He drives a Range Rover he can barely afford to fill up. Why? 'Because everybody does.'

I can barely afford to fill this thing up, let alone park it... So why do you drive it? And he says, because everybody does. (a Range Rover driver, as he told it)

Rabbi Naftali Horowitz

Ep 2Jul 11, 2021

Wanna Build Wealth? Avoid These Money Mistakes

with Rabbi Naftali Horowitz

When you swipe a credit card, it's very simple. You are spending future money today. You're mortgaging your future today.
Rabbi Naftali Horowitz

More moments · 6

Do You Really Need a Financial Advisor for a $25,000 Account?

Nothing is for free: $1.80 at home vs $7.50 down the block

People leave their 401k in cash for 10 years. It's criminal.

Married 30 years, never carried a credit card balance, and why swiping doesn't hurt

The billionaire's only real friend: the kid who split his lunch

Why Our Cost of Living Rises Faster Than Inflation

Try this · top 3

Quotes

“Absolutely, it's avoidable. It's very simple. We have to live as though it doesn't exist. (on whether debt is avoidable)”

Rabbi Naftali Horowitz

“A can of tuna costs $1.60. Two slices of bread, 20 cents. Walk down the block, it's $7.50 for the same sandwich. Just do the math.”

Rabbi Naftali Horowitz

“I can barely afford to fill this thing up, let alone park it... So why do you drive it? And he says, because everybody does. (a Range Rover driver, as he told it)”

Rabbi Naftali Horowitz

“You don't really need to be a rocket scientist to buy Vanguard's Total Market Index and call it a day and leave it alone.”

Rabbi Naftali Horowitz

“Do you know how many people I've met put money into 401k plans and leave it in cash for 10 years? It's criminal.”

Rabbi Naftali Horowitz

“If I could spend an hour listening to a client and then I don't have two minutes to listen to my wife, shame on me.”

Rabbi Naftali Horowitz

Takeaways

1 The frum family needs more capital than the average American family: more children, housing limited to Jewish communities, private school tuition, Shabbos and Yom Tov. "Jewish inflation" runs about 2% above real inflation because the whole community economy has growing families.
2 The standard of living has risen (homes, two cars, summer homes, vacations). Some of it is real income growth, and some is easy credit and gemach loans that weren't available 25 years ago.
3 Good debt is a doable mortgage or a business loan with a clear payback plan. A credit card balance is the worst debt vehicle there is. Ask what you'd do if debt didn't exist: go without, cut elsewhere, or figure it out.
4 Every purchase is a tradeoff, even for the wealthy: the gadget vs. a tzedakah check, the takeout vs. money to fix the refrigerator.
5 Peer pressure is stronger in frum communities because rich and poor share the same classrooms, shuls and blocks, and because of shidduchim. The counter is Torah, hashkafa and real self-worth, and parents who don't give in themselves.
6 Hire someone and get advice are different things. Good advisors have seven-figure minimums. Below that, index funds and self-education beat paying someone.
7 Money in cash, CDs or savings loses purchasing power to inflation every year. Young investors should be aggressive, not in bond or cash funds.
8 Grow earnings by advancing in your main career, not by juggling side hustles. Wealthy clients built one business until it was self-sustaining before starting another.
9 Contentment comes from purpose, meaning and real relationships, not wealth. A widow who lost everything to Madoff lost her friends too; a billionaire's only real friend was the boy who shared his sandwich.
10 Traits of successful people: full responsibility, no blame or shortcuts, humility, willingness to learn and to make mistakes. The skills that make you succeed at work are the same ones that make you a good spouse, parent and friend.
11 To give something up, replace it with a different joy: picture the peace of mind of retirement money or a paid-for simcha instead of the daily Uber Eats.

Full episode

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