Why You Can't Stop Spending Money
How to escape runaway spending and the nature of lifestyle leaps.
Welcome to The Alpha Snail! I already like you just for being here.
If you’re interested in learning more about finance and wealth creation—and don’t mind a dash of philosophy—you’re in the right place!
If you subscribe below, not only will you receive one locally-sourced handcrafted email from me each week, but you will have my eternal love and admiration.
Have you ever been on one of those parabolic treadmills? They're really something else. As best as I can tell they aren’t for gentle jogging but rather, for hauling ass. There are no buttons, and no speed controls. It’s entirely self propelled. The faster you run, the faster the belt turns. Things can get out of hand very quickly.
Although I run quite a bit, I still can't figure out how to use these gracefully. Despite my best efforts, I always find myself sprinting like a lunatic. On top of that, there’s really no reasonable way of slowing down. So you have to abort by grabbing the safety rails and lifting your bodyweight off the track. The belt will slow to stop, and the workout’s over.
Our spending behavior is a lot like this hellish treadmill. Once you get on, you're just one big stride away from a full on sprint.
Luckily there’s a reliable method to slow ourselves back down, and in the coming months, I’m going to need to use it.
Step Function Lifestyle Change
Our lifestyles don't slowly ramp up, but rather, build through a step function. That's to say, "Lifestyle Creep" is a misnomer. It doesn't so much creep up on us, as it pounces.
Just 2 years ago, nearly all of my friends were in grad school. Our average income was about $32,000 a year. We split our time between $6 pints at the local brewery and board games. Occasionally we’d decided to “play adult” with quaint dinner parties and cookouts.
Today, my life is quite different. Nearly all my friends are employed by FAANG companies, bringing in multi-six-figure salaries. We spend our time frequenting high end speakeasies and sampling $16 cocktails. Concerts every other weekend are not unusual, neither are $1,000 weekends to Napa.
For nearly a decade of my life, I was cruising along, business as usual.
Then, Boom! New city, new job, new life.
This didn’t feel like a lifestyle creep, but rather a lifestyle explosion.
Understanding Perceived Effort
As a runner, I track my metrics religiously. They help me build a quantitative understanding of what’s going on in my body every time I head out the door for a workout. Some of the most important metrics I’ve found are: pace, elevation gain, heart rate, and perceived effort.
That last one, Perceived Effort, is the only one that doesn't show up on the watch screen. That metric is subjective, and possibly, the most important of them all.
A phenomenon that I've noticed—and have been experimenting with lately—is how heart rate translates to perceived effort. For instance, if I'm able to keep my heart rate at around 145-150 bmp, I can run 20 miles no problem. The crazy part is, it won’t even feel hard.
Here’s some actual heart rate data from a recent 12 mile run. Although it was long, the perceived effort was easy. I could have gone all day.
Compare that to a recent 5 mile run. This time the perceived effort was brutal. At this rate, it’s was just a matter of time before I was forced to tap out.
Lifestyles act much in the same way.
If we stay within our limits, and hover right around a comfortable baseline, we can go all day. We're cruising. Life is good. Not only that, but we can clip off some really impressive milage. By keeping the Perceived Effort of our lifestyles at a comfortable level, we're setting the stage for enduring prosperity.
This works in just the opposite way as well. You may think you're out for a simple jog, but next thing you know your arms are flailing, your legs are spinning, and your heart is beating out of your chest. When the Perceived Effort of simply keeping up with your lifestyle is unbearable, you're in the danger zone.
Why Do Lifestyles Build?
Lifestyle expansion is alarming for one simple reason, there is no upper bound. For every two story house, there is a bigger and fancier three. For every five star hotel, there is a vacation home. For every Ferrari, there is a private jet. There’s always one more level.
Our lifestyles build as a step function, rather than a gradual ramp, for several reasons. I wanted to highlight three in particular, because they are by far the most common. Each of which individually can bump you up to a new lifestyle level but when combined, will certainly set you on a dangerous course.
Starting a New Life
Last year I moved from North Carolina to California. I had to completely start over, and it wasn't a smooth and gradual change.
It wasn't as if one week I found myself in Tennessee with 73% of my old friends, the next in Colorado with 34% of my old friends, and the last in California with 0%.
One day I was in North Carolina, the next in California.
One day old life, the next, new life.
Lifestyle changes happen in leaps, because life happens in leaps.
In order to build a new life, or embark on a new phase, you fundamentally have to change states. It will not be gradual, but sudden and all at once.
The same applies to starting a family, buying a home, and a host of other life changes.
Changes in Income
Salaries, much like lifestyles, jump. This is less intuitive if you've been at the same company for several years, but if you've moved around a bit, you might've already noticed this.
We’ve all come to expect a 3-7% annually raise by staying with our current employer. But by jumping ship, you have the opportunity to increase your salary by nearly 10-25% each time.
I've observed friends do just this. After each move, they find themselves with an elevated salary, a fancier title, and as you probably guessed a new lifestyle. In as little as five job hops, I've seen people go from getting paid $75,000 a year to $225,000.
A higher paying job is probably the most salient example of how lifestyles can leap. We've all seen it play out.
Our Desire to Fit in
If you grew up with older siblings, you probably still remember how badly you wanted to be a big kid. You wanted to play their games, and fit in with their friends. You were clearly a baby, but you dreamed of being bigger. Most importantly, you wanted to be accepted by the people you admired.
We don't stop doing this as children.
If all of your friends are making multiples of your salary, a fun night out could really do damage to your bank account, but barely make a dent in theirs. By running with the big kids, you risk getting crushed just by trying to keep up.
Recognizing a Lifestyle Leap
The first indicator that your lifestyle is getting out of hand is your Perceived Effort. Remember that when tracking runs, perceived effort doesn't show up on your watch data. It is an ex post facto self assessment. You have to actually sit and reflect.
The same applies for assessing our lifestyle.
Your Perceived Effort won't show up on a spreadsheet. It won’t be found in the difference between your income and your spending.
It's not a number. It's a feeling.
And for me, that feeling is in my stomach.
Walking home from Whole Foods yesterday, I felt physically sick. The nausea hit me in two waves. The first was spurred on by the fact that I just spent $75 on some apples and cheese. The second was brought on by an invitation.
That day, a close friend had invited me to do something fun that I simply couldn't afford. Now in reality, I could “afford" it but something irrational in my gut took over. The invitation had been compounded. It’s as if the force of every night out, every concert, every trip and every Amazon purchase in the last year was behind it.
For the first time in a long time, my Perceived Effort fired a warning shot, and it hit me right in the stomach.
Everyone's warning shot will be different.
You may be curt or snappy with your spouse. You may get headaches or sweaty palms. You may start working harder or longer hours. I even know someone who's warning sign is an increase in spending velocity!
How your Perceived Effort manifests will be unique to you, but what’s absolutely critical is that you learn to recognize when the speed has been dialed up too quickly. You're no longer comfortable in your own life. You need to pull the brakes.
Coming Back Down to Earth
The only way to reset back to baseline—and the only way to slow down one of those freaky parabolic treadmills—is to eject. To lift yourself from the spinning belt. To stop.
For many, this manifests as physically changing locations, even if it’s just for short periods of time.
Henry David Thoreau moved to Walden Pond for two full years, to determine if he could “survive, possibly even thrive, by stripping away all superfluous luxuries, living a plain, simple life in radically reduced conditions?"
Carl Jung constructed—and frequently retired to—Bollingen Tower. A four bedroom stone house he built with his bare hands, to escape the bustle of Zürich.
Siddhartha Gautama, the grandmaster of lifestyle reset, sat under a fig tree for 49 days (more on this later).
Regardless of the exact method, the goal of a lifestyle reset is reminding yourself how little you really need to be happy. It doesn’t work if you bring the life you’re trying to escape with you.
My Personal Lifestyle Resets
Between the ages of 25-28, I spent time traveling to nearly two dozen countries, and living entirely out of a backpack. This is how I pulled the brakes in my own life.
Each time I unpacked my bag in a 12 person hostel room, I was gifted a gentle reminder that I don’t really need much to live. More than that, I don't really need much to live joyously. Aside from my health, and a few basics, everything else was fluff and convenience.
Electricity is great, but I've lived months without it. Playing cards, beer, and a few good friends more than make up for its absence.
Air conditioning is nice, but if everybody is sweating, for some reason you don't seem to care.
In 2017, I spent three months traveling throughout India. In this time, nearly all of my preconceptions on comfort and necessity were erased. Everything I believed to be an essential, was gone. And yet, I was happy.
I stood in awe of the Taj, and swam in the Ganges River. I ate beautiful food, and met beautiful people. For three months, life was distilled.
Stripping everything away, all the contrivances, all the luxuries-turned-necessities, I realized that life is no less beautiful.
This is the only way I know to reset.
Turning it off, and turning it back on again.
Sojourn to a Fig Tree
You may be discouraged to hear that, following every reset is a return. Our retreat into the wilderness will only stave off our growing lifestyles temporarily.
Surely there’s someone who’s found a permanent fix? Someone who broke free of the cycle entirely. Well, there's actually a name for doing just that, it's called Nirvana. It's what The Buddha achieved.
If you're not familiar with the story, Siddhartha Gautama was born a Prince. He lived at the height of luxury, and yet still felt a deep emptiness. To escape the contrivances and meaninglessness of palace life, he decided to leave the safety of his home to look for peace. After years of wandering, he found himself sitting under a fig tree. He wouldn’t emerge for 49 days, but when he finally did, he was unshackled from all worldly desires. He had reached enlightenment as The Buddha.
Interestingly enough, even the archetypal story of freeing yourself from growing desire starts with a physical state change. Leaving luxury and security behind, in an attempt to thrive with less.
Although complete enlightenment is probably out of reach for most of us, retreat can serve as one of the best—albeit temporary—antidotes for a runaway lifestyle.
One day, despite your best efforts, you're going to return to the old climb. You're going aspire for more. Retreating “into the wilderness” was never about quitting the cycle entirely. It was about recalibrating.
Understanding that there’s no one-time cure—and that lifestyle leaps will follow you throughout your tenure on Earth—means that we can begin to plan appropriately.
We can anticipate times of high Perceived Effort, looking for warning signs that the pace is picking up too quickly. We can notice the literal gut check and use that information to slow things down.
I encourage you to hit the brakes often, and sit under every proverbial fig tree that you find. There is no shame in lifting yourself off the track before the speed kills you.