How to Define What is "Enough" Financially with Manisha Thakor (EP.143)

0:28We all need to make smart decisions with our money. by visiting retirementpodcastnetwork.com. And today I'm pleased to be joined by Manisha Takor, who's worked in financial services for over 30 years and has long had a focus on women's economic empowerment. She is a nationally recognized thought leader around issues of financial literacy and education, being featured in all the major media outlets. She's also written a few personal finance books, and that's why I had her here today to share insights from her latest book, Money Zen, The Secret to Finding Your Enough. We talk about redefining success, breaking free from what she calls the cult of never enough, and some practical steps to embrace a life of enough.

1:12If you are looking to align your financial decisions with your deepest values for living a more fulfilling life, then this episode is for you. As always, you can find resources and links mentioned during the show in the show notes at thelongterminvestor.com. Now, without further ado, here is my conversation with Manisha Takor.

1:36Manisha, welcome to The Long-Term Investor. Peter, it's an honor to be here. Well, I was so excited when I saw your new book come out and it's not that new anymore. It's been out for a little while. We've been chatting a while to get you on the show. Money's in, the secret to finding enough because you had written a book earlier, targeted, correct me if I'm wrong, women in their 20s and 30s. And this really, I feel like captures a much more holistic audience. So let's start with the basics. Let's start broad. What is money's in? Money's in is a phrase that I have been using for about 15 years now.

2:14And I define it as the state of mind where you have calm, confidence and clarity around the role you want money to play in your life and your relationship with money. Which I think so much of what people listening to podcasts like this or these YouTube channels are looking for the nuts and bolts of like how to get from A to B in the technical sense with their retirement accounts, with their savings plan. But often I find, at least among my audience, I have a lot of people who are hustling and this softer side, if you want to call it, sometimes gets left behind. You talk a little bit about the cult of never enough.

2:58Maybe you could explain one, what that is. And two, how would you know if you happen to be trapped in this cult? Sure. So I define the cult of never enough as this pervasive feeling that may be subconscious, not always is it conscious, that no matter how much you earn or how much praise you receive or how many accomplishments you achieve, it's just never enough because you're not quite enough. Or if you flip it on its head, it's like you've bought into this society-wide mantra that the cure for anything that ails us is more, do more, be more, have more. And so it is escaping that mindset, which is a recipe for misery, because you can always keep going on that hamster wheel as the cult of never enough.

3:56And I would say one of the biggest ways you can discover that you are in it is if, like me, you find yourself divorced in midlife and having lost pretty much all of your friends from growing up because you weren't there for birthdays and holidays. And I'm speaking somewhat facetiously as I say that, but the biggest signal from it is that you feel like work is this pervasive cloud that you live in. And even though you started off because you loved your work, as so many of us type A driven folks do, it's gotten to a point where it has literally clouded out all other points of joy in your life, or it feels like it's about to if it hasn't already.

4:42Well, I mean, finding enough is a challenge for people, even if they're not fully there. And the subtitle of the book, I mean, the secret to finding enough is quite intriguing. I mean, do you think you could share the secret here in a way where people can maybe apply it to their lives? I hope so. The primary reason why I wrote the book was that I woke up as I was approaching my 50th birthday and realized that I'd spent my entire adult life as a human doing and not a human being. And that while I had achieved and exceeded all of my financial goals, I was emotionally bankrupt. And this goes back to something you said earlier about the nuts and bolts of personal finance.

5:26For the longest time, I believe that if I could for myself and teach others the nuts and bolts of personal finance, then they would hit money's end and have no issues. But what I found is that there is a sub-segment of us who are so driven and without understanding why we are driven, we can inadvertently find ourselves on the dark side of that striving front. In other words, I'm not saying don't be ambitious. I'm saying understand why you're being ambitious and harness the healthy parts of that and stare down the ugly parts and exercise them from your psyche. And when you're able to do that, which is not easy, and I know it's not three tips, two or five magical ways that you can find your enough, that's how you get to a point where you can identify what's the right amount of work in your life.

6:33what is the right amount of professional accomplishment or financial accomplishment that you want to aspire to. And so that's how I think about, quote unquote, the secret. The answer to this problem is going through the process of understanding the four core drivers of landing in the cult of never enough. And that's why, unlike a lot of nonfiction books, and I'll wrap this in a second. The first two-thirds of the book is about how people land in the cult of never enough. And only the last third is how do you live with a new psyche? Whereas most nonfiction books are 10%, 15 % the problem and the remainder are the tips.

7:20And the reason this is so different is that the solution, the answer is understanding how you ended up with the problem. Such a highly personal process. And you share such highly personal stories throughout the text. I want to pull on that string a little bit that you dangled out there on those four core drivers. Can you explain those a little bit more? Sure. So when I woke up midlife, I had just experienced the second of two literal near-death health crises. And I, in recuperation from the second, wanted to figure out, like, I'm a smart person. How did I end up in this place where I was so unidimensional as a human being?

8:08And how did I end up at a place where I quite literally viewed my self-worth as a human as my net worth? That number drove everything about how I felt about myself. And of course, even when I hit the number, then I'm like, no, that's not the number. The number needs to be bigger. And so never enough. So what I set out to do was a two-year research journey to identify how I and other people I've met fell into this. And what I discovered was it's a very interdisciplinary answer. And there are four broad buckets of reasons. The first one is, and we can dive into them if you'd like. The first one is something called small T traumas, things that happened to us before the age of 25 when our brains are fully formed.

8:55And if we dive into any of them, this is the one that I think is really powerful. So small T traumas are things that happen to us when we're young that on the surface seem like they're small things and shouldn't affect us as successful adults, but they do. So in my case, I'm mixed race. I grew up in a small, very white town in Indiana, and I was just other. I was chubby. The kids made fun of me. And now we'd call it severely bullied. Back then, we just called it being the odd girl out. But it was really painful for me. And I felt so ostracized from my peers that the way I found any degree of acceptance was through my academics and accolades from teachers.

9:37So I became the proverbial, intense, extremely diligent student. And as I continued into the workplace, what replaces grades and accolades from teachers, but your income and promotions. And so what started out as a somewhat healthy behavior to deal with a very painful period in my life took on a life of its own. And as an adult, it's not like I'm waking up every morning and thinking like, wow, remember when Jenny called me cow butt or Jeff said I had thunder thighs? Like, no, it's not that, but it's this self-perception that gets in your head. And what I found in talking to a number of executive coaches who deal with very high level clients in terms of their leadership positions.

10:30And I asked them, like, what percentage of your client base do you think is driven by small T traumas? And the answers range from 75 % to 100%. And so first of all, even addressing that that stuff is in the past, it hurt us, we develop compensatory behaviors, and some of them, some of those behaviors are no longer serving us. Manisha, that's a wonderful description. Maybe we could also touch on some of the other three. Sure. So the second factor I call societal influences. And by this, I'm referring to the well-known adage that in the United States in particular, when you meet somebody within the first two or three questions, you're asked, what do you do?

11:16And then you're judged by the person asking, what do you do? And you judge yourself based on the answer. What do I do? And it's to the point where there's one gentleman I came across who decided to do a series of qualitative experiments. He had dinner parties with groups of small people who didn't know each other. And for the first 90 minutes, the rule was you can't talk about what you do at all. And the guests uniformly struggled mightily to engage in 90 minutes of banter and conversation without talking about work. And so that tells you how ingrained it is in us. And it's because in this culture and increasingly around the globe, we've moved from having jobs to having careers to having callings.

12:09And so we end up in this relationship with work and identity that can become incredibly toxic if it gets to the point where that identity excludes vital other pieces in your life, like connection to other humans and a power higher than yourself if you're religious, spiritual, having fun, having creativity, being curious, all of these things can fall by the wayside when you over identify as society encourages us with what you do. Well, that identity piece, I feel like I see all the time, particularly when people retire and they lose such this large piece of their identity. And I see it in the workaholics as well, including myself from time to time.

12:57I know that's been a bigger focus the past year or So for me is diversifying those buckets a little. Do you mind touching on those other two drivers as well? Sure. But let me just say a quick word about what to do in the transition. It's really true. I've had two personal experiences to kind of illustrate this point. When I was married, my ex-husband was 20 years older than me. And we at one point had a second home in a community in Santa Fe, New Mexico, that was very upscale. And for many people, it was their third or fourth home. And so it was a very accomplished crowd. And what I noticed as people retired was 60 % of people retired successfully and 40 % could not give up the identity of having been the CEO or the founder of this or that.

13:49And what I observed was that the people who had a healthy relationship with their work during those years of incredible success were the ones that were able to transition into retirement and the ones who are suffering from at least one, if not all four of the issues that lead to the cult of never enough thinking. Those were the folks that were really struggling. And then that struggle oftentimes moved into their marriage, which oftentimes then ended and then intensified the struggle all the more. And then the second thing I'll just say about it is I'm now 53, almost 54, and I'm sliding into retirement.

14:36And when people ask me what I do, even having written this book, I'm still struggling. Like, I feel the need to tell people, I went to Harvard Business School. Like, I have this need to put up some peacock feathers. I can't just say, yeah, I'm on Duolingo a lot trying to pick up from 11th grade Spanish so I can go to Barcelona and order churros and chocolate with the right accent, you know? That sounds delightful, by the way. I appreciate digging into those two. What else round out those drivers that kind of separate the money problems from the money worries? So money problems, let me just clarify that because that's a really important delineation.

15:17delineation, money problems are things that we can solve with factual pieces of advice. For instance, my credit score is in the crapper. What do I do? I am dealing with elder care and trying to save for retirement and putting my kids through college. How do I prioritize cash flow and savings in this juncture of my life. Money worries are things that are very guttural. And no matter how much practical financial advice is given to you, it does not eliminate the visceral negative fear, anger, sadness that comes up from that. And I know that sounds really woo woo, but it's what I've noticed is, you know, I meet people who sell a business and they net$50 million and they're still worried about being poor and running out of money because there's something in their history that's driving that.

16:17So money worries is the qualitative piece and it is highly influenced not only by your personal money history, but by cultural norms. And that's the piece where we are exposed today to so many images of lifestyles that do not match financial reality. And so it's like we're looking into a financial funny mirror. And I'm not just referring to the stuff we see on social media, which at this point we all know is Photoshopped and 40 photos are taken and one is picked. I'm talking about really basic things like watching reruns of Law and Order in your pajamas while you're eating ice cream because you're so stressed out at 2 a.m.

17:02about a client meeting that's coming up. And you're looking at these subliminal images where I'll use a female example in this case, where you've got a policewoman who's showing up for her shift in New York where it's humid with no frizz in her hair. So obviously she just got a fresh blowout every morning. Okay, that's 60 bucks, 70 bucks or more in New York. And when you layer it out in terms of the clothes the person's wearing, the cars they're driving, the homes they're living in, I did this for multiple characters across multiple shows. What I found is you would have to earn 30 to 50 % more in order to live and groom like the images we're seeing of quote, average people on TV.

17:43And so a big part of this number three at the core is that we're trying to feel like we're enough, but we're comparing ourselves to things that aren't even real. real. I can think back to shows that I used to watch all the time and how outlandish the assumed financial situation would have had to be given some of the occupations of main characters. But social media has certainly put that on steroids, that entire trend. And as you sort of mentioned, it's basically a highlight reel that may not even be a highlight reel of the actual game, just kind of as of a school play, so to speak, not always 100 % reality.

18:25I appreciate all these examples. Let's hit that fourth driver. Yeah, the fourth driver is the one that was the most unexpected to me, which was behavioral science and factors that come from that. And probably the most stark example I can give you from this speaks to Maslow's hierarchy of the needs. So we know at the bottom of Maslow's hierarchy of the needs that we have base needs that have to be met, food, transportation, shelter. And until we meet those, we're not able to move up the pyramid into self-actualization, which some might just call contentment with oneself in one's life. And Peter, if you and I got thrown into the woods together 300 years ago, we would not have trouble figuring out how to find food and shelter and take care of ourselves.

19:15But today, we all take care of those needs with money. And so the role that money plays in our life now becomes very visceral in the sense that it is absolutely essential to our well-being. And so our amygdalas are now intertwined with money the way they used to be with a proverbial bear. And the set of actions that that feeling biologically can cause you to take frequently is to feel like you don't have enough. You need to grab more and more to prepare for the upcoming seasons, which with nature, you have seasons of growth and seasons of rejuvenation and rest. So we're not like a bear that needs to fill up to survive winter, but our brains don't know that anymore.

20:16And so we're constantly filling up and whether it's shopping online or striving for that next promotion and the next raise. And that's just one example of how our human biology has not kept up with capitalism. Well, maybe a nice transition point. I really enjoyed the chapter that dove into some of the science of why we are hardwired to hustle. Do you mind sharing some of the insights from that part of the book? Yeah. So what is it that triggers us? It's neuropathway. One of many things I learned is that we have something called synaptic pruning that's constantly going on in our brains, which is that our brains literally, if you want to think about it in lay terms, are like snipping away escape routes from dealing with things that take too long so that your brain automatically responds to a problem with the quickest possible solution.

21:21The classic example is you put your hand near a flame. You don't even have to think about it. Your hand jerks back away. What's happened in modern society, and particularly in those of us who struggle with never enough, is that our brains have often synaptically pruned away healthier ways to deal with feeling a lack of self-confidence or lack of self-esteem or feeling shame or feeling embarrassment or feeling less than. So in a case like me, whenever I'd feel any of those emotions, well, what I'd immediately do is open my laptop and start working more to prove I was a badass in the business world.

22:05And that was my one neuropathway that was so deeply carved. I had no other mechanisms to deal with those other emotions. I don't regret working hard, and I certainly don't encourage people to not work hard. What I encourage people to do is what the scientists call strive for healthy work engagement, which means when you're focused on work, you're focused on work. And when you're not at work, you are able to completely set it aside. And so sometimes people with healthy work engagement work extremely long hours, but they don't feel that because they are disconnected when they're away from it. As opposed to me, I felt like I was living with work 24-7, 365.

22:56Of course, I wasn't working 24-7, 365, but it felt like it because that's what my head was processing because the synaptic pruning in my brain had become such a deep crevice. Well, Manisha, for years, you've been helping people squeeze the maximum amount of happiness from their money using a toolkit that you call joy-based spending. How does this work? So there are three steps, and it was born out of the realization that anytime I started to talk to an individual about the B word budgeting, I mean, I could immediately see the physical response in their body. Only two out of 100 people were excited about budgeting.

23:37I happened to be one of those too. I love it, but other people don't. And when I tried to figure out why, I realized it's because people felt you were draining joy from their life by asking them to keep track of their money. So I came up with three tools. The first is what I call a joy audit. And I ask people to write down for as long as they possibly can. A month truly is ideal, but if you can just do a week, fine. Write down everything you spend money on. But at the end of the time period, you don't have to add anything up or judge yourself. You just pull out a yellow highlighter and you highlight anything you spent money on that did not bring you joy.

24:17Now, of course, there's going to be some of the usual stuff like utilities and cable, blah, blah, blah. And yes, it's good to see if you can negotiate them down. But what I'm talking about are things like soccer lessons where your kids hate the coach and you hate driving them there. Wham! Money saved and joy brought back into your life. or meals out with a couple who are real wine aficionados and you're on keto and not having any liquid carbs in your body and the bill comes and you split it 50-50 and you're like, oh my God, that was a$300 bottle of wine that we just paid half of. So you shift that to, we're meeting up at Shake Shack where we each place our own orders and you can buy a beer and those are the kinds of things that I'm talking about.

25:04I've never met anybody who's not been able to find a significant amount of leaky money in doing a joy audit. And sometimes it's big stuff, Peter. Sometimes it's like, oh my God, the kids are gone and we now have three times more bathrooms than humans in this house. Maybe it's time to downsize. Step two is something that is inspired by Vicki Robbins' iconic book, Your Money or Your Life. And it's this notion of equating the money that comes into our lives with the life energy that we or somebody in our household expended to earn that money. And a very simple way to think about it is take your household income, and this works up until about$250 ,000.

25:45So we have a lot of very successful people listening. So if your income is above$250 ,000, use$250 ,000 as the number. But the idea is most of us work 2 ,000 hours a year, if you assume 40 hours a week, 50 weeks a year. And so you divide your household income by$2 ,000. Keep it really simple. I'm going to use$100 ,000 as your income. And you divide it by$2 ,000. And what do we have? We've got$50 before tax. So next time you see something for$500, you can ask yourself, you've got this ruler, do I want to spend more than 10 hours of my life's energy to have this thing or not? And then there's no judgment.

26:26You get to decide whether it's worth it or it's not worth it. but you've got a good ruler. And then the last one is the power of the pause, which is when you see something that you do not absolutely have to have now, take a photograph of it. If it's in a tangible store or an idea that you saw somewhere, or if it's online, put it in your bucket and force yourself to wait a week to see if you really need or still want that item or experience. I love all of those ideas. It seems like some of the examples you were just staring right into my soul, Manisha, but we'll save that for another time. I think that's a little bit more of the hard side of money mixed with the soft.

27:13We've covered a lot of the soft, but if we were to look at today's conversation or even the book as a whole, are there any steps or is there one step that you feel like people can take today to implement your advice? Yes. Yes. My last name is Talk War and my mom says it should be Talk More because that's what I always do. I can never answer a question succinctly. So I'm actually going to give you two takeaways. The first one is something that I have asked thousands of people to do over the years, literally. And it's to say, what would happen if you woke up one morning and somebody said, well, here you go, Peter, here's$50 million after tax.

27:50And guess what? You're going to die in exactly five years. Ask yourself, what would I stop and what would I start doing in my life? And inevitably, people have these big categories. I'd stop working. I'd stop worrying. I'd start volunteering. I'd start spending more time with family. But I encourage people to really drill down and identify, okay, what steps would I have to take in order to make those things happen? And how can I start to put those into practice in my life now? And then the second one comes from a woman that I interviewed for the book who'd spent a long time working at the University of Colorado Hypertension Center.

28:36And she ultimately concluded that very healthy people that got over their hypertension subconsciously live their life according to this mantra of connection creates balance. So that the next time you personally feel discombobulated, ask yourself to whom or what do I need to connect in order to move incrementally closer to feeling contentment? And for some of us who are very finance oriented, it might be pulling up our budget and looking at it over again and seeing if there's something that's throwing us off. At other times, it's giving yourself permission to be curious and go pick up a history book or a biography or something totally out of your work sphere and connect with learning the way we used to when things seemed so fresh and new back in college or grad school.

29:35And so those are two things that I think people can do to start stretching their minds if they, like me, had synaptic pruning that basically led them to think the answer to any emotion they didn't want to deal with was just to work harder and earn more money. I love that perspective, Manisha. Thank you so much for sharing. And before we sign off, obviously, if you are watching or listening to us, you'll be able to find what I'm about to ask in the show notes at thelongterminvestor.com. But if people don't make it there, Manisha, where can they find you? I like to keep my life simple. There's one question I can answer succinctly, moneyzen.com.

30:16Perfect. Well, again, check out moneyzen.com. Check out the book. If you're enjoying our conversation, leave us a comment, leave us a review that helps other people find this wonderful information. Manisha, thank you again for joining me today. Oh, Peter, it's wonderful to have had this chat with you. Thanks for listening to the Long-Term Investor Podcast. To access free financial resources and submit questions to be answered on the show, visit thelongterminvestor.com. Peter Lazaroff is an employee of PlanCorp and BrightPlan. All opinions expressed by Peter and any podcast guests are solely their own opinions and do not reflect the opinions of PlanCorp or BrightPlan.

30:58This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of PlanCorp and BrightPlan may maintain positions in the securities discussed in this podcast.