Caleb Hammer — Blog

Unfathomable money level

Today I was reading a thread on r/sanfrancisco about a two-bedroom two-bath rental in the Sunset district costing $6,500 per month. That is both incredible and unfathomable. That amount of money is a bit more than my own monthly take-home, and I honestly do not view myself as making peasant money. A reality where people can spend that much on rent alone is difficult to conceptualize. $78,000 a year just to put a roof over your head.

But obviously there are plenty of people capable of spending those amounts. You watch enough Caleb Hammer and you begin to believe there’s lots of folks out there struggling financially and making stupid decision. On the flip side, there’s lots of folks making really good money and can spend with impunity. Look at this guy who casually spent $635K on a special edition Acura NSX, a practical museum piece because each additional mile is ruinous to its now record-setting evaluation.

Imaging spending house-level money on a vehicle you won’t drive! Meanwhile, I don’t think I’ve made that much money total in all my years of working. I might as well be on a separate planet.

I can see how someone in similar financial situation as me can easily get nihilistic about it. Cost of living is insane, housing prices are beyond the stratosphere, and then there’s social media indicating that it’s only you who is the broke one. Given those circumstances, I too would YOLO what little money I have into options markets or prediction markets. At least that gives me a puncher’s chance to attain the life that seemingly everyone else have. Because working a normal job isn’t mathematically going to get me there.

Maybe I should start lining up at Target on a weekday morning for the latest Pokemon cards release, hoping to score a card worth reselling. Or line up at Harbor Freight for the latest limited tool drop to then resell on eBay for profit. What’s the quickest way to multiple X my money so I can afford life.

I understand those that do. What are we supposed to do when the median rent price is higher than our take-home?

No magic pill

Personal finance is easy. Spend less than you make. Put that extra money into the market in a low-cost index fund. Rinse and repeat every single month for decades, until you are ready to retire. You can say it all fits on an index card.

But like losing weight - eat less than you expend in energy, what’s easy on paper is difficult for people to execute. That’s why American obesity rate is top 10 in the world. (GLP1 agonists to the rescue!) And consumer credit card debt is at an all time high.

From watching personal finance shows like Caleb Hammer, what I am seeing is that people do understand what needs to be done, but the salience of that action is buried under a pile of emotions hijacking the brain. That forthcoming vacation is way more exciting to think about. The DoorDash delivery person is coming soon with that burrito you deserve after a long day at work. Why yes you absolutely should spend a year’s salary on a brand new car.

The boring and unexciting slog of wealth accumulation never stood a chance against those positive emotions. Just like the cozy and comfortable couch beckons you to abandon your difficult and tiresome workout plans for the day.

It can’t be all down to willpower, right? To mentally fight against the easy and pick the hard. Because we all know that willpower is fleeting. Our marvelous minds can convince and rationalize us of (and out of) anything. Spend six-figures on a car? Of course! I am a card-carrying car enthusiast. Hashtag man maths.

Unfortunately, unlike weight loss, there’s no magic pill for debt.