“Is that your unicorn palace?”
I blinked. Parsing the connotations brought to mind by the unfamiliar expression.
Before settling on unlikely.
Hopes and dreams territory. A heavenly nirvana. The ultimate happy path. Winning at life.
The framing of the expression suggests disbelief at the implausible or impractical nature of the ask.
Did unicorns exist? Possibly. The Scottish certainly believe so, adopting it as their national emblem, said to represent “innocence, purity, and power“. Ignoring the irony that the pure are powerless, while those in possession of any real power lost their innocence long ago.
Did all unicorns reside in palaces? Or were unicorn palaces the exclusive domain of overachievers and the beneficiaries of generational wealth?
As is so often the case, reality differs markedly from legend. Science tells us that some 38,000 years before Genghis Khan led his horde across the Steppe, the first humans to arrive in the region encountered an unusual animal: giant furry rhinos. These rhinos were said to be nomadic and solitary by nature, rarely encountered at the best of times, before climate change rendered them extinct.
But their legend lived on.
Handed down from one generation to the next.
Stories embellished and exaggerated with each retelling. Until an animal with poor eyesight and the grace of a lumbering tractor had evolved into a sleek mythical beast possessing magical properties.
Symbolism. The truth no longer mattered. Certainly not enough to get in the way of a good story!
Recently I watched a couple of episodes of Ramit Sethi’s tv show on Netflix. The premise behind the show is simple, think Grand Designs or Queer Eye but for money. Celebrity host performs money makeovers for reality television actors playing members of the general public.
The casting ran the gamut of clichés, striving to tick all the “people like me” inclusion boxes. Entitled affluent white people. Black working poor. Vain gay men. Naïve young women. All making bad choices. All lying to themselves about the reasons why.
While the program is a thinly veiled advertorial for Sethi’s “I will teach you to be rich” brand of financial coaching, his approach intrigued me.
Choosing to focus on the positive.
Enabling the attainment of dreams via automation, conscious spending, and self-awareness.
Teaching the skills required for sustainable financial self-sufficiency.
Recognising that winning the money game is achieved via behavioural psychology, not spreadsheets.
It is a variant of the approach adopted by many of the good personal finance writers today. Pete Matthew. The team behind Monevator. Michelle Freeman. George Agan. Mrs Flamingo. Nick Carr. Sonny Bailey. Nick Maggiulli. Lawrence Yeo. And in particular, Morgan Housel.
In their own way, each encourages the audience to ask themselves “why”? Why do I do this? Why do I want that? Why do my behaviours not align to my professed beliefs.
Their good stuff focuses on the timeless rather than the fashionable.
Choosing substance over clickbait or fleeting news cycle headlines.
Stories that will continue to resonate with readers long after their blogs “go dark”.
Choosing (for the most part) not to serve up empty promises of easy answers or paint-by-numbers checklists. No one-size-fits-all plans. None of the frugalista, penny wise pound foolish, nonsense that dominates the personal finance niche. To quote Sethi, focussing on the “$30,000 questions, not the $3 ones”.
I once shared a youth hostel with this old guy who claimed to be a globetrotting emergency medical physician. Whenever a natural disaster struck, he would jump on the first available flight to provide aid to those in need. In between disasters, he spent his days hanging out at youth hostels telling tall tales and charming the pants off female backpackers.
Over a few beers, the guy spoke of “aequanimitas”, which meant always remaining calm and composed. Few things in life were as hectic and stressful as emergency medicine, so having a checklist containing sequenced rules of thumb helped him avoid making mistakes in the moment.
I don’t remember the entire list, but it went something along the lines of:
- First fix breathing, bleeding, and circulation.
- Assume the worst until proven otherwise.
- Watch for common warning signs.
- Everyone lies. People are idiots. Trust no one. Believe nothing. Always do your own thinking.
- You will make mistakes. Learn from them.
- Treat others as you would like your closest loved ones to be treated.
- When in doubt, do what is best for the patient.
I remember admiring the guy’s approach and storytelling. Though some of that admiration was grudging, after the pants he charmed off were those of the pretty backpacker I had been chatting up!
Sethi applied a similar approach to his television money makeovers.
Starting with an evidence-based review of finances and cash flow. Reading through bank, brokerage, and credit card statements. Identifying anomalies. Gaps. Inconsistencies. Warning signs.
Did the punter regularly spend more than they earned?
Were they haemorrhaging money to consumer debt, credit card interest, or student loans?
Could they weather a financial storm, or predictably unpredictable “life happens” event?
Did they have the balance right between living for today and saving for tomorrow?
Were those savings being invested?
Were those investments wise? Cost-effective? Efficient?
Then he met with the punter in person. Attempting to get a sense of their personal circumstances. Their goals and challenges. Whether their behaviours aligned with achieving their desired outcome.
Being television, there had to be manufactured drama. A couple on the verge of divorce. A Ferrari driving socialite who prowled along Rodeo Drive. A reality television star who was trying and failing to finance an influencer lifestyle on a beer budget. A parasitic vampire who financed their lavish lifestyle via eye-watering levels of child support.
One by one, the characters received Sethi’s advice. Paid it lip service by tinkering around the margins. Thanked him for his efforts with vague promises about big future changes they would make. Then they disappeared from the narrative.
Which is a fair reflection of the realities of any advice-based profession, from coaching to counselling to therapy. The adviser can provide clients with best advice in the world, but can’t make them listen.
Sometimes they get to vicariously join the client for part of their journey. Watching like a proud parent as their client stumbles, grows, and (hopefully) eventually succeeds.
More often, they attempt to equip the client with the tools needed for success, and then wish them safe travels. Never learning how the journey ended, or what adventures occurred along the way.
The tag line for the tv show was “what is your rich life?”. This involved the client articulating their happy place. Sethi then helped guide the client to construct a substantive long-term plan for making that happy place attainable.
The work of years or decades, not the easy answers promised by a 20-second TikTok or 280 character Tweet.
None of the “rich life” visions involved a magic number. No net worth, savings rate, or total market return calculations. All were expressed as variants of having “enough“.
Enough to not worry about money.
Enough to pursue the things they enjoyed free from guilt or pressure.
Before watching the show, I was vaguely aware of the existence of Sethi’s book, but hadn’t encountered his work. I did a bit of bit of background research, and turned up a list of money “rules” Sethi had published on Twitter earlier this year. His financial equivalent of the aequanimitas list.
Combining that Twitter thread with the lessons from the tv show, I’ve paraphrased the list below (and screened out one item about flying business class for flights exceeding 4 hours):
- Always have 1 year of emergency fund cash
- Of your gross income: Save 10%. Invest 20%. Spend no more than 30% on housing (including rent/mortgage + property taxes + renovations + repairs + service charges + utilities)
- Be able to pay in full for large expenses before spending (e.g. weddings, holidays)
- Spend whatever you want on education and health
- Buy the best and keep it for as long as possible
- Earn enough to only work with people you respect and like
- Prioritise time outside of your finances spreadsheet
- Marry the right person
The list is an interesting combination of lifestyle enablement today and saving for tomorrow.
Accepting that longevity is uncertain. There are no guarantees we will live to see retirement, nor be fit and active enough to enjoy it should we be fortunate enough to do so.
Recognising that any plan focused on self-discipline, self-denial, or delayed gratification is unlikely to be sustainable over the long term. Which means it will ultimately fail.
Understanding that behavioural psychology is the key to winning the money game.
Is Sethi’s “rich life” a unicorn palace? Possibly. New branding applied to an old concept: visualisation.
But without a goal to aim at, each little step we take will be directionless. Neither taking us towards nor diverting us away from a target destination. Instead, we wander aimlessly. Spinning our wheels. Treading water. Marking time.
For those of us fortunate enough to eventually succeed in attaining those “rich life” goals, chances are high that lived reality will contain only a passing resemblance to long imagined fantasy. Giant hairy rhinos where we envisaged beautiful magical horses.
But whatever form reality takes, if we followed the common path described by any of those personal finance writers, we will have enjoyed a “rich life” throughout the journey.
- Agan, G. (2023), “Principles Personal Finance“
- Bailey, S. (2023), “NZ Wealth and Risk“
- Carr, N. (2023), “Your Money Blueprint“
- Davis, J. (2018), “The Siberian unicorn lived at the same time as modern humans“, Natural History Museum
- Freeman, M. (2023), “Fire and Wide“
- Housel, M. (2023), “Collaborative Fund“
- Maggiulli, N. (2023), “Of Dollars and Data“
- Matthew, P. (2023), “Meaningful Money“
- Money Flamingo (2023)
- Osler, W. (1904), “Aequanimitas“, McGraw-Hill
- Sethi, R. (2023) , “10 Money Rules“, Twitter
- Sethi, R. (2009), “I will teach you to be rich“
- Studio Lambert (2023), “How to Get Rich“, Netflix
- Yeo, L. (2023), “More to That“