Howes: Hi, I'm Lewis Howes, New York Times best selling author and entrepreneur, and welcome to "The School of Greatness," where we interview the most influential minds and leaders in the world to inspire you to live your best life today.

In this episode, we sit down with Haley Sacks.

She's a New York Times best selling author and the financial educator known online as Mrs.

Dow Jones, dubbed by the Wall Street Journal as the financial guru millennials listen to.

Today, she's here to teach you how to break free from money shame, and rewrite the beliefs that you've carried since childhood around money, how to spot the real difference between looking rich and actually being rich, and finally, how to put your money to work so you can stop stressing and start building the future you deserve.

Sacks: Money relationships are basically set by the time you're 7 years old.

If you're someone who's living with a lot of money shame, yeah, you're responsible for a lot of this, but there's also a lot of forces outside of you that are causing you to feel like this about your finances.

And so, the best thing that you can do is empower yourself financially so that you can make your own money because that's going to let you be able to live your own life.

Howe: So, let's dive in and let the class begin.

Sacks: I would say the three rules to become a future rich person, number one, you have to figure out your money mindset.

And that is why the first chapter of the book is simply called "Face It."

Because, you know, I can give you all of the financial advice in the world, but none of it is going to stick, you're never going to make any actual changes, if you do not figure out the root of your relationship with money, and then set up systems and have awareness towards acting differently.

So, that's really the first step.

Howe: And something you say around that, you say, "When you lean into your biggest wound, that's where the magic happens, and the moment I stopped avoiding my finances and took control, my whole life shifted."

That's something you said in the book.

Sacks: Yeah.

Howe: So, it was really kind of like this "a-ha" moment, then realizing, "I need to create a new mindset around money and take control of my finances."

Okay.

So, money mindset's one.

What would be the next rule?

Sack: So, then, the next rule is really understanding how to utilize your action money.

Howe: Action money?

Sacks: Yeah.

So, I coined this term in the book.

And that is the money that you have left over after your expenses.

And you know, it doesn't matter who you are, you could be, you know, Warren Buffett, or you could be, like, you know, someone -- not Warren Buffett.

Most of us aren't.

But if you don't have that action money left over that, then, you can play with to grow wealth with, you're never going to make progress financially.

Howe: So, you have all your expenses, you calculate that, and then everything left over -- is this everything left over, minus the lattes and going out to dinners, or is this just everything left over?

Sacks: Well, you know, I do believe that you need to leave room in your budget for fun, or your financial life will never be sustainable.

Then, you're going to be the person who's rewashing their paper towels and who's -- you know, I coined the term of financial energy, which, you know, we all have a finite amount of energy each day.

I mean, I feel like I wake up and I think every day that I'm going to, like, run a marathon, and like, start a new company, and like, you know, like, donate to every charity, and get my whole to-do list done.

And then, by 4:00 p.m.

I'm like, "Okay, want to get into bed.

Can I have a cookie?"

Like, "No one bother me," you know?

Because you wake up with all the gusto in the world and it goes away, and I think that a trap that people fall into with their finances is that they have that burst of energy towards wanting to change, which is so great, and it's something that you should absolutely hold onto and garner, but you have to understand how to put it to work so it will actually move the needle.

And so much of the financial information, especially fed to women, is about using that financial energy towards things that don't matter.

Howe: Like what?

Sacks: Like the avocado toast, or the latte, or...you know, I read something about don't buy pre-chopped vegetables at the store.

You should always chop them yourself.

What about learning to negotiate?

What about, you know, understanding compound interest?

What about spending that energy to improve your skills so that, then, you can put yourself in the position to be paid more?

When you look 10, 20, 30 years down the line, that is what's going to move the needle for you more than that $5, $10, $20 that you saved along the way.

That being said, if you are overspending, which many people are, that's something that you have to deal with.

We live in an age of frictionless finance, which is very dangerous because people use spending as a form of emotional regulation.

And right now, on our phones, it's never been easier to use Apple Pay like "Apple be paying."

Not only that, we are the most advertised-to generation ever.

Howe: Crazy, right?

Sacks: Yeah.

Our parents saw 500 ads a day.

We see 5,000.

So -- more, actually.

Howe: 5,000 a day?

Sacks: Yeah.

Howe: Oh, my gosh.

Sacks: Yeah.

So, there's all these things that we're told that we need to buy, and it feels impossible to hold on to your finances, you know?

Howe: Yeah.

What was the -- In the first year after you had your financial a-ha moment, what was the biggest mistake you made even though you knew you shouldn't have done it?

Like, something that you're like, "Okay, I'm going to do this anyways because I feel like this is an opportunity," or it's cool, or try this out, even though you knew it went against, like, the new rules of money you were learning about.

Sacks: I've made so many mistakes.

I'm not that financial expert who, like, you know... I feel like people think that, in order to be good with money, you have to have, like, a certain personality type.

And I am clear in the book, like, I'm the girl who probably is bringing her passport to the bar because I don't know where my license is.

You know, I was on a date last week, my hair caught on fire.

Like, it's like, things like this always happen to me.

Like, it's like I'm not a... I'm not the girl with the hair washing schedule, and the perfect handwriting, and all these things.

And so, you know, in that first year, I still was struggling a lot with wanting to look rich instead of being rich.

Howe: Really?

Sacks: And I still struggle with that.

And it's something that I, you know, have learned to devalue in my mind, like designer goods and things like that, but I still get caught in it sometimes.

Howe: Sure.

What's the difference between looking rich and being rich?

Sacks: Looking rich is like when you're, you know, just wearing a ton of designer logos, and you want to stunt, and make people think that you have this illusion of wealth.

And there's actually, Lewis, influencers who -- the New York Times just did an article on all these influencers who teach you how to look rich.

So, they, like, tell you to wear, you know, neutral colors, and you know, like, to dine a certain way and all these things.

And to me, that has to do with learned financial helplessness.

Because if you feel like the system is out to get you and there's no chance to win, you start looking for cheat codes to get you there faster, and sort of faking rich is the way to do it.

Howe: Really?

Sacks: Yeah.

But then, when you actually see really rich people, they don't care about that stuff.

They're so casual.

They, you know, they're driving a Jeep.

They've like, they've got, like, a few hobbies that they really enjoy, they love their family, you know, they're, like, they're donating, they're, you know, they have time to themselves, they invest in their health, but they don't care about, like, "Oh, this is my Louis Vuitton bag" or whatever.

It's really about buying back your time.

And health.

Howe: Health and time.

Sacks: Yeah.

Those are the two biggest assets.

Howe: What would be, like, a few key signs of people who are trying to project... project that they're rich versus people that are wealthy, the signs that they have?

Sacks: Okay, so, in that first year, I got a check that I thought was, like, life-changing... That was $3,000.

And not only did I buy a Louis Vuitton bag, but I bought one where it has the LV enlarged.

So... Howe: Super big.

Sacks: Yeah, like -- Howe: Like, let me project.

Sacks: Yup.

Exactly like -- Like, let's not just -- don't just know, "Okay, lowkey Louis Vuitton bag."

Like, no, no -- it's loud.

Like, you're not going to be able to ignore the fact that, like, this is a designer bag.

And by the way, probably fake, like, from eBay, from, like, a random seller, like, not box fresh.

And you know, I could not have given that money over quicker for this item that I thought signaled success and gave me value.

And then, of course, the rent came and it was like, "Okay, I'm in a bit of a pickle because I did spend all that money on, you know, the bag."

And so, that was sort of a tough month.

But I keep that bag now as a reminder because I think I still will always have that dog in me a little bit of, like, you know... ...falling a bit for the allure of, like, luxury.

But I also know that the gratification of it is so fleeting and that I actually get so much more value for my money when I spend it on experiences, or, you know, on creating my future more.

Howe: I mean, this is not a "right or wrong" conversation.

I've never been, like, I've been more about quality and premium, like, buying quality and premium versus... which brand is it?

Sacks: Yeah.

Howe: It's more of like, "is the brand premium?"

but not "is the name known so that I can project?"

Now, I'm not saying like, listen, I have a Tesla.

There're signaling all around.

Sacks: Yeah.

Howe: I'm wearing a Rolex.

Someone gave it to me as a gift, but it was like... Sacks: Give it to me.

[ Laughs ] Howe: Exactly.

But part of me feels weird when I buy... like, brand names to show it off.

For me, I feel weird about it, even though I, again, I have a nice Tesla, I have a Rolex.

It's like, I'm not saying I'm better than or something, but... ...I always look for premium.

Like, I want premium experiences, I want premium food, I want quality time, I want premium, like, travel.

Sacks: Yeah.

Howe: That's what I'm looking for, to create more, like, comfort, I guess, more, like, quality, more of that in my life.

And maybe I have a wound against going against brands for some reason.

Like, I don't know, maybe it's something different there.

But when someone only wants brands and they're like, "I cannot wear anything unless it's designer name and it's showing it," right?

And it's signaling it.

What are they saying to the world, typically, if that's the case?

Sacks: Well, to me, this is a form of learned financial helplessness, which is when you feel like the system is so out to get you and there's no real opportunity to win, and so, you start to prioritize things that don't really matter because you're sort of looking for shortcuts and ways out versus actually understanding that there's always still ways to win, you just need to find them.

And so, this could come as, you know, ignoring your bank statements, quiet quitting I think is a really good example of learned financial helplessness.

Howe: Really?

Sacks: But -- yeah.

You know, where you sort of just give up, you're like, "Well, you know, I shouldn't have to count on myself."

Like, it's, you know, the people who are sort of like, "We're on a spinning rock, the world is burning," or, you know, I see this a lot when I... ...give projections for investments.

So, I'll talk a lot about how important it is to start investing early.

And if you invest at 25, $200 a month, 8 to 10% return, by the time that you are in your 60s, you will have over $700,000.

Howe: Crazy, right?

Sacks: Which is so cool.

Howe: $200 a month.

Sacks: 200 bucks a month.

Howe: At 25.

Sacks: Yep.

And if you start at 35, that goes down... Howe: By half, at least.

Sacks: Yep.

Exactly.

But when I say that, there's always people in the comments who are going to say, "Well, $700,000 by the time that I'm in my 60s isn't even going to matter."

Like, you know, "Inflation is so crazy," and they're not wrong.

Since 2000, you know, price of living has gone up 67%.

Wages have increased 7%.

Howe: But if you don't invest anything and you have $0 at 65, you're screwed.

Sacks: Exactly.

Howe: Then, what do you do?

Sacks: Exactly.

But learned fin-- It's like this financial nihilism where you just count yourself out.

And that is something that I really talk about a lot in the book because I think that we see it a lot in young people who then prioritize, like, flexing, or, you know, you see it even, like, people going to Coachella on buy now, pay later, where they're living so much more for the now versus prioritizing their future rich person because they feel like there's no point.

Howe: So, let's go back to this moment, this a-ha moment.

You made $3,000, you went on eBay, you bought a big Louis Vuitton bag, right?

And you still buy designer brand stuff today, right?

I'm assuming.

Sacks: You know, a lot less.

I now do a lot of... ...luxury resale.

So, now, it's become, like, a savvy hobby of mine where I have traveled around the world, and I've gone to Asia, I've gone to Europe, to find secondhand luxury goods, and then I'll either keep them or I'll flip them.

Howe: Really?

Sacks: Yes.

Howe: Oh, so you make, like, a business out of it.

You use it for a few months and you can make money.

Sacks: Exactly.

Howe: That's interesting.

Sacks: Yeah, yeah.

Howe: It's more of an asset.

Sacks: Yeah.

It's an -- I mean, but it's a hobby.

It's still -- it's not going to change my life, the money that I make on it, but it's become more gamified.

But I'm very outspoken against, you know, the whole, like, Birkin culture online, which I fell for, too.

Howe: What's that?

I don't even know.

It's a bag?

Sacks: Yeah.

The Birkin bag from Hermes.

Howe: What's the culture about it?

Sacks: You know, there's so much information out there that is perpetuated that a Birkin is as good of an investment as the S&P 500.

And so, it sort of tricks women into thinking that, like, you should spend $20,000 on a bag and that that's, like, a really good idea because yeah, it's going to beat the stock market, and you can wear it, and it's, like, going to make you look rich, but it's also going to make you rich.

And it's like, in actuality, those numbers are not correct.

They are completely graded on a curve.

Of course, there are some very rare assets that come from Hermes that's like the crocodile diamond secret, like, you know... Howe: There's like 20 of them in the world.

Sacks: Yup, and those are gonna swing the whole pendulum one way.

But for most people, put your money in the stock market.

Like, what are you doing?

It's makes no sense.

Yeah.

And so, then, you know, I really started to focus on value-based spending.

Howe: Ahh.

What is value-based spending?

Sacks: So, it's when you really -- 'cause you can have anything, Lewis, but you can't have everything.

And I think so much of financial advice makes you feel like you have to deprive yourself to get where you want to go.

But in reality, you can actually just implement your dollars towards what you value to live a life that feels, like, so much fuller, and you know, you get so much more out of it.

And so, you know, picking a few categories of things that you really like to spend on, like, for example, I don't really care about coffees.

Like, there's a lot of people who I feel like love to have their, like, little sweet treat, whatever.

That's something that I could cut really easily from my budget.

But then, there's other things, like I have a dog walker, and that's, like, a really big part of my life that I wouldn't give up because it's like, it allows me to work more, and like, I know that my dog's being taken care of, which helps my mental health.

And so, it's like, you know, what are those trade-offs, you know?

Howe: Sure.

That's great.

Then, what would you say is the mindset difference between someone who makes money versus someone who's building wealth?

Sacks: Oh, this is such a great, great question, Lewis, because there's actually a story of someone in the book, it's a real story of this guy named Ronald, who was a janitor, and so he never made... How: A lot of money.

Sacks: He didn't have -- yeah.

He didn't have a high salary.

But he died with $8 million.

Howe: Come on.

Sacks: $8 million.

Howe: A janitor his whole life?

Sacks: Yep, janitor his whole life, but was... No, he worked as a gas station attendant, as well.

Howe: Okay, Sack: So, it was between -- But like, neither are high-paying jobs.

And then, he was able to -- He died in Vermont and he was able to... he donated the money to the library there and to the hospital.

He really made a difference, but he lived frugally.

So, he always had action money, right?

And he also invested in his financial literacy, so he understood index funds and put money away consistently in them, so they were compounding over time, and he was able to then, you know, at the end of his life, see this massive profit because we know that, you know, with compound interest, it's like a snowball running down a hill.

It gets bigger and bigger and bigger.

It builds on itself.

And so, I think that's such a good example because people think that, in order to be rich, you have to have this really high salary.

But like, you...that's not true.

You just have to spend less than you make and be putting the difference to work.

Howe: With all the... I mean, I could imagine people in their 20s or 30s right now saying, "That sounds nice, that he had $8 million when he died, but he didn't live a full life because he didn't spend any of it, and since I get 5,000 advertisements a day, and every musical venue, and Coachella, and whatever travel, and trip, and adventure that's trying to sell me something right now, I'm going to go live my life to the fullest."

So, what do you say to someone in their 20s and 30s who's like, "I want to live my life full now and not die with a bunch of money in the bank"?

Sacks: The people who are like, "Forget your 401K, I want 401K memories."

Howe: Right?

Right?

Exactly.

Sacks: Yeah, yeah, yeah.

Well, you know, we talked about compound interest and the importance of starting early, and I just think that it's such a missed opportunity to get your money in the market.

But I also understand that, right now, we are fed so much of people who are living these crazy lives.

Like, whenever you go online, you're seeing someone who's your age, who's, like, 10 times hotter than you, has, like, 10 times better of a relationship, they're going on 10 times more vacations, like, they're just 10-X everything.

And you're like, "shoot," like "this, what I'm looking around at, not doing much for me now.

Like, this sort of sucks, actually."

So, then you think, "Okay, let me go buy the thing that they have because it's going to make me feel like them and give me their life."

But that's not how it works.

Then, you just have that thing and you don't have anything else.

And you're actually in debt, which causes you a lot of financial stress, and it just adds to a life that's keeping you really small.

And so, I think that it's really, that's why the whole first part of "Future Rich Person" is so much about mindset, because you have to understand those triggers and you also have to learn emotional regulation because if you don't, then you're just going to keep acting impulsively, trying to keep up with the Joneses.

Howe: Yeah.

I mean, it seems like a lot of people have shame that they carry around money.

It seems like it.

Sacks: Mm-hmm.

Howe: Why do you think so many people carry shame when they think about money, talk about money, don't talk about money, and what is the process you have for them with the kind of judgment-free finance conversation you share?

Sacks: I think that shame really comes from when we are trying to hide something.

Like, when we don't want someone to see us fully.

And money is so tied to value, like, even in the world, like, a dollar can get you something, like, it's valuable.

And so, I think that a lot of us think that however much money we have... ...is how valuable we are.

Howe: Mm.

Sacks: And that's really complicated because if you don't have that much money, then you're not going to think that you're valuable.

And that's also why I think we see people faking looking rich.

Howe: Interesting.

Sacks: Because that gives perceived value.

Howe: They want to show like they're more valuable than they are.

Sacks: Exactly.

Howe: When someone shows that they're more valuable than they actually are internally, then what happens with that disconnect?

Sacks: Yeah, well, then, you're just living a life that's not truthful, and it's always going to catch up to you because you're, you know, living on borrowed money, and that's a hedonic treadmill.

Like, you know, getting out of debt is very hard.

It's not impossible, but it's something you have to really focus on.

Howe: It's hard.

Sacks: Yeah, it is hard.

And so, yeah, I would say, if you're someone who's living with a lot of money shame, first of all, know that it's not your fault.

Like, this is never taught, and money relationships are basically set by the time you're 7 years old.

And so, depending on how you grew up, look, yeah, you're responsible for a lot of this, but there's also a lot of forces outside of you that are causing you to feel like this about your finances.

So, let's -- we might not be able to change them, but we can work around them.

And doesn't it feel good to name them?

Because then, you can sort of take some of the impetus off of yourself.

Howe: Yeah.

Did you ever have any blame or frustration around your father for having this knowledge and not passing it down to you?

Sacks: I mean, yeah, I, like, still have it with him.

Howe: Really?

Sacks: Like he's... The amount of work that I do to try and get him to do estate planning, and like, I'm so obsessed with planning for death because I-- sorry -- but I, you know, like, I don't w... I know I'm going to be so upset when my parents pass away.

Like, I'm so close to them.

It's going to devastate me.

Howe: You're going to be sad.

Irrelevant of money and things and all this stuff.

You're sad.

Sacks: Yeah.

Like, I want to be able to deal with my grief outside of wondering, "Oh, do I have access to their bank account?

How do I get access to their digital files?"

Like, you know, "How do I pay the mortgage?"

Like, I want to understand these things while everyone is healthy, and you know, alive.

And there's a lot of secrecy around it because I think that -- Howe: Really?

Sacks: Yeah, because I think that he has seen... He works with such high-net-worth individuals and families, and he's seen how much, you know, Warren Buffett always says you should always give a kid so much -- enough money that they can do whatever they want, but not enough money that they don't have to do anything.

And I think that my dad has seen a lot of kids who got enough money that they didn't have to do anything, and it really depleted their sense of worth because then, they were sort of, you know, helpless, like, they didn't really have any purpose.

It's important to make sure that you don't speak from a place of scarcity, but you speak from a place of value.

Howe: What is the difference between scarcity and value?

Sacks: So, okay, for example, say you're at the store and your child wants to, you know, get a toy, and you say, "We can't afford that."

That's very different than saying, "We're saving towards something else."

Like, we have this other goal that we're working towards, so that doesn't align with our spending right now.

Because then, it shows them that, like, you're working towards something else, you're value-driven, versus making them feel like there's not enough.

Howe: What is the greatest money advice your dad has taught you, whether through his behavior or actions or lack thereof?

Sacks: You know, my dad is successful, but he's really lowkey and really generous.

So, like, he gives away so much money, but also, like, drives an old Jeep, wears Hokas every day with, like, just, like, a... some sort of down vest, and like, you know, he's very unassuming.

And I love that about him.

And I always say like, "Dad, do you think it's crazy that you have a daughter who has, like, this, like, luxury disease?"

Because I'm like, "How did I get this mental illness of, like, why do I --" Like, I've had to rework my brain so much from, like, you know, wanting to look rich versus being rich.

And he's like, "No, you know, I think it's a lot about your upbringing," and whatever.

So, he understands, but it's like, he doesn't have it at all.

He's so -- he would give the shirt off of his back, like, he's so humble.

And so, I think that's been something that I've learned from him that's amazing.

But then, you know, also just compound interest and how simple it is to grow wealth.

Like, I, you know, now have my own investment portfolio, of course, I'm very passionate about investing.

And I talked to him about it, and what's so crazy is that what I'm investing in and what I tell my audience to invest in, these low-cost index funds, they're the same vehicles that the billionaires are putting their money into.

Like, it's not like you need some secret cheat sheet or whatever.

I always say you should want an above-average relationship, above-average life, above-average travels, experiences, food, sex, whatever it is, but you want your investment returns to be average.

Do not chase getting rich quick.

Howe: Love your work, Haley, I've got one final question for you.

And that's, what's your definition of greatness?

Sacks: People who are able to see that, like, the system is flawed, and things aren't perfect, and there's all these forces that are working against you, and reasons from your childhood and your family not to -- do it anyways.

Howe: If today's conversation moved you, there is so much more where that came from.

Make sure to scan the QR code on screen now, or visit greatness.com/tv to follow "The School of Greatness" podcast and sign up for our free newsletter.

And stay tuned for more episodes of "The School of Greatness" right here on public television.

Again, my name is Lewis Howes, and if no one has told you lately, I want to remind you that you are loved, you are worthy, and you matter.

And now, it's time to go out there and do something great.

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