Confessional: Materialism, worthiness, and financial “discipline”

Katie: Welcome back, #RichGirls and Boys, to The Money with Katie Show. I'm your host, Katie Gatti Tassin. And today we are getting existential. I've been trying to find the right words to articulate these feelings for a long time. And recently the ideas finally began to assemble themselves into a cogent manner. We are discussing money's role in our own worthiness, materialism and consumerism, and more broadly, purpose. Our guest today is Haley Hoffman Smith, a manifestation mindset expert once named Forbes’ most influential speaker. I first found her on Instagram, and I found her content to be super interesting from a subconscious behavior angle. And if you think I overly dabble in the woo woo on this show, after today's episode, I think you might have a deeper sense of why. 

So this episode was inspired by a question that I get from time to time when I jokingly refer to myself as a reformed materialist, referencing my old shopaholic tendencies and my previous inability to save money. And it always goes something like this: “Hey, how do you flip the switch from being a spender to a saver, or how do you find the discipline to stop spending money on things that you don't need?” And I would reflect on that question a lot because candidly, I don't find myself to be an overly disciplined person. I would bet that I value my own comfort and convenience more than your average person, and I have a hard time forcing myself to do things that I don't want to do. In retrospect, it's kind of amazing that my evolution from Spendy McSpenderson to Sally Saver was as drastic and quick as it was. 

So today I wanna break it down, and pose a few theories and questions about the way money has a lot less to do with discipline, and a lot more to do with our own worthiness and purpose than we think. My hope is that these questions create some reflective prompts for you as well. If you find yourself struggling with what you would perceive on the surface to be a discipline issue with spending. Because before I was “75% save rate Money with Katie,” I was “camping out at Dillard's in northern Kentucky for a Dooney & Bourke sale Katie,” and my own transformation has taught me a lot that I'm honestly still reckoning with. I think there's actually quite a distinct connection between practices like meditation and mindfulness, and personal finance. When we aren't in tune with the driving forces behind our own behavior, it's really hard to change that behavior, especially when money is often used as a means to fill a void, and that void is in all of us—some of us just do a better job of recognizing it and contending with it than others.

It's similar to our relationship with food, alcohol, and drugs. Some people use those things as a crutch. The relationship with them is emotional or unhealthy because they're filling a void. Money is no different. It's hard to change our financial behavior until we understand why it's our behavior in the first place. So many of the conversations around building a rich life come down to questions about what makes you happy. But I don't think we often stop to question whether the things we think are going to make us happy actually will. We may describe flying first class or hiring a private chef or upgrading our home gym. But in reality, most of these things are just other attempts at filling the void. That's not to say they wouldn't be enjoyable, but chasing happiness is likely the wrong metric, the wrong objective. Happiness and fulfillment are not one and the same. I can be happy because I take a dose of MDMA. And does that lead to long-term fulfillment? Is that flash of happiness the best goal? I would argue it's not, because it's fleeting, and hedonic adaptation suggests that it's an insatiable pursuit. Happiness often looks a lot like desiring happiness, and desiring is just the state of wanting, which leaves us actively, you guessed it, unhappy. 

Here's how this played out in my own life. So let's start with the necessary context. Growing up in a middle class home to two working parents, I never wanted for the essentials, but we also didn't really indulge in what I would consider to be luxuries. I was privileged enough to attend a private Catholic school at a cost of around $5,000 per year in our Cincinnati suburb. But I was definitely one of the least well-off in my circle of friends, and my parents always joked that I somehow seemed to always befriend the rich kids. And honestly, they weren't all that wrong, but I was also surrounded by rich kids.

So we lived in the less expensive suburb out by the airport. We did not have luxury cars. We never really went out to eat or on vacations. And we certainly didn't wear designer clothes, apart from the Limited Too shopping trips I could extort out of my dad when my mom wasn't home. Of course, luxury and privilege are pretty relative. What I'm trying to say is that I was relatively less well-off than all of the people that I hung around. So growing up around people with money, relatively speaking, slowly shaped my own self-image. I perceived myself to be “less than” in the ways that mattered to a teenage girl at an all-girls’ school, where status implicitly and explicitly determined your social standing. And at 15, this felt like life or death. Maybe that's why, as soon as I found myself with a little bit of pocket change, either from summer jobs, gifts, or other nefarious sources, I spent it with reckless abandon. I just needed to have it all. It was inescapable. I just couldn't go one day without… 

Henah, senior editor: Katie, you, you good? You okay? 

Katie: Oh, hey, Henah. Yeah, I think I just, I just need to sit by my Zen rock garden for a little bit. 

Henah: Oh, sorry, Katie. You know, unfortunately we don't have time for that, but I can snap you back into place with this cool trick I learned in my communications class. Follow my finger from left to right; follow the sound of my voice. Follow my finger from left to right; follow the sound of my voice. 

Katie: Follow your finger. Follow your voice. Follow…weddings…bear market…Jessica Simpson pumps…Bean Dog…FedEx man...zombies…materialism… 

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Katie: I was talking about…something about financial responsibility? Oh no, it was, it was reckless spending. Ah, yes. So when I found myself with a little pocket change, either from summer jobs, gifts, you name it, I spent it with reckless abandon. The weekly nannying check no sooner cleared my student bank account before it was handed over to a sales associate in exchange for three pairs of the Jessica Simpson pumps that I lusted after. Side note: Talk about a woman with range. Shout out Jessica Simpson and the shoes that defined my generation. Anyway, I was constantly trying to acquire the status symbols—the clothes, handbags, trips to sushi restaurants—that put me on a level playing field with the young women I was surrounded by, and my money management skills reflected that. 

Let's pause here, because I think this is a very important identification of the overall trend I wanna talk about, which is I was using money to make up for a perceived personal lack. I felt subconsciously inferior to my friends and their families who had more. And in order to assuage those feelings of being “less than,” I used money to compensate. This was pretty standard for me for most, if not all of high school. Material goods were very important to me. I asked for Ugg boots and Michael Kors bags and Abercrombie polos for Christmas. Most of the time I did not get them, but I often defined myself by my ability to procure those things.

So, fast forward to college. The stakes were raised. So were the price tags. Once I got to Alabama, I was in a league that I could no longer compete in. I went from posturing for status with other 16-year-old girls in the low-cost-of-living rural Kentucky suburb, to hanging around young sorority women whose dads owned entire cable television networks across the Southeast, and got them Range Rovers for their 17th birthdays. There was no amount of Christmas money that was gonna help me anymore, and consciously or subconsciously, my means of defining myself shifted. This is, by the way, really only something that I can recognize in retrospect, after a lot of self-reflection. I didn't realize that this is what I was doing at the time.

And yes, I joined the sorority, too—again highlighting how everything is relative. I had a full academic scholarship to school, so my parents agreed to fork over the $8,000 per year for the sorority, the housing, the meal plan, et cetera. And suddenly I was thrust into a world that took the materialism dial, turned it up to 11. My sorority sisters carried Louis Vuitton bags. They had forearms full of David Yurman cable bracelets. They had second homes in Rosemary Beach and AmExes that were tied to their parents’ checking accounts, with charges that mostly went ignored by their parents. In short, Dorothy, we ain't in Kansas anymore. Even as a person with a tremendous amount of personal privilege, I was being vastly shown up financially by the women I was surrounded with.

And the TL;DR was that I couldn't keep up. It was no longer even within my reach to fake it anymore. So I mostly just stopped trying. And looking back, it makes perfect sense that my attempts at fitting in shifted to something that I'm sure a lot of young women experience in their college years, particularly if they're in an environment that is conducive to this: my outward appearance. Because at Alabama, being beautiful was table stakes. I wanted to be blonder and tanner and more manicured. I wanted to be thinner and prettier, with clear skin and shinier hair, because the implicit message around me in many of the social settings there was that a woman's primary value or contribution to any room she walked into was being nice to look at. The irony, of course, is that every single one of the traits that I just mentioned are not only surface level and superficial, but also expensive. It costs money to highlight your hair and to get spray tans and to have your nails done. It's expensive to have trendy clothes and top-of-the-line skincare or hair products. This is the phenomenon that I usually refer to as The Hot Girl Hamster Wheel. And I will link a blog post about it in the show notes. It's the never-ending cycle of expense and time required to meet the conventional beauty standards implicitly leveled at women. Again, the same theme is playing out: using money to make up for a perceived personal lack. I was deriving my worthiness and my purpose from how I looked, and using money to further that goal.

The general theme I observed when I look back at all of this is that money was just always filling the gap. There was some void inside me that money was the conduit for filling, sometimes directly, sometimes indirectly. It's probably no surprise, then, that this state of existence wasn't actually very enjoyable. I felt like I was always on The Hot Girl Hamster Wheel, and I felt like I was running a race that I couldn't win. I knew I couldn't win, whether it was trying to keep up with the wealthy girls I was friends with in high school, or trying to embody the pretty Southern sorority girl aesthetic. There was always someone who was richer or prettier than me. And it felt like a losing proposition. The hard thing though, was that it was a losing proposition from which I derived my self-worth. I couldn't simply stop, or at least I didn't think I could, because it would've meant I needed to face the root of the issue: that I wasn't really sure who I was or where my innate value actually came from. It would've meant doing soul-searching that required more than a bottle of St. Tropez Express Tan. Striving to be the fashionable girl or the pretty girl was a lot simpler than asking myself, where does my true value come from? And money was just the means to an end. In short, obsessing over the outer appearance of things, where the impact and results are tangible and observable, is a lot easier than peeking behind the curtain of the complicated inner world, where we may have to face some of those deeper existential questions.

And there were smaller ways thematically that this played out. Entertainment and the avoidance of boredom or downtime also became a money drain. Spending money on drinks, food, music out, often was less about the simple enjoyment of those things and more about filling time and having to do something, being distracted from my own thoughts. We usually are not conscious of any of this as it's happening. We can only observe it in retrospect against the foil of my transition to frugality, and the broader financial independence philosophy. 

So my transition from spender to saver? The truth is that it wasn't hard for me to transition from being a spender to a saver, because being a spender was becoming exhausting. It is a lot of work to monitor trends and brands, and to generally keep up with the Joneses. And it's not just financially taxing, it's mentally exhausting. In this way, deciding to stop trying to find the best shampoo for the shiniest hair, or cutting out my monthly Sephora habit of searching for the product that would finally make my skin glow, or even eliminating things like monthly manicures and pedicures, and realizing that the world didn't end because I didn't have gel nails, felt more like relief than sacrifice. 

FI, on the other hand, has been far more achievable. It feels like a return to the basics. There's this set goal that is specific to the person, and can be coldly calculated and planned for. The financial independence “retire early” world gave me an out. It gave me a sense of broader purpose and a goal that wasn't contingent upon having the nicest stuff or being the most beautiful woman in the room. Though my mom still says I am, so thank you very much. On the contrary, it embraced themes like simplicity and discipline and finding joy in little things. That was really attractive to me after spending most of my adolescence chasing after something I knew deep down I would never achieve. For the first time in a very long time, my means for determining my own success did not involve comparing myself to somebody else. It felt so much nobler to pursue one's own freedom and independence. And it finally felt like a race I could win. During that period, I did get back to the basics. I spent a lot of time outside. I learned about meditation and movement. I embraced free or low-cost entertainment like podcasts and books and Netflix. I felt like I was starting to understand myself on a deeper level, because I had really stripped away all the noise that used to distract me from having to consider those questions.

So when people ask me how I did the hard work of cutting back, I admit it came pretty easily to me, because I was so tired of running in place. Pursuing FI felt like hopping off the Peloton treadmill and onto an outdoor path with fresh air. And I really embraced the lifestyle and felt this higher sense of purpose and drive. But this neat little financial redemption arc is not quite over. Things went on like that for, I don't know, 2018 to most of 2021. So there were about three years where I worked really hard, I saved like crazy, and I did some pretty extreme things in the name of frugality. I mean, it was really extreme. Like looking back, maybe I went just a little bit too far, but those Jessica Simpson pumps, though, like, wow… 

Henah: Katie, let's settle you down again. Okay. Follow my finger. Follow the sound of my voice. 

Katie: Henah, no, let's see how you like it this time. How about you follow my finger, follow my voice, follow my finger. Follow my voice. 

Henah: Follow your finger, follow your voice. Sam Cat’s in the shot. Slam poetry, edits…so many edits. 

Katie: Let's do retakes. I don't know. I'll start over scrolling back up for retakes. 

Henah: Slack, Google calendar, Zoom meetings, scheduling, rocketship to the moon… 

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Oooh, Henah, you're looking so calm now. Okay. So between 2018 and 2021, I was doing some extreme things in the name of frugality, like setting up a system at work wherein I would be alerted by Outlook anytime there was a catered lunch meeting, and I would bring empty Tupperware containers to work, go in after the meeting, and grab whatever was left over for my dinner that evening. So I went from a near $0 net worth to around $200,000 just in a couple of years. And I could feel myself inching closer and closer to my goal. It was intoxicating, but then something weird happened. My income began going up, and suddenly I was faced with a weird dilemma. There was a two- to three-month period at the end of 2021 where I think I earned around $150,000 in like 10 weeks’ time. And suddenly the extreme frugal behavior really began to feel silly. Giving up my extensive and expensive beauty regimen in the name of FI felt noble. It made a lot of sense when my take-home pay was $3,000 per month. The $300 spent on hair, nails, makeup, it was a sizable portion of my income back then. But in a $30,000 month, $300 felt like a rounding error. And I was faced with an interesting dilemma. Who am I without the staunch commitment to this goal, or to this frugal lifestyle? Is it okay to start spending more because I'm making more? And if I do, what does that say about me? For years, I identified really strongly as the frugal person with a lot of self-discipline who didn't need material things to be happy. It's funny how introducing a high income can reintroduce the temptations that lay dormant for so long. I was suddenly able to buy the things that were always out of reach before, and I could do it without really making a big dent in my savings goals, as long as I wasn't going really over the top. So it put me in a weird position, which frankly, I still haven't quite ironed out. And that is, if you can have some of this material stuff without sacrificing your future, do you want it? 

The reason I think so many people struggle with their own psychology around finances, whether they frequently overspend and don't know why or how to rein it in, or they're really stingy and constantly feel terrified they're never gonna have enough or there won't be enough for them, is because most of the answers we need in order to solve the greater money mysteries in our lives have nothing to do with money. So what I've learned since becoming conscious of this, I realized that my anxiety is deeply interrelated to my current need or fascination with financial security, security more broadly. Subconsciously, I think I relate having a lot of money with safety and comfort. Feeling trapped or uncomfortable or stuck or inconvenienced are emotions that for whatever reason elicit that feeling of anxiety and panic in me. And because I hate feeling that way, money is the Band-aid that I've chosen to slap on the problem. So I've really been trying to sit with those feelings more and meditate on why I have such an anxious temperament, and why I fear discomfort and pain so much, in an attempt to assuage some of the feelings and develop coping mechanisms outside of this very practical capitalist solution of well, I'll just accumulate so much wealth that if I am ever uncomfortable, I can just pay my way out of it. Because while that might work on the surface, it's also worth acknowledging that again, much like the previous two examples, the chances it'll do anything for us emotionally, at least to fill that void, are slim. 

The human psyche is fascinating. And if the last 15 years have taught me anything, it's that money is usually not the answer. Once your basic needs are met and you have basic security, there's pretty clear research pointing to diminishing returns on the long-term happiness you will feel from excess wealth. In closing, I wanna share a quote from Seneca that I heard in Tim Ferris's content. “Set aside a certain number of days during which you shall be content with the scantest and cheapest fare with coarse and rough dress saying to yourself the while, is this the condition that I feared?”

So with that, let's welcome Haley Hoffman Smith to the show. Haley, thanks for being here. I am really excited to chat with you today. 

Haley Hoffman Smith: Thanks for having me, Katie. I'm excited too. 

Katie: Absolutely. So for someone who has maybe heard of mindfulness or meditation, but isn't quite sure what they mean in practice, can you give us your kind of quick definition? Haley Hoffman Smith: Sure. Really quickly, it's just the act of being really self-aware on how you're feeling, what you're thinking about, and how that is creating your reality, in terms of what you're attracting, how your day is going, and how just like slight changes in your mood or that self-awareness can have a ripple effect into the better things that you're attracting because of your thoughts and feelings.

Katie: I love that definition. That's actually maybe my favorite one I've heard yet. 

Haley Hoffman Smith: It just came to me. I've never been asked that before. 

Katie: Really? Oh my god.

Haley Hoffman Smith: Good for you, Katie. 

Katie: Well, I'm glad. So this episode is about the ways in which we often use money, as humans, to fix a perceived lacking in ourselves. And that sometimes when we think we have a discipline problem, what we actually have is a void that we're trying to fill with something that money can buy. And a lot of the time it's not about the money at all. What would you say to someone who wants to explore themselves or that void, so to speak, but maybe doesn't know where to start with that self-awareness and getting to know themselves on a deeper level?

Haley Hoffman Smith: Such a good question. Also, I love that you brought that up too, because I was just reading The Big Leap by Gay Hendricks. Again, it's one of my favorite books and it talked about how, you know, money is a common issue in relationships, like an argument factor. But he said relationship problems around money are never actually about money. It's always about something deeper. It's never about…which is, you know, crazy to think about. 'Cause usually we're like, “No, no, of course it's about money. They're spending too much,” or whatever it is, but there's a lot of ways that you can do this. So I'll say that when it comes to the self-awareness around a potential void, asking yourself what it is that you're not admitting to yourself is a big one. 'Cause a lot of us like to go through life skimming the surface on the superficial level because it's easier than looking deeper. And we like to resist things that are coming up. Like maybe for example, you know the relationship you're in isn't serving you. You're not liking your job. There's something you really wanna pursue, but you're scared. Like something's not a fit. A lot of times we're taught that pushing it down is easier. But think about pushing as something that you're doing as an action that's exerting effort. So we think resisting it's like, “No, no, no, no, no, I'm just not looking. That's not like requiring any effort or action,” but if you're pushing it down, it actually is draining you. So it's much easier to just like look beneath the surface, look behind the curtain, and be like, okay, what is actually really going on here? 

So meditation can help with that. Mindfulness, having conversations with…doesn't have to be like a therapist or an EFT practitioner, but it can be even just a friend or journaling. And just being in that place of true honesty with yourself can really help. 

And I believe too, with money, going back to the root wounds around money from your upbringing can be very powerful. So how was money used as a bargaining chip in your relationship with your parents? What did they teach you about money? What is your perception of your worthiness of money, like your rate per hour? Do you have weird memories or beliefs because of a boss that didn't pay you your worth, and it was really hard to get a raise? Like really pulling back the curtain and looking at what's going on that's fueling those beliefs around money, but also your self-concept, is a really powerful place to start. 

Katie: Wow. What was that question? I wanna really make sure we reiterate that that's “What am I not wanting to admit to myself?”

Haley Hoffman Smith: Yeah. “What am I not wanting to admit to myself?” Because it's so hard and so scary sometimes 'cause we know if I admit this to myself, it's gonna make me have to change everything. Like I'd rather live in ignorance to my unhappiness than see it and therefore have to make changes. 

Katie: Yeah. Have to act on it. So on that note, on happiness: One thing that I wanna get your take on as someone who has had a lot of financial success is contentment and fulfillment. So I saw your post recently about buying your dream car. Congratulations. 

Haley Hoffman Smith: Thank you. 

Katie: And I think that sometimes people assume, and I'm gonna include myself in this group, that if they can just earn a lot of money or they can just buy their dream car or have a lot of traditional success, that that will make them feel fulfilled and content. And I would love if you could speak to that temptation or that trap and where you derive fulfillment from, and any practices that help you stay grounded. 

Haley Hoffman Smith: Yeah, absolutely. I mean, it's definitely a common trap and it's something that I fell into too. Like for me, I remember when I was starting out, I was an entrepreneur. I was like, okay, if I can only hit, you know, six figures a year, then I'll know that I've made it. And I was looking to it as a way of like validating what I was doing in entrepreneur…you know, being like, oh yeah, this is good over having a nine to five, but that was not about money actually at all, same thing. It was more about my own insecurities around being an entrepreneur. And then you hit, you know, the financial milestones. You think it's gonna change everything and maybe you're able to afford more. You're able to get, you know, certain things on your vision board or whatever it is that you're working towards, but it doesn't actually change as much as you think. 

And I think a powerful story of this for my own life too, is, you know, when I moved to New York City, I was really, really afraid of, you know, getting my apartment, and obviously rent is really high here. I got this tiny studio apartment and somehow just taking that leap for myself attracted a lot more money, which was amazing. But I was like, no, I really want a two-bedroom apartment. That's what I want. I'm gonna be a different person. I'm gonna feel so much better when I'm in this huge two-bedroom apartment in New York City. Like that's how I’ll know I've made it. And when I moved into my now two-bedroom apartment, I was not happy, Katie. I actually felt extremely like homesick. Like it felt too big. And to this day I really miss my studio apartment, but it's 'cause of like the memories associated there, like working towards my big goals and my dreams, like my first year living in the big city. 

And so all that to be said, like we think it's going to activate something within us and make us more of what we are, when really like everything you are is right here. And money is a very powerful tool, obviously, and a resource. And I'm so grateful for my financial success, but it doesn't change as much as we think. And sometimes you have to like make the money to learn that, like…Jim Carrey said in some commencement speech that, you know, he thought like all the money and the fame in the world would get him to a certain level. But then he made all the money in the world, had all the fame in the world, and it changed absolutely nothing. And he had to have that realization in that moment to be like, okay, what is life actually about? Like what is happiness actually about? 

Katie: That is so good. I love that quote. It reminds me of the idea that like, wherever you go, there you are, whether you're in the fancy apartment or the nice car, it's like, you're still bringing you, at your core, to all of those experiences. So as a spiritual person who creates a lot of content around manifestation, meditation, EFT tapping, things that often involve sitting with a lot of discomfort and facing uncomfortable truths, I would love to hear you speak to some practices that may help us be with that discomfort or learn to accept it, rather than trying to push it down or change it. Or in this instance, fix it with money. 

Haley Hoffman Smith: I think a lot of it is being willing to feel the hard things. I learned that I was really scared of my emotions. And I think we, a lot of us can relate to that. A lot of us have felt really hard things, we've been hurt a lot. We've been through pain and we'd rather just not feel it. And that honestly, like trying to escape emotional discomfort is a huge motivator, right? Like we try to avoid pain and go towards pleasure. And so we'll do a lot to avoid the pain, but going back to what I said initially around resistance, that doesn't mean the pain's not still there. It's still deep within you. So something that I like to do, especially when it comes to like mindfulness and meditation, is if I'm feeling discomfort about something, if something's coming up around worthiness or there's fear, there's shame, I'll close my eyes and I will sit with it and I'll ask it to reveal itself and I'll just let it like wash over me and through me. And just by doing that, I find that I actually release a great deal of it. And I'll ask the emotion, what is it that you're trying to say to me? What is trying to come forth? Because it's not, you know, just rearing its ugly head for no reason. Like something's trying to be said. What is the memory that needs healing, the self-concept that needs healing? Like, tell me. I'm listening. I'm validating that you're there. I'm listening to you. And then from there, I'll move into EFT tapping. So if listeners are unfamiliar, EFT tapping is emotional freedom technique, where you're tapping lightly on meridian points. It's kind of like acupuncture, but emotional and no needles, no needles needed. It's like your little fingers.

Katie: Sign me up. 

Haley Hoffman Smith: Yes. 'Cause I hate needles. And it releases energy, which emotion is just energy, right, that is in your body and in your psyche, so that you feel lighter. So then after I get the gift from the emotion, I'll tap, I'll affirm out loud affirmations of what I would rather believe. So if something's coming up, like, “I don't believe I'm worthy of this new big dream.” I'll be like, maybe, just maybe, I am worthy, as I'm tapping. And I'll really honor the emotion and the message that it brought, because I see emotions as messengers. Release it, but then also integrate what I'd rather believe, and understand that like, okay, that came up for a reason, I can attach it to, there must have been a memory in the past where there was a lot of pain and I've been carrying that, and that was ready to come up. Or ooh, I'm going through something kind of uncomfortable right now. But as I acknowledge it and I release it, I know I'm moving to the next level of my life, because the reason this came through as a trigger was to get me to the next level.

Katie: Mmm. So I had never heard of this before I started watching your content. And so I was doing some Googling. So anyone that's listening that is interested in trying this, you can Google EFT tapping, and it will show you on the physical body where these meridian points, where that pressure release is. So just a note on that, because I was doing it the other day. Haley Hoffman Smith: Yeah. Amazing. On the note of money or anything else you wanna tap on, one of my favorite resources is Brad Yates on YouTube. I have watched his videos religiously. He was like one of the very, very first in EFT tapping. His videos go back to like the early two thousands. It’s really amazing, and you just tap along with him. So it's a great resource to do anytime.

Katie: Brad Yates. We'll put him in the show notes.

Haley Hoffman Smith: Great. 

Katie: On the manifestation piece to kind of close us out, I think sometimes this is a trap I always fall into. It's tempting to try to manifest things that are rather material. Right now I have this kind of ongoing joke with myself and with Instagram, Rich Girl Nation community, that every time I see a white Porsche Macan, I'm like, that's a sign that I'm supposed to keep going, or like that's my dream car. But I think at the end of the day, a lot of these material things that we may put on a vision board, or we may try to manifest, they're things that we think are going to make us happy, but won't. Or they're, they're kind of being incepted into our minds from an ego place or a consumerism place, not really coming from that soul place. And I'm really curious how you think about setting and manifesting goals that are coming from that soul place, and how you differentiate between that and kind of the outside world maybe influencing you into wanting something. 

Haley Hoffman Smith: Yeah. Okay. So what I love that you've said, Katie, was around how it's gonna make us feel, 'cause it really does come back to feeling. So we all have things we want materially. I most recently, just one week ago, got my dream car. And for me, if you would ask me this, I guess two weeks ago before I had the dream car, okay, what would you feel? What would you feel if you had the dream car? I would've said I would've felt free. It would've felt expansive. It would've felt, you know, luxurious. I'd feel excited. Okay, fill in the blank, all the things that I believed it would make me feel. And then a question you can ask yourself is, okay, well, how can you provide yourself that feeling right now? Or why do you believe that's what you need to get there? Or is there something else that you can do on your own, where you don't have to like open your wallet or go pay for anything, that can get you there? 

And totally, like, I believe I stepped into that experience and fully have embodied that experience and love it. Not to be like, oh look, I have a Range Rover, or I believe this is gonna make me happy. Now it's more of a vehicle—in this case, literally—for more of the emotions that I have been feeling, right, around expansion, freedom, like wanting to go on road trips, like having that as like a fun resource in my relationships, to get outta the city, whatever it is. But I first had to like tap into that emotion on my own, and be very clear on what is it that I want from this. And that goes back to the self-awareness too. And that question, like what are you afraid to admit to yourself? Because if the thing that you're afraid to admit to yourself is, Ooh, I want this because it's gonna prove to so and so from high school that I made it, or that I did it on my own or whatever it is, like, okay, well, what happens if they don't see it? Or they don't think that you've made it or what…you know, whatever it is, how are you gonna feel then? Especially as you're making your car payments. So having those honest conversations will get you there too. 

And again, a lot of this stuff is like, you learn through the experience of it, that certain things, you get it, and it only fills you up for like a split second. And then you'll go back to the void, unless you have been working through your emotions, self-aware of them. It's like, I'm really in a place now that I'm grateful for because of all the work that I've done on myself, the inner work, where when I decide to buy something, it's few and far between because I'm like, ooh, you know, that's something fun that I wanna do as like a celebration of something. Okay. But not because I need to feel something more. It's because things are already feeling really good. And this just feels like a fun thing to have on top of that. And that whole thing for me has been very like wholesome, very fulfilling, before even that thing. And so I think it goes back to identity too. Like for me, it wasn't like, oh, let me get this nice apartment or this dream car or anything like that to be something more than I am. It's more like, this is fun. Like let me enjoy my experience and the 3D in reality and get the things that feel good to me. But I'm not looking for that extra, like, hit of dopamine from it. 

Katie: There is such a subtle energetic difference too, between, you know, like you said, the, what emotion or what feeling am I trying to get from getting this thing? But that, differentiated from, I'm already feeling really good. This is a 3D celebration, to use your words. Or this is just a fun way to commemorate that, as opposed to this is the vehicle through which I am affirming or validating or getting something that I'm not providing for myself, which I think is just a really cool distinction to make, and something to be conscious of and aware of when you are kind of dabbling in that world, where it can be so easy to find worthiness in those types of things.

Haley Hoffman Smith: Yeah. And for that too, I would ask listeners, if that resonates with you, to look back in your life, it could be like your childhood, any other time in the past where getting those things did make you feel better, or like who taught you that? Did you have a parent who was a shopaholic, would always get things to prove it? Or did you grow up without anything at all, but you went to a high school where certain cars or luxury items were a status symbol, and so you always felt inadequate because of that? And you feel like that's gonna fulfill a void. Like what is the real wound there? And if you can heal that first, it’s actually gonna be easier to manifest the things you want. And you'll actually really authentically be able to enjoy them, because you don't need them.

Katie: Whew. What a note to end on. Haley, thank you so much for being here. That was wonderful. 

Haley Hoffman Smith: Thank you, Katie. Thanks for having me. 

Katie: Welcome back to Rich Girl Roundup. As a reminder, we will take listener questions every month. I will put out a call for questions on Instagram. So, shameless plug, follow Money with Katie on Instagram if you're not already, and we will pick one that feels interesting and widely applicable and will answer it. As my standard disclaimer, I am not a licensed financial professional. This is not financial advice. This is “What would Katie do?” This segment is brought to you by Betterment, giving you the tools, inspiration and support you need to become a better investor. Here's this week's question from Kristen. 

Kristen: Hi, Katie. This is Kristen, calling in from Charlottesville, Virginia. And my question is, if you're gifted individual stocks from relatives, what should you do with them? Should you sell them and reinvest in index funds, knowing you'll be paying capital gain, or should you just hold onto them and see what happens? Thanks so much. 

Katie: This is a great question. And at its heart, it comes down to diversification. If you've been gifted a bunch of individual stock that's grown in value, I know paying capital gains taxes can be daunting and feel suboptimal. But the reality is that an individual stock is not an index and it can go to zero. A company can go out of business, and we see that all the time, right? Companies are constantly going out of business and new ones are forming. That is capitalism at work. Of the original 12 or so stocks on the Dow Jones Industrial Average, none of them are still on the index. I say this to drive home the point that holding a stock for the long term is a very different gamble than holding an index fund for the long term, because the index funds are more elastic in nature. They capture the growth and failure of many companies simultaneously. It's also worth exploring here how much of your total portfolio value this individual stock comprises. If it's more than 5% to 10% of your total portfolio, you are probably pretty overexposed to it. Particularly if you weren't even the one who chose it in the first place, which would be the case if you inherited it. So you're basically weighing the risk of the stock losing a lot of its value against the known cost of the tax bill, which we can calculate by looking at your cost basis and the long term capital gains that you have accrued. So if your income for the year, plus the capital gains, equal less than $445,850, you will pay 15% on your gains, and if it equals more, you'll pay 20%, and you can pay that tax bill with your gains.

So for example, pretend your relative paid $10,000 for the stock in 1975. Okay? And now it's worth $100,000. You have $90,000 worth of capital gains. You will pay 15%, most likely, on $90,000, for a tax bill of $13,500. That's a lot of money, but remember you have just liquidated a hundred thousand dollars. So $13,500 of that can be set aside to pay that bill during tax season. And if you typically get a tax refund, it may be even lower when it all shakes out. The other thing that I wanna note is that many relatives pass down individual stock within IRAs, which are tax-sheltered investment vehicles. So you can buy and sell within an IRA without incurring any capital gains taxes. So this calculus, this question really only applies from a tax bill standpoint if we're talking about a taxable brokerage account. 

All right, y'all that is all for this week. I will see you next week, same time, same place, on The Money with Katie Show. Our show is a production of Morning Brew and is produced by the very creative Nick Torres, and me, Katie Gatti Tassin. Sarah Singer is our VP of multimedia and additional content editing comes from the lovely senior editor, Henah Velez. Sam cat is our VP of chaos, and man, he was really living up to that title today. While Jojo Beans is our chief of woof, barking at any passerby, regardless of how well our recording is going.