu: Ok, let us discuss the ways of the financial fool. First, lifestyle inflation—when your spending rises with your income. We spoke often about The Creep, haven’t we?
Ronin: You mean like when I got my first raise and immediately upgraded from instant ramen to sushi takeout every night?
Sifu: Yup. Instead of upgrading your lifestyle, you should put those extra funds into saving or investing.
Ronin: Yeah boss. I’ve gotten better over the last few raises, and tried to keep my expenses the same. Maybe a small celebration meal here and there, but nothing major.
Sifu: Well done, son. Now, you’re a boss!
2. Impulse Purchases
Sifu: Next, the temptation of impulse purchases. How are we doing on that front?
Ronin: Ah, my Achilles’ heel. Who can resist half-price Adidas kicks? Damned that Cousin Cletus – it’s all his fault. He’s buds with the guys in the store, and they’re always giving him “friends and family” discounts.
Sifu: Hmmm. Did you happen to need new shoes, #1?
Ronin: E-nope. But they are super slick, dude!
Sifu: Thought so, numbskull. Take a moment to consider if the purchase aligns with your goals—or if it’s just a fleeting desire.
Ronin: Oy! Got me there, boss.
3. Debt-Fueled Spending
Sifu: Lastly, the worst habit of all—debt-fueled spending.
Ronin: You mean credit cards, boss? My frenemy. ‘Buy now, pay later’ – gotta admit, sounds fantastic!
Sifu: Killer marketing kills you. Debt can trap you in a cycle. Interest payments erode your wealth, leaving you working for lenders rather than building your own financial future. Who’s the boss now, #1?
Ronin: Dang it! We really don’t need to give more of our money to the banks, do we, Sifu?
Sifu: True that. I personally use the banks, and don’t let them use me. You can learn to do the same. Use debt wisely, or better yet, avoid it. Living within your means is key to true financial freedom.
Ronin: Are we done, Sifu? How’d I score on the test?
Sifu: Hmmm. #1, my tally shows that you’ve done well in some areas and are lacking in others. Not the best, but also not the worst. I’ll give you a C+ today.
Ronin: C+? Woo-hoo! I was totally expecting a big ole F.
Sifu: Ah, ye of litte faith, #1. You should be more confident that you are progressing, albeit slowly, towards your FIRE goals. It takes time to master all this business. Stay patient and stay strong. Remember, I have your back, so you got this, my man!
Ronin: I’m giving you a solid A, boss! Now, I’m fully open to negotiation. If a 3 course lunch at the isakaya in on the books for us, I could be persuaded to get that to an A+. What you say, bossman? You ready to get upgraded?
Sifu: Hahaha. Too clever is not clever, boy. Let’s go – on me!
Sifu’s Notebook
4 Expert Spending Tips & 3 Deadly Mistakes You’re Making
The best spending you’ll ever do is thoughtful and aligned with your values, bringing long-term happiness and growth—like investing in yourself or on your relationships. On the other hand, mindless spending, driven by impulse or habit, can quickly drain your finances and leave you with regret. It adds no real value and can sabotage your financial goals. By being intentional with your money, you can avoid these traps and build a more fulfilling, secure future.
Spend like a Financial Boss – The Best Spending You’ll Ever Do
- Spending on Education and Self-Improvement
- What it Means: Education and personal development are investments in your future earning potential. Whether it’s formal education, online courses, or self-directed learning, spending in this area can yield significant returns.
- Why It’s Important: The skills and knowledge you gain can lead to higher income, better job opportunities, and more financial security.
- Spending on Health and Wellness
- What it Means: Prioritizing your health is one of the best investments you can make. This includes spending on nutritious food, exercise, and preventive healthcare.
- Why It’s Important: Good health is essential for maintaining productivity and enjoying the fruits of your labor. Neglecting health can lead to costly medical bills and a reduced quality of life. Being healthy in retirement is a blessing.
- Spending on Relationships
- What it Means: Investing in relationships, whether through quality time, gifts, or shared experiences, can lead to a happier, more connected life.
- Why It’s Important: Strong relationships provide emotional support, reduce stress, and contribute to overall well-being, which in turn can positively impact your financial decision-making. This has also shown to impact overall health in a very positive way.
- Spending on Time-Saving Services
- What it Means: Sometimes, spending money to save time can be a wise decision. Whether it’s hiring help for household chores or investing in technology that makes your life easier, these expenditures can free up time for more valuable activities.
- Why It’s Important: Time is a finite resource. By spending money strategically, you can focus on activities that contribute to your financial goals and personal fulfillment. It’s true: “Time = Money”.
Spend Like a Financial Dumbass – The Dangers of Mindless Spending
While spending money is important, it’s easy to fall into the trap of mindless spending—making purchases without considering their long-term impact.
- The Trap of Lifestyle Inflation
- What it Means: Lifestyle inflation occurs when your spending increases in proportion to your income. This can prevent you from saving and investing enough to achieve your financial goals.
- Why It’s Important: By keeping lifestyle inflation in check, you can ensure that income increases go towards building wealth rather than just maintaining a higher standard of living.
- Impulse Purchases
- What it Means: Impulse purchases are unplanned buys often driven by emotions or marketing tactics. While they might provide short-term satisfaction, they usually lead to financial regret.
- Why It’s Important: Being aware of impulse spending and learning to manage it can help you make more intentional purchases that align with your long-term goals.
- Debt-Fueled Spending
- What it Means: Relying on credit cards or loans to fund your lifestyle can lead to a cycle of debt that’s hard to break. High-interest rates can erode your wealth and limit your financial freedom.
- Why It’s Important: Avoiding or minimizing debt allows you to keep more of your money, invest in your future, and avoid the stress of financial insecurity.
