All Segments
Jared Dillian — How To Live a Stress-Free Financial Life | Episode 196
49 segments available
Jared Dillian is a writer, strategist, financial expert, public speaker, and author of four books, including No Worries: How To Live a Stress-Free Financial Life (out this month!). He joins us to discuss why you should never loan money to your friends or family, why the FIRE movement is a fast track to a miserable life, the hidden costs of being cheap, and MUCH more! Important Links: - No Worries: How To Live a Stress-Free Financial Life - http://buynoworries.com) - Jared’s Website - https://www.jareddillian.com/) - Jared’s Twitter - https://twitter.com/dailydirtnap) - Daily Dirtnap - https://dailydirtnap.com/) - We’re Gonna Get Those Bastards - https://wggtb.substack.com/) - Jared Dillian Money - https://www.jareddillianmoney.com) Show Notes: 0:00:00 Intro 0:01:12 Main podcast 0:02:03 From Coast Guard, to Wall Street, to Writer 0:05:48 “I am not in the money business—I am in the happy business“ 0:14:11 The Awesome Portfolio 0:22:42 Stop Worrying About Small Financial Decisions 0:27:52 The Biggest Financial Decisions You WIll Ever Make 0:33:38 Keep Your Finances Separate From Your Partner; Never Loan Friends or Family Money 0:39:33 To Make Money, You Have to Want Money 0:42:39 Generational Attitudes to Money 0:45:48 Being Wealthy vs Being Rich 0:50:12 Blowing Up Your Identity 0:52:33 Improving Financial Education 0:58:27 Why Investing Should Be Hard 1:04:30 The Hidden Costs of Being Cheap 1:07:57 Why People Are Scared of Entrepreneurship 1:10:26 The Worst Financial Decision Jared Has Ever Made 1:13:06 Jared as Emperor of the World Books Mentioned: - No Worries: How To Live a Stress-free Financial Life; by Jared Dillian - Those Bastards: 69 Essays on Life, Creativity, and Meaning; by Jared Dillian - All The Evil of This World; by Jared Dillian - Street Freak: Money and Madness at Lehman Brothers; by Jared Dillian - Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!; by Robert T. Kiyosaki - The 7 Habits of Highly Effective People; by Stephen R. Covey
Segments Timeline
The Happiness Business
Jared Dillian emphasizes that personal finance should focus on happiness rather than just accumulating wealth. He critiques the FIRE movement and the obsession with cutting expenses, arguing that such stress can detract from enjoying life. Dillian believes that financial decisions should not dominate our thoughts, allowing us to prioritize relationships and well-being.
"the education and things like personal finance like investing like money is almost non-existent I was shocked at the beginning of this semester how little the students knew about really really really ..."
From Coast Guard to Wall Street
Jared Dillian shares his journey from the Coast Guard Academy to becoming a successful trader on Wall Street. He discusses his transition from a math major to a financial analyst, detailing his experiences at Lehman Brothers and the challenges he faced in the finance industry. Dillian reflects on his career path and the decision to become a writer.
"the things that matter are relationships with people and our pets well hello everyone it's Jim o Shany with another infinite Loops I have been reading my current guests material for quite some time to..."
The Writer's Journey
Dillian discusses his evolution into writing, highlighting his passion for storytelling and the challenges of being a writer in the financial world. He shares insights on his newsletter, the Daily Dirtnap, and his various published works, including his upcoming book, 'No Worries: How To Live a Stress-Free Financial Life.'
"which comes out next year yeah so uh I'm from Connecticut I'm from the eastern part of Connecticut um went to the Coast Guard Academy out out of uh high school and I was a I was a math major at the Co..."
Not Just About Money
In this segment, Dillian clarifies that his book is not about getting rich but about achieving a stress-free financial life. He critiques conventional personal finance advice that often increases stress and emphasizes the importance of happiness over wealth accumulation. Dillian argues for a balanced approach to finances that prioritizes well-being.
"wanted to publish a financial newsletter started the daily dirt naap in 2008 um around that time I was approached by a literary agent who wanted me to write a book about leing brothers so that was Str..."
The Emotional Weight of Money
Dillian explores the emotional connections people have with money, discussing how self-esteem and societal pressures can lead to financial stress. He contrasts the attitudes of Wall Street professionals with those of the general public, highlighting the taboo nature of discussing finances outside of financial circles.
"and people make money off the newsletter but I don't I really think of myself more as a writer first and an and an analyst or a financial person second I really think of myself as a writer and you kno..."
Striving for Financial Freedom
Dillian shares his vision of achieving a state where money is no longer a source of stress. He acknowledges the challenges of constantly thinking about money in his profession but emphasizes the importance of striving for a life where financial concerns do not dominate one's thoughts.
"the money business you're in the happiness business yeah expl explain well you know there is such a thing as a personal finance industry like it's a whole industry of giving people advice on Personal ..."
The Dichotomy of Writing and Finance
In this segment, Dillian reflects on the dichotomy between his writing career and his financial analysis work. He discusses his desire to focus more on creative writing while managing the stress that comes with financial responsibilities. Dillian expresses a hope to transition away from daily financial writing to pursue other literary endeavors.
"like even the decision of whether to go to a soda machine and get a soda for a dollar becomes this complex decision-making process about do I need it can I wait until I get home I'm thirsty whatever l..."
The Awesome Portfolio Explained
Dillian introduces his concept of the 'Awesome Portfolio,' which is designed to be simple, boring, and diversified. He explains the allocation strategy of 20% in stocks, bonds, cash, gold, and real estate, and discusses its historical performance. Dillian contrasts this approach with traditional financial advice, advocating for a more balanced investment strategy.
"over my career at least I found that a lot of people tie a bunch of extra stuff to money like am I good enough am I providing for my family you know and as you would have it that is a huge source of s..."
The Awesome Portfolio Explained
Jared Dillian introduces his 'Awesome Portfolio,' a simple, diversified investment strategy consisting of 20% stocks, bonds, cash, gold, and real estate. He emphasizes its historical performance, highlighting its ability to minimize volatility and drawdowns compared to traditional portfolios, making it a more stable investment choice.
"but it it brings an element of stress into my life which I really don't want you know yeah and uh do do you look at that as kind of a a dichotomy I mean in other words you you've got the some great sh..."
Volatility vs. Stability in Investing
Dillian discusses the importance of minimizing volatility in investment portfolios. He contrasts the Awesome Portfolio with traditional index funds, explaining how emotional reactions to market fluctuations can lead to poor investment decisions. He advocates for a strategy that allows investors to stay the course during market downturns.
"and uh you brought up a couple things there uh I think we both love entrepreneurship we're gonna talk a bit about that a little bit later because you've got some great ideas there but you brought up y..."
The Emotional Challenges of Investing
In this segment, Jared Dillian addresses the emotional challenges investors face, particularly during market downturns. He explains how fear and greed can lead to poor decision-making, emphasizing the need for a stable investment strategy that minimizes emotional stress and allows for consistent compounding.
"uh talk to me about like you know there's the classic 6040 that most financial advisors uh try to put their clients in I've heard the you know take your 100 minus your age and like if you're 60 you sh..."
The Role of Cash in the Awesome Portfolio
Dillian defends the inclusion of 20% cash in his Awesome Portfolio, explaining its benefits in a rising interest rate environment. He discusses how cash can provide stability and liquidity, countering criticisms about its low yield, especially in the context of current market conditions.
"this is that the index fund industry which Vanguard is a part of what they the advice that they give people is just a dollar cost average into these index funds and write out the draw downs and keep d..."
The Flaws of the FIRE Movement
Jared critiques the FIRE (Financial Independence, Retire Early) movement, arguing that its extreme saving strategies lead to a life of deprivation. He believes that small luxuries contribute to happiness and that focusing solely on frugality can create a negative mindset towards consumption and enjoyment.
"you want to call it is the thing that I've seen more people get shaken out of positions in markets than almost anything else right because they they hyperbolic discount uh the future everything is jus..."
Finding Balance in Financial Decisions
In this segment, Dillian advocates for a balanced approach to financial decisions, emphasizing the importance of making smart choices regarding significant expenses like housing. He argues that while small luxuries should not be neglected, the focus should be on making wise decisions about larger financial commitments.
"been your reaction to the awesome portfolio well so you mentioned cash and I came up with this uh in 2019 when rates were zero and a lot of the push back I was getting is why do you have 20% in cash c..."
The Impact of Small Luxuries on Happiness
Dillian discusses how small luxuries, such as daily coffee, can enhance life satisfaction. He contrasts this with the tendency to sacrifice small pleasures for larger financial goals, arguing that such sacrifices can lead to unhappiness and that enjoying small luxuries is essential for a fulfilling life.
"the winter I'm like one of these freaks that drinks iced coffee in winter so $3.7 cents 250 days a year it's like 900 bucks okay I'm G to work for 40 years 900 bucks over 40 years is $36,000 if I put ..."
Big Financial Decisions Matter Most
Jared Dillian highlights the significance of major financial decisions, such as buying a house or a car. He stresses that these choices carry substantial risk and impact on one's financial future, urging listeners to approach them with careful consideration rather than impulsive decisions.
"the little things they make themselves miserable absolutely miserable like you know I I don't want to get gross on the podcast but the reason I drink the coffee is it facilitates digestion okay like I..."
The Three Biggest Financial Decisions
Dillian outlines the three most critical financial decisions people make: buying a house, purchasing a car, and managing student loans. He explains the risks associated with each and stresses the importance of understanding the long-term implications of these choices.
"the big decisions right if you don't mind bring us through some of what you view as the biggest decisions people people make in the financial well one of them I mentioned it's the house that's the big..."
Marrying for Financial Compatibility
Jared shares his personal experience of marrying someone with similar financial values. He explains how aligning financial attitudes can prevent conflicts and contribute to a stress-free financial life, highlighting the importance of shared values in a partnership.
"biggest offender these days are law schools we have a huge amount of lawyers in this country there's more lawyers in the United States per capita than any other country in the world by a lot and most ..."
Keeping Finances Separate in Marriage
Dillian advocates for maintaining separate finances in marriage, explaining how this approach can reduce stress and conflict over money. He shares his own experience of managing finances separately with his wife, emphasizing the benefits of this strategy.
"miserable and also it works the other way you know for somebody who's who likes to spend money for somebody who is a high roller you can't marry somebody who is cheap because you're just going to be g..."
The Risks of Lending Money to Family
Jared discusses the complexities of lending money to friends and family, advising against it unless structured as a gift. He explains the emotional risks involved and how it can lead to stress and conflict within relationships.
"money because if I want to spend money on something stupid it's my money she can't say anything about it whereas if we had a joint account and I was buying stupid stuff out of the joint account we wer..."
The Importance of Hard Work for Financial Success
Dillian emphasizes that achieving financial success requires a strong desire to work hard and make sacrifices. He addresses the mindset needed to pursue wealth and encourages listeners to consider additional avenues for income.
"investment or are you just considering this because it's your brother-in-law you know so and uh have you ever been in these situations yes I have I have and and and my guess is that's why they made th..."
The Hard Work Behind Wealth
Jared Dillian emphasizes the necessity of hard work to achieve financial success. He discusses how many people intellectually desire wealth but are not willing to put in the effort required to attain it. Dillian reflects on the experiences of the wealthy, noting that their journeys are often fraught with challenges, and encourages readers to consider taking proactive steps, like starting a business or seeking a raise, to improve their financial situations.
"because uh it it kind of it it it relieves the stress on both parties so to speak um as opposed to just me I mean I can definitely see your way of doing it as well you know on on the subject though li..."
The Envy Trap
In this segment, Dillian discusses the destructive nature of envy, referencing a quote about it being one of the worst emotions. He highlights how envy can harm the person who feels it more than the one they envy. Dillian also reflects on the importance of recognizing different paths to success and how personal fulfillment can come from choices that differ from societal expectations.
"you know what I mean so but if if you talk to anybody who's super rich it's it like it's never been easy for these people it's never been easy so you know I stand by the book 100% um and I hope I hope..."
Generational Financial Mindsets
Dillian shares insights on how different generations experience financial landscapes. He contrasts his own experiences in the 1980s with the challenges faced by Millennials and Zoomers today. Dillian argues that while starting conditions may vary, success is achievable regardless of one's background, emphasizing that the future is unpredictable and can change for the better.
"at it um I I wonder how many people could actually have that kind of dispassionate F right because of the old mimetic desire and all that kind of stuff you see somebody's making a lot of money it's ju..."
Wealth vs. Rich: A New Perspective
This segment explores the evolving definitions of wealth and being rich. Dillian discusses how younger financial advisors are redefining these terms, suggesting that wealth is more about understanding what 'enough' means for an individual rather than a specific monetary figure. He shares a story about a man who felt rich after a change in circumstances, illustrating that wealth can be a state of mind.
"depending on what kind of zech guys financially they find themselves uh I don't I mean I'm an exer right I'm an exer so I'm kind of been between you know uh Boomers and Millennials a lot of people are..."
Personal Fulfillment Beyond Wealth
Dillian reflects on whether personal fulfillment requires financial success. He argues that success can be measured in various ways, not solely by wealth. Using examples from his own career as a writer, he emphasizes that professional success does not necessarily equate to being wealthy, and that happiness can be found in pursuing one's passions regardless of financial status.
"literally does not matter so the other thing is is that you can't predict the future um you know you don't know like things are tough on Millennials and Zoomers today but maybe it'll be different in 2..."
The Importance of Reinventing Yourself
In this segment, Dillian discusses the necessity of reinventing oneself to achieve financial goals. He shares his personal journey of changing careers multiple times, highlighting the psychological challenges involved in such transitions. Dillian encourages listeners to embrace change and pursue new opportunities, even if it means stepping outside their comfort zones.
"think so let me tell you a story I know a guy in Myrtle Beach who was homeless for eight years lived in a tent um mostly by choice like he he didn't really feel like getting a job and he didn't mind l..."
Education and Financial Literacy
Dillian addresses the lack of financial education in schools and its impact on students. He shares his experience teaching personal finance at a university and the importance of equipping young people with financial knowledge. Dillian advocates for the inclusion of personal finance in school curriculums to better prepare students for real-world financial challenges.
"think it's where you are in your path um I forgot the second part of your question I think what I said was G does personal fulfillment and happiness does that require a certain base level of financial..."
Debt and Risk: Sources of Financial Stress
In this segment, Dillian elaborates on the two primary causes of financial stress: debt and risk. He discusses how understanding these concepts is crucial for managing finances effectively. Dillian reflects on the challenges students face in grasping basic financial principles, emphasizing the need for better education on credit, debt, and risk management.
"know so um I think if you're I think if you're professionally successful like I don't I don't think I don't think like that means that you have to be wealthy as a precondition you know what I mean lik..."
Understanding Debt and Risk
In this segment, Dillian elaborates on how debt and risk contribute to financial stress. He addresses the fundamental misunderstandings students have regarding these concepts and the challenges they face in grasping their implications.
"you know um like it I I was shocked at the beginning of this semester like how little the students knew about really really really basic stuff like credit cards and debt and stuff like that they just ..."
The Reality of Student Loans
Dillian reveals the alarming lack of awareness among students about the nature of student loans, particularly their non-dischargeability in bankruptcy. He emphasizes the need for education on this critical topic to prepare students for real-world financial challenges.
"what do you think the fundamental misunderstanding especially with the kids that you're uh teaching now but also just people in general with what why are these so um difficult for people to get a hand..."
Tech Solutions for Financial Literacy
Dillian contemplates the potential for technology to aid in financial education, suggesting the idea of an app to help those who struggle with understanding debt and risk. He reflects on the complexities of personal finance compared to institutional finance.
"class I'm like do you guys know that you cannot discharge these in bankruptcy like if you go bankrupt you still have this debt they had no idea they had no clue like they it's it is the worst kind of ..."
The Challenge of Personal Finance
Dillian discusses the intricacies of personal finance, arguing that it is often more complex than institutional finance. He highlights the importance of understanding various financial decisions and the challenges individuals face in making informed choices.
"who like are clueless about debt are clueless about things like Risk um where you know just basic financial planning um or or are we gonna still fall uh victim to all of the normal foibles that screw ..."
The Impact of Free Trading Apps
In this segment, Dillian critiques trading apps like Robinhood for their gamified approach to investing. He argues that making investing too easy can lead to poor financial habits and emphasizes the value of a more challenging investment process.
"two options one is optimal one is suboptimal it's pretty easy to figure out but personal finance is like a big linear optimization problem so when you ask somebody a question about whether they should..."
The Case Against Commission-Free Trading
Dillian presents his argument against commission-free trading, suggesting that it encourages overtrading and poor investment decisions. He shares his personal strategy of paying higher commissions to promote disciplined investing.
"at the time and I don't remember what I had to do to fill it out I mean there was the internet in 1998 the internet was there uh I guess I guess I I I don't think I I don't think I filled out an appli..."
The Psychology of Investment Costs
Dillian explains how the psychology of costs affects investment behavior. He discusses the importance of transaction costs in promoting a buy-and-hold strategy, contrasting it with the impulsiveness that can arise from free trading.
"you know what happens when something is free if you have like a company function and you have free pizza people overc consume free Goods they take all the pizza they bring bags they bring it home they..."
The Importance of Commitment in Investing
Dillian reflects on the necessity of commitment in investing, sharing a personal anecdote about his early experiences. He emphasizes that the effort required to invest can lead to more thoughtful and successful financial decisions.
"have a brokerage account with one of the big Brokers and I pay like $150 commissions on purpose I actually pay high commissions on purpose because I'm not going to be ripping in and out of stuff I'm G..."
The Consequences of Being Cheap
Dillian discusses the social consequences of being overly frugal, sharing insights on how cheap behavior can strain relationships. He argues that financial habits can significantly impact personal connections and overall happiness.
"um that's a that's an interesting thing it reminds me of uh when I was a kid my parents had a tiny tiny little uh vacation place on one of the um Bohemian out Islands Alo and uh the neighbor and and w..."
Financial Stress and Its Ripple Effects
In this segment, Dillian explains how financial stress exacerbates other life stresses. He highlights the interconnectedness of financial well-being and overall mental health, stressing the importance of addressing financial issues.
"taking it more seriously um what do you think ultimately though you know I've been I I was in asset management for 30 plus years and the the one thing that I just kept seeing as I said earlier just li..."
Entrepreneurship and Financial Freedom
Dillian explores the broad spectrum of entrepreneurship, discussing its potential to provide financial freedom. He emphasizes the diverse opportunities within entrepreneurship and the mindset required to succeed.
"69 cents a can and I would agonize over like 10 cents and people people do that and it just it just does not matter you know and I do the math in the book I do the math in the book and I tell people i..."
The Hidden Costs of Being Cheap
Jared Dillian discusses the consequences of being cheap, emphasizing that while it may prevent financial hardship, it can severely damage personal relationships. He shares anecdotes about how frugality can create tension and discomfort among family and friends, highlighting that the personal finance industry often overlooks these social repercussions.
"less of them than we think like people people in this country are generally good with money and I think you have more cheap people than more people like that you know and there's consequences to being..."
Financial Stress Amplifies Life's Challenges
In this segment, Dillian explains how financial stress can exacerbate other life stresses. He argues that while financial issues can be resolved, they often compound existing problems, making them feel more overwhelming. This insight underscores the importance of managing financial health to maintain overall well-being.
"behavior so that's interesting uh and it's very true uh we had a family member extended uh not immediate family but we called him alligator arms because he could never get to his pocket to get uh you ..."
The Fear of Entrepreneurship
Dillian explores the common reluctance many people have towards entrepreneurship, citing fear of risk and responsibility. He shares a personal story about encouraging his wife to start a business, illustrating the internal conflict between the desire for stability and the potential for happiness that entrepreneurship can bring.
"areas particularly your relationship how do you think Financial stress differs from just the general stresses of life it's it's Financial stress makes other stresses worse that's what it does it's not..."
Happiness Over Success in Entrepreneurship
Jared Dillian advocates for prioritizing happiness over traditional measures of success in entrepreneurship. He argues that even failed ventures can lead to personal growth and fulfillment, contrasting this with the dissatisfaction often found in corporate environments. This perspective encourages a mindset shift towards valuing personal satisfaction in one's career.
"sometimes feel that people uh look at things like entrepreneurship uh which by the way is a huge basket right like entrepreneurship could be starting your own uh small business it could be you know a ..."
Lessons from Financial Mistakes
Dillian reflects on his worst financial decision involving Canadian interest rate futures, detailing how stubbornness led to significant losses over two years. He emphasizes the importance of learning from mistakes and the emotional toll that poor financial choices can take, providing a cautionary tale for listeners.
"around 2008 or nine I was really pushing her to start a company um that would basically like an engineering firm that would do CRM work and stuff like that I'm like you would kill it you would absolut..."
Key Takeaways for Financial Success
In this segment, Dillian shares essential advice for achieving financial stability. He stresses the importance of focusing on major financial decisions, minimizing debt, and finding balance in financial life. These practical tips serve as a foundation for listeners looking to improve their financial health.
"entrepreneurship is the best thing in the world because you will be happy right it doesn't even matter if you are successful if you start a company you will be happy even if it fails even if it fails ..."
Becoming the Emperor of the World
As part of a fun segment, Dillian imagines what he would do if he were 'Emperor of the World' for a day. He humorously suggests that everyone should get a pet and reflects on the importance of relationships over material success, emphasizing a legacy of kindness and connection.
"you've ever made I've had some bad trades I'm actually kind of dealing with one right now because I'm trying to sell my house and I put it on the market like a month late and now it's bad um I made I ..."
Reflecting on Life's Legacy
Dillian discusses the significance of contemplating one's legacy and the impact of relationships on personal fulfillment. He shares insights from Stephen Covey's '7 Habits of Highly Effective People,' encouraging listeners to think about how they want to be remembered and the values they wish to impart.
"down a lot of money like for two years I was miserable you know I did hang on until the pandemic they cut rates to zero I got bailed out I made a bunch of money but from like 2017 to 2019 like it was ..."
Where to Find Jared Dillian
In this closing segment, Dillian shares where listeners can find more of his work, including his book 'No Worries' and his newsletter. He emphasizes the importance of engaging with his content for ongoing financial education and personal growth.
"cautionary advice like other than other than the things that you've that we've already chatted about it you've already enumerated in the book like what what kind of if if you if I guess if you had an ..."