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For 14 years, Khe worked on Wall Street, where he was among the youngest managing directors at BlackRock, focusing on alternative investments. Despite this impressive career, he felt empty and quit his job at age 35 during what he called a “third-life crisis,” leaving without a clear plan.
Nine years ago, he established Rad Reads as his second career, starting with 18 months of financial runway. Inspired by his surfer/skater lifestyle and love for the Teenage Mutant Ninja Turtles, he wanted to incorporate the idea of “rad.” With no following, Khe began writing about the internal struggles of being a successful 35-year-old yet feeling empty after becoming a parent. He soon realized he wasn’t alone in facing these questions.
What started as a weekly newsletter evolved into a multimedia platform, now featuring blogs, social media, podcasting, and YouTube. But regardless of the medium, Khe notes that Rad Reads has always centered on living a productive, joyful, and examined life.
In this episode, Khe and I talk about the pursuit of meaningful wealth by balancing money, time, and happiness.
Here are my notes from our conversation.
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The Value of Time (04:18)
Khe highlights the importance of realizing that not all hours hold equal value. For a long time, he focused on squeezing every last drop of efficiency. However, he came to appreciate the wisdom of “if your ladder is pointing in the wrong direction, it doesn’t matter how fast you climb it.”
Khe learned that efficiency tactics can only do so much if you lack clarity on your goals. Instead, he found that small but impactful actions, like building relationships with reporters, could yield significant results. Checking in periodically with journalists led to substantial media coverage without needing a PR agency—just a few hours over the years.
Diminishing Returns of Money and Marginal Utility (08:12)
To explain the concept of marginal utility and the diminishing returns of money, Khe uses the example of Elon Musk. The billionaire wouldn’t notice if he acquired $500 million worth of small companies because, at a certain point, the next dollar holds no additional value. In fact, additional wealth might even be a hassle, bringing extra tax forms.
Although this scenario is extreme, Khe points out that everyone experiences diminishing returns at different times based on their financial situation, upbringing, and tastes. He asks Peter whether he would accept $10,000 for a task requiring five hours of data entry on a Saturday. Peter admits that while he’d decline now, he would have accepted the offer in the past.
Khe emphasizes that people encounter their personal marginal utility curves differently. The curve eventually flatlines, and money’s value diminishes.
Balancing Financial Independence and Time (12:38)
Peter and Khe discuss how identity and values shift as people age, especially for parents. Khe talks about the “magic window” when children are young and want to spend time with their parents. He acknowledges that this window will close eventually, and he might not have the same bond with his children in a few years. Instead of waiting for financial independence to buy back that time, he believes it’s crucial to cherish it now.
Khe warns against the fallacy of trading time today for more time later. Retirement, for example, offers the allure of future freedom, but health and energy levels at 60 may differ from those at 30. Purchased time won’t match the quality of moments that could have been enjoyed earlier.
Questioning Financial Independence Conventional Wisdom (18:34)
Khe commends the principles of financial independence, such as investing, compounding, and delayed gratification, which have also contributed significantly to his wealth. However, he emphasizes that achieving financial independence isn’t the ultimate solution. He cites examples of wealthy individuals who are still overweight, depressed, or divorced, showing that money can’t solve every problem.
Instead, he believes financial independence often becomes an excuse to avoid confronting deeper fears and challenges. For instance, the pursuit of validation at work can cause people to neglect family and personal needs. People who are passionate will always find time for their interests, while others might use financial independence to justify inaction.
The Scarcity Mindset and Non-Money Fears (29:36)
Khe highlights the scarcity mindset, especially among those who didn’t grow up wealthy. Such people often experience irrational fears of financial ruin regardless of their financial security. He shares an example of a client who sold his company for $50 million but remains fearful of financially harming his family through mundane expenses like staying in fancy hotels. Despite having enough money to sustain that lifestyle indefinitely, the client still worries.
Khe attributes these fears to one’s self-worth, childhood experiences, and value system, not just spreadsheets. He reiterates that while financial independence offers useful principles, it won’t address non-monetary fears like mortality or personal identity.
Resources:
- Subscribe to the RadReads.co Newsletter
- Follow Khe Hy on Twitter
- Listen to The Examined Life Podcast
The Long Term Investor audio is edited by the team at The Podcast Consultant
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