Podcast Summary: "How to Stop Being Weird About Money" (w/ Paco de Leon)
Podcast Title: How to Be a Better Human
Host: Chris Duffy
Guest: Paco de Leon, Author and Finance Expert
Release Date: February 10, 2025
Introduction: The Intersection of Money and Creativity
In this enlightening episode of "How to Be a Better Human," host Chris Duffy explores the often uneasy relationship people have with money, especially within creative professions. Duffy shares his personal struggles with financial management as a comedian and writer, highlighting the unexpected necessity of budgeting and expense tracking in sustaining his passion. To delve deeper into this topic, Duffy welcomes Paco de Leon, a finance expert who uniquely combines his financial acumen with his artistic background.
Notable Quote:
Chris Duffy [00:01]: "Money management is not my passion, and yet if I don't put in the time and effort to handle it correctly, I won't get to do the things that I actually am passionate about."
Paco de Leon’s Unique Perspective on Finance
Paco de Leon introduces himself as both a finance professional and an artist, offering a dual perspective that bridges the gap between financial systems and creative endeavors. He emphasizes that his approach to finance is not about endorsing capitalism but about empowering artists to use money as a tool for their creative freedom.
Notable Quote:
Paco de Leon [01:29]: "I’m not a fan of capitalism. Almost everyone I work with and know and love is an artist, including me. So I know the way the system is set up."
Money as a Proxy for Power
Central to their discussion is the concept of money as a proxy for power. Paco argues that financial stability is essential for artists to maintain their creative independence and influence. Without effective money management, artists risk compromising their ability to create and sustain their work.
Notable Quote:
Paco de Leon [06:33]: "Money is just one form of currency, and it's an important form of currency. And for better or for worse, the path that we're on with humanity is we have to figure out that financial aspect, that financial piece."
Valuing Your Work: Pricing Strategies
A significant portion of the conversation revolves around the challenges of pricing creative work. Chris shares his own revelations about raising his rates, noting that higher prices often lead to greater respect and better client relationships rather than deterring potential clients. Paco echoes this sentiment, explaining how underpricing can inadvertently signal low quality and attract clients who do not value the work appropriately.
Notable Quotes:
Chris Duffy [15:35]: "I was shocked because I thought that if I said... I thought people would be angry or like me less. It was astonishing to discover that most of the time when I said $500, people who were trying to hire me respected me more."
Paco de Leon [17:33]: "It's a weird thing that happens when you are showing people, like, okay, here's how I'm gonna value this... cause somebody who maybe doesn't have a draw... 'I'm a dollar oyster.'"
Emotional Barriers: Dealing with Shame and Stress
The episode delves into the emotional aspects of financial management, particularly feelings of shame and embarrassment associated with money struggles. Paco shares personal anecdotes about overcoming shame, advocating for vulnerability and open communication as ways to alleviate these negative emotions.
Notable Quote:
Paco de Leon [38:49]: "When it comes to your offering, you have to be able to answer the following question. Why would anyone hire you over your competition? If you can't answer that question, neither can your potential clients."
Practical Financial Management: Buckets and Budgeting
Paco offers actionable strategies for managing finances, especially tailored for freelancers and artists. He introduces the concept of using separate accounts or "buckets" to allocate funds for different purposes, thereby creating scarcity and controlling spending. This method leverages technology and free checking accounts to simplify budgeting and prevent impulsive expenditures.
Notable Quote:
Paco de Leon [34:28]: "You have to recognize the danger that we're in and figure out ways to protect yourself from all the ways that you're being exploited."
The Virtue of Thrift and Its Impact on Power
Reframing the concept of thrift, Paco discusses its importance not as being cheap but as a mindful allocation of resources. Thriftiness, in this context, empowers individuals to direct their finances towards impactful areas, enhancing their overall power and ability to make meaningful changes.
Notable Quote:
Paco de Leon [29:32]: "It's all about trying to be mindful with your resources. ... understanding the opportunity cost and the trade-off is hugely important."
Advice for Different Financial Situations
Paco provides tailored advice for various financial scenarios:
-
For Freelancers Starting Out:
- Reach out to your network to validate your services.
- Implement a system for saving and tax planning early on.
-
For Those with Stable Jobs and Side Hustles:
- Maximize employer benefits such as health insurance and retirement plans.
- Manage side income effectively to ensure financial stability.
-
For Parents Teaching Kids About Money:
- Foster a sense of self-worth and confidence in children.
- Help them understand the abstract value of money and its role in the world.
Notable Quotes:
Paco de Leon [43:17]: "First week or first month, they should start reaching out to their network and say, hey, I'm selling this thing. Will you buy it? Or do you know somebody who will?"
Paco de Leon [44:26]: "One thing is I would make sure that your child knows that they're valuable in the world no matter what they do and what they choose."
Overcoming Financial Exploitation: Setting Boundaries
The conversation touches on the importance of setting financial boundaries to protect against exploitation. By understanding market dynamics and the value of their contributions, individuals can better negotiate terms and resist undervaluation.
Notable Quote:
Paco de Leon [28:08]: "Really what I've seen is I've seen a lot of people just feel like this world of money is not for them. ... But I think net, net, net. It's just going to help people suffer less at the end of the day. And that's really all I'm trying to do."
Conclusion: Empowerment Through Financial Literacy
The episode wraps up with a strong emphasis on the importance of financial literacy and empowerment. Paco reiterates that understanding and managing money effectively allows individuals, especially creatives, to sustain their passions without being hindered by financial instability.
Notable Quote:
Paco de Leon [28:59]: "If I can get as many people to understand, you know, the underlying forces and where they can find their agency, then I think net, net, net. It's just going to help people suffer less at the end of the day."
Key Takeaways
- Financial Management is Crucial for Creatives: Handling money effectively enables artists and freelancers to focus on their passions without financial distractions.
- Value Your Work Appropriately: Setting fair prices for your services enhances respect and attracts better clients.
- Address Emotional Barriers: Overcoming shame and stress related to money can lead to healthier financial habits.
- Implement Practical Strategies: Utilizing separate accounts or "buckets" can help manage spending and savings effectively.
- Foster Financial Literacy: Understanding the financial system empowers individuals to navigate and influence it positively.
Resources Mentioned:
- Paco de Leon’s Book: Finance for the People
- Paco’s Website: thehellyagroup.com
- Chris Duffy’s Website: chrisduffycomedy.com
Follow-Up Actions: Listeners are encouraged to implement Paco’s practical advice, such as setting up separate financial buckets, reaching out to their networks for feedback, and fostering open discussions about money to demystify and destigmatize financial management.
This episode offers a profound exploration of the intricate relationship between money and creativity, providing both emotional support and practical tools for listeners to better manage their finances and, consequently, enhance their creative pursuits.