Once You Get Money, Upgrade These 8 Things Immediately

Once you start making more money, the easiest mistake is upgrading the wrong things. You end up spending because you can afford it. But there is a better way to spend. I spent years on Wall Street and as a CEO making [music] tough calls about money. So I learned these lessons by getting it wrong a lot. Your next dollar has four possible jobs. Four categories [music] worth upgrading immediately. And the last one has the worst financial [music] return. And that one matters the most. Money actually can buy you happiness. >> [music] >> Just not the way we think. In 2010, Nobel Prize winning psychologist Daniel Kahneman suggested that happiness has a ceiling. According to his research, when you reach $75,000 a year, more money doesn't seem to improve your day-to-day emotional well-being. And for more than a decade, everyone quoted that number. Except that it turns out we were all reading it wrong. So in 2023, Kahneman teamed up with another researcher and they both arrived at a surprising conclusion. For most people, more money does keep making life better. But the relationship between money and happiness is not a straight line. Let's say you get X amount of lift in your happiness by going from 40,000 to 80,000. Now the same lift will happen only when you go from 80,000 to 160,000. And then if you want a similar lift once again, then you have to go from 160 to 320,000. So it just takes more and more money to provide the same hit. It seems like money behaves just like any drug. The economic principle here is called diminishing marginal utility. The next dollar has to work harder than the last one because it's worth less to you. I love ice cream, so I know this well. Your fifth ice cream cone won't give you the same pleasure as your first one. Believe me, I've tried. So, being rich and living a life that's rich in meaning are two entirely different things. If your net worth rises while your self-worth falls, you're just rich on paper. We want to talk about where will my next dollar create the most additional value for me? Can the additional money buy back your health, your time, your attention? Can it increase your future earning potential? Can it make your relationships, [music] your experiences, and your actual life richer? I call it the 4S framework. So, let's use this framework [music] to figure out what is actually worth upgrading and why?