5 Money Milestones and the Lie Each One Tells

0:00The six figures is just the receipt. It is evidence that the becoming happened. But the becoming is the actual asset. And the becoming is what carries you to the next milestone, and the next, and the one after that. So if you didn't feel anything when the salary number ticked over that threshold, that's not a failure of the milestone. That's the milestone working exactly as designed. Hello friends, this is Tyler Gardner welcoming you to another episode of your Money Guide on the Side, where it is my job to simplify what seems complex, add nuance to what seems simple, and learn from and alongside some of the brightest minds in money, finance, and investing.

0:45So let's get started and get you one step closer to where you need to be.

0:53quick note before we dive in july's pre-order incentive for my book real wealth is live and this one is for the investors who are ready to go beyond the basics pre-order this month tell me you did at tylergardner.com book and i'll send you investing 2.0 beyond the foundation a full hour video presentation on the five things every investor needs to know after they've mastered the Fundamentals, yours to keep delivered to your inbox digitally in early August. And if you pre-order now, you're locked in for every monthly incentive through December 1st. TylerGardner.com slash book. Now let's get into it.

1:30I want to do something a little different again today, because a few months back I published the Sedona, Arizona episode about the five things my wife and I learned about money and life from becoming snowbirds for the first time this year. And that episode was, against all of my expectations, the most listened to episode that I've put out this year. And a lot of you wrote in to say it was nice to hear an episode that wasn't about the difference between a Roth and a traditional IRA, or telling you to invest in low-cost index funds for the 400th time. So we're going to try another one of those today.

2:09What do I mean by that? Well, this episode is going to be a little more personal, a little more philosophical, and if I'm being honest, the closest thing to a homecoming I've done on this show. Before I was a finance guy, I taught English. For most of my adult life, I have kept the literature and the money in separate rooms. The novels happen at night, the reels talking about money while I walk through the trails of Vermont happen in the morning. The two halves have largely tried not to make eye contact. Today, they're going to make eye contact. We're going to be working, over the course of this episode, with a Greek poet writing in Alexandria in 1911, an 18th century English moralist who wrote what may be the most devastating philosophical novel ever published to pay for his mother's funeral, a contemporary British novelist whose work will, if you let it, sit on your chest for a week, and an American writer many people consider the defining novelist of his generation, who reached his own literary capstone and did not, by his own account, find what he had been looking for at the top of it.

3:18Each of them is going to teach us something specific about a financial milestone we are taught to chase. And if I do this right, the literature and the money are going to turn out to be the same conversation, which is the suspicion I've been carrying with me for a long time, and I'm finally, on this episode, willing to test out loud. So here's the question I want to start with. Have you ever passed a financial milestone that you had been waiting on, sometimes for years, and then felt absolutely nothing? Not bad, not good, not transformed, just nothing. Same cup of morning coffee, same dog, same vague, low-grade sense that something was supposed to happen and it didn't.

4:07Well, I have. Multiple times. And I think most of you have too, even if you haven't quite admitted it to yourselves yet, because we exist in a financial culture that sells milestones the way the mattress industry sells mattresses, as the one thing that once acquired will fix your sleep, your back, your marriage, and quite possibly your sense of existential dread. We are told again and again that there's a number or a status or a structural change to our finances that will make us feel different, solved, done. And then you arrive, and you just don't feel any of it. I have a book coming out on December 1st of this year.

4:52As regular listeners know, this is the dominant fact of my professional life right now, and it has been for about two years. There's a real possibility that the book does well. There's also a real possibility that it doesn't, and that I will need to retreat to a yurt and become a cheesemaker, which honestly sounds wonderful and I'm not ruling it out. But somewhere in the back of my head, even as I'm doing the work, every interview, every newsletter, every cringy reel of me walking through the woods asking you to pre-order the book. I am already running a pre-mortem on what December 2nd is going to feel like.

5:29What happens that day? The most likely outcome is that it feels like any other Wednesday. Maybe a slightly more nervous Wednesday, but still largely a Wednesday. So today's episode will explore four financial milestones that we are taught to chase. four honest looks at what each of them actually delivers, and four works of literature that taken together build the argument I want to make, which is this. You need destinations. You absolutely need destinations. Without them, you don't set out. Without them, nothing happens. Compounding doesn't compound, discipline doesn't form, you stay in bed. But you cannot ever, and I mean ever, let yourself believe that any one destination is the one that's going to solve it.

6:26The wise person has multiple Ithacas, always plural. The trap is believing in the singular. The Greek poet I keep mentioning is C.P. Cavafy, who wrote a poem called Ithaca in 1911 that almost nobody outside of certain English departments has read, but that I think every adult with a 401k should have stapled to the back of their respective statement. We're going to come back to him at the end of the episode. Until then, I want you to just hold the word Ithaca, the destination, the one you set out for. And familiar ask before we get into it, if this show has been useful to you in any way, a review on Apple or Spotify genuinely helps the show find the people who need it, and it lets me know that it is not insane to be doing this every day at my dining room table while my bloodhound stares at me like she's concerned for my mental health, which she may be right about.

7:23All right, let's start with the first Ithaca. milestone number one the first six figures there is no number in american income discourse that does more cultural work than six figures six figures is when you've made it six figures is when the worry stops when you join the adults at the adult table when you put up the away message on whatever financial anxiety has been running in the background since you opened your first paycheck and realized with some confusion that the gross was not in fact the same number that was going to be deposited. We have built an entire shorthand around it. Ooh, he makes six figures.

8:10Ooh, she's a six-figure earner. It is the threshold that does not require additional context. If you make six figures, the assumption is that you are fine. You're doing well. You can stop thinking about it. So let me tell you about the first time I crossed into six figures. I had been a teacher, then I was an advisor. The transition came with a substantial pay bump, and the W-2 the following January had a number on it I had genuinely never seen attached to my name before. I remember very specifically sitting at my kitchen table with a document in my hand and feeling for about four seconds like a different person.

8:49Six figures. There it is. I've arrived. And then I did some basic math. Federal income tax, state income tax, Vermont, which I love and which is also financially speaking, not Tennessee. By the time you backed out the legitimate, non-negotiable, non-aspirational deductions, the actual amount of money landing in my checking account each month was, in fact, considerably less than the cocktail party version that six figures suggests. And then there were the bills. The mortgage, the car, the food, which had somehow between my early 20s and my early 30s become much more expensive without me ever conspicuously upgrading anything.

9:33The various subscriptions I would have been hard-pressed to cancel even though I could not, with any seriousness, claim to use most of them. The dog, who's a financial dependent in ways I had not fully anticipated when we picked her up. By the time the actual money got to actual life, the six figures had become, in any practical day-to-day sense, a slightly more comfortable version of what it had felt like to make less. Now, I was not, I'll tell you honestly, living paycheck to paycheck, because I was always the type of person who would save. I simply had been taught to always save a portion of my income.

10:08But I was very recognizably the same person, with the same anxieties, looking at the same bank balance the same way, and wondering why six figures had not done what six figures was supposed to do. A lot of you have lived a version of this. Many of you are living it right now. The cost of living in any major metro in this country has so completely outpaced the cultural meaning of six figures that the threshold is for millions of people functionally a punchline. You can earn six figures in San Francisco, in New York, in Boston, in increasingly large parts of the country, and be, by any reasonable definition, financially stretched.

10:52So you can be the friend at the dinner whose Venmo is doing arithmetic in real time, even though on paper you're the one who has apparently made it. The number was supposed to fix something, but it didn't. This is where Cavafy comes in, and I want to read you the opening lines of his poem because they are exactly the right thing to read when you are sitting at a kitchen table, looking at a tax form, the gross income on which you had been imagining for years and feeling vaguely embarrassed that you do not feel transformed. As you set out for Ithaca, hope your road is a long one, full of adventure, full of discovery.

11:35That's the opening. Most people who know this poem stop quoting it there, because that's the part that fits on a Pinterest board neatly. But the line that matters for our purposes is the one that will come a little later in the episode, and I'm paraphrasing because the translation varies, The line that says essentially that the value of Ithaca is in having set out for her in the first place. The destination is what made you start walking. That's the gift. The gift is not waiting for you on the island. So here's what I've come to understand about the first six-figure salary several years and several income brackets later.

12:15The number was not the prize. The prize was who I had to become to be paid that number in the first place. Think about who you had to become to get there. You had to develop a skill that someone, somewhere, was eventually willing to pay six figures for, which, depending on your field, took five or ten or fifteen years of work that nobody applauded. You had to take the job you weren't entirely sure you could do and figure out how to do it. You had to get over imposter syndrome at least four separate times. You had to negotiate a salary, which most of us would rather have unanesthetized gum surgery than actually do.

12:56You had to build a professional reputation that opened the door to the offer in the first place. You had to be reliable, often for years, when nobody important was watching. And you became that person. The six figures is just the receipt. It is evidence that the becoming happened, but the becoming is the actual asset, and the becoming is portable, and the becoming is what carries you to the next milestone, and the next, and the one after that. So if you didn't feel anything when the salary number ticked over that threshold, that's not a failure of the milestone. That's the milestone working exactly as designed.

13:39The destination's job was to make you build the skill. You built it. Now you're someone with the skill. And now we keep going. This week's episode is brought to you by Thrive Market. I love cooking at home. What I don't love is the grocery store, which, as a raging introvert, ranks somewhere between a crowded airport and a mandatory team-building exercise on my list of preferred activities. I once spent 11 minutes in the express lane having a spiritual crisis about whether 12 items would somehow count as 10. So when I came across Thrive Market, a membership-based online grocery that gets quality, healthy ingredients to my door for five bucks a month, I was in.

14:26No more spending that same five bucks just on gas to get to the store in rural Vermont. And every paid membership sponsors one for a family in need, teacher, first responder, or veteran through Thrive Gives. That's my type of business. Here's what else I love about Thrive Market versus every other delivery service I've ever tried. The quality and health standards are real. They restrict over a thousand ingredients before anything hits the site. The label reading is already done for me. 90 plus dietary filters, member pricing up to 30 % off, free delivery on qualifying orders, and one flat monthly cost with no per-order fees, no tip math, no surprises.

15:13So for someone like me who cooks seriously and wants to know what's actually in their food, this is the solution I didn't know existed until I found it. So if you're ready to build your ultimate summer cart, join Thrive Market at thrivemarket.com slash Tyler for$20 off your first three orders plus a free gift. That's thrivemarket.com slash Tyler. This week's episode is brought to you by Gelt. Most of you listening probably already work with someone for taxes, but if you're a solopreneur, a real estate investor, or a high net worth individual whose CPA has somehow gone completely radio silent since April, this is for you.

15:57A great CPA gets in touch with you. They call in July, They ask if you've thought about something. They don't wait until March to react to a bill that was already written. The moves that actually reduce your tax burden don't happen in March. They happen now. PTE elections, S-corp timing, K-1 cleanup, prior year retirement contributions. Real tax strategy takes months to implement, and summer is exactly when the smart decisions get made. By January, the year is already over. GELT is built around exceptional tax professionals focused on your strategies and your relationship, powered by cutting-edge technology that handles the rest.

16:39This is for those who demand talent and welcome innovation and know the difference between ordinary and extraordinary everywhere. GELT is taking on new clients this quarter, including an extension rescue program for anyone who filed an extension and needs a deadline-safe handoff. Done right, your tax strategy could pay for a genuinely excellent summer vacation. Done wrong, the IRS is going to get that trip instead. Visit joingelt.com slash Tyler to get started. That's J-O-I-N-G-E-L-T dot com slash Tyler. Milestone number two, Coast Fire. Coast Fire, for those who haven't fallen down the relevant Reddit rabbit hole yet, is the milestone where the money you have already invested in retirement accounts or brokerage accounts will, if left alone, compound to a comfortable retirement number by the time you actually want to retire.

17:35You don't have to add another dollar. You can coast. The math has been done. You are, financially speaking, free to spend all future earnings on current expenses and experiences knowing that compounding should take care of your retirement. The standard formula, as we've gone over in a previous show, is to take your target retirement number, divide by 1 plus R raised to the N, where R is your expected real rate of return, and N is the years until retirement. For a 40-year-old aiming at$2 million by 65 with, let's say, a conservative 6 % real return, the Coast Fire number is roughly$466 ,000. That is to say, if a 40-year-old has$466 ,000 invested and never adds another dollar, they will, on average, have$2 million by 65.

18:30It is, at least on paper, the moment you can stop running. I want to tell you about an 18th century English writer named Samuel Johnson who wrote a short philosophical novel in 1759 called The History of Aracelus, Prince of Abyssinia, reportedly to pay for his mother's funeral. Johnson is one of those figures who, if you didn't have to read him in college, you have probably never heard about or thought about, but he was so famous in his time that Johnsonian is still an adjective people use generally to describe a particular kind of crusty, witty pessimism that I personally find appealing, and thus based two years of Master's work entirely devoted to Dr.

19:15Johnson's works. In Rassilus, the title character is a prince who has spent his entire life in something called the Happy Valley. Every need is met. Every comfort is provided. Every form of pleasure is on tap. It's paradise, a literal, walled, fully funded paradise from which there is no need to ever leave. For those of you who need a more current image in your heads, see Moana. The island gives us what we need. Rassilus, like Moana, naturally is going completely insane. He cannot stand the contentment. He cannot stand the sufficiency. He needs to know urgently what would actually satisfy him in the wider world, because life in the Happy Valley has produced not happiness, but a particular and excruciating kind of restlessness.

20:08So he escapes. He travels with his sister and a wise old poet, and they meet philosophers, hermits, kings, scholars, all of whom claim to have figured out how to live, and none of whom actually have. Fittingly, the book ends with what Johnson, with extraordinary honesty, titles The Conclusion in which nothing is concluded. They give up. They sail home. The novel just stops, more or less, with the suggestion that whatever they were looking for was not findable in the form they were looking for it. This is coast fire. This is exactly coast fire. I'm going to share something I have not really said publicly before.

20:53When I crossed my own coast fire threshold a couple of years ago, meaning the number where if I never added another dollar to my retirement accounts, the math still said I was going to be fine. I didn't stop working. I didn't start coasting. I didn't slow down for one minute. I quit my job at the advisory firm and started a content business that in its first year paid me roughly the gross annual income of a particularly motivated lemonade stand. I had the financial permission to ease off, and I responded by working harder than I had in any of the preceding 15 years. My wife, who's watched me do many strange things over the course of our marriage, looked at me one Saturday morning while I was filming reel number four of the day and asked with genuine curiosity if I was okay.

21:42I didn't have a good answer. I was working because I wanted to be working. The financial constraint had been my cover story for my entire professional career, but the actual driver was something underneath that, and removing the financial fear had simply revealed it. Here's what Coast Fire actually delivers. It doesn't deliver peace. It doesn't deliver the cessation of striving. It does not deliver a switch that turns off ambition or insecurity or the very specific neuroses that drove you to save aggressively in the first place. What it delivers is information. It tells you, by removing the financial pretext, what you were actually doing the work for in the first place.

22:24So some people, upon reaching Coast Fire, discover that they were working entirely for the money. And they do, in fact, ease off. And they go play pickleball. And good for them. That's genuinely the dream. Most people, in my experience, discover something a little more uncomfortable, which is that they were working for reasons that money was only partially related to. For identity. For purpose. For the structure that work imposes on a day. for the very specific dopamine of a problem solved or a project created, and that this ultimate financial security has not addressed any of those reasons. Like Rassilus, you do not arrive at the happy valley and become content.

23:10You arrive and discover that the contentment was not what you were chasing, the conclusion in which nothing is concluded. The financial lesson here is real and practical. Hit Coast Fire if you can, because optionality is one of the most valuable things that money can buy. Once you are coasting, you are no longer financially captive. You can take a worse-paying job that you love. You can leave a good-paying job that's killing you. You can take a year off and watch your kid grow. You can do the absurd, unprofitable thing. But you should not, and I'm saying this clearly, expect Coast Fire to make you stop wanting things.

23:51Because it will not. It will reveal what you actually want, which is a different and more useful gift, but it is not the gift you were sold. The happy valley is real. You can live in it. Just know you will still be you when you get there. Which brings us to milestone three, retirement. I want to spend a little extra time on this one because I think it is the most important and the most carefully misunderstood of all the milestones we're talking about today. Retirement is the capital I Ithaca of personal finance. It is the destination. It is the thing that in our culture organizes the entire arc of working life.

24:30Save for retirement, plan for retirement, defer for retirement. The whole framework, the whole industry I used to work in, in fact, is built on the premise that retirement is the country at the end of the long road, and that the suffering of the journey is justified by what is waiting for you when you arrive. I want to talk about Kazuo Ishiguro's novel Never Let Me Go, published in 2005, which I'm going to spoil pretty thoroughly because the philosophical point requires it and because the book has been out for over 20 years. But if you would like to read it first, and I cannot recommend it strongly enough, it is one of the great books of the last quarter century.

25:13You should pause this and come back. I'll wait. This episode is brought to you by Anthropic. I want to tell you something I probably shouldn't admit publicly, but will anyway. Claude is my lowest cost business partner, and I genuinely don't know what I'd do without it. Here's a recent example of how I actually use Claude. I uploaded a photo of myself and my brand color palette and asked Claude to build me a full presentation deck, properly branded, right colors, right fonts, right hierarchy. Four minutes. I've spent entire afternoons with designers going back and forth on things that took Claude four minutes.

25:54I use it for podcast research, newsletter drafts, social scripts, sponsor decks, and the occasional reality check on whether a joke I think is funny is in fact actually funny. And it tells me plainly when something isn't landing, which is the kind of feedback that costs considerably more when it comes from a human and doesn't always need to. Claude is the AI for minds that do not stop at good enough. The collaborator that understands your entire workflow and thinks with you. Whether you're debugging code or strategizing your next business move, Claude extends your thinking to tackle the problems that matter.

26:29For problems worth solving, get started with Claude at claude.ai slash tyler. That's claude.ai slash tyler. And check out Claude Pro, which includes access to all of the features mentioned in today's episode. Claude.ai slash tyler. This week's episode is brought to you by Gelt. Most of you listening probably already work with someone for taxes. But if you're a solopreneur, a real estate investor, or a high net worth individual whose CPA has somehow gone completely radio silent since April, this is for you. A great CPA gets in touch with you. They call in July. They ask if you've thought about something.

27:14They don't wait until March to react to a bill that was already written. The moves that actually reduce your tax burden don't happen in March. They happen now. PTE E-elections, S-corp timing, K-1 cleanup, prior year retirement contributions. Real tax strategy takes months to implement, and summer is exactly when the smart decisions get made. By January, the year is already over. GELT is built around exceptional tax professionals focused on your strategies and your relationship, powered by cutting-edge technology that handles the rest. This is for those who demand talent and welcome innovation and know the difference between ordinary and extraordinary everywhere.

27:56Gelt is taking on new clients this quarter, including an extension rescue program for anyone who filed an extension and needs a deadline-safe handoff. Done right, your tax strategy could pay for a genuinely excellent summer vacation. Done wrong, the IRS is going to get that trip instead. Visit joingelt.com slash Tyler to get started. That's j-o-i-n-g-e-l-t dot com slash Tyler. Okay, here's the setup. The novel is told from the perspective of a woman named Kathy, who grew up at a boarding school in the English countryside called Hailsham. Hailsham is, on the surface, like other boarding schools.

28:35There are kind teachers. There are friendships. There is art class. There's the slow process of growing up. But it gradually becomes clear through hints and fragments that Kathy and her friends are clones. They have been brought into existence, raised at Hailsham, and educated specifically to serve as organ donors for the broader population. After they leave the school, they will, over a period of years, donate organs until they complete, which is the word the book uses for what we would call die. There's a rumor throughout the book that students who can prove they are truly in love, that two clones have a real, deep, demonstrable bond, can apply for what's called a deferral, a delay of the donations.