In my post, “How You’ll Feel Achieving Various Millionaire Milestones,” a commenter named Joseph shared these thoughts:
“I’m fascinated by someone worth $10M or $20M not feeling wealthy. Are they hanging out with nothing but billionaires? The only other explanation is a scarcity mindset. But I suppose that mindset got them to where they are. They need to now learn to spend! Once we hit $5M, there will definitely be a silly $150,000–$200,000 car happening. I think staring at a Porsche or Lamborghini logo will help with the not feeling wealthy thing.”
Learning how to spend is something many prodigious savers and investors have to work on. When I turned 45 in 2022, I made it my mission to start spending more to draw down my net worth. It worked, but not by intention. Thank you, bear market for losing me so much money that year!
Then at the end of 2023, I intentionally dropped a load of cash on a house I didn’t need. My thinking: I might as well live in the nicest home I can afford while the kids are still with us. Surely, the extra property taxes, maintenance costs, and opportunity cost would start dragging down my net worth. YOLO!
But the stock market had other plans. It surged in 2024 and is up again so far in 2025. Meanwhile, San Francisco real estate roared back to life, with bidding wars in the springs of both 2024 and 2025. Now we’re in a holding pattern.
It turns out that my net worth is more dependent on the whims of the markets than on any of my actions. The only reliable way to reduce it is to make consistently bad investments, and then panic-sell at the bottom. But who wants to do that? After a lifetime of investing, my instinct is to keep trying to make profits.
For spending, I can only eat so many wagyu steaks before feeling ill. My favorite retro Air Jordans cost $200, and there’s only so much closet space. I’m not into fancy $50,000+ watches or clothes, nor is my wife. Flying private is outrageously expensive, so we won’t. And I still can’t bring myself to pay a lot for a vacation rental when we’re either out and about most of the day or sleeping for eight hours a night.
Spending money wastefully requires special skill, and that is something I’m working on developing.
It’s Easy To Not Feel Rich Even If You Technically Are
If you have a net worth over $1 million, you’re wealthier than about 94% of Americans. If you’re not there yet, I will help you get there with my USA TODAY bestseller, Millionaire Milestones: Simple Steps To Seven Figures.
Cross $13 million in net worth, and you’re in the top 1% in one of the wealthiest countries in the world. You should feel rich at this level, but not always.
So why don’t more rich people feel rich?
Because it’s relative, as Joseph alluded to when he mentioned “hanging out with nothing but billionaires.”
I replied to Joseph:
Yes, there is a scarcity mindset. For example, 50% of NVIDIA employees are worth $25 million or more. Which means you’re often bumping into colleagues worth $50–$100+ million.
My softball friend who joined Figma in 2018 is probably worth $30–$50 million. But the co-founders? Worth $4–$6 billion.
It’s all relative. Living in San Francisco, the competition is fierce and so is the wealth. Best to relocate to Honolulu instead for a better life.
You’re Not Going To Blow Your Money Once You Get Rich
Unless you completely lack self-discipline, you’re going to keep making sound financial decisions after reaching the various millionaire milestones. I put the odds of Joseph actually spending $200,000 on a Porsche or Lamborghini once he hits $5 million at less than 50%. When you know how long it took to get there—and the risk and effort involved—you tend to be more judicious.
He’s either going to follow my 1/10th Rule For Car Buying or more importantly, follow my House-To-Car Ratio to ensure he’s spending responsibly. If Joseph is making $2+ million a year or owns a $10+ million home based on my 30/30/3 Rule For Home Buying, only then might he buy a $200,000 on a car.
I believe everyone is long-term rational. And rationally, everybody will do significant research before spending on such an expensive item.
I’d Much Rather Invest In My Children’s Future Than Buy A Nice Car
Case in point: Nine years of ownership later, I can’t bring myself to replace my 10-year-old Range Rover Sport with a new one for $120,000 out the door. I bought my car for $60,000 out the door, and it still gets me from A to B just fine. Yet, my net worth is much higher than it was in 2016.
Spending $120,000 on a depreciating asset just feels wrong when I could invest that same amount into a basket of growth stocks, the S&P 500 index, a rental property, or the Innovation Fund, which holds stakes in companies like OpenAI, Anthropic, Anduril, Ramp, and Databricks.
The opportunity cost of not investing feels too high. Am I supposed to YOLO with a $120,000 car that I’ll be too afraid to drive to the supermarket given it’ll get dinged up? Or should I invest $120,000 in my kids’ futures so I’ll worry less about them when they’re adults?
Obviously, any rational person who loves their children would choose the latter.
When Investing Feels Better Than Spending
At some point, you may realize you simply enjoy investing more than spending. Watching your money compound is exhilarating, especially when you get in early as an angel investor or are a limited partner in a venture fund that finds one or several unicorns. Even more satisfying is the freedom and optionality that come with greater wealth. This has been me since about 2010.
As a parent, I live with a constant low-grade worry about my children’s future. Saving and investing for them reduces that anxiety. For example, as soon as I bought and earmarked one rental property per child, my stress around housing and college costs declined.
In 5-15 years, these homes will be paid off and will:
- Provide shelter for them if necessary
- Generate rental income to pay for their college
- Offer part-time jobs managing the property
- Support my retirement
It feels good knowing my children will not be destitute and homeless, even if the world rejects them based on their identity.
So… When Is It OK To Splurge?
We’re constantly told to save and invest. Delay gratification. Let compound interest work its magic. That’s the right approach during the first half of your life.
Eventually, spending on “unproductive” things isn’t just acceptable, it’s rational, healthy, and deeply rewarding. Dying with millions in the bank would be a shame. It would mean all those hours of work and stress spent accumulating wealth went unused, when some of that money could have been enjoyed to make life richer along the way.
Here’s a framework to help you decide when it’s OK to splurge:
1. You’ve Hit Your Core Financial Goals
If you’ve:
- Built a 6–12 month emergency fund
- Maxed out retirement accounts
- Save at least 20% of your income and invest consistently
- Carry no high-interest debt
Then you’ve earned the right to loosen the reins. A $5,000 vacation or $1,500 hobby splurge won’t derail your future. It may even enhance it.
2. The Expense Aligns With Your Values
Not every return is financial. Some purchases create:
- Lasting memories
- Joy or personal renewal
- Connection with people or places
Ask yourself:
“Will I remember this in five years?”
“Does this reflect the life I want to live?”
If yes, go for it.
3. It Boosts Energy, Focus, or Time
Some “splurges” actually unlock productivity:
- Hiring help
- Upgrading your workspace
- Booking a short recharge trip
Seen through the right lens, these expenses are investments in a better quality of life.
For decades, I was too stubborn to hire help around the house. But one day, I accepted a gardener’s offer to trim all the plants in front of my home for $300 and what a difference it made. Not only did I save at least five hours of time, but the curb appeal also improved dramatically compared to when we were doing the maintenance ourselves.
4. You’ve Already Practiced Frugality For 10+ Years
If you’ve been disciplined for at least a decade, not spending can become the risk. Hoarding every dollar leads to regret, especially as time becomes your most limited asset.
Spending after years of restraint isn’t reckless, it’s rebalancing. You must practice the art of decumulation. And the best age to start decumulating wealth is around 45-50.
All the research shows that spending tends to decline after retirement and as you age. Why? Because you’re simply not as healthy or mobile to enjoy your wealth anymore. Spend more now, while you still can truly enjoy your money!
5. It’s a Small % of Your Net Worth
Simple rule: If a purchase is 1–2% of your net worth and adds real value to your life, it’s probably worth it.
Example: If your net worth is $1 million, a $10,000 – $20,000 luxury trip won’t set you back. It might actually make you feel more alive. The key is to spend the money on something you really value. Because if you don’t, even $1 is too much.
Spend With Intention, Not Guilt
The goal of wealth isn’t just to accumulate, it’s to live well. Once you’ve built your foundation, give yourself permission to enjoy your money in ways that matter.
There’s no point working hard to make money if you don’t use it to live a better life.
Personally, I care more about security and freedom than material things. Wearing simple clothes that are comfortable is just fine. Driving my 10-year-old car, so long as it’s safe, feels great. Sitting in Economy class next to my 8-year-old son is a ton of room, and we don’t get to our destination any slower than those paying 2-10X more for First. I don’t need a nice watch because my phone works just fine.
But here’s what I do value:
1. Living In A Nice Home While My Kids Are Still Living With Us
It’s always been a dream to own a home with an enclosed yard where my kids can play safely, without worrying they’ll run into the street or be approached by a stranger. So I bought the almost perfect house, even though it meant diverting significant capital away from potentially higher returns. We spend at least 15 hours a day at home, so we utilize our house more than anything.
2. A Quality Education For Our Children
This includes them becoming fluent in a second language. That type of education in San Francisco costs an arm and a leg. But it’s aligned with my values, so I’m willing to spend for now. I’m also excited about improving my Mandarin with my children over the years.
3. Great Food
Having lived in New York City and San Francisco since 1999—arguably the two food capitals of America—it’s hard not to be spoiled by amazing cuisine. And once food delivery services were perfected, we went all in, regularly ordering from our favorite local spots. The only downside to loving great food so much? A higher calorie count and a wider waistline than I’d like. No Chippendale’s dancing for me!
4. Freedom From Being Told What To Do With My Time
Most importantly, I’d rather give up a steady paycheck with benefits in exchange for the freedom to choose how I spend my time. In finance, not earning at least a $250,000 base salary feels like spending $250,000 a year for my freedom. Once I reached the Minimum Investment Threshold, where work became optional, I decided to walk away instead of suffer through the “one more year” syndrome.
Spend According To Your Values
Life isn’t just about maximizing investment returns, it’s also about enjoying the journey. Don’t be afraid to spend in ways that meaningfully improve your quality of life.
Ultimately, the goal is to align your spending with your values. If you do that, your money will always feel well spent.
Get A Free Financial Analysis From Empower
When investing starts feeling more exciting than spending, it’s the perfect time to make sure your money is working as hard as you are. If you have over $100,000 in investable assets—whether in savings, taxable accounts, 401(k)s, or IRAs—you can get a free financial check-up from an Empower financial professional by signing up here.
It’s a no-obligation way to have a seasoned expert review your finances, uncover hidden fees, rebalance inefficient allocations, and highlight opportunities to optimize. Greater clarity means greater confidence—and more satisfaction when you choose investing over consuming.
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