In my submit, “How You’ll Really feel Attaining Numerous Millionaire Milestones,” a commenter named Joseph shared these ideas:
“I’m fascinated by somebody price $10M or $20M not feeling rich. Are they hanging out with nothing however billionaires? The one different clarification is a shortage mindset. However I suppose that mindset received them to the place they’re. They should now be taught to spend! As soon as we hit $5M, there will certainly be a foolish $150,000–$200,000 automobile occurring. I feel gazing a Porsche or Lamborghini brand will assist with the not feeling rich factor.”
Studying easy methods to spend is one thing many prodigious savers and buyers need to work on. Once I turned 45 in 2022, I made it my mission to begin spending extra to attract down my internet price. It labored, however not by intention. Thanks, bear marketplace for shedding me a lot cash that yr!
Then on the finish of 2023, I deliberately dropped a load of money on a home I didn’t want. My considering: I would as properly reside within the nicest dwelling I can afford whereas the youngsters are nonetheless with us. Certainly, the additional property taxes, upkeep prices, and alternative price would begin dragging down my internet price. YOLO!
However the inventory market had different plans. It surged in 2024 and is up once more to this point in 2025. In the meantime, San Francisco actual property roared again to life, with bidding wars within the springs of each 2024 and 2025. Now we’re in a holding sample.
It seems that my internet price is extra depending on the whims of the markets than on any of my actions. The one dependable strategy to scale back it’s to make persistently dangerous investments, after which panic-sell on the backside. However who desires to try this? After a lifetime of investing, my intuition is to maintain attempting to make earnings.
For spending, I can solely eat so many wagyu steaks earlier than feeling in poor health. My favourite retro Air Jordans price $200, and there’s solely a lot closet house. I am not into fancy $50,000+ watches or garments, neither is my spouse. Flying personal is outrageously costly, so we gained’t. And I nonetheless can’t convey myself to pay so much for a trip rental once we’re both out and about a lot of the day or sleeping for eight hours an evening.
Spending cash wastefully requires particular ability, and that’s one thing I am engaged on creating.
It’s Simple To Not Really feel Wealthy Even If You Technically Are
In case you have a internet price over $1 million, you’re wealthier than about 94% of People. If you happen to’re not there but, I’ll make it easier to get there with my USA TODAY bestseller, Millionaire Milestones: Easy Steps To Seven Figures.
Cross $13 million in internet price, and also you’re within the high 1% in one of many wealthiest international locations on the earth. You ought to really feel wealthy at this stage, however not at all times.
So why don’t extra wealthy individuals really feel wealthy?
As a result of it’s relative, as Joseph alluded to when he talked about “hanging out with nothing however billionaires.”
I replied to Joseph:
Sure, there’s a shortage mindset. For instance, 50% of NVIDIA workers are price $25 million or extra. Which implies you’re typically bumping into colleagues price $50–$100+ million.
My softball pal who joined Figma in 2018 might be price $30–$50 million. However the co-founders? Price $4–$6 billion.
It’s all relative. Dwelling in San Francisco, the competitors is fierce and so is the wealth. Finest to relocate to Honolulu as an alternative for a greater life.
You are Not Going To Blow Your Cash As soon as You Get Wealthy
Except you fully lack self-discipline, you are going to hold making sound monetary selections after reaching the assorted millionaire milestones. I put the percentages of Joseph really spending $200,000 on a Porsche or Lamborghini as soon as he hits $5 million at lower than 50%. When you know the way lengthy it took to get there—and the chance and energy concerned—you are usually extra even handed.
He is both going to observe my 1/tenth Rule For Automobile Shopping for or extra importantly, observe my Home-To-Automobile Ratio to make sure he is spending responsibly. If Joseph is making $2+ million a yr or owns a $10+ million dwelling based mostly on my 30/30/3 Rule For Dwelling Shopping for, solely then would possibly he purchase a $200,000 on a automobile.
I imagine everyone seems to be long-term rational. And rationally, all people will do important analysis earlier than spending on such an costly merchandise.
I might A lot Somewhat Make investments In My Kids’s Future Than Purchase A Good Automobile
Working example: 9 years of possession later, I can’t convey myself to switch my 10-year-old Vary Rover Sport with a brand new one for $120,000 out the door. I purchased my automobile for $60,000 out the door, and it nonetheless will get me from A to B simply high quality. But, my internet price is way larger than it was in 2016 largely because of the bull market.
Spending $120,000 on a depreciating asset simply feels incorrect after I might make investments that very same quantity right into a basket of progress shares, the S&P 500 index, a rental property, or the Innovation Fund, which holds stakes in corporations like OpenAI, Anthropic, Anduril, Ramp, and Databricks.
The chance price of not investing feels too excessive. Am I purported to YOLO with a $120,000 automobile that I will be too afraid to drive to the grocery store given it will get dinged up? Or ought to I make investments $120,000 in my children’ futures so I am going to fear much less about them after they’re adults?
Clearly, any rational one that loves their kids would select the latter. The $120,000 might flip into $300,000+ 10 years later!
When Investing Feels Higher Than Spending
Sooner or later, you could understand you merely get pleasure from investing greater than spending. Watching your cash compound is exhilarating, particularly while you get in early as an angel investor or are a restricted associate in a enterprise fund that finds one or a number of unicorns. Much more satisfying is the liberty and optionality that include larger wealth. This has been me since about 2010.
As a father or mother, I reside with a relentless low-grade fear about my kids’s future. Saving and investing for them reduces that anxiousness. For instance, as quickly as I purchased and earmarked one rental property per youngster, my stress round housing and faculty prices declined.
In 5-15 years, these houses can be paid off and can:
- Present shelter for them if essential
- Generate rental revenue to pay for his or her faculty
- Provide part-time jobs managing the property
- Assist my retirement
It feels good understanding my kids is not going to be destitute and homeless, even when the world rejects them based mostly on their identification.
So… When Is It OK To Splurge?
We’re consistently informed to save lots of and make investments. Delay gratification. Let compound curiosity work its magic. That’s the precise strategy through the first half of your life.
Ultimately, spending on “unproductive” issues isn’t simply acceptable, it’s rational, wholesome, and deeply rewarding. Dying with hundreds of thousands within the financial institution can be a disgrace. It could imply all these hours of labor and stress spent accumulating wealth went unused, when a few of that cash might have been loved to make life richer alongside the way in which.
Right here’s a framework that will help you determine when it’s OK to splurge:
1. You’ve Hit Your Core Monetary Objectives
If you happen to’ve:
- Constructed a 6–12 month emergency fund
- Maxed out retirement accounts
- Save no less than 20% of your revenue and make investments persistently
- Carry no high-interest debt
You then’ve earned the precise to loosen the reins. A $5,000 trip or $1,500 passion splurge gained’t derail your future. It could even improve it.
2. The Expense Aligns With Your Values
Not each return is monetary. Some purchases create:
- Lasting reminiscences
- Pleasure or private renewal
- Reference to individuals or locations
Ask your self:
“Will I bear in mind this in 5 years?”
“Does this mirror the life I need to reside?”
If sure, go for it.
3. It Boosts Power, Focus, or Time
Some “splurges” really unlock productiveness:
- Hiring assist
- Upgrading your workspace
- Reserving a brief recharge journey
Seen via the precise lens, these bills are investments in a greater high quality of life.
For many years, I used to be too cussed to rent assist round the home. However in the future, I accepted a gardener’s provide to trim all of the vegetation in entrance of my dwelling for $300 and what a distinction it made. Not solely did I save no less than 5 hours of time, however the curb enchantment additionally improved dramatically in comparison with once we have been doing the upkeep ourselves.
4. You’ve Already Practiced Frugality For 10+ Years
If you happen to’ve been disciplined for no less than a decade, not spending can turn into the chance. Hoarding each greenback results in remorse, particularly as time turns into your most restricted asset.
Spending after years of restraint isn’t reckless, it’s rebalancing. You need to observe the artwork of decumulation. And the finest age to begin decumulating wealth is round 45-50.
All of the analysis reveals that spending tends to say no after retirement and as you age. Why? Since you’re merely not as wholesome or cellular to get pleasure from your wealth anymore. Spend extra now, whilst you nonetheless can actually get pleasure from your cash!
5. It’s a Small % of Your Internet Price
Easy rule: If a purchase order is 1–2% of your internet price and provides actual worth to your life, it’s in all probability price it.
Instance: In case your internet price is $1 million, a $10,000 – $20,000 luxurious journey gained’t set you again. It’d really make you’re feeling extra alive. The bottom line is to spend the cash on one thing you actually worth. As a result of should you do not, even $1 is an excessive amount of.
Spend With Intention, Not Guilt
The aim of wealth isn’t simply to accumulate, it’s to reside properly. When you’ve constructed your basis, give your self permission to get pleasure from your cash in ways in which matter.
There’s no level working exhausting to earn cash should you don’t use it to reside a greater life.
Personally, I worth safety and freedom excess of materials issues. Comfy, easy garments are all I would like. My 10-year-old automobile nonetheless feels nice to drive so long as it’s protected. Flying Financial system with my 8-year-old son offers us loads of house, and we arrive simply as quick as these paying 2–10X extra for First. I don’t want a elaborate watch both, my iPhone tells the time simply high quality.
However right here’s what I do worth:
1. Dwelling In A Good Dwelling Whereas My Children Are Nonetheless Dwelling With Us
It’s at all times been a dream to personal a house with an enclosed yard the place my children can play safely, with out worrying they’ll run into the road or be approached by a stranger. So I purchased the just about excellent home, despite the fact that it meant diverting important capital away from doubtlessly larger returns. We spend no less than 15 hours a day at dwelling, so we make the most of our home greater than something.
2. A High quality Schooling For Our Kids
This contains them turning into fluent in a second language. That sort of training in San Francisco prices an arm and a leg. However it’s aligned with my values, so I’m prepared to spend for now. I am additionally enthusiastic about bettering my Mandarin with my kids through the years.
3. Nice Meals
Having lived in New York Metropolis and San Francisco since 1999—arguably the 2 meals capitals of America—it’s exhausting to not be spoiled by superb delicacies. And as soon as meals supply providers have been perfected, we went all in, often ordering from our favourite native spots. The one draw back to loving nice meals a lot? The next calorie rely and a wider waistline than I’d like. No Chippendale’s dancing for me!
4. Freedom From Being Instructed What To Do With My Time
Most significantly, I’d reasonably surrender a gradual paycheck with advantages in change for the liberty to decide on how I reside my life. In finance, not incomes no less than a $250,000 base wage looks like spending $250,000 a yr for my freedom. As soon as I reached the Minimal Funding Threshold, the place work grew to become elective, I made a decision to stroll away as an alternative of undergo via the “another yr” syndrome.
Spend In accordance To Your Values
Life isn’t nearly maximizing funding returns, it’s additionally about having fun with the journey. Don’t be afraid to spend in ways in which meaningfully enhance your high quality of life.
In the end, the aim is to align your spending together with your values. If you happen to try this, your cash will at all times really feel properly spent.
Get A Free Monetary Evaluation From Empower
When investing begins feeling extra thrilling than spending, it’s the right time to ensure your cash is working as exhausting as you might be. In case you have over $100,000 in investable property—whether or not in financial savings, taxable accounts, 401(ok)s, or IRAs—you may get a free monetary check-up from an Empower monetary skilled by signing up right here.
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The assertion is supplied to you by Monetary Samurai (“Promoter”) who has entered right into a written referral settlement with Empower Advisory Group, LLC (“EAG”). Click on right here to be taught extra.
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