One of the world's most prolific financial speakers, Andrew Hallam is on the show today to help you invest & spend for happiness, health & wealth. He is a top bloke that I want you to know about. This is his second time on the show to talk about his new book Balance. I have learnt so must about investing from Andrew, I value his wisdom and want you to know about him too.
In this Money Mindful podcast episode, you will hear:
- About the 4 quadrants of a successful life
- How to align your money habits with your purpose
- Tips for living well
- And of course, about Andrew’s new book, Balance
You can listen to the episode above or read the unedited transcript below.
How To Invest & Spend for Happiness, Health & Wealth with Andrew Hallam
Meaghan Smith, Andrew Hallam
Meaghan Smith 00:20
Hello beautiful people. Welcome to another episode of the Money Mindful podcast. I'm your host Meaghan Jean Smith, a money mindset and life coach for women. Women work with me to uplevel their money mindset, let go of their money blocks and create the money and life that they want and deserve. Welcome to the show today. We are getting into the swing of the new year and what a better time to learn about how to invest and spend for happiness, health and wealth. Before I introduce you to my very special guest today, I have a little favour to ask. If you are enjoying the show and you get a lot of value out of it, I would be really grateful if you would leave a review or a five star rating on iTunes or any of the platforms where you listen, if that's available for you to do, or please share the podcast. Leaving a review helps others find the show which is a really beautiful thing.
Meaghan Smith 01:25
Okay, so let's get into it. My guest is no stranger to the Money Mindful podcast. In fact, if you're a longtime listener, you may remember this guest from way back in 2020. Episode 34 it was, and it's still one of my most popular episodes, so I'm thrilled to have back on the show one of the world's most prolific financial speakers, the only author to have a number one selling personal finance book on Amazon USA, Amazon Canada and Amazon United Arab Emirates, best Selling Author of 'Millionaire Teacher' and the upcoming book 'Balance'. Andrew Hallam is on the show. Andrew, welcome.
Andrew Hallam 02:10
Thank you Meaghan, for a wonderful introduction.
Meaghan Smith 02:15
Ah, look, I'm really thrilled to have you here. Andrew, I said it last time you were on the show and I'll say it again, you have had a really positive impact on my financial situation in my life, in terms of investing, and I find your message and your teaching and your books so valuable, and really accessible and easy to understand. I love your style. And so I just welcome you on the show, welcome you back. I want all my listeners new and old to know all about you and your goodness, and yeah, hear all the things. So, welcome.
Andrew Hallam 03:00
And my goofiness.
Meaghan Smith 03:02
Your goodness - goodness!
Andrew Hallam 03:03
No, no, I said goofiness. I certainly don't take myself very seriously. I don't deserve that.
Meaghan Smith 03:08
You totally do. Alright, listen, for those who haven't heard of you before, and if you haven't heard of Andrew, come on, what is happening? You've got to go out and buy all his books immediately. Do you want to do a little intro? Just tell us a little bit about you, for those who are thinking 'Who is Andrew, who's this guy, I've got to find out about him.'
Andrew Hallam 03:33
Sure. I was born in England, raised in Canada. When it comes to money, my family didn't have a lot, my dad was a mechanic and there were four kids to feed. And my mom, she stayed home to make sure we didn't get into trouble, and then later got a retail job. But we were just, you know, very lower middle class in terms of middle class income levels, but had an amazing childhood despite that, and perhaps arguably even because of that. I ended up becoming a school teacher. And when I was going to university and I was studying to become a teacher, I met a mechanic who was a self-made millionaire. One day, he sat me down and he started talking to me about things like money and compound interest and essentially what you talk about with Money Mindset, and inspired me to start investing small amounts of the money I was earning from age 19.
Andrew Hallam 04:36
And so I never earned a massive salary, but I did start at a much younger age than most people. And I didn't go for any homeruns, I looked at evidence based investment strategies. I kept things really simple. And so much as I talk about in my book, Millionaire Teacher, gradually things started to fall into place. So by the time I was in my mid-30s, perhaps I was about 36, it's when my investment portfolio crossed a million dollars. And I was amazed because in so many ways, it was just what the mechanic had told me. He said, like, really, this isn't that hard, just get money working for you so you don't have to work as hard for money and you can end up having more choices in life to do what it is that you want to be doing.
Andrew Hallam 05:26
So I started teaching this and writing about this. And so I was a high school teacher in Canada, and then I took a year off and I travelled. Then I got a job at Singapore American School, so I taught international students. And that was 2003. I was there for 12 years, where I taught high school personal finance and high school English. And then my wife and I decided in 2014, that we wanted to take one year off. And then one year led to two which led to three, which has led to seven and going on eight. I do a lot of speaking, and it was really by accident, Meaghan, that this all happened. It was one of those things where, you know, it started out so small, innocently. And I didn't look for it, it was just a friend would say to me, 'Oh, I see that you're in, you know, Germany? And could you come and speak to teachers at our International School here in Germany.'
Andrew Hallam 06:22
And so we'd be riding our bike, like we'd have a tandem. And we'd be cycling, like cycle touring, and go, 'Yeah, I guess we could, we could cycle up to Frankfurt and give a financial talk.' And then word started spreading. I didn't advertise it, word just started to spread, and it went from international schools to international businesses. And it just got to the point where I know, at one stage, just before the pandemic, I ended up giving 90 talks in 14 different countries within a seven month span. And it was incredible for us because we were wanting to live a life of adventure. And so what we were doing was at one stage, we were trying to drive from Canada to Argentina. Did I tell you about this last time?
Meaghan Smith 07:17
I don't know - let's just talk about it. Because even if we've talked about it before, you were on ages ago. We can't remember these things, we're old. I've got grey hair and you've got no hair, so we're definitely going to talk about it again.
Andrew Hallam 07:37
Maybe we talked more about money than lifestyle. But my wife and I decided we'd buy a camper van. And we bought it in Canada, and we decided we would drive it to the tip of Argentina. And we spent 17 months in this camper van. But I would get these requests to do these finance talks all over the place. And they just kept on coming. And so we would, I mean, I had one set of presentation clothes, I guess what we could call that. And the rest of the time, really I'm wearing T-shirts and shorts and sandals and shirtless and just living this super, almost bohemian life. And it was this awesome contrast, Meaghan, because what my wife would do is she would sort of schedule or corral the speaking requests into like, say, a six week period where we would focus on Europe. And so anyone who contacted us from Europe, she'd say, 'Okay, here's our six weeks for Europe, and if you want Andrew to speak here, then great, we'll schedule it.'
Andrew Hallam 08:37
So we would, you know, be in Guatemala in this camper van and we would park it and we would pray to God it would still be there when we got back, you know, because you don't know where you're leaving it, you know, there's a guy who says he's gonna look after it, you think, 'God, is this even gonna be there, when we get back, are the wheels gonna be on it.' And so we'd fly off to Europe, and I'd be speaking often at big corporations, international schools, but also big corporations, large resort chains, insurance companies, banks, that kind of thing. And so I'd be rubbing shoulders with these supremely type A personalities who earn massive amounts of money in many cases, the directors, the CEOs, they'd take us out for dinner, we'd get to know them and, and hang out with them a little bit as they would be playing host to us. And then when we finished the, say, six week period, we'd fly back to Guatemala, get back in the van, and the contrast was awesome.
Andrew Hallam 09:37
Because we would be hanging around - we spent 17 months in this van, and we'd be hanging around these families who were raising their children and are these people adventuring, like driving from Argentina to Alaska, and people stretching money like you wouldn't believe, Meaghan, how creative and ingenious people can be to stretch their resources, like the stories I could tell you are phenomenal. And so we'd have this massive contrast, huge contrast, between these very high salary people, and then these people who would be sort of living this amazing life of adventure. And then hearing how they made money, like, how were they actually able to do it, that was one of the first questions they would ask each other. And we would ask them, like, 'Okay, how are you pulling this off', and it was so fascinating to see how creative people can be.
Andrew Hallam 10:38
So I guess, you know, that's really I think, in part, one of the things that really inspired me to write the book 'Balance', is that I would look at things that motivate, like, what motivated people, and who did I feel was happier? Was it the CEO of this firm, that drives a Maserati, that invites me to speak, and wears the Rolex and takes us out for this five star meal. Do I get a sense of just like a twinkle in the eye, laughter, fun? Do I get a sense that they're physically healthy and happy, emotionally healthy and happy? And it was really anecdotal, Meaghan, where I found that - mostly - that it was the people actually that were adventuring and raising their kids in RVs, they were actually happier. And so I thought, like, Okay, I'm not one of these people that believes that, you know, rich people are not happy and poor people are, or people without money. I don't believe that at all. But I wanted to dig into like, what am I discovering here on a very consistent, albeit anecdotal level, and where can I find the science here that either contradicts that notion, or supports it? And so the book 'Balance' really came to be as a result of much of my ponderings and my observations.
Meaghan Smith 12:06
Yeah. First of all, I'm just taking it all in, what you've just said, like what an amazing lifestyle you created for yourself, just being able to be out and about having an adventure and then flying into places and living the high life for, you know, a little period of time, every now and again, and putting on your nice shirt, and then getting back out to it. I love that so much. And even that alone, I love, Andrew, that people can just hear that, that that's possible, that there's people out there doing these kinds of things. Because I think, I mean, I see it all the time, and I have it myself, like with my own limiting thoughts, like where I think that this is how life is, and this is what we have to do. But actually, we have so many more options available to us. Anyway, I don't want to go too much off on a tangent here. But let's just talk a little bit about - so the reason why I've got you on the show is because you've got a new book coming out. Now I think by the time this episode comes out, I think the book will be out. It's called 'Balance'. Why this book? Why now? I mean, I know you've touched on it a little bit, but what were you hoping, like, why have you written this?
Andrew Hallam 13:33
I felt that if I looked overall at how we define success, most of us define success based on a single dimension. And so that single dimension is monetary or career based, that's success - it's so common. We use it all the time. And it's a form of abuse, actually, to do that. It's not fair to us. It's not fair to the people we're labelling as successful either. Because, you know, career and money does not necessarily equal success. When you look at like why, you know, you and I were talking about this earlier, about why we do something, like what motivates us to do anything, what motivates us to make money, what motivates us to eat certain foods, or to exercise or to go to sleep or anything. It all boils down, if you keep asking why, it all boils down to somehow, some degree of life satisfaction. You're making that choice to feel secure, or content or happy or purposeful. And so all of these things sort of funnel into this concept of life satisfaction. So then the realisation for me was that, Hah! Truly successful people would be those that would best live their lives to enhance life satisfaction, so what does the research say?
Andrew Hallam 14:58
And so by delving into it, I found what I defined as four quadrants of success, kind of like four legs of a table. And one quadrant was money. We do need to have money, we need to be able to feed ourselves, to keep a safe roof over our head. A second quadrant was your level of health. So to do what you can to maximise your health, and that doesn't mean that you have to be an Olympian, by any stretch, it means that you're doing what you can with what you have, to better or to at least maintain your vessel, I mean, you have one body. And that body has to last you a lifetime. I use the example here of a friend who was a bicycle racer, and a neat guy, super positive. And when he was in his 50s, and still super active, he was hit by a driver in a car and he became a, they call them actually, partial quadriplegic. And so he has partial movement of all of his limbs.
Andrew Hallam 16:11
But I'll tell you, Meaghan, that guy has been so purposeful, every day, about moving his body in ways that he can within the limits that he's able to, and part of that is, to me, made him like the epitome of physical success, because he's maximised what he can. So again, money, health, relationships are huge. Like when we look at the Harvard study of adult development, and it's an eight-decade long study, basically trying to define what makes people happy, like, what is it? And after researching people for eight decades, they came to a really simple conclusion, that it's not money. It's not even genetics. I mean, that all plays a role. But more than anything else, it's relationships. And so that's the third leg of the table. And then the fourth leg of the table is a sense of purpose. Like, what gets you up in the morning, what drives you, what motivates you? So you have to have all of it, right? Like a little bit of all of it, a nice balance of all of it. So that's why I called the book 'Balance'.
Meaghan Smith 17:22
Yeah. This is so - we talked about this off-air, beforehand, like, you talk a lot about this stuff at the start of the book. And I was just like, yes, yes, yes, nodding my head all the way through the start, because - this is just my personal opinion, right, I don't know this to be factually true. But I think a lot of people are motivated, they think they're motivated by money in the sense that they think that money is the thing that creates the happiness, right?
Meaghan Smith 17:51
Like, if I have the money, then I will be happy. And I don't necessarily know that people are consciously making these decisions in their mind. But it's something that is drilled into us all the time, right, it's like more, we need more, like have more money, so you can have, I don't know, more clothes or a better car, or you can live in a better area. But the sad thing that I see is that we get these things, and then it's like, Oh, I still feel the same, hang on a minute. What's going on?
Andrew Hallam 17:51
Andrew Hallam 18:29
I see it that there's two levels of acknowledgment there, our understanding. One is like an intellectual understanding where you can ask people right out, 'Are people that have more money, are they happier?' And just about everybody will go, 'Well, no.' We know that they aren't. But behaviorally, we live our lives in many respects pursuing money and more, and/or more stuff. And the stuff part is the fascinating part to me, Meaghan, like, this is so interesting in that the bar has been changed in terms of what's considered normal. So if you think about your parents, when they were, I mean, your parents' generation, they didn't have as many things. And the generation before them, had even fewer things.
Andrew Hallam 19:22
But when we look at research on overall levels of contentment, and I referenced research in my book, that's been done in the United States decade after decade, where they polled people across the country to ask them, like, 'How would you rate your overall life satisfaction?' And what they found is that although income levels, even relative to inflation, so real earning power has been increasing each decade, level of satisfaction has been dropping fairly consistently since the late 1980s. And one of the theories here is that we're actually seeking fulfilment through things, like material acquisitions. And so we're buying things, thinking that they're going to make us happy. So it might be like a bigger house, or let's upgrade the house, or a new car, a better car.
Andrew Hallam 20:19
And what is happening, two things. One is that often we're not really able to pay cash for those things. So we're borrowing money to do it. And research suggests, it's really solid here, where when we have more debt, we actually end up on aggregate more miserable, like it drags us down, whether that's on a conscious level, or a subconscious level, the research on it is really, really solid, that debts do end up weighing on us. And so this is the fascinating thing, we often go into debt, to buy some thing. And things do not enhance our life satisfaction. In fact, it's actually inversely correlated. The more we pursue things, whether we can afford them or not, the more we pursue things, and the more things we acquire, the less life satisfaction we glean from that. So, you know, in my book I did talk about that woman who is a friend of mine, who owns a an interior design company, and she works with really, really wealthy people. I asked her, like, what - I've called her Janice in the book, so I'll use that name now, just so I don't end up slipping up. But I said, 'Janice, how wealthy are these people?' And she said, 'Well, the poorest among them -' and she used that word, which was kind of funny. She said, 'Well, the poorest among them, they're worth about 150 million US, and we have to make them feel like, we're doing them a huge favour. That's all they've got. And we're redesigning a golden bathroom for them, or, you know, redesigning their yacht, or building, you know, a little movie theatre inside their private 737 jet.'
Andrew Hallam 22:09
And so it was interesting talking to her, because she would always talk about how miserable her clients were. So I asked, like, 'Janice, come on, like, you obviously have to have some people who are super happy just with their lot in life.' And she said, now this is her take on this, and she's been doing this for 20 years, she and her friends are all in this circle, and so they've got their own interior design companies where they work with the uber-rich, and she said, 'Andrew, we get together and we talk about the dysfunction of the uber-rich.' And she said, 'In 20 years of doing this business, I've only ever met one client who I actually think is happy.' So Janice believes that wealthy people are miserable. And I don't. I don't, not at all.
Andrew Hallam 23:00
What I was looking at when digging into the research is it's not that the wealthy people are miserable. It's that the wealthy people that aspire to stockpile material acquisitions like trophies, they end up miserable. And and it's not just them, the research is across the board. It's fascinating, despite the socio-demographic, that if we pursue stuff, and we think stuff will make us happier, it's like a process of hedonic adaptability that takes place. We get so used to it, there's the new thing, and it's really quickly not very exciting, it just becomes a thing. And then in turn, what we do is, after a while, without realising it, we want to upgrade it. And we start the process all over again, and often, we go into debt to upgrade.
Meaghan Smith 23:52
Okay, I'm just gonna stop you there, because you talk about hedonic adaptability quite a bit in the book, and I will fully admit I had to look that up, I was like, what? What is that? And I'm pretty sure there'll be people listening who are also like, what's this guy talking about? So let's just explain that a bit. Let's drill down, first of all, what does that mean? And why is it important to know about this? How does it affect us?
Andrew Hallam 24:17
Hedonic adaptability is, it's like, think about the pleasure that is acquired when you do something or you purchase something. And in this case, it's usually when you're purchasing something. So, you know, there's a level of pampering yourself. So that's hedonism, right? The idea that you're pampering yourself, you deserve it, it's good to buy this, you deserve it. But what ends up happening is we become used to that thing that we bought, brand new purse or brand new iPhone, we get used to it so fast. So after, you know, a couple of weeks, that phone that you were pining for before, is now just a tool. It's just another phone. You really love it no more than you loved your previous phone. So it's that vicious cycle we often get into where it becomes a bit like a sugar high when we acquire these things, and then a low, which correlates, which ends up sort of a result of that sugar high, we end up dipping into a low. And so what do we do to try to pull out of it? We buy something else, we try to get another sugar high.
Andrew Hallam 25:23
So it becomes a little bit like an addiction. And it's unhealthy. And you know, it reminds me a little bit of, you know, the little story of the two fish and they're swimming, two young fish are swimming towards the old fish. And the old fish says, 'So hey, boys, how's the water?' And one young fish looks at the other and says, 'Well, what's water?' It's become such a natural - people listening to me right now are like, 'Oh, it's not me. No, I don't buy lots of stuff.' But our society has done it so much, so that we've normalised it. We do, we have so much more than our parents and our grandparents did. And we're not happier as a result of that. So it's the idea that, wow, what's the science behind happy spending, because there's a science behind it, and I'm excited by that.
Meaghan Smith 26:14
Yes, and I want to link this up, because I'm not sure if everyone's gonna understand how this relates, but this is why I get so passionate about coaching on money, not because I think everybody should go out and have heaps of money, but I just think money is such a trigger for so many of us. And I've coached people who are seriously wealthy, like, have money that I can't even imagine having that much money. And then people who are just, you know, regular, middle class people, whatever. And they have the same stuff happen. Like, it's not about how much money you have, always, but the thing that I see that makes people happy, that I work with my clients on, Andrew, and what I've done in my life, the reason why I feel happy is because it's like about being connected to who we really are, what we want to do, like what's important to us. And I think when we operate on that level, that's where happiness comes from. And when we feel like we can meet our own needs from the inside, out.
Meaghan Smith 27:29
But I think what so many of us try to do and what I hear from what you're saying, is we try to meet our needs, externally. We try to do something externally, that we think is going to make us feel better. And that's the illusion, because no thing can make us feel a particular way. I mean, look, of course, I think if a new car shows up in your driveway, it's a lot easier to feel, you know, the way that we think, it can create some feelings of 'Oh, great, you know, now I've got a new car,' but at the same time, that's not the car, it's impossible, the car's not putting a feeling inside your body. Like that's an inside job. That's why you can meet somebody, I don't know, sitting on a mountain with a crystal or whatever, who feels great. And then somebody who has everything and doesn't feel great, it's because I don't think we're taught when we're growing up, how to regulate our emotions, how to actually listen to our body, how to trust ourselves, how to have a good relationship with ourselves, how to actually listen to our own voice, like what we want. I mean, I think we get bombarded with so many images.
Meaghan Smith 28:49
Do you know, have you heard of Lynne Twist? Andrew, she wrote the book, 'The soul of money'. And she talks about - I love her, she's - actually I feel very similar when I talk to you and when I think of her. She talks about how we have this tsunami of scarcity messaging, right? Like, we need this, like, get a cream, you've got too many wrinkles, you're not enough, like this constant messaging, we're not enough, right? We need more. And I think we believe it. I think that's the issue. Like we actually believe that messaging and I mean, in some ways, I think, intellectually, we can say, 'Oh, yes, yes, yes, but that's not true.'
Meaghan Smith 29:39
But on other levels, I think we really do, we feel it, we feel like we're not enough and we need more. We try to get more things like whether it's money or we need to get another degree or we need to go and, I don't know, do our masters or something and then finally we'll be good enough, you know, If we can get a house in this suburb, then finally we can be good enough. And that's like the, you tell me if I'm wrong here, but that's actually the deeper message that I felt was coming from your book, that it's like we don't need stuff. That's not what makes us happy. It's being true to ourselves. And I mean, you talked about it in the way of linking these four table legs, the four quadrants together. Yeah, I mean, am I on the right track here? Like, that's what I felt like the book was about.
Andrew Hallam 30:37
Yeah, absolutely. I mean, there was an Australian palliative care nurse named Bronnie Ware. And she would ask people, she wrote a book called 'The Regrets of the Dying', and she would interview people who were dying. She did this for years. And she asked them, like, 'What are your regrets?' And it was never, that 'I wish had this job', or 'I wish I worked harder', or 'I wish I earned more money'. It was all relationship based. And it was relationships that people had with themselves and with other people. And one of those things, Meaghan, was, you totally nailed it, it's that 'I wish I was true to me. I wish I was true to myself.' That was it. That was huge. There was 'I wish I kept in touch with old friends. I wish I did different things.' Like I actually pushed myself to experience different things instead of just ending up with the same routine, day after day. So this is really what we call, these are relationship based regrets.
Andrew Hallam 31:40
And you know, when we look at happiness research, and David Blanchflower did a fascinating study, he and a team of researchers looked at people in 132 different countries to figure out, at what level are we happier in terms of our age demographic, and this was interesting, Meaghan, because it comes back to what you were talking about. It ended up looking like a U shape where people were happiest in their early 20s. And from that point, they actually start to decline. And so you were talking about just that need to keep up appearances, and to feel like you're enough, and to feel like will other people respect me, if I don't have this type of career. So they're not necessarily following passion, but they're following expectations of others, which is what Bronnie Ware warns us about when she says, the regrets of the dying is not being true to yourself.
Andrew Hallam 32:39
And then the fascinating thing is, you know, this trough just continues into your 30s and 40s, but then, late 40s, people start coming out of it, and by the time they're 50, life satisfaction is consistently higher for people, when they're 50, than typically when they're 40, or 35, or even late 20s, because it's at that point, where - and I don't know whether it's the idea that maybe it's a realisation of pending future mortality, where we realised 'You know what, we're all going to die at some stage, and so I better get on with living the best life that I can, for me.' Like, they start to say, 'Well, to hell with a lot of this other stuff. I refuse to be pulled in by societal pressures and marketing pressures. I want to be me.' And I think it's helpful in that, we don't have to be in our 50s to get to that point. Like, that can be, listeners, are you listening to me right now, that could be you at 25 and 30, and 35 and 40. It's all about a mindset.
Andrew Hallam 33:49
And when you look at something like, take FOMO, you know the fear of missing out on something else, your neighbour buys a brand new car. Michigan State University did a fascinating study. It was actually also replicated in Germany, where they looked at people that drove high end vehicles versus people that drove just basic regular runabouts, low priced cars and secondhand cars. And the research found that when you test drive a new car, you're pretty excited about it. But it's back to that hedonic adaptability, when they ask these people how they would rate their driving experience. First of all, you ask them, and again, right out the front, if you ask them, 'Okay, so you drive a Porsche? Are you happier driving that than you were driving your Honda Civic?' Everybody says yes. So this is what Daniel Kahneman who's a behavioural economist, this is what he called reflective happiness. It's what will come out of your mouth. And this is almost like a justification for what you will do, you're justifying that.
Andrew Hallam 34:54
But the true happiness is something that Daniel Kahneman calls experiential happiness. And so what this research study did, this Michigan State University study, which I thought was so interesting, because they would ask people to rate how they felt during their last driving experience, the last time they were driving their vehicles. And of course, like any research study, the subjects didn't really know what they were looking for. They asked all kinds of different questions, not just that one. But what they were really trying to do is they were trying to see like, what kind of correlation there was between the vehicles they were driving, and their levels of satisfaction while driving. And they found, Meaghan, absolutely none, because of the hedonic adaptability.
Andrew Hallam 35:39
So when you see someone who drives up in their brand new car, in their brand new 7 series BMW, our initial gut feeling is often one of FOMO, like, 'I wish I had that.' But the irony is that after a couple of weeks, behaviorally, that person will not feel any better driving that, than you are driving your 15 year old Toyota, and they end up often having the debt that accompanies that, it's kind of like a an added accessory, which can actually drag them down. So I think recognising how this all works, when we look at behavioural studies on life satisfaction, I think that can help us, put us into that mindset, where we don't necessarily have to reach age 50, before we start to say, 'I'm going to be true to who I am, and I'm actually going to start putting my spending where my values are, and where I can get the biggest bang for my behavioural buck, life satisfaction.' And so that was a premise that I really wanted to articulate in the book 'Balance'.
Meaghan Smith 36:47
Oh, my God. Okay. There's like about five different points I want to talk to you about all of that. First of all, 100% yes, like this exact thing that you talked about happened to me when I turned 40. Because I was just like, 'Okay, I'm 40 now. If I don't do' - well, I'm not 40 now, but when I was 40, I was like, 'If I don't do what I want to do now, then when? When is it going to happen?' And that was like the biggest shakeup for me, and that's when I started this podcast, that's when I started doing a whole, like made a whole heap of big changes in my life, changed career, changed everything, because I was like, 'Well, when? If not now, when? When's it going to happen? When I'm 50? When I'm 60?'
Meaghan Smith 37:31
And I think that mortality thing did, I mean, I don't feel like I'm close to death at 40 or anything, but I feel like, I'm not a kid in my 20s anymore. You know, I've got kids, things have changed, like, that was the, what's the word I'm looking for, catalyst, for me, and I do feel so much happier now Andrew, it's amazing. I mean, I have bigger challenges I think, like I do things that require more courageous action, because I'm not just following the status quo. Like, you know, I had a very secure teacher job and everything and I'm not doing that now, and so I have had to process a lot, like draw on my courage to take new action. But the payoff is massive. It's huge, in terms of my day to day, like the way that I feel, the energy, just like how I feel about my life, and what I'm doing and everything. So I think that that's an amazing point.
Meaghan Smith 38:36
The second thing I want to touch on with what you're saying, is I'm really curious. I want to talk about debt. So you've said that there's studies, and I'm curious about this because sometimes what I work with, with my clients, is neutralising debt, because I think a lot of us have this idea that debt is bad, right? So if we're in debt, bad, bad, bad, that's terrible, and we can give ourselves a lot of shame for being in debt, and it can cause a whole lot of drama that is totally unnecessary. And one of the things that makes common sense to me, like with consumer debt, is it's like - look, if you use your credit card to buy something like, I don't know, a handbag or groceries even. But if you're using your credit card to buy something, if you're not paying it off straightaway, you're paying a price for the money, like you're actually buying the money. That's what you're doing. You're buying the money and there's a price tag on that money. And so the item that you're buying, I don't know, let's say it's 100 bucks, it might actually cost you 150 bucks to buy that thing.
Meaghan Smith 39:47
And so for me mathematically, you know, I said, 'Let's just drop the drama around it, but when we look at the maths, does that make sense, do you want to be paying $150 for that $100 item, you know, how important is it to you?' And that when you start looking at it like that, I think, you know, you can let go of the drama of the consumer debt. But investment debt, and this is what I'm curious, like, if there's research on this, because I'm curious, I have debt, I have investment debt. So it's no secret, I've talked about on the podcast before, I have a few investment properties, and I have debt on those properties. But I don't have any drama around it. Like, I'm quite happy to have that debt. It's getting paid off, it's accounted for. And that debt has allowed me to double my net worth. So I'm friends with that debt. I'm totally okay with having that debt. And I'm just curious, was there research on that part, of people having investment debt? I mean, I'm sure there's people out there, I don't have debt on shares, but I know you can - I don't even know what it's called, but you can do something where you get debt to buy more shares or something like that. I can't think of the name of it, but I'm sure you know what I'm trying to say.
Andrew Hallam 41:18
Yeah. Yeah. There's, it's interesting, because I think that most people, when you look at debt, most people don't have investment properties, they have a house. And so we're really, as you know, you can get into a sect or a group of friends. And you could start to almost normalise the idea that everybody's got investment properties, but they don't. So when they look at that research, it's probably, like the vast majority of that's going to be consumer debt, not, you know, property investment debts. And I think the thing with properties is, the beautiful thing is, that you're not paying for it. So you've just set something up very cleverly, where, and you understand how this works, where you have a mortgage, and you have somebody else who's paying that mortgage. So okay, yeah, you're responsible for it, but it's paying itself. And so this is something, and I think it's one of the reasons why people are much more comfortable with that and they can sleep much better at night, than having consumer debt and credit card debt, that unless it's really attacked, it can end up being so expensive for us to buy a lot of these things that we're purchasing. And, again, a lot of these things we're purchasing aren't adding to our life satisfaction. So it's, yeah, makes much more sense to try to curb those expenditures with the credit card, those material acquisitions, for sure.
Meaghan Smith 42:50
Yeah. And so then that leads into my third point from what you were talking about in terms of spending for your values. And this is linked, because for me, buying a house, an investment house, that doesn't really have any immediate benefit on my life that I have access to, right? But the reason why I've done this, and also the reason why I invest in shares as well, I reinvest all my dividends and everything. So I mean, it's almost like nothing, there's no difference, right? I just, every time I get paid, I put a percentage away, but my life still is the same. It's not like I'm walking around with diamonds dripping off me or anything, because I have these investments.
Meaghan Smith 43:36
But I'm spending that money in alignment with my values because I think of my future self like my Nanna. I think of this woman in the future, who's me, and I think, 'I really want to look after her, I want her to be safe, I want her to be able to just wander down to the supermarket and get what she needs without having to cut out little coupons or whatever, and I want her to be safe and looked after' and that's a huge motivator for me. I mean, even though I know she's me, it's like I think of her as a different person, and that's how I find it easy to invest and put that money away now, because it feels very connected to myself and what's important to me, I want to make sure I'm okay, when I'm older when I'm not, you know, as fit as I am now. And that's in alignment with my values. So I would rather spend money on that than getting a brand new car and I mean, this is actually quite literally something we're going through at the moment because we have an old car and it's been such a wonderful car until it's not. My mechanic actually just came and picked it up right before we had this interview and I'm like, 'Oh, jeez, I think we're gonna have to buy a new car.'
Meaghan Smith 45:03
But anyway, let's talk more about this idea of spending money that's in alignment with the life that we want and our values. You tell a story in the book about how much money you spend on massages, which I just think is so great. Like, this is totally, because we're not trying to say don't go out, this is used so often, the whole, 'Don't buy a latte and you'll be able to buy a house' and it's like, Oh, come on, whatever. If you want to buy a latte, buy a latte if that floats your boat and you love it and you get so much joy from buying a latte every day, buy a latte. But if you're doing it on automatic and you have no idea how much you're spending on it, and it's not even something that's important to you, then maybe don't. But you talk about this in the book and I think it's a really important point to raise for those who aren't aware of this. Can we talk some more on that? Do you want to tell your massage story?
Andrew Hallam 46:02
Well, yeah, we can tell the massage story. A friend of mine one day said to me, and I was living in Singapore, and he said to me, 'Andrew, you spend a ridiculous amount of money on massages.' And so I'm supposed to be this guy who's really good with money. And anyone, I mean, we all have these inconsistencies, they are what make us human, but many of those inconsistencies are also what enrich our lives. And so he said to me, 'I've just done like back of the envelope math, and you spend about $7,000 a year on massages.' And my wife and I had, there was a woman in Singapore who used to come to our home every Wednesday. Now, her name was Juliana. She was this Malay Singaporean with these just freakishly strong hands. And I would run home from work, and we had a massage table, and I'd lay down after work on every Wednesday, so I'd get a massage, and it was like torture for the first half hour. And then eventually, when she'd worked through the knots, it was just so relaxing. And then my wife would follow, she'd have her massage.
Andrew Hallam 47:10
And then on the weekend, maybe on a Friday, we would go to a foot reflexology place. And we'd lay there for an hour while someone rubbed our feet and our calves. And we just loved it. It was one of those things that you know, if we flew off to Thailand, where it's really cheap, that was awesome, because sometimes we'd do, like, I admit, I would sometimes do like two, and my wife will laugh, but I've done three in a day, where I'll go like oh, I've got three today, where I'll go in - and so the viewers can't see, the listeners can't see, but I'm bald and oh my gosh, oh my gosh, having someone do like a head and face massage for an hour, like head, neck and face. Oh, it's the best. So I walk out of there, and then invariably, you know, we get on with our day, and I come back a few hours later. And then I'm like, wow, I say to my wife Kelly, 'Do you want to go and have a foot massage?' And we do the same thing and then we cap it in the evening with this full body massage. Okay, that's hedonism. Like, that's the pure, pure definition of hedonism. And research too suggests that that isn't necessarily a great thing, to go overboard like that, because then it's not a treat. But back to your point, it's, you know, looking at the opportunity cost, and is that what you wanted to look at?
Meaghan Smith 48:32
Yeah, that, but also just spending money on what's important to us.
Andrew Hallam 48:37
Yeah. You know, I love just looking at that happiness research where it suggests that spending money on experiences enhances our lives. Spending money on stuff almost never does. So when we spend money on experience, and that might be a massage, that might be a trip that you take, that might be you and some friends renting a cabin by the ocean, or whatever it is, you're building memories, and those memories become part of who you are. And I like to think of this as when you're around a campfire, you're on a beach, and you're chatting with friends just about life in general, and your experiences, or the things that you've done. But when you're getting together with old friends, you're never talking about that new iPhone that you bought back in 2014. You're never talking about that car that you owned, when you were 27 years old. You're going to talk about the experiences you had. Because those are things we truly value especially if those experiences are shared with people we love and respect.
Andrew Hallam 49:43
And so when we realise that, and then we start living our life accordingly and spending our money to enhance that and not the material acquisitions, this overall boosts life satisfaction tremendously. So I'm not the sort of person who will say, you have to be penny pinching all the time, so that some point in the future, you'll have a lack of money so you can retire. And there are a couple of reasons I don't believe we should do that. One is, I bring it back down to mortality. That's one. I mean, in the book, I talk about how our lives are like a dark hourglass, and no one can see the sand in it. And at first, that hourglass gets tipped. And we have no idea how much sand is left. And so for that reason, I believe we have to try to live with one eye on today and one eye on tomorrow. Not to just focus on tomorrow, and not to just focus on today, but to recognise both.
Andrew Hallam 50:48
And one thing too, Meaghan, when people get really into this, like the acquisition of money, for example, and they start thinking about and reading about, say, the FIRE community [Financial Independence, Retire Early] and people retiring early, and getting really excited by that, and sacrificing everything, so that they can retire early. Research on this, again, is so interesting, in that my recommendation to people these days is, and this takes a lot of financial stress off people too, I think it can make people feel a lot lighter. My recommendation is, if possible, never fully retire. And so what I mean by that is you could hate your job, let's say you're whatever, you're an accountant, or you're a lawyer, and you're hating what you're doing, it's getting tiring, you're putting in long hours. I'm not saying work until you die, I'm saying when you get to the point where you're financially independent, at that stage, you can choose to do something else that drives you and that motivates you, and it's fun, and it's part time. So then you can spend time with people you love and respect and enjoy experiences. And that part time work brings in a little bit of income.
Andrew Hallam 52:03
And this isn't just me, mentioning like an anecdotal observation to say people that do this are happier. The research on this is incredibly solid. If we retire early, and we fully retire, research suggests on aggregate, we do not live as long. And so this is one of those things, when we looked at the four quadrants of success that I talked about, the fourth quadrant was a sense of purpose. To live and to thrive, we must have a sense of purpose. And so it doesn't always have to be something for money, either. You could be working for a charity, you could just be volunteering, but it's that thing that gets you up in the morning, and gets you contributing. And so it's what the Japanese call a sense of 'ikigai', that sense of purpose, which adds to our level of longevity, adds to our longevity, and our life satisfaction, and I think, Meaghan, it alleviates a lot of stress from people that say, 'I must hit a certain financial figure at X date so that I can put my feet up.' And I say to that, 'No, relax. Work as long as you can, in the capacity that you want to work, because by doing that you come to the realisation you don't necessarily need as big a financial pot later down the road as you might think.'
Meaghan Smith 53:26
Yeah. And we can circle back to what we were talking about at the start, about happiness, is that FIRE to me sounds like, you know, where we're doing all these things for the future, because we think in the future, when we don't have to work, we'll be happy. But I'm sorry to say, if you're not happy now, if you can't generate happiness now, you're not going to be happy later in life, right? Like, I think this relates to what you're saying too, is that we always think, 'Oh, when I reach the goal, when I get this, then I'll be happy.' It's like no, you can actually be happy right now. And you can, I don't mean 'So what's the point of having a goal?' Not that. It's like 'Have a goal.' Amazing, if you want to - I've got a frog in my throat, hang on - If you want to have the independence to be able to retire, good on you. Go for it, but not at the expense of your life now. Right? Like how can you do it in a way that you can feel happy now, like you can create those things that you think you're going to have?
Meaghan Smith 54:48
Like when you retire, if you think you're going to go rollerblading every weekend - I don't know why that just popped into my head, but let's say that's the image you've got. 'Yeah, when I retire I'm going to go rollerblading more.' Well, go rollerblading more now, bring it into your life now, bring those things into your life now, because that's what's going to create that life satisfaction, not busting your balls to some date in the future that you think you're going to be happy. Because happiness doesn't come from things or from retirement. I mean, it's the same with everything, we think, 'Oh, when I leave this job, then finally I'll be happy.' Yeah, you're happy for a few moments, like when you first leave, you get this relief, but then the same reasons why you weren't happy in that job come with you. You're still the same person, your same issues and all the thoughts that you have about life still come with you whatever happens, no matter what car you're driving, where you live, all those things.
Meaghan Smith 55:50
Am I getting too deep here, Andrew, I don't know. But this is what your book is all about. And for those of you who don't know Andrew, go and get - I mean, actually, I think this book 'Balance' is the book you read before 'Millionaire Teacher'. I think this is the first book you read, like, get in touch with why you want to be more intentional about how you spend your money, and also all the aspects of your life. But then, okay, so you've decided that you want to be a little bit more intentional with how you generate wealth for yourself, so you can have money work for you and not the other way around, then go and get 'Millionaire Teacher'.
Meaghan Smith 56:37
And I can't believe we've been talking for almost an hour and we haven't even talked about investing in shares, because Andrew is a wealth of knowledge in this area, like how to invest, in a really simple and easy way. You don't have to go out and learn about all different companies, you can do it in a way that's so simple. I do the method of, are we're going call it a method, I don't know, it's a style, the style of investing that Andrew does, I also do that same style, I've learnt it from him. So I kind of don't want to leave the episode without talking about 'Millionaire Teacher' because I feel like that's how people know you, you're so well known for that. And it's such a wealth, pardon the pun, of knowledge.
Meaghan Smith 57:29
But everything that we've been talking about, I feel, leads to this concept I've been thinking about this week. I read this article, and I'm sorry to the person whose article it was, I can't remember who they were or what their name was, but some wealthy dude was talking about how you can be rich or poor, at any income. And this relates so much to what we're talking about, that if you earn a high income, but you spend more than you make, and you're in debt, and you're unhappy, or whatever, yeah, your income might be higher, but you're still unhappy, and you still don't have wealth, right, financial wealth, and you can be so you're 'poor', like in quotation marks, even though you've got a high income. But then you could be someone on a low income, who, you spend within your means, you spend intentionally on the things that are important to you and what you value, and you don't spend more than you earn. You're rich. Like, that's rich to me, I mean, that's my definition of wealthy. I tend to use the word wealthy because that word rich still triggers me a little bit, you know, I think of, I don't know, Gucci bags or something when I think of that word rich. What are your thoughts about that?
Andrew Hallam 58:52
I think that it comes down to gratitude. So it's feeling and recognising and feeling grateful for what you do have and who you are, and where you're at in life, and even the material things, like looking at those things and taking moments to just reflect on some of the remarkable things that you do own, that you don't necessarily get used to and take for granted. Try not to allow that hedonic adaptability to get in the way of what your life satisfaction is. You know, it's interesting I'm going to say, with 'Balance', the book. My hope is, I'm going to say, save your money and don't buy 'Millionaire Teacher' because in 'Balance', I think I took all of the aspects of 'Millionaire Teacher' and I think I condensed it to the best of my ability in 'Balance' itself. So I explained how the stock market worked, and how and why you should be purchasing the same products I talked about in 'Millionaire Teacher' I talked about in 'Balance'.
Andrew Hallam 1:00:19
And the thing about the book 'Balance', is it's more up to date. So the all-in-one ETFs, the all-in-one life strategy funds that you and I have talked about before, are mentioned in 'Balance', where I actually mentioned them. They're relatively new products. And so it's just an easier way of investing, in the way I've described in 'Millionaire Teacher', but now that we have some new products that bring it together so that you can end up investing that same way, far more easily. So that, and I think I added that component on socially responsible investing, as well, like there are people that decide, 'You know, I don't really want to own companies that have really high carbon footprints or like, you know, oil based, oil and gas based companies, I would rather feel a little bit more comfortable knowing that my funds or the stocks within my chosen indexes are a little bit more environmentally sound.' So I have that chapter on the socially responsible investing as well. So yeah, my recommendation is to save your money. Skip 'Millionaire Teacher'.
Meaghan Smith 1:01:35
I'm going to be controversial here and disagree with you, because I think yes, go and get 'Balance', and yes, I do think that it covers that stuff. But I think this is a classic case of, you know when something's easy to you, you think it's easy for everyone. And I see this like, we know about something, and it's just so easy to us, and so we just assume it's easy for everyone. So I still think that if you, because I'm telling you, I've met so many people who are just like, 'Shares are so complicated, I can't do that.' And so I still think get 'Millionaire' - I'm going to give this a total plug for you, Andrew, because I still think 'Millionaire Teacher' is an amazing book. Go get both, read 'Balance' first, and then if you feel like you want to go deeper on the understanding about what the heck are these ETFs and all of this index fund stuff, I think you explain it really well in 'Millionaire Teacher' as well.
Meaghan Smith 1:02:41
But listen, this happened last time and like I met your wife as well off air and I feel like we could have talked for so long. But let's wrap it up because you know, podcasts, people have got lives, you know, I know that there's someone listening right now, they're at school drop off, and they've got home already and they're like, 'Hey, the episode's still going, what's happening, wrap it up, guys?' Right?
Andrew Hallam 1:03:04
[Laughs] It's because I won't shut up, I'm so passionate about this stuff.
Meaghan Smith 1:03:09
Don't worry, I'm the same. So alright, let's - one last pearl of wisdom. I always wrap up with you know, a little money practice or - last time you talked about, I think it was tracking your money, so we won't do that one again. Do you have any little tip? Something that you do, that you'd be happy to share?
Andrew Hallam 1:03:33
Meaghan, I don't. I try not to think about money. And so if that's my tip, okay, let that be my tip. Um, I hardly ever look at my account balance, and I've always been like that. So my investment account just does its thing. It obviously it goes up and down with the markets but over time it continues to grow, and I hardly ever look at it. And I think that's my greatest tip. So let's talk about, just super quickly, how Fidelity did a study to see which were its best investors, you know, like, what was their level of education, what was their age demographic. They were people who either forgot they had accounts with Fidelity, or they were dead. There's my tip.
Meaghan Smith 1:04:22
Just leave it alone. Invest the money and then leave it alone. Yes. Yeah, yeah.
Andrew Hallam 1:04:29
Yes, yes. You know, it's like your investment portfolio is like a bar of soap. Like the more you mess with it, the smaller it gets.
Meaghan Smith 1:04:36
Alright, so before we leave, I know you've given me, I will put all the details on my website, how people can find you and your books and everything but just tell us, just in case somebody doesn't want to go and do that, where can they find out more about you or get your books?
Andrew Hallam 1:04:51
Oh well my website is andrewhallam.com , it does have links to my books there and my books are available at all major retailers both online and brick and mortar, so, I mean Amazon. What do you guys usually use? Do people in Australia often use Amazon? Or is there another online service you use more prolifically?
Meaghan Smith 1:05:10
Amazon, Book Depository - Book Depository I think is more Europe but certainly here and Booktopia is an Australian one. Yes.
Andrew Hallam 1:05:18
Yeah. So 'Balance' is available on all of those.
Meaghan Smith 1:05:23
Amazing. So let me just say a heartfelt thank you again, Andrew for coming on the show for a second time and it's pretty spesh, because I've got to say there's only been two men who have ever been on this show and not because we don't love the men, we love the men, but I'm all about the women, women empowerment and everything. But not only have you been on the show once, you've been on twice now so it's a pretty big deal.
Andrew Hallam 1:05:50
Well, thank you it is an honour.
Meaghan Smith 1:05:53
Thank you so much, Andrew. Alright. So good. Andrew is a wealth of knowledge when it comes to investing. And I would love for you to learn from him. If you haven't already listened to or even if you have, go back and listen to the original episode that I did with Andrew, I think it's Episode 34. I'll make sure I link it in the show notes. Go to the show notes of this website, get his new book 'Balance' that is out now, just learn from him. You won't regret it, okay, I've learned a lot from him and I really do value what he has to say and that is why he's on the show again, right, twice. So getting my full recommendation there.
Meaghan Smith 1:06:44
And if you are loving what you are learning on the Money Mindful podcast and want to work with me, yes, I love it. I love helping women uncover and unblock their limiting beliefs around money and success. And like we've talked about on the show today, I think to have money and success and a life that you love and love yourself in it requires a positive relationship with money and yourself. And if you would like to create that and you'd like some help with that, I can help you with that. So you just need to go to my website, book a consult, we'll meet, we'll chat, we'll find out if we're a good fit. And until next time, have a beautiful week. Bye bye.
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