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You’ve done everything “right” but you’re still worried about money. Why?

Advanced personal finance lessons for all of you who have mastered the basics.

Our product team has been working on something so interesting, I asked them to share some of the insights we’ve discovered.

Alistair Clark, one of our product developers, has been speaking with people who have already done the basics of personal finance: These people have already set up automated savings accounts and invested. Many have accumulated considerable amounts of money in the hundreds of thousands (or millions) of dollars.

So what’s next? What do you do when you’ve already done the basics of personal finance?

Alistair got the kind of behind-the-scenes access that few of us have. He spoke to wealthy people about their hopes, fears, and dreams around money — and discovered that once you’re at a more advanced level, your concerns change. Your goals change. And whether you intended to or not, your lifestyle changes.

Let’s see what he found.

Alistair, take it away…


Every week, Ramit gets thousands of emails with questions about personal finance.

99% of the time, his answer is the same: “Go read my book, I Will Teach You to be Rich.

But 1% of the time, he gets a really interesting email that doesn’t have a simple answer, and he’ll forward it over to the IWT product team to see if we can help.

For example, check out this email a reader sent to Ramit after reading the IWT book:

It’s too beginner for me. I finished because of the entertaining style and I like to vet books before recommending them. My stage is this:

  1. Zero debt… pay credit cards to zero, twice a month. Paid off my mortgage 25 years early ($230k). Haven’t paid a car loan in over 5 years. And my twins are now in school (so no more $1,500/mo child care any longer).
  2. I’m self-made with a video production/photography business + my wife is a psychologist with the VA, so we have a decent income.
  3. We each have contributed $18k into our 401ks (mine is a solo-k) for years.
  4. We have maxed our ROTHs for about 7 years each (more on this later).
  5. We are very frugal (our two spending items are 1. quality food (groceries) and 2. travel).
  6. I’m about to turn 38, wife is 34.
  7. We have $750k-$775k invested/saved and adding our house puts us over a million.


At IWT, we love seeing emails like this. Here’s someone who actually took action, implemented our personal finance advice, and is now in a great place with their finances.

From the outside in, there’s absolutely nothing to worry about! And yet, we continue to get emails just like this from people worrying about their finances.

What’s going on here? Why do we worry about money even though we’re doing everything right?

The psychology of why we worry about money

In Ramit’s book, he outlines what we call “The Ladder of Personal Finance.” People loved having a clear roadmap telling them exactly what to do next.

pasted image 0 422“The Ladder of Personal Finance” from Ramit’s book, I Will Teach You To Be Rich

But eventually, you get to the end and there are no more rungs on the ladder. You’ve checked all the boxes. All you’re left with is that same empty feeling we had after finishing our favorite video game that we spent hours trying to master. Except… you don’t have another game to play. With your finances, it can seem like the only thing left to do is sit and wait for the next 30 or 40 years until you retire.

I don’t know about you, but that sounds boring as hell.

I’m impatient. I want to be optimizing, tweaking, and doing something to keep getting better every single day. If someone came to me tomorrow and said, “OK Alistair, you’ve checked all the boxes for your business. Now you just have to put it on autopilot and go sit on a beach for the next 30 years,” I’d tell them they were crazy.

Humans are problem-solving machines. We aren’t good at sitting on our hands and being patient. For example, just look at this video of a woman in a self-driving car for the first time. Does she look relaxed? No! She is freaking out and worrying because she has nothing to do.

If money is supposed to buy us peace of mind, then why do some of us act just like this woman in the self-driving car? And what is the “last mile” that can get us to be more zen about our finances? 

3 things we noticed from people who don’t worry about money

As I mentioned above, I’m on the product team here at IWT. We’re in the course-making business, which means solving some gnarly problems for our readers. And this is the type of big question we LOVE to tackle to see if we can find interesting, counterintuitive solutions.

Over the past month, we’ve been digging into the tactics and mindsets of the wealthy to find out what they do once they’ve “checked all the boxes” and mastered the basics of personal finance.

How do they get to that enviable position where they never have to worry about money again? What do these carefree people know that we don’t?

Today I’d like to share three examples:

1. They are prepared for everything

Earlier this year, the New Yorker ran a fascinating article titled “Doomsday Prep for the Super-Rich”. In the piece they described how some of the smartest, most successful people from Silicon Valley and Wall Street are preparing for the apocalypse (yes, you read that correctly). They are buying remote property, building self-sustaining bunkers, and sometimes even stockpiling ammunition to prepare for the eventual breakdown of civilization.

When asked the simple question of “Why?” here’s what Yishan Wong, the former CEO of Reddit, told the New Yorker:

Most people just assume improbable events don’t happen, but technical people tend to view risk very mathematically … The tech preppers do not necessarily think a collapse is likely. They consider it a remote event, but one with a very severe downside, so, given how much money they have, spending a fraction of their net worth to hedge against this … is a logical thing to do.

Maybe you’re not ready to drop a few million on a bunker in rural Kansas, but that doesn’t mean you can’t be prepared for the future.

In speaking to our students who worry about money, I’ve noticed that a lot of people are afraid of unpredictable things that might happen in their future. Some people refer to these as “the things you don’t know that you don’t know” or “unknown unknowns.” Here’s how one student described his fear:

What worries me isn’t job loss. What worries me is the million other things that could pop up. What’s hiding around the corner that I don’t know about?

This type of fear can be incredibly powerful, because your imagination runs wild with worst-case scenarios. It’s like when you are walking down the stairs into a pitch black basement of a rickety old house. It’s terrifying. Anything could be lurking in those shadows.

But there’s a simple solution: Turn on a light.

You can do the same thing with your finances. Instead of being afraid of “unknown unknowns,” you can shine a light on your financial future by learning from people ten years older than you who can tell you exactly what to expect.

We call it the “10 Year Savings Strategy” and wrote about it here.

2. They protect the money they already have

Ever see a news story about a rock star or athlete going bankrupt and wonder, “How is it even possible to lose that much money?” ESPN’s documentary Broke investigated the phenomenon of very rich athletes going completely broke. The statistics are shocking:

According to a 2009 Sports Illustrated article, 60 percent of former NBA players are broke within five years of retirement. By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress.

One of the primary causes of financial problems for these athletes was not extravagant spending. It was mostly due to bad investments, ranging from real estate to restaurants to car washes.

It’s an interesting cautionary tale because one of the most common questions I get from students who have “mastered the basics” of personal finance is “How do I make my investments grow faster?”

As your wealth grows, you’ll find the investing opportunities start to grow as well. Instead of just a “boring” target date fund, now you can buy real estate, invest in start-ups, and take sizable positions in individual stocks. At a certain level, the world of hedge funds and private equity start to open up as well. It’s tempting to throw your money at these exciting opportunities and promises of outsized returns and it’s easy to develop an obsession with growth and moving faster.

I find this fascinating, because the research I’ve done revealed that the most successful wealthy people have the opposite approach. Instead of asking “what can I gain?” their #1 question is “how can I avoid losing money?”

For example, Warren Buffett has two rules of investing:

Rule 1: Never lose money.

Rule 2: Never forget rule 1.

So what does this mean for you?

This is more a matter of mastering your own psychology than any new tactic or fancy asset allocation. There’s a reason at IWT we consistently recommend boring, simple investments like lazy portfolios and target date funds.

But we’ve also spent enough time studying the psychology of personal finance to know that being a 100% disciplined monk with your investments is near impossible. No matter how much you read about the merits of basic index investing and why stock picking never works, there’s still a little voice in your head saying, “Yeah, but what if I find the next Amazon stock? I’d be a millionaire in five years!”

Here’s what we recommend: instead of suppressing that voice in your head, embrace it. Take 5% of your portfolio and put it aside for whatever crazy idea you have for making your money grow faster. Invest in Bitcoin. Buy $5,000 in Tesla stock. Invest in your cousin’s car wash if you want.

Do whatever you want, because while you might lose that 5%, you can sleep well at night knowing 95% of your money is still safe and protected.

3. They don’t do it alone

There’s a great scene in Entourage where the agent Ari Gold is introducing the management team of actress and singer Mandy Moore.

(Heads up: You may want to put in headphones for that link, there’s some NSFW language in that clip.) 

It’s kind of eye-opening as he goes down the line introducing this super-team of six people who are required to manage the career of just one person: manager, music agent, publicist, attorney, music manager, theatrical agent, etc.

It’s also possible to develop the same type of super-team to manage your finances and literally outsource your worry to someone else. Attorneys, accountants, life insurance specialists, financial planners, investment advisers, and even a psychologist or psychiatrist could all be part of your financial super-team.

You might be thinking, “Wait, what? I thought Ramit hated financial advisors. Doesn’t he spend an entire chapter in his book telling me NOT to hire a financial advisor. So what’s going on here?”

I asked Ramit about this incongruence, and he pointed out a really interesting and counterintuitive insight: Once you reach a certain point, the basic personal finance rules no longer apply.

Normal people with ordinary financial needs don’t require an advisor. That’s why we tell most people it’s not worth their time. But once you’ve conquered the basics, then the basic rules no longer apply.

Here are a few scenarios where it DOES make sense to pay an advisor:

  • When you have a lot of investable assets (~$1MM+) and have much more to lose if you make a mistake.
  • If you have complex situations (imagine having three kids, planning for college, and buying a house at the exact same time).
  • When you just want a second set of eyes to make sure you have everything done right and aren’t missing anything.
  • When you’re short on time and want to pay for convenience (e.g., you can hire a bookkeeper who you forward bills to and who pays them for you).
  • When you run your own business, an accountant is a no-brainer who can “cover your ass” and also look out for things you don’t know about.

Is hiring an advisor expensive? Yes, of course. But ask yourself, how much is constantly worrying about your finances costing you?

If you’re looking at getting help with your finances from a professional, then we recommend beginning your search at the National Association of Personal Finance Advisors ( These advisors are fee-based (they usually have an hourly rate), not commission-based, meaning that they want to help you, not profit off their recommendations.


If you read I Will Teach You to be Rich, applied everything, and you’re now running into new, more advanced problems where there aren’t clear answers… it can feel weird to bring stuff like that up to friends. “Hi, do any of you know what to do after you max out your 401k and pay off your house? Thanks!”

But here at IWT, you’re with your fellow weirdos. It’s safe, we promise. In the comments tell us how you’ve “leveled up” and what you need help on next. We want to help.

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  1. avatar

    We are in a very similar boat as the letter writer. We're mid-thirties, debt-free/maxed out retirement accts, have paid off our mortgage and just had our first kid. As a part of our annual planning, we just committed to doing more of your 2nd suggestion and have siphoned off some money to dabble outside of the usual safe investment vehicles which has been fun. As far as what we need help with, our most interesting conversations are around sequencing (ie. what should we do NEXT?). I feel like we have a good grasp on what the options are, but haven't really developed a framework to determine which one should come first.

  2. avatar

    I’m a bit behind the subject of this article, but not by much. The only debt my family had is our mortgage and we are able to invest a very high percent of our income each year. Here are a few things that worry me:

    1. We have a lot invested in index funds. Every single financial blog/book/advisor recommends exactly this. When there is unanimity in the PF world, I get worried. Is it possible that the S&P 500 could be overvalued? Is that even possible?

    2. General instability. I know that I shouldn’t worry about what I can’t control, but what if I find out there WAS something I could have done after all?

    3. What am I even saving for? How much should I be spending? This probably sounds crazy, but my husband and I can’t seem to wrap our head around what our lifestyle and spending should actually look like. For a long time I’ve felt that we should save every penny we can to potentially retire early or just feel more secure, but is that really necessary? Once we’ve maxed out our retirement accounts, put something in the kids 529s, and invested a bit, how much do we spend of what’s left over?

  3. avatar

    My wife and I own an ecommerce business and we earn a good amount. We know we need to get a financial advisor and accountant, but we’re having a hard time finding professionals we feel we can trust. Because of our background all our family and friends are in a much different boat and so we can’t ask for advice or referrals. Entrprenuership can be pretty isolating.

  4. avatar

    I enjoyed this post and the comments about what to do next if you have your fiances in order. I think one big piece that should be added in your comments on protecting what you have and preparing for the worst case is to consider preparing for long-term care.

    A disabling illness is much more likely than an apocalypse. I work in a neurology clinic with degenerative conditions. I have seen many individuals have their finances decimated by a medical condition that wipes out their ability to work in their primary money making years. Many others give up working to care for a love one who needs help.

    There were commenters in the ten year planning article saying they are never getting married or having kids. What these folks need to know is that "saving money" on the front end by avoiding those expenses and relationships often costs hugely if you do need care later on. Our health system depends on families caring for people who need help. Having someone in your life who gives a damn about you and your life preferences is a huge win if you require care. If you don't have those individuals in your life you need to save money for personal care aides, geriatric care managers, long-term care insurance or assisted living fees. Money gives you options, and planning for it makes sure it is there if you need it. This is separate from your traditional "retirement" savings.

    Short and long-term disability programs often pay out a much lower levels than your working wage. When you get Social Security disability most long-term disability payments shrink or disapear. Actually run the numbers in your situation and see if you could maintain your lifestyle if you had to depend on those payouts.

    Regular health insurance doesn't pay for long-term care. This is a major misconception that a lot of people have when planning for the future. If you want long-term care insurance you have to get it before you are ill, the younger you are the cheaper it is. It is getting harder to find good policies because even though it is expensive, insurance companies don't make a lot of money off it. It is a type of insurance where the majority of people who buy the policies end up using them.

    If you are in your late 40's, 50's or 60's this should be on everyone's radar for planning. If you are a lone wolf type that has decided to avoid binding personal relationships you should start this planning earlier.

  5. avatar

    Wow, great timing. This is the question we were trying to figure out for 2017.

    We set out to look for help early in 2017. For financial advisors, this is our experience. Seems to be a service gap between 800k-1.5m where the type of financial advisor doesn't seem to make sense. Type 1 is the guy who helps set you up with the basics like: find your asset allocation, debt elimination planning (if any), life change planning (school, having a kid, buy a house), and basic review of current portfolio. Which for us we didn't make sense since we're pretty well verse in those areas. Type 2 is where they take a part of your portfolio (or all of it) and invest on your behalf. I see it like (JP Morgan) Chase Private Client. Doesn't make sense to us until a sizable chunk. Maybe like 1.75m.

    We've added an umbrella policy.

    We've diversified into other asset classes like precious metals. < 10%

    We're looking into diversifying into rental real estate 10-20%. This is the biggest decision and learning curve we've been struggling with. It's the biggest one that comes with a biggest dose of concern, fear, and lack of knowledge, and high learning curve. We've been shoring up cash reserves to mitigate risk when we start investing in this area.

    We've started to spend more time on diversifying our incomes. Instead of taking in that freelance client, use that time to build up a course or a product. 1-2 less freelance client per month.

    We slacked off on getting a trust/will. That'll have to slide into 2018.

    We gave away a little bit more generously this year as well.

    For others, if the age and family situations permit. Look into term-life insurance and long term care. And disability, if you don't get one from your employer / have one.

  6. avatar

    Interesting article. We're in that weird space of meeting most of our financial goals, putting kids through college and looking at what changes to make to retire securely. I can't talk w/ friends about money any more because we are in a totally different world. The wild card for retirement is health costs, and that's another topic that no one wants to talk about.

  7. avatar
    S. C-G

    YES, YES, YES in regards to your index fund comment. I completely relate.

  8. avatar

    I think next, make sure expense ratios are as low as possible (admiral funds, for instance) and make sure investments are in proper accounts, i.e. bonds in IRA, not taxable.

    Make sure everything is as tax efficient as possible.

  9. avatar

    How about charity? At some point your chances of living in comfort are extremely high, while so many others suffer. Giving makes you feel good too.

  10. avatar

    I think you're doing your readers a disservice to say that most people couldn't benefit from the help of a financial planner. As an advisor myself, I have met many individuals that do not have their finances in order. For instance, contributing to their 401k's (with no match) getting 4% on their investments and pay 20% on credit card and other consumer debt. I see this all the time. I know you bring this up in your book, but that's only one of a myriad of problems. Another one is not carrying life and disability insurance when you have a family that relies upon you for financial support. I'm not sure if you mention that in your book but that is a huge mistake people make as well. As people's net worth grows, the opportunities for tax savings and making wise investment decisions become all the more important. Most regular people could benefit from the outside look of a good financial planner. Telling people its a waist can give them a false sense of confidence, when in reality 99% of cases that I've seen, there are improvements that could be made.

  11. avatar

    One of your last questions is key. What are you saving for? You have to look at what your goals are and then work back from there. For instance, your retirement. When do you want to retire and how much income do you want to take in retirement (The ultimate goal of saving for retirement should be to spend it)? Do you want all or part of that income to be guaranteed in retirement? Once those questions are answered, you can begin to construct a plan that fits your needs. Once the plan for your goals are fully funded, everything leftover you could consider extra spending money to either use for your enjoyment or give away to help others.

  12. avatar

    You also bring up a good point about index investing. If the majority of investors start dumping money into the S&P index without regard to valuations, company profitability, future growth potential etc, that could potentialy create some issues down the road for people.

  13. avatar

    Wow! Great work. I have a few of the same thoughts along with the rental units and adapting to the learning curve.

  14. avatar

    Why not consider a robo advisor like Wealthfront or Betterment? They’re fintech robot advisors and are positioned right in between the DIY and JPMC financial advisors and charge about 0.25% to 0.40% fees. Or Personal Capital which charges more (<1%)but also gives you financial advisors.

  15. avatar

    The best way to manage fear is to first accept that you are feeling fearful. Next, look at whey you feel that way. In terms of finance, do a complete audit of your personal finances. Find the exact areas that are causing you to feel fear. Those are the areas that you might need to improve on. If you cannot resolve it yourself, seek outside help.

  16. avatar
    Sean @ FrugalMoneyMan

    The psychology of investing has always fascinated me. My fiancée and I are 25 & 24 years old. We are fairly young in the investing world, and we became debt free about a year ago. During my path towards learning and eventually one day achieving financial independence, I discovered how easy/basic investing can be. Almost anybody can become a multi-millionaire by tapping the power of compound interest at an early age, and consistently funding those investments (Stock Index Funds) over a long period of time. Then how come most people don't become wealthy???

    As you brilliantly stated, we for some reason believe we can do better than a "boring" 8% annual return. Our thinking, especially at our early ages, plays this weird mind trick that makes us think we can do better than what the stock market returns on an annual basis. We see that 1 of our stocks increased by 50% one year and all of the sudden we believe we are Warren Buffet. Eventually everyone figures out that the market will beat their individual returns over the long-term, and it is EXTREMELY IMPORTANT to understand that as early as possible.

    Thanks for sharing!

  17. avatar
    Wendy Merron

    Changing our mindset about money is a game changer. Here's something I learned from my father.
    Get a brand new $100 bill and place it in your wallet.
    Now…anytime you begin to say "I can't afford that," replace that comment with "I choose not to spend my money on that right now."