Three Expensive Lessons About Money That Changed How I Think About Wealth

I just finished Morgan Housel's "The Art of Spending Money" and it completely changed how I think about wealth. Five years ago when I was broke, his first book "The Psychology of Money" transformed how I thought about earning. Now with two profitable companies, I realized I had zero framework for spending decisions.

In this episode, I break down the three lessons that hit hardest as a founder, why I chose to stay in Toronto instead of moving to SF or going nomad, and the spending audit that will probably shock you when you try it yourself.

Key Topics Covered

The Problem With Having Options (3:15)

• Why having money creates different problems than being broke
• Two paths: upgrade everything vs. optimize for freedom
• Why I chose Toronto as my base instead of SF/NYC or going nomad

Lesson 1: True Wealth Is Autonomy (7:30)

• The difference between being rich and being wealthy
• From credit card struggles to having options three years later
• Why freedom beats luxury goods every time
• Building optionality vs. locking into expensive cities

Lesson 2: The "Enough" Problem (12:45)

• Why entrepreneurs fall into the same traps as employees
• The endless treadmill from $1M to $10M to $100M
• Defining concrete "enough" numbers for business and personal
• When everything becomes choice instead of necessity

Lesson 3: The Status Purchase Trap (17:20)

• The one question that filters out status purchases
• How this applies to business decisions (tools, hiring, funding)
• Why we went from 14 employees back to 5 people
• Status thinking almost killed our productivity

The Spending Audit Challenge (20:30)

• How to categorize every dollar from the last three months
• Finding $1,500/month in unused subscriptions
• Understanding your spending psychology vs. just saving money

Quotable Moments

"Rich people have lots of assets. Wealthy people have freedom.""Without a ceiling, you end up on an endless treadmill. $1 million becomes $10 million becomes $100 million. It never stops, and it makes your life miserable.""Before any major purchase now, I ask myself: 'Would I buy this if no one else knew about it?' If the answer is no, it's a status purchase.""When we had 14 employees, I thought we looked like a 'real company.' The reality? It was chaos. Now we're back to 5 people and we ship faster.""As entrepreneurs, we control both sides of the equation: how much we earn AND how much we spend. Most founders optimize for earning. Few optimize for spending.""Wealth isn't about how much you make. It's about how much control you have. And spending is where you either build that control or destroy it."

Key Takeaways

1. Autonomy beats assets - Control over your time and independence is the highest return on money
2. Define your "enough" number - Without a ceiling, you'll chase endless milestones forever
3. Filter out status purchases - Ask "Would I buy this if no one knew?" before major expenses
4. Optimize spending, not just earning - Most founders focus only on the income side of wealth
5. Freedom enables better decisions - The ability to say no and choose projects creates competitive advantage

Stories Shared

• From credit card struggles to profitable companies in three years
• Choosing Toronto over SF/NYC/nomad lifestyle for optionality
• Reducing team from 14 to 5 people and improving productivity
• Finding $1,500/month in unused subscriptions during spending audit
• Seeing stressed commuters on Toronto subway every morning
• Recent trip to London and maintaining option to move there later

Action Items for Listeners

The Three Filters:

1. Freedom Filter: Does this increase or decrease my autonomy?
2. Enough Exercise: Write down concrete numbers for "made it" (business revenue, personal net worth)
3. Status Purchase Rule: Would I buy this if no one else knew about it?

The Spending Audit Challenge:

• Categorize every dollar spent in last 3 months (business and personal)
• Use ChatGPT or Excel to help with categorization
• Ask for each expense: Utility or status? Freedom or fiction?
• Email George your findings or questions

Book Mentioned

"The Art of Spending Money" by Morgan Housel

• Follow-up to "The Psychology of Money"
• Focus on spending frameworks vs. earning strategies
• Practical principles for both personal and business finances

Connect with George

• Email: [email protected] (for feedback or questions about your spending audit)
• Newsletter: newsletter.founderreality.com
• Blog: founderreality.com
• Twitter: @TheGeorgePu

Podcast Schedule Update

New Publishing Schedule:

• Tuesday: First episode of the week (more flexible for editing)
• Wednesday: Founder Reality deep-dives
• Friday: Tech Takes and industry insights

Next Episode Preview

Coming Tuesday: "Why I Stopped Using AI Tools Everyone's Raving About" - My contrarian take on which AI tools actually move the needle for technical founders vs. which ones are just startup theater.

Founder Reality delivers unfiltered insights from building AI-powered businesses. Real talk about money, decisions, and what actually works - substance over performance.

Episode Tags

#FounderReality #MoneyMindset #WealthBuilding #FounderFinance #SpendingStrategy #MorganHousel #Entrepreneurship #FinancialFreedom #StartupFinance #BootstrapFounder