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.”
Spending Money Extravagantly Requires Skill
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 largely thanks to the bull market.
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. The $120,000 could turn into $300,000+ 10 years later!
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 value security and freedom far more than material things. Comfortable, simple clothes are all I need. My 10-year-old car still feels great to drive as long as it’s safe. Flying Economy with my 8-year-old son gives us plenty of space, and we arrive just as fast as those paying 2–10X more for First. I don’t need a fancy watch either, my iPhone tells the time 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 live my life. 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
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I also struggle with investing instead of spending. In my case I have found that having a special account for spending helps. My wife and I enjoy taking nice vacations 2 or 3 times a year, and to fund this we put all of the rent checks from our rental houses into special account, and use this account to pay for our trips. With this dedicated joint account I don’t have the urge or unilateral ability to invest every available dollar.
With my personal account I have purchased a modest new car this year (the 23 year old Yukon was requiring more frequent repairs) , and have replaced some windows in my home, but this was a struggle for my overly frugal self.
Yes, my wife and I still have individual accounts in addition to the joint account. We both have similar incomes and this allows us to spend, save, or invest as we choose without having to ask permission.(Amazon stops by daily) We are both frugal, I’m an investor, she is a saver(it’s just the way she rolls)
Thanks for sharing Paul. I also segment my rent checks, but mostly all to my online brokerage account, and now $2,500/month auto-invest in the Innovation Fund.
It’s so hard for me not to want to re-invest the stable rental income into something more!
Thank you Sam for this article and your commenters for their perspectives! It reinforces our decision to do some major spending and do it in the most rational way. We are retired folks living on SS + passive income. Even though our net worth is already in 8 digits we are content with living a middle class lifestyle and driving reliable but inexpensive cars. It’s difficult to change the lifestyle if you are used to living frugally. My highest earned income never exceeded $100K but I liked my job as a college professor so I continued until 71. Until then our primary residence was 3 bd 2 ba 1500 sq ft home. Our passion has always been investing not spending so our only luxury until now was a Florida vacation home. However, after long discussions some of which involved reading your articles about decumulation, we have decided to put our cash to work and after lengthy search we have acquired a luxury 9000 sq ft home in a gated community in a suburb of a major Midwestern city. The home itself is an investment but furnishing and decorating it will involve quite a lot of fun and some major spending. The best part of it is that does not require selling a single share of stock so both can be passed as legacy to our children and grandchildren.
When you grow up poor, it so hard to justify spending on what may seem to be silly things… I just bought a new/ used pair of shoes online because I couldn’t justify the full price if I could get a pair that was purchased but returned to retailer for 1/3 the price…
I still remember my mom putting money in separate envelopes for mortgage, food, bus fare, braces etc. It really is hard to see what people spend money on and not think it silly. We now live on Maui and the lifestyle here is just amazing, but you know what? I want to get a lot in Monterey and then put a tiny house on it to get out of the hot summers here…thats my goal!
Love your blog!
I’m retired for 10 years so I can give you a perspective that many are searching for. Nice house that is paid for. Nice cars. Nice furniture. Nice tv’s. Nice art work. Nice view. Friendly and kind neighbors. House cleaning person twice a month. Yard guy once a month. No debt. Being able to spend, travel, eat out etc. Safe neighborhood. Having enough passive income that your assets grow every year. Staying healthy to be able to golf, kayak, ride bike. Having something to do everyday that’s fun. Being loving and kind to your family. Being grateful and thankful for what you have. Not resisting What is.
Congrats Steve. Sounds like you have obtained enlightenment.
How did you overcome the desire to save and to spend more? Was there an age you started to intentionally spend more? Is there anything you would have done differently when you first retired 10 years ago?
I think it helped that we didn’t have children (my daughter) until I was I was 39 and my wife 37. We met in college and have been married for 52 years. We lived in 3 houses and never had a mortgage or car payment. We lived conservatively but always spent what we wanted and had money left to save. We are very fortunate indeed.
Sam, you’re likely right that I won’t do that high of a car purchase. I’m completely content as is with my 2019 Audi worth around $20,000. I’ll probably find a middle ground and spend 80K on something when that time comes. I’m honored that I inspired a post LOL.
Always great to have community input! Learning from others and discussing topics with different perspectives is what makes running this site the most fun.
Great post, Sam. The world is filled with investing strategies and how to keep building your portfolio so decumulation is a great topic and needed advice for many. I find decumulation stories fascinating because most frequently it’s not a math problem to be solved but a significant psychological hurdle to overcome. Interesting side note…..a specific diagnostic criteria for obsessive-compulsive personality disorder is “miserly spending style toward both self and others; money is viewed to be hoarded for future catastrophes.” (I read this and realized I know many of these types!). For me, I find myself with a multiple seven figure net worth the poster child for compounding, staying invested, and starting early. My first job out of college (very average state school doing work that many would consider boring) paid about $2,500 per month gross but I started investing and never stopped. Now about 30 years later my investments in an average year have have started to well exceed what I bring home. It’s an odd feeling some days. It felt like it happened slowly then all at once when my portfolio reached a critical mass. I have started to shift my thinking on buying decisions to look more about what a major purchase does to my net worth, and less about what is represents as a percentage of my take home paycheck because my paycheck is paltry compared to my portfolio returns. It has helped me enjoy some splurges I never considered before like taking entire family in business class on international flights. I did it and didn’t even register and realized it was not even a blip on my net worth. In the final years of my career I am going to continue this approach because I realized you can do these things AND still grow your portfolio once it reaches a certain size. I enjoy your articles!
Awesome Jerry! Yes, the difficulty of spending more is always psychological. I think a big part of it is because investing just feels SO RIGHT after decades of doing it. So to not do it and give up on future potential gains just feels so wrong.
But our lives are finite. We’ve got to force ourselves to do so. I just got to Sonoma County today, and I’m gonna pick me up a three extra dessert pastries for $12 each. Not cheap, but YOLO! But damn, $36 ain’t gonna make a dent if Buffett keeps buying UNH lol.
Thanks for reading.
great article. Really hits home for me. I am in my late 30s and have l prioritized savings since I started working… others around me, would likely have called it extreme, but I didn’t necessarily deprive myself of anything that would’ve brought me meaningful incremental happiness. I have 3 kids and my net worth is now 6.5Mish and I’m making $800Kish with meaningful upside over the coming years…. My net worth has obviously ramped more recently as a result of the markets and my income has meaningfully jumped over the last few years as I did not make over 500K until a few years ago…. However, my equity in the biz is scheduled to move much higher…..
We never spent more than 4K in rent before and our cars did not cost more than 25Kish… I am not into jewelry or clothes either…not too much traveling and when we do, it’s not crazy.
However, we recently just spent $4.7Mish on our primary home. Between our 3Mish mortgage, taxes, insurance, maintenance etc we are close to $300K annually, not
To mention the opportunity cost on the large down payment! Obviously, it is not the best financial decision as the large down payment and meaningful monthly nut would be much better served back in the market…
However, I have a good gig work wise and don’t anticipate retiring early. I’m hopeful these expenses will look less meaningful as my income ramps up. What do I need the money for if I’m not going to retire anytime soon? With all that being said, I have surprisingly spent more on random things for the house because all the sudden when you’re spending all this money to live there, every other expense seems relatively trivial. It’s a really weird feeling! All of the sudden a sauna, speaker system, better landscaping etc seem like rounding errors… I was really freaked out before I bought the house and figured I would be ultra conservative in my non-housing expenses, especially given I’m not swimming in excess cash flow given the monthly nut…not a meaningful net saver any longer to say the least. However, the reverse has happened, and I seem pretty calm about it all financially… Worst case, things really change, I can always sell the house and I have a decent balance sheet to fall back on…in the meantime, while the music is playing, what’s the difference if I’m worth 6, 7, 10m etc…
Maybe I just have lost my mind and I’m not thinking clearly. I don’t know.
Sounds like you are doing a good job spending with the $4.7 million house purchase in your 30s and a $800K income. Awesome! I’m sure you’ll really enjoy your home. YOLO!
What is it you do and do you enjoy it? So long as you enjoy your work and are happy to work many more years, you should feel free to keep spending. But don’t forget to forecast your misery so you have enough capital and passive income not to have to work anymore.
Another thing to consider is how much time you want to spend at work while your kids are still young and want to spend time with you – generally done around 12 years old. Hard to know!
Appreciate the response…I completely agree with the sentiment regarding spending more time when the kids are young…tough timing for me as I just can’t imagine walking away right now especially as it feels like my income is at an inflection point. While I much rather be with the 3 kids all day, play golf/tennis daily, travel more and be away from the screens….my kids are almost all in school now during the day, I can work from home/anywhere and be with the kids shortly after they get home most days and I have some flexibility with my schedule, not tons. I definitely don’t “love” the grind much of the time, but I have it pretty good and feel
Fortunate to have such a unique situation… I also want the option for the kids to potentially come into the businesses one day.
given that, I feel more comfortable with the spend…if that changes, I suppose I could always sell and downgrade my housing expenses by 70% plus easily..,,
I actually am envisioning the opposite playing out… I’m hopeful my income can keep ramping and I step up to a home 2-3x ($10-15m) my current value in the next 5-10 years if my income can increase around that same amount.., it’s crazy that $15M plus homes in my general area are not so crazy and there are many in the 30-40m plus level….clearly housing is the one item I want to and am comfortable pushing the boundaries on relative to income/NW…I am also more comfortable, pushing the housing nut given I have the 6+ saved as I feel like that gives me some protection, and my income is more or less just enough to cover the expenses plus some savings, albeit not crazy amounts. It is a convoluted and weird way of rewarding myself or justifying why I can push it a bit.
Also, my non/housing expenses are quite modest, but that’s somewhat noise in the context of such a large housing nut.
If I started ramping (cars, travel boats etc) this part of my expenses, I obviously wouldn’t be able to be as adventurous with the housing burn.
Cool. What is it you do and how long more do you plan to work?
Financial services and don’t really have a specific time in mind in terms of retirement… i would like to continue at least long enough to see if the kids want to get into the field.
That’s a great goal. It’s similar to working until the kids graduate college to ensure all financial responsibilities are taken care of.
Thanks for reading for the past 15 years. You must have come a long way!
You are also one of the few constants in my entire life…… You are really the only blog I have consistently read since I started my journey 1.5 decades ago. I am very grateful for all the wisdom you have shared and you have played a profound role in my life.
My wife also still works part time in marketing/PR and I suppose it might make more sense to simply allow her to completely stop working and perhaps upgrade our non-housing lifestyle in Lou buying a more expensive house down the road…all things to consider. I like the idea of spending on a home as we still have “equity” as opposed to other purchases where it immediately brings down our net worth l…… That is likely somewhat of an irrational view as the expenses to upkeep the home are such a a massive burden.
Thank you again for a great post.
Giving the gift of freedom to your wife will be one of the best gifts if she dislikes her job and wants to do something new.
Very well-timed article for me! I just booked a family trip that’s way more than I usually spend, but I told myself all of the things you mentioned above. Decumulation is definitely tough sometimes, but it’s mutually exclusive from thinking you’ll just blow all your money. My mindset and habits will not change, so I completely agree that splurging when appropriate is absoultely the way to go. Thanks, Sam :)
Love it! That’s exactly the mindset I’m trying to reinforce. Spending more than usual on a family trip isn’t “blowing money,” it’s investing in experiences and memories that often end up being priceless. Decumulation is tricky because the saver’s mindset is so ingrained, but like you said, it doesn’t mean suddenly becoming reckless. Enjoy that trip — you’ve earned it!
I agree that being able to spend in ways that align with your personal values is a wonderful thing. Simple example, I used to have so much guilt buying non biodegradable plastic trash bags because I couldn’t stomach the cost of the biodegradable ones. Fortunately over time the costs have come down and I have built more wealth so now I am comfortable buying them and have also switched to compostable “plastic” wrap. These are very little things of course in comparison to spending money on a car or a home. But I think the underlying theme is the same.
I agree that being able to spend in ways that align with your personal values is a wonderful thing. Simple example: I used to feel so guilty buying non-biodegradable plastic trash bags because I couldn’t stomach the higher cost of the biodegradable ones. Over time, as the costs have come down and I’ve built more wealth, I’m now comfortable buying them — and I’ve also switched to compostable “plastic” wrap. These are small things, of course, compared to buying a car or a home. But I think the underlying theme is the same: aligning spending with values makes it feel good rather than wasteful.
Great post Sam. This is somethimg i struggle with myself as I’m always looking at the size of portfolio through the lens of safe withdrawl rate ~4% – 5%. Even with rental incone it seems prudent to pad the base and provide greater safety margin to mitigate sequence of return risk. But i recognize i will likely die with more than zero or enough. I get more of a thrill watching money compound than spending on depreciating assets.Travel / experiences likely an area i can improve upon however.
Thanks, Dan. I can totally relate. I’ve also spent years looking at my portfolio through the lens of the safe withdrawal rate and padding the base to hedge against sequence of return risk. It’s a prudent mindset, but like you, I realize the odds are high I’ll pass away with more than enough. Watching money compound is definitely thrilling, but I’ve found that intentionally redirecting some of that energy toward experiences — especially travel with family — pays a different kind of dividend. It’s a balance, and I’m still working on it too.
I agree with your hypothesis that most people are long-term rational. I’ve always thought “once I hit x net worth” or “once I hit x in my investment account, I’ll splurge and buy this.” Nearly every time I’ve gotten to that milestone, I’ve found that “thing” isn’t worth it and I like the number in my account better.
It’s going to be a tough transition to eventually spend! Good tips in here.