The most powerful way to think about money

0:00 i went from working in a high-paying six-f figureure job that left me feeling unfulfilled to taking an 84% pay cut to do something that I genuinely love and ironically that shift eventually led me to make even more money but this time feeling a lot more fulfilled and this journey all started with one change and that is how I think about money and how it fits into my life and so I thought it'd be interesting to make this video where I take you behind the scenes of that mindset shift and show you how changing your relationship with money can eventually change everything we're going to split this video into three parts first we're going to find your tipping point where we're going to understand the point where more money stops adding value to your life and starts taking away from it then we're going to go through something that I call the wealth paradox which is why

0:46 most people chase money endlessly even when we know it's not the answer and how to break free from that cycle and the third thing we're going to go over is three actionable evidence-based steps you can take to align your money with the life you actually want to live let's start with number one finding your tipping point there's this really interesting study that looked at the relationship between money and happiness let's call it the experience of fulfillment and how much money we need to actually feel fulfilled and spoiler alert the journey is far from linear at first more money does equal more fulfillment when you're meeting your basic needs food shelter safety each extra pound or dollar makes a noticeable difference it's like stepping out of survival mode and into stability and

1:31 then as you move from the essentials to the nicities things like a nicer home better quality food more convenient transportation that positive relationship between money and fulfillment feels even stronger you're building comfort and you're building security but once you've achieved comfort and you start moving into the luxury territory the relationship between money and fulfillment begins to change we hit what's known as a fulfillment ceiling and beyond a certain point more money and more possessions don't actually bring lasting happiness in fact they just bring clutter both physically and mentally the more stuff we accumulate the less satisfaction we get from it and actually the fulfillment curve reaches a peak and then it begins to decline during the stage you're

2:17 spending more you're accumulating more but you're actually feeling less fulfilled we all have a tipping point it varies person by person and there are some studies including the Princeton study that was done in 2010 that suggested that this number could be around $75,000 a year that's the point where for many people more money doesn't necessarily equate to more happiness i know for me I found that real unfulfillment phase or that tipping point at a slightly higher level but it was definitely below the six figure mark but ideally you want to find what is your tipping point because as soon as you find that tipping point and you feel that level of unfulfillment that's when you want to change the way you use your money but that's a lot easier said than done why and to explain that I'm going to move to part two the wealth paradox even though we know that there's this

3:02 tipping point and we're aware of it we're in an environment where more is always better and the pursuit of more money almost feels like a requirement during our lifetime and it's only really upon facing a life-changing event or death where we realize how insignificant this pursuit of money actually was throughout our lifetime and I was recently rereading the top five regrets of the dying by Bonnie wear she was a nurse who spent years listening to people share their biggest regrets at the end of their lives and the regret that was most common is I wish I had the courage to live a life true to myself not the life others expected of me there were amongst other regrets there was I wish I hadn't worked so hard and I wish I'd let myself be happier and what's so striking especially when rereading the

3:47 book is that none of these regrets were about money not one person said I wish I earned more or I wish I bought more things and it's very clear throughout most of our lives we treat money like it's the be all and end all and yes I can't deny money's importance and if you watch my videos and this isn't the first video that you're watching then you probably think the same way but beyond a certain level the constant pursuit of it is actually a distraction from what actually matters and this is one of those things that we know in theory but it's only truly understood by most people when there is a life-changing event or you're nearing the end of your life but if you can actually realize this sooner and I don't just mean a one-time realization i mean a constant awareness where you're regularly checking in with yourself reminding yourself that the pursuit of money for

4:33 its own sake is actually a distraction unless it's a byproduct of something that you genuinely enjoy or care about the sooner you can understand that the sooner you can move on to part three which is aligning your money decisions with your life goals so how do you do that first define your vision and your financial path i.e the why behind your money you need to get crystal clear about what you want out of your life not just financially but holistically what experiences do you want what relationships do you want to nurture what purpose do you want to pursue i knew that I didn't want to do a job that was unfulfilling forever i wanted to do something meaningful something I loved something I gave back and that I could always get paid to do and so as soon as I made that decision every money decision that I made whether it was

5:18 saving spending or earning had to align with that vision i designed my finances around that goal if something didn't fit I adapt to it or I let it go and that's alignment alignment is really hard to achieve and to do without having a financial plan if you don't know whether you're in income surplus or deficit what your cash flow looks like or how much you need to save or invest to even reach your goals then it's virtually impossible to then take control of your life so the very first thing you need to do is become obsessed with personal finance i've got a bunch of videos on this channel i've also created a super comprehensive financial plan document it's a 94-page document filled with how-tos trackers surveys quizzes calculators and activities to help you build a life that actually feels true to you it takes you through every part of

6:04 your financial journey and there's also a section where you can map out your goals short-term medium-term and long-term and then map out the exact money steps you need to take to get there based on your money personality your risk appetite and your broader life goals it's everything I did with my finances to be able to get from where I was to where I wanted to be and you can find it on nisha.me/plan moving on to the second strategy spending money on experiences and growth we know that spending on experiences tends to bring more lasting happiness than buying stuff experiences creates memories they strengthen relationships and they shape who you are but an area that people forget to spend on and is arguably one of the most powerful forms of spending is investing in yourself your skills your knowledge your growth when you spend money

6:50 learning something new whether it's cooking coding a creative hobby you're not just buying knowledge you're also building something that can generate more value in the future and when your spending is aligned with growth it feels less like a sacrifice and much more like an investment it feels fulfilling because it's fueling something meaningful and every time I felt like I've hitten a curve or felt unfulfilled and I invest in some sort of learning or growth automatically my fulfillment levels and my overall happiness increases and I know it's not a one spike thing it's something that is going to last forever and strategy number three reframe money through time the final approach comes from reframing how we think about the relationship between time and money there's this really powerful exercise from the book Your

7:37 Money or Your Life where you calculate your real hourly wage so this isn't your salary divided by hours it's your salary minus all work related expenses so commuting any professional clothes that you wear stress management divided by all the work related hours so you're also including your commuting your decompressing and anything that you can allocate to work hours when people do this exercise they're often really surprised to find that their real hourly wage is much lower than they thought and once you do that you can start thinking about purchases in terms of life energy so for instance this new upgrade costs 40 hours of my life energy is it still worth it when you start thinking of money in terms of time rather than just abstract numbers this automatically makes money less relevant because you're focusing on the truly finite resource

8:24 your time on this planet and you start making your life decisions around that i found this to be one of the most impactful ways to decide how I make my money decisions if you got to this part of the video thank you for watching and I'd love to hear from you what is one thing you're going to do as a result of watching this video and if you like this video you might also enjoy this one right here which is actually about why most people feel financially behind when it comes to their finances and what you can do about it thanks so much for watching and I hope to see