Two people can appear to be doing the same thing, but in a very different way. We see this with Travel Hacking, when you have one poser in First Class that is paying cash, and another poser that is paying with points.
While they may order the same meal, and both elect a diet coke as their beverage of choice, there is a key difference between the two people, as the underlying system built allows one to partake in the experience with little to no financial cost, whereas the other may be in debt, or at least using funds that could be used on other things.
This invisible difference is a part of the Framework™. Things that we cannot see, and perhaps cannot first comprehend, that make massive differences to two people who otherwise seem similar.
In the case of the Travel Hacker vs Big Spender, cash is not the defining factor, since anyone with a credit card could, in theory, pay $20,000 for a flight. The defining factor here is knowledge. Knowledge enables a person to experience a $20,000 flight.
My belief is that if we define a key framework factor, such as knowledge, it is something that we must continue to invest in. As such, one of my biggest personal expenses is education.
A tale of two resellers
I’ve found a way that part time resellers could put $53K into roth (on top of their work based plans) but if you ask a reseller if they would like to invest in such a plan, they will likely scoff and state that they could earn much more by just reselling more.
Imagine two such resellers, both with $25,000 per month in sales, earning $7,500 profit. While they both might agree on the strategy to eschew the retirement account, and they both sell the same amount each month, a framework factor might be at play that drastically changes the decision.
Reseller A might have nothing in the 401(k) and rents their home, while Reseller B might have paid cash for their home, and have enough in the 401(k) already to be covered in retirement, perhaps he has two other passive income businesses that provide enough income to cover his food and other monthly bills.
You could put a hundred such resellers in a room and they may appear aligned on the plowing of profits back into growth, but how many have the same underlying framework?
Cash, or more accurately wealth, is another framework factor here, but for me the importance is more in the presence of FU money.
FU money means you have enough in reserve to make key lifestyle changes, and level up safely. For example, if you are 30 with $500K in a 401(k) and house paid off, you can feel a lot more confident about quitting a job and attempting a new business venture, whereas if you are deeply in debt and cannot afford to fund a 401(k) at all, you are stuck treading water.
Therefore, the Framework aspect of Wealth comes from finding a neutrality point, where you have enough wealth to survive a change, to make a pivot in your career, or head back to school for a higher level degree.
Debt can be used here, but it has to be very tightly controlled, and used for tangible ROI items.
The Vegas Example
I’m heading to Vegas for a conference in November, it costs $800 for 3 days, plus room and board.
To the observer, I’m some big spending VIP. I’ll be flying in non stop from the East Coast, Limo picking me up at the airport and dropping me off at my Penthouse. To the travel hacker nothing (much) special here, other than zero out of pocket for the hotel.
I’ll be dining in Robuchon (or maybe Morimoto, or maybe both) and spending up to $1,000 on dinner (for 1). To the travel hacker, something different here. To the casual observer, I’m insane, but in reality, they are spending more money than I am by buying their meal from a grocery store in attempt to save.
This lifestyle hacking is very different from the approach you see at somewhere like Mr Money Mustache, where instead they look at saving and substituting experiences in order to escape the rat race. Clearly they have an edge on the average Joe, but at the same time, pure substitution in order to exist isn’t what I call living.
For me, the final piece of the upcoming Vegas example is the $800 ticket to enter. The fallback option for this is ‘valid business expense’ meaning that I get to discount it by my tax rate (not a lot..) but also there are other ‘hacks’ available. I do think that having a business fits somewhere into the Framework™, but not sure where yet. It is basically a walking discount card to any number of things, and a key difference between two people who otherwise appear the same.
In terms of getting into the conference, this is where thinking outside of the box comes into play. If Vegas is the land of comps, is there a way to get a comped ticket to a conference? If it works, then I save another $600-700, if not, then I have two fallback options to reduce the cost further.
Think of Travel Hacking as the ability to appear like Person A, but paying Person B’s price, but remember, life is a lot bigger than travel, and the concepts of hacking it can extend far further.