Previous: Class Differences, The Bachelorette Tax, & The Wedding Industrial Complex
Next: 6 Time & Money Investments That Made Me Way More Marketable Than My Degree



View count:97,731
Last sync:2024-06-16 20:00
Hey, guys.

It's me, Chelsea, from The Financial Diet. And this week's video is sponsored by

So here at TFD, we do not believe in building wealth just for the sake of it. To some extent, money does buy happiness in the sense that you need enough money to be able to meet all of your needs, in order to even really function, let alone focus on the things that make you happy. But hoarding money for the sake of it is beneficial to no one, let alone the society around the person doing it.

But that being said, we often deprive ourselves of so many things in life because we think we have to be rich in order to enjoy them or to perform them. Wealth can be an invisible barrier to many things, but it isn't to everything. But there are many things that we could be doing at all income levels to help enrich our lives and to make us feel wealthier.

And we don't have to wait until we have millions in the bank in order to do so. So without further ado, here are seven things you think you have to be rich for but don't. Number one is setting up long-term passive income.

Passive income has become a buzzy term on TikTok and elsewhere. But the type of passive income that we're taught are key to getting rich while doing nothing, like setting up a real estate empire, for example, not only come with hefty upfront costs of time and money, making them not so passive at all, but they can also be really exploitative. But the one-- hello, my girl.

Look at her. You want your little Bunny? It's a bear, but all of her toys are named Bunny because she can't remember that many words.

But the best vehicle for generating passive income is also the one that is available to us all, regardless of income level. And that's investing in the market, especially in a tax-advantaged retirement account, like a 401(k) or an IRA, because by investing money with these accounts, you're setting funds aside with the near guarantee of growth and generating income for your future self so that you no longer have to rely on your income from a job. The 2023 contribution limit for 401(k) has been raised to $22,500, which for most Americans is an unfathomable amount to save in a year.

But even if you can't get to that number, don't be discouraged from investing anything toward your retirement passive income. A good goal would be to aim to put 10% to 15% of your income towards retirement or to get as close to that range as you possibly can while still affording your expenses. We've had a pretty rocky market year.

And for some people who are less experienced with investing, that can seem like a complete deterrent to the concept of investing in the market. But it's important to remember that this volatility is normal. It's cyclical.

And it's part of investing for the long term. I'm going to link you in the description to some of our greatest hit investing videos, as well as our class with Dumpster Doggy, a.k.a. Amanda Holden, a.k.a. our all-time favorite investing expert and personal friend of mine, who will take you through the entire process of everything you need to invest, regardless of your income level.

But point being if you think investing is something that only rich people can do, that is probably the number one most important financial myth to dispel forever. Number two is getting financial advice tailored to your situation. So the idea of having someone that you pay to help you make the right financial decisions can feel like a luxury that is only for rich people.

And to be fair, for a long time, that was pretty much the case. Getting to work with a living, breathing financial advisor has historically been reserved for those with high net worths and been out of reach for people who don't just have six figures collecting dust in a checking account. Luckily, you don't have to have anywhere near that amount to get personalized money advice from a professional. provides clients with a top-notch advising team for a fixed, flat annual fee. While our motivations are highest at the beginning of the year, unfortunately, despite our best intentions, we're all hardwired to make the worst decisions at the worst times with our money, even when we know logically what we should be doing. That's where comes in.

Think of them as your financial accountability partner. Their team of advisors work for you, not commissions, and help you to achieve your smart financial goals through planning, investing, tax strategizing, and more. Click the link in our description to schedule a consultation call with today at and never make another financial decision alone.

Number three is having a dinner-party-worthy home. So hosting and entertaining in your home, if that's something you want to do, can often feel like a luxury that's only reserved for the wealthy. But having grown up in a house where when I was little we didn't have much, my parents hosted very frequently.

And it wasn't just something that they wanted to do. It was also, in many cases, a much more affordable option than constantly going out to restaurants. And I was hosting parties in my truly sinister studio apartments when I lived in them in Paris.

And, trust me, I made it work on a shoestring budget. And I would argue that barring some really toxic potential roommate discord that you probably want to resolve for other reasons, basically anyone can become a host and have a place that's worthy of entertaining and throwing the kind of parties you might have in mind. So here are just a few things to be intentional about in order to make the most of any hosting experience.

And it starts with going to my personal TikTok, @FaganChelsea, as seen here, because it's my safe space to do all of my posting about my recipes and my dinner parties. I love it. But other than that, you're going to want to keep a clean, clutter-free space for guests to gather.

And if you don't have the space for a large dinner table in your everyday life, consider temporarily moving around some furniture or looking into things like folding or drop-leaf tables, which you can set up next to each other and spruce up with a tablecloth to give the illusion of one big table or fold down to put away if even a smaller table is not something you can have room for all the time. Have a few drink options available. I often like to center around one punch-style drink.

And make sure you always have nonalcoholic options that are available so that everyone can enjoy and have something special whether or not they drink. There is nothing worse than when someone who comes two to party and doesn't drink is forced to have lukewarm tap water while everyone else gets to enjoy special fancy beverages. And it's also, on that note, perfectly OK to assign specific requests to bring things, such as a dessert or an app or a specific drink when guests ask if they can bring anything.

You can even go potluck style if you want to be more cost effective. Sending out formal digital invitations is also really fun and makes things feel super special at very little cost. I personally love Paperless Post, but you also don't have to spend any money to send them out and can do it all by email.

Investing in inexpensive tablescapes and place settings are another great one. And even small things, like having cloth napkins versus paper ones, can make a huge difference. And they're reusable versus something that you constantly throw out.

Tablescapes don't have to be fancy either. Sometimes I just put a little bit of fruit and a couple of candles and maybe a eucalyptus sprig or two in the middle of the table and I'm good to go. And sticking with dishes that you've made before and are totally confident in, because dinner parties are about much more than the food.

And the most important thing is to not feel worried about how something is going to turn out or to spend the entire night in the kitchen. I get a ton of questions about hosting and entertaining, especially because I do live in a relatively small living space. And a lot of people think that doing this kind of stuff is totally out of reach unless you have endless money to blow.

But I assure you, it is absolutely not the case. And I also highly recommend it as an alternative to constantly going out. Now still on the lifestyle tip, number four is having a signature style.

So we often associate looking put together with being wealthy. But, just like with hosting and entertaining, it often just comes down to how intentional you're being about the choices you make. Creating a personal style does not have to be expensive.

And, in fact, in many cases, having fewer pieces and just having them be pieces that fit and look great are going to be a much better alternative than having an overstuffed closet. Similarly, buying things vintage and secondhand can often provide you with pieces that are of higher quality if they're older and are more original and personally defining than whatever you might be able to get in a fast-fashion store for often the same or less money. And, similarly, something very underrated is that it's not often the piece itself that makes someone look really put together.

It's the tailoring of that piece. So rather than constantly buying different options that don't all fit you well, having one or two key pieces that are perfectly fit to your body are a much better building block of personal style. Paying special attention to things like silhouettes and colors in which you feel your best and most powerful is another easy way to guide yourself toward the right pieces.

But most importantly, remember that in an era where clothing is basically now disposable after a single use, having things that are considered and of higher quality, which, again, often come from places like thrift and vintage stores, automatically makes you look much more rich. Number five is outsourcing certain tasks. So we often can feel guilty about outsourcing things that we don't have time for or aren't very good at.

And this is something to remember, that not only everyone should be able to do if it's the right move for them, but it also doesn't have to be something that is only available to the uber wealthy. And, interestingly, when it comes to outsourcing, middle-class Americans aren't necessarily outsourcing nothing. In many cases, the tasks that fall traditionally under men's work get outsourced, while women's work is taken care of from within the home.

From Gemma Hartley's book Fed Up-- Emotional Labor, Women, and the Way Forward, which is a recent TFD Society book club pick-- if you want to join in the future conversations, click that Join button. Come join our book club-- a 2015 survey by Working Mother found that the gender divide in domestic work for couples in dual-income households was still stuck in a bygone era. Moms were in the majority for scheduling medical appointments for kids, taking time off work for those appointments, cooking, cleaning, laundry, shopping, filling out permission slips, grocery shopping, and tidying, while dads were mostly tasked with taking out the trash, lawn care and landscaping, filing taxes, car washing, and car maintenance.

The top five most outsource chores on the list? Everything in the men's column except for taking out the trash. So if cleaning or grocery shopping are a big source of stress for you or are difficult for accessibility reasons or something you don't have time for, it is OK to pay someone to do these things as long as you are paying them fairly and treating them well.

At the end of the day, as long as something is not derailing your longer-term financial goals, you don't have to feel guilty about spending on it. As I mentioned, I did not grow up with a lot. And for a long time, it was really hard to imagine the idea of outsourcing certain things because that would have just been unthinkable in our home growing up.

But as I got older, I realized that a key part of valuing and understanding my own time was realizing that there are certain things that I'm just not good at and take me five times longer than it would take a professional. It's the reason, for example, I use an accountant, who, by the way, pays for themselves in terms of the money they save on taxes. But for some people, it's things having a cleaning person or buying prepared meals or even having a virtual assistant for certain tasks.

The point is identifying the things that you could use help with is not shameful and not something you have to wait until you're uber wealthy to do. Reclaim your time. Number six is negotiating.

And this is a drum that I beat frequently on the channel, but it is always worth revisiting. Research consistently shows that those who feel or actually are powerful tend to believe that they are more entitled to resources than those who are less powerful and tend to demand a bigger piece of the pie for themselves, a.k.a. rich people are much more likely to attempt to negotiate in basically any circumstance. But you don't have to earn the ability to negotiate, whether you're trying to get more money at your job or a better price on your car.

In my day-to-day life, especially when it comes to the people around me and my family and friends, I'm often asked now about advice on these types of things, financial matters and career matters, et cetera, given what I do for work. And it is consistently shocking to me how many people who are excellent at what they do, who have a ton of self-confidence in all different areas, will sell themselves insanely short when it comes to negotiating for their value. A shocking number of people don't negotiate at all, most of those people being women.

And many people never even do the basic research to see if they're being hugely underpaid or low-balled at an initial offer. This information is now blessedly available to all of us on places like Glassdoor, where we can see what other people are being paid for these things and use it beyond our own capacity and skills to negotiate for what we're worth. But again, very few people do it.

And even at TFD, I have hired before and had many people come in the door without negotiating for their rate. The key is knowing your worth, having evidence and data to back up your points, having a track record that advocates for you, and doing a little good old-fashioned role playing to actually practice how the conversation will go because it's very easy to get tongue tied in real time. Lastly, number seven is becoming a connoisseur of something.

So we will often associate being wealthy with becoming an expert in something, like being a wine snob, for instance. But A, often these people don't really know much of anything about these subjects but are just more easily able to access really good versions of these things. And we also tend to think of them as having all this time to dedicate to this personal cultivation and hobbies.

But rich people aren't necessarily working less and freeing up more time than you are. In the classic 1930 essay, "economic Possibility of our Grandchildren," the economist John Maynard Keynes forecasted a future governed by a different set of expectations. The 21st century's workweek would last just 15 hours, he said.

And the chief social changes of the future would be the difficulty of managing leisure and abundance. But 60 years later, it seems more true to say that it is not leisure that defines the lives of so many rich Americans. It is work.

Elite men in the US are the world's chief workaholics. They work longer hours than poorer men in the US and rich men in other advanced countries. In the last generation, they have reduced their leisure time by more than any other demographic.

And, personally, I don't think there's anything I can think of less aspirational than earning more money just so you can work more. But if nothing else, this is proof that you don't have to be rich in order to have things like a hobby or develop a real understanding of something. Now, again, as I said in the beginning, if you don't have enough income to meet your basic needs, these things will also be out of reach.

But for many people in the middle, we often underestimate the extent to which these things are available to us. I mean, going back to the wine snob thing, there's even literally a Wikihow on how to do it. And it does also necessitate having some free time, which is easier said than done, especially if you have things like children, for example, or are working multiple jobs in order to make ends meet.

But carving out a specific interest and dedicating time in your schedule to furthering that interest, if that is at all available to you, has huge psychological benefits and will lead you to feel that you are living a richer, fuller life. And, as we discussed in the Eve Rodsky interview, one of the best ways to prevent burnout is by taking a serious interest in your own life and your own time, which often sometimes necessitates changing jobs. Lastly, you can also plan the things that you need to do around what you want to become a connoisseur of.

For example, you have to eat. And you likely cook at least some of your meals. So you could start cultivating a working knowledge of Szechuan cooking by making one Szechuan dish a week at home, which is what I started doing.

And now I have a whole shelf in my spice cabinet devoted to the cuisine. The same can be said for things like learning languages or becoming really good at a specific game or really anything else that we often believe we have to have way more money than we do to really dedicate time for it. And lastly on that note, let me just say, nothing is better for this and more underutilized than the library.

Not only is it all the free books, which can be in paper or Kindle form or whatever e-reader you like, they also have at many libraries enormous amounts of free classes and workshops and clubs and ways to enrich yourself that literally don't cost any money and are also a really cool way to meet people that's not a bar. Shout out to libraries. We're always coming back to the libraries here at TFD. [XYLOPHONE DINGING] And I am popping in here to answer this week's two questions from TFD Society members.

And if you are not a Society member and you want to ask these questions and have access to all of our other amazing perks, like our exclusive monthly bonus videos and our book club and tons of other stuff, just go ahead and click the Join button. But let's get into it. This week's first question is, "In the episode on imposter syndrome, you talked about how relatives and in-laws didn't take your career seriously at first.

How did you deal with it? I myself had my fair share of comments on how my current career situation is absurd and useless. And it feels insulting and infantilizing, as if I needed a boomer Karen to give me advice on how to build a career in tech field that she doesn't know [BLEEP] about." OK, so I think you're already on the right track, I would say.

My fair share of comments on how my current career situation is absurd and useless-- OK, so I think one of the things that is really important to just address here is that it is very important to separate out in your mind relevant, useful, constructive feedback from people whose opinions you really value and nonsense that you need to tune out. And anyone who would refer to your career as things like useless and really degrade you about them, that person, you can just write off their opinion because who talks like that? That's a horrible thing to say.

There are times when people whose opinion you value will have constructive criticisms to offer. And if you're seeking feedback from someone and they offer critical feedback, I think that could be important to take into account. But ultimately, what I kind of had to learn in the process of building a business throughout all of the time when it wasn't really socially valorized or validated, and even today in work, all the time, I am faced with choices where the right choice is not necessarily the more lucrative or more socially valorized choice.

I think what's really important-- and sometimes it really helps to journal this out or speak with a really trusted person in your life or a therapist about this-- is to really determine what your metrics of success are. What are the things that are important to you? What really helps your quality of life?

What is setting you up for the kind of future you want? And anything that doesn't fall into those categories, anything that is not successful on those predetermined metrics I think you can really write off a little bit and say, once I'm meeting those needs, the rest is just noise, no matter who it's coming from, also kind of especially who it's coming from because some people just have no business weighing in on this stuff. OK, number two, question two, any hacks on how to tell your landlord to [BLEEP] off?

But in all seriousness, renting is literally destroying our finances and we have no other option. I feel as though we will be renting forever at this point and we'll never be able to actually acquire assets that will increase in value. Also [BLEEP] car culture in America.

That is also a huge pain point in our budget. Yeah, I mean, all of this is real as hell. I'm vibing with it.

How to tell your landlord to [BLEEP] off, hard to do, right? Yeah, you're in a pretty precarious relationship if you alienate the person who could evict you. The truth is that good news and bad news in this situation.

One, the good news is that as a renter, you do have a much higher level of flexibility to change your living situation than someone who is locked into a mortgage. Now, that may mean things having a place that is smaller or less centrally located or has fewer amenities. But you do have a more day-to-day level of flexibility, again, compared to someone with a mortgage.

And it's important to reiterate that just because you own your home does not mean that you're building value in that home. Many people lose money owning homes. And it is not universally the good investment that we're taught to believe it is.

So I think it's important to reframe that in your mind. But the bad news is that it is, you do have relatively little leverage as a tenant as it pertains to a landlord. One thing that I really recommend everyone do is know their rights.

Actually do some research on things like tenant law and see. It's important to separate out in your mind what is just an annoying landlord versus a landlord who you could theoretically take to court. And while you don't have a ton of leverage, there are a lot more resources for tenants than most people know about.

So I think really informing yourself of your rights as a tenant is very important. And then secondly, remembering that this paradigm that we constantly grow up with of you throw your money away if you're not owning a home is very much not true. So I just wouldn't despair on that front.

And you're not throwing your money away. Everyone has to live somewhere. The car culture has to be a different question.

But I feel you. But, as always, guys, thank you for watching. And don't forget to hit the Subscribe button and to come back every Monday, Tuesday, and Thursday for new and awesome videos.