How to Become a Future Rich Person with Haley Sacks (EP.263)

0:02We all need to make smart decisions with our money. The Long Term Investor podcast shows you how by distilling complex financial matters into easily digestible lessons. And now here's your host, chief investment officer at PlanCorp and the author of Making Money Simple, Peter Lazaroff.

0:21The Long Term Investor Host:Welcome back to The Long Term Investor. Today's guest is Haley Sacks, better known online as Mrs. Dow Jones. Haley has spent the last decade making personal finance feel a lot less intimidating and a lot more entertaining. And I think that comes from her early career work in comedy, working for people like David Letterman and later Lorne Michaels. But she is on the show today to talk about her new book, Future Rich Person, which is built around the idea of action money, the money you create by earning more and spending more intentionally. We talk about all sorts of great topics, like the difference between looking rich and being rich, and how social media and frictionless spending can quietly sabotage your finances.

1:03The Long Term Investor Host:As always, you can find detailed show notes at thelongterminvestor.com, but let's not waste any more time. Here is my conversation with Haley Sachs. Haley Sachs, Mrs. Dow Jones, welcome to The Long-Term Investor. I can't wait to be here. Thank you, Peter. Well, Future Rich Person, your new book is phenomenal. But before we dive into some of the content that came out of that, I was just hoping quick background for those who don't know of you and your work. Tell us about yourself. Tell us what you're all about. Absolutely. So I am credited as being sort of like the first financial influencer. I've been doing this for 10 years.

1:45And when I started being online and posting videos about money, not really a thing. But I started my career in comedy. So everyone's always like, oh, you never worked on Wall Street? Well, I my first job was for David Letterman. And then my sort of aha money moment came because I got hired by Lorne Michaels, who started SNL. And that was my first full time job, because I don't know if anyone listening is familiar with the entertainment industry, specifically comedy, but it is very much like gig worker oriented. So it was very cool to get that full time gig with Lorne.

2:24The Long Term Investor Host:I mean, Lorne and Letterman, those are pretty big names, very big names. I was definitely locked in with comedy. But, you know, something that I talk about a lot in the book is like this idea that the American dream is sort of dead and like can't really look to corporate structures anymore in the same way to have financial success. You know, like it used to be for our parents' generations. you were at the same job for 30 years, you just put money in your 401k, you were safe, you could retire. But now we have to be so much more creative and really have our own backs. And so in a way that I didn't really notice then, I ended up, my aha money moment was, okay, sorry, I got hired at Laura Michaels the first day on the job.

3:08It was my first full-time job too. They asked me about health insurance and 401ks. And I didn't even know how to read a paycheck. I thought a 401k was a road race. It was very bleak. I had no financial literacy. And, you know, I went home and tried to learn because I was so excited about this job. I didn't want them to fire me. And all the information that I found was either like so pandering towards women, like really telling us about deprivation, rewash your paper towels, don't have avocado toast, no lattes, or it was investing advice that really felt like it was for men. And it was sort of for guys who look like guys that look like they've never been through puberty, basically using a lot of jargon to explain things to me in a way that just seemed like overly complicated.

3:54And so when I just sort of started to do the research myself, I was like, wow, this is not that hard. Like I've completely been catfished. I have been, you know, telling myself for my whole life that money's not for me, that I basically need to like my dad will do it for me or I'll marry someone who's going to do it. And like this is like so complicated. And, you know, by being good with money, my life's going to get so much smaller and it's going to get worse. And what I realized was, A, being in control of my finances gave me so much freedom, so much ability to basically do whatever the hell I want, which I do, which is freaking awesome.

4:28And also that you basically just need like seventh grade math and some automation and you could be rich, too. So that's sort of where Mrs. Dow Jones was born. But then back to the whole part of, you know, the American dream is dead, you know, can't trust corporate. I got laid off from Lorne Michaels. So I was working there for six months and was sort of like building this idea out. And then I was like, OK, cool. I can either like go grovel for a job at Comedy Central, which, you know, media is dying. I'm going to be making like$50 ,000 a year. Like it's, you know, I'm going to have to, you know, work so much.

5:03It's going to be I'm not going to own anything that I do. or I can really try and make this a thing. And so I gave myself a year to pursue this. And in the meantime, I was working as like a freelance music writer for a company called Fuse. Like, right. I'm not really that into music. So it's funny because I was like writing all the videos for, you know, I think it was like Phineas would come or, you know, Sophie Tucker, like all these cool bands that I had no idea about because I'm really just a Swifty. And then by the end of that I got in the New York Times. And so which sort of changed my career.

5:36And then shortly after that was the pandemic, which was obviously like a big boom for financial content as well. And yeah, I've been doing it ever since. And this is my first book, though. So it's really been like a long lead up to this. And I'm really excited.

5:49The Long Term Investor Host:Well, it turned out great. And I really appreciate like how approachable that you're making some of this stuff. And I thought what was interesting is you opened the book with people who are kind of ashamed or overwhelmed or just avoiding their money. So maybe let's start there. Why is shame such a powerful barrier to building wealth? You know, Peter, like the whole first part of the book is called Face It because I've done this for almost 10 years. I've worked with tens of thousands of people. And what I've noticed is that, you know, I can give you all the money advice in the world, but you're never actually going to change your finances if you don't first change your money mindset and you first don't understand why you act the way that you act.

6:30And so, you know, shame is so powerful because neurologically it activates the same threat response as like physical danger. You know, when you feel financial shame, you go offline, like you're no longer there. And, you know, we have so much financial shame, despite the fact that no one ever taught us, you know, there's a reason that with generational wealth, 90 % of it is gone by the second generation. And And by the third generation, 70 % of it is gone. And it's because anyone can inherit money, but no one can inherit financial literacy. So every person that you see who's rich or who's doing well with their money is someone who learned, who took the time to learn.

7:08So when people talk about shame being this powerful barrier to building wealth, I love to always take the other side, which is like, OK, yeah, you might feel ashamed, but what are you ashamed of? Because you were never taught this. It's not taught in schools. I guarantee your teachers never taught you this. And you not knowing anything actually puts you in the same boat as like Warren Buffett, Oprah Winfrey, Rihanna, like Michael Bloomberg, whoever you look up to in the financial space, like Jay-Z, whatever. All these people who made a lot of money and are keeping it and growing wealth started at the same place as you.

7:39And the only difference between you and them is that they have the audacity to try and become a future rich person. So it's really about just taking that risk and getting out of your own freaking way.

7:50The Long Term Investor Host:Now, everybody, when we're talking about trying to be a future rich person, everybody's always talking about investing in the stock market. And hey, like the show is called The Long-Term Investor. I've written a book on that, too. Like investing in the stock market's important, but you highlight how maybe the better investment is in yourself, like your skills, your confidence, your earning potential. Why do you feel like people should be starting there? You know, it's not that it's a better investment necessarily, but like a huge part of my book is about making more money. And, you know, I think that especially, like I said, for women, not to be a broken record, we're told all about this shame and we're but there's a floor to how much you can cut, but there's no ceiling to how much you can earn.

8:30So, you know, we're never taught negotiation. And most of us are also like not taking into our own hands our ability to make ourselves more valuable. You know, like we sort of passively it's this American dream that we're sold, right? That like, if you just stay on this path, you don't really have to do anything. As long as you just follow it, you're going to get where you want to be. And that's actually not true anymore. You have to be much more aggressive and much more creative. And so what that means in practicality is like, yeah, building your skill set, making sure that you are keeping track of your wins at work.

9:07So when you negotiate, you have a full track record of that. There's so many ways to improve your ability to make more money. And like that is going to have a much bigger impact on your long term financial health than anything else, as long as you don't spend it all. If you could make more money, not spend it all and put it to work in the stock market, you need both to make more money and then also use it to grow wealth, then you will reach financial freedom. You'll be a future rich person.

9:34The Long Term Investor Host:You know, I like that you mentioned the wins part now. I think you called it a wins folder in the book where you kind of compile a wins folder. And Haley, I did that the first, I don't know, five or six years of my career where every quarter on a piece of paper, I would write down the things I did and I would show it to the person I was reporting to, because I think what people forget is nobody's thinking about you. Everybody's kind of thinking of themselves. It's just a little bit of human nature. And so it's like one thing to celebrate and it's another way to like document, Hey, I'm adding value.

10:03The Long Term Investor Host:And it sort of lets you, if you don't follow, I had somewhat of a nonlinear career path. I would argue you did too. You know, sometimes those wins are what like shows you the path, but you also say like, Hey, if you don't spend it all, that's the other way to wealth. I mean, you definitely talked about that in the book. Tell me what like better spending looks like in your opinion. So first of all, like I love money. I love spending money. Like me too. Yeah. Like I agree. We could spend some together sometimes, but like, no, I'm not that financial expert who comes at things from a place of deprivation.

10:34Cause I know just from my own life, I think something that held me back so much from taking control of my finances was this idea that it was really going to suck to be good with money. That like, oh, if I, you know, sort of like going on a diet or starting a workout plan or something where you're like, oh, I know I should do that, but it's going to be so hard. I don't want to, it sounds brutal, you know? And so not about deprivation. I love money. I, you know, I don't think that so much of financial advice makes you feel like to be good with building, growing wealth and like reaching financial freedom, becoming a future rich person, you have to like absolutely cut everything out.

11:07And, you know, I have a future rich person spending plan in the book, which really has balance. Like it's, I really believe sort of, you know, similar to a diet where it's like, you can't be so extreme or you're going to go off the rails. And so I talk a lot about the 50, 30, 20 budgeting rule, just as a template. So 50 % of your after tax income towards needs, 30 % towards wants, 20 % to future you and that's your action money. But that 30 % towards wants is so important. So you can use that in any way that fits you. That could be, you know, maybe you're someone who wants to go on like one big trip a year, put it towards that.

11:44Maybe you're someone who wants to go on like a few smaller trips. Maybe you're someone who like loves to go to theater. Maybe you're someone who like loves to buy vintage jewelry or you want, you know, whatever your thing is that really gets you going. But, you know, something that I talk a lot about in the book too is having a money date, which is a set time every month where you look through your finances, which I mean, most people don't do, which is crazy because what you don't measure will never grow. It's so important to keep an eye on your bottom line. But one of the things that I love the most about a money date is that you can look through your spending and ask yourself, like, how did I feel this purchase?

12:19Was it worth it? Did I buy that just because I was stressed or anxious or because an influencer told me to? Or was that because like that is 100 % aligned with my financial values. And it's something that I freaking love and gives me so much like for. And so it's a good moment for you to sort of figure out what do you actually value?

12:37The Long Term Investor Host:Yeah, people will talk about their values all the time. I'm like, but show me your spending, and I'll tell you what your values actually are. That's such a good point. And for me, and I love the exercise. Yeah, that exercise is great. There's times where I've like, when earlier in my career, I spent more time like, trying to help people just find more money to save and say like, hey, you and a significant other print off the same credit card statement and put like high value, medium and low. And like, if you both have low on something, cut it. It's not about like criticizing one person's low or one person's high, but you know, like anything, like you said, that awareness, whatever exercise that has you kind of looking at your, your expenses, your savings, your cash flows.

13:19The Long Term Investor Host:I think that's wildly, it's just like stepping on the scale every morning. I'm not saying stepping on the scale every morning is going to prevent you from making poor eating choices in the day. I make poor eating choices every day, despite stepping on this scale. But, you know, I'm sidetracking a little, you know, one other thing you were kind of mentioning with the spending is you talked about like saving for goals and like the things that you want to spend on and like what to treat. I mean, how do you feel like somebody should be thinking about short term goals versus maybe long term investing or even just long-term goals?

13:50I think it's really important to do both, but it's like they both come from different budgets, right? Like if we're talking about the 50-30-20 rule, 50 % towards needs, 30 % towards wants, 20 % to future you. So I would say that like if it is a want, like a vacation or something like that, then it should come from that 30 % versus if it is like a long-term goal that's actually asset building, like, okay, I want to max out my Roth IRA or something like that, it comes from the 20%. So, but it's, you know, everything is a balance. You can't have everything, but you can have anything. So it really, but I do think that having financial goals is really motivating and that it is something when you know your why it makes it really easy to know why not.

14:37The Long Term Investor Host:Great point. And you mentioned in the book about how you really shouldn't be like saving for the future or investing for long term until you have something set aside. Now, Haley, I wrote a book called Making Money Simple several years ago and talked about emergency funds just as you do. But I, for a few years, have felt like emergency funds need a rebrand. And you sort of do that because you call it like an exit plan. You call it a few money. You call it a fire extinguisher. I'm just like boring. I'm like, oh, it's like a it's an excess cash or a cash reserve. I'm thinking. But the thing is, you tap an emergency fund sometimes for things that aren't emergencies, right?

15:15The Long Term Investor Host:I mean, there's just such a wide opportunity set for that money beyond just, uh-oh, here's an unexpected expense. Yeah. Oh, well, I mean, I do think it's an emergency if you are like in a job that you're totally dying at and like you have like an abusive boss or whatever, or like fair enough relationship that you need to leave. Like, especially for women, I think an emergency fund is just so important because it gives us the opportunity to get ourselves out of situations. An emergency, I guess what you're saying, traditionally, oh, a car accident, my dental thing or whatever, you know, it is. I think emergencies can be emotional, too.

15:55Of course, there's a sliding scale here. It doesn't mean like you have a bad day at work and you're like, emergency fund, I got to quit. You know, you sort of know if you're in one of those situations where you're totally stuck and your soul is dying a little. And to me, that is an emergency. And that's what money is all about. Being a future rich person is about having control over your life.

16:13The Long Term Investor Host:Yeah, that flexibility. I like that you're clarifying my thought pattern there because the traditional, as you point out, emergency for like unexpected medical expense, car crash, those are real things. But I think it's just the flexibility that cash offers you is underrated, especially when people and this is not as true now as it was maybe 10 years ago. But sometimes people look at their cash and it's not earning that much. And they say, gosh, I should be investing this money. I mean, what do you say to people like that who are resistant to build up any sort of cash reserve because they want to invest it?

16:44I mean, my chapter in the book on investing has like a warning label on it that says like, warning, do not invest unless you have an emergency fund and it paid off your high industry debt. And that's because of math. Like I'm very data driven. And like, if you skip go and you go right to investing and you have no emergency fund, then you might get into an emergency and have to pull your money out of the stock market when the market is down. And look, we are long term investors, Peter. Obviously, we're on the show, but we know the stock market does not always go up. You know, it goes down and up and down and up and then eventually up over time.

17:24But like, you know, if you need your money in that time where is down, you might have to take it at a loss, not to mention all the tax implications. You're breaking up a compounding cycle. So it really has a huge impact. You have to do things logically. Same thing with investing if you have high industry debt. I mean, debt is a, you know, credit card debt could be 27 percent, like the stock market makes eight to 10 percent. So you're on a hedonic treadmill if you're investing, but you have a high industry debt that you're paying off.

17:54The Long Term Investor Host:Well, and I think some people think that they forget the important point that you just made that the stock market, your expectation should be like eight to 10 percent, whereas they're thinking, I'll just get into this IPO and make a lot of money and, you know, off to the races. I do feel like, you know, there's a lot of people who look at their investments and don't really understand what risk is or don't understand the risks they're taking. And when you think about people who are engaging with your work, I mean, what's the kind of misconception or common mistake that you see people making on the investment side, I should say?

18:26I think that there is just this idea of getting rich quick that is quite dangerous. And it comes from financial nihilism, like this idea that the system is so out to get you. There's no more opportunity. The world is burning. We're on a floating rock. So we might as well just fully send it and not take the boring way because we've already been so screwed by the system. So we need to find a different route. And I will say that there's still so much opportunity to grow wealth. And those are the people who actually lose. But that's something that I see the most is just this, you know, inclination to get rich quick.

19:03I think I also see a lot of people who are scared to invest because they think that it's risky. So they would rather keep their money in a checking account or a savings account, even if they have more than enough. They've over saved their emergency fund. They don't have debt. They want us over save from that because they're like convinced that by putting money in the market, they're putting themselves at risk. But like, you know, the inflation report just came out. Inflation is at three year highs. You cannot outrun inflation. Like if you keep your money in cash, then you are just losing purchasing power every single day.

19:36So actually, that's more dangerous than investing.

19:39The Long Term Investor Host:Yeah, I couldn't agree more. Like the long term investing is actually like the safe option. Like that's you being like a boring grandma. I love it. Well, and I think, yeah, everyone thinks about the volatility piece. And, you know, you sort of point out at times and maybe not in these exact words, but like you should expect the drama to come, right? Like when you get invested, the reason we invest is to grow our savings at a rate greater than inflation, ideally without taking undue risk. And to me, like what's undue risk? I mean, I typically think it's investing in individual stocks. It's trying to get in and out at the right moment.

20:15The Long Term Investor Host:But something like a 10 % drop or a 20 % drop or even a 30 plus percent drop, like those are actually kind of normal. So, I mean, when you are talking to followers, when you're talking to others, like how do you feel like you can set expectations on that front to say like, yes, it's risky to not be investing. But what are those things you should be expecting as you are an investor? I always say like, I do not want an average wardrobe. I don't want an average relationship. I don't want average travels or friends. But like when it comes to investing, give me average. Like I want to be average. Like that's what we need to pursue.

20:53Like be fabulous and over excel in every other part of your life. But like you are going to make yourself go broke if you look for opportunities to be not average investing. Like, you know, that's really my name of the game is like I pursue an eight to 10 percent. Like maybe that is maybe I miss out on opportunities. You know, a lot of things come across my desk, investments, but I'm never looking to get rich quick. And I'm never looking for things that over promise because most things that over promise over deliver under deliver. Look at the SpaceX IPO. You think anyone's getting rich off that these retail investors are screwed.

21:32The Long Term Investor Host:No, every big institutional investor I know with access to the SpaceX IPO is just talking about how they can get rid of it. And it's like, why would you want something? Why are you so desperate to buy something at the price that the smart money is desperately trying to sell it at and liquidate from? But you know, it kind of comes you talk about in like your spending part about like, looking rich versus like being rich. And sometimes I think that applies to like the portfolio to totally like I was just in Florida. And I saw this guy walking like the boardwalk. I was in Marco Island with a SpaceX IPO shirt.