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Ramit Sethi of I Will Teach You To Be Rich speaks with Nicole and Drew, 39 and 40, who are expecting their first child in just two weeks. They split their time between Southern California and Maui, where they each own a home. Nicole bought her house after Drew made it clear that continuing to stay with roommates was not an option.

Today, they earn $296,700 a year, own $1.25 million in assets, and have a net worth of more than $500,000. But their two homes consume over 40% of their income, and once their numbers are corrected, their fixed costs rise to 85%. Despite their high income, they feel unable to eat out, attend concerts, or enjoy the life they have worked to build.

Nicole is a psychology professor who plans everything down to the dollar and worries about having enough savings. Drew is a life coach and therapist-in-training who admits that she often goes by “vibes” and trusts that things will work out. With a baby arriving and their savings falling, they must decide whether Drew can realistically double her income or whether they need to sell the Maui house.

In this episode we uncover:

• Why Nicole bought a house within months of Drew’s housing non-negotiable
• How they ended up supporting two homes in two different states
• Why earning nearly $297,000 still leaves them feeling financially trapped
• Their $1.25 million in assets and nearly $1 million of debt
• Why their fixed costs jumped from 77% to 85%
• How their two homes consume more than 40% of their income
• Nicole’s numbers-first approach and Drew’s habit of going by “vibes”
• How grad school, flooding, and a $29,000 sewer repair drained their savings
• Why the baby may not increase their expenses as much as expected
• How Nicole’s sabbatical gives them a temporary financial window
• Why their Maui house is co-owned without a clear written agreement
• Whether Drew can realistically double her income after graduating
• Why depending on one future income increase is a major financial risk
• How selling the Maui house could release around $150,000
• Why selling could reduce their fixed costs to approximately 65%
• How they could keep Maui in their lives without owning property there
• How they can build a plan that does not require everything to go perfectly
• Why “spaciousness” becomes the center of their new Rich Life vision
• The decision Ramit believes they need to make before their savings fall further

Chapters:

(00:00:00) Introduction
(00:03:09) Two homes in two different states
(00:07:03) Nicole kept her housing costs at just 12%
(00:08:18) Drew’s housing non-negotiable changed everything
(00:14:43) Nicole tracks the numbers, Drew goes by “vibes”
(00:21:26) What does their Rich Life actually look like?
(00:24:47) Ramit reviews their Conscious Spending Plan
(00:25:53) $1.25 million in assets and $986,000 of debt
(00:28:15) They earn $296,700 but still feel squeezed
(00:29:46) Their fixed costs are higher than they realised
(00:32:50) Two homes consume 40.5% of their income
(00:34:50) Grad school, flooding, and expensive home repairs
(00:40:16) Their real fixed costs jump to 85%
(00:45:19) Can they afford their new baby?
(01:06:01) Drew’s “life will provide” money mindset
(01:12:00) Are they actually on track for retirement?
(01:24:39) Ramit reveals their retirement projections
(01:33:19) Selling could reduce their fixed costs to 65%
(01:50:07) Redefining their Rich Life around “spaciousness”
(01:53:04) Ramit’s final assessment

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Transcript:

Ramit [00;00;00;03 – 00;00;19;05]: I’m about to speak to Nicole. Andrew? They’re 39 and 40 years old. Expecting a baby in a matter of weeks. And they both live in two different states, in two different homes that they each purchased. Nicole applied to speak to me. Let me read you from her application, she wrote. My partner basically needed me to buy a house.

 

Ramit [00;00;19;05 – 00;00;40;04]: It was a non-negotiable for drew to stay with me in a house without roommates. So I ended up buying a place in, wondering if that was a mistake. She continues on to say, we are unable to eat out and to go to concerts because we are putting all of our funds into houses and needs. It consumes me and worries me so much.

 

Ramit [00;00;40;05 – 00;01;03;20]: Now, if somebody said to me, hey, we intentionally are making this sacrifice because we want to build equity and blah blah blah. Okay, but that’s not what I’m hearing here. I’m hearing panic. I’m hearing regret. I’m hearing uncertainty, especially with a baby near. Do I want to take a look at their numbers by pulling up their conscious spending plan?

 

Ramit [00;01;03;21 – 00;01;39;18]: Okay, let’s take a look. Assets 1.2 million. Investments 183,000. Savings at 67,000. Debt 986,000. Total net worth 516,000. Now fixed costs 77%, which is quite high. Explains some of the panic that I heard in the application. Investments at 3%, that’s quite low. Savings at 10%, guilt free spending at 10%. When I look at their financial situation, the word that comes to mind for me is complicated.

 

Ramit [00;01;39;20 – 00;02;07;21]: Two houses, two different states. Panic over what to do about their finances, and a baby coming in a matter of weeks. I want to get to the bottom of this. Let’s begin by speaking to Nicole and Drew. Let’s go back to the moment where you were filling out this application. Do you remember where you were? What was going on at that moment that called you to apply to speak to me?

 

Nicole [00;02;07;22 – 00;02;22;06]: Yeah, we’d been having a lot of conversations about our housing situation, given the fact that we are supporting two households and two different states. Housing costs are the biggest part of our, I guess, CSP.

 

Ramit [00;02;22;08 – 00;02;27;11]: And what is the tenor of those conversations that you’d had?

 

Nicole [00;02;27;13 – 00;02;35;00]: Tough. At times it feels like we have slightly different goals and that’s okay.

 

Ramit [00;02;35;02 – 00;02;36;01]: Why is it tough?

 

Nicole [00;02;36;02 – 00;03;06;19]: We both really love our various home bases for important reasons. I have family and community in Southern California and that’s really important to me. And drew has family and community that, you know, she has built in Maui. And for either of us to give up that community is really tough. And it has been a conversation of, can we actually support two households with our income?

 

Nicole [00;03;06;20 – 00;03;07;27]: I see, yeah, okay.

 

Ramit [00;03;07;29 – 00;03;16;04]: Let me understand your living situation now. So we have Southern California, Hawaii. What’s the situation with the houses?

 

Nicole [00;03;16;07 – 00;03;32;09]: We are bicoastal. Couple drew owns a 50% share of her house in Maui, and it generates income through like, rent. And I own the house here in Southern California.

 

Ramit [00;03;32;11 – 00;03;38;21]: The house that you own a 50% share in. Is that your primary residence as well? Yes.

 

Drew [00;03;38;27 – 00;03;45;26]: It’s kind of like a boarding house. Is the structure. It’s two, three bedrooms and then two studios.

 

Ramit [00;03;45;28 – 00;03;47;19]: Oh, yeah. Where do you live?

 

Drew [00;03;47;24 – 00;03;49;05]: Oh, one of the three bedrooms.

 

Ramit [00;03;49;06 – 00;03;55;22]: Got it. Yeah. We’ll look at the income later. But is the income that it generates consistent for you? Yes. Okay.

 

Drew [00;03;55;24 – 00;04;05;10]: What’s inconsistent is the, like, repairs and housing costs that I because I’m new so I don’t have I didn’t have like the numbers all laid out yet as far as what to expect.

 

Ramit [00;04;05;17 – 00;04;07;22]: Do you make a profit?

 

Drew [00;04;07;29 – 00;04;09;13]: Yeah. Sometimes.

 

Ramit [00;04;09;15 – 00;04;17;14]: Okay. Okay. Yeah. And then Nicole, your house that you live in, that’s your primary residence. How many bedrooms does it have?

 

Nicole [00;04;17;14 – 00;04;18;18]: Two bedrooms. One bath.

 

Ramit [00;04;18;19 – 00;04;19;11]: Got it. Okay.

 

Nicole [00;04;19;12 – 00;04;36;20]: When I’m not teaching, we spend our time in Maui. And during that time, I rent out this Southern California home. And then drew rents out the three bedroom space when we’re not in Maui.

 

Ramit [00;04;36;24 – 00;04;47;22]: So I’m very curious to look at the numbers and see how it how it plays out. Okay. That’s cool. And a time period. Like how much time are you spending in Southern California versus Maui and vice versa?

 

Nicole [00;04;47;24 – 00;04;50;06]: It depends. It’s approximately 5050 though.

 

Ramit [00;04;50;07 – 00;04;51;29]: Okay. Like six months, six months.

 

Nicole [00;04;52;00 – 00;05;04;03]: About I spend a little bit I need to spend a little bit more because I teach and I have to be on campus. But drew will come a little bit later and go a little bit earlier to prepare the house. And now. Cool.

 

Ramit [00;05;04;04 – 00;05;05;09]: So what do you teach?

 

Nicole [00;05;05;10 – 00;05;06;29]: I teach psychology.

 

Ramit [00;05;07;00 – 00;05;07;19]: Oh, cool.

 

Nicole [00;05;07;21 – 00;05;08;05]: Yeah.

 

Ramit [00;05;08;06 – 00;05;10;11]: All right. One of psychology.

 

Nicole [00;05;10;13 – 00;05;12;11]: Developmental and research.

 

Ramit [00;05;12;12 – 00;05;16;16]: Cool. Very cool. All right. Awesome. When is baby due?

 

Nicole [00;05;16;17 – 00;05;20;01]: In two weeks. Two less than what?

 

Ramit [00;05;20;04 – 00;05;22;00]: We. Oh my God, congratulations.

 

Drew [00;05;22;03 – 00;05;27;25]: Could happen right here, right now. If you’re lucky, doctor.

 

Ramit [00;05;28;01 – 00;05;30;18]: Best episode ever. First baby.

 

Nicole [00;05;30;19 – 00;05;31;07]: Yes.

 

Ramit [00;05;31;08 – 00;05;35;28]: Okay, just so I understand, how long have the two of you been together?

 

Drew [00;05;36;01 – 00;05;38;10]: Two. Yeah, two and a half years.

 

Ramit [00;05;38;11 – 00;05;41;02]: Okay. Married? Unmarried.

 

Nicole [00;05;41;04 – 00;05;44;15]: We’re on the road to our domestic partnership.

 

Ramit [00;05;44;16 – 00;05;46;00]: Oh, cool. Okay. Yeah. Great.

 

Nicole [00;05;46;02 – 00;05;47;16]: Just more legal hurdles.

 

Ramit [00;05;47;17 – 00;05;56;16]: Okay, cool. Now, I do want to ask about the housing situation for a second. Nicole, I understand that you were living with roommates.

 

Nicole [00;05;56;20 – 00;05;57;24]: Yeah.

 

Ramit [00;05;57;26 – 00;06;01;16]: And I think you were quite conscious of your expenses. Is that right?

 

Nicole [00;06;01;17 – 00;06;27;23]: Extremely so. Okay. So I was a really poor grad student for a really long time and made basically no money. I covered my tuition costs like, I didn’t want to take on student loan debt. And so I lived with roommates. And then even when I got my full time job, I was living with roommates because I was let’s see, my housing costs were like 12%.

 

Ramit [00;06;27;24 – 00;06;35;02]: Whoa. So you were a full time professor living with roommates? Yeah. In love. Yeah. This is so.

 

Nicole [00;06;35;04 – 00;06;35;15]: It was.

 

Ramit [00;06;35;15 – 00;06;54;01]: Great counterculture. Yeah, I love this. But just think of it. Who in America can can even fathom the idea? Like, I became a full professor, and I am choosing to live with roommates. No. We believe. Oh, I made it to this level. Now I need an SUV, I need this house, I need that vacation, etc.. And you were like, no.

 

Nicole [00;06;54;03 – 00;07;11;10]: No, it was amazing for me, okay? I could save money. I could put money into retirement. Things I’d been wanting to do for forever. I was in my 30s when I finally got this job and it was like, oh my God, I can finally catch up. And I could go, like I was living life so well, I could go out to eat and not worry about it.

 

Nicole [00;07;11;10 – 00;07;16;14]: I didn’t have to think about a budget because I knew I could cover it.

 

Ramit [00;07;16;15 – 00;07;40;07]: Yes. Okay, then, in your application, you wrote the following. My partner basically needed me to buy a house. I was living with roommates when drew and I met. I was intentional about saving money. It was a non-negotiable for drew to stay with me in a house without roommates. So I ended up buying a place. Im wondering if that was a mistake.

 

Ramit [00;07;40;09 – 00;07;43;19]: Take me back to that conversation. Yeah. What happened?

 

Nicole [00;07;43;25 – 00;08;15;07]: Basically, drew said that if I wanted her to come and spend time with me, there could not be roommates. So it was like, okay, well, if I want to continue this relationship, I don’t want to be fully long distance. That’s going to have to change somehow. I did want to eventually buy a house, and I had been pretty aggressively saving, like I’d been putting $4,000 a month into a fund to buy a house.

 

Nicole [00;08;15;09 – 00;08;32;09]: And so it was like, okay, well, I could just move up the timeline a little bit, you know, instead of two years from now. I could just do it now. And instead of the $4,000 a month going into a savings for this house, it will go into the mortgage for the house.

 

Ramit [00;08;32;11 – 00;08;34;25]: How soon after that conversation did you buy the house?

 

Nicole [00;08;34;25 – 00;08;35;28]: Three months.

 

Ramit [00;08;35;29 – 00;08;36;11]: Fast.

 

Nicole [00;08;36;12 – 00;08;37;16]: Okay, fast.

 

Ramit [00;08;37;17 – 00;08;40;18]: Drew, what was going on in that conversation for you?

 

Drew [00;08;40;19 – 00;09;08;13]: Well, you know, she couldn’t come to Maui full time because of her job, and so that would have been the ideal. You know, like, I have a house come here. And what was going through my mind was like, I can’t live with these random people. And, you know, I just couldn’t live like that. Why? I think there are circumstances where it could have been okay if there was some private space or like a better bathroom situation.

 

Drew [00;09;08;14 – 00;09;18;09]: It just was for me. I felt like I was in college and I had been living a different way for so long. I couldn’t go back and live like that. Yeah.

 

Ramit [00;09;18;10 – 00;09;27;18]: Was that like a major disagreement for you, or was it like drew, you said, this is what I need. And then Nicole, you were like, okay, cool. Bought the house.

 

Nicole [00;09;27;18 – 00;09;55;18]: There was pushback. And actually, we had had the conversation earlier. We had had the conversation maybe 6 to 9 months earlier. And I had said, can we wait for I think I said, a year and we made it six months. And she was like, I can’t do this anymore. Like, it’s got to be either that or I’m just not coming for this next semester.

 

Nicole [00;09;55;20 – 00;10;18;17]: And so it was like, okay, well, I saved for six more months. It’s not the full year, but it’s at least half of it. We can at least start looking. We can see what’s within my budget. And so I started looking and we found ourselves very quickly.

 

Nicole [00;10;18;19 – 00;10;21;25]: Housing market. Yeah. The housing market was crazy.

 

Ramit [00;10;21;28 – 00;10;24;06]: How did you decide to buy versus rent?

 

Nicole [00;10;24;07 – 00;10;29;03]: Okay, so I know your philosophy on buying a house, but and.

 

Ramit [00;10;29;03 – 00;10;31;08]: I think what is my philosophy on buying a house?

 

Nicole [00;10;31;09 – 00;10;34;10]: That you should know your numbers and only do it if it’s right for you.

 

Ramit [00;10;34;13 – 00;10;37;24]: Oh, God. Yes, you are correct.

 

Nicole [00;10;37;26 – 00;10;59;11]: And you personally don’t own a house yet. And that’s okay. That’s right. For you. And so I think at the time, the decision was right for me in terms of I did run the numbers, it was within the percentage that was like reasonable a little on the high end, you know, but it was around the like a third of my income.

 

Nicole [00;10;59;12 – 00;11;13;01]: Good. And for being in Southern California, it felt like it was okay. I was already saving the amount that I was going to be putting towards a mortgage. It felt like it was an okay decision at the time. Great. Yeah.

 

Ramit [00;11;13;03 – 00;11;36;03]: All of that sounds amazing. Ideal. You ran the numbers. It was roughly within parameters. You had already been saving the amount that you would then pay for the mortgage. Yeah. Amazing. So, you know, you’ve proven excellence that you can do that. I want to know about a time in the last, let’s say, a year where maybe you were not on the same page with money.

 

Ramit [00;11;36;11 – 00;11;40;02]: Maybe it caused tension for the two of you. Can you think of a time?

 

Drew [00;11;40;05 – 00;12;08;12]: Yeah. What? We had a thought. Oh, I don’t know if it became a fight, but when we were talking under the tree at Nicole’s parent’s house, I can see it in my mind. It was just so tumultuous, and I don’t actually remember what was happening. But I remember my internal state was, like, one of feeling so much agitation, like, you know, brewing, that I wanted to just hit the eject button and just be like, I can’t do this, and I need to go on a walk.

 

Ramit [00;12;08;13 – 00;12;09;14]: What was the topic?

 

Drew [00;12;09;15 – 00;12;22;02]: It was like actual numbers about something. But I did have to, like, walk away, like calm myself down and then be like, okay, I can go back and I can talk about numbers for another hour.

 

Ramit [00;12;22;08 – 00;12;23;20]: Nicole, do you remember the topic?

 

Nicole [00;12;23;21 – 00;12;51;16]: Yeah, we were talking about housing and school. So drew is currently in school right now and so paying for tuition. And that’s been tough. And then we’ve had some issues with actually a little bit of instability with the renting situation in Maui. And it’s been pretty stressful. And so we were having some really tough conversations about how to make that work.

 

Ramit [00;12;51;23 – 00;12;56;11]: Well, what was your perspective like in a couple of sentences?

 

Nicole [00;12;56;14 – 00;13;05;25]: There needs to be enough cushion so that if things go wrong, we don’t have to scramble to get just anyone.

 

Ramit [00;13;05;26 – 00;13;09;06]: Okay. And what was your reaction to that, drew?

 

Drew [00;13;09;12 – 00;13;23;11]: Overwhelm. Just like. Yes. Like my my reaction is yes to, you know, we need to have somebody we need to have a plan. You know, we need more of a cushion and then just some overwhelm.

 

Ramit [00;13;23;11 – 00;13;31;24]: I’m curious about the way you said yes. You’re like, yes, yes, but also no. Well.

 

Drew [00;13;31;24 – 00;13;36;10]: I’m like, yes. And I don’t know what the numbers are and I don’t know how to make that happen.

 

Nicole [00;13;36;11 – 00;13;36;24]: Yeah.

 

Drew [00;13;36;25 – 00;13;41;13]: I’m not a numbers person, but I’m getting excited about numbers in life and being more grounded.

 

Nicole [00;13;41;13 – 00;13;56;27]: I think what actually made it more of a conflict was that I’m really numbers driven and practical, and it was like, okay, we’re going to need $3,000 for this and we’re going to need, you know, x, y, z amount that we want to put away into a fund just for this. And how do we do that?

 

Ramit [00;13;56;27 – 00;13;59;12]: And and what did you notice about Drew’s reaction?

 

Nicole [00;13;59;13 – 00;14;03;04]: Yeah, it was too much detail.

 

Drew [00;14;03;05 – 00;14;18;05]: That’s what I remember. It was like so like the minutia of it all was so overwhelming because it was numbers almost to like the cent or something, you know, it was just really intense for me. And I felt really frustrated.

 

Ramit [00;14;18;06 – 00;14;21;09]: Are you used to avoiding numbers?

 

Drew [00;14;21;12 – 00;14;44;17]: I mean, sort of I have dyscalculia, but you know, that’s one thing that might contribute to it. And I do feel like I go by vibes, you know, and I can like feel the about of something, you know, like a roundabout, like I’m good with a generalized like it could be a 5 to 15 and I’m good.

 

Ramit [00;14;44;20 – 00;14;45;06]: Okay, okay.

 

Drew [00;14;45;07 – 00;14;49;10]: There’s no need to figure out if it’s 895. Like it’s too much.

 

Ramit [00;14;49;12 – 00;14;58;01]: Got it. Got it. Yeah. And by your smile, I’m taking you treat money differently. Yes. How do you do it?

 

Nicole [00;14;58;03 – 00;15;19;16]: I wouldn’t say that. I am needing everything to be down to the scent, but I like to know to the dollar for relative things, and then I will. Like, I’m the one with the spreadsheet. And so I look at our 12 month average, or I’ll look at a six month average for things.

 

Ramit [00;15;19;17 – 00;15;21;00]: And what do you do for a living?

 

Drew [00;15;21;01 – 00;15;28;12]: I am a life coach and I’m in grad school right now in my last year to get my therapist license. Yeah.

 

Ramit [00;15;28;13 – 00;15;29;15]: Okay. Interesting.

 

Drew [00;15;29;16 – 00;15;56;01]: I have been on a mission since I left Taiwan, where I lived my whole adult life, and since moving to the States, I’ve had to really, like ground in to reality a little bit. I’m very much a dreamer, and I’ve needed to start looking at finances and looking at numbers and think about insurance and houses and all of these things that I never really had to consider before.

 

Ramit [00;15;56;02 – 00;15;59;05]: Before. How were you able to not look at those things?

 

Drew [00;15;59;06 – 00;16;18;19]: Oh, just in Taiwan, I was it’s just not such a big thing. You know, I’m not. The rent was, you know, minimal. And I didn’t have a car. I didn’t have, you know, health insurance is it’s. Everybody has health insurance. You know, it’s not something you have to get through an employer. So it’s just a really different way of living.

 

Drew [00;16;18;21 – 00;16;33;25]: Got it. So coming back to the States for me or coming to the States as an adult, I felt really destabilized. I felt really behind. I felt there’s just a big opportunity to like, step into this. And yeah.

 

Ramit [00;16;33;27 – 00;16;54;04]: I’m getting a few clues that are starting to help me piece together what’s happening here. We have drew. She’s a life coach. She’s not particularly interested in pinning down specific numbers. Something could cost five bucks, 15 bucks, whatever. We’re in the same ballpark. And then we have Nicole, who is structured about her finances. She likes to project things.

 

Ramit [00;16;54;04 – 00;17;05;16]: She likes to calculate things. What do you think? Are these two views on money compatible? Let me know in the comments below.

 

Ramit [00;17;05;19 – 00;17;12;22]: Are the two of you building towards a joint vision of a future together? Have you discussed what that is?

 

Drew [00;17;12;25 – 00;17;30;07]: Very much so. The vision is to have more of a cushion and to retire with money, like put money in towards retirement. That’s it.

 

Ramit [00;17;30;10 – 00;17;38;24]: Vision. Wait, that’s like today and 30 years from now, what about anything in between? Yeah. Hold on. Hold. Nicole, I know you have a vision. Go ahead. Drew.

 

Drew [00;17;38;25 – 00;17;46;02]: Okay. Gosh, I really haven’t gone there in a little bit because I’ve been in the weeds. Yeah, and that feels emotional.

 

Ramit [00;17;46;02 – 00;17;51;09]: That’s okay. Put aside this vision that the two of you have talked about. What’s your vision?

 

Drew [00;17;51;10 – 00;18;14;25]: My vision is community. My friends, my family. It’s one of my favorite things ever to go somewhere. Like our last one. We did Joshua Tree for a week and just have a bunch of friends come and just be together. Nice. Just totally relax. I love doing that on Maui, I love hosting, I love just having friends come and just enjoying life together.

 

Drew [00;18;14;27 – 00;18;37;19]: I love really good food. We both love really good food and going out to amazing restaurants and trying different food. And yeah, like my dream, my vision for my life is that work is study. It’s it’s fulfilling. It’s pretty stress free. And I just get to enjoy my family and my community and nature in the beautiful places that we live.

 

Ramit [00;18;37;20 – 00;18;45;06]: Got it. Okay. Tell me about the role of the baby. Where does he fit in?

 

Drew [00;18;45;08 – 00;19;11;21]: He came so fast, we actually thought we would have a couple more years. We were successful on our first try, so that’s beautiful and amazing. And it’s happening really fast. He fits in. He’s going to join our lives like we’re bringing this baby into our lives, which are going to be filled with love and play and community. And we’re just we’re bringing him into our fold.

 

Drew [00;19;11;23 – 00;19;14;21]: You know, we just want to bring him with us, with whatever we want to do.

 

Ramit [00;19;14;22 – 00;19;20;17]: Got it. Okay, now, Nicole, I want to hear about your vision.

 

Nicole [00;19;20;18 – 00;19;55;20]: One of the things that actually attracted me most to drew was the fact that we have a similar vision in terms of so deeply valuing community and work life balance and wanting to live presently, not for the future. Okay, so even though we’ve talked a lot about retirement, I think that’s important. I think we are talking a lot about it because we do have a little bit of concern of when that will happen, but the primary thing for us is that we’re not waiting until retirement to enjoy our lives.

 

Nicole [00;19;55;22 – 00;20;24;28]: Like my goal for me personally, because I think yours is maybe even a better percentage of that, my goal is to not put more than 40% of my capacity as a human into work, and I want the other 60% for myself and my community and our child and our family. You know, I think that’s really valuable. I think sometimes we spend too much of our resources and time working.

 

Nicole [00;20;25;00 – 00;20;34;13]: And it’s not to say that I don’t want to work. You know, I do, and I enjoy my work, but I don’t want it to take up so much of our lives. I want us to live now.

 

Ramit [00;20;34;14 – 00;20;47;28]: Got it. Okay. That’s very helpful. Do you mind? Let’s take a look at the numbers. I want to understand what what we’re dealing with here. And then I think I’ll have a lot more questions. What was it like putting the conscious spending plan together?

 

Drew [00;20;47;28 – 00;21;09;04]: It was kind of stressful. Again, probably me, because I it’s hard to find specific numbers. I’m like, that’s about this number. And that’s good enough. And, you know, Nicole would encourage me to like go and look and like actually find the number, which was annoying and beneficial. Okay.

 

Ramit [00;21;09;08 – 00;21;11;03]: Yeah. And about for you, Nicole.

 

Nicole [00;21;11;05 – 00;21;17;10]: It was I had most of it already. And the parts I didn’t have, it was just fun I enjoyed it.

 

Ramit [00;21;17;11 – 00;21;19;02]: Did you talk about it together?

 

Drew [00;21;19;05 – 00;21;19;13]: Yeah.

 

Ramit [00;21;19;14 – 00;21;21;28]: Yeah, okay. We did. Any insights?

 

Nicole [00;21;22;05 – 00;21;24;23]: Yeah. I mean, it was very clear the source of our stress.

 

Ramit [00;21;24;24 – 00;21;25;24]: Which is what, in a.

 

Nicole [00;21;25;24 – 00;21;27;09]: Word, housing.

 

Ramit [00;21;27;11 – 00;21;29;08]: Okay.

 

Nicole [00;21;29;11 – 00;21;31;08]: You’ll see. Our goals are crazy.

 

Ramit [00;21;31;10 – 00;21;39;18]: All right. Okay. Let’s see. Nicole, can you read off the word in bold and the number next to it for this entire box, please?

 

Nicole [00;21;39;19 – 00;21;59;20]: Okay, so assets is 1,252,000. Investments, 183,764. Savings, 67,269. And debt 986,526.

 

Ramit [00;21;59;21 – 00;22;01;08]: Total net worth.

 

Nicole [00;22;01;11 – 00;22;06;01]: 516,000 and $507.

 

Ramit [00;22;06;02 – 00;22;08;08]: Great. Okay. What do you think about those numbers?

 

Nicole [00;22;08;12 – 00;22;25;29]: It’s okay. Yeah. It’s like pretty. Pretty okay. I’m more worried about the other numbers. I think the one thing that I am concerned about is that the savings, it doesn’t cover us for very long.

 

Ramit [00;22;26;00 – 00;22;29;11]: 67,000. Okay. Yeah. Drew, what do you think about these numbers?

 

Drew [00;22;29;12 – 00;22;37;01]: The debt number. I know that includes mortgage, but to see it laid out is astonishing.

 

Ramit [00;22;37;04 – 00;22;38;10]: Astonishing means what?

 

Drew [00;22;38;11 – 00;22;48;06]: Just shockingly high. I know it’s very American, and it makes sense in this context, and it feels astonishing.

 

Ramit [00;22;48;07 – 00;23;18;22]: Okay. Drew and Nicole, you both have mortgage or let’s say, a house worth approximately similar amounts, 644 or 608,000. Okay. Investments we have, let’s just say out of 183,000. The vast majority of that is Nicole’s. Would that be fair to say? Yeah. Okay. Same with savings and then debt. Looking at it. Drew has 11 a mortgage of 427.

 

Ramit [00;23;18;25 – 00;23;31;18]: Nicole has a mortgage of 545,000. Yeah. Okay, let’s keep going down the list this time. Drew, I would like for you to read off your gross combined monthly income, please.

 

Drew [00;23;31;21 – 00;23;34;02]: 24,725.

 

Ramit [00;23;34;03 – 00;23;37;21]: Okay, great. How much did you think you made per year?

 

Nicole [00;23;37;23 – 00;23;43;02]: I mean, I knew how much I made. This was the hard part. I didn’t know how much we made. Yeah.

 

Drew [00;23;43;04 – 00;23;44;18]: I didn’t think about it.

 

Ramit [00;23;44;19 – 00;23;47;25]: You didn’t think about it? Like, did you have a sense?

 

Drew [00;23;47;25 – 00;23;49;09]: I just knew it was enough.

 

Ramit [00;23;49;11 – 00;23;57;14]: Oh, okay. Okay. And in your application, do you recall what you wrote as your income?

 

Drew [00;23;57;20 – 00;23;59;06]: Oh, I do 200 k.

 

Ramit [00;23;59;07 – 00;24;03;00]: 200 k. The actual number is. Can you read that number off, please?

 

Drew [00;24;03;01 – 00;24;05;09]: $296,700.

 

Ramit [00;24;05;10 – 00;24;09;17]: Only off by $96,000 per year.

 

Nicole [00;24;09;18 – 00;24;11;20]: No big deal.

 

Ramit [00;24;11;23 – 00;24;15;07]: That’s wild. My job. What do you think about that?

 

Drew [00;24;15;14 – 00;24;17;07]: That’s our combined annual income.

 

Ramit [00;24;17;08 – 00;24;17;26]: Yes.

 

Drew [00;24;17;27 – 00;24;22;00]: I mean, that’s pretty nice. That’s a nice number.

 

Ramit [00;24;22;01 – 00;24;23;04]: So you didn’t know that till now?

 

Drew [00;24;23;06 – 00;24;23;16]: No.

 

Ramit [00;24;23;16 – 00;24;24;16]: No idea. Okay.

 

Drew [00;24;24;18 – 00;24;27;21]: Because it’s not on the sheet. It doesn’t normally come up in the CSP, right?

 

Ramit [00;24;27;22 – 00;24;29;07]: No, you have to. You have to buy 12.

 

Drew [00;24;29;08 – 00;24;29;14]: Yeah, I.

 

Nicole [00;24;29;14 – 00;24;30;01]: Didn’t realize.

 

Drew [00;24;30;04 – 00;24;31;16]: It’s price surprise.

 

Ramit [00;24;31;19 – 00;24;34;21]: That’s kind of interesting, right? Yeah. What did you think?

 

Nicole [00;24;34;23 – 00;24;57;01]: It’s not unexpected. Yeah. I knew exactly how much I made. And I had a sense of how much drew makes. Because I know how much rental income is generated and the small amount of coaching income. So I had a sense, but I didn’t know it was exactly that. I would have said probably 250, which is still pretty.

 

Ramit [00;24;57;03 – 00;25;05;24]: So we’re either 50 or $96,000 more than you thought. So are we done here? Are our problems solved?

 

Drew [00;25;05;26 – 00;25;07;16]: No. Scroll down. Kick us out.

 

Ramit [00;25;07;22 – 00;25;17;10]: But how can that be, though? If there’s a money problem and you’re now making $100,000 more than you thought, aren’t we done?

 

Drew [00;25;17;12 – 00;25;20;14]: That’s really cool.

 

Nicole [00;25;20;17 – 00;25;21;06]: No.

 

Ramit [00;25;21;13 – 00;25;21;23]: What do.

 

Nicole [00;25;21;23 – 00;25;25;23]: You call the fixed costs are almost all of that.

 

Drew [00;25;25;25 – 00;25;26;11]: Yeah.

 

Ramit [00;25;26;12 – 00;25;26;20]: I.

 

Drew [00;25;26;20 – 00;25;28;25]: See, because we’re still struggling every month.

 

Ramit [00;25;28;25 – 00;25;32;27]: I see. Yeah. Do you think if you made $50,000 more, the problem would be solved?

 

Nicole [00;25;32;28 – 00;25;33;06]: No.

 

Ramit [00;25;33;06 – 00;25;52;23]: Probably not. Yeah. So I’m glad, actually, that we have this massive disparity that we’ve all confronted, and we can laugh about it because we realized 100 K more than we thought, and it’s still not solving problems. Yeah. So let’s keep working our way down. Fixed costs. What’s that percentage there?

 

Drew [00;25;52;24 – 00;25;53;29]: 7770.

 

Ramit [00;25;53;29 – 00;26;12;24]: 777%. So that right there explains yeah. Feeling stressed out about money, having disagreements under a tree about money and on and on and on. That explains it right there. Yes. It tells me so much about a couple. When I see that number, we’ll come back and drill down on that. Let’s just look at the rest of these. Your investments are at 3%.

 

Ramit [00;26;12;27 – 00;26;34;15]: So I do want to note that you are contributing $1,200 a month to your pretax, which is great. And on top of that 3%, which is $600 a month, it’s nice, not particularly high, but when we combine them, it’s it’s fine savings at 10%. And then finally guilt free spending at 10%. Is that number accurate?

 

Nicole [00;26;34;17 – 00;26;52;08]: It’s actually really accurate. I know that you think that that’s not it’s like actually really accurate. It’s actually less than that. It’s been a lot less than that because we’ve been saving up a lot of money for legal funds. Okay. Because of our domestic partnership and our, our baby and adopting and stuff like that.

 

Ramit [00;26;52;09 – 00;26;56;07]: How much will it cost you for legal?

 

Nicole [00;26;56;12 – 00;27;01;05]: 17,000. 17,000? Yeah. And I’ve paid off 12 of it.

 

Ramit [00;27;01;06 – 00;27;05;28]: So 17,000 in total to have the baby. Yeah. Is that right?

 

Drew [00;27;06;00 – 00;27;14;19]: And includes estate planning. And, you know, we we’ve gotten very comprehensive with our paperwork for each other.

 

Ramit [00;27;14;20 – 00;27;28;07]: It’s good to know because, you know, some of this, like in a heterosexual relationship, you would do it. Yeah. Like some legal planning, but some of it not. And I think a lot of people don’t know what is involved with same sex parents having kids.

 

Nicole [00;27;28;07 – 00;27;28;27]: So expensive.

 

Ramit [00;27;28;28 – 00;27;31;04]: It’s a lot really expensive. Yeah, right.

 

Nicole [00;27;31;10 – 00;27;45;03]: We did it the cheap way. Yeah, yeah. We have a known donor that is a very nice human being who agreed to help us. Got it. And so we just had to pay the legal fee to do the court documents so that all of us are protected.

 

Ramit [00;27;45;08 – 00;27;48;08]: But we had cost tens of thousands, maybe hundreds of thousands.

 

Drew [00;27;48;08 – 00;27;48;19]: Could be.

 

Nicole [00;27;48;20 – 00;27;53;09]: Yes. Yeah. So, you know, 17,000 pounds, actually pretty affordable.

 

Drew [00;27;53;10 – 00;27;54;07]: Yeah.

 

Ramit [00;27;54;09 – 00;28;15;15]: I don’t think a lot of people know how much it costs to have a baby if you’re in a same sex relationship. I have a couple of friends. They had a baby through a surrogate, and it cost them over $250,000. That is shocking. And these are things that if you’re in a heterosexual relationship, you may never think about.

 

Ramit [00;28;15;15 – 00;28;37;13]: But I’m very, very grateful that on this podcast we get to meet people from all different communities, all different parts of life, all different financial means to show you what it takes in order for them to live their rich life. So I’m thankful that I get Drew and Nicole here to share some of the numbers, even though they are quite modest in their situation for how much it will cost them to have a baby.

 

Ramit [00;28;37;16 – 00;29;06;07]: Can we drill down on the fixed costs? Yeah. All right, so here we are at 77%. I would like to take a look at what these numbers include. Whoa. All right. So your rent slash mortgage, all of it combined is $10,022 per month. So I see two properties here. One for 4000, one for 6000 per month. So right there, that’s 40.5%.

 

Drew [00;29;06;10 – 00;29;07;23]: Yeah that’s crazy.

 

Ramit [00;29;07;24 – 00;29;11;15]: What do we know about that number? What should that number be. Generally speaking.

 

Nicole [00;29;11;23 – 00;29;12;29]: Less than a third.

 

Ramit [00;29;13;00 – 00;29;21;21]: Yeah less than a third. We say less than 28. But it can be 3233. And high cost of living areas which both of you live in. But at 40. What do we know?

 

Nicole [00;29;21;22 – 00;29;26;01]: It’s really high. It’s really high into all of our ability to do anything else.

 

Ramit [00;29;26;02 – 00;29;47;11]: Exactly. And in fact, I saw that in your application. You said we cannot eat out. Yeah, because of our housing. Yeah. Now, if you came here and you said, look, we’ve decided we are not eating out for the next five years because we’ve made a conscious decision that we want to have these properties for this reason, and we’ve run these numbers.

 

Ramit [00;29;47;13 – 00;29;53;23]: I would say amazing. You’ve done all the math. You’ve decided. Is that the case here?

 

Drew [00;29;53;25 – 00;29;59;26]: No. Okay. I don’t want to just exist in the two houses. Not doing anything.

 

Nicole [00;29;59;28 – 00;30;01;26]: Nicely put. Yeah, that’s.

 

Ramit [00;30;01;26 – 00;30;16;13]: I really like how you put that, because that actually describes how so many Americans live. Yeah. Let’s buy a big old house. And then we got to furnish it, and then we got to maintain it. And then for what? This is the American dream.

 

Nicole [00;30;16;15 – 00;30;17;24]: Yes. And then we’re trapped.

 

Ramit [00;30;17;25 – 00;30;24;20]: Then we’re trapped. Okay. So you do not want that? No. And yet, nevertheless, you are here spending 40.5%.

 

Drew [00;30;24;22 – 00;30;25;12]: Yeah.

 

Ramit [00;30;25;16 – 00;30;37;25]: On housing. Okay. Let’s look at the rest. Utilities, insurance. Car payments at 1125. That’s two cars. Two cars? Okay. Debt payments at 1071 a month. What’s that for?

 

Drew [00;30;37;26 – 00;30;41;09]: For my grad school, I. Yeah.

 

Ramit [00;30;41;10 – 00;30;42;26]: How much is your grad school debt?

 

Drew [00;30;42;27 – 00;30;45;17]: Oh, the debt I have right now is is 15 K.

 

Ramit [00;30;45;20 – 00;30;51;18]: And you’re paying $1,000 a month for that? Yes. Is that all you’re going to incur for grad school? No. How much is going to be.

 

Drew [00;30;51;24 – 00;31;01;09]: I’m about to have another ten, like 10,200 to to graduate. That’s what I’m going to need to pay by the end of May.

 

Ramit [00;31;01;11 – 00;31;03;19]: So 15 K plus 10-K. Yes. 25.

 

Drew [00;31;03;20 – 00;31;04;12]: K 25.

 

Ramit [00;31;04;13 – 00;31;05;22]: Okay. Where’s that money going to come.

 

Drew [00;31;05;22 – 00;31;07;06]: From I don’t know.

 

Ramit [00;31;07;08 – 00;31;08;26]: Are just.

 

Drew [00;31;08;27 – 00;31;10;05]: I don’t know okay.

 

Nicole [00;31;10;07 – 00;31;14;22]: Yeah that’s a question we actually have that we need to figure out.

 

Ramit [00;31;14;25 – 00;31;35;17]: Okay. We’ll see what we can. Okay. I love this combination here. I never I don’t mind people like tweaking the labels once in a while. That’s fine. But this one is great. Clothes slash home slash home repair and renovation. Seems like it would all be in the same aisle. Okay.

 

Drew [00;31;35;18 – 00;31;39;06]: It’s overalls and boots to do the their home repairs.

 

Ramit [00;31;39;07 – 00;31;42;20]: And it’s $1,400 per month.

 

Nicole [00;31;42;21 – 00;32;07;27]: Yeah, it was really, really high this last year because Drew’s house had a massive flooding incident happen, and the kitchen was built in probably the 70s and hadn’t been renovated ever. Yeah. And so it was like, well, if we have to rip out all of the flooring, we’re going to have to rip out the cabinets. We might as well replace the cabinets because it’s they.

 

Drew [00;32;07;27 – 00;32;08;22]: Were water damage.

 

Ramit [00;32;08;24 – 00;32;10;01]: How much did it cost? Drew.

 

Drew [00;32;10;06 – 00;32;11;01]: Ten.

 

Ramit [00;32;11;07 – 00;32;11;14]: Yeah.

 

Drew [00;32;11;15 – 00;32;13;06]: Ten is I think what we. Yeah.

 

Ramit [00;32;13;07 – 00;32;36;22]: Now let me ask you a question because I learned this on Twitter. People on Twitter told me that the landlord can simply pass on their costs to the tenants, and tenants are paying taxes. They’re paying their landlord’s mortgage, all maintenance. Now, were you able to just pass on those expenses to tenants?

 

Drew [00;32;36;23 – 00;32;37;23]: I sure wasn’t.

 

Ramit [00;32;37;24 – 00;32;52;10]: Wow. You’re telling me people online don’t know what they’re talking about? So shocking. So you basically ate the costs. The money had to come from somewhere. Yes. And you can try to raise rent, but you charge based on what?

 

Nicole [00;32;52;11 – 00;32;52;25]: Good value.

 

Ramit [00;32;52;26 – 00;32;53;25]: What the market will bear.

 

Drew [00;32;53;26 – 00;33;04;10]: And we actually can’t raise rent in Maui right now. Why is that? The Lahaina fires, they put in an emergency proclamation that you can’t. Still, it’s still active. Yeah. Yeah.

 

Ramit [00;33;04;12 – 00;33;05;06]: Okay. Wow.

 

Nicole [00;33;05;10 – 00;33;15;03]: Yeah. It’s actually there’s a lot of housing related things, and it’s good because it does need to realize. Yeah, we wouldn’t raise the rent anyways.

 

Drew [00;33;15;10 – 00;33;24;15]: But we what we did is like hired contractors at the lowest cost we could. And then we did a lot of the work ourselves. We laid the whole flooring ourselves.

 

Nicole [00;33;24;16 – 00;33;30;14]: Got it. Yeah. We did a lot of our own work. That’s cool. We became knowledgeable pretty fast.

 

Ramit [00;33;30;15 – 00;33;39;19]: All right, let’s look at the rest of it. Here we have. Subscriptions are fine. And then miscellaneous we have 15%. Did you adjust this?

 

Nicole [00;33;39;21 – 00;33;40;25]: We adjusted it down.

 

Ramit [00;33;40;27 – 00;34;00;06]: Yeah. Because you know your numbers. Yeah, fine, I believe it. All right. So we’re at a total of about 17,000 a month, which, you know, is high. Yeah. Is it high? I don’t know if you made $10 million a month, then. No it’s not. That’s relative, but it’s all relative. And so what we see is 77%. Yeah. That part is high.

 

Ramit [00;34;00;08 – 00;34;01;09]: Yeah. Okay.

 

Drew [00;34;01;10 – 00;34;11;06]: I mean, I guess I want to point out that starting next year, I will be able to be making more money. Like, I just haven’t been so far.

 

Ramit [00;34;11;08 – 00;34;15;10]: You currently make $10,450 a month.

 

Drew [00;34;15;11 – 00;34;15;27]: Yes.

 

Ramit [00;34;15;29 – 00;34;17;06]: That’s a pretty good salary.

 

Drew [00;34;17;07 – 00;34;20;00]: Well, still struggling.

 

Ramit [00;34;20;07 – 00;34;29;01]: You say? Maybe, maybe, maybe making more will positively affect the CSP. I think that’s true. Yes it will. Yes. How much are you going to make just so we can take a look?

 

Drew [00;34;29;02 – 00;34;38;22]: Well, if I go into a private practice, I can make whatever I need to make within the confines of, like, I can make whatever I need to make.

 

Ramit [00;34;38;23 – 00;34;42;12]: No, no. You can’t. I mean, okay. Make $1 million a month. Can you do it?

 

Drew [00;34;42;13 – 00;34;49;00]: No, I don’t need $1 million. What? I need to have that in 77%. Be what, 50? What would.

 

Ramit [00;34;49;00 – 00;34;51;10]: Be to 60%? Okay. How much do you need?

 

Drew [00;34;51;16 – 00;34;54;06]: Oh, like another 12.

 

Nicole [00;34;54;08 – 00;34;55;24]: What you need per month.

 

Ramit [00;34;55;25 – 00;34;59;07]: Hold on. Go ahead. Drew, I like hearing you talk me through this.

 

Drew [00;34;59;08 – 00;35;01;20]: Okay, I think I might need another 12 k.

 

Ramit [00;35;01;21 – 00;35;20;10]: Another 12 k on top of this. Let’s try that. So let me just I’m just going to since you make actually now that we’re looking into this I’m like wait a second. Wait do you pay any taxes. Yeah. Where’s the taxes on this. So here’s your gross, which is like what you get paid and your net is the same as your.

 

Drew [00;35;20;11 – 00;35;32;06]: $330 in taxes, apparently. No, I do pay taxes. I pay for point 5% on my local taxes. And then I don’t know what the government, the big government.

 

Ramit [00;35;32;07 – 00;35;36;08]: But like, why is this number so high? Like what’s happening here?

 

Drew [00;35;36;08 – 00;35;39;05]: I don’t know, Nicole didn’t fix that number for me.

 

Ramit [00;35;39;07 – 00;35;43;28]: Let’s just fix it right now. Nicole, what is the correct number here? Do you know.

 

Nicole [00;35;44;00 – 00;35;47;26]: My estimate would be.

 

Nicole [00;35;47;28 – 00;35;50;04]: Like 8000.

 

Ramit [00;35;50;06 – 00;35;59;04]: Maybe 8000. Let’s say that it could be 7000. 800. Whatever. 8000. Okay, I want you to watch what happens to the fixed cost number. Ready?

 

Drew [00;35;59;07 – 00;36;01;19]: Oh. No.

 

Ramit [00;36;01;20 – 00;36;02;04]: That’s.

 

Drew [00;36;02;04 – 00;36;04;04]: So. Maybe that’s why I kept it at ten.

 

Ramit [00;36;04;05 – 00;36;22;24]: Thousand for everyone listening and not watching. First of all, get on YouTube. Second of all, that fixed cost number jumped from 77% to 85%. Yeah. Now we have a more accurate representation. So it’s high. It’s really high. You are essentially spending more than you make.

 

Nicole [00;36;22;25 – 00;36;23;25]: Oh yeah.

 

Drew [00;36;23;28 – 00;36;24;08]: Yes.

 

Ramit [00;36;24;10 – 00;36;46;00]: It’s tough. Every month I’ve since the chill come over the room now. But I would rather have the honest truth here. Yeah. Oh, the numbers in the CSP are not right. I’m shocked, but actually, I don’t mind. I still see comments over and over saying why doesn’t remits team prescreened them and work with them to get their CSP?

 

Ramit [00;36;46;01 – 00;37;06;12]: Because I don’t want that. It’s hard to get your numbers in a correct form. I want to see how you do it, because then I can work with you and help you untangle your assumptions. I want to help you understand where you might have taken a wrong turn. Now, there are some clear changes that I see in the CSP, but I’m not going to sit here and lecture them about all the things they should do.

 

Ramit [00;37;06;13 – 00;37;28;21]: I need them to understand first how risky of a situation they are in. If it was just the two of them working stable jobs, making $296,000, they would be at incredible risk. But guess what? One of them is an entrepreneur. That’s risky. Oh, and they’re about to have a baby. That’s risky. They are compounding risk on top of risk.

 

Ramit [00;37;28;21 – 00;37;36;07]: And I want to show them how precarious of a situation they’re putting themselves in.

 

Ramit [00;37;36;09 – 00;37;46;25]: So you mentioned that you need to make. Why don’t we just double what you make and let’s just see what happens? Sure. Okay. 16,000. And that number drops to.

 

Drew [00;37;46;26 – 00;37;47;25]: 61%.

 

Ramit [00;37;47;25 – 00;37;59;27]: 61%. So you are correct. If you doubled your income tomorrow, you’re in a healthy financial position and you’d be able to do quite a bit. What do you think about that?

 

Drew [00;37;59;28 – 00;38;13;16]: I think honestly, I think it’s doable. Like as soon as I graduate, I really do feel like I could make that amount and it would just feel like so much relief. I think we could keep the two houses great.

 

Ramit [00;38;13;16 – 00;38;28;09]: So that is an option. So let’s put a pin in that, because at least according to the numbers, that part would work. Yeah. Well it would work if nothing were about to change in two weeks. Yeah. Is there something happening in two weeks?

 

Nicole [00;38;28;16 – 00;38;30;18]: I don’t know. Maybe a baby.

 

Ramit [00;38;30;19 – 00;38;34;07]: So, like, where does the baby fit in? Financially speaking.

 

Nicole [00;38;34;09 – 00;38;34;17]: Yeah.

 

Drew [00;38;34;18 – 00;38;34;25]: Wow.

 

Ramit [00;38;34;27 – 00;38;37;25]: Yeah. Have we. Have we modeled any of that.

 

Nicole [00;38;38;02 – 00;39;01;10]: A little bit? What’s really great is because we will be spending the first year and a half or so of this child’s life in Maui. There’s a really good community that’s set up there with really great community resources. So our grocery costs are actually going to go down quite a bit. Okay. We’ll have access to community support that will help with kind of like childcare and things like that.

 

Nicole [00;39;01;10 – 00;39;13;07]: So we’re not going to have to pay for child care as long as actually in either community. We’ve been really intentional, like the community here in Southern California. I have my parents that live ten minutes away. Great. And so.

 

Ramit [00;39;13;08 – 00;39;19;02]: So you’ll be able to have childcare, let’s say, at low cost, no cost. What are we talking about.

 

Drew [00;39;19;03 – 00;39;20;19]: For low cost?

 

Nicole [00;39;20;20 – 00;39;22;16]: Yeah, I would say low cost.

 

Drew [00;39;22;19 – 00;39;25;23]: Like an occasional babysitter is the only thing I think we might do.

 

Nicole [00;39;25;25 – 00;39;26;08]: Exactly.

 

Ramit [00;39;26;09 – 00;39;28;13]: So that’s like, how many times a week?

 

Nicole [00;39;28;15 – 00;39;29;18]: Not even once a week.

 

Ramit [00;39;29;22 – 00;39;30;08]: Not even once.

 

Nicole [00;39;30;08 – 00;39;31;05]: A month, a week.

 

Ramit [00;39;31;12 – 00;39;41;06]: What is that going to be, like, 200 bucks? 200 bucks? Yeah. Yeah. Okay. That’s quite nominal. Yeah. And diapers, food, that kind of stuff. What are we talking about?

 

Nicole [00;39;41;07 – 00;39;43;29]: So food in Maui will be free.

 

Ramit [00;39;44;01 – 00;39;45;29]: What? Why? This is like.

 

Drew [00;39;46;01 – 00;39;47;11]: Paradise Collective.

 

Nicole [00;39;47;12 – 00;39;48;13]: Yeah. So there’s.

 

Drew [00;39;48;13 – 00;39;54;25]: An amazing birth collective out there that offers new parents and expecting parents resources.

 

Ramit [00;39;54;26 – 00;39;55;13]: No kidding.

 

Nicole [00;39;55;14 – 00;39;55;24]: Yeah. Yeah.

 

Ramit [00;39;55;24 – 00;39;57;03]: It’s really funded.

 

Drew [00;39;57;04 – 00;40;00;26]: It’s a government funded thing. I think I don’t think it. Government grants.

 

Nicole [00;40;00;26 – 00;40;18;13]: There’s definitely grants. I’m not sure if they’re government grants, but they’re grants and they offer it to any expecting or recent parents. No kidding. And it’s a whole like you get a whole bag of groceries every week. You get access to free education classes. Yeah.

 

Drew [00;40;18;16 – 00;40;19;09]: Free massages.

 

Ramit [00;40;19;10 – 00;40;21;00]: What is it for moms? Just so everybody knows.

 

Drew [00;40;21;01 – 00;40;22;14]: Pacific birth collective.

 

Ramit [00;40;22;16 – 00;40;23;02]: That’s so cool.

 

Drew [00;40;23;02 – 00;40;23;25]: It’s so cool.

 

Ramit [00;40;23;26 – 00;40;46;26]: You know, like, the fact that I am, like, shocked. And and we live in the wealthiest country in the world really speaks to the fact of how misaligned we are. Yeah. The fact that, like, oh, two new parents getting groceries once a week, I’m like, what? But like, isn’t that something that we would be able to do or we should be able to do more broadly?

 

Nicole [00;40;46;27 – 00;40;52;14]: It’s amazing. It’s sad, actually, that we don’t have access to it here in Southern California.

 

Ramit [00;40;52;15 – 00;40;55;06]: Because I’ve never heard of anything like it, honestly. Yeah, that’s really cool.

 

Nicole [00;40;55;06 – 00;40;59;04]: And it’s not just like a bag of whatever’s left over from the grocery store.

 

Drew [00;40;59;05 – 00;40;59;28]: It’s really nice.

 

Nicole [00;41;00;07 – 00;41;18;23]: Really nice food. It’s all like, for the most part, locally grown. And they give you staples as well, so you can have a stock of rice and beans and canned goods and fresh vegetables, and they give you eggs and chicken. And it’s really an amazing resource.

 

Ramit [00;41;18;26 – 00;41;26;00]: It sounds like your fixed costs with baby are not going to change dramatically. Would that be fair to say?

 

Drew [00;41;26;03 – 00;41;34;01]: Yeah I don’t. I mean, barring any like medical stuff that the baby could have, that would be the only thing that could come up.

 

Ramit [00;41;34;06 – 00;41;36;09]: Well, both of you continue working full time.

 

Nicole [00;41;36;11 – 00;41;37;29]: Yes, yes.

 

Drew [00;41;38;00 – 00;41;40;11]: I mean, Nicole’s on sabbatical.

 

Nicole [00;41;40;12 – 00;42;05;23]: Yeah. So I’m lucky I. The timing was. I don’t know if it’s miraculous, whatever it is, but I was able to be on sabbatical for the next year. So after I give birth, I’ll have until the semester starts, and then I’ll have our regular unpaid leave. But I have enough sick time to take off 12 weeks. Right. And so I’ll take off the 12 weeks and I’ll start sabbatical.

 

Nicole [00;42;05;27 – 00;42;06;08]: And I’ll.

 

Ramit [00;42;06;08 – 00;42;08;20]: Have paid sabbatical. It’s paid out.

 

Nicole [00;42;08;23 – 00;42;18;02]: So I’ll get my full, regular pay for a full year to go do research, which I can do from home. Great. And I’m really excited about that.

 

Drew [00;42;18;03 – 00;42;25;11]: And then my income will stay the same. Yeah. Minus wherever that 10-K is going to come from to finish the school.

 

Ramit [00;42;25;12 – 00;42;41;04]: Got it. Yeah. And now going back to your income potentially increasing because it seems much more feasible now that I know we’ve talked about childcare and things like that. Doubling your income. Like you already make $10,000 a month. Yeah. So is doubling your income realistic?

 

Drew [00;42;41;06 – 00;43;00;04]: Yeah. Because if I’m working as a therapist in addition to being a coach, then I will be able to just see more clients and. Yeah, and I’m going to be doing my own private practice, most likely. So I get to charge what I need to charge.

 

Ramit [00;43;00;05 – 00;43;10;08]: Got it. Yeah. And you’re comfortable with that because earlier you mentioned, you know, not raising rent even if you could etc., etc.. Are you comfortable charging market rates or even higher than market rates?

 

Drew [00;43;10;09 – 00;43;35;00]: I am I my vision for my work and what it has been for coaching is that I offer like high ticket prices. But then there’s an there’s an expectation or knowing that those people are paying for lower income people who can’t afford care. So I will have a sliding scale essentially, where I will be able to do sessions for therapy for 30 bucks, 60 bucks, like a handful.

 

Drew [00;43;35;08 – 00;43;37;22]: And then there will be people covering that who have the funds.

 

Ramit [00;43;37;23 – 00;43;38;07]: Okay.

 

Drew [00;43;38;09 – 00;43;41;07]: So morally, ethically I think yes.

 

Ramit [00;43;41;09 – 00;44;11;11]: Good. Good answers. All right. My assessment on this is you have a high income $300,000 of high income and potentially going up considerably. So that’s great. You also have you’re in the enviable position of having a baby with very low increasing expenses like this is highly atypical. Amazing. And what I always tell people is there’s this golden period.

 

Ramit [00;44;11;12 – 00;44;31;08]: Seize it. Enjoy it, take some of the money, put it towards investments. Take some of the money, save it, take some of the money. Go out and eat. In a way, I’ve never had a golden period with a baby because baby costs always increased dramatically. But in your case, amazing. You’re both going to continue working. You both have child care, you both have food provide.

 

Ramit [00;44;31;09 – 00;44;50;06]: It’s like okay, amazing. So what do we want to do? I do agree that your investments are low. We can look at what it’s going to turn into in the future. Savings are okay. We can talk about what that means. You know, you currently have few months of emergency fund, right? I think with the baby, you.

 

Nicole [00;44;50;06 – 00;44;51;07]: Want it to be more.

 

Ramit [00;44;51;09 – 00;44;51;20]: Yeah.

 

Nicole [00;44;51;22 – 00;44;55;14]: Yeah, especially in this economy. I’d like it to be 12 months.

 

Ramit [00;44;55;14 – 00;45;19;23]: Exactly. We want to become a little bit more financially conservative when there are kids in the picture. So for sure. Yes. Good instinct. And then, you know. Well, what we see now is your guilt free spending is down to 1% or $273, which we know cannot be right, which is why we have a problem. You’re drawing. So we have a problem right now, but a potentially bright future.

 

Ramit [00;45;19;25 – 00;45;22;01]: How do we get from here to there? Yeah.

 

Drew [00;45;22;04 – 00;45;53;23]: I feel like taking this opportunity and like having unfortunately, having felt really squeezed and really stressed did prompt me to want to do so much better and to know the things and to prepare. So I think that having the goal set up for what’s happening and where we’re going to be putting money and what we’re going to be doing, especially when I can start making more income and then sticking to it.

 

Drew [00;45;53;23 – 00;46;02;10]: And unfortunately, I think we have to keep living really low this next year, like keep our spending super low.

 

Ramit [00;46;02;13 – 00;46;02;25]: Okay.

 

Nicole [00;46;02;26 – 00;46;30;29]: I think that realistically, what I’m seeing is that we’re probably going to have to draw down some on the savings if we want to not be miserable all the time. And I don’t think we want to be miserable all the time. And to be honest, that’s a little scary to me to know that we’re going to be going in reverse where I’d like I’d like to be increasing our savings amounts.

 

Nicole [00;46;31;03 – 00;46;43;25]: And I don’t know if it’s possible for us to increase our savings amount, because the biggest place to cut from is a place we either have to sell our house or not. I just don’t know where else to cut from, to be honest.

 

Drew [00;46;43;26 – 00;46;53;09]: So like, do we? Yeah. For the next year, do we just not cut and do we just. I never even thought about drawing from savings even more.

 

Ramit [00;46;53;11 – 00;46;53;20]: Well.

 

Drew [00;46;53;21 – 00;46;54;29]: That feels so scary.

 

Ramit [00;46;55;00 – 00;46;55;28]: That’s what you’ve been doing.

 

Nicole [00;46;55;28 – 00;46;56;27]: It’s exactly what we’ve.

 

Ramit [00;46;56;27 – 00;47;00;05]: Been doing. You’ve already been doing. You just didn’t acknowledge.

 

Drew [00;47;00;06 – 00;47;01;18]: Just wasn’t paying attention to it.

 

Ramit [00;47;01;19 – 00;47;14;29]: Yeah. Let’s explore what the options might be. Yeah. But first I kind of want to understand what got you here. Nicole, what do you remember your family saying about money when you were young?

 

Nicole [00;47;15;02 – 00;47;33;22]: So we didn’t really talk about it a lot out loud. My upbringing was primarily by my dad’s side of the family whose Chinese. And so we don’t really talk a lot about the details of anything. In fact being here is kind of terrifying.

 

Ramit [00;47;33;24 – 00;47;37;00]: You don’t talk about like what numbers, feelings?

 

Nicole [00;47;37;00 – 00;47;56;04]: What numbers or feelings or anything. And if you ask for help, it should only be like within family. Like even then. Like why? Why are you needing help? Are. It’s okay. Yeah. It’s pretty daunting being here. It’s exciting.

 

Ramit [00;47;56;05 – 00;48;01;00]: As well. You’re doing great. And I think it’s a very courageous to ask for help.

 

Nicole [00;48;01;01 – 00;48;12;06]: Yeah I agree. I mean, as a teacher, I want my students to ask for help. Yes. So I get the philosophy. And doing it yourself is always a little a little scary.

 

Ramit [00;48;12;07 – 00;48;18;15]: For sure. Did he teach you about savings, investments?

 

Nicole [00;48;18;17 – 00;48;40;19]: Saving to some extent. So when I was in high school, he actually. And this. I’m so thankful for this. He had me open up a credit card when I could so I could establish credit. And he told me, you have to put something on it every month, and then you just pay it off and every month you can put something on it, but you have to not ever put more on it than you have to pay it off.

 

Ramit [00;48;40;23 – 00;48;44;20]: It’s good lesson. Yeah. Okay. And have you ever gone into credit card debt?

 

Nicole [00;48;44;21 – 00;48;48;19]: I have actually. So.

 

Nicole [00;48;48;21 – 00;49;19;03]: When I was teaching adjunct and I was in grad school, I was teaching at like five different places. Basically, you have to an adjunct professor makes a lot less money than a full time professor. And so I was all over the place, and I knew that if I ever wanted to be able to teach full time, I was going to have to make some sacrifices so that my resume is the best, because there are so many people that are wanting full time academic jobs.

 

Nicole [00;49;19;08 – 00;49;41;06]: And so I was going to have to do unpaid labor, basically, so that I could make myself be a good candidate. And that’s what I did. So for a year, I cut the number of jobs that I worked, and I did unpaid labor at school, join university service, I served on academic Senate and things like that did work for my department.

 

Nicole [00;49;41;07 – 00;50;02;21]: Things that look really, really good on a resume and you can talk about, but they don’t pay you. Yeah. You know, and so I knew at that time and it was such a privilege that I was going to go into debt. And I didn’t want to ask my dad for help. So I took on credit card debt, and I said, I’m going to get a full time job this year.

 

Ramit [00;50;02;22 – 00;50;05;13]: Could your dad have afforded to help you?

 

Nicole [00;50;05;15 – 00;50;07;13]: Probably. Okay. Yeah.

 

Ramit [00;50;07;14 – 00;50;09;04]: Did you grow up middle class?

 

Nicole [00;50;09;04 – 00;50;10;25]: Wealthy middle class?

 

Ramit [00;50;10;27 – 00;50;14;17]: Yeah. What about your mom? What’s her role with money?

 

Nicole [00;50;14;20 – 00;50;42;02]: Well. Not much. My mom. She was diagnosed with cancer when I was four. And so for the next five years, she battled cancer. And she didn’t do much work. But we spent a lot of time making memories. Yeah. And so, yeah, I think what I learned was, like, memories are important. Experiences are important. Yeah. More than anything.

 

Ramit [00;50;42;04 – 00;51;04;18]: Nicole didn’t mention this explicitly, but her mom passed away when she was nine years old. And you can imagine what kind of effect that has on a child, especially as it relates to money. It’s no surprise that some people who lose a parent become even more concerned with safety and security. And I think that is part of what we see here with Nicole.

 

Ramit [00;51;04;20 – 00;51;25;12]: She likes to plan. She wants to make sure that under all scenarios, she is okay. And I think that’s fine. I think safety and security are a good thing with money. We have to take this need. In light of her relationship with drew, I don’t think drew particularly feels the need for safety and security with money. I think she likes it.

 

Ramit [00;51;25;13 – 00;51;39;17]: I think she wants to spend it on the things that are important to her. But how do we create a way for them to have a compatible view of money together? Drew, what about you? What do you remember your family saying about money when you were young?

 

Drew [00;51;39;24 – 00;52;07;14]: So I don’t remember anything being said. Well, my parents both came out of poverty, were from the south, Alabama and Louisiana, and came out of a lot of poverty and a lot of trauma, and they really made a life for themselves. And it’s really beautiful. They I saw for them that money gave them experiences. And we went out to eat at restaurants like three days a week.

 

Ramit [00;52;07;17 – 00;52;08;01]: Wow.

 

Drew [00;52;08;05 – 00;52;34;07]: You know, like, they they really wanted to live it up. And it was really. Yeah. It’s really beautiful to look back on that now. So I remember when I was a teenager, my parents bought my both my grandma’s tickets to Hawaii to go on a trip with us, and we spent like a couple of weeks on all the different islands with my two grandmas.

 

Drew [00;52;34;10 – 00;52;43;18]: So there was this like giving, giving to family kind of idea and concept and like just fun. Just embracing life and really living life.

 

Ramit [00;52;43;19 – 00;52;48;18]: How did your parents go from being in poverty to being able to eat out three times a week?

 

Drew [00;52;48;19 – 00;52;57;11]: They’re both really smart. Not that it has to do with being smart necessarily, and they just they worked hard. They really did just work hard.

 

Ramit [00;52;57;11 – 00;52;59;23]: And did you say you grew up in. Was it Taiwan?

 

Drew [00;52;59;25 – 00;53;14;14]: I grew up in Texas for ten years, and then I was in the Marshall Islands until I was 17. And then for college, I went to college in Alabama, where my mom all lives.

 

Ramit [00;53;14;16 – 00;53;14;23]: Oh, I.

 

Drew [00;53;14;24 – 00;53;23;11]: Got it so kind of all over. Wow. And that was part of their, their life. They were like, yeah, we can go live in the Marshall Islands. Let’s go. Let’s let’s live it up.

 

Ramit [00;53;23;14 – 00;53;29;16]: What messages about money do you think you took away from your upbringing?

 

Drew [00;53;29;19 – 00;53;46;14]: One that I really had to work through early on when I started working, was that you have to work hard to make money. That one. I saw my dad go through that and work his whole life. And to be able to retire. And now.

 

Drew [00;53;46;17 – 00;54;18;09]: To not be in the best shape, to do the things that he wants in retirement. And then the other one was that, unfortunately, money can be used as a tool for manipulation. So there’s a lot of like money can cause a lot of pain actually. And thirdly, to share money and just really like live it up as much as you can and enjoy life with the money that you do have.

 

Ramit [00;54;18;11 – 00;54;24;10]: The second point you made about money can be a tool of manipulation. Was that something you experienced?

 

Drew [00;54;24;10 – 00;54;28;25]: I watched it in my family.

 

Ramit [00;54;28;27 – 00;54;30;28]: Yeah. Would you learn from that?

 

Drew [00;54;31;01 – 00;55;02;27]: I learned a lot about what it means to be a woman and how women couldn’t have, you know, bank accounts of their own until the 70s and how, you know, a lot of women have been stuck in situations that they shouldn’t have had to have been in because there was no financial freedom. And how that’s still to this day, kind of carries on with some boomers and and other people.

 

Ramit [00;55;02;28 – 00;55;17;12]: Yes. You mentioned live it up money. You know, we’ve got to use it. I didn’t hear any money messages about saving for investing. Were those that messages you grew up with or. No.

 

Drew [00;55;17;13 – 00;55;41;10]: I did actually. You know, I did have some messages growing up around. I remember when I started university, my dad told me, never take out a loan. Do whatever you can to not take out a student loan. He taught me. Let’s see, when I bought my first car, he. He said, never buy a car new, okay? Always buy a used car.

 

Drew [00;55;41;14 – 00;55;45;06]: They will depreciate heavily when you drive them off the lot.

 

Ramit [00;55;45;09 – 00;55;47;26]: You have a used car or you have a new car.

 

Drew [00;55;47;27 – 00;55;49;14]: No, I have a I bought my car. New.

 

Ramit [00;55;49;15 – 00;55;55;04]: You have a new car and you have a student loan. Okay. Zero for two so far. What else?

 

Drew [00;55;55;06 – 00;56;10;14]: Sorry, dad. Actually, I vaguely remember this. I think he offered myself and my siblings at some point a sum of money, like 150 bucks or something. If we would read. I think it was a Dave Ramsey book.

 

Ramit [00;56;10;16 – 00;56;12;18]: All right. And did you wait?

 

Drew [00;56;12;20 – 00;56;14;02]: Warren Buffett’s the good one, right?

 

Ramit [00;56;14;03 – 00;56;14;27]: Yes.

 

Drew [00;56;14;29 – 00;56;16;20]: Maybe it was Warren Buffett.

 

Ramit [00;56;16;25 – 00;56;20;07]: That’s actually pretty. That pretty much encompasses. He’s a good one.

 

Drew [00;56;20;10 – 00;56;25;28]: He has a good one, right? He’s like a family man. He lives, like, below his means or something. Goes to show you. I probably didn’t read.

 

Ramit [00;56;25;28 – 00;56;32;25]: The book. Yeah. I mean, okay, so the big takeaway is he offered us money and we still didn’t do it. All right. Got it.

 

Nicole [00;56;32;27 – 00;56;36;09]: Which is funny because you love reading. You will read almost anything.

 

Drew [00;56;36;09 – 00;56;40;27]: And I’ll listen to this financial like my book. Yes. You have. I have.

 

Nicole [00;56;41;01 – 00;56;43;13]: We read it together. Wow. That was like one of.

 

Ramit [00;56;43;13 – 00;56;48;11]: Our the only guests on this podcast you have ever read my book. This is like, let me just soak it in for a second.

 

Drew [00;56;48;13 – 00;56;50;06]: It’s really good to get a gold star.

 

Ramit [00;56;50;08 – 00;56;59;27]: Yeah. What money messages do you both find that you grew up with that you are now bringing to this relationship?

 

Nicole [00;56;59;28 – 00;57;08;03]: I think the biggest one is that while money is useful, it’s also really scary.

 

Ramit [00;57;08;06 – 00;57;10;08]: And how does that show up here?

 

Nicole [00;57;10;10 – 00;57;25;13]: I’m anxious. I’m so anxious about having enough savings and retirement and the economy and not knowing where to put things, and like what happens if the AI bubble bursts and all of a sudden everything’s gone, you know.

 

Ramit [00;57;25;16 – 00;57;27;15]: You normally anxious in other parts of life?

 

Nicole [00;57;27;18 – 00;57;29;29]: Yeah. I’m a more anxious person.

 

Ramit [00;57;30;00 – 00;57;33;16]: Got it. Okay. That’s helpful to know. Drew, what about you?

 

Drew [00;57;33;20 – 00;57;54;03]: There’s something about, like philippensis in a way. Not that I would say. I’ve. I see my family like that, necessarily, but that seems to be what I’ve internalized. Like, I’m not taking it too seriously. Wasn’t really focused on it. I kind of always was like, it’ll work out.

 

Ramit [00;57;54;05 – 00;57;57;14]: Yeah, it’ll work out. I can approximate it.

 

Drew [00;57;57;15 – 00;58;01;02]: I can approximate it. Yeah. It doesn’t. The actual number doesn’t really matter.

 

Ramit [00;58;01;02 – 00;58;02;28]: It’s your religious.

 

Drew [00;58;03;00 – 00;58;06;19]: Sort of, but not really. But yes, for sure. What religious.

 

Ramit [00;58;06;20 – 00;58;11;08]: Hold on. It’s. That was a very interesting answer. What is that?

 

Drew [00;58;11;09 – 00;58;14;24]: Well, my dad was excommunicated from the church when I was five.

 

Ramit [00;58;14;25 – 00;58;15;03]: Okay.

 

Drew [00;58;15;04 – 00;58;16;28]: So it was all around.

 

Ramit [00;58;16;28 – 00;58;18;20]: Me, even though he was excommunicated.

 

Drew [00;58;18;20 – 00;58;23;05]: Exactly. And then all my grandparents still went, and they were highly religious. And so, yeah.

 

Ramit [00;58;23;07 – 00;58;33;04]: The reason I asked is when you say, you know, a bit flippant, one thing about people who grow up religious, they often say, God will provide and they.

 

Drew [00;58;33;04 – 00;58;33;13]: May know.

 

Ramit [00;58;33;15 – 00;58;35;22]: Yeah. Oh. Familiar phrase.

 

Drew [00;58;35;23 – 00;58;36;10]: Oh, yeah.

 

Ramit [00;58;36;11 – 00;58;48;00]: Okay. Implication being, we don’t need to pay particular attention. We’re doing the right thing. We’re good people. We’re faithful. God will provide.

 

Drew [00;58;48;01 – 00;59;09;17]: Yeah, definitely not relating to the God part, but and I do I do feel like I have a lot of privilege in the world. And that privilege also will provide sometimes, you know, it’s like I, I feel that I’ve seen it to be true. So not just God, but privilege.

 

Ramit [00;59;09;18 – 00;59;10;13]: Got it.

 

Nicole [00;59;10;15 – 00;59;19;18]: Yeah. I’ve heard you say literally that you just trust that it’ll work out. You trust that it will happen, that somehow the money will come.

 

Ramit [00;59;19;19 – 00;59;21;19]: It’s the secular version of God will provide.

 

Drew [00;59;21;20 – 00;59;26;13]: It is. Or it could be like the hippie like granola. The woo version.

 

Ramit [00;59;26;14 – 00;59;27;10]: Life will provide.

 

Drew [00;59;27;10 – 00;59;28;08]: The universal.

 

Ramit [00;59;28;09 – 00;59;46;25]: The universal purpose. Yes. Okay. Wow. I think you both really nailed it with the messages you bring. And when you hear each other describe those messages. Does it make sense? Some of the things we see on the CSP, some of the things that you disagree about and are worried about.

 

Nicole [00;59;46;26 – 00;59;47;22]: Totally.

 

Ramit [00;59;47;23 – 01;00;21;25]: Yeah. Perfect sense. I actually love it. Yeah. It’s interesting to hear Drew’s upbringing living in multiple countries, very ambiguous relationship with money, and I think that can be really positive. It allows you to deal with ambiguity. Well, probably make friends really easily, but it can also make you chafe at the idea of structure. But if you want to live a life where you respect money, where you’re not just subsisting, but you’re actually thriving, giving yourself lots of opportunity, plans are actually a good thing.

 

Ramit [01;00;21;27 – 01;00;28;17]: They can be fun. That’s what I’m hoping to show them today.

 

Ramit [01;00;28;19 – 01;00;36;14]: In the application you mentioned, you know, hey, we we struggle to go out to eat things like that. What happened?

 

Nicole [01;00;36;17 – 01;00;38;15]: Drew went to school.

 

Drew [01;00;38;18 – 01;00;39;04]: Yeah.

 

Nicole [01;00;39;04 – 01;00;40;14]: And then things happened.

 

Drew [01;00;40;14 – 01;00;54;09]: And then the flood happened, and it. Yeah, it just all. There was a tipping point and. Oh, and there were emergencies that happened basically, like there was a plumbing issue at the house that we had just bought in Southern California.

 

Nicole [01;00;54;14 – 01;00;55;02]: Oh, yeah.

 

Drew [01;00;55;06 – 01;00;56;23]: Which was like 35.

 

Nicole [01;00;56;24 – 01;00;57;29]: No, it was 29, but.

 

Drew [01;00;58;06 – 01;00;59;18]: 29,000.

 

Nicole [01;00;59;19 – 01;01;13;05]: Yeah. I had to replace the sewer. Wow. All the way into the street. It was a disaster. If you are buying a house, make sure that you get a full inspection. And if they don’t get the sewer scope through all the way, do not go forward with this house.

 

Ramit [01;01;13;07 – 01;01;33;11]: I don’t even know what any of those words mean, but. Yeah. Yes. Get your sewer scopes checked. America. Yes. Okay, good. Good lesson. Okay, so. So several maintenance items came up that were unexpected. Yes. You went back to school. Which? Which implies what? You. It’s costing more money.

 

Drew [01;01;33;13 – 01;01;34;18]: Yeah, it’s.

 

Ramit [01;01;34;19 – 01;01;36;12]: But your finances are separate. Correct?

 

Nicole [01;01;36;13 – 01;01;56;21]: Our finances at this point are like kind of separate. But we help each other whenever we need, like we share an emergency fund and things like that. In terms of legally were each other’s. We have power of attorney. So our names may not be on each other’s bank accounts, but we can do whatever we want with each other’s bank accounts.

 

Nicole [01;01;56;22 – 01;01;57;03]: Okay.

 

Ramit [01;01;57;06 – 01;01;59;28]: Yeah. So you are legally. Yes. Combined.

 

Drew [01;01;59;28 – 01;02;00;19]: Combined? Yes.

 

Ramit [01;02;00;20 – 01;02;01;20]: Yeah. Got it. Okay.

 

Drew [01;02;01;22 – 01;02;21;08]: But I think what’s been happening is my expenses through school. And then the Maui house. I went through my emergency fund because of the things that came up. And then, you know, Nicole was essentially covering that from her side.

 

Ramit [01;02;21;09 – 01;02;23;17]: What would you have done if you were not together?

 

Drew [01;02;23;20 – 01;02;29;18]: I would say I probably would have reached out to some contacts.

 

Ramit [01;02;29;21 – 01;02;30;19]: To do what?

 

Drew [01;02;30;21 – 01;02;33;05]: To ask for money.

 

Ramit [01;02;33;07 – 01;02;38;20]: Oh, why don’t you just reach out to them right now? Who are these contacts?

 

Nicole [01;02;38;23 – 01;02;40;17]: Yeah, I want to know.

 

Drew [01;02;40;19 – 01;02;45;15]: I’m thinking. Well, I co-own the house with a friend. We bought the house together.

 

Ramit [01;02;45;17 – 01;02;46;05]: Okay. 50.

 

Drew [01;02;46;06 – 01;02;46;23]: 50. 50.

 

Ramit [01;02;46;24 – 01;02;50;12]: 50. They cover 50% of the expenses.

 

Drew [01;02;50;14 – 01;02;54;00]: No, but all of the rental income comes to me.

 

Ramit [01;02;54;01 – 01;02;56;26]: What’s the split? Like, how do they get money?

 

Drew [01;02;56;28 – 01;02;58;02]: If we sell the house.

 

Ramit [01;02;58;03 – 01;02;59;09]: How much do they get?

 

Drew [01;02;59;10 – 01;02;59;28]: 50.

 

Ramit [01;02;59;29 – 01;03;00;11]: 50.

 

Drew [01;03;00;12 – 01;03;02;01]: Well, we don’t know yet.

 

Ramit [01;03;02;03 – 01;03;02;23]: Oh.

 

Nicole [01;03;02;25 – 01;03;03;17]: 50%.

 

Drew [01;03;03;24 – 01;03;04;23]: 50%.

 

Ramit [01;03;04;24 – 01;03;08;07]: What is this? What’s happening right now? Well.

 

Drew [01;03;08;10 – 01;03;23;08]: It’s like it’s it’s, I guess if if I invest a lot more time and if I end up investing personal money that doesn’t come from the rental incomes, then I would expect to be compensated for.

 

Ramit [01;03;23;09 – 01;03;25;16]: That. Was the sell the house. No contract?

 

Drew [01;03;25;17 – 01;03;27;13]: No. Just vibes.

 

Ramit [01;03;27;15 – 01;03;33;17]: Okay. What the heck? Like, I was like, how does a life coach sign a contract? And the answer is, they don’t.

 

Drew [01;03;33;18 – 01;03;37;17]: Know you’re just with God, with the universe. Like I trust.

 

Ramit [01;03;37;18 – 01;03;46;14]: Like, there’s a lot of it would seem. Perhaps it would make sense if I get a higher percentage. Like, what does the contract say?

 

Drew [01;03;46;22 – 01;03;50;25]: Look, this was five years ago. Me? She was a different human.

 

Ramit [01;03;50;27 – 01;03;51;20]: Okay, okay, okay.

 

Drew [01;03;51;21 – 01;03;52;15]: I wouldn’t do it the.

 

Ramit [01;03;52;15 – 01;03;54;01]: Same way. About to have a heart attack right now.

 

Drew [01;03;54;02 – 01;03;55;14]: Everybody do your contracts.

 

Ramit [01;03;55;15 – 01;03;59;03]: Okay. So. And do you talk to this person? Like, are they active?

 

Drew [01;03;59;04 – 01;04;00;11]: We’re so close. Oh.

 

Ramit [01;04;00;12 – 01;04;12;06]: Best friend. Okay. Got it. I need to get my game face back on. All right, so what’s the vision for where you live going forward?

 

Drew [01;04;12;07 – 01;04;36;16]: Yeah, I think our vision is to be bicoastal because Nicole’s job is amazing. So really, like, taking advantage of that. While that’s possible, when I actually met her, I encouraged her. I was like, do you want to just quit and move to Maui? Because I was living in a different world, and I’m so glad that she was like, no, we need retirement.

 

Nicole [01;04;36;22 – 01;04;41;11]: It’s really nice to have paid for health benefits. Yeah, I have a pension.

 

Ramit [01;04;41;12 – 01;04;45;19]: Yeah. So you’re planning to keep at least live in both cities, right?

 

Drew [01;04;45;21 – 01;05;03;14]: Live in both places. Keep our keep working, but keep our work stress levels at 40% or lower. You know, like, not expending too much energy for work and then just enjoying, like, they’re both beautiful places and they offer so much and just really, like, enjoying our life.

 

Ramit [01;05;03;15 – 01;05;13;03]: Okay, cool. Question. Because babies coming, at a certain point, there’ll be school questions. Have you thought that far ahead?

 

Nicole [01;05;13;05 – 01;05;18;18]: We’ve had conversations. It’s going to be a conversation probably for the next few years still.

 

Drew [01;05;18;20 – 01;05;28;20]: Yeah. Which there could be like school expenses in the future possibly. Or we would do public school. These are just big conversations that need to be had.

 

Ramit [01;05;28;21 – 01;05;44;20]: Like the by coastal thing I think is awesome for adults. Yeah, I know my wife and I are bicoastal, and even if you have like a two year old three year old. Okay. Yeah. What about five? Eight? Certainly like 13.

 

Nicole [01;05;44;21 – 01;05;45;12]: Yeah, yeah.

 

Drew [01;05;45;14 – 01;05;48;21]: My.

 

Drew [01;05;48;23 – 01;05;52;15]: Feeling about it is see where the world’s at?

 

Ramit [01;05;52;17 – 01;06;00;28]: Let’s assume the world’s that where it is today. Meaning there’s public school, private school options, etc.. What would you do if you had, like a 13 year old today? What would like.

 

Drew [01;06;01;00 – 01;06;03;25]: To have them here for school year.

 

Ramit [01;06;03;28 – 01;06;07;23]: Here in Southern California for the school year and then summer.

 

Drew [01;06;07;26 – 01;06;09;25]: Maui summer? Yeah.

 

Nicole [01;06;09;25 – 01;06;22;11]: Okay. I have to be here for the school year. I teach during the school year, so it kind of works out that I teach. Yeah, because for the most part, our schedules will fairly align and then summers will get to go to Maui.

 

Ramit [01;06;22;12 – 01;06;28;19]: I like that plan. Your visions of a rich life. Are they compatible with each other?

 

Nicole [01;06;28;22 – 01;06;29;10]: I think so.

 

Ramit [01;06;29;11 – 01;06;38;07]: Yeah. Okay. Yeah. The part about retiring at roughly 60 or so. Have you put numbers behind that?

 

Nicole [01;06;38;07 – 01;07;07;01]: I have, but it’s gotten off track in the last couple of years. Yeah. So I was looking to basically max out my 403 Be every year, and I would have easily actually been able to retire earlier than 60 because my pension would have covered part of it, and then my 403 B would have matured to a decent place, so I could have pulled 4% and been fine.

 

Nicole [01;07;07;03 – 01;07;24;22]: But but now I’m not putting nearly as much into my 403 B as I used to be.. Because because of the well, it’s not the house as much as. It’s like we’re covering the renovation and the schooling costs.

 

Ramit [01;07;24;24 – 01;07;26;03]: Although we know that.

 

Nicole [01;07;26;06 – 01;07;27;01]: That will end.

 

Ramit [01;07;27;03 – 01;07;29;27]: That will end. In fact, your income will go way up.

 

Drew [01;07;29;28 – 01;07;30;29]: Yeah. Yeah, exactly.

 

Nicole [01;07;30;29 – 01;07;42;09]: So I’m hoping it can change and shift, but I figure the like couple of years of pretty low investing. Maybe moving my goal from 55 to 60 is reasonable.

 

Ramit [01;07;42;11 – 01;08;08;02]: Two years in the grand scheme generally does not affect people as much as they think. I know that investing early makes a huge difference. Yes, but just in general, if people take a year or two and they cut their contributions by 50, sometimes even 100%, and then they go back to where they were, truthfully, over the course of 30 years, it makes a little difference, but not that big.

 

Ramit [01;08;08;02 – 01;08;25;17]: We’re talking about small percentage amounts. Yeah. So I like to put everybody at ease, especially like young parents. They tend to freak out because they’re like, oh my God, I have to cut my contribution rate, blah blah blah blah blah. It’s okay. For a year or two. Sometimes people have very high temporary expenses. Okay. Loosen up a little bit.

 

Ramit [01;08;25;18 – 01;08;41;01]: Give yourself a little bit more. Maybe save a few percentage points less, invest a little bit less. Feel good, but make a plan within 18 to 36 months. We are going back to this percentage and honor it and you will be effectively back on track.

 

Nicole [01;08;41;04 – 01;08;56;21]: That feels really relieving. Yeah, honestly. Yeah. I’ve had so much anxiety being in the red I guess is what the. Yeah, for the last bit of time. And it’s like, how are we ever going to catch up again? Yeah.

 

Ramit [01;08;56;26 – 01;09;05;26]: I don’t like catching up. That whole thing catching up puts you in a bad mental state. Yeah. You’re a new person today. Let’s live in this chapter of life.

 

Nicole [01;09;06;01 – 01;09;06;08]: Yeah.

 

Ramit [01;09;06;14 – 01;09;28;03]: Okay, cool. I do want to look at the numbers. My concern is not that. Nicole, you will have enough for retiring. That’s not my concern at all. My concern is that the two of you do not talk about money at the same level. And that has to happen. It has to. So that is what I would like for the two of you.

 

Ramit [01;09;28;04 – 01;09;28;22]: What do you think?

 

Nicole [01;09;28;23 – 01;09;29;05]: I would.

 

Drew [01;09;29;05 – 01;09;31;04]: Love that. That feels so good. Okay. Yeah.

 

Ramit [01;09;31;05 – 01;09;59;12]: Okay. So this is what we’re going to do in a second. I’m going to put your CSP back up on screen. I want you to build a plan where you don’t need every single thing to go right in order to be okay. Yes, there’s a classic mistake people make. They’re like, okay, in order for us to live our rich life and have our numbers where they need to be, we just need to triple our income, cut our expenses, never get sick, never have any maintenance like, oh no, no, no, no no.

 

Ramit [01;09;59;13 – 01;10;00;14]: I’m like, what?

 

Nicole [01;10;00;16 – 01;10;01;14]: Yeah.

 

Ramit [01;10;01;16 – 01;10;10;19]: When we’re in planning mode, we always plan as if life is going to be perfect. But when we live life, it’s never perfect. And you both know that. Yeah. How many things have broken in your house?

 

Drew [01;10;10;23 – 01;10;11;12]: So many things.

 

Ramit [01;10;11;14 – 01;10;11;21]: Yeah.

 

Nicole [01;10;11;22 – 01;10;12;29]: It’s been so stressful.

 

Ramit [01;10;13;00 – 01;10;25;17]: Yeah. Okay. So we’re going to be conservative in our planning, which might mean that we have to make some decisions that might feel like a little uncomfortable now, but they are a lifetime of comfort.

 

Drew [01;10;25;19 – 01;10;25;25]: 

 

Ramit [01;10;26;02 – 01;10;37;06]: Okay okay. Let’s throw up the CSP on screen. Our goal is to get your fixed costs to 60%.

 

Nicole [01;10;37;07 – 01;10;37;24]: Okay.

 

Drew [01;10;37;25 – 01;10;38;13]: Okay.

 

Ramit [01;10;38;15 – 01;10;44;06]: All right. What would you like to do to get this number close to 60%.

 

Nicole [01;10;44;07 – 01;10;45;13]: I have no idea.

 

Drew [01;10;45;15 – 01;10;54;02]: I mean, I’m honestly like, I’m just almost like, we just hold on for the ride. And then starting in May of next year, I start making more money.

 

Ramit [01;10;54;04 – 01;11;16;25]: That is one possibility. If you take that risk and everything goes well from now until then, let’s just say about a year from now, then your fixed cost will come down to roughly 60% and you will have plenty of money. In fact, I’ll show you what it looks like to be able to assign. Let’s take a look. I’m just going to.

 

Ramit [01;11;16;26 – 01;11;32;25]: For easy math, I’m going to double your net. You’re now at 61% fixed costs. If we go all the way down, you have $8,000 per month to play with. Yeah. I mean, that’s huge. Why don’t we say, what would you do with that $8,000 per month.

 

Drew [01;11;32;28 – 01;11;35;25]: Half and half. Half savings and investments.

 

Ramit [01;11;35;26 – 01;11;38;03]: Okay. What about guilt free spending?

 

Drew [01;11;38;03 – 01;11;41;11]: So, yeah, we would need, like, a couple thousand for guilt free.

 

Ramit [01;11;41;12 – 01;11;41;26]: Okay.

 

Nicole [01;11;41;27 – 01;11;44;13]: Yeah, I would say reasonably, if we wanted to.

 

Ramit [01;11;44;13 – 01;11;52;16]: Hold on. Notice what’s happening here. You’re about to give me your mathematical answer. Correct. And isn’t part of what we want to change is this dynamic? Yes. Okay. Go ahead. Drew.

 

Drew [01;11;52;17 – 01;12;01;05]: Yeah, I feel like okay, let’s say we’re spending 22. We’re investing 22 and then we’re savings are 22.

 

Ramit [01;12;01;06 – 01;12;13;10]: Okay, I like it I like where are you going? So I put 2200 for savings. Yeah. Your investments are at 10%. Your savings are at 16%. And you still have $3,800 a month for guilt free spending.

 

Nicole [01;12;13;13 – 01;12;14;07]: I love that.

 

Drew [01;12;14;08 – 01;12;22;15]: Maybe we just whatever’s left over at the end of the month, we just put it toward a fund. Like an investment fund or something.

 

Ramit [01;12;22;16 – 01;12;31;27]: Remember how they. Have you ever heard that phrase pay yourself first? Yeah, pay yourself first means we put the money in investments first, and whatever’s left, we can spend it.

 

Drew [01;12;31;29 – 01;12;40;18]: Yeah. So we would have to know, like, what we’re spending, what we want to spend every month, and then basically. Yeah, invest and save the rest.

 

Ramit [01;12;40;20 – 01;12;56;06]: Yes, that’s one way to look at it. But again, I want to flip it. I what I like to do is I like to say how much do we want to save and invest every month. And whatever’s left is what we get to spend because we pay ourselves first.

 

Drew [01;12;56;07 – 01;13;09;22]: So this is like a, a mind shift that it’s almost like it’s having a hard time landing in me. What you’re saying. You’re saying no. The money that you have, like guilt free spending.

 

Ramit [01;13;09;23 – 01;13;34;09]: So first off, know how much you take home every month. Okay, $28,000 per month. So we’ve got this much to distribute. Okay. Next, we know that we have some guideline numbers. Less than 60%. You’re at 61. I’m fine with that. Okay. These numbers, we like to see them roughly at 10% or so. Okay. In this case you’re at 24 and 16.

 

Ramit [01;13;34;09 – 01;13;35;10]: What does that tell you?

 

Drew [01;13;35;11 – 01;13;36;05]: That we have a lot.

 

Ramit [01;13;36;06 – 01;13;48;22]: You have a lot. Yeah. And if you want to put an even finer point on it, you can actually calculate how much you will have at age 55, 60, 65. So you can tell if you need to tune that up. That becomes very precise.

 

Drew [01;13;48;24 – 01;13;57;18]: What if we know how much we need by 60, and we know we have 20 years to go hard on investments, then we could just choose that number and put it aside.

 

Ramit [01;13;57;19 – 01;14;20;18]: I like that. I like that’s that’s how you do it. Yeah, exactly. That’s exactly how you pay yourself first. So I will say that I’m just going to intuitively suggest this investment number probably needs to be higher than 10%, but lower than 24%. If I had to guess, we’re talking about the range of like 1,415% ballpark. Okay.

 

Drew [01;14;20;19 – 01;14;22;13]: So say 1515.

 

Ramit [01;14;22;13 – 01;14;28;02]: So that means you have some money that you can play with and move elsewhere, right? Where would you like to move it?

 

Drew [01;14;28;03 – 01;14;29;16]: You mean in the investments?

 

Ramit [01;14;29;18 – 01;14;30;24]: Nope. In.

 

Drew [01;14;31;01 – 01;14;31;14]: Oh.

 

Ramit [01;14;31;16 – 01;14;33;01]: Like I could go to savings. Oh, right.

 

Drew [01;14;33;02 – 01;14;37;24]: Because we’re going from 24 to 15. So yeah, I mean, that could be our guilt free.

 

Ramit [01;14;37;24 – 01;14;51;10]: Spending, I agree. So let’s just for the sake of math, let’s take 2200 bucks from investments and move it down here. And that gives you 8% and it gives you 16%. That’s great.

 

Drew [01;14;51;11 – 01;14;54;06]: That’s pretty good. And I feel like 22 is doable.

 

Ramit [01;14;54;07 – 01;14;56;16]: Could you do that 2200 bucks.

 

Nicole [01;14;56;18 – 01;15;06;15]: We could do it. And I think we’d be really happy and super comfortable given the cost of living. If it was three.

 

Ramit [01;15;06;16 – 01;15;28;12]: Oh, you would like it to be higher, I like that, okay. Yeah, I like I like advocating for yourself. That’s great. The good news is your savings doesn’t need to be saving forever. No. So you’re currently saving 4400 a month. And just for easy math, 4400. It’s going to take you a while because your fixed costs are high.

 

Ramit [01;15;28;13 – 01;15;32;01]: Very high. So you’re going to be doing that for a long time. Years. Fine.

 

Drew [01;15;32;01 – 01;15;34;22]: Because we need like 12 months of fixed costs.

 

Ramit [01;15;34;24 – 01;16;00;24]: Yeah. You need $200,000 for 12 months. It’s a lot. It’s a chunk of change. But I will say this, it sounds outrageous to a lot of people listening to like, $200,000 in a savings account. But when you have a family unit that is making $300,000 a year and your expenses are high, there’s a lot of things moving, then you need liquidity.

 

Ramit [01;16;00;28 – 01;16;15;08]: You need cash. Because if something goes wrong, like a $40,000 flood, what are you going to get it? Put on a credit card? No way. You need to have liquidity. That’s what this is. So it will take you years to get there. But there.

 

Nicole [01;16;15;08 – 01;16;17;03]: You go. I’d love to see you.

 

Ramit [01;16;17;03 – 01;16;18;04]: Want to see some?

 

Nicole [01;16;18;06 – 01;16;19;23]: Yeah. What you were asking for.

 

Ramit [01;16;20;00 – 01;16;29;06]: Let me give you a couple of projections here about where you’re going to be. So your pension, I believe you told us, gets you what percentage?

 

Nicole [01;16;29;13 – 01;16;35;03]: If I retire at 60, it will be 7%, I think.

 

Ramit [01;16;35;05 – 01;16;54;27]: Okay, so let’s start with your old situation. If you change nothing, if the income does not double, what happens? You will have about $1.6 million at the age of 60. Okay. What do you think about that number right off the bat?

 

Nicole [01;16;54;28 – 01;17;02;14]: It’s great if we own our homes and that housing cost is not 40% anymore.

 

Ramit [01;17;02;15 – 01;17;04;25]: Okay. Nicely put, I agree. Drew.

 

Drew [01;17;04;26 – 01;17;10;24]: Yeah, I it sounds like a lot to me. Okay. I’m surprised by.

 

Ramit [01;17;10;26 – 01;17;21;27]: Let’s go deeper. Yeah. If you take 4% of that money every year, you can and you retire at age 65, you can safely withdraw 4%.

 

Drew [01;17;21;28 – 01;17;23;16]: Oh, yeah. You were just talking about this.

 

Nicole [01;17;23;17 – 01;17;24;00]: Yeah.

 

Drew [01;17;24;02 – 01;17;25;01]: Oh 4%. Okay.

 

Ramit [01;17;25;03 – 01;17;31;11]: Yeah. The 4% rule. So that would give you per year of income $67,000.

 

Drew [01;17;31;17 – 01;17;36;04]: So we’d have to live on $67,000 a year. Yeah. We would have to have no housing costs.

 

Ramit [01;17;36;05 – 01;17;44;05]: Or housing would have to be paid off. Yeah. So that’s one. And what else? Just consider that the two of you make $300,000 today.

 

Nicole [01;17;44;06 – 01;17;44;15]: Yeah.

 

Drew [01;17;44;17 – 01;17;53;25]: I mean, are all of our fixed costs would be probably just going to that basically. And then we wouldn’t have any guilt free spending.

 

Ramit [01;17;53;27 – 01;17;54;09]: Yeah.

 

Drew [01;17;54;10 – 01;17;56;04]: Yeah, we would be struggling. I think.

 

Nicole [01;17;56;05 – 01;17;56;15]: It would.

 

Drew [01;17;56;15 – 01;17;57;20]: Be tough. Yeah.

 

Ramit [01;17;57;25 – 01;18;08;26]: Now there is something I want to add the pension. So the pension at 60% would give you $102,000 per year. So that’s quite a bit.

 

Drew [01;18;08;27 – 01;18;10;29]: On top of the one.

 

Ramit [01;18;11;00 – 01;18;18;15]: In the top of the 67. Okay. So that means that per year you would have about $170,000.

 

Nicole [01;18;18;17 – 01;18;19;29]: That’s not bad.

 

Ramit [01;18;20;01 – 01;18;20;25]: Not bad.

 

Drew [01;18;20;26 – 01;18;22;26]: Yeah that’s amazing.

 

Ramit [01;18;22;28 – 01;18;33;15]: 170 K and assume you keep both houses and pay those off. I don’t know if you’ll pay them off in time.

 

Nicole [01;18;33;21 – 01;18;34;03]: No.

 

Ramit [01;18;34;09 – 01;18;35;09]: That’s a problem.

 

Nicole [01;18;35;11 – 01;18;36;10]: Yeah. That’s why.

 

Drew [01;18;36;11 – 01;18;41;04]: There we have a we both got a 30 year recently. Recently.

 

Ramit [01;18;41;05 – 01;18;41;10]: Okay.

 

Drew [01;18;41;11 – 01;18;42;16]: So that’s been five years.

 

Nicole [01;18;42;17 – 01;18;45;00]: So yeah I’m putting a little bit more than I’m.

 

Drew [01;18;45;00 – 01;18;46;02]: Putting a little bit more.

 

Nicole [01;18;46;02 – 01;18;49;28]: But yeah. So mine is 25 years.

 

Ramit [01;18;50;00 – 01;18;52;28]: Still how many years until you retire at 60.

 

Nicole [01;18;53;00 – 01;18;54;06]: 21.

 

Ramit [01;18;54;08 – 01;19;05;14]: Okay. So there’s a few years. Well, you might work extra. You might save some extra, put some extra payments. You could do it. You could play with it. Yeah. It’s not perfect, but it’s within the realm of possibility.

 

Drew [01;19;05;16 – 01;19;10;19]: Yeah. It’s doable. And especially if you retire, I could keep working easily, you know, from home.

 

Ramit [01;19;10;20 – 01;19;17;21]: Can I just. Can I make a point? I don’t like to plan for retirement. Where, like.

 

Drew [01;19;17;23 – 01;19;18;07]: We’re like.

 

Ramit [01;19;18;07 – 01;19;19;10]: It’s pretty close.

 

Nicole [01;19;19;12 – 01;19;19;20]: Yeah.

 

Ramit [01;19;19;21 – 01;19;39;02]: Tight way. That’s not how I live my life. I live my life where if you tell me I need, like, a million. I want to have a plan. Where with my eyes closed, I come in at 1.8 million. Yeah. Because I know that something’s bad’s going to happen, and I’m gonna have to stop working for a couple of years and blah, blah, blah, blah, blah.

 

Ramit [01;19;39;04 – 01;19;51;00]: Yeah, yeah. So I don’t like this, and I’m sharing it with you because I want you to develop an intuition and a taste for when the numbers don’t smell right.

 

Drew [01;19;51;07 – 01;19;52;01]: Yeah, yeah.

 

Ramit [01;19;52;02 – 01;20;17;26]: Doesn’t smell right to me. Especially a couple making 300 K. You don’t want to live on less and be like, oh, can we afford grapes? Sucks. Okay, so let’s go to the new situation. The one in which we assume that you double your income. Yeah. Here’s what we got. If you retire at age 60, you will have $3.6 million.

 

Ramit [01;20;17;28 – 01;20;20;12]: That’s a lot more than the other case.

 

Drew [01;20;20;13 – 01;20;21;17]: Yeah, it’s more than double.

 

Ramit [01;20;21;18 – 01;20;22;07]: Yep.

 

Nicole [01;20;22;12 – 01;20;23;16]: 42.

 

Ramit [01;20;23;17 – 01;20;27;24]: 44%. Wow. That’s pretty. How’d you do that in your head so fast?

 

Drew [01;20;27;25 – 01;20;28;23]: She’s so smart.

 

Ramit [01;20;28;25 – 01;20;30;08]: That’s impressive.

 

Nicole [01;20;30;10 – 01;20;33;03]: I just took 1% and multiply it by four.

 

Ramit [01;20;33;06 – 01;20;41;24]: That’s very good. Okay, listen, like 50% of the people on this show don’t even know their own income. Well, actually, including this show. Yeah.

 

Nicole [01;20;41;25 – 01;20;42;16]: All right. Case in.

 

Ramit [01;20;42;16 – 01;20;56;05]: Point, your 4% withdrawal number would be $147,000. And then we add on pension at 60% would be $102,000, for a total amount, $250,000 per year.

 

Drew [01;20;56;06 – 01;20;59;10]: Which is close to what we’re making now. Yeah.

 

Nicole [01;20;59;11 – 01;21;18;15]: I think that the one thing to consider is that the house in Maui, it generates income. Yes. And so I even if we were retired, maybe we wouldn’t rent out all of the units so there’d be a little less landlords work, but there could still be income there.

 

Drew [01;21;18;16 – 01;21;24;08]: Yeah. And I could still be working a little bit if we wanted an extra, like 50 K or something.

 

Ramit [01;21;24;09 – 01;21;26;16]: It feels a lot more comfortable talking about this one, doesn’t it?

 

Nicole [01;21;26;19 – 01;21;27;01]: Yeah.

 

Drew [01;21;27;03 – 01;21;27;25]: It feels nice.

 

Ramit [01;21;27;27 – 01;21;34;22]: It’s like. Oh, yeah. Like, we don’t have to scrimp on everything. Yeah. Okay, so what needs to happen in order for this to become a reality?

 

Drew [01;21;34;26 – 01;21;42;25]: I think what needs to happen is I just need to take all this information and live it, essentially.

 

Ramit [01;21;42;27 – 01;21;59;24]: Yes. I think to be more specific, at least to put in a language I would use would be you’ve got to start modeling these things and understanding them. And that happens through engaging. It’s like learning how to cook. We can hear about it all day long. The next thing we want to read a cookbook. That’s a good start.

 

Ramit [01;21;59;28 – 01;22;18;08]: But then ultimately we need to get in there. And we need to start like trying stuff because some eggs are going to break and we’re going to be like, oh, but it’s not the end of the world. I have another egg. Let me practice, right? That’s what happens with this. When you deeply get in there and start playing with the numbers and typing on the, you know, my compound interest calculator, and you go, wait a second.

 

Ramit [01;22;18;08 – 01;22;29;21]: If we put an extra $100 towards this mortgage, we shave off three years. That’s crazy. That’s when you really get it. Yeah. Now, for the next year, we want to talk about that.

 

Drew [01;22;29;22 – 01;22;30;11]: Yeah.

 

Ramit [01;22;30;14 – 01;22;43;24]: You have a baby coming. Which, even with all the amazing benefits you have, still introduces ambiguity. Yeah. Yeah. Uncertainty. How do you think about that in terms of finances?

 

Nicole [01;22;43;26 – 01;22;45;03]: It’s really scary.

 

Ramit [01;22;45;06 – 01;22;50;21]: Yeah. Like, what if the job, for whatever reason, doesn’t materialize?

 

Drew [01;22;50;24 – 01;22;59;07]: I mean, I don’t know, then we get what we get from nickels.

 

Drew [01;22;59;09 – 01;23;00;09]: And my job.

 

Ramit [01;23;00;10 – 01;23;11;10]: Hold on. Play it out for me. So let’s say that I’m going to just make up a morbid situation. Let’s say you get sick. Yeah, and you can’t work. What happens?

 

Drew [01;23;11;12 – 01;23;15;18]: Oh, gosh. It was just like, wouldn’t it would. We would be unhappy.

 

Ramit [01;23;15;20 – 01;23;17;17]: What about the numbers? What about the money?

 

Drew [01;23;17;20 – 01;23;19;12]: The money would be stressed.

 

Ramit [01;23;19;13 – 01;23;23;15]: Yeah. Would you be able to afford your expenses?

 

Drew [01;23;23;19 – 01;23;26;21]: Well, we’re at 85% correct.

 

Ramit [01;23;26;22 – 01;23;30;11]: So you’re you’re basically spending more than you make right now?

 

Drew [01;23;30;13 – 01;23;31;02]: Yeah.

 

Ramit [01;23;31;09 – 01;23;34;14]: You would not be able to pay for the house’s right. One or both.

 

Nicole [01;23;34;18 – 01;23;35;03]: For sure.

 

Drew [01;23;35;04 – 01;23;37;24]: Yes. That’s also an answer. Yeah. Yeah.

 

Ramit [01;23;37;26 – 01;23;39;06]: Like on a very practical level.

 

Drew [01;23;39;07 – 01;23;39;14]: Yes.

 

Ramit [01;23;39;15 – 01;23;42;12]: Run out of money. You would run out of money. And when you run out of money, what happens?

 

Drew [01;23;42;13 – 01;23;45;19]: We live with Nicole’s parents, right? If we run out of money.

 

Ramit [01;23;45;22 – 01;23;48;26]: Or you find yourself back in that roommate situation.

 

Nicole [01;23;48;29 – 01;23;50;16]: Another which are tenable.

 

Ramit [01;23;50;22 – 01;24;21;29]: They’re not tenable, I agree. Yeah. So all of this presupposes that you not only graduate, which I’m sure will happen, but it presupposes that. But also, you get a job. Okay. That’ll happen. Which doubles your income? Yeah. All of it. Within a year. Yeah. I don’t know, to me, that’s like. That’s a lot. All focusing on one thing happening.

 

Drew [01;24;22;05 – 01;24;23;00]: Yeah.

 

Ramit [01;24;23;05 – 01;24;26;21]: It’s like a single point of failure for me. Right. I don’t like that.

 

Drew [01;24;26;22 – 01;24;27;15]: Yes.

 

Ramit [01;24;27;16 – 01;24;52;01]: If you decided, for whatever reason, to slow down your education or stop for a while and go part time because you’re really enjoying time with baby or whatever. Who knows? A parent got sick. Who knows? So would you be open to considering a plan where if we don’t have everything has to depend on you achieving this major thing?

 

Drew [01;24;52;04 – 01;24;55;22]: Yes. All right. Is there such a plan?

 

Ramit [01;24;55;24 – 01;24;56;14]: What you do? Yeah.

 

Drew [01;24;56;17 – 01;24;57;23]: There’s no idea.

 

Ramit [01;24;57;23 – 01;25;00;09]: What would you do? Ask for help if you’re not sure.

 

Drew [01;25;00;10 – 01;25;07;06]: How could we possibly. I mean, we could sell a house. That’s, like an obvious big thing.

 

Ramit [01;25;07;08 – 01;25;09;02]: Is it obvious?

 

Drew [01;25;09;04 – 01;25;11;08]: I mean, they’re the biggest expenses.

 

Ramit [01;25;11;10 – 01;25;13;16]: Should we explore what that looks like?

 

Nicole [01;25;13;18 – 01;25;16;12]: We can. Let’s just explore.

 

Ramit [01;25;16;15 – 01;25;28;20]: Let’s let’s put the CSP back up on screen. I have no idea what it would look like. I don’t even know if it’s a good idea or not, but I would like to explore it because it’s the biggest numbers. Yeah. So which house would you sell?

 

Nicole [01;25;28;27 – 01;25;29;27]: This is the hard part.

 

Drew [01;25;29;29 – 01;25;41;26]: Yeah. I mean, if we want to keep Nicole’s great job with all the benefits, then it makes the most sense to sell the Maui house. And the Maui house has a lot of income that comes through it.

 

Nicole [01;25;42;02 – 01;25;43;11]: So it’s.

 

Ramit [01;25;43;14 – 01;25;53;00]: Well, let’s play it out. Okay, so let’s model out selling the Maui house. We’ll be a little loose with it, but if you sold it today, how much would you get?

 

Drew [01;25;53;06 – 01;25;56;05]: 1.5. Oh and then I would get half of that.

 

Ramit [01;25;56;06 – 01;25;58;23]: So you’d get 750. Yeah.

 

Drew [01;25;58;29 – 01;26;00;15]: Seven. 50. Yeah.

 

Ramit [01;26;00;16 – 01;26;13;11]: You owe 500. You would. You would get 750. So that’s 250,000 you would get minus taxes blah blah blah transaction fees. Shall we say 150?

 

Nicole [01;26;13;12 – 01;26;14;22]: Sure.

 

Drew [01;26;14;24 – 01;26;16;21]: Yeah. I feel like it would be more.

 

Nicole [01;26;16;21 – 01;26;17;24]: But capital gains.

 

Ramit [01;26;17;29 – 01;26;18;08]: That’s what.

 

Nicole [01;26;18;08 – 01;26;19;15]: Every house of.

 

Ramit [01;26;19;17 – 01;26;32;26]: Every homeowners like. I thought I would get a lot more. Actually, they don’t even know because they don’t look at the numbers. They don’t know anything. They go, I sold it for this much. I’m a Jillian Air. I go, you never factored in. All right. We’re just going to say 150. Maybe it’s more. Maybe it’s less, but.

 

Nicole [01;26;33;03 – 01;26;34;06]: Sure. Yeah.

 

Ramit [01;26;34;11 – 01;26;39;19]: Okay, so you just got $150,000? Yeah. What are you doing with the money?

 

Nicole [01;26;39;20 – 01;26;42;02]: We have to adjust all of the income levels.

 

Ramit [01;26;42;03 – 01;26;45;28]: Yeah. We do. So the current income.

 

Nicole [01;26;46;04 – 01;26;48;08]: Goes down by $7,000.

 

Ramit [01;26;48;09 – 01;26;49;22]: That’s how much comes in every month.

 

Nicole [01;26;49;23 – 01;26;50;08]: Yeah.

 

Ramit [01;26;50;09 – 01;26;51;10]: Wow. That’s a lot.

 

Nicole [01;26;51;11 – 01;26;52;09]: Yeah. Yeah.

 

Ramit [01;26;52;10 – 01;26;54;10]: That’s a big. That’s a tricky situation.

 

Drew [01;26;54;11 – 01;26;55;29]: That’s why it’s very tricky.

 

Ramit [01;26;56;00 – 01;27;03;21]: All right, let’s take a look. So this number which is currently 8000 net goes down to 1000. Yep. Is it 7000 net net.

 

Drew [01;27;03;25 – 01;27;04;14]: Yep.

 

Ramit [01;27;04;19 – 01;27;07;22]: Okay. Let’s take a look. Oh, you’re at 130.

 

Nicole [01;27;07;24 – 01;27;08;10]: Yeah.

 

Ramit [01;27;08;12 – 01;27;14;21]: All right. All right. All right. But we don’t have the cost of this anymore. Is it this one?

 

Nicole [01;27;14;22 – 01;27;15;16]: Yeah, it’s that one.

 

Ramit [01;27;15;16 – 01;27;24;20]: So let’s zero that out. We’re down to 84%. Basically the same number. However, what’s the difference?

 

Nicole [01;27;24;21 – 01;27;25;25]: 150.

 

Ramit [01;27;25;27 – 01;27;27;09]: $150,000.

 

Nicole [01;27;27;10 – 01;27;33;07]: Yeah, right. Oh, we’d take out the car payment and we’d take out the insurance.

 

Ramit [01;27;33;08 – 01;27;34;04]: Why is your payment.

 

Nicole [01;27;34;04 – 01;27;36;22]: Go away? Because we only have one car in each city.

 

Ramit [01;27;36;23 – 01;27;40;27]: Oh I see. Got it. Okay. Yeah. Got it. Zero. Okay. Wow.

 

Nicole [01;27;41;00 – 01;27;42;15]: Insurance would above.

 

Ramit [01;27;42;17 – 01;27;49;15]: The insurance would go out. Okay. Yeah. 73%. Wow. What about this repair?

 

Nicole [01;27;49;18 – 01;27;50;24]: Zero zero.

 

Ramit [01;27;50;25 – 01;27;57;03]: Zero on that. Okay. What percentage are we at for fixed cost right now? 69. 69%. That’s interesting.

 

Nicole [01;27;57;07 – 01;28;04;07]: The housing. Reno? Yeah. On my column, it wouldn’t be a thousand. It’d be more like 500.

 

Ramit [01;28;04;08 – 01;28;04;23]: Really?

 

Nicole [01;28;04;24 – 01;28;10;03]: Yeah. My house doesn’t have as much. It’s. The square. Footage is very small in comparison.

 

Ramit [01;28;10;05 – 01;28;11;15]: What’s the fixed cost? Number?

 

Nicole [01;28;11;19 – 01;28;13;27]: 65. Wow.

 

Ramit [01;28;13;28 – 01;28;15;03]: What’s happening right now?

 

Drew [01;28;15;06 – 01;28;19;21]: It went down like 20%. Plus we have 150,000.

 

Ramit [01;28;19;25 – 01;28;20;28]: Just liquid?

 

Nicole [01;28;20;29 – 01;28;21;22]: Yeah.

 

Ramit [01;28;21;28 – 01;28;27;24]: 150,000. Which you could use for. Give me some options.

 

Drew [01;28;27;26 – 01;28;28;23]: Retirement.

 

Ramit [01;28;28;24 – 01;28;31;14]: You could invest all of it. Yeah. You could. What else could.

 

Drew [01;28;31;14 – 01;28;32;19]: You do? Emergency fund.

 

Ramit [01;28;32;21 – 01;29;00;22]: Emergency fund. You could knock out your emergency fund payment in one fell swoop. And then the money you used to put towards it, which is like 4000 bucks a month, could be used for further retirement. Take a little bit of it and enjoy it. Yeah, yeah. ET cetera. Etc.. How about you both go? Hey, we love Maui. So we’re gonna put $1,000 a month aside, and we’re going to go there and rent a place for a month, a year.

 

Ramit [01;29;00;23 – 01;29;02;18]: But we don’t need to maintain any of it.

 

Nicole [01;29;02;19 – 01;29;09;12]: Yeah. Oh my God. The no landlord stress would be amazing.

 

Ramit [01;29;09;13 – 01;29;12;00]: No more phone calls. Yeah. No more flights.

 

Drew [01;29;12;02 – 01;29;14;03]: There’s so many phone calls. Yeah.

 

Ramit [01;29;14;08 – 01;29;15;18]: So it’s an option?

 

Nicole [01;29;15;19 – 01;29;16;18]: Yeah.

 

Ramit [01;29;16;20 – 01;29;25;12]: Kind of pleasantly surprised to see that. Like, I see a lot of realizations happening for you. What’s happening?

 

Drew [01;29;25;14 – 01;29;42;07]: Because the house has been a source of stress. It just feels like. Yeah, an exhale that we wouldn’t have to have that stress anymore. Yeah. So that feels nice.

 

Ramit [01;29;42;09 – 01;29;44;28]: Kind of echoes what you said about the kind of life you want to create. Right.

 

Nicole [01;29;44;29 – 01;29;45;17]: Yeah.

 

Ramit [01;29;45;19 – 01;29;49;18]: You don’t want to spend a ton of time on work.

 

Drew [01;29;49;20 – 01;29;50;17]: Yeah.

 

Ramit [01;29;50;19 – 01;29;52;21]: Being a landlord is work.

 

Nicole [01;29;52;26 – 01;29;53;16]: Yes.

 

Drew [01;29;53;17 – 01;30;12;12]: It really is work. Yeah. We would. I would have to have that fund that you mentioned, like a thousand a month or more. That would be so essential because I would be so devastated if I had to stay in SoCal all the time.

 

Ramit [01;30;12;12 – 01;30;33;14]: And you could never go back. Yeah, that’s not the case. Right. One thing that I love doing when I speak to people and help them create their rich life is they often think, if I make this decision, I can never have that again. Like, if I sell a house or if I get rid of my third car, whatever, and I go, wait a second.

 

Ramit [01;30;33;15 – 01;30;43;10]: Do you love driving this car? I love it. I love a BMW. I have horrible tasting cars I love. I go, why don’t you rent it from Turo?

 

Nicole [01;30;43;13 – 01;30;44;21]: Yeah.

 

Ramit [01;30;44;24 – 01;30;59;21]: Take it out. Two days, two times a month. Get a nicer one. And? And because we have this idea that we have to own it. And if we don’t own something, it feels like chopping off part of our arm. We necessarily limit ourselves.

 

Nicole [01;30;59;23 – 01;31;28;07]: Yeah, I love that. It gives me a sense that there’s not just one option. Yes. It felt like, okay, we have to just really bear down and like, grit our teeth and get through this year and pray that you get enough clients and pray that enough of them want to pay the fee that we need. And if all of that works out, then we’ll be okay.

 

Ramit [01;31;28;10 – 01;31;31;05]: Yeah. It’s really high stakes.

 

Nicole [01;31;31;06 – 01;31;42;02]: Yeah. And we can still do that, actually. And then if it doesn’t work, we have this backup plan. That feels really good.

 

Ramit [01;31;42;05 – 01;32;13;04]: Yeah. That’s really beautiful. Yeah. And you have now upside because you’ve really, like, cut down your fixed costs. So what that means is if you are able to let’s just say add 50% to your image. That’s like amazing. Wow. I mean, you’re already crushing it right now, as is at $296,000 with 150 K liquid. So if you’re able to increase your income a bit.

 

Ramit [01;32;13;10 – 01;32;32;06]: Wow. That’s like thousands and thousands. And if you’re able to double your income, I mean, you have more money than you know what to do with. Yeah. All because you made one decision. Now that cascades through the rest of your life, and maybe five years from now, you go, hey, I actually really want to go back to Maui and have a place of our own.

 

Ramit [01;32;32;10 – 01;32;50;23]: Okay, cool. Well, we have $380,000 in savings. We have this, we have that. What does it look like now that we are both speaking this language at the same level, we can now start to plan ahead. But we’re not playing not to lose. We actually get to play to win.

 

Nicole [01;32;50;25 – 01;32;54;15]: That’s cool. That’s really cool. Yeah.

 

Ramit [01;32;54;16 – 01;32;58;25]: I love it. I love seeing it in both of your eyes. Yeah. What are you feeling right now?

 

Drew [01;32;58;27 – 01;33;30;20]: I’m feeling excited. I’m feeling connected. I feel like we. This decision that I had for Maui was before I knew you and before this family. And. Yeah, there’s something here about, like having it be more intentional for us moving forward and like, how there are possibilities. And it doesn’t just have to rely on me doubling my income. You know, starting in May next year and then having it be sustainable because, yeah, maybe it’s not.

 

Drew [01;33;30;20 – 01;33;33;00]: Maybe something happens and then we have alternatives.

 

Ramit [01;33;33;02 – 01;33;33;14]: Yeah.

 

Nicole [01;33;33;15 – 01;34;06;03]: That’s so much pressure that I hope you can feel can come off your shoulders. Like it doesn’t have to be everything on you. We can still have a dream life. We can have our rich life. And it doesn’t all have to be completely on your shoulders. Yeah, and we can make it work so that no matter what, you can still have the ocean and the people in the community.

 

Nicole [01;34;06;05 – 01;34;07;07]: Yeah.

 

Drew [01;34;07;10 – 01;34;21;23]: I think I would want to see the specific numbers for what, like a three month stay on Maui would look like if we’re not just staying with friends and we want to have our own place and then factor that in. Yeah. And yeah.

 

Ramit [01;34;21;25 – 01;34;46;07]: I love that. I love that you’re asking. I would need to see the numbers. Yes. I love that that’s so cool. Yeah. You should be really thoughtful. And you should factor in airfare and hotel and all that stuff. Airbnb, whatever it may be. But I suspect I’m not sure. But I suspect that even going there for two months at a time or something like that, will never equal the cost of ownership.

 

Ramit [01;34;46;13 – 01;34;57;25]: It might feel different because you’re actually paying out of your pocket, but when you look at the numbers and you have the full board in front of you, you go happy to do it.

 

Nicole [01;34;57;26 – 01;34;59;09]: Yeah.

 

Ramit [01;34;59;12 – 01;35;03;08]: Again, it’s up to you, your rich life, what you both want. Yeah.

 

Nicole [01;35;03;13 – 01;35;20;08]: Yeah, I love that. I love the idea of, like, figuring out what is the thing that actually matters. And what are we doing to, like, get there. So if being and Maui is what matters, do we have to actually own a home? Great to get there.

 

Ramit [01;35;20;11 – 01;35;40;17]: No. Do we have to be there these specific months? Do we have to do x, y, z? What’s the important thing that we really need to make happen? We need to be there with our people. Yeah. Cool. What are all the ways to get there? Just opening up the idea of potentially selling the Maui house has changed everything in this room right now.

 

Ramit [01;35;40;17 – 01;35;59;01]: I think that drew a Nicole feel really good at simply the option of being able to sell their house. It’s kind of like a lot of New Yorkers who live in a building with a rooftop. They have a grassy area or a barbecue up there. Do they ever use that rooftop? No, never. But they love knowing it’s there.

 

Ramit [01;35;59;01 – 01;36;16;09]: And this is the same thing happening with Drew and Nicole. Just the idea that they could possibly sell the house feels incredibly expansive, but I don’t want to let him walk out of here just feeling good. I want to press them a little bit. Okay, so let’s talk about next steps.

 

Drew [01;36;16;10 – 01;36;41;26]: Yeah, yeah. I feel like before the baby gets here, if possible, we just run a bunch of scenarios, you know, like, let’s look at selling you quitting your job and us just living in Maui on my salary. Let’s look at Maui and what it would be to go there for three months without the house. And let’s look at my different salary possibilities.

 

Drew [01;36;41;26 – 01;36;58;02]: And yeah, I just this idea of like the possibilities that are there for us is really fun and encouraging. And then we have that information and then we can, yeah, be on the same page. I love that you like that. It’s so.

 

Nicole [01;36;58;03 – 01;37;03;25]: It’s great to hear you say that. It sounds fun. Yeah. You don’t usually use that word.

 

Ramit [01;37;03;26 – 01;37;04;07]: Yeah.

 

Nicole [01;37;04;13 – 01;37;05;13]: That’s cool money. Yeah.

 

Ramit [01;37;05;14 – 01;37;27;27]: That’s actually really cool. Your energy is super positive. Yeah, I like that. And as as I can see here and I. And I’m grateful that you’re letting everybody else see it’s the vision first and then the numbers second. So like, hey, let’s I love that you’re like, let’s play with what if you quit your job? That’s cool. Yeah, kind of unlikely, but I like that you brought it up.

 

Ramit [01;37;27;28 – 01;37;39;25]: Yeah. And that’s. We should play with that. Yeah. What if we move here? What if we move there? What if x, y, z. Everything’s up for discussion, and then we can decide what feels right. It’s actually fun to do that.

 

Drew [01;37;39;26 – 01;37;40;11]: Yeah.

 

Ramit [01;37;40;12 – 01;37;47;16]: Then we plug the numbers in and say like, okay, what would it look like? That’s obviously not going to work. Cross that one off. Right. This could work.

 

Drew [01;37;47;19 – 01;37;57;10]: Yeah. We’re in such a place of privilege and have so many advantages. And so it is play. It’s like we get to play with this money and see what we want to do with it.

 

Ramit [01;37;57;12 – 01;38;11;18]: Beautiful. It’s I love this abundance. I can hear it in you like we have abundance. And we get the gift of being able to choose how we spread it around. Yeah. Would there be a date by which you would want to make a decision?

 

Drew [01;38;11;19 – 01;38;12;05]: 

 

Nicole [01;38;12;06 – 01;38;28;02]: Probably this place is is home. And to have time to really actually make the decision I feel like Drew’s going to need to be there. I could be wrong.

 

Ramit [01;38;28;05 – 01;38;28;12]: I see.

 

Nicole [01;38;28;12 – 01;38;57;13]: Your point. She’s so experientially in her decision making that I feel like while I could make this decision logically and just in my head hypothetically and stuff like that, that’s not the way that drew makes decisions. And I feel like having a at least a few months, but maybe it could be less of time there, would allow her to feel into like, how much time do I need here every year?

 

Ramit [01;38;57;14 – 01;38;58;28]: What do you say, drew?

 

Drew [01;38;59;01 – 01;39;21;26]: Yeah. Thank you. I feel so seen. That’s really sweet. And I actually feel excited by the three month proposal. Not that I say yes to it, but what I’m saying is, I feel excited by the confines of a deadline. That’s pretty soon, actually, because it is. This is a big deal. Like, we are not in a good place, you know.

 

Drew [01;39;21;27 – 01;39;30;14]: And so I think it does require a little bit of urgency. And I could maybe do like a six month or something.

 

Ramit [01;39;30;15 – 01;39;31;25]: There’s lots of ways to play it.

 

Drew [01;39;31;26 – 01;39;32;15]: Yeah.

 

Ramit [01;39;32;17 – 01;39;56;06]: Could be three, could be four, could be six. You all can decide. Part of that decision would be modeling out how much are we going to have in savings? How much is it going to cost for us to fly to Hawaii? Now all these things start to really need to be factored in. And and then you have to decide, you know, like if I, if I’m you and I’m down to 20 K in savings, we don’t want that.

 

Ramit [01;39;56;07 – 01;40;00;20]: Your fixed costs are too high. We also have to remember that just because you decide to sell doesn’t mean it sells.

 

Nicole [01;40;00;21 – 01;40;02;06]: Oh, no. Yeah, right.

 

Ramit [01;40;02;07 – 01;40;02;18]: So there’s.

 

Nicole [01;40;02;18 – 01;40;03;22]: All sellers fees and.

 

Ramit [01;40;03;22 – 01;40;07;25]: All this stuff. Yeah. There’s like a lot of stuff to happen and you need to paint it or whatever.

 

Nicole [01;40;07;26 – 01;40;08;16]: Yeah.

 

Ramit [01;40;08;19 – 01;40;31;10]: But what I love hearing from you, drew is, hey, actually, tell me what’s on your mind because I like the confines. I don’t mind the urgency. Yeah. Another way to look at it would be to say we can keep this place in Maui. But, drew, this is how much you have to make starting a month from now, right?

 

Nicole [01;40;31;11 – 01;40;32;12]: Yes, yes.

 

Ramit [01;40;32;13 – 01;40;52;29]: And then maybe Drew’s like. Sounds great. Get out of my way. Yeah, that’s another option. Yeah, but it has to be consistent. It can’t be like one off client. It’s got to be consistent, right? Put it all out on the table. My point is, use the numbers to guide you. Because if you’re down to 20 or 30 K, which is not far off from where you are at 67 K in savings, you’re in a danger zone.

 

Nicole [01;40;53;00 – 01;40;54;17]: Yeah, yeah, I like that.

 

Ramit [01;40;54;18 – 01;41;08;07]: Cool. I think that the two of you should jointly figure out your timeline and. Yeah, like, if it’s me, you know, you have three months of expenses. I wouldn’t let it get much less.

 

Drew [01;41;08;08 – 01;41;11;24]: I see why you said the three month number. Okay. Yeah, yeah, yeah.

 

Ramit [01;41;12;01 – 01;41;21;20]: I don’t like to ever have my back against the wall. So the urgency is actually, like, very functional. And it will help you make the right decision.

 

Nicole [01;41;21;21 – 01;41;22;05]: Yeah.

 

Ramit [01;41;22;06 – 01;41;22;17]: Yeah.

 

Drew [01;41;22;18 – 01;41;23;08]: Yeah.

 

Nicole [01;41;23;14 – 01;41;24;20]: I appreciate that.

 

Ramit [01;41;24;21 – 01;41;43;02]: Okay. You still have decisions to make. But what we’ve done, I think is we’ve kind of it’s like we’re in a garden. We’ve kind of opened up the possibility. Like we’ve loosened up some of these plants that have these deep roots. Maybe we’re going to be in Maui with a home that we own, maybe in a different form.

 

Ramit [01;41;43;05 – 01;41;57;25]: Maybe you’re going to be making what you’re making. Maybe you’re going to double your income. Who knows? Maybe you’re going to work at the place you work for 20 years, maybe 30. I don’t know. Is your rich life vision still the same, or has it changed as we’ve been talking?

 

Drew [01;41;57;26 – 01;42;24;04]: For me, I’m feeling the the spaciousness that call for spaciousness. You know, that really used to be such a core value of mine, just to have spaciousness in life. And by that I just mean, like, not super stressed, not feeling like squeezed on, not feeling like a back against a wall. And I’m it has been very tight and money has created so much stress.

 

Drew [01;42;24;04 – 01;42;30;11]: And so I’m really feeling called to include spaciousness in our, in our life.

 

Nicole [01;42;30;14 – 01;43;05;25]: I love that. Yeah, yeah. I feel like community is still core, and work life balance is part of that getting to spaciousness. But it is interesting. I feel like having a sense of what can we be doing to make our lives easier, as opposed to I feel like we’ve been holding on so tightly to one specific way of doing it, and it’s not necessarily even serving us like it’s not necessarily serving that vision.

 

Nicole [01;43;05;28 – 01;43;06;11]: Yeah.

 

Ramit [01;43;06;12 – 01;43;30;07]: It’s really powerful. Spaciousness is a word I’ve not heard associated with a rich life before, but it makes so much sense. Yeah, it’s it’s actually speaking to me as well. When you say that spaciousness on my calendar, spaciousness, even in a room where we have high ceilings and spaciousness in the way that I can think about all the different ways I want to do the things I want to do, there’s so many different ways.

 

Ramit [01;43;30;09 – 01;43;47;24]: That’s really cool. I love that. And what you mentioned about we’ve been holding on so tightly, but maybe we need to be relooking at the vision and zooming out and saying, like, are we still doing it? Or are we just holding on to this thing that’s been in our hands for a long time?

 

Nicole [01;43;47;25 – 01;43;49;13]: Yeah, definitely.

 

Ramit [01;43;49;14 – 01;43;50;08]: It’s kind of cool.

 

Nicole [01;43;50;10 – 01;43;50;26]: Yeah, it’s.

 

Drew [01;43;50;26 – 01;43;51;14]: Very cool.

 

Ramit [01;43;51;14 – 01;44;16;16]: I find you’re both very agile with the way that you think about these things. Agile agility in a rich life, very important because necessarily the world will throw things at you. And, you know, like they have those stories about the monkey. Once you put something in their hand, they can’t let go. That’s a lot of people. Yeah. Like we just have this idea we have to buy an SUV or a house or this or that, and we just can’t let go even though we’re drowning.

 

Ramit [01;44;16;22 – 01;44;23;12]: Yeah, but the fact that you can now play with these ideas. Yeah, it’s really impressive.

 

Drew [01;44;23;14 – 01;44;24;03]: Yeah.

 

Nicole [01;44;24;05 – 01;44;25;18]: Thank you. It’s really exciting.

 

Drew [01;44;25;19 – 01;44;26;18]: And it’s exciting.

 

Nicole [01;44;26;21 – 01;44;35;28]: It’s felt like drowning, honestly. Drowning. And this feels like. Oh, I could just stand up. We were in the shallow.

 

Ramit [01;44;35;29 – 01;44;39;07]: Beautiful. Yes. Yes. That’s it.

 

Nicole [01;44;39;09 – 01;44;40;24]: Love it.

 

Ramit [01;44;40;27 – 01;45;01;14]: What’s going to happen with Drew and Nicole? I actually have no idea. I would say 5050 odds, which is quite rare after I speak to a couple. 50%. They follow what we talked about today. They make a plan, they go back to Maui and they realize, hey, we can come back here in different forms, but maybe we don’t need to own this house.

 

Ramit [01;45;01;14 – 01;45;27;02]: 50% odds. They never get around to making a decision. Life gets in the way. And with a new baby just weeks away, I think it’s going to be very difficult to follow a strict financial plan, especially for the next few months, because things are going to become a little bit tumultuous. All I hope is that they remember to zoom out and look at the big picture of their rich life at 85% fixed cost.

 

Ramit [01;45;27;03 – 01;45;47;09]: They need to make a decision. In fact, not making a decision is the same as making a decision. So I really hope they get aggressive. They get direct with each other and they decide to potentially sell that place, bank the money and start over on their joint vision of a rich life together. And now let’s check out their follow ups.

 

Last Updated on August 4, 2026 by Katie

I’ve picked up a lot of cheap living hacks over the years, and none of them came from some frugal-guru lightning bolt moment.

It came from a late weekend night staring at my bank statement, wondering where my money kept disappearing to.

I quit a full-time job to freelance while travelling as a digital nomad, which meant my income went from “predictable” to “whatever this month decides to be.”

Something had to give, and I wasn’t willing to reduce the adventures I wanted to have to save money.

So these aren’t the kind of cheap living hacks that ask you to skip every coffee and colour-code a spreadsheet until you forget what fun feels like.

They’re the small, boring, repeatable changes that quietly free up cash without you noticing the sacrifice.

Some will save you a few pounds a month. Some will save you hundreds a year.

But all will help you save money even on a low income and maybe build up an emergency fund so you have a safety net.

 

Cheap Living Hacks to Help You Save More While Living Well

Whether you’re saving for a house deposit or just want to have some cash left at the end of the month, these cheap living hacks will help you out.

And don’t panic, you can still have fun! This guide will just show you how to be smarter with the money you have.

Let’s dive in!

 

1. Audit your subscriptions properly

Don’t just glance at your bank app. Open a full month’s statement and highlight every recurring charge.

I found a fitness app I’d forgotten I signed up for during a January “new year, new me” phase eighteen months earlier.

Eighteen months of £9.99 for an app I’d opened exactly once.

Do this every three months, not as a one-off, because subscriptions have a way of creeping back in the moment you stop watching.

Free trials are the worst offenders, so set a calendar reminder for the day before it converts to paid.

It takes twenty minutes and it’s the single highest-leverage thing on this whole list.

 

2. Shop the reduced section first

Most supermarkets mark down items nearing their sell-by date in the late afternoon, and I plan meals around whatever’s in that yellow-sticker section rather than deciding the menu first.

It flips the whole process on its head, cheaper and honestly more fun, like a mystery box you get to cook your way out of.

Tesco and Sainsbury’s near me tend to mark down around 6pm, so I time my shop accordingly.

You will occasionally end up with three punnets of blueberries and no plan, and that’s fine; freeze them.

The savings add up faster than meal planning from a recipe book ever did for me.

Further reading: 25 ways to save money on groceries.

 

3. Try secondhand before new, every time

Not just clothes: furniture, kitchen gear, tools, anything you’d normally buy new.

Facebook Marketplace and local Freegle groups have furnished half my flat over the past few years.

The desk chair I’m sitting in right now cost £15 and looks better than the £200 one I nearly bought new.

My honest failure here: I once bought a “vintage” lamp that turned out to be held together with electrical tape, so check the item properly before you commit, not after you’ve carried it up three flights of stairs.

Still worth it nine times out of ten.

Further reading: 13 things I stopped buying to save thousands.

 

4. Learn three basic repairs

You don’t need to become a handyman, just able to fix a running toilet, reset a tripped fuse, and sew on a button.

Between those three skills, I’ve dodged at least four call-out fees that would’ve been £60 to £80 each.

YouTube will teach you all three in under an hour combined, and none of it requires special tools you don’t already own.

It’s one of those cheap living hacks that feels intimidating right up until you actually try it once.

After that first fixed tap, you stop calling tradespeople for anything minor.

 

5. Rediscover what your library actually offers

Mine isn’t just books anymore.

It’s free audiobooks and ebooks, occasional free museum and gallery passes, and once, memorably, a pressure washer I borrowed through a tool-lending scheme instead of buying one I’d use twice a year.

Most people haven’t set foot in a library since school and have no idea what’s changed.

Ask at the desk what schemes they run locally, because it varies by council and nobody advertises it well.

This one costs you nothing but five minutes of curiosity.

 

6. Cook in batches and actually freeze the extras

I used to cook “enough for tonight” every night, which meant more shop trips, more impulse buys, and more takeaway temptation.

Now I cook double or triple portions of things like chilli, stew, and curry, and freeze what’s left in labelled containers.

Future-me on a Wednesday when freelance work has eaten the whole day is enormously grateful to past-me for this.

It also means the nights I genuinely can’t cook don’t turn into a £15 Deliveroo order out of desperation.

Buy decent freezer containers once and this pays for itself within a month.

Further reading: 27 cheap snacks on a tight budget.

 

7. Make coffee at home, but don’t be precious about it

I’m not going to tell you to give up coffee shops entirely, because nobody actually follows that advice.

What worked for me was making my daily coffee at home and treating café coffee as a genuine treat rather than a habit.

A cafetière costs under £15 and makes coffee I actually prefer to what I was buying.

If you’re spending £4 to £5 a day on takeaway coffee, that’s close to £1,500 a year, which is a fairly large chunk of change for something you could replicate at home in five minutes.

This is one of the cheap living hacks that pays for itself in about a week.

 

8. Buy store brand for anything you can’t taste the difference in

The idea that name brands are automatically better quality is mostly marketing.

Supermarket own-label versions of cereal, cleaning products, and basic medicine are often made in the same factories anyway.

I switched almost everything except one specific brand of peanut butter I’m genuinely fussy about, and my shopping bill dropped noticeably without changing what’s actually in my cupboard.

Test it properly: buy the store brand once and keep whichever wins.

You’ll likely find you can’t tell the difference in most categories, and the ones where you can are usually a short list.

 

9. Pick up a genuinely low-cost hobby

Expensive hobbies aren’t inherently better hobbies; they’re just better marketed.

Walking, running, gardening, drawing, and reading all cost close to nothing once you’ve got the basic kit, and I’ve had more consistent enjoyment from a £4 sketchbook than I ever got from gym memberships I stopped using after February.

The trick is picking something you’d do even on a tired day, not something that sounds impressive at a dinner party.

My own honest confession: I bought a £300 bike intending to cycle everywhere and it now mostly holds coats.

Start cheap, prove you’ll stick with it, then upgrade if you actually need to.

Further reading: 5 hobbies that can earn you money.

 

10. Downsize or share your living space

Housing is almost always the biggest line item, so it’s also where the biggest savings live if you’re open to changing it.

Renting a room instead of a full flat can save several hundred pounds a month.

House-sharing with the right people is genuinely more pleasant than living alone with a tighter budget, too.

I know this isn’t realistic for everyone, and I’m not going to pretend downsizing is painless, since there are real trade-offs around privacy and space.

But if your rent is eating more than a third of your income, it’s worth at least running the numbers on what a smaller footprint would free up.

 

11. Use cashback and rebate apps properly

Apps like TopCashback and Quidco pay you a small percentage back on purchases you were already going to make.

It sounds trivial until you actually total it up over a year.

I route most purchases through one of these apps first: insurance renewals, big buys, even some grocery deliveries.

It won’t transform your finances on its own, but stacked with everything else on this list, it adds a steady trickle of money back into your account for essentially no extra effort.

The only rule is don’t let the cashback talk you into buying something you didn’t actually need.

 

12. Trade skills instead of paying for them

This is one of the more underrated cheap living hacks. It doesn’t require any spare cash at all, just time and a skill someone else wants.

I’ve traded proofreading a friend’s dissertation for a haircut, and helped a neighbour with her computer in exchange for house-sitting while I was away.

Ask around your friends, family, and neighbours what they’re good at and what they need, because the overlap is usually bigger than you’d expect.

It feels almost old-fashioned, and that’s exactly why it works so well when everyone else is reaching for their card.

 

13. Wash clothes in cold water

This one sounds too small to matter, and I was sceptical too. But switching to cold water washes saves a meaningful amount on energy bills over a year, without any real downside.

Cold water is also gentler on fabric, so clothes last longer before they start looking tired.

Most modern detergents are formulated to work fine in cold water anyway, so you’re not sacrificing cleanliness for the sake of the saving.

It’s the kind of change you make once and then never think about again, which is honestly the best kind of cheap living hack there is.

 

14. Join Freecycle or Buy Nothing groups

I only discovered these groups relatively recently and genuinely regret not joining sooner.

Neighbours in these local groups give away things that are still perfectly good, things like airfryers, sports equipment, furniture, and kids’ toys, rather than deal with selling them.

I’ve both given away and picked up things this way, and it’s satisfying in a way that buying new never quite is.

Search for your town name plus “Freecycle” or “Buy Nothing Project” and you’ll likely find a group already running near you.

Check it before you buy anything you don’t urgently need.

 

15. Negotiate your bills once a year

Phone contracts, broadband, and car insurance all quietly creep up if you never call, because loyalty is rarely rewarded.

I put a reminder in my calendar for a month before each renewal date and spend ten minutes on the phone asking what they can do for me before I switch elsewhere.

It’s an uncomfortable call the first time you do it and completely routine by the third.

I’ve had insurance quotes drop by nearly £200 for the year just by mentioning a cheaper competitor’s price.

It’s a small effort for one of the better returns on this whole list.

Further reading: 15 ways to cut monthly expenses and save big.

 

16. Run a no-spend weekend once a month

Pick one weekend and commit to spending nothing beyond absolute essentials: no takeaway, no online shopping, no spontaneous trips into town.

It forces a bit of creativity: cooking from the cupboard, walking instead of a paid activity, reading a book you already own.

I was surprised how much of my “normal” spending was really just boredom spending once I removed the option entirely. It doesn’t have to be miserable, either.

Honestly, the first no-spend weekend I tried felt more restful than most weekends I’d actually spent money on.

Also check out these 10 websites where rich people give away free money.

 

17. Turn your water heater down a notch

Most water heaters default to around 140°F. That’s hotter than you actually need for washing up or showering comfortably.

Turning it down to about 120°F trims your heating costs over the year without you noticing any real difference in comfort.

It’s a five-minute change that you make once and then forget entirely, which puts it firmly in the category of cheap living hacks that require zero ongoing effort.

If you’re not sure how to adjust yours, a quick search for your model will walk you through it.

 

18. Volunteer your way into free events

Music festivals, local conferences, food fairs, and community events almost always need volunteers.

In exchange, you typically get free entry, sometimes free food, and occasionally a much better view than paying customers get.

I’ve worked a handful of shifts at a local food festival for full access the rest of the day, which would’ve cost a ticket I couldn’t justify that month.

It’s a few hours of light work for an experience you’d have paid for anyway.

Search for volunteer sign-ups on any event you’re interested in before assuming a ticket is your only option.

 

19. Do a proper DIY skincare and grooming swap

Haircuts, manicures, and skincare routines get expensive fast if you’re paying for every step of them.

I still get my hair cut professionally, but I stopped paying for the extras I could easily do myself, things like deep conditioning treatments, basic manicures, and teeth whitening strips instead of a dental clinic top-up.

None of this means lowering your standards.

It just means being honest about which parts of a routine actually need a professional, and which parts you were paying for out of habit.

The money saved here has quietly funded a proper haircut every six weeks instead of a rushed one every three months.

 

20. Track your spending somewhere you’ll actually look

None of the other nineteen cheap living hacks on this list matters much if you’re not tracking where the savings are actually going, because it’s easy to save money in one place and quietly leak it somewhere else.

I use a simple spreadsheet, not an app with notifications I’ll eventually mute, and I check it every Sunday for ten minutes.

It doesn’t need to be sophisticated.

What matters is that you actually look at it regularly, because the looking is what turns these individual hacks into an actual habit rather than twenty good intentions you forgot about by March.

Further reading: 15 free budgeting apps that will transform your finances.

 

Final Thoughts on Cheap Living Hacks

None of this requires cutting your life down to the bone.

The hacks that actually stick are the boring, repeatable ones you set once and forget, not the big once-a-year decisions.

Start with two or three from this list, not all twenty at once. Get them running on autopilot, then add the next one.

 

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Ramit Sethi of I Will Teach You To Be Rich speaks with Sana and Arhem, both 27 and newly married. One month before their wedding, Arhem revealed that he had hidden $30,000 of credit card debt. After they both lost their jobs, Sana discovered that he had fallen even further into debt without telling her.

Today, they earn $188,000 a year and have created an aggressive plan to tackle their $165,000 of total debt. But while their numbers are improving, the betrayal has fundamentally changed their relationship. Sana has become the financial orchestrator, while Arhem feels like a student trying to prove that he can be trusted again.

In this episode we uncover:

• Why Arhem hid $30,000 of credit card debt before their wedding
  • How Sana discovered that the debt had grown again
  • Why the financial betrayal nearly ended their relationship
  • How they are rebuilding trust after years of secrecy
  • Their professor-and-student dynamic with money
  • Why Sana feels responsible for supporting her entire family
  • How cultural expectations shape her financial decisions
  • Their $188,000 income and $165,000 of total debt
  • Why their highly organized financial system still feels joyless
  • How Arhem accumulated his credit card debt
  • Why earning more money will not stop Sana from worrying
  • The danger of postponing happiness until they are debt-free
  • Why their debt payoff plan may be too aggressive
  • The connection between joint finances and rebuilding trust
  • Why Ramit recommends couples therapy
  • How they can start prioritizing their marriage
  • The changes Sana and Arhem made after the conversation

Chapters:

(00:00:00) Introduction
(00:03:00) Arhem hid $30,000 of debt before their wedding
(00:09:00) “If things don’t change, the relationship is done”
(00:12:51) Can Sana ever completely trust Arhem again?
(00:15:00) Their professor-and-student money dynamic
(00:17:47) Why Sana feels responsible for supporting her family
(00:23:50) Their $165,000 debt and negative net worth
(00:26:29) They earn $188,000—but live like they’re struggling
(00:33:00) “When do I actually get to enjoy my life?”
(00:39:45) Sana’s childhood money rules
(00:50:00) How Arhem accumulated his credit card debt
(00:57:43) What does their Rich Life actually look like?
(01:05:00) Why their relationship keeps coming second
(01:11:00) Ramit reviews their aggressive debt payoff plan
(01:20:00) Why they need to start spending on joy now
(01:25:00) Joint finances, trust, and couples therapy
(01:30:00) Putting their marriage ahead of everyone else
(01:41:00) Sana and Arhem’s biggest realizations
(01:48:28) Six weeks later: what changed?

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Transcript:

[00:00:00:02] Sana: Our him had told me that he was in debt a month before our wedding.

[00:00:04:15] Ramit: How much debt did he tell you? He was in the first time.

[00:00:07:04] Sana: 30 grand of credit card debt. It was like being stabbed.

[00:00:11:21] Arhem: In my mind. I thought, okay, well, if I don’t tell her, then that means that I don’t burden her with it.

[00:00:16:24] Sana: I worry a.

[00:00:17:13] Arhem: Lot.

[00:00:18:10] Sana: About my family. I worry about my sister. I didn’t think that I would need to worry about my partner.

[00:00:24:04] Arhem: She did have 100% trust in me and I lost it. Essentially what I said. If things don’t change, then the relationship is done.

[00:00:31:05] Ramit: I think that you’ve made a fundamental miscalculation.

[00:00:33:24] Sana: I want to get to a stable place where I can help my family the way I want to, without feeling limited myself.

[00:00:43:11] Ramit: Right now, you have no connection to feeling joy. Your worldview is so deeply embedded in the idea that you need to be in control of everything, that you’ll do that until the day you die.

[00:00:54:05] Sana: It feels like I’m slowly getting crushed under it.

[00:01:00:19] Ramit: What would you do if you were about to get married, and you discovered your partner was hiding tens of thousands of dollars of credit card debt? Today I’m speaking to Sunna and Aram. They’re both 27 years old. They’ve been married for about a year, and they wanted to speak to me after a huge betrayal in their financial relationship.

[00:01:18:25] Ramit: They actually both applied to speak to me, Sunna, last September. Hum. Just recently. Just a few months ago. Listen to the difference in their applications. I found out one month before the wedding that my partner is $30,000 in credit card debt, and I felt so hurt and betrayed. I think a lot of us would feel that way.

[00:01:38:16] Ramit: I’m very curious to talk to Sunna and see what was going through her head when she discovered this. Now let’s look at what our home wrote just a couple of months ago. We got very open and honest about my financial mistakes and how it could be a relationship ender. Since then, things have been much better. Where the roadblock comes in for me is that I want my wife to trust that we won’t go back to that low point again.

[00:02:03:22] Ramit: The question is, a year after being married, how do you come back from this and what is the path forward together? Let’s take a look at their conscious spending plan. Assets. $46,000. Investments $80,000. Savings 29,000. And debt $165,000. Kind of interesting. Yes, they have high debt. I’m going to assume student loans. I’d like to find out. What else.

[00:02:29:07] Ramit: Is there some credit card debt that was mentioned? $80,000 in investments already. Pretty considerable in their 20s. Total net worth -$9,019. Fixed costs 75%. That’s higher than I would like to see for sure, especially with that high of an income. I’m almost willing to bet that a huge part of that comes from their debt payments investments. 2%. That’s low savings, 13%.

[00:02:56:12] Ramit: Guilt free spending 11%. I have a lot of questions. Let’s talk to Sunna and I understand that you are both navigating a financial betrayal. Can you tell me a little bit about that?

[00:03:10:25] Sana: We got married in December 2024, so we’re a relatively young couple. We talked about finances before we got married, and I remember I had broken down my entire system and our home had told me was like, oh, like, I don’t do it like that, but I haven’t figured out. And so I didn’t question it further. Or home had told me that he was in debt maybe a month before our wedding.

[00:03:36:17] Sana: And then like a week after we had signed our lease. I didn’t know about this. I would have planned about the apartment and the size of our wedding differently if I’d known. But we got married and then our home was all like, I have this debt. I’m not going to go into more debt. But then things got to a really deep pit.

[00:03:56:09] Sana: In the middle of the summer time last year, we were already going through some financial troubles because we both lost our jobs for different reasons and had gone a little bit deeper in his debt. But he hadn’t told me, and so it felt like I was thrown under the bus a second time. I hate the idea of living in debt, and I can’t keep going deeper.

[00:04:19:09] Sana: And you need to take this as seriously as I do.

[00:04:21:18] Ramit: How much debt did he tell you he was in the first time?

[00:04:25:08] Sana: It was about 30 grand of credit card debt.

[00:04:28:09] Ramit: Okay. What did you feel when he told you that?

[00:04:30:09] Sana: It was like being stabbed. If I had known before we had started looking for apartments, we would have gone with a different price point. We could have found a little bit more affordable place. And so I had dreams of where of what our life would look like. And it felt like it’s not the same.

[00:04:49:24] Ramit: And when you say stabbed, what do you mean?

[00:04:52:20] Sana: I have spent my whole life avoiding debt. I know my parents struggled. I’ve. I know how hard my parents worked to pay it off. And so I was in no debt. I went to college on a full ride. I was going to be a teacher, and I had taken out loans and grants, but they all were forgivable if I had served a certain number of years.

[00:05:16:13] Sana: And so I had always calculated my life to be debt free so I wouldn’t feel that same burden. And so it felt like I had gone through so much effort to avoid this point. But I, through no fault of my own, I was still put into debt.

[00:05:35:17] Ramit: When he told you he had $30,000 of credit card debt a month before the wedding. What was your response?

[00:05:43:05] Sana: We had talked about like, what would our timeline look like for kids for buying a home? It’s like, well, the home is out of the question of this point. And I told them then that I am not ready to start a family until that debt is paid off. If that means five years, five years, that means seven years, seven years.

[00:06:01:14] Sana: But it’s not going to be as soon as we both thought.

[00:06:03:23] Ramit: Okay, okay, our home. Go back to that conversation a month before the wedding. What do you remember about that moment?

[00:06:13:16] Arhem: I remember we were buying furniture for the apartment, and I think that’s that was kind of the catalyst that led to this conversation, because I knew that I was about to be let go from the company. And so I was already nervous about that. And the wedding was coming up. And so I didn’t know how long the job search would take.

[00:06:31:11] Arhem: So then that’s why I was nervous about getting this, this furniture. And so then that’s when I asked, like, you know, why do you feel so nervous about it? And then that’s when I shared what was actually causing me this much anxiety.

[00:06:41:29] Ramit: Why didn’t you bring it up earlier?

[00:06:43:15] Arhem: I knew that it was bad, but I guess I wanted to shield her from it, which is why I didn’t want to share it. And so I thought, okay, I’ll come up with a plan on my own. I’ll. I’ll deal with it on my own and handle it on my own, essentially because I didn’t want the burden to be on her.

[00:07:00:28] Arhem: And I guess in my mind I thought, okay, well, if I don’t tell her, then that means that I don’t burden her with it.

[00:07:07:21] Ramit: Where did you get that reasoning from?

[00:07:09:14] Arhem: I feel like that was kind of the behavior that was modeled to me. That’s that’s kind of the dynamic between my parents and that my mom is a warrior. And then my dad is, you know, he he kind of takes on debt. He handles the bigger expenses. And whenever my mom brings up a concern, he sort of hand waves it away, saying, I’ll figure it out.

[00:07:30:18] Arhem: I’ll take care of it. And so that’s kind of what made sense to me, that I don’t really see a point in telling her about it, because it’s not her responsibility to take care of. It’s my problem to solve, I guess, is the way that I reasoned it.

[00:07:45:07] Ramit: What was the.

[00:07:45:22] Arhem: Fallout.

[00:07:46:11] Ramit: From you telling Sana about your debt the first time, and then the second time that you had gotten into more debt?

[00:07:52:18] Arhem: So the first time, I feel like it brought a little bit of a cloud over all of the wedding, because the wedding was then the next month after that, and then after the second conversation, that’s when it was the real low point. That’s and essentially what Sana said, which is what I took to heart, that, you know, if things don’t change, then their relationship is done.

[00:08:14:03] Arhem: Essentially.

[00:08:14:24] Ramit: You said that’s.

[00:08:15:15] Sana: Not always the implication of what I said. Yes.

[00:08:18:28] Ramit: What did you actually say?

[00:08:20:22] Sana: I don’t get panic attacks, but I started like wheezing. Needed to use my inhaler, which I never use. Yeah, it just felt like I’m putting in so much effort on my own and my partner is not matching that energy. And if we are not aligned, then I can’t keep doing the heavy lifting and this relationship won’t last as long as forever.

[00:08:50:12] Ramit: Now, looking back at that second conversation, what do you think Sana was going through when she realized you were in even more debt?

[00:08:59:25] Arhem: Sana as very methodical and she has grown up through hard times, financially difficult times. And it would be one thing if if she put herself in that position. But I think what she felt is that something out of her control now put her in a tough position. And I feel like there was a phrase she said at the time that, like, she’s sinking underneath and she doesn’t know how to do anything about that.

[00:09:26:29] Arhem: And it was primarily because of me that we were in a difficult spot.

[00:09:31:15] Ramit: How accurate is that?

[00:09:32:21] Sana: That’s pretty accurate. I worry a lot about my family. I worry about my sister. I didn’t think that I would need to worry about my partner, and I’ve always wanted to be on a team and approach life together. But it felt like I already have so much on my plate. And I told him that, like, there’s only so much I can handle, and at some point I would break and then that would be the end.

[00:10:06:01] Sana: And so the last summer was difficult, but something clicked for him. I gave him your book, he read it. We started listening to her podcast together. We put together our CSP. We consolidated all of his debt. And so now it’s paying it off as aggressively as possible. I’m very grateful that ARM has learned because he cares about a relationship.

[00:10:37:00] Sana: So I’m glad that piece is there. It’s just it’s going to take us a couple of years to get out of the pit that we’re in. Yeah.

[00:10:45:04] Ramit: Wow. That’s pretty impressive. I just want to say, have you both acknowledged how much has changed in the last few months?

[00:10:54:13] Arhem: I think we tried to I think she does a better job at saying, you know, I’m proud of you and I see what you’re doing. I, I guess I have a tough time in seeing that progress, because I know how bad of a spot we were in before and kind of seeing the way that she was that day.

[00:11:10:27] Arhem: I still see her see it clear as day, like I just didn’t want to go back to that, how she was that day. And so to me, that felt like the thing that clicked that day. Okay.

[00:11:22:07] Ramit: Two things really impressed me about this couple. First, that Sunna said, hey, this is not okay. And if you don’t make changes, then this relationship as it is can’t go on. That takes a lot of courage. That takes standards and boundaries. And so when I heard that, I’m making a mental note of it, saying, wow, she can really call the ball, she saw what was going on.

[00:11:49:14] Ramit: She said, that’s not acceptable. This is what I expect. And especially in the South Asian culture, where ending a new marriage would be a big deal. That takes a huge amount of courage. Then I want to note that Aram also responded to that. He was like, whoa, this is serious. I better fix this right now. And he has done that.

[00:12:12:00] Ramit: You’ll notice that sometimes when people have huge amounts of debt, one partner will not be as clear as Sunao was. They’ll dance around it. They’ll say, it would be nice if she just said, this is what I expect. You’ll also notice that sometimes the people who incurred the debt will come up with excuses. They’ll have reasons. They’ll try to push the ball back to the other person.

[00:12:33:03] Ramit: No, in this case, he said, I messed up. I’m making the plan. And he has stuck with that plan now for months and months. It’s really quite impressive for both of them, if you think about it. So the two of you are here now. You have a plan. You’ve been paying off the debt. What about the trust? Where are you with the trust when it comes to money?

[00:12:55:18] Arhem: I’m operating at a deficit. I’m still not at 100% trust because she did have 100% trust in me and I lost it. So now I have to regain it back. Okay.

[00:13:06:23] Sana: Yeah. And I would say it’s being rebuilt. I, I see where we were last summer and it’s been almost a year since that point. And so we’ve come hundreds of miles here. But I wouldn’t say that I have blind trust. Okay. Yeah.

[00:13:24:07] Ramit: Do you think you ever will?

[00:13:25:20] Sana: I think so, I think it will take time. I think the marker for me, it would be when or have climbed out of that credit card debt and then is able to show that he can stay out of it permanently.

[00:13:38:17] Ramit: Okay. Some people will never have blind trust. I think that’s okay. Some people will. That’s okay too. But I like that you have a vision of what it will take for you to trust him again with the money. How does money flow in your lives? Like, just paint the picture for me. You both get paid. And what happens?

[00:14:00:03] Sana: We have not combined our finances, and so we get paid out from work separately into our own accounts. And then we set up our CSP. And so we automate what goes where. And then after all of that is done is what is left over for us to enjoy.

[00:14:19:17] Ramit: So do you have a joint account at all? No. Okay. So like, somebody might pay the rent. Somebody pays groceries. Is that how it works?

[00:14:28:20] Arhem: Yeah, we designated that. Okay, I’m going to take care of this. You take care of that. But we pay out of our own accounts.

[00:14:34:08] Ramit: Got it. Okay. And how do you feel on a monthly basis about money?

[00:14:40:01] Arhem: I have to be very strict and very vigilant, and it does feel a little bit constrained. But I also feel that it’s helpful for me right now to be somewhat constrained.

[00:14:52:00] Sana: I would say that I’ve never felt like fully free to do whatever I want with my money, but since last year, I’ve been tracking like, everything. And so now I know exactly where my income is going. We’ve cut down how much we have for guilt free spending, but we’re very intentional with what we do with it. And then I’m also working on telling myself that it’s okay if I spend on myself, because I know that’s something that I’ve struggled with my whole life.

[00:15:22:11] Ramit: You say yes to other people before you say yes to yourself. Yes. Yeah. Okay. In your entire relationship, not just in the last six months, but in your entire relationship, what role does each of you play?

[00:15:35:11] Sana: I feel like like an orchestrator or like, sometimes like the Mad Hatter. I feel like I know everything that is expected of me and everything that I have to do. And so I take care of those things first, and then whatever’s left is for me. Oftentimes it’s not enough for me, but I’m okay with that.

[00:16:01:25] Ramit: Got it. Okay. Do you have your hands in too much or just the right amount?

[00:16:07:20] Sana: Leaning on too much. But I can do it.

[00:16:11:10] Ramit: Oh, okay. What’s your role?

[00:16:13:21] Arhem: Before last summer, I felt like she was kind of nagging or nosy about money. And then I was either trying to avoid talking about it or just sort of hand wave it away, like, you know, I’ll figure it out. Why are you being on my case now? I feel like it’s like a professor. Then I’m like a student and I say, hey, like, look at how I did.

[00:16:35:25] Arhem: Did I do good this time? I really want to show her that I am taking. I’m still taking that day seriously in that time. Seriously? Yeah, I do feel like she’s an orchestrator and I guess I’m I yeah, I guess student teacher maybe like.

[00:16:50:04] Ramit: What should the roles be? Because if these are the roles that you want, we can build around that. But if not, tell me, what roles do you think that you would like to both be?

[00:17:01:05] Sana: I would like for both of us to have equal rows and responsibility like a colleague. I don’t want there to be a hierarchy. Okay. And so if he wants to be my co conductor of my orchestra.

[00:17:16:15] Arhem: Yeah, I would like for both of us to act as like, you know, two C-suite members maybe as part of a business like. But I feel like in a successful business, if there are two, two higher ups around the same level, they have a trust in each other and they don’t have to check in on each other so frequently.

[00:17:34:19] Arhem: Got it.

[00:17:35:19] Ramit: Okay, that’s good to know that that’s the vision of where you want to go. You mentioned that you feel that you have to over prepare sometimes. What does that mean? How does it show up?

[00:17:47:05] Sana: I help my parents financially. My dad used to talk about buying a home and he’s like, yeah, we can do it. So I was like, okay, like, I want to help you with that. And so I had saved up a certain amount. We didn’t end up buying a home, but they did move apartment. And so I’ve been helping them financially with that.

[00:18:07:18] Sana: My sister went through some hard times last year and I was helping her financially as well. I also left my profession and so I do have to pay back those grants. I’m in my second master’s program.

[00:18:24:16] Ramit: What are you getting your master’s in undergrad?

[00:18:26:29] Sana: I was so committed to being a teacher. I went to a master’s program, became a teacher, taught for a couple of years. But then I burned out very quickly and I knew that it wasn’t sustainable. And so I stepped away. I went through a little bit of like, a midlife crisis in terms of my career. And so I pivoted.

[00:18:51:26] Sana: I got my undergrad degree in math. I’m a data analyst now. I’m getting my second master’s in data science with the goal of like, getting as proficient as I can in data science, and then with also the goal of maximizing my income as fast as I can, as early as I can, just so I can do everything that I want to do.

[00:19:17:09] Sana: Okay. But I’m taking out loans intentionally for the first time. But it feels like with all of these things, there’s less space for me.

[00:19:30:17] Ramit: Hearing you describe it feels overwhelming to me. I can’t imagine how it feels for you.

[00:19:36:27] Sana: Yeah.

[00:19:37:29] Ramit: What’s going through your head as you think about it? It’s okay if you need to take a minute.

[00:19:42:17] Sana: Yeah. Nobody puts this responsibility on me, but I put it on myself, okay? I know that my parents worked hard. My mom especially. She did a lot for me. And so as they get older, as I get older, I want to take some of their burdens off their shoulder. And so when they had moved apartments, I had agreed, like, I want to support you.

[00:20:10:17] Sana: And so I have been. My sister and I agreed that we would go, we would have a certain amount that we would support our parents with. And then she lost her job. And so I took on her share. And so I was doing double what I had first agreed to. I want to get to a stable place where I can help my family the way I want to without feeling limited myself.

[00:20:39:22] Ramit: Yeah, I can see that. You start off with the best of intentions. You still want to help them things come up. Your sister loses her job suddenly. You’re now responsible for double the amount than you had thought. Do you ever say no to your family?

[00:20:54:24] Sana: They told me not to help them.

[00:20:57:29] Ramit: They tell you not to. And your response is.

[00:21:02:12] Sana: I can’t stop. Because I know what my parents income is. And I know that their apartment would be too much if they paid for it completely on their own. And so I don’t want to put the burden on them. And so right now I can help. And so I want to.

[00:21:23:27] Ramit: Does it feel good?

[00:21:25:17] Sana: Yeah I feel like I can always do more for them.

[00:21:29:26] Ramit: Interesting answer.

[00:21:32:14] Sana: Yeah.

[00:21:33:00] Ramit: Any surprises are I’m hearing what’s on I say.

[00:21:37:09] Arhem: At least what I see is I don’t really know how much more she can do without stretching herself even further out.

[00:21:44:18] Ramit: You don’t have a brother, do you.

[00:21:46:01] Sana: Know we’re two sisters?

[00:21:47:21] Ramit: Are you the oldest? Okay. You know, usually we hear men saying, I can do more. I can take on more, I can take a burden. Whatever. If I have to work seven days a week and get sick, no problem. I’ll do it. Like grind my body into the ground.

[00:22:05:26] Sana: My dad tells me and my sister that we’re like, sense to him. And I laugh it off, but like he says it because we we, the two of us post ourselves as far as we can go. We got it to great schools. We both made sure we’re not going to put a burden financially on our parents to go to college, so we made sure that we had scholarships to cover it.

[00:22:30:09] Sana: And like we’ve gone away further than anyone expected. And so I don’t know. In like South Asian culture, that’s the role of a son.

[00:22:40:23] Ramit: Got it. That’s helpful. Think about what it means to take on more and more burdens from more and more people. If you’re strong, you can take those burdens on. It might actually feel good for a while, but over time, those weights get heavier and heavier. You start to shrink. It’s small, it’s restrictive. It limits what you can do in your own life because you’re simply following what other people have put upon your shoulders.

[00:23:08:15] Ramit: I’m actually really glad that I get to speak to them, because there’s a large cultural role happening as well. Typically, the oldest son is the one who is responsible for his parents, but because Sana does not have brothers, she is the oldest. She has essentially seamlessly stepped into the role of needing to take care of her parents. There’s also dynamics around who’s the responsible one, what do we talk about, what is okay and what is not okay.

[00:23:38:09] Ramit: But if you were raised in the South Asian culture, you invariably know these rules. I know that we’re here because Ram had a ton of credit card debt, and he betrayed her by not being honest about it. That is not okay. But Sana also has a role to play. In fact, when I speak to couples, almost always I find that they have co-created the dynamic that they find themselves in, and we’re going to get into their numbers right after this.

[00:24:13:04] Ramit: Can we take a look at your numbers? Okay. Can you read the word in bold. And then the combined number next to each of these for the whole box? Go ahead.

[00:24:24:13] Sana: Assets are 46,250. Investments are 80,840, savings are 29,460. Debt is 165,569, with a total net worth of -$9,019.

[00:24:44:23] Ramit: Okay. What do you think about those numbers?

[00:24:46:28] Sana: They’re not positive. I would love for them to be positive. I think we have a long way to go. This is the starting line of where we’re beginning.

[00:24:58:10] Ramit: Okay. What do you think about the numbers?

[00:25:00:28] Arhem: I don’t think that they’re reflective of the kind of income or the kind of profession or the high standards I think, that we both hold ourselves to. And so but like I said, they’re a starting point for now.

[00:25:14:04] Ramit: Okay. What’s the 165 K in debt? What makes up that number.

[00:25:18:20] Sana: For my dad? I have about 7000 on my car. And then the rest of it is the student debt that I’m taking on for my master’s program.

[00:25:27:26] Ramit: And then I want to ask the same question to you, our home, let’s just say $100,000 of debt. What makes that up?

[00:25:33:23] Arhem: Yeah. So 52 of it is student loans. 18 of that is a car loan with an interest rate of 3%, like just under a thousand is a medical debt 0% interest. And then the remainder of that is consolidation loans, which are essentially to pay off the credit card debt.

[00:25:54:07] Ramit: Okay. How much. And the in all of that the consolidation.

[00:25:58:22] Arhem: You can say close to 20.

[00:25:59:25] Ramit: Five okay. Great. 25,000 in consolidated. What’s the interest rate on.

[00:26:03:28] Arhem: That one is ten one is 11. So it’s made up of two loans.

[00:26:07:03] Ramit: Okay okay. That helps me understand. I know by the way that we have a disparity in savings. We have $25,000 in savings for $4,400 for our and $80,000 in investments for a $500 in investments for. Let’s go on to the income. Can you read off your combined monthly income, please?

[00:26:33:00] Arhem: 15,738.

[00:26:35:01] Ramit: All right. Cool. So the two of you make $188,000 per year by a show of hands. Who knew that number? Wow. Both. Okay, good, I believe you. You two know your numbers very well. Great job. Okay, what do you think about that number $188,000.

[00:26:52:17] Sana: That’s a fantastic income.

[00:26:55:01] Arhem: Good. Yeah, I think it’s quite good for the age. Right.

[00:26:58:11] Ramit: Right now. 27. Right.

[00:27:00:22] Arhem: 27. We’re just turned 20.

[00:27:02:08] Sana: We’re turning 28.

[00:27:03:02] Ramit: This 2728. Okay. Yeah. Great income. Very good. All right. Let’s take a look at the rest of this. So you all just so we highlight your contributing a combined $778 a month to your 401. Yeah. What does that to get the match? Yeah. Okay. You have 75% fixed costs. What do you think about that number.

[00:27:25:10] Sana: It’s very high. But then we’ve also inflated it a bit because our home is overpaying for his debt to pay it faster.

[00:27:33:06] Ramit: That’s what I suspected. Taking a look at the numbers here you have rent of $3,600, which is 23%. Not bad for the area that you live in, which is expensive car payments at 1020 total two car payments. Yeah. All right. Debt payments at 1976. And I see that’s you paying 1597 a month. That’s over the minimum, I assume.

[00:28:01:10] Arhem: Yeah, a big chunk of that is the consolidation loans. Basically I’m paying two times the amount of payment.

[00:28:07:00] Ramit: That’s right. So that’ll that’ll raise this number considerably just to play with the number. Here. Let me just take this down to let’s just say $1,000. And what would happen. Yeah you’re down to 69%. So there’s quite a bit of wiggle room with an income like that. Looking at the rest of these groceries or only 506. Is that true?

[00:28:26:20] Ramit: Yeah. How is that possible? You eat at work? No. To hell tell. Tell America what you eat.

[00:28:32:15] Sana: Oh, we shop at our local meat market, and we got everything there and so.

[00:28:37:12] Ramit: But go into detail, because I have too many people who come on the show telling me they spend 1500 a month for two people, and there’s no way for me we can cut it down.

[00:28:44:17] Arhem: A lot of it is I feel like they seafood, Asian food.

[00:28:49:06] Sana: Pretty much. It’s chicken and rice.

[00:28:51:10] Ramit: Yeah, yeah. Oh my God. All roads lead back to chicken and rice.

[00:28:55:23] Sana: In different cuisines. Love it in a rice.

[00:28:57:24] Ramit: Okay. I don’t even want to get into my whole rant about food and my chicken and rice theory, but great. Love it. $506 a month for two people and you’re not eating at work for free.

[00:29:10:09] Arhem: And I will say like that also includes sometimes you get like little treats and stuff and like what? Like sometimes we’ll get cookies or like sparkling juices and stuff. So if we really wanted to cut it down to the bone, we could maybe make that for 50, but.

[00:29:25:21] Ramit: Okay, cool. You have cats. Multiple. How many cats?

[00:29:30:02] Sana: Just two.

[00:29:31:14] Ramit: All right. Subscriptions at $21. What is your subscription for $21.

[00:29:36:27] Sana: That’s Spotify family.

[00:29:38:18] Ramit: Amazing. No Netflix, no nothing.

[00:29:41:04] Sana: We leech off of family and friends.

[00:29:43:20] Ramit: Okay, parents, this is you, son. Sending money to your parents?

[00:29:49:14] Sana: Yeah, it’s actually 600W.

[00:29:52:01] Ramit: Why is it not correct here?

[00:29:53:03] Sana: It’s because I have the pool that I had saved up years ago. And so I put in 200 for my paycheck and then 400 from that pool.

[00:30:03:11] Ramit: You’re drawing from that savings? Yeah. Okay. Got it. All right. Miscellaneous. You put it into $160. I actually believe you. I have no comments. Okay, moving on to investments. What’s this number?

[00:30:16:09] Sana: Just 2%.

[00:30:17:06] Ramit: 2%. Fine. Savings are at 13%. You have $200 a month for vacations. You have car maintenance home for 360. This is for you eventually buying a house.

[00:30:28:18] Sana: I just want three months of rent saved up in a home specific account, and then emergency funds for everything else.

[00:30:35:04] Ramit: Great. I like the way that you’ve structured this. I really like that. It’s methodical. You know, you’ve made choices like I wouldn’t make. Well, I wouldn’t own cats, but I like that you. Everything has a rationale for it. It’s like walking into somebody’s house and there’s a nice little organization system for everything that’s really, really helpful. And then finally, down to guilt free spending.

[00:30:56:19] Ramit: 11%, I believe this. What do you spend this $1,143 a month on?

[00:31:02:16] Arhem: I mean, it’s really just eating out every so often. Like maybe I’ll get gifts for family or got it.

[00:31:11:06] Ramit: Okay, I’m going to take this off screen, but I think I have a good understanding of your numbers. How do you both feel looking at that CSP?

[00:31:20:11] Arhem: Honestly, I feel a little bit better about how it looks now than I used to feel about it in the past, but I also feel that it can be better. And that’s what we’re trying to work on, is to make sure that that that we don’t feel stressed about money every month. Okay.

[00:31:37:04] Sana: I’d rather be overprepared that under. And so seeing it all broken out like that and then knowing exactly where things are going makes me feel comfortable.

[00:31:47:21] Ramit: Is there any happiness in money for either of you?

[00:31:51:19] Sana: I think now when we do go out to eat, we don’t feel bad about spending it at a restaurant.

[00:31:59:10] Ramit: Every interesting answer. Is there any happiness in money? Sunna? When we eat out, we don’t feel bad. The lack of feeling bad is not feeling happy. Let me ask it again. Is there any happiness when it comes to your money?

[00:32:17:29] Arhem: I wouldn’t say I feel happy, it’s more like okay, we have structure. So maybe to Sonny’s point, when we go out to eat, it’s like, okay, we’re not worrying about are we making the wrong decision here by eating out now I feels like, well, we plan for this so we can enjoy this, at least for right now. But there’s not a broad happiness.

[00:32:39:25] Arhem: Maybe. To your point.

[00:32:40:25] Ramit: I don’t think there’s a narrow happiness either. It doesn’t feel happy at all. It feels very organized, which I love. Meticulous, yes, I love that too. But interesting that I’m the only one using the word love here. It feels a bit soulless to me. Tell me if I’m reading that wrong. That is the way that it feels to me.

[00:33:03:10] Sana: It feels like we’re grinding right now. Yeah. And so it is very structured and somewhat limited for us now, but there is an end date in sight.

[00:33:15:21] Ramit: And then what will happen?

[00:33:18:25] Sana: Some other things are going to come up, but at least you won’t be in debt.

[00:33:23:01] Ramit: But but I could easily foresee that the debt gets paid off. And then you go, okay, cool, we need to up our three months to six months. We need to up our payments on this, to that, we need to start saving for a car and then for a house and then maybe other things. And it just becomes one series of checklists after another.

[00:33:43:10] Ramit: Does any of this sound familiar?

[00:33:45:16] Sana: Yeah.

[00:33:46:06] Ramit: Like what?

[00:33:48:01] Sana: It’s just delayed gratification. I mean, I’ve joked about it with him, too. It’s like we’re going to pay off this debt. And then like pretty soon after that, I’m going to have my student debt to pay off, and then we’re going to have kids and then there’s childcare. And so all of our debt payments now are going to be replaced with childcare costs.

[00:34:10:08] Sana: And I’m really glad that we’d be able to afford it. But then like, when do I get to enjoy it feels like never. So yeah.

[00:34:20:29] Ramit: What is the answer to that? Because I don’t think a couple making $200,000 in their 20s should be living like subsistence farmers. Is the approach to just grind more.

[00:34:32:09] Sana: That is, for now, I think we’re going to. I’m really glad that we’re going on vacation once a year. And so it feels like, okay, we’re going on vacation in seven months. When we’re there, we won’t have to worry about anything.

[00:34:47:02] Ramit: Well, vacation is good, no doubt, I love it. I don’t think that really solves the systemic root here. Yeah, it’s nice. It’s a trip, but that doesn’t solve what’s going on.

[00:34:58:04] Arhem: I guess when I hear it back, it does sound very robotic and maybe a little soulless, but to me, I don’t feel like our day to day life is that way. And if anything, the way that I feel. You can tell me if I’m wrong. But the way that I feel is I feel like we’re on a project, like we’re working towards a goal and I actually derive some joy day to day seeing, okay, how much of the debt am I at now?

[00:35:22:03] Arhem: I think my personal net worth when we first started this was -82, okay. And now it’s at -69. That’s great. So you know, to me at least, I derive some joy day to day saying, okay, I’ve made all this progress so far. We are making this progress so far. So yes, it is checking off a checklist. But, you know, if we were on a sports team, we’re working towards a championship.

[00:35:45:25] Ramit: I like your pushback and I like a couple that is united in a big, bold goal. I love that and it takes sacrifice which you’re doing I can tell. You know, like the way you describe your groceries, you could easily be spending a lot more, there’s no doubt about that. But I’m getting many clues that while you will achieve your goal, I know you will pay off the debt, that there’s perhaps a lack of meaning behind what is happening here.

[00:36:18:29] Ramit: And I also want to help you create a vision of money that is maybe bigger and more meaningful than we fill up account after account for things that may happen. I see you nodding, Sana.

[00:36:30:17] Sana: Yeah, I think we’re so long I’ve operated where I have to fill up these buckets. For everyone else. It feels like I know I don’t spend on myself as much as I could, and so part of it, it’s like when I do have that, like, what would I spend it on?

[00:36:52:17] Ramit: You don’t even know.

[00:36:53:18] Sana: Yeah.

[00:36:55:22] Ramit: Well, we can figure those out soon. I noticed that you get emotional when you’re talking about your family and about yourself. What do you think is behind that?

[00:37:06:11] Sana: I guess the clearest example I could give if you’ve watched Encanto, there’s the sister Luisa, who is super strong, but she also has a ton of things put on her. She feels like she’s holding the world. It’s a cartoon, but like, I relate to her so well and my family is always talked about me in a way where, like, sonar has things figure it out.

[00:37:34:05] Sana: Son is an overachiever, really smart. So I’ve always pushed myself post, post push, and I know that it took a lot of sacrifices to get here from my family, and I want them to know that I appreciate them. And I guess I would say that, like my income for sure, or combined income is higher than when my parents ever could as hard as they worked.

[00:38:06:15] Sana: And now that I’m moving up in life, I can’t move up and just leave them behind and I have to take them with me. But it’s a lot more effort and work to do that than I had ever anticipated.

[00:38:25:23] Arhem: The word that I had used when I first met someone, and when I was starting to fall for her, is that she’s very impressive. Like everything that she does, she just does it exceptionally well. And I really admired that about her. But now as I’m living with her, I see, I guess maybe the cost of that in that the toll that it takes on her mentally and physically to.

[00:38:49:29] Ramit: Just imagine for a moment that you grew up in the South Asian culture. Imagine that you were the oldest child. Imagine that your parents somewhat struggle with their finances, and you make more money than anybody in your family. Of course, you are going to be expected to help them. And of course, there is no concept of saying no to your family that doesn’t exist.

[00:39:12:08] Ramit: How would you react? You might react the very same way Sanaa is reacting, but deep down she also looks at her own relationship and she’s realizing this isn’t the type of relationship that I thought I would find myself in. What is she supposed to do? That is where the struggle is. Feeling trapped by so many of these external expectations and not knowing where to go next.

[00:39:38:25] Ramit: There is obviously something going on here. And up next I’m going to ask her how she grew up with money. It’s very illuminating.

[00:39:50:12] Ramit: What do you remember your family saying about money when you were young?

[00:39:53:09] Sana: My mom has this notebook. It’s essentially a spreadsheet. She has a spreadsheet on paper where she has years of records and she would like fill it out as she would pay bills every month. And so when I was flipping through a book that I found out that we were in debt my whole childhood, and I didn’t know my sister and I didn’t ask for much, but we got everything that we wanted.

[00:40:19:23] Sana: My mom was able to achieve a lot with the limited resources that she had. And then the biggest culture shock was just going to college.

[00:40:29:03] Ramit: Before we get to college.

[00:40:30:17] Sana: My gosh, I did it. Expect to cry this much.

[00:40:35:16] Ramit: It’s okay. Do you cry when you talk about your family in everyday conversation?

[00:40:41:28] Sana: No.

[00:40:43:11] Ramit: Why do you think today.

[00:40:44:27] Sana: I carry the weight of expectations on me, whether it’s I put them on myself or my family, put them on me and it feels like I’m slowly getting crushed under it. And so this is how it’s released.

[00:41:04:26] Ramit: Helps you express the feeling of having all these expectations put on you.

[00:41:09:26] Sana: Most of the time I’m great. I don’t feel weight. It’s just every once in a while it just piles up. And then this is how it releases.

[00:41:21:22] Ramit: Yeah. How would you describe that?

[00:41:23:10] Sana: That I have a lot of things on my plate, and that I try not to show it to other people, that I try to do everything without looking or sounding stressed.

[00:41:36:25] Ramit: Yeah.

[00:41:37:16] Sana: But it takes a lot of work to do that. And sometimes when I try to hide it from other people, that’s work in itself too.

[00:41:48:27] Ramit: Yeah. You know, I don’t get affected by stress. Like most people. I can take on a lot, like run a company, do all kinds of stuff. And for a long time I, I told myself, like, I don’t feel stress the way that others I just don’t I don’t feel it. And then my company went through a tough time and we had to do serious layoffs.

[00:42:13:11] Ramit: And during that time I found myself waking up gasping for air. I never had this happen in my life, ever. I went to see the doctor doctor look inside my mouth and basically said, nothing’s wrong. Do you have any stress in your life? I laughed like, yeah, I have a huge amount of stress, but I simply never connected the two because I don’t feel stress.

[00:42:38:18] Ramit: And I remember walking out of there. I was in my mid to late 30s and being like for the first time, I realized, as silly as this sounds, oh, I’m just the same as everybody else. I’m just the same. I may have a higher threshold for dealing with certain things, but I’m just the same as everybody else.

[00:43:01:01] Sana: I know I am too.

[00:43:02:19] Ramit: Before you went to college, what was going on with money in your household? With your mom and dad?

[00:43:10:08] Sana: My mom, for as long as I can remember, has always managed the money. In adulthood. I learned that when my sister and I were really young, like my dad had taken out that a very high interest rates, and my mom studied math, and so she understood what the cost of that was. And so she said, you know what?

[00:43:33:27] Sana: Like, you work a lot, so why don’t I take care of this for you? And so she manage things to get us out of the debt.

[00:43:42:24] Ramit: This sounds extremely familiar.

[00:43:45:16] Sana: Yeah.

[00:43:47:12] Ramit: Like identical. I know your mom studied math. What did you study?

[00:43:53:07] Sana: Also math.

[00:43:54:26] Ramit: Your mom managed the money. Made a lot of plans of getting out of debt.

[00:43:58:22] Sana: Yeah, that.

[00:44:00:19] Ramit: Although I will say. Are you made a plan as well?

[00:44:03:09] Sana: Yeah. I wanted to make sure I could solve it for him today. I could pay off his debt today, but it is his. And I do want him to take away the lesson of what it takes to do that. And like I’ve tried my best to hold myself back as much as possible. But at the end of the day, this is our work to do.

[00:44:30:12] Ramit: That’s interesting. It’s quite strong of you creating a boundary, saying it’s important for you to learn this lesson. I could solve it today, but I’m not going to. That’s amazing. Have you ever applied that same thing to your own family?

[00:44:44:04] Sana: No.

[00:44:45:04] Ramit: Why? They disconnect.

[00:44:46:16] Sana: My mom single handedly runs our home and she tries not to show her stress. And I know I learned it from her. I want to do as much as I can to take that stress off of her. And so, even though she tells me not to help them with rent, I know that they can figure it out. But I don’t want I know.

[00:45:11:17] Sana: I also know that my mom would be the one to figure it out instead of my parents together figuring it out. And so I don’t want that extra burden on my mom. And so I try to reduce it for her.

[00:45:26:20] Ramit: Does it work?

[00:45:27:17] Sana: Yes and no. Every single month she tells me that I feel guilty from taking this from you. I, as a parent should be giving to you. But I tell her that no, I want to. That I promised that I would, and I’m going to live to that promise.

[00:45:45:04] Ramit: It’s interesting. After you got married, you effectively told Aram, if you don’t make a plan for this and deal with it, this relationship can’t continue. You said that, right? You said a boundary, maybe even changing the terms of your promise. And what was the result of that? What did he then do?

[00:46:04:15] Sana: Our homes learning now.

[00:46:06:16] Ramit: Yeah. He’s going through some tough times, but he’s made a plan. He’s executing on it. Right. You changed the terms of your promise. And the result has been would you say negative or positive?

[00:46:19:00] Sana: It’s positive.

[00:46:19:22] Ramit: Very positive. And yet you can’t change the terms of your promise with your parents, specifically your mom. Even though your mom has told you every single month. Don’t do this.

[00:46:34:20] Sana: I don’t I don’t know if that’s going to make my sense, but our him and I are partners and so I expect of him what I expect of myself. Okay. But my parents are my parents. They’re above me. I don’t expect my parents to be the same as me and or home.

[00:46:51:20] Ramit: It’s interesting. There is a hierarchy, but we might look at it and say you treat them almost as if they’re below you, below, as if they couldn’t figure things out for themselves like a child. I’m.

[00:47:08:20] Ramit: I don’t mean to insult. Hope it’s not coming across. I’m very sensitive to the South Asian dynamics here. I’m very well aware of them.

[00:47:18:27] Ramit: It’s. You know, it’d be easy for somebody who’s raised here with no cultural knowledge to be like, just cut him off. Obviously, that’s not what I’m saying. But when you say hierarchy, you see them as above you, because that’s what we are taught. Parents are above you, teachers are above you, etc., etc. but in a way, your expectation for our him has raised, his abilities raised, and yet the way that you have built this financial relationship with your parents and your mom especially has not raised their abilities fair.

[00:47:58:19] Sana: I would say that because I’m able to help them every month, they’re quality of life has gone up because they are in a nicer place now than where we live before.

[00:48:14:25] Ramit: I think that’s totally, totally respectable. How about your quality of life?

[00:48:21:04] Sana: My quality of life is also better than where I was as a child, but I’m also under a lot of stress.

[00:48:29:13] Ramit: Thank you for watching me through how you grew up with money. I think it’s very illuminating.

[00:48:36:25] Ramit: What about you? What do you remember your family saying about money when you were young?

[00:48:40:09] Arhem: I feel like it was somewhat conflicting messages in that what I heard from my mom was if we were walking through a store and there was a shirt I wanted to get, for example, my mom would say, I’ll think about it. Or maybe. And I interpreted that as probably no, because if she would, if she was going to get it for me, she would have just gotten it.

[00:48:59:12] Arhem: So a lot of times what I heard from her was that we were scarce with money. But then what I would see from my dad is that, well, no, we can’t get it. We can buy the toys. We can. And I think especially where the showed up is that, like my brothers and I could not have access to a lot of money or a lot of things or toys or whatever, but whenever family or friends or anybody came around, then, you know, let’s get tickets for Disneyland or let’s go to SeaWorld, or based on our income, my parents income, I feel like we were probably middle class, but we were trying to be in the

[00:49:35:21] Arhem: upper middle class level.

[00:49:37:17] Ramit: And how did that come out? Obviously SeaWorld and things like that. But was there other things.

[00:49:42:02] Arhem: Sometimes they would do, like home renovations or home projects. My parents don’t save up the money for it methodically. And so my dad’s philosophy especially is, well, let’s get it on credit. What’s the monthly payment? Okay. I can do that monthly payment and that’s it. That’s the extent to which they think about it.

[00:49:59:00] Ramit: Do you think that your spending behavior came from observing your family’s relationship with money?

[00:50:04:10] Arhem: Yeah, I’m I’m almost positive because and to Sonny’s point from earlier, like pretty much right out of school, my salary was already higher than my dad’s salary. And so in my mind, I thought, well, I have a lot of money and I can spend a lot of this.

[00:50:20:01] Ramit: What did you spend the money on? Just like.

[00:50:23:20] Arhem: Clothes going out to eat. I used to go out with friends a lot, so we would go out and either go out to eat, go watch movies, whatever, and the credit card balance built, because I would just keep the balance on there and either only pay the minimum or not really pay much at all. And I think before I met, I did not treat that with the level of importance and urgency that I should have been treating it.

[00:50:52:28] Arhem: The problems that I sort of brought into our marriage, which is that I had a lot of high interest debt on me and didn’t really have a concrete plan on how to solve it, or maybe didn’t understand the urgency or the importance of it. I think we’re behaviors that were model to me as a kid, because I know that my parents didn’t.

[00:51:12:18] Arhem: I think my mom knew that it was urgent and not good to have credit card debt, but I don’t think my dad really cared about or felt any kind of way about it.

[00:51:22:14] Ramit: Do you see yourself in the same dynamic as your dad before?

[00:51:26:15] Arhem: Yes. I think I’m making a conscious effort now that I don’t want to repeat either about my parents dynamic. Was or her parents dynamic, because I just I think it brings constant stress and anxiety to the point that either it forces a big burden on one parent in her case, that her mom had to take on a huge burden.

[00:51:50:21] Arhem: Or in my parents case, I feel like my mom worries about it kind of to herself. And I don’t want to repeat that kind of dynamic.

[00:51:59:02] Ramit: What messages about money do each of you bring to this relationship?

[00:52:05:17] Arhem: I guess what I would say is that as long as you have money coming in, and so long as the amount of money that’s coming in is like whatever payments you have, if you can make that, then you’re okay as long as you’re not at zero in the checking account.

[00:52:19:16] Ramit: Yes. That’s quite interesting that the idea of as long as we can make our monthly payments, we’re fine. Yeah, that is how a lot of people see money. It’s a very rudimentary way of looking at money. Okay. It’s kind of like saying, as long as we have a roof over our head, we’re okay. It’s like, that’s it. That’s the standard.

[00:52:40:04] Ramit: Like literally something over our head. And we have to go deeper than that. I think that’s a very accurate message you bring to this relationship. Sana, what about you?

[00:52:49:24] Sana: One memory that I have going up whenever we would go grocery shopping with my mom after checkout, she would always check the receipt. And if there was ever anything wrong with it, she would go directly to whoever to get it corrected. And so she’s always been like, super on top of how her money is being spent. And so I still find myself price comparing even when we go to the grocery stores like this.

[00:53:23:01] Sana: This juice is a dollar more than the other. Maybe you should get the cheaper one, but then I’m trying to catch myself. It’s like I don’t need to always do that.

[00:53:33:29] Ramit: Yeah, that’s a great example. That’s a great example for many reasons. One, you directly have modeled what you saw your mom doing checking into everything. But to me, that example goes even deeper, because if you look at the amount of wealth that someone accumulates over their entire lifetime and you add up all the mistakes they ever caught on a grocery receipt, how much is it worth?

[00:54:02:19] Ramit: Negligible $10. $100. It’s essentially meaningless. The idea that some of the activities that some of us do with money, we do them for hours every single week for our entire lives. And if you actually understood money, you would realize it’s meaningless. We would have been better off doing these two things really well, and never worrying about getting overcharged for apples.

[00:54:31:19] Ramit: And we would have been just fine. How much of that is showing up in this relationship? The idea that I need to be in control of everything.

[00:54:42:13] Sana: I know I have that feeling. That’s why I feel like an orchestrator.

[00:54:46:20] Ramit: Yeah. Now that you mention it, what if you were not the orchestrator? Who would you be?

[00:54:52:05] Sana: I would like to be every once in a while, somebody who can let someone else take charge. And I’m just there.

[00:55:00:10] Ramit: You’re just there.

[00:55:01:10] Sana: Being me, being a person, not worrying.

[00:55:07:01] Ramit: You think it’s possible?

[00:55:08:14] Sana: Yeah, I think it’s possible.

[00:55:10:05] Ramit: I know it is. So is it something you would want to do? Maybe change your role?

[00:55:17:19] Sana: Yeah I would. Right now I have, like, vacations to look forward to, because that feels like the only time where I can completely unplug from my day to day. And so I would like to not carry the weight every once in a while. That’s more frequent than just a vacation once a year.

[00:55:40:25] Ramit: Good. I can make it happen if you want. I’m going to start by asking you to change your language. So what you just said was interesting. You said I would like to not carry the weight. It’s kind of passive when you think about it. What is another way to say that that would involve you taking an active role in changing your relationship?

[00:56:03:22] Ramit: Look, I’m carrying the weight. If I want to get this weight off my back, what do I have to do?

[00:56:10:24] Sana: I have to take it off.

[00:56:12:12] Ramit: Yeah, you have to be a little bit more aggressive than that.

[00:56:16:01] Sana: To unload.

[00:56:16:25] Ramit: Yeah. Throw it off. Would you be willing to do that?

[00:56:21:01] Sana: Yeah. Okay. I’d want to. Yeah. If I knew how to, I would. Okay.

[00:56:26:29] Ramit: Well, we can talk about that. There’s a lot of tools and there’s a lot of people you can also get help from who can help you do that. Sometimes there is so much poignancy and even sadness in watching these messages simply get recreated generation after generation. Now there are some things we take away from our parents that we love and we admire, and we want to actively recreate those amazing.

[00:56:56:18] Ramit: But this is not one of them. This idea that I am now sentenced to a life of anxiety, that I constantly have to be looking over my husband’s shoulder and maintaining everything in this relationship. Because if I don’t, it all falls apart. Too many people, especially women, find themselves in exactly the same situation. Not on my podcast. I will not allow it.

[00:57:20:16] Ramit: Especially when you make the kind of money and have the kind of education that she does. So one of the things I want Sanaa to see is that there is a brighter future. There is something that will change, but it has less to do with the numbers and more to do with her looking inside and changing her relationship with others.

[00:57:43:06] Ramit: Have the two of you talked about what your rich life is?

[00:57:46:19] Sana: Neither of us really traveled much as kids, and so there’s a lot of the world that we haven’t seen. Cool. And so you want to hit a different country every year.

[00:57:55:20] Ramit: Keep going. I love this.

[00:57:57:00] Arhem: I do really enjoy traveling, but what would feel more meaningful and fulfilling to me is that I was at a certain wealth level that I could help my parents, I could help my brothers, I could help other family members with, you know, be able to be someone that they can rely on. And it’s not a burden onto me, and it’s not going to hamper us in any way.

[00:58:19:07] Ramit: Okay, I like that. Anything else?

[00:58:22:07] Sana: I, I do want to always support my family. Right now I see it where I have to expand my income so that I can afford helping my family while still expanding my budget for everything else. So I still see that as a part of my vision. And then also something that we joke about right now is I would love to foster cats.

[00:58:46:03] Sana: Right now it’s kitten season. And so there’s a ton being born, but there’s not enough room for them. And so if we could bring in a couple into our home, I think it’s a good way to give back.

[00:58:59:16] Ramit: I like that. I like that you’ve thought about it, I can tell. It seems like you talked about it as well. The vacations, the family. How about the way that the two of you relate to money? What would it look like in a rich life?

[00:59:14:14] Arhem: We have a coffee shop in a bagel shop near where we live in. Every so often we like to. On a Sunday morning we go walk there, spend some time there, and then we walk back. Yeah, and I would love to be able to do that without thinking about, okay, if we do this today, maybe we won’t be able to eat out later in the week or later next week.

[00:59:33:18] Ramit: Okay, so you’d like to do it more often without having to as carefully think about it? Yeah, I think that with the two of you making 188,000 soon to be a lot more, there will be a point where you go anything less than 25 bucks, 200 bucks, 500 bucks. We’re never going to think about it. We’re just going to do it.

[00:59:53:00] Ramit: That’s our worry free number. Even if it’s as low as $5. And you just don’t have to think about it. So you’ll get there, it’s no doubt. Would that solve what you want?

[01:00:05:02] Sana: Right now we track everything. I would love to get to the point where we have the big pieces in place, but how it operates, we don’t have to worry about that.

[01:00:17:13] Ramit: If you made three times the amount of money you made today, would you still worry about money?

[01:00:22:14] Sana: I would like to say no, but I don’t think that’s true because I keep adding things to my plate. And so even though our income would grow, so would the things on my plate. And so if everything grows proportionately, my worry stays the same.

[01:00:42:22] Ramit: No, it’s it’s not a math question. You could keep your expenses where they are today and double your income, and you would still worry why?

[01:00:51:26] Sana: Right now I feel like I have my hands in all the buckets.

[01:00:55:18] Ramit: Yes. And how do you feel about it?

[01:00:58:17] Sana: I feel spread that.

[01:01:00:00] Ramit: Yep. And I would say bad. You don’t feel good about money. I don’t see any joy. Even though you make a lot of money. You have a lot of money invested. You know, it’s going to turn into a whole bunch of money. No, joy. We can’t get to the rich life. You guys can paper it over with vacations.

[01:01:19:28] Ramit: But how many people do you know in America who are unhappy a lot? And then they take one vacation a year and they’re like, how come I’m not happy? Disneyland didn’t make me happy. Do you want to do that? No. Sucks. It’s play acting. The American dream. The idea that let’s overburden ourselves with all these expenses. Let’s never talk about money except to worry about it and fight about it.

[01:01:45:11] Ramit: And then we’ll take a vacation. Surely that will solve everything. And it doesn’t. And then we wonder, why are we so unhappy? Are we going to settle for this?

[01:01:56:00] Sana: No.

[01:01:56:12] Ramit: No, it’s got to be more to it.

[01:01:58:04] Sana: I know that we make a very healthy income. I want to feel good about that income without all the caveats attached to it.

[01:02:10:15] Ramit: Nice.

[01:02:11:21] Sana: Or haven’t I talk about, like, it’d be so fun if we joined the league together and learned in youth sport together, but it always keeps getting delayed.

[01:02:21:22] Ramit: Why?

[01:02:23:00] Sana: Because it feels like I have to take care of everything else first before I can treat myself to that.

[01:02:29:12] Ramit: Sorry. What’s. What am I doing with my body? What am I doing with that?

[01:02:33:18] Sana: I said throw it off.

[01:02:35:12] Ramit: So tell me, what’s one thing you want to throw off?

[01:02:37:28] Sana: I want to create a little bit more unstructured time. Where? And I have a weekly said time of we’re going to both do something.

[01:02:47:24] Ramit: What’s something you do right now that you would be willing to not do anymore?

[01:02:52:29] Sana: I would love to not have to spend one day a week cleaning our apartment.

[01:03:00:06] Ramit: That’s that’s it. That’s the easiest thing. Okay. Love it. How can you make that happen?

[01:03:07:09] Sana: We would love to hire someone to help.

[01:03:10:00] Ramit: That’s one option. What else?

[01:03:12:08] Arhem: I find it a little interesting. I think that she’s saying that she wants more unstructured time. Because when we’ve talked, last year was very unstable, very chaotic. And I think that the reason we’re doing better now is because our weeks are so structured. But now I’m hearing what son is saying, that maybe there can be a little bit more leeway, more unstructured.

[01:03:33:23] Arhem: Exactly. That’s why I’m wondering.

[01:03:35:24] Ramit: Talk to each other. I’ll just listen.

[01:03:37:16] Sana: I mean, our walks are definitely one of those things. I would just like to add to our list of activities that we do together.

[01:03:46:16] Ramit: Can I ask a question I love this, I think you should.

[01:03:49:02] Sana: Yeah.

[01:03:50:08] Ramit: Why do you think that you two are having a discussion about two hours a week for a couple with no children? That makes almost $200,000 a year.

[01:04:03:11] Arhem: The practical answer, I think, for one, is that we both work full time. She goes to the office and she’s also in grad school right now. So a lot of her days really are taken up in work and then school on the weekends, and then we see each other’s families. And then before you know it, the next week starts right there.

[01:04:21:00] Arhem: And so even talking about two hours of unstructured time feels like we have to carve it out of the week because it’s it doesn’t seem to freely be there.

[01:04:30:03] Ramit: You agree?

[01:04:30:27] Sana: Yes. And then also there is a cost of joining the league. It’s not that much. It’s a couple hundred, but it’s just that delay been of gratification where it’s like, let’s pay off this debt and then we can join the league versus I could probably just do it next month.

[01:04:51:08] Ramit: Does it feel good sometimes to restrict yourself?

[01:04:54:12] Sana: Yes. Because then it feels like the reward is bigger at the end. As a student, there’s always more that you can do and you can always be better at what you’re doing. So if I put on an extra three four hours into studying, I can be more prepared and then feel like it’s easier when I walk into the task.

[01:05:17:18] Ramit: Are you seeing the connection with why I’m bringing this up?

[01:05:20:00] Sana: Yes, because I do it with my finances as well. Like, I see the end goal and then I try to put all the work for it, forward thinking. And so I onload myself now rather than.

[01:05:34:01] Ramit: It’s not about your money, it’s about your relationship.

[01:05:37:05] Sana: Oh.

[01:05:37:27] Ramit: You say that you want time together. But when I ask why are we discussing two hours a week for a couple making multiple six figures with no kids? And there’s a very set of logical reasons. We have family, we have work, we have grad school, we have all these things. But ultimately, it’s the same principle you’ve been applying since you were a little kid.

[01:06:03:26] Ramit: I need to work. There’s more I can do. I need to do this, and then this and then this. And finally I will be in the place that I can do it. The same thing is coming up over and over and over again. I don’t know that you see it. So just to put it very bluntly, you two are going to make a lot more money.

[01:06:22:24] Ramit: The debts going to get paid off. No doubt about that. And you are going to recreate some of the exact same dynamics that you saw your parents doing, not just with money, but a lack of connection, a lack of a vision. Your worldview right now is so deeply embedded in the idea that you need to be in control of everything, and that you need to do A, B, C, d all sequentially, that you’ll do that until the day you die.

[01:06:48:22] Ramit: And guess who will observe that? Your kids. And then they’ll just do the exact same thing. What is the rich life? You told me vacations. You told me the bagel shop. What is it with the two of you?

[01:07:00:14] Arhem: I guess I would love to do more things together without a checklist running in the in the back of our head, like, you know, I feel like now, the time that we spent together, it’s stuff like grocery shopping. Or maybe it is going to see our families or it’s to serve some broader functional. Yeah. It’s.

[01:07:20:29] Ramit: Yeah. Okay. So let’s fix it right now. If you both claim you want to have more unstructured time, make it happen for this coming week. What would you do?

[01:07:34:19] Sana: Today we both took the day off. So you’re planning on having lunch together and walking around the area? Great.

[01:07:40:20] Ramit: Next week.

[01:07:41:19] Sana: And then we were talking about joining a bocce ball league. Great. I was debating it, but I’m leaning closer and closer to just getting us those seats.

[01:07:52:02] Ramit: And when you say you were debating it in your head, you were saying time, money, anything else?

[01:07:58:14] Sana: It was those two. Okay. And then also we have my cousin and his brother come over on Thursdays in the week that I’m looking at is on Thursdays. So I was I was going to convince them to join. They might or might not, but I still want us to do it.

[01:08:15:03] Ramit: Great, great. I love that the two of you come first. And if they want to join, great. And if not.

[01:08:21:06] Sana: Push.

[01:08:21:19] Ramit: Off, just say, hey, we’ve decided like we’re going to be doing this. So Thursdays not going to work anymore. It’s totally okay. What else?

[01:08:31:01] Arhem: I love watching movies. I would love to be able to some weeknights during the week. Maybe we go watch a movie and it doesn’t have to be a weekend. It could be like a Tuesday night. Could you do it? I want to say yes, but I still come back to the thing of because she’s in grad school and we both work long hours.

[01:08:50:29] Arhem: I guess the question that I have for you then is how do we reconcile this? Where for someone like Sena, who is so organized and wants to control different factors of their life, and I know that I’m trying to control it because I don’t want to go back to how last year was, how do I put in my head that maybe life could be better, kind of loosening the rope.

[01:09:13:06] Ramit: It’s a good question. Life is better. Now, I, I think you would both agree. You’re you have a debt payoff plan. You’re more in control of the money. I think that’s really good. What I’m hearing that you’ve both expressed in different ways, especially you, Sena, is I want to have a little bit more fun. I want to be more connected with each other.

[01:09:37:24] Ramit: And when I’m asking you, like, what would that look like? It’s actually very simple stuff. It’s playing a sport once a week. It’s seeing a movie maybe once a month. So the way I would do it is first I would just say, can I afford it? Okay. And I think with your numbers even being in debt, you could afford a movie and a sports league.

[01:10:00:07] Ramit: So do we all agree on that?

[01:10:02:09] Sana: Yeah.

[01:10:03:02] Ramit: Okay. The second thing is I would say timewise. When does it work? Look, sometimes grad school is going to make it so that she has to work five days a week in the evenings. Fine. But I might ask her. Hey, I’d like for us to go and spend some time together. I’m thinking Tuesday or the second Thursday of the month.

[01:10:24:01] Ramit: How does it look for you? Plan ahead. Put the time on the calendar. It’s still structured, but you are driving that one and she can just be and then you can do the same, vice versa. That’s how you do it. And if you need to change it at the last minute, change it. But over time, I think that you will be able to make these date nights or whatever you want to call them happen regularly.

[01:10:47:21] Ramit: What I’m trying to get you to do is to maybe realize that the point of life is not to be dialed in on every single thing all the time, until the day you die. That sucks. That’s actually meaningless. It’s just you sitting there exerting control on what’s the next problem in life. You actually do all this stuff so that you can live a rich life.

[01:11:08:02] Ramit: And if that means something as simple as walk into a bagel shop or seeing a movie, great, then you should do that. Can we look at the debt payoff plan? So I understand that you have a debt payoff plan. I’m going to put it on screen here. It’s very impressive. This is a great debt payoff plan. So when you look at this.

[01:11:29:26] Ramit: What does it tell you?

[01:11:30:27] Arhem: I feel like I look at this and I see a light at the end of the tunnel.

[01:11:34:21] Ramit: What is the light?

[01:11:35:18] Arhem: I feel like it’s at the end of 2028 once the car loan is paid off. If we can just get to the end of 2028, because I’m also, once I pay off that first consolidation, then I plan on paying off the other one more aggressively so that pay off date should be a little bit sooner.

[01:11:51:03] Ramit: So according to this, you’re going to pay off one of your loans by the end of 2026. And the longest loan is 2043. But if you take the amount that you’re paying towards the consolidated first loan, and then you just roll it into the next one and the next one and the next one, all of these are paid off by roughly 2030.

[01:12:14:00] Ramit: Did you know that?

[01:12:14:28] Arhem: Yeah. Oh 2030.

[01:12:16:09] Ramit: What’s that reaction?

[01:12:17:18] Arhem: In my mind, I thought it would be 2035 for this.

[01:12:21:01] Ramit: Faster than that.

[01:12:22:04] Arhem: I’m a little shocked. I’m not going to lie.

[01:12:25:13] Ramit: Did you know that?

[01:12:26:23] Sana: No. We only planned it until everything but the student loans is done.

[01:12:33:02] Ramit: Oh. It’s true. It will be paid off faster than you think. And even if it’s 2035. What do you care? You’re in your 30s at that point. Still quite young. I’m like, what’s happening right now? Because to me, I’m feeling joy. And the reaction I’m seeing from you is concrete. It looks like I’m looking at concrete right now.

[01:12:55:22] Ramit: What’s happening?

[01:12:56:22] Arhem: I guess it’s not really going to hit me until it’s done.

[01:12:59:06] Ramit: Oh, so we have to wait another ten years to feel it?

[01:13:01:26] Arhem: No, I see this, like, you know, we’re a sports team working towards a championship, and our championship is. This is going to be paid off.

[01:13:10:15] Ramit: But you guys are not a sports team. Your husband and wife, it’s different. I like goals, I like winning, yes, but I don’t want to only win with my wife. I want to be connected to my wife. I want to feel intimate. I want to feel joy. I even want to feel sadness. I want to feel my wife is not my business partner.

[01:13:33:09] Sana: We do laugh together. We’re not. We’re not only a strictly business all the time. I think just when it comes to money, we end up turning into like these. Emotionless.

[01:13:49:14] Ramit: Yes, keep going.

[01:13:51:01] Sana: And like regimented?

[01:13:54:24] Ramit: Yes.

[01:13:55:28] Sana: But outside of this spreadsheet, we do have fun together.

[01:14:00:10] Ramit: What if money could also be fun? Yeah. What would it look like if it were?

[01:14:04:25] Sana: We can say yes to things without thinking twice about it.

[01:14:08:03] Ramit: Okay. What else?

[01:14:10:00] Arhem: The early part of our marriage, we were prioritizing fun and going out to eat and, you know, having a fun time with each other. But then maybe the message I took away is that the low point that we were at is because I prioritized that rather than this, I would say so, but but maybe not in the way that I think it should be.

[01:14:29:02] Ramit: Okay, so let me ask you this. You wanted to come here and speak to me. Why?

[01:14:34:10] Arhem: I don’t think this is the way that we should be. I think this is fine for us to do till maybe, let’s say, 20, 28, but I don’t know if we should be doing this when we’re, like, 35 years old and on. Okay. I wanted to learn from you how how can we be prepared now to be able to live that way later on?

[01:14:55:01] Ramit: Okay.

[01:14:55:23] Sana: I’d say I wanted to come on here to feel less stressed when it comes to money. I think the joy that we feel when we look at this is like before we were this much under, and now we’re this much under, as in, we’re climbing out of the hole. But I think the true joy doesn’t come from digging yourself out.

[01:15:20:09] Sana: It’s to what you can unlock yourself to do with it.

[01:15:25:11] Ramit: Beautiful, true joy is not linear. True joy, in my experience, is not simply we did this and we got here. Although that is great. It’s a great sense of accomplishment of what you’ve been able to do individually and together. It’s huge, huge. Having this plan is amazing. I rarely see a plan like this. What I am gently suggesting to you is that you have created a life where everything must be functional to earn its way.

[01:15:59:19] Ramit: We have to check this box. We have to achieve ROI on this. We have to have a plan that is paid off in this amount of time. All those things are good. But you didn’t leave time for just being, just enjoying. And actually you’re spending so much time on things like this when it comes to money that there’s no time left for a rich life, for just enjoying each other.

[01:16:28:08] Ramit: What I’m trying to get you to see is that your entire world view of your relationship with money is purely functional.

[01:16:34:16] Sana: Yeah, I know our home brings up every once in a while. It’s like, I know we’re doing better, but, like, do you feel like our life is too structured? And our answer has always been like, we have to do it this way now and then once we get to the light at the end of the tunnel, we can do more.

[01:16:53:08] Ramit: There’s no light.

[01:16:54:07] Sana: But we could do. We could integrate pieces of that joy now.

[01:16:59:07] Ramit: Yes, yes, exactly. You get it. So what do you want to do? The debt payoff plan is solid. You’re going to be paid off in five years. Hell, make it ten according to your own calculations. Either way, you’re in your 30s. Amazing. So it’s done. It just needs time. What else? You have debt as well, right? You made a career change.

[01:17:24:25] Ramit: How much is your debt.

[01:17:26:11] Sana: In total? By the time I’m done with this program, it’s going to be close to 100 K.

[01:17:32:08] Ramit: Where is the debt payoff plan?

[01:17:33:24] Sana: It’s to the right of it.

[01:17:35:09] Ramit: Let’s look. Oh my God, another payoff plan okay.

[01:17:38:28] Sana: I don’t have dates on this because I’m still taking out those loans.

[01:17:44:12] Ramit: But we can estimate.

[01:17:45:19] Sana: Yeah. So my salary is where it’s at right now. Once I finish this program, I can easily increase it by 40 50,000. Wow. And so I want to use a part of that increase to to pay off the debt faster.

[01:18:01:14] Ramit: Okay, fine. Yeah. So do you feel confident that with the salary increase, you’re going to get that you can have an effective debt payoff plan and pay off your debt in, let’s say, ten years?

[01:18:13:04] Sana: I know I can do it in time. I want to do it faster.

[01:18:16:22] Ramit: Why?

[01:18:17:27] Sana: Because I’ve seen my parents struggle with the debt, and I want to not struggle with debt as early as possible.

[01:18:26:11] Ramit: Are you struggling right now with money?

[01:18:28:27] Sana: I would say yes. I struggle to spend outside of responsibility.

[01:18:34:19] Ramit: Yes. And so when you say I want to pay my debt off as quickly as possible. Do you see how that contributes to you not having a healthy relationship with money? How so?

[01:18:46:13] Sana: Because I limit myself. Because my salary is powerful enough, where I could do a lot more with it than I can, but then I try to plan out towards all the buckets. But when it comes to paying out this off this new debt, it doesn’t have to be as rapid as three years. Even if I could do it, it’s okay if I spend a little more on interest.

[01:19:15:01] Ramit: What would you spend the money on anyway?

[01:19:16:28] Sana: Right now we can only travel once a year. I talk about I would love to go multiple times a year. Okay. Internationally, I’d love to travel with family too. And bring them with me.

[01:19:29:08] Ramit: Cool. I love that. Anything else.?

[01:19:33:06] Sana: I’d want us to increase more of what we already do together without feeling the guilt. And so.

[01:19:43:11] Arhem: I would love to.

[01:19:44:11] Ramit: Have you all never heard me say this phrase. The way you feel about money is highly uncorrelated to the amount in your bank account. Do you notice how you’re interchangeably mixing those things? When I make more money, I’d love to not feel guilty. How how would you not feel guilty about money?

[01:20:01:26] Sana: I have to rewire my brain so that it’s okay if it costs me more, if I take a little bit longer to pay it off. If I can use more of my income now for things that I want to do now.

[01:20:20:05] Ramit: Like.

[01:20:21:16] Sana: Like the sports league and I, I wanted to take arts art classes.

[01:20:27:13] Ramit: Yes. Do you see why I’m emphasizing the importance of finding joy with money now? It’s a skill right now. You you have no connection to feeling joy. And even when we talk about what would you do with the money, it’s difficult for you to to think about spending because you see spending as losing. If I’m spending, I’m losing because that money could be going towards filling up some arbitrary bucket.

[01:21:01:04] Ramit: It does take rewiring. How would you rewire your brain.

[01:21:04:17] Sana: By just booking those classes?

[01:21:07:02] Ramit: Yes to that. What else do you see? A therapist?

[01:21:11:03] Sana: I have been on and off.

[01:21:12:25] Ramit: Good. Okay, so maybe a more regular therapist. Good. What else?

[01:21:18:06] Arhem: We really love our apartment, so if we could always light a candle without worrying about, like, do we have enough candles in reserve?

[01:21:27:17] Ramit: Yo, is that true? Do you worry about that?

[01:21:29:18] Sana: I do not.

[01:21:30:08] Arhem: Like candles.

[01:21:33:02] Ramit: She goes even that’s crazy for me. I know it’s kind of surprising that I might tell somebody who has, like, 100 K of debt and their husband has all this credit card debt. Hey, why are you paying off all this debt so fast? It’s very counterintuitive, but I want to emphasize that money is a small but important part of a rich life.

[01:21:57:09] Ramit: They could get their numbers 100% textbook perfect, and they would not be living a rich life because they’re not connected. She feels intense over almost every part of her life. That’s not a healthy relationship. They have a professor student relationship with finances. That’s not healthy either. Sometimes there is value in saying, hey, what are we prioritizing and what’s it costing us if we’re putting $3,000 a month towards debt but we can’t eat out and have a bagel?

[01:22:33:18] Ramit: Then what kind of life have we created for ourselves? Now I get that it’s easier for the vast majority of people to simply be told, do this. Pay everything off on your debt, and don’t ever see the inside of a restaurant. Yeah, that’s easy and it’s simple, but I’m not here to just give you an easy and simple answer.

[01:22:51:28] Ramit: I want you thinking for yourself, what kind of rich life? Am I creating if I always feel bad about money? Because trust me, when you’re debt free, you’re not going to magically feel good. So the most important thing that I am telling this couple is that you cannot wait to feel good about money. It starts today. It is a practice that you work on over and over.

[01:23:14:27] Ramit: And yes. In addition to that, you make sure that your numbers are dialed in. Both of those things can be true. In fact, both of them must be true to live a rich life. I noticed on your CSP that it was clearly delineated whose money is whose and that you mentioned you don’t have combined finances. What do you think about that?

[01:23:41:02] Sana: In my head, I’ve delayed this until our debt is paid off.

[01:23:45:08] Ramit: I see, so when his debt is paid off, then it means what to you.

[01:23:50:12] Sana: That has made those changes on their permanent that that right now is relatively new. And so it’s a new habit and it’s doing like the novelty of it versus when it’s actually paid off. It’s like, no, this is just who he is now.

[01:24:06:08] Ramit: Okay. And you agree?

[01:24:08:28] Arhem: Yeah. I think that’s that would be like graduating to a new step in our relationship. And I feel that I have to earn that graduation to that next step.

[01:24:19:10] Ramit: I see. Is there an agreement that once your debt is paid off, that the two of you combine your finances?

[01:24:26:18] Arhem: Yeah, I guess not. Not so specifically like that.

[01:24:30:00] Ramit: You want to do it now? I’ll listen, but I’d love for you to actually be explicit with each other.

[01:24:37:18] Arhem: I guess I would ask, is there are there certain debts that you want to see paid off before we combine our finances, or is it just.

[01:24:46:07] Sana: It would just be the credit card.

[01:24:48:11] Arhem: Credit card?

[01:24:49:15] Sana: Yeah. Which is two years. Two years.

[01:24:53:21] Ramit: Do you want to combine your money?

[01:24:57:15] Sana: Right now I feel like we are a team, but joining our finances would really solidify that home.

[01:25:04:29] Ramit: Why?

[01:25:05:16] Sana: Because right now, even though we work together, it is still his and hers.

[01:25:11:27] Arhem: Yeah, I think I would like that more as a symbolic gesture, that I regained that trust from her, and that would be reflected by way of us combining accounts together.

[01:25:25:13] Ramit: Yeah. Do you see therapist?

[01:25:30:05] Arhem: I used to, but not.

[01:25:31:15] Ramit: Not currently. And a couple’s therapist. Have you ever done it together?

[01:25:35:04] Sana: We’ve talked about it, but then we didn’t go.

[01:25:38:11] Ramit: Well, first, I think you should see a couples therapists. I think it would be great and individual as needed. But you mentioned that you grew up without a lot of money and that you then went to this elite school and you kind of saw all these different ways that people with money behave. You two now make a lot of money.

[01:26:00:15] Ramit: You make $200,000 a year in your 20s. You’re not behaving like a couple. That does. You’re agonizing over finding two hours a week. You’re debating over, you know, this, this sports bocce ball registration, but most importantly, debating over couples therapy when there are clearly issues to be discussed. Who cares? Find the money. You have it. You have plenty of money.

[01:26:29:18] Ramit: There’s nothing more important in your marriage than the two of you. How does that strike you?

[01:26:35:13] Arhem: I think one of the things that I have sort of realized as we’ve been talking, is that something that it sounds like Sana saying that she would like is a little more whimsy, I guess, day to day. And I feel like I tried to incorporate that last year, but then the situation got really bad. And to me, what I internalized is that what she really prioritizes is security and stability, which is why I think now everything is like bulletproof.

[01:27:04:17] Arhem: And to me, I sort of prioritize that as saying, okay, this is now the number one thing that’s going to make sure that she’s okay is that we’re secure, we’re stable, things are on a schedule. Things are like routine. She doesn’t have to worry about what’s going to happen the next day.

[01:27:19:19] Ramit: I think that you’ve made a fundamental miscalculation. It’s a well-intentioned one, but is a miscalculation. You were irresponsible with your spending. You were not transparent with her. That was inexcusable. She told you very directly, look, either fix this or there’s not going to be a relationship. I think that was very courageous. And I think that you responded to that.

[01:27:42:10] Ramit: You were like, oh, holy, I didn’t realize this. I’m going to fix this. So you made a debt payoff plan. You told yourself she prioritizes safety and security, but do you realize that it all started with you believing, I won’t tell her about this credit card debt, because then she’ll worry. You’ve been trying to make her not worry for years.

[01:28:07:04] Ramit: Does it work? Is she worried?

[01:28:09:17] Arhem: Yeah. I think she still is worried.

[01:28:12:09] Ramit: Correct?

[01:28:13:15] Sana: Yes, I would say that. I know I’ve spent pretty much my whole adulthood prioritizing other people over myself, but my priority should be our relationship. And so if I don’t question supporting my family, why am I questioning whether or not we can afford to go do things together?

[01:28:37:18] Ramit: Should we talk about that?

[01:28:38:22] Sana: Yeah. Tell me. I think I think you are right. And it is a mindset shift to see myself first and not see it as a selfish act. I know you would benefit from couples therapy.

[01:28:58:22] Ramit: What do you think you would get out of it?

[01:29:00:18] Sana: Connection to which is the primary goal?

[01:29:03:24] Ramit: Yes. Good. Maybe an understanding of each other. Maybe the understanding of this dynamic that you’ve created. The one where you worry about others before yourself or hum responds to that worry. What does he do? He. He makes a plan. He follows the plan. He goes, if I if I plan this plan even more than I planned it, then maybe she’ll stop worrying.

[01:29:28:15] Ramit: That doesn’t work. So he doubles down on the plan. And now you’ve both created this dynamic where you’re living for some day, as you put it, with a light at the end of the tunnel. The light’s not coming. You’ll be debt free, there’s no doubt about that. But you will still both worry each of you chasing this feeling.

[01:29:48:23] Ramit: But because you don’t talk about feelings, because you don’t know how, you didn’t see that your parents doing it, having a healthy dynamic, then the only thing you both do is double down on the plan. It’s functional. Your money will grow, but where’s the feeling in it? That’s what couples therapy can get you.

[01:30:12:21] Sana: I know you’re right. I know what you’re saying is true. And I know is my priority. And I have to execute on that rather than just thinking about it.

[01:30:26:02] Ramit: What might you be willing to move on from has agreements you’ve made in the past?

[01:30:34:16] Sana: I think I can still do. Everything that I first set out to do is just rather than seeing everything is equal. I put our home first and our time together comes first before I let the worry consume me with other things.

[01:30:54:19] Ramit: You’ll see your family quite frequently. That’s a lot of time. Would you be willing to reduce the amount of time you see your family?

[01:31:01:14] Sana: We’ve talked about this a lot.

[01:31:03:07] Ramit: I’m less interested in talking about it.

[01:31:05:17] Sana: Yeah.

[01:31:06:05] Ramit: I want action.

[01:31:07:12] Sana: Yeah. I think the way that it has worked in the past is that other people fill in our calendar, and then we find time based on what’s left. But I do want to shift to where we fill our time together first, and then let other people fill it in second.

[01:31:27:17] Ramit: That’s how you send the signal to each other that you are the most important thing. We this unit is the most important thing. We love them, but they come second. So how would you do that?

[01:31:40:19] Arhem: If we look at our calendar, we say, okay, you know, the next four Saturdays we’re going to plan a date. And then if someone else asks, let’s do something on Saturday, we say, oh no, we can’t because we have our date plan. Great for Saturday.

[01:31:56:02] Sana: Yeah, I know what’s happened in the past. We’ll have a plan, but then our plans are flexible. But other people plan an event on Saturday. And so it’s like, well, what if we moved our day to another day and then we go to this commitment and I’ve been pushing back on like, well, if we keep following other people’s schedules, then that leaves very little time for us.

[01:32:21:24] Ramit: This is really common topic for like Asian and South Asian people and their relationship together versus their extended family. This is like point number one. It’s like in every soap opera. You know what I mean? And it’s going to be hard the first few times. And yet it is also necessary. Okay. And what about the money that you’re giving to your parents?

[01:32:45:14] Sana: I don’t want to reduce it, but I think instead of, like, right now, I’m doing a split between what actively comes out of our paycheck, my paycheck versus my savings. I think it’s okay if I just rely on the savings for a little bit to create that extra space for us. It’s spend more time together, okay?

[01:33:05:05] Ramit: We talked about the trust before, like it seems like you’re in the process of earning back son as trust, and that’s good. I agree with that. I just I want to know about the joint. The joint combination. In my opinion, married couples should have joint finances. I do obviously leave room for individual accounts. I think if you have incurred a bunch of debt, then it can make sense for that person to disproportionately pay for that, all of that.

[01:33:38:07] Ramit: I think if the plan is that you’ve been explicit, hey, once the credit card is paid off, we should combine our finances. Great. That’s a couple of years away. Fine. As long as you both know it and you agree to it. Another option is a post. Nope. A post up would be something that you may want to consider, which is hey, even though we’re already married, we should make a legal agreement on what kinds of debt we came into this relationship with and that way.

[01:34:07:06] Ramit: Worst case scenario, we both know exactly what happens and that then frees us up to be unified together. I’m not asking you make a decision today, but I am asking you to think about what would a future look like that is united. Right now, it’s not.

[01:34:24:25] Arhem: A way.

[01:34:25:07] Ramit: That.

[01:34:26:10] Arhem: We could be united. For example, as we open a joint savings account for vacation and we call it like, okay, this is our trip to Switzerland. Do you want to.

[01:34:34:00] Ramit: Do it?

[01:34:35:05] Sana: Yeah, that could happen today.

[01:34:38:02] Ramit: Do you want to do it?

[01:34:39:13] Arhem: I only want to do it if she’s okay with it. Because the reason why is because I know that I broke that trust before, and I don’t want to mishandle it.

[01:34:50:00] Ramit: Okay. So don’t. So don’t mishandle it. I don’t think you are seeing the dynamic here. You’re so eager to please Sunna by deferring to her that you’re simply putting more work on her. When was the last time you said to her, here’s what I want to do with money in our relationship. When was the last time you said something like that?

[01:35:11:19] Arhem: I feel like I say it most weekends, like, hey, we can, like, maybe we can go to the bakery around us and we, you know, maybe we get some pastries from there.

[01:35:22:17] Ramit: Are you telling her or asking her?

[01:35:24:12] Arhem: I feel like usually I’m asking. You are.

[01:35:27:18] Ramit: When you said earlier you would like your dynamic to be co C-level execs, right? In a business, they don’t ask their colleague for their thoughts on every last decision. They have a vision and they have a rationale and they propose things. And sometimes they say like, look, this is what I think we should do. This is what we’re going to do.

[01:35:54:19] Ramit: But right now you don’t feel you can do that, because what.

[01:35:58:16] Arhem: It feels like, the dynamic that’s been established is that she has final say. And so I don’t I guess maybe I don’t feel like I’ve earned finals.

[01:36:08:11] Ramit: Maybe five more years of penance, maybe. Maybe ten.

[01:36:13:18] Sana: I don’t think of myself as the only one who has final say. I don’t want you to feel that way.

[01:36:20:20] Arhem: But that’s what it feels like. And I guess the reason maybe that I’ve been playing into it more is because it feels like it’s been working. Maybe. Maybe she feels better, but now I’m realizing that she’s still worried about it, so maybe it’s not working quite as well.

[01:36:35:27] Sana: I think it would be nice to have things just plan for, and all I have to do is show up.

[01:36:41:27] Arhem: Yeah, maybe this is what couples therapy would be helpful for, because I feel that in the past, and even to this day, when I do try to take the lead on planning things or suggesting things, then then you come in and take control and then it sort of morphs into your vision. And I don’t want to repeatedly push back.

[01:37:03:16] Arhem: So it’s easier for the dynamic overall. If if I start with a suggestion, you morph it to your vision and then and then we go from there.

[01:37:12:17] Sana: I add my opinion because you phrase it like a suggestion, but it is extra work on me to think about it. I, I would enjoy if you just told me what to do every once in a while.

[01:37:30:02] Ramit: You want to practice right now? Yeah. Let’s pick something low stakes. Got something in mind?

[01:37:35:12] Arhem: There are some movies coming out in the summer that I would like to watch. I will decide on the movie. I’ll pick out the seats and what screen we’re going to watch it on. We will eat a dinner before then, and I’ll book the reservation. I’ll find the reservation, make sure it’s appropriate to our dietary limits. Does Saturday work.

[01:37:57:28] Ramit: Or.

[01:37:58:24] Arhem: Does Friday work?

[01:38:00:15] Sana: I would like that.

[01:38:01:21] Ramit: That was good. Okay. What just happened there?

[01:38:03:20] Arhem: I took action, I had the whole plan laid out already from start to finish, and I just all that I asked her essentially was what day works for you to.

[01:38:14:10] Ramit: Do that? That was my favorite part. Does Friday or Saturday I love that. And what did you feel?

[01:38:19:10] Sana: It feels nice to not plan something. Yeah, it feels nice to spend time with someone that I care about. And they’ve got all the logistics figured out.

[01:38:33:26] Ramit: Yeah, that’s. Partnership was really cool. Okay. You mentioned earlier at the beginning today that you’re worried about falling back into old financial habits. Are you worried about that? Because to me, it doesn’t seem like you’re at any risk of that.

[01:38:49:24] Arhem: Maybe 5% worried. Not. Not really that worried.

[01:38:52:27] Ramit: Okay. So keep an eye on it. But in my opinion, from talking to you and from talking to both of you, doesn’t seem like a huge risk. If anything, you have become so structured. To me, the opportunity here is not to spend the next 25 years playing defense, but rather to observe what’s actually going on and go, holy.

[01:39:12:29] Ramit: I’m so deep in the spreadsheet, there’s other things to spend more time on that are more worthy of your time. I think that’s important for you to know. You should be spending time on the things that are important, and you already did a nice job with the debt payoff plan. Now that it’s in effect, it’s happening. It’s going automatically.

[01:39:33:17] Ramit: It should not be taking up all kinds of energy from you. Take that energy and redirected to what’s more important here. What would it feel like for you to put yourself and your relationship first?

[01:39:47:12] Sana: I will start saying yes to what I want now, as opposed to pushing it off another month or two months a year. Plus, it’s okay if I take away from the other buckets, if I feel myself first. Because a lesson that I’m still learning is that if I crush myself, then I’d have nothing left. But if I take care of myself first, what I’m able to give will be more joyful.

[01:40:20:26] Ramit: Yes, I love that you use that word joyful. That, to me is the theme of what you should both be seeking. The default answer in your life has always been get to the next step as quickly as possible. That is your invisible script. Hurry up! Graduate. Hurry up. Get an A+. Hurry up, hurry up, hurry up and you will hurry yourself right into the grave.

[01:40:47:09] Ramit: As for the two of you, it actually is an incredible testament that after this financial betrayal of not sharing this credit card debt, that you can even talk about joy. But you can. You have a debt payoff plan. You have two people who both want to be better. So it’s finding joy in daily life, changing the way that you talk to each other, getting some help because it’s not doesn’t come natural, especially after you probably didn’t see your parents doing this and start thinking of yourselves not as, you know, what’s the world going to do to us, but like, oh my God, we’re actually really powerful.

[01:41:24:23] Ramit: Sure, we have some debt to pay off, but we’re a young couple that is making a lot of money and is going to make more. So what do we want to get out of this? What do we get? What surprised you about our conversation today?

[01:41:40:13] Arhem: The thing that was most surprising in the connection you made of the original sin was because I didn’t want to worry her more, and actually me trying to repair that is also worrying her more. And I guess I didn’t put that connection together, that my response was, I think you said a fundamental miscalculation. I didn’t even think of it that way.

[01:42:03:14] Arhem: So that was the biggest surprise.

[01:42:04:28] Ramit: Good.

[01:42:05:21] Sana: I think in the first ten minutes he told us that our spreadsheet was not joyful. I didn’t think it was that apparent. I know that we were have been regimented, but I thought that’s just the way it has to be, but I don’t have to push it until later. I can have that now.

[01:42:24:28] Ramit: That’s just the way it has to be. What a powerful theme that you’ve been operating under for so long. That’s just the way it has to be. Who says? Everybody tells me I have to buy a house. I’ve had to do this. I have to do that. That’s just the way it has to be. And I go, nope, I’m not taking your burden on me.

[01:42:49:06] Ramit: I create my own rich life. And importantly, my wife and I do it together. So we decide what has to be, but nobody else gets to put it on us. Same for you to not even family while you can respect them and love them, but you to decide what you keep joyfully and what’s not for you. I am hopeful that this couple will make changes.

[01:43:22:03] Ramit: Let me tell you what I know for a fact is going to happen. I know that their numbers are going to continue being dialed in. The debts going to be paid off. I have no concern about that at all. What I am less sure about is can they completely change their relationship to money? And that is decades of really hard work.

[01:43:48:01] Ramit: It is seeing a couple’s therapist, probably individual therapists. It is totally changing the dynamics of how they make decisions about things as simple as joining a bocce ball league. It’s everything and everywhere. Can they do it? Of course. They’re both really smart. Both really capable. Will they do it? I hope so because I want them to feel joy.

[01:44:13:03] Ramit: Not just on vacation, but day to day. And I want them to change the patterns that they have seen and observed and inherited from their parents. Because if they choose to have children one day, I don’t want their children to be burdened with this idea of being a martyr or hiding debt from your partner because you don’t want to worry them.

[01:44:31:24] Ramit: No, I want them to be in it as partners are. So that is my hope for them. Can they do it? Yeah. Is it going to be hard? Yeah, but all valuable things are. And now let’s check out their follow ups.

[01:44:47:00] Speaker 4: Then about the week since he met you I think walking in last week, I thought that the our conversation was going to be about why our faith costs are so high and what we can do to reduce it. And so I was very surprised to see a complete 180 from that, where the biggest takeaway was that I should actually be loosening up more and spending more on myself.

[01:45:11:05] Speaker 4: Now, I’ve always seen myself as a protector and an orchestrator, where I need to have my hands in everything just so I can take care of not only myself, but also everyone around me. And so I never considered that I might have taken my being responsible to an extreme where I’ve over planned and stressed myself out more than I needed to be.

[01:45:39:07] Speaker 4: And I especially didn’t consider that I might have taken Aurum to that extreme as well. And so I’ve been very intentional this past week about loosening up and saying yes to things that I would enjoy right now, as opposed to things that I should be doing. And so some examples of that would be that we’ve been having more spontaneous walks, and we’ve gone for dessert and we’ve played sports, and it’s been really nice to decompress that way.

[01:46:14:23] Speaker 4: And I’m looking forward to making more changes to help myself carry less of a load.

[01:46:22:17] Arhem: Thank you for granting us the time to do our session with you. The biggest takeaway for me is that we were not spending our life or spending our time in the way that we should be. For two people in our 20s with no kids and the kind of income that we make. It was really eye opening for me to hear from another outside source that we really do not have to be so involved in the nitty gritty details of life or finances, to the point that it’s detrimental to our relationship and to our time together.

[01:47:01:08] Arhem: It was it was really important, I think, for me to hear that the time that we spent together as husband and wife should be joyous and heartfelt and not, you know, really detailed and like, logistically good, but it’s all very robotic and mechanic. I don’t like thinking that that’s how our time was, but I think it’s pretty clear that that’s how our time has been.

[01:47:26:08] Arhem: In an effort to turn that around. I’ve been taking an initiative to plan more dates together, to prioritize our days together, and to have a lot of unstructured, fun time. And we plan on thinking less about how much something costs and thinking more about, is this something reasonably that we can do and would we enjoy doing it? And the other thing that I have made a conscious effort to do is to tailor my language so that it’s not asking a question, which puts the burden on her.

[01:47:59:20] Arhem: It’s more that I will plan myself and I bring some out along with me, and we have fun together that way. The biggest takeaway for me is that I want our money to be something that makes our life meaningful and fulfilling, rather than just it be something that I accomplish and check off. So I’m really appreciative to remain and the team, and we look forward to implementing these changes in our life together.

[01:48:28:15] Arhem: It’s been about six weeks since our podcast session. For me, I think the biggest thing that has stuck with me is to have a bias for action. So I’ve been trying to be much more mindful about being active, not just in my language, but also in my actions, and not only being active just in how I live my life, but for the both of us together.

[01:48:54:16] Speaker 5: And for me. The.

[01:48:56:15] Speaker 4: Coming out of the coaching call. The first week was very heavy. I’ve always seen myself as the responsible one, but I never considered. And through Remy’s coaching, I realized that maybe I’ve taken being responsible to an unhealthy extreme. And so the biggest skill that I want to work on is spending on myself and so, and teaching myself to lesson that it is possible for me to spend on things that I enjoy, while also taking care of everything that needs to get taken care of.

[01:49:30:11] Speaker 4: And so with that in mind, we have opened up our very first joint account together. This account is strictly for fun things, and so we’re putting aside $400 a month before anything else so that we can prioritize our time together. And not just time, but also quality time specifically.

[01:49:51:06] Arhem: In addition to that, one of the other big concrete changes we’ve made is that we’ve been in couples therapy together. So we’ve done a few sessions already, and I think it’s been really helpful as far as putting language towards putting language to dynamics and maybe some of the conversations that we didn’t know how to navigate with each other.

[01:50:15:28] Arhem: So it’s been really helpful towards that. And finally, the biggest thing I think that we’ve changed about our dynamic is that we’ve been much more intentional in our quality time together. So not just setting aside a day on the weekend for the two of us to be together, but also most days out of the week, we’ve been trying to carve out time in the evening where we can have quality time with each other, and it’s not burdened by responsibilities or anything else.

[01:50:45:16] Arhem: It’s just time for us to enjoy together. And I think we’ve noticed a really big, positive change in our relationship.

[01:50:52:24] Speaker 4: Yeah, and I know into the coaching session I thought that the entire conversation would be about our debt because that there’s that that scares me. But going through the whole call, we realized and I know deep down that we are very competent and confident in our skills and our doubt will get taken care of. And so there’s no need to overthink or overcomplicated.

[01:51:17:19] Speaker 4: We are already on a good plan, and we’re going to be debt free very soon. And so our biggest thing to work on is not clearing the dead, but learning how to use our money intentionally and in a way that’s meaningful to us. So thank you for pushing us outside of our boundaries. We are really excited about what’s ahead of us and we’ll keep in touch.

[01:51:41:24] Arhem: Yeah. Thank you all.

[01:51:42:26] Speaker 4: Bye.

Last Updated on July 27, 2026 by Katie

Ten years ago I was refreshing my bank balance at 11pm on a Tuesday, like maybe it’d have changed since 4pm.

It hadn’t.

I’d just quit a job that paid fine but made me want to lie face-down on the carpet by Wednesday lunchtime.

No plan. Just a laptop, a vague idea that “freelance writing” was a thing people did, and a spreadsheet titled “MONEY” that I updated obsessively out of pure anxiety.

What I didn’t know was that the business I’d stumbled into, writing for other people’s websites, was one of the oldest, most reliable ways to make money from home there is.

I thought I’d found a clever loophole. Turns out I’d just picked one of the businesses that’s been quietly working for decades.

That’s the thing about evergreen business ideas.

They’re not flashy, nobody’s making a viral TikTok about starting a bookkeeping business, but they work year after year because they solve problems that don’t go away.

But it’s important to note: none of these are “always successful” in the sense of “you literally cannot fail.”

What makes them evergreen is that the demand never dries up. Whether you succeed is still down to you.

Here are 21 evergreen business ideas that have stuck around for exactly that reason, split into service-based work, online and digital businesses, and property-based income, with the honest version of what it takes to make each one stick.

Service-Based Businesses

These are the evergreen business ideas I’d point a complete beginner toward first, because most of them don’t need much money to start.

Just a skill, a bit of nerve, and somewhere to advertise yourself.

1. Bookkeeping

Startup cost: $300–$1,500 (course, bookkeeping software like Xero, a basic website)

Why it works: Every business has to track money coming in and going out, and most owners either don’t know how to do it or actively dread it. It’s not seasonal the way some services are: someone needs their books sorted in January just as much as June.

And because clients rarely switch bookkeepers once they trust one, it tends to turn into steady recurring income rather than a one-off job.

How to make it successful: Specialise early. “Bookkeeping for Etsy sellers” is findable; “bookkeeping” on its own isn’t.

Get properly comfortable in one cloud tool, usually QuickBooks or Xero, rather than half-knowing several.

Real talk: the first few months are slow because you’re building trust with people who are handing you access to their actual bank accounts, so don’t expect a full roster by month two.

Further reading: How to become a fully booked bookkeeper as a beginner.

2. Cleaning services

Startup cost: $200–$800 (supplies, transport, basic marketing)

Why it works: People cut back on plenty of things before they stop caring about a clean home or workplace, which makes this one of the more recession-resistant ideas on the list.

It’s also low-overhead and easy to start solo before scaling into a small team. Regular contracts, weekly or fortnightly, mean the income compounds instead of resetting every job.

How to make it successful: Target a specific pocket first, like Airbnb turnovers or small offices, rather than “everyone.”

Pro tip: First-time discounts get people through the door, but recurring bookings are where the real money sits.

I know someone who built a full client roster in six months from nothing but Nextdoor posts and word of mouth.

3. Tutoring and test prep

Startup cost: Under $100 (Zoom account, whiteboard app, headset)

Why it works: Parents will find money for their kid’s grades even when they’re cutting back everywhere else.

It’s flexible, can be done entirely online, and pays well per hour once you’ve got a few regulars. Exam season alone tends to keep a steady stream of new clients coming in.

How to make it successful: Narrow your offer. “GCSE maths tutoring” books out faster than a vague “tutoring” ever will.

Platforms like Preply are decent for picking up your first few clients while you build a list of your own, and once you’ve got testimonials, move people onto packages rather than one-off sessions.

Further reading: 10 platforms to teach English online with no experience.

4. Childcare

Startup cost: $500–$2,000 (licensing, safety gear, first aid certification, insurance)

Why it works: Childcare is about as recession-resistant as it gets, since working parents rely on it to function day to day.

Plenty of providers start from their own front room rather than a purpose-built space.

It’s also heavily trust-based, which means good providers get referred constantly rather than having to chase new clients.

How to make it successful: Check your local licensing rules before you take your first booking.

This step alone can take longer than people expect.

Keep a consistent daily routine, since that structure is often what parents are really paying for, and market through local parent groups rather than cold advertising.

5. Handyman or home repair work

Startup cost: $800–$2,500 (tools, vehicle, insurance, marketing materials)

Why it works: Not everyone wants to hire a full contractor to fix a wonky shelf or a dripping tap, and that gap is exactly where this business lives.

It doesn’t need a storefront, just reliable tools and the ability to actually show up when you say you will. As homes age, the list of small jobs never really stops.

How to make it successful: List yourself on TaskRabbit, Facebook Marketplace, and Nextdoor to get your first jobs moving.

Take before-and-after photos. They do more for your credibility than any amount of self-promotion.

Once you’re steady, consider specialising, whether that’s rental maintenance or flat-pack furniture assembly.

6. Mobile mechanic services

Startup cost: $3,000–$15,000 (vehicle, diagnostic equipment, tools, licensing)

Why it works: People rely on their cars daily, and when something breaks, they want it sorted fast, ideally without taking a day off work to sit in a garage waiting room.

Fewer mechanics offer to come to you than you’d think, so there’s genuinely less competition here than in the trade as a whole.

You also skip the overhead of running a physical shop while still charging solid rates.

How to make it successful: Start with quick-turnaround jobs, like oil changes, battery swaps, and brake work, before taking on anything diagnostics-heavy.

Be upfront with quotes and explain the work in plain English. That’s what builds repeat customers in a trade people often feel intimidated by.

7. Pet services

Startup cost: $300–$3,000 (grooming tools, insurance, kennel space if boarding)

Why it works: Pet owners spend on their animals in a way they won’t always spend on themselves, and that emotional attachment makes this a sticky, repeat-business industry.

Walking, grooming, and boarding all naturally turn into recurring bookings rather than one-offs.

Trust matters enormously here, since clients are handing over something they treat like family.

How to make it successful: Start with one service. Dog walking is the easiest entry point before expanding into grooming or boarding.

Rover and Wag are fine for picking up early clients, but most of the dog walkers I know built their real base from one glowing review in a local Facebook group.

8. Hair and beauty services

Startup cost: $1,500–$8,000 (tools, certification, chair rental)

Why it works: Haircuts, colour, and manicures are routine spending for most people, not a luxury they cut the moment money’s tight.

That makes this a steadier business than it might look from the outside, with clients who return on a predictable cycle.

It’s also largely recession-resistant, since people keep grooming themselves even on a budget.

How to make it successful: If a salon isn’t in budget yet, mobile services or renting a chair are both genuinely solid ways in.

Post before-and-after shots consistently. In this trade, Instagram basically functions as your portfolio and marketing in one.

First-visit discounts and referral incentives tend to work especially well here.

Further reading: 13 beauty side hustles to make $2,000/month in your spare time

9. Fitness coaching

Startup cost: $300–$1,500 (certification, insurance, equipment)

Why it works: People pay for accountability even when they could technically follow a free workout online.

The coaching is really what they’re buying, not the exercises themselves.

Interest in fitness has stayed fairly resilient over time, even when spending tightens elsewhere.

How to make it successful: Get certified, then offer a handful of free or low-cost sessions early to build a portfolio and testimonials.

Package your offer. An 8-week programme sells far better than open-ended “personal training.”

Document client progress with their permission, since real results are the best marketing this industry has.

Real talk: every single one of these took someone longer than they expected to feel “worth it” financially.

I’m not saying that to put you off. I’m saying it because the people who quit in month two are usually the ones who thought month two was supposed to feel easy.

Online & Digital Businesses

This section of evergreen business ideas is closest to my own story, and honestly, the one I get the most messages about.

It’s also the one where the gap between “sounds easy” and “is easy” is widest, so I’m not going to sugarcoat any of it.

10. E-commerce (niche products or private labelling)

Startup cost: $500–$5,000 (product samples, a Shopify store, branding, ads)

Why it works: Online shopping keeps growing, and a niche store targeting one specific audience, like eco-friendly kitchenware or pet accessories, builds loyalty in a way generic stores can’t.

Private labelling lets you put your own branding on existing products, which gives you full control over pricing and how the customer experiences your business.

You’re not fighting Amazon on price, you’re competing on identity, and that’s a fight small brands can actually win.

How to make it successful: Pick a niche people are genuinely passionate about or buy repeatedly, not just a trending product.

Win on branding, packaging, and messaging rather than trying to undercut everyone on cost.

Real talk: I’ve watched friends sink money into ad spend before they’d nailed their product photography or their “why us” story, and the ads just burned cash instead of converting.

Further reading: 23 best things to sell on Etsy to make money online.

11. Affiliate marketing

Startup cost: $0–$500 (domain, hosting, email software, maybe Canva)

Why it works: You promote other people’s products and earn a commission, with no inventory and no customer service headaches.

It’s genuinely scalable, since one good piece of content can keep earning long after you’ve written it.

The businesses that do well tend to build trust first and sell second, through honest reviews, comparisons, and tutorials rather than hard pitches.

How to make it successful: Pick a niche you actually understand, whether that’s fitness gear, software, or parenting products, because readers can tell when you’re faking familiarity.

Build an email list early so you’re not entirely dependent on search traffic or social algorithms.

Join a few solid affiliate networks (Amazon Associates and ShareASale are common starting points) and be transparent about the fact that you earn from the links, because readers trust that honesty more than they’d trust silence.

Further reading: How to start affiliate marketing with no money.

12. Blogging or niche websites

Startup cost: $100–$300 (domain, hosting, a theme or page builder)

Why it works: A blog earns money through ads, affiliate links, or your own digital products once it starts ranking in search, and that income becomes semi-passive over time.

It’s genuinely one of the best businesses for people who like writing or research and want something that keeps working while they sleep.

I built Remote Work Rebels on exactly this model, and posts I wrote years ago still bring in traffic and money today.

How to make it successful: Pick a specific niche rather than trying to write about everything. “Budget travel for solo parents” beats “travel blog” every time, because it’s actually findable.

Real talk: it took me the better part of a year before my blog earned anything meaningful, and I nearly gave up around month five when the traffic graph looked like a flat line with a pulse.

13. Online courses or coaching

Startup cost: $100–$1,000 (course platform, microphone, webcam, basic branding)

Why it works: People are always willing to pay to learn something faster than they’d figure it out alone, whether that’s a hobby or a career skill.

If you’ve got real experience in something, packaging it into a course lets you sell your knowledge at scale instead of trading hours for money one client at a time.

Once the systems are built, it’s genuinely low-overhead to keep running.

How to make it successful: Validate the idea before you build it.

A free webinar or downloadable guide will tell you fast whether people actually want what you’re planning to sell.

Keep your first course short and practical rather than padding it out with filler, because people buying courses want a result, not a lecture series.

Further reading: How to make passive income selling courses online.

14. Dropshipping (with a long-term strategy)

Startup cost: $100–$500 (store platform, domain, supplier app integrations)

Why it works: You list products without holding inventory, and a supplier ships directly to your customer, which makes it fast and cheap to test ideas.

The businesses that survive past year one usually realise early that the product isn’t the differentiator; the brand and the customer experience are.

It’s a genuinely low barrier to entry, which is both its biggest strength and its biggest trap.

How to make it successful: Choose a niche with some emotional pull, like pet lovers or new parents, and avoid oversaturated products like phone cases.

Invest in clean branding and fast, trackable shipping, because trust is what turns a one-time buyer into a repeat customer.

Real talk: most dropshipping failures I’ve come across weren’t a bad product; they were someone treating it as a get-rich-quick scheme and quitting the moment the first ad set didn’t convert.

Further reading: How to sell t-shirts on Etsy using Printify.

15. Digital marketing agency

Startup cost: $1,000–$5,000 (tools like Canva or Semrush, domain, portfolio site)

Why it works: Every business needs visibility, but most small business owners don’t have the time or the know-how to run their own SEO, social media, or ad campaigns.

If you can genuinely move the needle for a client, they’ll keep paying you, and this business scales well because you can eventually bring on freelancers to handle the workload.

It’s low-overhead compared to most agency-style businesses, since you mostly need a laptop and some proven results.

How to make it successful: Pick a niche, like local restaurants or online coaches, rather than trying to serve everyone.

Offer a free audit in exchange for a testimonial or case study when you’re starting out, since social proof matters more here than almost anywhere else on this list.

Start with one or two core services rather than trying to offer everything from day one, because spreading yourself thin is the fastest way to deliver mediocre work across the board.

Further reading: 13 digital marketing side hustles for beginners.

16. Virtual assistant work

Startup cost: Under $100 (laptop, internet, a simple portfolio)

Why it works: Business owners constantly outsource the tasks that eat their time but don’t need their specific expertise: email management, scheduling, data entry, customer service.

Solopreneurs and small online businesses are especially reliant on VAs, since they often can’t justify a full-time hire.

It’s one of the lowest-barrier businesses on this whole list, which makes it a genuinely good starting point if money’s tight.

How to make it successful: Get specific about what you offer rather than listing “general admin support,” which sounds vague and forgettable.

Upwork and Freelancer are decent for your first few gigs, but pitching directly to online creators tends to land better once you’ve got a bit of experience.

Overdeliver early to collect testimonials, then raise your rates once you’re consistently booked out.

Further reading: How to become a virtual assistant with no experience.

17. Freelance writing

Startup cost: Under $100 (laptop, portfolio site, maybe a Canva subscription for pitching graphics)

Why it works: Every business with a website needs content, whether that’s blog posts, email newsletters, or product pages, and most of them would rather pay a writer than do it themselves badly.

It’s the business I started with, and it taught me fast that demand for decent writing never really dries up, it just shifts between formats.

It’s also genuinely flexible, since you can work with clients across time zones and industries without ever leaving your desk.

How to make it successful: Niche down as soon as you can. “Freelance writer” is invisible; “SaaS content writer” or “finance blogger for small business owners” gets you found.

Build a small portfolio of writing samples before you start pitching, even if that means writing a couple of unpaid pieces for your own site first.

Real talk: my first few clients paid embarrassingly little, and it took real effort (and a bit of nerve) to raise my rates once I actually had proof I was worth more.

Further reading: How to become a high-paid freelance writer in a few months.

18. Social media management

Startup cost: $100–$500 (scheduling tools like Buffer, a portfolio, maybe a Canva Pro subscription)

Why it works: Most small business owners know they should be posting consistently and have absolutely no time to do it, which is exactly the gap this business fills.

It’s recurring, monthly income if you land retainer clients rather than one-off projects.

And because platforms and trends shift constantly, clients tend to stick with someone who already understands their brand rather than starting over with someone new every few months.

How to make it successful: Specialise in a platform or industry rather than claiming you can do it all.

Show, don’t tell: a small portfolio of mock content or results from a past client (even a friend’s small business) does more than any pitch.

Set clear boundaries around scope early, because “social media management” can quietly balloon into strategy, customer service, and ad management if you let it.

Further reading: How to become a social media manager with no experience.

Property & Asset-Based Businesses

This section’s a bit different from the rest, since most of these need either capital or someone else’s property to get going.

Still solid evergreen business ideas, just a different starting point.

19. Vending machines

Startup cost: $2,000–$10,000 (machine purchase or lease, initial stock, location fees)

Why it works: People buy snacks, drinks, and everyday items on impulse, in gyms, offices, laundromats, wherever there’s foot traffic and a moment of “I could go for a coffee right now.”

A well-placed machine keeps earning with very little day-to-day involvement once it’s stocked and running, which makes this one of the more genuinely passive ideas on this list.

It’s also relatively recession-resistant, since a $2 snack is a purchase people barely think twice about, even in a tight month.

How to make it successful: Location is everything here, arguably more than the machine itself.

A machine in a busy office building will out-earn three machines in dead-end spots, so it’s worth spending real time negotiating placement before you buy anything.

Pro tip: start with one machine in a location you can visit easily to restock and check on, rather than spreading yourself across multiple sites too soon.

Track which products actually sell and cut the ones that don’t; vending margins are thin enough that dead stock quietly eats your profit.

20. Airbnb rental arbitrage

Startup cost: $2,000–$10,000 (deposit, furnishings, insurance, no property purchase required)

Why it works: You lease a property long-term, furnish it, and rent it out short-term on platforms like Airbnb, pocketing the difference between what you pay in rent and what you earn in bookings.

It’s the way into short-term rental income without needing a deposit for a mortgage, which makes it far more accessible than buying a property outright.

Done well, one solid unit can be reinvested into a second and third, building a small portfolio without ever owning bricks and mortar.

How to make it successful: Get explicit written permission from the landlord before you sign anything, since subletting for short-term rental without approval is the single most common way this goes wrong.

Choose a location with strong, consistent tourist or business travel demand, because arbitrage margins are thin enough that a slow season can wipe out your profit.

Pro tip: run the numbers conservatively before committing to a lease, factoring in void periods and cleaning costs, not just a best-case occupancy rate.

Further reading: How to start an Airbnb business without owning a house.

21. Property management services

Startup cost: $1,000–$3,000 (business registration, management software, insurance, local advertising)

Why it works: Plenty of landlords would rather pay someone else to deal with tenants, repairs, and maintenance than handle it themselves, especially if they own property somewhere they don’t live.

Property managers typically charge 8 to 12 per cent of monthly rent per unit, which adds up to stable, recurring income once you’ve got a handful of clients.

As long as there are landlords who don’t want the hassle, there’s demand for this business.

How to make it successful: Start small, ideally managing a single property for someone you already know, and learn tenant screening and lease handling properly before you scale.

Use software like Buildium or RentRedi to keep everything organised rather than running it off spreadsheets and memory.

Build a simple website aimed at absentee landlords and investors specifically, since that’s your most likely client base.

Final Thoughts On Evergreen Business Ideas

Twenty-one evergreen business ideas is a lot to look at and still feel no closer to starting.

So here’s the shortcut: forget which one sounds most exciting and pick the one closest to something you can already do, even badly, tomorrow morning.

Give whatever you choose a proper run before you judge it, longer than feels comfortable, longer than the internet tells you it should take.

Consistency does more of the work here than talent ever will.

That’s really the whole point of evergreen business ideas: the demand sticks around, and so does the person who doesn’t quit.

00:00:00:21 - 00:00:05:04
Ramit
You are spending the most amount of money we pay for our kids college.

00:00:05:06 - 00:00:09:13
Mia
If you say, well, give yourselves more money and don't give money to the kids, that feels selfish.

00:00:09:14 - 00:00:12:12
Jake
Growing up in the Midwest, you just save money than you die and you give it to your kids.

00:00:12:12 - 00:00:20:12
Mia
My anxiety increases because a budget has always been really hard for me. There's always this tension of, you know, we can't even go out to dinner this week.

00:00:20:13 - 00:00:23:20
Jake
I feel like this pressure, just like I'm like, gosh, here we go.

00:00:23:21 - 00:00:26:10
Ramit
You are now spending more than you make every.

00:00:26:14 - 00:00:27:16
Jake
It explains the savings.

00:00:27:17 - 00:00:29:07
Ramit
How's that feel to you?

00:00:29:08 - 00:00:30:00
Mia
Scary.

00:00:30:01 - 00:00:34:01
Jake
That's why we're here. I just want someone to put their arm around me and say, sign. This is what you're supposed to do.

00:00:34:02 - 00:00:45:11
Ramit
That person doesn't exist. What if, instead of following that feeling, I followed the numbers by connection, by conversation, and by a rich live vision.

00:00:45:13 - 00:00:52:19
Jake
In 20 years, I don't want them flying to California to have your kid tell them about money.

00:00:52:21 - 00:01:15:13
Ramit
You know, in America, we do some pretty funny things with our money. In the name of the kids, extracurriculars, huge birthday parties, SUV when they are two months old. And college, of course has to be fully funded. Now, I don't have a problem with any of those things, as long as they are intentional and as long as you ran the numbers.

00:01:15:15 - 00:01:35:11
Ramit
The problem, of course, is almost nobody does that. Most parents simply follow a script, and that script often costs them their own financial future. Today I'm talking to Mia and Jake. She's 40. He's 38. They've been married for four years. They have a blended family with three children, two from Mia's previous relationship and one child that they share together.

00:01:35:11 - 00:01:57:24
Ramit
And this idea of paying for their kids college is causing resentment between them. Mia applied, and here's what she wrote. I don't think either of us realized how difficult it was going to be to create a stepfamily. Money is a real sticking point because my ex-husband does not contribute very much, and I want to provide my kids with what I can because we're able to.

00:01:58:01 - 00:02:35:12
Ramit
Okay. Pretty complex situation. How would you reconcile this if you were sitting in my chair? Let me show you the numbers so you have a little bit more information. Assets 443,000. Investments zero. That's interesting. Savings 13,900. Low with three kids. Debt 176,410. Total net worth $280,490. Okay. Fixed costs at 50%. Very nice investments at 22%. I'm confused because their investments above are at zero.

00:02:35:18 - 00:02:54:03
Ramit
Not sure what to make of that savings at 25%, which is quite high. Guilt free spending at 3%. I don't believe that. Honestly, I'm kind of confused by their numbers. They're very perplexing, so I need to talk to them to figure out what's going on. And I have a lot of questions. Let's get started with Mia and Jake.

00:02:54:05 - 00:03:15:21
Ramit
Mia, you wrote the application, and in the application you wrote something I wanted to ask you about. You said our values are mostly aligned and we have a plan with our money. But when it comes to implementing it, I feel resentment from my husband that a big chunk of our money goes to support my two kids, who are not his biological kids.

00:03:15:23 - 00:03:18:22
Ramit
Is that an accurate reason for why you're here today?

00:03:18:23 - 00:03:43:03
Mia
I think that Jake and I really do agree on our values. Like like this is what we want to do. But in the implementation of it, the reality is that a big chunk of our money is going to make up for the fact that I didn't plan and save earlier when my two biological kids, our oldest kids, were younger.

00:03:43:04 - 00:04:11:11
Mia
There's always this tension of like, well, I just, you know, we can't even go out to dinner this week, right? And I'm like, oh, that's true. No we can't. And then there's some guilt that I feel, and I don't think that there's any resentment about me or like our values because, like, we've agreed to it. But there's this like underlying tension that I'm afraid we'll get worse if we don't sort of come to a place where where that underlying resentment is gone.

00:04:11:12 - 00:04:39:15
Jake
Yeah. I mean, I think that it's not resentment. I think it's just frustration would probably be the the better term for it. You know, I'm making more money than I ever have. I've gotten my job that I've really been trying to get. That's given us a lot more money. You know, my ideal life would be, you know, being able to go out to eat without thinking about it, you know, like, that's kind of like my rich, rich life is like being able to buy a few things here and there without being very stressed about things and not thinking about money, which I know is not a realistic thing, but I mean, just even walking around

00:04:39:15 - 00:04:51:01
Jake
here, you know, just yesterday I was like, wow, these are the things we could buy with all the money that we're putting into to school. But I don't resent Mia or anything in the kids or what they were doing. That's where they were at their time.

00:04:51:01 - 00:04:56:10
Ramit
And when you say walking around here yesterday. These are the things we could buy. What's an example of that?

00:04:56:10 - 00:05:15:13
Jake
I'm noticing that a lot of my rich life revolves around our house and our idea of like, making it a really great spot for us and the kids, and it's our forever home, hopefully. And that's ideas of maybe getting a hot tub or getting landscaping done. We put a fire pit in and I was like, oh, you know, if we just put like one of the kids tuitions, you know, would be able to do it in a couple of months.

00:05:15:13 - 00:05:17:07
Jake
So it's like that kind of thinking.

00:05:17:08 - 00:05:19:12
Ramit
Got it. Did you have this conversation today or yesterday?

00:05:19:13 - 00:05:20:23
Jake
Yesterday. Yeah, yeah, just walking around.

00:05:20:24 - 00:05:36:10
Mia
I think the exact comment was man in. If we just took the money that we were spending on college in eight months, we could do a hot tub and probably start on the landscaping. And I literally don't know what we were walking by.

00:05:36:12 - 00:05:38:08
Jake
Probably a landscaping hot tub store.

00:05:38:09 - 00:05:43:10
Ramit
So yeah. Yeah, there's one. Right? Right. Yeah. And what was your reaction to that when you heard that?

00:05:43:11 - 00:05:52:03
Mia
I think my general reaction is just to be quiet, like I think internally. Like I don't even think I said anything. I think I maybe laughed when I was like, yeah, yeah.

00:05:52:04 - 00:05:53:21
Ramit
How long are the two of you been married?

00:05:54:01 - 00:05:55:14
Mia
So just over four years.

00:05:55:16 - 00:05:58:17
Ramit
Yeah. Okay. For years. And how many children total?

00:05:58:21 - 00:05:59:13
Mia
Three.

00:05:59:14 - 00:06:00:04
Ramit
Three kids.

00:06:00:04 - 00:06:04:07
Mia
That's two from my previous marriage. And then we have a daughter together.

00:06:04:08 - 00:06:06:21
Ramit
How old is your daughter? Three. Three. Okay, great.

00:06:06:22 - 00:06:09:12
Jake
And we're spending a fortune on her preschool right now, too.

00:06:09:13 - 00:06:09:23
Ramit
Really?

00:06:09:24 - 00:06:10:06
Mia
Yeah.

00:06:10:07 - 00:06:14:03
Ramit
Yes. Oh, okay. And how about the two other children? How old are they?

00:06:14:04 - 00:06:15:13
Mia
14 and 11.

00:06:15:14 - 00:06:16:24
Ramit
Oh, okay. That's good to know.

00:06:17:00 - 00:06:31:11
Jake
And can I just clarify one thing, too? Yeah, it's one of these weird things. It's like, I know what's best for the kids in our family and investing in their school. And it's like, I think it's the right thing to do, but I'm not sure. And that's kind of why we're here. It's just like we want to, you know.

00:06:31:12 - 00:06:32:16
Mia
The background, the balance.

00:06:32:20 - 00:06:33:20
Jake
It feels off. Yeah.

00:06:33:21 - 00:06:35:16
Ramit
It's like we balance of what.

00:06:35:18 - 00:06:39:06
Mia
The money we're putting towards the kids versus the money we're putting towards the things.

00:06:39:06 - 00:06:43:10
Jake
That and like our savings is probably not where we want it either. We want more money in our savings to.

00:06:43:11 - 00:06:46:01
Ramit
Okay. Hold on. What's what's off with the balance?

00:06:46:02 - 00:07:16:06
Mia
We're really emphasizing as much money as possible towards the kids between saving for college and the our youngest preschool. And so like our daily spending or like sort of like our guilt free spending is like really minimal and that doesn't feel sustainable. But also like if you say like, well, give yourself more money and don't give money to the kids, that feels like selfish.

00:07:16:08 - 00:07:19:02
Jake
Yeah. You agree? I would agree with that. Yeah.

00:07:19:03 - 00:07:23:11
Ramit
Okay. That's interesting. Do the two of you make decisions about money?

00:07:23:12 - 00:07:24:24
Mia
Do you mean together?

00:07:25:01 - 00:07:31:19
Ramit
Well, that kind of answers my question, right? No. Yeah. Let's start with together. Do you make decisions together about money?

00:07:31:20 - 00:07:40:24
Mia
I would say big picture. Yes. Although I'm not sure that we've always been doing that. It's not something we think about a lot.

00:07:41:00 - 00:07:42:16
Ramit
Okay. Do you agree or disagree?

00:07:42:17 - 00:07:54:21
Jake
Yeah I would, I would agree that it's been something that we haven't talked a bunch about. I've always enjoyed. Just like we're just we save a bunch of money. You die with a bunch of money. That's that's what happens. Oh.

00:07:55:01 - 00:07:55:23
Ramit
You grew up in the Midwest?

00:07:55:24 - 00:08:00:19
Jake
Yes. Yes, yes. I guess I'd grown up in the Midwest. You just saved money. Then you die and you give it to your kids.

00:08:00:20 - 00:08:06:03
Ramit
Yeah. How did the conversations about money and kids typically go?

00:08:06:04 - 00:08:12:16
Mia
I usually say something like, so we have to do the budget.

00:08:12:17 - 00:08:16:00
Ramit
Okay. And what is your reaction to that, Jake?

00:08:16:01 - 00:08:20:24
Jake
Just anxiety and and anger. Anger probably.

00:08:21:04 - 00:08:23:11
Ramit
I feel anger too when I hear that word. Yes, yes.

00:08:23:12 - 00:08:47:11
Mia
I probably my anxiety increases because to be completely honest like that has a budget has always been really hard for me. Like I, it's hard for me to like wrap my head around like, what are the right buckets to think about? And so I'm trying to explain, thinking like, here's my thinking, Jake. Here's what I think we should do.

00:08:47:13 - 00:09:10:00
Mia
But it's probably not making a lot of sense because I barely understand it. I just know, like money is going out and it's probably more than we should have going out. And then Jake's like, well, but what about this? And then which is usually a super reasonable question. I'm like, I don't know, you know. And so then I get stressed and then he gets stressed.

00:09:10:00 - 00:09:12:06
Ramit
And then where do the kids come into this?

00:09:12:12 - 00:09:13:10
Mia
As in.

00:09:13:11 - 00:09:21:21
Ramit
Like the primary question today is we sending too much right towards our kids. And this is a source of potential conflict where the kids come in.

00:09:21:21 - 00:09:37:14
Mia
I would say my default is to treat that money as if it doesn't exist. Maybe like where the kids come in is if we it's like, well, what if we spent a little more money here? And then my response to that is like, we don't have that.

00:09:37:15 - 00:09:45:02
Ramit
Got it. So the kids money is sacred, like it does not exist. Non-negotiable. Got it. Yes. Are you open to changing that?

00:09:45:03 - 00:09:46:13
Mia
I'm open to it.

00:09:46:18 - 00:10:15:09
Ramit
Just imagine if Jake had said I don't want to send a single sent to your kids. That would be incredibly complicated to unravel. But fortunately, they do seem to have similar values. So now the question becomes, with a blended family, how do we decide the right amount of help to give? And I am starting to suspect they have only thought about help in terms of how big of a check they can, right?

00:10:15:10 - 00:10:28:22
Ramit
But there are a lot of other ways you can help kids to. And Jake, what about you? Like when the you mentioned like, hey, can we spend a little bit more eating out or doing x, y, z? And she says, well, we can't. What's your reaction?

00:10:28:22 - 00:10:45:12
Jake
It's like confusion because I'm making more money than I've ever made in my life. A little backstory, like when we first got together, we bought a huge house that was great. Everything on our is like ten out of ten wishlist. Perfect. Oh, I had a big truck trying to act really tough. You know that tough guy? You know, that's that's what I needed.

00:10:45:18 - 00:10:46:00
Ramit
I didn't.

00:10:46:00 - 00:10:46:17
Jake
Know this. Yeah.

00:10:46:18 - 00:10:48:14
Ramit
So this is when you got married? Yes.

00:10:48:15 - 00:10:59:12
Mia
It was like. So we're both. This is both of our second marriage. And I think we were both, like, so happy to have happiness. We were just like, let's just like, spend. Let's have everything that we'd ever.

00:10:59:12 - 00:11:00:15
Jake
I don't know how we survive.

00:11:00:16 - 00:11:02:05
Ramit
So you bought a how big is the house?

00:11:02:06 - 00:11:03:22
Jake
Was that. It was. It was.

00:11:03:23 - 00:11:05:16
Mia
Like a almost 4000ft².

00:11:05:17 - 00:11:06:09
Ramit
Holy.

00:11:06:11 - 00:11:06:21
Jake
Yeah.

00:11:06:22 - 00:11:07:22
Mia
Three car garage.

00:11:07:23 - 00:11:10:02
Ramit
That's for two of you and a little baby.

00:11:10:03 - 00:11:10:16
Mia
Yeah, well.

00:11:10:16 - 00:11:11:12
Jake
And the time.

00:11:11:16 - 00:11:18:24
Ramit
Babies need space. Yes. 4000 square foot. Okay, so then you bought the truck. What kind of truck?

00:11:19:03 - 00:11:27:02
Jake
Toyota tundra. And I didn't stop there. I got I spent $3,000 on rims because that's what you need at 35.

00:11:27:04 - 00:11:28:21
Ramit
Totally. How much is it? Tundra?

00:11:28:23 - 00:11:32:15
Jake
I like 50,000. Something like that. It was great.

00:11:32:17 - 00:11:34:18
Ramit
Paul. Yeah. Okay. So then what else did you get?

00:11:34:19 - 00:11:35:03
Jake
I mean.

00:11:35:04 - 00:11:36:16
Mia
I mean like new furniture.

00:11:36:17 - 00:11:41:05
Ramit
Furniture like. So you had the house, the truck, etc.. Yeah, it sounds like this is.

00:11:41:05 - 00:11:56:21
Jake
And then and then. Yeah. And then we kind of started talking about finances and that's what kind of got us into it. And then through conversations, we decided that the house is a money pit and we didn't I mean, not a money. It was just we're probably house broke at that point.

00:11:56:22 - 00:11:57:04
Ramit
Wow.

00:11:57:05 - 00:12:16:01
Jake
So we sold the house $200,000. House cheaper. Same neighborhood. It feels so much more like us. It's fantastic. We sold my truck. We have one car that we had. Two cars paid off. We had to get a bigger car just recently because.

00:12:16:04 - 00:12:16:12
Mia
The four.

00:12:16:16 - 00:12:18:03
Jake
Of our kids are now.

00:12:18:05 - 00:12:21:24
Ramit
But, like, how long to make the decision to sell the house? That's a huge decision.

00:12:21:24 - 00:12:37:22
Mia
It was a big decision. But I feel like we just looked at each other and we were like we were we were so housebroken. And it just seemed like, why are we doing this? Because it wasn't like neither of us were attached to it. We were like, if there's something that we can change, like, what can we change?

00:12:37:23 - 00:12:39:24
Mia
And to be like.

00:12:40:01 - 00:12:40:06
Jake
Yeah.

00:12:40:07 - 00:12:52:03
Mia
Credit to our credit to our parents. Both of us were taught from a young age like, do not go into debt other than for a house. So like, we didn't have other debt. So it was sort of like, okay, if we have money to play with, this is it. It's like the house.

00:12:52:03 - 00:12:54:23
Ramit
What was this sign that you were house poor?

00:12:54:24 - 00:12:55:19
Jake
I mean, this was probably.

00:12:55:19 - 00:12:57:09
Mia
Were thinking about every penny.

00:12:57:11 - 00:12:58:03
Jake
Yeah. And we.

00:12:58:03 - 00:13:15:10
Mia
Were that's when I was doing, like, the spreadsheet. And it wasn't just like it wasn't big idea numbers. It was like we spent $12.37 at donut getting donuts for the kids. Like, we cannot spend that. It was. Yeah.

00:13:15:11 - 00:13:18:10
Ramit
How would you describe money felt at that time?

00:13:18:12 - 00:13:22:19
Mia
It was horrible. It just felt like being strangled.

00:13:22:20 - 00:13:23:23
Ramit
Right? Wow.

00:13:24:00 - 00:13:36:00
Jake
Well, like, we've even, like, we had a big house gym that we worked out in. It was lots of expensive things that I'd been collecting during Covid. Sold all that, like Planet Fitness is a bunch of weirdos, but it's still pretty good.

00:13:36:02 - 00:13:38:04
Ramit
How did it feel to just sell all that stuff?

00:13:38:07 - 00:13:52:01
Mia
It felt good. Good. Again, we got married. We were so happy to have happiness, spent all the money. And then it was like feeling like, okay, now we're making smart decisions. It was almost like we had an entire relationship in like three years.

00:13:52:02 - 00:14:13:14
Ramit
Well, what I appreciate about this is I don't mind people making decisions about money, even mistakes about money. We all make mistakes, I make them, we all make them. What I really appreciate is that you caught it, and you took a dispassionate look at the numbers and you were like, this does not work. We got to make a change.

00:14:13:14 - 00:14:27:20
Ramit
If you actually build that skill, of course, correcting, you can actually go through life making a lot of mistakes because you're like, let me move fast knowing that if something goes wrong, I will correct it, learn from it, and I won't make that mistake again. So I'm willing to bet the two of you will never be house poor again.

00:14:27:24 - 00:14:28:20
Ramit
Yeah, yeah.

00:14:28:21 - 00:14:38:17
Jake
And that's what I love about Mia is how reflective and honest. And I think those conversations are what brought us together, Wolf. Very effective and honest. When we make a mistake, we need to fix it.

00:14:38:18 - 00:14:56:22
Ramit
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00:16:01:17 - 00:16:03:10
Speaker 4
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00:16:03:13 - 00:16:21:05
Ramit
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00:16:21:07 - 00:16:40:18
Ramit
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00:16:40:18 - 00:16:59:06
Ramit
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00:16:59:07 - 00:17:17:20
Ramit
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00:17:17:22 - 00:17:28:08
Ramit
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00:17:28:10 - 00:17:52:07
Ramit
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00:17:52:07 - 00:18:16:18
Ramit
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00:18:16:18 - 00:18:23:20
Ramit
It felt horrible. Is it different now because you mentioned like you can't really go out to eat?

00:18:24:01 - 00:18:28:06
Mia
I think we took all the extra money and put it towards college.

00:18:28:08 - 00:18:31:14
Jake
It's like that, like yanking the steering wheel this way. And now I'm like.

00:18:31:15 - 00:18:42:09
Mia
It's like you weren't saving any. Like we're not saving enough for the kids is like a to some extent, maybe an overcorrection. But again, there's that whole tension about like, well, isn't that the right thing to be saving for?

00:18:42:15 - 00:18:45:14
Ramit
Well, isn't a house the right thing to be buying?

00:18:45:16 - 00:18:57:09
Jake
Yeah. Fair point. Yeah. We don't know what the right answer is. I think that, you know, I keep having someone I just want them to put their arm around me and say, sign. This is what you're supposed to do. You know, it's like, feel free to put your arm around me and tell me.

00:18:57:13 - 00:19:03:01
Ramit
That's actually quite interesting. What if I told you that person doesn't exist?

00:19:03:03 - 00:19:06:16
Jake
That's what I expected. Yeah. Otherwise, yeah.

00:19:06:18 - 00:19:12:20
Ramit
It's not your dad. It's. No. Nobody is going to be that person for you except.

00:19:12:20 - 00:19:13:13
Jake
You, right?

00:19:13:14 - 00:19:14:17
Ramit
How would that strike you?

00:19:14:17 - 00:19:30:10
Jake
I know, I say I want somebody to come and put their arm over me, tell me what to do. But I want to be confident in the decisions that we're making, okay? It'll make it easier to not spend that money or do this or make that decision knowing it's in the right spots in our money's worth. You know that term money working for us?

00:19:30:12 - 00:19:37:10
Jake
I hear people say that all the time to. I don't know what that means, though. Really? Yeah. I'm serious.

00:19:37:12 - 00:19:38:24
Ramit
What what do you think it means.

00:19:39:00 - 00:19:47:08
Jake
Putting it in the stock market? I don't know, I've just. Yeah. I mean, my Midwest is probably showing right now. Just. You saved money and you put it away and hand it off the next group.

00:19:47:08 - 00:20:10:23
Mia
I wonder if part of it is that we get a pension. And so we've never had to think about, like a 401 K, or like, where does the 401 K money go? Like, there was never any conversation about that. I want to understand the idea of a pension. Like I get it conceptually, but on a day to day basis, like should I be, should I be investing more?

00:20:10:23 - 00:20:11:18
Mia
I don't know.

00:20:11:24 - 00:20:16:13
Ramit
Have you asked about this?

00:20:16:15 - 00:20:19:02
Mia
Person? No one. Okay, I'm asking you.

00:20:19:03 - 00:20:19:17
Ramit
Okay. That's a.

00:20:19:17 - 00:20:37:08
Jake
Fair and like with with the pension what we are a little that we know about it is that you get retirement is a top three years. So an average in average. So I've got two master's degrees I'm now I'm going to be a principal next year. And that's I just keep wanting to add income. So at that top three years as high as possible.

00:20:37:09 - 00:20:51:06
Ramit
Okay. When it comes to the money in your relationship, the tension is around how much Mia that you are sending towards your kids. Jake, what would you do with the money if you had more of it?

00:20:51:08 - 00:20:53:17
Mia
No judgment.

00:20:53:19 - 00:21:11:02
Jake
I don't know. My mind is going a a lot of different ways. Like I'd probably save it. I'd put it into savings somehow, try to collect interest, that kind of thing, put some money into our house, like, you know, the landscaping idea that we wanted to do our family really liked. We inherited a hot tub and that broke.

00:21:11:04 - 00:21:30:24
Jake
That would be something I'd probably put it into. Those are kind of my ideas and maybe a food service we talked about, like possibly something that, you know, health is really important to both of us. We both exercise regularly, and I think to have healthy food options consistently and not add it as a stress, because when we come home from work, just everybody's dumping their problems on us.

00:21:31:01 - 00:21:35:19
Ramit
Have you all talked about these three things saving house food.

00:21:35:20 - 00:21:36:24
Mia
We've talked about it.

00:21:37:01 - 00:21:38:08
Ramit
Any conclusions.

00:21:38:08 - 00:21:59:07
Mia
We do want to save for the house stuff? That's probably like the most conclusion. I agree that having some sort of like a food problem, I think we probably agree on that. Like if we could have like healthy food prepped and delivered to us, that would be amazing. But any food service is just like so much more than what we spend on groceries.

00:21:59:07 - 00:22:01:13
Mia
It just doesn't seem to make sense.

00:22:01:14 - 00:22:05:10
Ramit
Are you too aligned about money?

00:22:05:12 - 00:22:22:17
Jake
I would say most of the things. The only thing I think that would cause any conflict on us would be vacation, I think is something that Mia wants to travel and I'm not. I feel like if we're putting all that money into school, it's like, I'd love to. I'd like to go sometimes, but it's not a need of mine.

00:22:22:19 - 00:22:24:04
Speaker 4
This couple is very likable.

00:22:24:04 - 00:22:45:00
Ramit
I like talking to them, but I am noticing that because they are so compassionate with each other, it's difficult to get a straight answer out of them. I'm not even sure if they agree or disagree. And so much of what's happening here is being polite to each other. Polites good, but sometimes I need somebody to say, I don't like that.

00:22:45:00 - 00:23:05:15
Ramit
No, this is what I want. That is what I'm pushing for. Here it is now, my personal mission to show Mia and Jake that they can be direct with each other and be polite. Y'all like feeling anxious about money? No, no. Let's try that question again. Do you like feeling anxious about money?

00:23:05:16 - 00:23:06:06
Mia
No.

00:23:06:11 - 00:23:23:18
Ramit
Both are saying no. No. Like yes. Very affirmatively. No, no. And yet the dynamic you've built allows you to both constantly feel anxious. Okay, let's let's find out what the numbers say and then we'll talk about them. All right. What was it like putting the CSP together?

00:23:23:19 - 00:23:39:10
Mia
It was actually really nice because it gave me a concrete way to think about our big picture, which is nothing that I've ever been able to do before. Like I had no idea. Like if somebody asked, like, what's your net worth? I don't even know how to calculate.

00:23:39:10 - 00:23:56:06
Ramit
That and consider how many years you kept a budget. Yes. Like we're tracking this and like you mentioned, like, should we be tracking the price of groceries or the price of soda? Yeah. It's unclear. Why do you think, looking back for the many years that you kept a budget, why do you think you were keeping that budget?

00:23:56:06 - 00:24:00:16
Mia
Because that was the number one thing I was taught about money is you balance your checkbook.

00:24:00:18 - 00:24:12:09
Ramit
Right? And so since nobody balances their checkbook anymore or basically uses one, you adapted that for today and we're using Excel or some tool using Excel.

00:24:12:10 - 00:24:13:07
Jake
Google Sheets.

00:24:13:08 - 00:24:16:11
Mia
Yeah. Do you want to know what I was doing? Because it's pretty crazy.

00:24:16:11 - 00:24:17:07
Ramit
I would love.

00:24:17:07 - 00:24:42:07
Mia
To tell them. So I would again, we spend on the credit cards because I get points for that. But we never don't pay them off. Great. Okay, so I would copy everything that was spent in the credit card statement, put it into an Excel spreadsheet. So I'm just copying and pasting it and then line by line one, make sure everything looked like there wasn't anything there that shouldn't be there.

00:24:42:07 - 00:25:05:10
Mia
And then I would try to sort them into categories. Categories. I don't know why I came up with those categories, I just did, and then I would try over multiple months to track, to see, like, are we spending on clothes, what we said we should spend? Are we spending on going out to eat what we should spend? But it was like dupe like I knew I was duplicating work like it's already there, but that's what.

00:25:05:11 - 00:25:09:16
Ramit
So I keep going. Why? Why do you think you were doing all this? What did it get you?

00:25:09:17 - 00:25:14:09
Mia
I think I felt like I was controlling our money.

00:25:14:10 - 00:25:35:17
Ramit
Exactly, exactly. This is a classic example. I'm actually really thankful that you're sharing this with everybody, because there's so many people who go through the motions of playing money. They are playing money. They are moving things from here to there. Why? You know, like the concept of a paper pusher. Let me pick this piece of paper up, push it over there.

00:25:35:18 - 00:25:50:04
Ramit
Like we all know that's useless, but we do it. And nobody forced you to write. No one sat you down and said, like you got to do this. No. If anything was echos from your parents, maybe grandparents, it doesn't work. Like if we actually took an honest look at it and be like, what am I getting out of this?

00:25:50:05 - 00:26:16:03
Ramit
But we get a sense of control and we like to feel like motion is productivity. Another great example of you correcting that and being like, hey, made a mistake, went down the wrong rabbit hole of a budget, we're going to stop that. And you did amazing. Okay, let's take a look at the numbers. Maya, can you read the word in bold and the number next to it for this entire box, please?

00:26:16:06 - 00:26:31:22
Mia
Assets 443,000. Investments zero. Savings 13,900. Debt 176,000 and $410. Total net worth 280,490.

00:26:31:23 - 00:26:33:18
Ramit
Cool. What do you think of these numbers?

00:26:33:24 - 00:26:50:16
Mia
I feel like our net worth is low considering how much we both make. I don't understand the investments line again, like we've got the pension, so I don't know if that should be higher.

00:26:50:17 - 00:26:51:03
Ramit
Okay.

00:26:51:05 - 00:26:56:10
Jake
I feel amazing about the debt. I think that that's something. It's it's our house. That's all.

00:26:56:16 - 00:27:00:05
Ramit
That's all. Yeah. Mortgage debt. Yeah. What's the interest rate?

00:27:00:07 - 00:27:01:00
Mia
6%.

00:27:01:01 - 00:27:01:14
Ramit
Yeah. Okay.

00:27:01:15 - 00:27:03:18
Mia
It's also a 15 year mortgage, so we're proud.

00:27:03:18 - 00:27:08:02
Jake
Of that. Yes. We sold from a 30 year to a 15 year. That was something else that were actually paid off.

00:27:08:03 - 00:27:08:14
Ramit
Nice.

00:27:08:14 - 00:27:16:17
Jake
Yeah. Yeah. I don't know what. I just don't know enough about net worth. Yeah. Obviously I want it to be higher, but I don't know like why.

00:27:16:20 - 00:27:24:19
Ramit
Yeah that's a good answer. That's honest. Yeah. That's actually common I would say most people feel that way. Do you looking at these numbers make you feel anything?

00:27:24:21 - 00:27:29:01
Jake
I think the only thing I would feel would be guilt. And I think it would be debt.

00:27:29:02 - 00:27:33:19
Ramit
Like, I think I could show you this glass of water and you'd feel guilt, like.

00:27:33:21 - 00:27:34:18
Jake
Yeah, I think so too.

00:27:34:19 - 00:27:38:24
Ramit
That's a default baseline. Okay. So you feel guilt because.

00:27:39:04 - 00:27:44:24
Jake
I don't feel guilt. I said if I felt if debt was way higher, I would feel guilt. That's the only feeling that I would have.

00:27:45:00 - 00:27:50:08
Ramit
That's quite an interesting response, though. Yes. Mia, how do you feel, if at all, looking at these numbers?

00:27:50:09 - 00:28:14:13
Mia
I'm proud that our net worth is something right. Like, I'm proud that there's something there. I'm proud of the decisions that we've made that have gotten us to have that. And I also feel I do think guilt is a default, but guilty that it's like, not more like, I wish I would have made some different decisions earlier in my life.

00:28:14:14 - 00:28:15:09
Mia
Cool.

00:28:15:11 - 00:28:22:14
Ramit
I appreciate that. Let's look at the income. Jake, what's the gross combined monthly income, please?

00:28:22:16 - 00:28:24:16
Jake
18,862.

00:28:24:17 - 00:28:33:08
Ramit
Cool. That means that your household income is $226,000 a year. Did you know that number?

00:28:33:09 - 00:28:33:18
Jake
Yes.

00:28:33:18 - 00:28:34:17
Ramit
We knew that. You knew that.

00:28:34:17 - 00:28:39:10
Mia
I had never made that calculation of our gross. I knew our net.

00:28:39:12 - 00:28:43:13
Ramit
So you didn't know? What did you think that you made as a household? Ballpark.

00:28:43:15 - 00:28:45:23
Mia
I probably would have said, like, 200,000.

00:28:45:24 - 00:28:47:23
Ramit
Okay. What do you think about that income?

00:28:48:01 - 00:28:49:03
Mia
I think it's great.

00:28:49:04 - 00:28:52:12
Jake
Yeah. No. It's great. And that's why it stresses me out. I don't know why we're.

00:28:52:13 - 00:28:53:11
Mia
Like, why are we counting.

00:28:53:12 - 00:28:54:11
Jake
Pennies jammed up.

00:28:54:11 - 00:29:06:24
Ramit
Like this? Is. This is funny. Like, people don't make enough money. They go, I'm stressed out. Then people make a ton of money. They go, I'm stressed out because why don't I feel better about money? Yeah. How much do you need to make to not be stressed out? Jake.

00:29:07:01 - 00:29:13:21
Jake
Well, I know that it'd just be better problems, you know, I've. I've read the subtle art where it's just you want to have good problems. So these are pretty good problems to have. But.

00:29:13:21 - 00:29:18:20
Ramit
But you're still stressed out, right? Yes. Maybe if you make 500 K, will you still be stressed.

00:29:18:22 - 00:29:22:12
Jake
If we kept our current assets? No, I wouldn't be stressed. Oh, really?

00:29:22:13 - 00:29:26:15
Ramit
500 is all you need to make. Just double.

00:29:26:16 - 00:29:30:02
Jake
I feel like you're leading the witness. I definitely. I'm sure I'd be stressed always.

00:29:30:03 - 00:29:30:15
Ramit
Yes.

00:29:30:16 - 00:29:31:20
Jake
Yeah.

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00:32:15:15 - 00:32:33:00
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Fassett is an SEC registered investment advisor. I'm not a member of facet and have an incentive to endorse facet, as I have an ongoing fee based contract for cash compensation. Based on this endorsement, all opinions are my own and not a guarantee of a similar outcome. Okay, let's look at the fixed costs. What's that number?

00:32:33:06 - 00:32:34:19
Mia
50% okay.

00:32:34:23 - 00:32:36:04
Jake
Quite good.

00:32:36:06 - 00:32:58:18
Ramit
That's on the lower end of the 50 to 60%. That's exactly what I would expect to see for a high income couple. When your income goes up like disproportionately up, this number should come down because, you know, you can only spend so much on toothpaste. So I think you're all doing a very nice job. I mean, look at that mortgage, $1,776.

00:32:58:20 - 00:33:03:21
Ramit
That's crazy. 9% of gross. Well done.

00:33:03:23 - 00:33:04:07
Jake
Thank you.

00:33:04:08 - 00:33:09:18
Ramit
Thank you. Especially considering you had a McMansion before. And this is amazing.

00:33:09:18 - 00:33:11:10
Mia
I'm very proud of that.

00:33:11:12 - 00:33:15:01
Jake
And the other one was 2000. Way more. Yeah.

00:33:15:03 - 00:33:19:09
Mia
And I think that's probably maybe one of my, our proudest money decisions that we made.

00:33:19:09 - 00:33:19:14
Jake
That.

00:33:19:19 - 00:33:20:21
Ramit
I love that.

00:33:20:23 - 00:33:21:24
Jake
That's so cool.

00:33:22:01 - 00:33:24:04
Ramit
You all ever celebrate that that you made that tough.

00:33:24:08 - 00:33:30:17
Mia
I think we do actually like we talked. We look at each other, I would say pretty regularly and like, oh my God, I'm so happy we did this.

00:33:30:23 - 00:33:36:04
Jake
And it feels better. Like it feels like home to its like the added bonus. It feels more like us to. Yes.

00:33:36:04 - 00:33:48:07
Ramit
So this is great energy. This is what now that I see that you can do this and that you do celebrate and you have I'm in my head, I'm going, cool. They can do that. So now I just need to transfer that.

00:33:48:08 - 00:33:48:20
Mia
I would love.

00:33:48:20 - 00:33:49:20
Ramit
That over to other parts of.

00:33:49:20 - 00:33:50:12
Jake
Your money. I mean.

00:33:50:13 - 00:33:56:06
Ramit
This is very good. Okay. Let's keep going. We have investments. What's that number.

00:33:56:10 - 00:33:57:20
Mia
22% okay.

00:33:57:21 - 00:34:15:09
Ramit
So that is your pension which is about $3,000 a month going to your pension. Yep. Okay. And I can see there's like a little bit of confusion on your part of like what's happening with this pension. What does it mean. But overall great savings. What's that number.

00:34:15:10 - 00:34:16:14
Mia
25%.

00:34:16:15 - 00:34:34:04
Ramit
Okay. The bulk of this is kids 529 and then you have an emergency fund. Okay. Personally I would have put the 529 under investments. Okay. But it's fine. Either way. It shows me where your priorities are. And then finally let's go down to guilt free spending. What's that number?

00:34:34:04 - 00:34:35:03
Mia
3%.

00:34:35:04 - 00:34:36:24
Ramit
Do you only spend $364.

00:34:36:24 - 00:34:38:08
Mia
A month? That's not right.

00:34:38:09 - 00:34:40:17
Ramit
Okay. How much do you spend? Like you don't know?

00:34:40:19 - 00:34:43:10
Mia
I bet that's just like what was left. Probably.

00:34:43:11 - 00:34:43:13
Jake
Yeah.

00:34:43:14 - 00:34:44:16
Mia
That is. That's just.

00:34:44:17 - 00:34:48:24
Ramit
So do you think that you were spending more than 364? That would be extremely lean.

00:34:49:00 - 00:34:50:02
Mia
Yes, of course we are.

00:34:50:03 - 00:35:00:08
Ramit
How much do you think that you are spending every month on discretionary items, including eating out, coffee, vacations spread out over 12 months, etc.?

00:35:00:12 - 00:35:09:06
Mia
I bet it's closer to like 1500. And even that probably is us being really strapped.

00:35:09:08 - 00:35:13:10
Ramit
Let's not do that. Let's be. Let's. How much are you realistically?

00:35:13:12 - 00:35:17:19
Mia
No, no, I think we're realistically spending probably 1500 to $2000 a month, but.

00:35:17:19 - 00:35:40:15
Ramit
I'm say 2000. Okay. When I do these numbers, I always want to be conservative because I never want to be surprised. Owing more money. If anything, I want extra money at the end of the year. Yeah. Cool. So at 2000, then the question is where's that money coming from? Yeah, I have a question. Your long term emergency fund says 700 bucks a month, but you have only $14,000 in savings.

00:35:40:16 - 00:35:44:00
Ramit
Yeah, you're pulling money out of your savings occasionally.

00:35:44:02 - 00:35:46:21
Mia
Yes, we have been. Which we want to stop doing.

00:35:46:22 - 00:36:05:04
Ramit
Well, that's. This all makes sense. Yes. So you're spending more than the CSP is reporting? Yeah. It's not planned for. And then you pull out of savings. Yes. Okay. You know, your savings is about two months of expenses. Were you aware of that?

00:36:05:05 - 00:36:05:21
Mia
Yes.

00:36:05:22 - 00:36:07:21
Ramit
Okay. How does that feel to you?

00:36:07:22 - 00:36:08:14
Mia
Scary.

00:36:08:15 - 00:36:09:13
Jake
That's why we're here.

00:36:09:15 - 00:36:17:20
Mia
That is why we're here. All right. I think us being here gives us hope, right? Like, I think if we had.

00:36:18:01 - 00:36:18:24
Ramit
Kind of answer that.

00:36:18:24 - 00:36:25:22
Mia
Because I would be more mad if I didn't feel like I'm going to talk with her. Me? He's going to help me figure this out.

00:36:25:23 - 00:36:26:08
Ramit
Wow.

00:36:26:09 - 00:36:43:01
Jake
I think that with me, it kind of reminds me of how I treated girls went before. I like when I was going through puberty. It scared me. I didn't understand it, so I just avoid it, okay? And I wanted, like, I can't be mad. I don't understand it well enough. I think that that's kind of where I'm at.

00:36:43:01 - 00:36:44:16
Jake
I just like this.

00:36:44:16 - 00:36:45:17
Ramit
Is quite analogy.

00:36:45:19 - 00:36:46:05
Jake
Yeah, it's.

00:36:46:05 - 00:36:50:03
Ramit
Yes. But what's the conclusion? Because now you're married. Actually, you've been married twice.

00:36:50:04 - 00:36:54:11
Jake
Yes. So I'm not afraid of girls anymore. Sort of.

00:36:54:13 - 00:36:55:15
Ramit
Are you afraid of money?

00:36:55:22 - 00:37:13:02
Jake
Yeah. I think I'm confused by it. And I think there's a deep seated fear of seeming dumb, and it's seeming like asking questions, you know, and I, I joke about not knowing what people say, making their money work for them. I think that this just like a knowing gap and I want to get it fixed. So that's kind of where I'm at.

00:37:13:02 - 00:37:21:02
Jake
So I can't I can't be mad that I don't, you know, it's like learning a new sport. You're not mad the first day. It's like I'm just trying to drink it in as much as I can right now.

00:37:21:02 - 00:37:26:02
Mia
And I think I'm just more scared than mad. The fear is bigger than the anger for me.

00:37:26:04 - 00:37:46:11
Ramit
I love Jake's analogy about being afraid to talk to women when he was growing up. I think a lot of men can really connect with that memory, but I also think that at a certain point you have to face your fears. There is no way but straight through those fears to go and talk to somebody to apply for a job.

00:37:46:11 - 00:38:07:12
Ramit
If you've been nervous about your career, you've got to face your fears with money and realize nobody else is coming to save me. And I was put on this earth. Not simply to save money in a savings account, but to live a rich life. Therefore, I'm going to start facing my fears. I'm going to learn how money works, and I'm going to start feeling good about it.

00:38:07:14 - 00:38:37:19
Ramit
For me, I always naturally understood money, but things like fitness, I felt like I was the odd man out like everybody else learned it and I just don't get it. And so when I talk to people and they don't understand money, I have a lot of compassion. It's kind of complicated. You get a million different people telling you a million different things, and as long as you got a roof over your head, it kind of seems like it's fine.

00:38:37:21 - 00:38:43:17
Ramit
So I appreciate you being so honest about it. Mia, you said you feel fear. What's the fear of.

00:38:43:22 - 00:38:52:00
Mia
The fear is that if something happened, if there was a catastrophic event, we don't have money to deal with it.

00:38:52:01 - 00:39:12:23
Ramit
If you had a fear of that, like, let's say I had a fear of slipping in the shower. Okay, I might get one of those plastic mats you have a fear of. If something happened, you won't have enough money, but your savings account is still $13,900. What's the difference?

00:39:13:00 - 00:39:21:05
Mia
I think in the moment that I want to go on a trip or I want to buy something, I'm just like, I'll deal with it later.

00:39:21:07 - 00:39:23:04
Ramit
Yeah. How often does that happen?

00:39:23:07 - 00:39:29:00
Mia
Oh, probably all the time. Right. Because if I was really afraid, I wouldn't be doing that.

00:39:29:01 - 00:39:44:02
Ramit
Yeah. How much do you think your relationship with money is problem oriented? Where you talk about the problems, you agonize over, the problems, you discuss the problems versus solution oriented where you say, okay, that's the problem. Here's what we are doing about.

00:39:44:02 - 00:39:46:01
Mia
It, 95% to 5%.

00:39:46:03 - 00:39:47:13
Ramit
Yeah, 95%. Problem.

00:39:47:14 - 00:39:48:23
Mia
Problem.

00:39:49:00 - 00:40:03:03
Ramit
Common. Really common. Just imagine with me for a second if we flipped it just flipped it 95% solution oriented, 5% problem oriented. What would that look and feel like to.

00:40:03:03 - 00:40:17:24
Mia
You that would feel like like when you said that you liked that we celebrated are the decision that we made about the house? To me, it would feel like having that 95% of the time, which sounds amazing.

00:40:18:04 - 00:40:20:07
Ramit
So you'd celebrate more. What else would you do?

00:40:20:08 - 00:40:35:23
Mia
I would worry less it like, and I could spend that energy doing something I enjoy. Like what? Hanging out with Jake. Spending time with the kids. Like I wouldn't be trapped to the spreadsheet.

00:40:36:00 - 00:40:37:15
Ramit
Are you trapped now?

00:40:37:17 - 00:40:42:14
Mia
Yeah, I watch it all the time. It still doesn't make sense to me. And again, I'm just like paper pushing.

00:40:42:16 - 00:40:53:07
Ramit
Yeah, yeah. Okay, I have a couple more questions about this. So you have preschool at $1,266 a month. How long will that last for?

00:40:53:08 - 00:40:55:21
Mia
Another 15 months.

00:40:56:00 - 00:40:56:19
Jake
One more school year?

00:40:56:20 - 00:40:59:17
Ramit
Yeah, one more school year. Yeah. Okay. And then after that.

00:40:59:18 - 00:41:00:18
Mia
Then public school.

00:41:00:23 - 00:41:07:02
Ramit
Got it. Cool. We have a deposit into an account. What's that for?

00:41:07:03 - 00:41:17:13
Mia
That is a joint account that my ex-husband and I each put that much money in. And it's like savings for, like when the kids need clothes. Like for the sort of bigger expenses.

00:41:17:14 - 00:41:33:08
Ramit
Got it, got it. So that's kind of day to day versus the 529 that you are saving for. Okay. Great. I mean, I love seeing this car payment at $398 a month, amazing debt at 459. That's what.

00:41:33:10 - 00:41:36:17
Mia
Treadmill. That's a treadmill that is done in three months.

00:41:36:18 - 00:41:38:23
Ramit
Yes. What is the interest rate on a treadmill?

00:41:38:24 - 00:41:39:21
Mia
It was.

00:41:39:23 - 00:41:54:01
Ramit
Yeah. Okay. All right. By the way, I noticed that something interesting. Your preschool amount is not being accounted for in the total. So let's go ahead and adjust that right now. Wow. What just happened to your fixed cost number?

00:41:54:01 - 00:41:55:21
Mia
It's a big jump 10% jump.

00:41:55:22 - 00:42:23:19
Ramit
Yeah jumped 10%. So let's recognize a couple of things. Number one childcare and preschool. Very expensive. Number two suddenly having that really high income and the low fixed cost, which was something I was like. Great job. It's not so low anymore right now. Preschool is temporary. And as you mentioned, public school after. So this number will go down.

00:42:23:20 - 00:42:28:09
Ramit
Yeah. But things are not so loose all of a sudden. What does it tell you.

00:42:28:10 - 00:42:34:01
Mia
It reinforces that we don't really know kind of what's going on.

00:42:34:02 - 00:42:44:09
Ramit
Agree. That is true. And what does it imply for the rest of your money if you just jump from 50 to 60%, what does it imply for the rest of how you're spending your money?

00:42:44:11 - 00:42:45:02
Jake
That shrinking?

00:42:45:03 - 00:42:45:07
Mia
Yeah.

00:42:45:08 - 00:42:51:13
Jake
That's true. I'm like feeling my hands getting hot right now. Yeah. Like I feel like this pressure. Just like I'm like, gosh, here we go.

00:42:51:14 - 00:43:11:11
Ramit
Okay, here's how I think about it I appreciate that. That's real for me. I'm still like, we got a puzzle here and we're going to figure it out. Certainly you do not have a lack of money. You all make a lot of money. So we got a puzzle. We just need to figure out which way the pieces all fit.

00:43:11:11 - 00:43:14:15
Ramit
So I'm not feeling hot hands at all right now, okay?

00:43:14:16 - 00:43:23:06
Jake
I have that confidence. And like, you have, like, you understand. And that's where it's like, I want that feeling. Where it's like where most of in life there's a problem. We'll fix it.

00:43:23:07 - 00:43:46:14
Ramit
Exactly. All right. We got to make some other adjustments. We have this deposit for your kids that was also not reflected. Look at the number now on your fixed costs, we're at 64%. So the financial picture has actually dramatically changed. Now I'm going to be a little more directive on my questions because at 50% I really don't care what you're doing.

00:43:46:16 - 00:43:54:15
Ramit
You do whatever you want. But at 64% I have questions. Utilities are 409. Why? That's a lot.

00:43:54:17 - 00:44:06:13
Mia
I would assume that our electric and gas are high, because I basically run the washing machine 100% of the time, and then the hot tub. Also.

00:44:06:15 - 00:44:10:17
Ramit
What how much is a hot tub cost? I truly do not know.

00:44:10:18 - 00:44:14:05
Mia
Well, just the electricity to run it to heat the water.

00:44:14:06 - 00:44:15:13
Ramit
How often do you get in the hot tub?

00:44:15:14 - 00:44:16:02
Jake
Well, it's.

00:44:16:04 - 00:44:17:05
Mia
Well now it's broken.

00:44:17:06 - 00:44:17:22
Ramit
So great.

00:44:17:23 - 00:44:20:21
Jake
It was so old it had a CD player on it, so.

00:44:20:23 - 00:44:25:01
Ramit
But, like, can I ask you, like when it broke, did you notice your utility bills going down?

00:44:25:02 - 00:44:28:01
Mia
I have not figured out how to.

00:44:28:03 - 00:44:28:10
Jake
We have.

00:44:28:15 - 00:44:32:18
Mia
Disconnected like to to stop.

00:44:32:22 - 00:44:33:01
Jake
Yeah.

00:44:33:01 - 00:44:35:19
Mia
That's basically we're still paying for a broken hot tub to run.

00:44:35:20 - 00:44:45:07
Ramit
Yes. Fix that. Yes. All right. This number is unusually high. And at 64%, we don't have room for that. Yeah, debt payments at 459. Again.

00:44:45:07 - 00:44:46:09
Mia
This is your three months.

00:44:46:10 - 00:45:00:24
Ramit
Oh, okay. Let's zero it out then just to see okay. So watch. So this we zeroed it out and it brings us down to 60%. Okay. Nice. Okay I'm going to leave it at zero. Groceries and gas are first of all why did you combine those two. It's a little odd combination.

00:45:01:01 - 00:45:06:06
Mia
Because it's what we put on the credit card. Like, it all goes on the credit card.

00:45:06:07 - 00:45:31:16
Ramit
You should change that. Okay. Gas should go with your car, cars, everything related to the car. Okay. So gas, parking tickets, parking, all of it should go there. That way you just have a good sense. A lot of times people don't realize, oh, my car payments 350, which mine used to be. And then when I netted out everything else, I added all together was over $1,000 a month, including parking and gas and everything.

00:45:31:17 - 00:45:34:06
Ramit
So we got to know these numbers. Know your numbers.

00:45:34:07 - 00:45:37:23
Jake
So move. So move the gas up to the carpet. Exactly. Okay.

00:45:38:00 - 00:45:39:21
Ramit
How much are you spending on groceries per month?

00:45:39:21 - 00:45:43:21
Mia
I do think we probably spend about $1,200 on groceries per month.

00:45:43:22 - 00:45:48:09
Ramit
Okay. What are you buying for 1200? I'm not the grocery Grinch. I'm just curious.

00:45:48:10 - 00:46:07:11
Jake
I think that's an area where we could really cut back. And I think that it's so cyclical, too, because when you add two grown children, like the meals change and we're trying to be proactive. And when when the older kids are not with us, then we try and do leftovers or things like that, and then it's just trying to save money.

00:46:07:11 - 00:46:09:18
Jake
But I definitely think that that's a spot.

00:46:09:19 - 00:46:10:19
Ramit
What do you think.

00:46:10:21 - 00:46:12:08
Jake
That we could save?

00:46:12:10 - 00:46:17:08
Mia
I agree that we can we probably could cut back on that a little.

00:46:17:09 - 00:46:21:16
Ramit
If you could bring this number down your groceries instead of 1200, what would you bring it to?

00:46:21:17 - 00:46:25:17
Mia
I think we could realistically do 800. I think we'd do 200 a week.

00:46:25:18 - 00:46:26:21
Ramit
You cut 400 off.

00:46:27:00 - 00:46:27:13
Mia
I think we could.

00:46:27:14 - 00:46:29:00
Ramit
I agree, that's pretty good. Okay.

00:46:29:01 - 00:46:36:00
Jake
How do we do that though? Like that's what's the action steps like you just do you just pull out $800 in every time you go and then it's just.

00:46:36:01 - 00:46:57:15
Ramit
That's it. Excellent question. When you start, most people in America do not shop to a number. They go to the grocery store and they're just like, that looks good. And when you are building this skill of sticking to a number, you can do that. You can literally pull out $200 a week in cash, or a simpler way is to simply, you know, your number.

00:46:57:15 - 00:47:22:09
Ramit
Every week. We're going to spend $200. Now, a lifestyle is lifestyle. If you go in twice a week, fine, it's 100 bucks each time. But you got to keep a note on your phone somewhere where you were tracking it over time. What I found is that people who are effective at hitting their grocery number, they basically eat the same thing a lot, like people who are hitting a number, especially when they need to hit a strict number.

00:47:22:10 - 00:47:46:00
Ramit
They basically come up with a meal plan and that's it. So that's number one. The second thing I've learned about patterns of successful people hitting a grocery number is one person is doing the shopping because they just know the numbers. They're connected. If another person goes and buys it, sometimes they have to, but they may not have that tacit knowledge that the primary person does, right?

00:47:46:02 - 00:47:47:08
Ramit
So that's what I would do.

00:47:47:09 - 00:47:47:19
Jake
Okay.

00:47:47:20 - 00:47:48:24
Mia
That's really helpful. Thanks.

00:47:49:00 - 00:48:07:01
Ramit
Cool. I'm going to take this down to 1100. Still leaving your gas in here which you can move later. And that brings you down to 57%. Honestly you're in great territory. Great territory. It's a little higher than I would like considering your income, but 57% is within parameters. Subscriptions at 315. What's this for?

00:48:07:03 - 00:48:14:12
Mia
So that would be all of the different TV services. So like every single one which I think we could totally.

00:48:14:13 - 00:48:15:10
Jake
Yeah we could.

00:48:15:12 - 00:48:17:00
Mia
I don't care about that very much.

00:48:17:01 - 00:48:18:10
Ramit
Yeah. How much can you take it down.

00:48:18:10 - 00:48:19:07
Mia
To 200.

00:48:19:13 - 00:48:20:11
Jake
At least. Yeah.

00:48:20:12 - 00:48:43:23
Ramit
Yeah. Okay. Great. I love that you say easy. Let's keep it easy. Okay? All right, 200. We don't need to cut to the bone on everything, right? You know, I'm interesting noticing that the two of you are very good at cutting costs. Like, I have not seen any resistance from you. It's uncommon. Most people, like, fight consciously and unconsciously.

00:48:43:23 - 00:48:50:17
Ramit
The two of you know, you're like, yeah, we can cut that. Yeah. Like what? What is that? Why is it so easy for you to cut costs?

00:48:50:18 - 00:49:00:12
Jake
For me, it's it's the greater good of our family. And I think that, like, financial stability would create such a safe environment in a household where we're comfortable moving forward.

00:49:00:13 - 00:49:02:04
Ramit
And what about you, Mia?

00:49:02:05 - 00:49:14:23
Mia
I agree with Jake, and I think I'm comfortable with it because it's just hypothetical when push comes to shove and I'm actually like, there's a pair of shoes I want I like.

00:49:15:00 - 00:49:31:12
Ramit
That's quite interesting. Wow. Very insightful. Both. We're going to tackle that as well. I think that you also might both be really comfortable with this because it's what you know. How long have you been told got to cut costs. Got a that's bad. Don't spend money forever. Yeah.

00:49:31:15 - 00:49:34:15
Jake
You know that's my that's my education on money is don't spend money you don't have.

00:49:34:16 - 00:50:01:16
Ramit
Exactly. So to me it's like me saying like drink a glass of water. Yeah. You've been drinking water, you know, for a long time, right. It's quite striking how easy it is for Mia and Jake to cut costs. Most couples do not find it this easy. They resist at every turn, even if they're in severe debt. But I also suspect that there is something much deeper going on here, which is that for Mia and Jake, being good with money means not spending a lot at all.

00:50:01:16 - 00:50:20:03
Ramit
And so while I want to cut some of their costs because I think they are a bit out of their parameters, I also know that that alone is going to take them back to their comfort zone. Cut costs shrink. I don't want to spend any money. That's not the path to a rich life for them. The path to a rich life manager costs.

00:50:20:03 - 00:50:32:11
Ramit
But also think critically about these major decisions like your investing, your 529 and yes, even their guilt free spending, your pension. Can we just talk about this for a minute.

00:50:32:11 - 00:50:33:05
Mia
I appreciate that.

00:50:33:06 - 00:50:40:20
Ramit
All right. So your pension I looked into it and I understand that you looked into it a bit as well before you came here. What have you learned about your pension.

00:50:40:20 - 00:50:51:06
Mia
When we retire? If we max out our pension. So if we wait till we're whatever the rule is, right? Like there's a formula, I think.

00:50:51:08 - 00:50:56:03
Jake
Of 88, it's the year's top. Plus how old you are, 88.

00:50:56:04 - 00:51:09:21
Mia
So if we wait to that then we get for the rest of our lives. Every month, 80% of the average monthly income of our top three years.

00:51:09:22 - 00:51:15:05
Ramit
Great. And when will you be able to retire based on that?

00:51:15:05 - 00:51:16:20
Mia
Between 55 and 60?

00:51:16:21 - 00:51:23:17
Jake
Yeah, I think it was 54 even because we both had been in going into that pension since 21. So. Great.

00:51:23:21 - 00:51:24:19
Ramit
How do you feel about that?

00:51:24:20 - 00:51:30:11
Jake
Good, good. It feels good. Feel good. Yeah. Yeah. It's just like this in the distance thing. I've never it's.

00:51:30:12 - 00:51:46:15
Mia
I guess one question I have is I don't know if, you know, 20 years from now, 80% of what I make. If that's enough to live on. Like, I don't understand how to make the the estimation of like how much will inflation go? Like I don't.

00:51:46:17 - 00:52:09:13
Ramit
Well, I don't know the details of that, but I'm willing to bet a little bit that your pension indexes for inflation. So usually a lot of different types of pensions and the like will account for inflation. They're not just going to pay you in today's dollars 20 years from now, because it would be worth far less. You could look into that.

00:52:09:13 - 00:52:26:16
Ramit
And literally you could just type in IP address inflation. Yeah. And I would not be surprised if it's like yeah we account for inflation etc.. Got it. Do you have a sense of how much you might make in the last three years? Average like a ballpark is helpful.

00:52:26:20 - 00:52:29:09
Mia
Like each year. You mean like what our yearly income would be?

00:52:29:10 - 00:52:31:15
Ramit
Yeah. Like, what can we use to project?

00:52:31:17 - 00:52:37:14
Mia
Sure. I think it'd be safe to say 140 each.

00:52:37:15 - 00:52:44:19
Ramit
Each. Okay. We can make some rough estimations, but in general, that's like quite amazing. Like, very few people have pensions like this anymore, you know that.

00:52:44:19 - 00:52:46:23
Jake
That's what we heard. Yeah. Everybody we talked to that.

00:52:47:00 - 00:53:04:19
Ramit
And the benefit of this like is back in the day in our parents time a lot of people had pensions. So basically like the two of you, they're kind of like I don't really think about investing like it's taken care of. All I know is I need to put the X money in the pension and then they retire, and then they just get a check every month.

00:53:04:19 - 00:53:21:24
Ramit
And by the time the two of you retire, your house will be paid off. Your expenses will be way lower. No more, you know, perhaps the food goes down. Certainly all the savings going to 529 is investing. All that stuff goes away and you're just like, oh wow, this is a lot of money. And we're 5455, which is quite young.

00:53:22:00 - 00:53:41:01
Ramit
Yeah, it's a great life. That was more typical in our parents time. And then companies took that and they said, this is really expensive, especially because people are living longer. And also we can get away with just shifting it on the burden of people. Let's make them save for it. You are responsible for your for one or your IRA.

00:53:41:01 - 00:53:59:21
Ramit
And like we don't have to account for this for the rest of their lives. So cool you all living in the, the public system of getting a pension. It's awesome if you are in it. Awesome. Okay, saving $700 a month. How did you pick that number?

00:53:59:22 - 00:54:11:14
Jake
I think it was 1000. I think we started with a round number, didn't we? Yeah. And then it was just like. That seemed like too much with what we were spending, and we just kind of went down to 700, I think. I don't know, there's, there's not like it's it's just.

00:54:11:20 - 00:54:12:10
Ramit
It's arbitrary.

00:54:12:11 - 00:54:13:03
Mia
It's arbitrary.

00:54:13:04 - 00:54:14:02
Jake
It could be anything.

00:54:14:02 - 00:54:22:12
Ramit
So I just want to point a couple of things out. If as we have made some adjustments, you'll notice that you are now spending more than you make every.

00:54:22:15 - 00:54:23:23
Jake
What explains the savings?

00:54:24:02 - 00:54:41:19
Ramit
Yeah. That's why your savings are being depleted. And that's why in part you feel. Yeah. Scared about money and scarce and like it's bad news because it kind of is. Yeah, but we could make some changes. What are the other big numbers on this CSP that are kind of flashing bright red.

00:54:41:20 - 00:54:45:11
Mia
Well the 529 is a lot.

00:54:45:12 - 00:54:57:01
Ramit
Yeah, that's a big one. So tell me, what is the thinking behind the $2,700 a month going towards the kids? 529.

00:54:57:03 - 00:55:21:22
Mia
When I was growing up, my parents told me what you want to avoid more than anything else is debt. And even though paying for school is a good investment, if you can avoid debt, do it. And they helped me so that I didn't have any debt coming out of college. So that's one is probably like that's just in my mind, like something that was just always like a given.

00:55:21:23 - 00:55:28:09
Mia
Like, if I can pay for my kids college that they don't have debt when they graduate college, I want to do that.

00:55:28:09 - 00:55:31:15
Ramit
Because debt is bad.

00:55:31:16 - 00:55:32:16
Mia
Because debt is bad.

00:55:32:17 - 00:55:34:00
Ramit
Anything else?

00:55:34:02 - 00:55:54:23
Mia
Like the cost of college now? Like it's just so outrageous. If it was, you know, even like 15 years ago and they were taking out like a total of 60 K for college, like, okay, not ideal, but now it's like 100, 150. Like that's so much debt. It just seems so big.

00:55:55:00 - 00:56:01:13
Ramit
Okay, okay. Is there any element of this was done for me. So I want to do it for them?

00:56:01:15 - 00:56:14:19
Mia
Yeah. I think the reason I hesitate is because I'm just trying to like emotionally gauge. Like is it that and I do think there's some like element of like pay it forward. Right. Like I was given that like this is what parents should do.

00:56:14:20 - 00:56:26:08
Ramit
Like yeah that's reasonable. What if the two of you did not make 230 plus $1,000 a year? What if you made 75 K year? Would you still be saving for kids? 529.

00:56:26:09 - 00:56:30:08
Mia
I think we would probably still doing a think we'd still do some.

00:56:30:09 - 00:56:49:16
Jake
Yeah, I don't think we could, but I'd be doing everything I can. I think that my my thing is it was done for me and I want my kids to have that same advantage that I had and that like, we'll give it to you, but you got to go earn it after that kind of thing. And I know there's so many different avenues of making money, but like, my way of thinking is safe.

00:56:49:16 - 00:57:00:05
Jake
And just go to school, get a job that pays and that's that's all I was told. And so I think that that's just like anxiety telling me to like, make sure my kids have that same opportunity that I had.

00:57:00:06 - 00:57:00:17
Ramit
Yeah.

00:57:00:19 - 00:57:10:10
Jake
Okay. Yeah. This is like the more you dig in and it's harder to defend and talk about, but I just don't know. It's just like this, an agreed upon truth that we've really not dove into.

00:57:10:15 - 00:57:11:23
Ramit
Agreed upon truth being.

00:57:12:01 - 00:57:14:14
Jake
That we pay for our kids. College because.

00:57:14:17 - 00:57:15:12
Ramit
It's like.

00:57:15:14 - 00:57:15:19
Jake
It's.

00:57:15:19 - 00:57:18:08
Ramit
Just this universal truth and axiom.

00:57:18:12 - 00:57:24:24
Jake
Yeah, it's like an agreed upon that we've never really dug into why. And I think that that's I think this is very eye opening.

00:57:24:24 - 00:57:39:21
Ramit
That's what I specialize in. Yes. And that is what I love. I don't mind if people take a quote, universal truth that we have, like, I should buy a house and they end up buying. I don't mind that, but we've got to interrogate the logic.

00:57:39:22 - 00:57:40:23
Jake
Yeah.

00:57:41:00 - 00:58:02:05
Ramit
There's a very simple message that many parents in America have, and that is I need to pay for my kids college now. I think it's a very nice idea. I also think it is a bit simplistic, the idea that I simply need to take all the money I've got and hand it over to my kids. I don't know how much, I don't know where they're going to go.

00:58:02:05 - 00:58:35:20
Ramit
I haven't talked to them about it, but I will sacrifice heaven and earth so that they don't have to go into debt. It feels really good, but it lacks any analysis at all. This is not about loving your kids. It's about thinking critically about one of the biggest financial decisions in your life. And what I am begging everyone on this podcast, and everyone who watches it to do, is to go deeper, go beneath the surface of this very nice, positive idea of helping kids and calculate how much how are they going to use it?

00:58:35:21 - 00:58:50:06
Ramit
What if we contributed this much? Not that much. What if we gave them nothing? What if we give them a million and really start to craft that decision as part of your rich life? Mia, can you tell me what your family said about money as you were growing up? What do you remember?

00:58:50:08 - 00:59:10:03
Mia
I just remember do not spend. And I remember always feeling like I always wanted to spend money. I was a kid who, like, I got babysitting money. It did not go into savings. I wanted to spend it right away. And I felt I always felt like I was doing something wrong. Spending money is wrong. Like, my parents are so amazing.

00:59:10:06 - 00:59:19:14
Mia
They're true minimalists. Like they don't need much stuff. They will eat the exact same meal for the rest of their lives.

00:59:19:15 - 00:59:20:13
Jake
You would like them?

00:59:20:15 - 00:59:21:07
Mia
Yeah.

00:59:21:10 - 00:59:40:07
Ramit
Interestingly, they also did take you to travel, and you've mentioned you would like to take your kids to travel. So a lot of similarities in how your parents raised you. Of course, the college thing paying for you, you want to pay for them makes sense. Did you ever find yourself confronting any contradictions about money?

00:59:40:09 - 00:59:59:01
Mia
I feel like the only contradiction that we ever confronted was the fact that I didn't seem to be able to do what they were doing. Like the contradiction was they do it. They're able to do it. It doesn't seem hard to them. And for me. I'm not able to do it. It seems very hard to me like that was the contradiction.

00:59:59:02 - 01:00:07:01
Ramit
Is it still hard? Yeah. Okay. Are they still alive? Still married? Yep. Cool. How are they with money now?

01:00:07:03 - 01:00:20:12
Mia
Exactly the same. Really incredibly responsible. I think maybe the only difference is that they're spending more on travel in their retirement than they did when we were kids, which I think rakes sense.

01:00:20:13 - 01:00:22:01
Ramit
Are they enjoying their money.

01:00:22:02 - 01:00:22:24
Mia
1,000%?

01:00:23:00 - 01:00:27:21
Ramit
Wow. This is a very healthy relationship in general.

01:00:27:22 - 01:00:56:21
Mia
Yeah, maybe I wish that they could have explained to me how it felt easy to them. Like what I saw was like there were spreadsheets and there was money tracking I didn't see, and they didn't talk about maybe the choices that they made, like, we could buy this, but I'm not buying it because we want to travel or like, I didn't see any of that.

01:00:56:22 - 01:01:01:07
Mia
They're super responsible with money. They were obviously making trade offs.

01:01:01:08 - 01:01:01:16
Ramit
They didn't.

01:01:01:16 - 01:01:02:23
Mia
Tell you, but they didn't tell me that.

01:01:02:23 - 01:01:07:04
Ramit
Okay, Jake, anything that Mia's missing partners often know best.

01:01:07:06 - 01:01:16:09
Jake
I mean, they are. They're a unit, and they are methodical. And they. Everything she said is exactly correct. It's just. It just seems flawless. They just. It seems it seems.

01:01:16:14 - 01:01:18:09
Mia
Like they never make a mistake.

01:01:18:11 - 01:01:24:10
Jake
Like we go over their house. I know exactly what meal we're going to get every single time. Oh, really? Yeah. It's. Yeah.

01:01:24:11 - 01:01:25:05
Ramit
That's interesting.

01:01:25:06 - 01:01:29:24
Jake
Yeah. And it's like they just it's very systematic. I mean, it's like.

01:01:30:00 - 01:01:31:20
Ramit
Do you have that with your food at home?

01:01:31:23 - 01:01:33:16
Jake
No no no.

01:01:33:18 - 01:01:39:21
Ramit
Do you have that with your savings. Like how did you choose the number 700. Is it methodical.

01:01:39:22 - 01:01:43:06
Jake
No, no. They they have they have a system where.

01:01:43:10 - 01:01:43:21
Mia
I don't know.

01:01:43:21 - 01:01:46:15
Jake
What it is. Yeah. I don't know what it is, but they definitely have something.

01:01:46:16 - 01:02:11:05
Ramit
But it's quite interesting, right? It's not that they are the perfect unit. It is that their behavior and attitudes are methodical. Yes. The clue is when you go over there, you know exactly what you're going to eat. That actually is a huge reveal. Yeah, that they have some type of system. It's not surface to you, but they have it just the same as if you ask me, what's my savings amount and savings rate.

01:02:11:06 - 01:02:18:04
Ramit
There's a reason for it. Right. And the best part of all is you all can do that for your system.

01:02:18:05 - 01:02:28:10
Jake
And I think the part that I'm most envious about is how much they're willing to help their family and, like, help their kids or, you know, Mia's brother or whatever, those, those kind of situations.

01:02:28:15 - 01:02:30:08
Ramit
But you're helping your family a lot.

01:02:30:09 - 01:02:33:12
Jake
Yeah. And I think that maybe that's part of what the allure is to.

01:02:33:13 - 01:02:35:08
Mia
I do think that's something we both value.

01:02:35:09 - 01:02:38:15
Jake
I really helping out my kids when when they're older.

01:02:38:17 - 01:03:02:11
Mia
Like when you talk about I know consciously that like the idea of paying for college 100% doesn't necessarily need to be like, it doesn't have to be 100%. Right. But like when you talk about lowering that, it makes me feel a little, you know, like, oh, I don't know if I can do that because I think there is we both have this value of like we take care of our family.

01:03:02:11 - 01:03:03:17
Mia
Like, that should be.

01:03:03:18 - 01:03:22:06
Ramit
So what? So what if when I suggest which, by the way, I have not even done today. But so what if I were to suggest instead of paying for 100% of college, you pay for 90 or 80 or 50 and it makes you feel anxious and guilty. So what?

01:03:22:08 - 01:03:31:21
Mia
Well, that doesn't feel a lot better than feeling anxious. So if I was already feeling anxious about money and you say, like, let's just trade the anxiety for guilt, that doesn't sound very good.

01:03:31:22 - 01:03:54:00
Ramit
My point is that just because you feel guilt does not mean that you have to follow that feeling. So sometimes it just the question is so wet, oh, I feel guilty. And yeah, I'm going to feel guilty. That's how I was trained for generations. I'm going to acknowledge that feeling. I'm going to ask, why am I feeling guilty?

01:03:54:01 - 01:04:15:14
Ramit
Oh, because my invisible script is that I have to pay for 100% of college. I'm going to write that down, and I'm going to turn the page and say, okay, I'm gonna set that aside for a minute. So what? Yeah. What if, instead of following that feeling, I followed the decision, the one that's informed by numbers, by connection, by conversation, and by a rich live vision.

01:04:15:15 - 01:04:37:11
Mia
Can I just stop there for a second? Because that feels like a really big, like shift in my thinking. Is that idea of like. I don't think I realized how much I was letting feelings and not decisions impact the money picture. Like, I never thought of it that way. And I feel like that's exactly like you just captured it.

01:04:37:12 - 01:04:42:08
Mia
Like I let the feelings instead of the decisions control what I'm doing.

01:04:42:09 - 01:05:08:11
Ramit
Yeah, amazing. But well done. That takes a lot of introspection to make that connection. Feelings are valid, but in my experience, way too often I'm talking over 95% of the time, people are making life changing financial decisions through feelings alone. Feelings do not come first on this. We've got to start with the vision of a rich life and then the numbers.

01:05:08:12 - 01:05:16:10
Ramit
And then we can talk about the feelings. Great insight. Okay, Jake, what do you remember your family saying about money when you were a kid?

01:05:16:11 - 01:05:36:18
Jake
My parents were fantastic. They were so supportive. But just money was never discussed at, like, ever. I, I knew we were well off. I knew we got basically whatever we wanted, but it was just it was never I have to this day, no idea how much money we had or what they had, what they have currently. They're separated now.

01:05:36:20 - 01:05:38:09
Jake
I've no idea.

01:05:38:13 - 01:05:42:13
Ramit
Would you you mentioned well-off. Would you say, like upper middle class? Well.

01:05:42:16 - 01:05:50:03
Jake
I would say. I would say upper middle class, probably towards wealthy in Midwest, in the small town that we grew up in.

01:05:50:05 - 01:05:51:06
Ramit
They help you with college?

01:05:51:07 - 01:05:51:19
Jake
Yes.

01:05:51:20 - 01:05:53:03
Ramit
Yes, they paid for the whole thing.

01:05:53:05 - 01:06:12:20
Jake
Yeah. I didn't really try and tell about 25. Like, I think I was kind of a late bloomer. I joke about I wasn't getting scholarships. It was just like getting into school. So they just blindly supported me, and they. And they got me. And I have had conversations with them that said, you know, we we gave you that opportunity, but you took it and run with it and ran with it.

01:06:12:20 - 01:06:14:00
Jake
And that was the.

01:06:14:02 - 01:06:19:08
Ramit
Are they going to give you money as part of an estate or inheritance?

01:06:19:09 - 01:06:24:08
Jake
Yes. I've talked a little bit about my to my dad. It's a mythical number. I don't know.

01:06:24:11 - 01:06:24:20
Ramit
He hasn't.

01:06:24:20 - 01:06:35:16
Jake
Told, you know, and I've discussed a little bit with him, but it's just it, it just the way they. I have no hard feelings. I just it's just not a conversation we've had ever in 38 years.

01:06:35:18 - 01:06:42:07
Ramit
So what money messages do you think you are bringing from your childhood to this relationship?

01:06:42:08 - 01:07:00:01
Jake
I think I follow every pattern of the idea of just avoid it, shut the door, pretend it doesn't exist. Like, are we rich or poor? I just love to just just ignore it. But I think that that that's something that's been really hard because I think there's a there's the fear and then the unknown. So it's just avoiding okay.

01:07:00:02 - 01:07:02:01
Ramit
So avoiding what about you mean.

01:07:02:03 - 01:07:09:12
Mia
I think I watched my mom, you know, every weekend she would be on the computer doing spreadsheet. I think.

01:07:09:17 - 01:07:10:21
Ramit
I just like, copied it.

01:07:10:22 - 01:07:13:16
Mia
Yeah. And I don't know what she was doing, but I have a spreadsheet.

01:07:13:17 - 01:07:32:22
Ramit
She's really funny. It's just the same thing generation after generation. It's a little ironic, isn't it, that Jake's parents are going to give him some amount of money? It sounds like it could be somewhat large. And he's afraid of money. He doesn't know what to do with it. He doesn't want to pay attention to it, doesn't want to pick up a book about it.

01:07:32:23 - 01:07:54:17
Ramit
He's playing defense. And yet at the same time, that is the exact same lesson they are passing on to their kids. These generational messages do not fade easily. If you do not fight to develop a new relationship with money, you're probably just passing on the one that your parents gave you. And frankly, although most parents try to do their very best, most parents didn't know what the hell they were doing with money.

01:07:54:18 - 01:08:09:00
Ramit
So I want you to do more. Your parents didn't have access to YouTube. They didn't have my book at their public library. They didn't have access to all this stuff for free. You do. What is your rich life vision together?

01:08:09:02 - 01:08:30:11
Mia
I think both of us agree that in our rich life, we don't have to track every penny. I think that would be like number one for me. I would love to have that feeling I feel about the house, like I made the right decision. I'm doing the right things. That is what I want. And I think for both of us, like that is what we want to feel great.

01:08:30:13 - 01:08:32:06
Ramit
Okay, what else is in your rich life?

01:08:32:06 - 01:08:49:24
Jake
I would add that I think after this, just in this conversation alone, it's changed to I want to be confident in the decisions we're making. I think, you know, knowing we're doing this. And I love that the conversation about using data to make those decisions, like, right now we're just using opinions and feelings, and that's something we hate at our work.

01:08:50:00 - 01:08:54:03
Jake
Yeah. It's like, well, if we're just going off opinions, we're going to go off of mine. Then, you know.

01:08:54:04 - 01:08:54:15
Ramit
Exactly.

01:08:54:15 - 01:08:55:06
Jake
I say that.

01:08:55:06 - 01:08:55:18
Ramit
A lot.

01:08:55:19 - 01:09:00:20
Jake
Yes. And it's just like and we in our jobs, like we're always trying to use data to make decisions. And then.

01:09:00:21 - 01:09:01:06
Ramit
I think.

01:09:01:06 - 01:09:01:16
Jake
The two of.

01:09:01:16 - 01:09:21:06
Ramit
You have been playing not to lose with money. I don't sense if you were playing to win right now, it's like, let's just not make a mistake and let's just put the money for the 529. Yeah. Is there anything about in the rich life, anything about. We want to get food delivery service three times a week. We want to travel.

01:09:21:07 - 01:09:26:10
Ramit
We want to take our kids or put them in this type of tutoring service. That's at what else? Give me specifics.

01:09:26:11 - 01:09:31:06
Mia
1,000% the landscaping. And like the hot tub? Yep.

01:09:31:07 - 01:09:33:05
Ramit
How come you're saying that even though it's your thing?

01:09:33:06 - 01:09:50:07
Jake
I agree, I think I think we I think it is like that's something that we constantly we're talking about that lately. And I think it started with your book. That's what really that I never, ever thought about what I was saving my money for. And I think that that's really kind of driven me a little bit more about like where we're saving those money.

01:09:50:08 - 01:09:51:14
Ramit
So you you never.

01:09:51:15 - 01:09:52:19
Jake
I never had a thing.

01:09:52:20 - 01:09:53:18
Ramit
You never had a vision.

01:09:53:19 - 01:09:58:01
Jake
No, I would be. I just want to save money. I don't want to spend money.

01:09:58:06 - 01:09:58:14
Ramit
I want.

01:09:58:14 - 01:10:02:15
Jake
Not to. Yeah. Playing not to lose. I mean, that was. That was my M.O. 100%.

01:10:02:17 - 01:10:09:03
Ramit
You know, in life, if you do not have a vision for your money, one will be created for you.

01:10:09:04 - 01:10:09:10
Jake
Right?

01:10:09:11 - 01:10:19:03
Ramit
And that vision typically is by a big house, by a big car, et cetera, etc., etc.. And then just fast forward until you die. Actually, exactly what you.

01:10:19:03 - 01:10:20:23
Jake
Just said. Pause and rewound. But then.

01:10:20:24 - 01:10:43:13
Ramit
Yeah, you went back and so you unwound some of that, which was awesome, but still did not replace that with a new vision. It was just like, save the money. And then Mia, your vision was first we need to have the house, etc. and then after unwound, it's like, well, I need to be doing these things that my parents taught me.

01:10:43:14 - 01:11:04:22
Ramit
And so how am I going to do that? Take all the money and put it for my kids $3,000 a month? The thing about this is actually like a very loving decision. It can be seen as a very rational decision. All those can be true. But I don't think you would be here if it weren't actually causing a problem.

01:11:04:23 - 01:11:08:09
Ramit
Right. And what is that problem in a sentence?

01:11:08:14 - 01:11:10:03
Jake
We don't have the money to do it.

01:11:10:04 - 01:11:16:18
Mia
It's making us take out of our savings. Yeah.

01:11:16:20 - 01:11:18:16
Ramit
So you agree we don't have the money?

01:11:18:18 - 01:11:20:06
Mia
Not the way we're spending now.

01:11:20:06 - 01:11:26:15
Ramit
Okay, I want to get back into the numbers. But before we do that conceptually, what do you think needs to happen?

01:11:26:15 - 01:11:39:06
Jake
I think the number one thing is we can't spend take we cannot take money from savings anymore. Like that is our last thing. And I think I'd almost like to put more money into savings because of the fear of, you know, I think.

01:11:39:11 - 01:11:40:23
Ramit
Where's the money going to come from?

01:11:41:00 - 01:11:47:06
Jake
Probably the 529 I think would be one. I think we talked about those minimal things that we talked about.

01:11:47:06 - 01:11:50:01
Ramit
Mia. What do you think conceptually needs to happen with your money?

01:11:50:02 - 01:12:09:01
Mia
We need to make a decision about the amount of money that we feel is right for college, and then use that decision to then make the rest of the money work. Like right now, it's just it should be 100%, but should it be like we've never actually questioned that in any way.

01:12:09:02 - 01:12:14:01
Ramit
Yeah. You never thought about the number itself. Whoa. Okay. I have to ask some questions.

01:12:14:02 - 01:12:21:03
Jake
Because it's that blind like that. Like you're supposed to do this, and it's like this ghost telling us that we have to do this.

01:12:21:03 - 01:12:30:16
Ramit
Well said. It's a ghost. Probably no one has even ever explicitly said you need to be funding 100% via 529. Nobody.

01:12:30:16 - 01:12:35:05
Jake
If somebody would have said it would have been but Jillian Dollars, I'm like, all right, well, let's start saving work.

01:12:35:09 - 01:12:37:01
Ramit
It's a midwest work ethic.

01:12:37:02 - 01:12:37:23
Jake
It's like it's the grinder.

01:12:38:01 - 01:12:57:14
Ramit
The goal, and we can execute. In fact, you even asked me to do that for you today. Yes. Give me a plan and let me execute. I don't want to have to think about it. And you notice I listen. But I never accept that mantle. Because you too will have to think. And then it will make it that much more likely that you will actually follow through.

01:12:57:15 - 01:12:58:10
Jake
Yeah.

01:12:58:11 - 01:13:19:24
Ramit
I think me and Jake have this one invisible script that is so firmly rooted in the center of everything related to their money discussions, that they just cannot see around it whenever they start talking about money. This looming ghost, as they called it, is standing right in front of the living room and it's saying, you got to pay for your kid's college.

01:13:19:24 - 01:13:34:17
Ramit
In fact, you have to send them every last cent you've got. On the question of the amount that you are putting aside, which is $2,700 a month for 526. Do you know how much that will turn into for your kids?

01:13:34:19 - 01:13:37:05
Jake
Yes, it's like 98 for.

01:13:37:08 - 01:13:46:03
Mia
Our oldest because we have the least amount of time. It's because he'll be in college in four years. So that'll be like 100. About 100.

01:13:46:05 - 01:13:47:01
Jake
It was 98.

01:13:47:03 - 01:13:49:13
Ramit
Let's say 100. That's fine. And then how about for the others?

01:13:49:14 - 01:13:55:19
Mia
And then I think it's 130. And then for our youngest who's three, I think it's.

01:13:55:20 - 01:13:56:16
Jake
Like 50.

01:13:56:17 - 01:13:58:17
Mia
No, I think it's more than I think it's like 170.

01:13:58:18 - 01:14:03:04
Ramit
So like, is that the right amount?

01:14:03:06 - 01:14:04:02
Jake
I have no idea.

01:14:04:03 - 01:14:04:24
Ramit
It's not.

01:14:04:24 - 01:14:06:23
Jake
Amusing is it not? Not about that.

01:14:06:24 - 01:14:13:24
Ramit
Like shocking that you are spending almost the most on this entire sheet. I'm just looking. Is there any number higher than that?

01:14:14:05 - 01:14:14:23
Mia
I don't think so.

01:14:14:24 - 01:14:24:14
Ramit
Your pension. But aside from that, you are spending the most amount of money and you haven't asked yourself, is this the right amount?

01:14:24:15 - 01:14:31:21
Jake
No. We've never. And then we get the idea that like, well, if it just it'll transfer over the next kid or something like we just like justify without of course.

01:14:31:22 - 01:14:55:06
Ramit
No wonder you feel guilty. You don't know even the basic numbers. And in many ways, I think you like feeling guilt because it's a familiar feeling the minute you you sold the house, which was a momentous move, What are we doing? Put it over here for five minutes. It's like no time to stop and think and say like, what is the right decision for us?

01:14:55:06 - 01:15:06:00
Ramit
Even though we made this huge life change? Yeah. Is 100 K right or not, I don't know. Have you talked to your kids about college funding?

01:15:06:01 - 01:15:06:11
Mia
Yes.

01:15:06:12 - 01:15:06:16
Jake
A.

01:15:06:16 - 01:15:09:02
Ramit
Little bit. Was the 14 year old say what's the conversation been?

01:15:09:03 - 01:15:27:22
Mia
The conversation has been we can help you with public university, but we if there's something else that you want to do, you're going to have to, you know, do scholarships or loans. And I think I've talked with him too about, you know, you don't as much as possible, you know, you don't want to have debt.

01:15:27:24 - 01:15:48:02
Ramit
Can I suggest a reframe of that conversation. Because it feels like almost every conversation that people our age, that the parents who were lucky enough to talk to us, that's how they talked. So it's like, all right got a dust off this document. All right. Here's what I can do for you. I can pay for this, but not that.

01:15:48:03 - 01:15:48:12
Ramit
That's all..

01:15:48:12 - 01:15:50:01
Speaker 5
You need to not do this.

01:15:50:01 - 01:16:13:14
Ramit
And it's just like a lecture. Meanwhile, you're actually telling them something amazing. Hey, dad and I saved up this much money. We worked really hard. I want to tell you what it took for us. This is what we did. And then this happened. And we, as you know, has been so amazing for us. We went to college. We teach.

01:16:13:16 - 01:16:38:01
Ramit
ET cetera. And so when it comes time for you to get to college, we want to give you an amazing gift. And that gift is that we can fund $75,000. Now, that could be your first year. You could split it out over four years. At that point, you're an adult. It's going to be up to you. But we are going to teach you and we trust that you will make the right decision.

01:16:38:02 - 01:16:43:18
Ramit
But we worked really hard and we love you and we trust you. What is the difference?

01:16:43:19 - 01:16:49:05
Mia
Well, one, it communicates the message of him being the decision maker.

01:16:49:06 - 01:16:50:12
Jake
Yes.

01:16:50:14 - 01:16:52:11
Mia
Also, it shows confidence.

01:16:52:12 - 01:16:54:23
Ramit
Yes. Keep going. What else?

01:16:55:00 - 01:17:04:17
Jake
It makes him like a collaboration. Like we're bringing him in like he's collaborative. It's part. It's work together and not like. Stop whining. I'm paying for your college. Like, totally like the message.

01:17:04:19 - 01:17:09:00
Ramit
Like exactly what about the part about how you share what it took for you?

01:17:09:02 - 01:17:15:16
Mia
What about totally different than. Than what we got? Like, that's one of the things I said I wish my parents would have done is say, how did you do that?

01:17:15:17 - 01:17:16:10
Jake
Yes.

01:17:16:15 - 01:17:16:21
Mia
Yeah.

01:17:16:22 - 01:17:38:04
Ramit
And I love that you caught that. Yes. Notice that you were invisibly passing on the same message to them. Don't tell them how it happened. Because deep down, a lot of parents believe we got a shield. Our kids from money. Wrong. You get the gift of talking about money in every function at the grocery store, at a department store, and for college.

01:17:38:05 - 01:17:56:17
Ramit
You get the gift of talking to them about that. So flip that entire worldview. We don't get to protect them. No, that's that's not they're not weak, little fragile beings. They are strong. And and of course what this really, really, if you peel it all the way back implies we need to get good about money.

01:17:56:22 - 01:17:57:16
Jake
So we can share.

01:17:57:21 - 01:18:15:03
Ramit
So that we can share that with our kids. And guess what? It's totally okay to tell your kids. In fact, they love it when you admit mistakes. Hey, we don't actually know any of this. Yeah, we had to fly across the country, meet this guy who who lit us up, and that's why we came back and we started reading this book.

01:18:15:05 - 01:18:17:24
Ramit
Yeah. Kids eat that up.

01:18:18:00 - 01:18:18:24
Jake
Yeah.

01:18:19:01 - 01:18:42:04
Mia
Can I tell you, like, what I'm feeling right now? Yes. Like, I had a way bigger emotional, positive, emotional response to thinking about empowering my kids with money. Then I like when I thought about saving for college. There was no feeling associated with that. But the feeling of like, I want my kids to know how to do this, like that, that's what I want.

01:18:42:05 - 01:18:48:22
Jake
It's like everything we believe in, in education and like building kids up. Powering power. Yes, you can handle it. And like, you're part of this.

01:18:48:24 - 01:18:49:20
Mia
And I don't know why.

01:18:49:21 - 01:19:00:14
Jake
I, I'm just thinking about, like, in 20 years, I don't want them, you know, flying to California to have your kid tell them about money, you know. So, yeah, it's like.

01:19:00:15 - 01:19:29:16
Ramit
That's amazing. It's funny when you mentioned that, actually, I felt my own heart beating faster. Yeah, it's very powerful. What is happening right now, especially the fact that you are both teachers, is like, you're incredibly connected to this concept of teaching and empowering. Like, I love that I'm a teacher as well, just in a different format. I actually think me, based on what you told me, it would be more empowering for you to give 30 K and teach than to give 120 K.

01:19:29:17 - 01:19:32:06
Ramit
Yeah. So what does that open up?

01:19:32:08 - 01:19:52:22
Jake
My mind just blown right now. I just like I like you know, we always at a phrase that I do I talk about my school is that high expectation with high support. And I have low expectation with low support. And I and like do not look at that and let's make decisions on feelings. It's like I am having the most cognitive dissonance I've had in 20.

01:19:52:23 - 01:20:04:05
Jake
It's just like, I like it's like this weird. You keep talking like, and this is no longer I'm not like sweat. My hands aren't sweating. It's like tingling. Feeling a little bit like that's that's really interesting. I just yeah, it's.

01:20:04:05 - 01:20:07:22
Mia
It's maybe like the first time that I felt, like, hopeful about money.

01:20:07:24 - 01:20:09:07
Jake
Yeah. I would agree with that too.

01:20:09:08 - 01:20:11:18
Mia
We just weren't making decisions.

01:20:11:20 - 01:20:14:08
Jake
Correct? No, we were doing everything. Was feeling based.

01:20:14:08 - 01:20:19:05
Ramit
Invisible scripts, feelings. Yeah. And letting those guide everything.

01:20:19:06 - 01:20:20:11
Jake
Yeah.

01:20:20:13 - 01:20:36:15
Ramit
Honestly, pretty amazing to watch this breakthrough. But what you're about to see makes this all the more magical. Because at this moment, while we were talking, we stood up to take a quick break, and I walked out of the room, but the cameras kept rolling. Take a look.

01:20:36:17 - 01:20:40:24
Jake
I think that, like, I need to figure out the hot tub we to disconnect.

01:20:41:01 - 01:21:02:13
Mia
But I think with the kids, we could we could say like, guys food. We want to have healthy food. So we're going to eat pretty much the same thing every week. If there's something that you want that's different, we're going to give you a budget and you have that amount of money that you can spend a plan, a different meal, but otherwise we're going to just like every week, it's going to be the same thing because.

01:21:02:14 - 01:21:03:03
Jake
I love.

01:21:03:04 - 01:21:04:15
Mia
I want to spend our money.

01:21:04:17 - 01:21:10:00
Jake
And I think about the point where he said, like, I'm afraid of falling on the bath, but I'm not going to put a mat down.

01:21:10:02 - 01:21:12:13
Mia
The other thing that I'm realizing about.

01:21:12:14 - 01:21:15:07
Jake
The need to talk to the kids about what's the biggest thing?

01:21:15:08 - 01:21:32:14
Mia
Yes, for sure. But I think, like when he was talking about like having a different about feelings and not decisions, like I would just look at the budget and be like, we're spending too much. That was a feeling. So then like, we just have to spend less. But then it was just like, how? Where what? There was no.

01:21:32:15 - 01:21:34:18
Jake
Like chart.

01:21:34:21 - 01:21:51:04
Mia
There was no like, I want this. So that's what I'm going to do. Even though like, I knew that kind of, you know. Yeah, I don't I don't want my kids. I want to teach them.

01:21:51:06 - 01:21:54:12
Mia
And I love, like how he's talking about like, hey.

01:21:54:14 - 01:21:56:03
Jake
The way he phrase.

01:21:56:05 - 01:21:58:05
Mia
Yes. Yeah.

01:21:58:07 - 01:22:00:00
Jake
I'm giving you this.

01:22:00:02 - 01:22:09:05
Mia
So it's a gift and I'm so excited to be able to do it. Let's, let's, you know, whenever you want to look at your account, we can pull it up and see how much it's in there.

01:22:09:07 - 01:22:30:10
Ramit
This is why I do this podcast, and is why I am so proud that hundreds of thousands of people are here every single week to witness it. Well done. I am honored to watch this happen in front of me. Now let's get back to their numbers. The question is, what can we do to use our money to live our rich life?

01:22:30:10 - 01:22:31:21
Ramit
Who would like to go first?

01:22:31:22 - 01:22:50:16
Mia
I think I would like us to make a decision about, like an amount of money that we want to give the kids. And it's not hypothetical. It's not. It's like we're going to give you this much money. And then once we've made that decision and we know how much we have left each month, then we look at everything else and figure out.

01:22:50:18 - 01:22:51:19
Jake
That sounds awesome.

01:22:51:20 - 01:22:53:06
Ramit
Do you have a sense of the number?

01:22:53:10 - 01:23:01:10
Mia
My gut right now is saying like 75,000. If that feels high, I'm open to that being lower.

01:23:01:12 - 01:23:07:00
Jake
Let's meet in the middle and go like 60. I think that that because I was thinking 50, I think like, would that be something? Maybe.

01:23:07:02 - 01:23:10:17
Mia
Are you okay? Are you okay with 6550, 65?

01:23:10:22 - 01:23:12:00
Ramit
65,000 okay.

01:23:12:01 - 01:23:14:01
Jake
Is that like a random. Like, I feel like.

01:23:14:02 - 01:23:16:08
Mia
It doesn't matter if it's random, because at least we decided.

01:23:16:09 - 01:23:16:23
Ramit
Yes.

01:23:17:00 - 01:23:17:08
Jake
Yeah.

01:23:17:09 - 01:23:19:02
Ramit
Great. Great great great.

01:23:19:06 - 01:23:23:06
Jake
So do we get I mean, would you then adjust and go back and it's.

01:23:23:06 - 01:23:26:22
Ramit
Like what I'm going to try to do right now. So we know the age of your kids 14.

01:23:26:23 - 01:23:28:01
Mia
11 and three.

01:23:28:02 - 01:23:30:14
Jake
And your ex is contributing some to.

01:23:30:15 - 01:23:36:22
Mia
That is true. Is that their dad? It's a smaller amount, but 15,000 per kid.

01:23:36:23 - 01:23:57:02
Ramit
Oh, okay. So he'll contribute 15,000 for the two kids, the older kids. And then you want to get a total of 65,000. Let's look at the rest of this. We ran some calculations and we'll speak broadly. It will change specifically as you dive into your own numbers. But in general, what we found is that you need to be saving.

01:23:57:03 - 01:23:58:03
Ramit
You want to guess.

01:23:58:04 - 01:24:00:02
Jake
2300? Okay.

01:24:00:07 - 01:24:00:16
Ramit
What do you.

01:24:00:16 - 01:24:02:11
Mia
Think, 1900.

01:24:02:12 - 01:24:04:08
Ramit
Good. It's about 1600.

01:24:04:10 - 01:24:05:19
Jake
Okay, that's a lot.

01:24:05:20 - 01:24:06:23
Mia
That's a lot less.

01:24:06:24 - 01:24:07:22
Ramit
A lot less.

01:24:07:22 - 01:24:09:03
Jake
About half. Yes.

01:24:09:08 - 01:24:32:12
Ramit
Yeah. And the reason that you can save less and still hit your numbers. One, you've lowered the amount, although you didn't really even know how much you were saving anyway. Right. But two, your oldest obviously needs more because they're going to be going to college in just a few years. Your youngest has almost decades. So that number is like way less that you need to be putting.

01:24:32:13 - 01:24:56:12
Ramit
So when we combine it all, it's about 1600 a month. Again, the number will change depending on several variables. You should calculate this carefully at home. So let's put that in 1600. That's a lot from 2700 to 1600. Yeah. Okay. So let's take a look at what's going on here right now. We have 57% in fixed costs. We have your investments at 22%.

01:24:56:13 - 01:25:11:06
Ramit
That is your post-tax. Well, that's your pension. Yeah $1,600 a month going towards the kids, and then you've got 700 bucks going towards your emergency fund, leaving you only 4% in guilt free spending.

01:25:11:08 - 01:25:15:18
Mia
You know how you recommended like separating groceries and gas. Can we just, like, do that? Yeah. Okay.

01:25:15:19 - 01:25:17:23
Ramit
How much is gas?

01:25:18:00 - 01:25:19:20
Mia
Probably 200 a month. Yeah.

01:25:19:21 - 01:25:20:06
Jake
200.

01:25:20:07 - 01:25:23:19
Ramit
200. I'm moving gas up here to 609.

01:25:23:24 - 01:25:29:09
Mia
And then I think we can get the groceries and gas. I think we can get groceries to 800.

01:25:29:10 - 01:25:29:19
Ramit
Yeah.

01:25:29:20 - 01:25:30:23
Jake
All right.

01:25:31:00 - 01:25:34:07
Mia
We put the subscriptions down already.

01:25:34:09 - 01:25:36:15
Ramit
What's this? Miscellaneous.

01:25:36:17 - 01:25:40:04
Mia
I, I actually think that we don't.

01:25:40:05 - 01:25:40:16
Jake
Have.

01:25:40:16 - 01:25:46:13
Mia
To do that. Like, I think we could, like, if miscellaneous was half of that. All right. Because.

01:25:46:13 - 01:25:59:08
Ramit
Okay, let's do that. 600. Yeah. All right. You are down to 52% outstanding. Okay. Very good. You've got 9% or $1,216.

01:25:59:09 - 01:26:05:01
Mia
I feel okay with that because in a year we won't have preschool and that will free up another.

01:26:05:02 - 01:26:05:18
Ramit
Oh, let's.

01:26:05:19 - 01:26:06:10
Mia
Look at it.

01:26:06:12 - 01:26:25:14
Ramit
I like it. Let's let's zero that out and see what happens. Are you ready? Yeah. So this is this is what the CSP is most powerful at is projecting ahead when you pay off debt like credit card debt, when you pay off a mortgage, when you don't have preschool anymore. It's like, let's just look at our crystal ball a few months in the future.

01:26:25:15 - 01:26:46:10
Ramit
Boom, here we go. You're at 52% fixed costs. I'm zeroing out your preschool. Whoa! Down to 43%. That's extremely low. Going down now. Y'all have 18% guilt free spending or $2,400. What do you think about that?

01:26:46:11 - 01:26:47:01
Jake
That seems like.

01:26:47:02 - 01:26:47:13
Mia
It.

01:26:47:15 - 01:26:52:22
Jake
Feels really good. That's really good. That's the the rich life. The idea of being able to spend.

01:26:52:23 - 01:26:55:04
Ramit
Okay. Now let's talk about it. Because what do you want to do with that money?

01:26:55:05 - 01:26:57:20
Jake
I'd like to put more into savings. I think.

01:26:57:23 - 01:27:04:16
Mia
I would feel most comfortable if we had six months of, say, like liquid money.

01:27:04:17 - 01:27:12:14
Ramit
Yeah. So that's about 30, 35,000, let's just say. So how much do you want to put into savings.

01:27:12:16 - 01:27:13:24
Jake
Per 1000?

01:27:14:01 - 01:27:15:22
Mia
At least a thousand.

01:27:15:24 - 01:27:17:01
Ramit
You're putting 700, right.

01:27:17:03 - 01:27:19:19
Mia
We do like 1200. Yeah 1400.

01:27:19:20 - 01:27:20:04
Jake
Double it.

01:27:20:05 - 01:27:25:05
Ramit
Yeah. All right. I like that 1400 a month, which is great.

01:27:25:06 - 01:27:26:06
Jake
Yeah, that feels really good.

01:27:26:07 - 01:27:36:18
Ramit
That now leaves you with $1,700 a month guilt free spending. Yeah, that's pretty cool. What would you do with that? Guilt free spending money?

01:27:36:22 - 01:27:40:22
Mia
I'm trying to decide if it's travel first or house first. You'd say house.

01:27:40:22 - 01:27:41:03
Jake
First.

01:27:41:08 - 01:27:42:14
Mia
House first. I'm okay with that.

01:27:42:15 - 01:27:56:01
Ramit
Great. So let's do this. Let's call instead of vacations, which sounds like you're not prioritizing. Let's call it house. And let's put let's put 750 a month. Let's just see what happens. 750.

01:27:56:02 - 01:27:57:01
Jake
One feels quick.

01:27:57:02 - 01:28:01:19
Ramit
Yeah. So how long would you need for you to be able to get something for the house?

01:28:01:20 - 01:28:04:22
Mia
Well, let's say we just started with a hot tub that's probably like six months.

01:28:05:01 - 01:28:05:10
Ramit
So that's.

01:28:05:13 - 01:28:06:07
Jake
Like a year, a year.

01:28:06:08 - 01:28:07:12
Ramit
A year. Yeah. Are you cool with that?

01:28:07:13 - 01:28:08:01
Jake
Yep.

01:28:08:02 - 01:28:20:09
Ramit
Great answer. Yep. Amazing answer. I just want to point something out to you. Most people, when I say like it'll take a year, sometimes it'll take seven years to get what they want. And I go, are you okay with it? They go. That seems like a long time. I go and.

01:28:20:10 - 01:28:22:01
Jake
Right. So what? Right.

01:28:22:02 - 01:28:38:14
Ramit
Everybody should be looking. Look, get tight on this shot. So what? Oh, it's going to take a long time, and you're going to be seven years older anyway. In seven years, you might as well have a ton of money, right? A year from now, that's nothing to be able to get this awesome hot tub and to have saved for it.

01:28:38:14 - 01:29:00:23
Ramit
No debt. Amazing, right? Okay. 750 a month that leaves you with $1,000 a month guilt free eating out. Random thing you saw on Amazon that you want to buy. But that's it. Yeah. And I personally would prefer you. Clear. Leave a little bit of like, do not get to $1,025. Yeah, right.

01:29:00:24 - 01:29:01:15
Jake
Right.

01:29:01:17 - 01:29:05:00
Ramit
Clear it with room to spare. Can you all agree to that?

01:29:05:01 - 01:29:12:02
Mia
Yes. Yes. And I would love some like, specific strategies for like like when people are doing that. How to.

01:29:12:02 - 01:29:12:14
Jake
Do it. Yeah.

01:29:12:19 - 01:29:29:14
Ramit
So the biggest thing that comes up here and surprises people is eating out. Eating out is a variable cost, and it's one of the very few numbers I suggest people track. Here's how you do it to make it even easier. You. Just like I said, people who tend to be successful with grocery store shopping tend to basically by the same thing all the time.

01:29:29:16 - 01:29:52:19
Ramit
Same thing with eating out. They go, okay, we are going to spend $400 a month eating out, okay? Each time we eat out, on average, this is how much we can spend. And so let's even reverse it. One more. How many entrees do we get our. We getting a drink or two or just none. You already know every month where you are going to go out to eat and what you're going to order.

01:29:52:20 - 01:29:54:02
Ramit
It's that boring.

01:29:54:03 - 01:29:54:23
Jake
I like that.

01:29:54:24 - 01:29:57:10
Ramit
People like they really do not like this. They're like.

01:29:57:16 - 01:29:58:23
Speaker 6
Takes all the fun out of it.

01:29:58:23 - 01:30:18:08
Ramit
I'm like, but it's actually really fun when you know that on Fridays pizza and, like, you're looking forward to it, you know, you get to think about it, you're talking about it. And then when you go there, you, you, you get to experience it like two times. One is planning it, thinking about it, talking about then two while you're there.

01:30:18:09 - 01:30:26:17
Ramit
Yeah. So yeah, you may not have as much serendipity, but didn't you both tell me you want to not have to worry?

01:30:26:23 - 01:30:31:20
Jake
Yeah. And that's the thing. Yeah. And that's a that's more than the other one.

01:30:31:22 - 01:30:34:16
Ramit
Exactly. And now you have a plan and you can just execute it.

01:30:34:17 - 01:30:36:00
Jake
Yeah I love it.

01:30:36:01 - 01:31:03:07
Ramit
Good question. Great question. If we zoom out of these numbers, are you living your rich life? Often when we are fiddling with numbers, we're down in the weeds. And I always like to zoom out and be like, hey, does this actually feel good if we if we execute on all this stuff flawlessly? Are we actually living our rich life, or did we just mechanic our way into moving numbers around in another way?

01:31:03:08 - 01:31:05:17
Ramit
So do you all like this as your rich life or not?

01:31:05:20 - 01:31:28:10
Jake
I absolutely do, and I think that having a plan and I think that through this conversation, part of my rich life is not stress of pulling from savings. And I think that that like I've re calibrated a little bit in a way of understanding it. And I and I'm like, now I'm trying so hard to not go straight to approaches and like how I'm going to do this, this, this.

01:31:28:10 - 01:31:40:13
Jake
But it's like I'm already like planning afterwards, like what the app's going to look like. And I think that that is going to be helpful, like knowing we know exactly what day we're going to go out to. And that is part of my rich life. And I've talked with that with me about those kind of things.

01:31:40:14 - 01:31:43:09
Ramit
And how do you feel is this living your rich life?

01:31:43:11 - 01:31:54:24
Mia
Yeah. And I think especially because I think I was confusing saving for college with preparing my kids for the future, and those aren't the same thing.

01:31:55:00 - 01:32:19:06
Ramit
Great insight, great insight, if anything, dumping a bunch of money on kids. I mean, it helps them with avoiding some amount of debt, but it doesn't teach them much. Right. You both are examples of that. And so you changing the generational messages you received, you know, in general you receive very good messages, which is nice. But because of the benefits your parents gave you, you can raise the bar on what you give your kids.

01:32:19:06 - 01:32:23:11
Ramit
That's amazing. What surprised you about our conversation today?

01:32:23:13 - 01:32:46:11
Jake
My biggest thing is how I'm perpetuating so much of what I had as my own childhood of money, being in how I've gone against every belief I have about using data, building capacity, trusting our kids, and how just because I was scared of something, I've been like the worst version of myself around. Money, I think, is probably what I would describe it as.

01:32:46:12 - 01:32:55:09
Jake
And I think that was very I opening today. And I think, like you said, is digging in. I'm starting to feel a little bit more comfortable digging in if there's an actual goal there.

01:32:55:10 - 01:32:56:24
Ramit
Nice. Beautiful. Mia.

01:32:57:00 - 01:33:17:15
Mia
I think my biggest surprise was that confusion between giving the kids money versus preparing them for money. Like, I did not think about it like that at all. And that feels so that just like I feel so much lighter.

01:33:17:17 - 01:33:40:16
Ramit
Yeah, yeah, I can see that that that specifically, I think probably because of your professions and the way that you relate to your kids like that really connects. And that's beautiful. Yeah. That's beautiful. What about resentment? When we began talking, there was a difference in how you looked at money. Do you think there will be resentment about money ongoing?

01:33:40:17 - 01:33:57:21
Jake
I don't feel like it because I think that, like, I feel like a weight has been lifted off our chest of taking from the savings. And I think that if we're if we follow our plan, which I know we will like, once we get a clear plan and have steps to it that we'll do it, that it's not going to be like, all this hard work isn't from nothing.

01:33:57:22 - 01:34:10:12
Jake
It's all this hard work is so that we're setting up for everybody to thrive and kind of do that, as opposed to saving, setting up all this hard work so that it can just all go to this big lump of money that we don't even know we haven't thought about. Great.

01:34:10:12 - 01:34:31:16
Mia
I absolutely do not think that there will be resentment. And I think one of the reasons is that we have a way to make a decision that we feel good about, and when we do that, there won't be resentment because we made the decision together. And that difference between letting feelings, guiding our money instead of decisions, guiding our money.

01:34:31:17 - 01:34:46:14
Jake
And that resentment or the resistance came from a lack of clarity and a lack of understanding. So I didn't want to dive in because it didn't make sense to me. And now I kind of like seeing you go through the numbers and like, we can do that, like that. That makes sense. Other than just clicking numbers on a keyboard.

01:34:46:15 - 01:35:09:15
Ramit
Totally. There's a purpose behind it. Yeah, I have a lot of confidence in them. Mia and Jake were so open with the feedback that I gave them so willing to engage, that I think they're actually going to do an amazing job. For years they have been talking around making decisions, and I help them immediately make some of the biggest decisions of their financial life.

01:35:09:16 - 01:35:22:02
Ramit
Watching them light up when they talk about getting their kids involved. That was when I knew this is going to stick, so I cannot wait to hear what they end up doing. Let's take a look at their follow ups.

01:35:22:04 - 01:35:28:17
Mia
Hey Ramy, it's Mia and Jake and we just wanted to follow up with our homework.

01:35:28:19 - 01:35:38:17
Jake
Our biggest surprise, for me at least, is be unwritten rules that I followed that were really guiding my past and I wasn't really diving deep into them. So it was really fascinating exploring that.

01:35:38:19 - 01:35:52:04
Mia
My biggest surprise is how much better I felt, even though we're standing less for college, and that's because we feel really aligned in the belief that we want to teach our kids about money, not just give them money.

01:35:52:06 - 01:36:05:05
Jake
My biggest takeaway is it doesn't matter how much money we have, I'm always going to have to be concerned with money. I used to think that if I could just keep making more and more money, eventually I wouldn't have to worry about it and all my problems would go away. But that's not the case. And I'm good with it because we have a purpose and a process.

01:36:05:05 - 01:36:06:04
Jake
Now for that.

01:36:06:05 - 01:36:31:12
Mia
My biggest takeaway is that we are finally aligned in the way that we talk about money, and that is aligned in our values. So we just feel really connected and it doesn't feel stressful anymore. We've made a few specific changes. So now that we know how we want to spend our money, it's been so much easier to go through our subscriptions and our just regular expenses and say like, yes, we want to keep doing that.

01:36:31:13 - 01:36:41:20
Mia
No, we don't want to do that. So it's probably like the biggest change that we've made so far is just really starting to audit our spending and say, like, keep doing it, stop doing it.

01:36:41:21 - 01:37:02:21
Jake
We have confidence in doing so. And that makes the biggest difference. So we just want to say thank you so much. We're so lucky that you guys took time to meet with us. Me, it's Jake and Mia here. We just got back from vacation and I actually enjoyed it because for the first time ever, I knew where our money was coming from and how much money we had and how much money we could spend.

01:37:02:21 - 01:37:05:01
Jake
So it really took a lot of the fear out of it.

01:37:05:05 - 01:37:28:21
Mia
Yeah, we've had two of our money meetings so far, and those are the first two conversations we've ever had as a couple about money that did not feel contentious. It actually felt like we were on the same team working forward, and it's allowed us to be super intentional with our money, which I think is one of the biggest shifts for us is we're not necessarily spending less.

01:37:28:22 - 01:37:35:19
Mia
We're just really investigating why we're spending what we're spending and then choosing to do it with much more intentionality.

01:37:35:21 - 01:37:51:09
Jake
Yeah. And I and I've really realized how we have to be consistent. You know, we can't just miss certain things, but it's definitely worth it because I'm no longer a grumpy old man on vacation. I'm so grumpy. But at least I know where the money is coming from. So we just want to thank you so much.

01:37:51:11 - 01:37:53:05
Mia
Thank you so much. It was life changing.

01:37:53:06 - 01:37:54:22
Jake
Absolutely. Thank you.

01:37:54:24 - 01:38:12:04
Ramit
If you want to know the exact month and year that you will have $100,000 in your investment portfolio, sign up for my new program, road to 100 K. I'll help you hit that number fast. Go to 100 K to sign up.

]]>

Ramit Sethi of I Will Teach You To Be Rich talks to Meg and Jo, a married couple in their 60s with more than $6 million in net worth, strong incomes, and a retirement problem that is not really about money.

Meg is ready to stop working. Jo wants to retire too, but feels terrified of making the wrong decision and carrying the responsibility for their investments alone. Despite having millions, speaking with financial advisors, and living well below their means, they remain stuck between fear, resentment, and “vibes.”

A special thanks to Facet for sponsoring this episode. As of the date of this recording, Facet is waiving their enrollment fee for new annual members, and for Ramit’s audience, Facet is offering $300 into your brokerage account if you invest and maintain $5,000 within your first 90 days. Head to facet.com/ramit to learn more about which membership option is best for you. Offer has been extended to 12/31/2026. #FacetAd

Facet is a SEC registered investment advisor. Ramit is not a member of Facet, and has an incentive to endorse Facet as he has an ongoing fee based contract for cash compensation based on this endorsement. All opinions are his own and not a guarantee of a similar outcome.

In this episode we uncover:

• Why Meg feels entitled to retire and Jo feels alone carrying the financial responsibility
• How Jo became the financial gatekeeper in their relationship
• Why Meg has avoided learning the details of their investments
• How different childhood experiences with money shaped their fears
• Why Jo’s experience during the 2008 financial crash still affects her decisions today
• How emotional labor around money can quietly create resentment in a marriage
• Why their disagreement about renovating their home is really about control and security
• What their $6.1M net worth, pension, investments, and spending actually allow them to do
• Why working longer could leave them with $14M they may never use
• The three retirement scenarios that show they can retire sooner than they thought
• Why Ramit says Meg needs to “step into her wealth”
• What Meg and Jo decided after seeing the numbers clearly

Chapters:

(00:00:00) Introduction
(00:02:26) Meg wants to retire, but Jo is hesitant
(00:05:40) How Jo became the financial gatekeeper
(00:10:19) “I wish you were a partner”
(00:19:18) Why Jo is scared to manage retirement alone
(00:27:22) Jo’s scarcity mindset and family history
(00:41:02) Renovating the house reveals deeper resentment
(00:46:46) “What do you base that on?” “Vibes.”
(01:01:24) The 2008 crash and Jo’s fear of losing security
(01:04:57) Their Conscious Spending Plan
(01:09:07) “I spent for dopamine. I gambled like an addict.”
(01:16:57) They have enough money but do not believe it
(01:19:22) Three retirement scenarios
(01:30:01) Why Meg thought Jo was saying they could not retire
(01:30:49) “God, I wish you were a partner”
(01:32:38) Choosing their retirement timeline
(01:36:07) Creating a retirement paycheck
(01:40:48) What happens if one of them dies?
(01:48:21) Meg and Jo’s follow-up
(01:49:54) “We have more money than time”

This episode is brought to you by:

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Ready to stop wondering where your money goes and start building your first $100K? Join Rich Life: Road to $100K at iwt.com/100K.

Apply to be coached for free on this podcast at https://iwt.com/apply

Transcript:

(00:00:00) Ramit: Can you retire?

 

(00:00:01) Meg: I’m not 100% sure. I want to retire.

 

(00:00:03) Ramit: What’s the hesitation?

 

(00:00:04) Meg: Joe said, “I think you feel entitled to retire.” It’s very frustrating. A little demoralizing.

 

(00:00:10) Jo: I do more of the emotional labor, and then I feel a little resentful. Meg just kind of skates through.

 

(00:00:16) Meg: If I didn’t have to learn more about our finances, I wouldn’t.

 

(00:00:21) Jo: God, I wish you were a partner in this. The thought of doing that by myself feels very lonely.

 

(00:00:26) Ramit: What do you remember your family saying about money when you were growing up?

 

(00:00:29) Meg: Nobody ever taught me anything about credit cards, which got me in a lot of trouble in my 20s. My parents never told the truth. Everything was a lie. Everything was gaslighting.

 

(00:00:40) Jo: I spent for dopamine. I gambled like an addict. Well, it was just a show.

 

(00:00:45) Ramit: What would it mean to you if you had to work longer than necessary?

 

(00:00:49) Meg: I’d feel resentful.

 

(00:00:50) Ramit: Towards?

 

(00:00:50) Meg: The world. But also Joe.

 

(00:00:53) Ramit: Are we ready to embrace this new chapter? This is a problem. It’s causing us problems. And you have to get good at this. What would you do if you were ready to retire? But your partner was not? Today I’m talking to Meg and Joe, 63 and 58 years old, and they’ve been together for over 20 years. Joe has been carrying the weight of the finances in their relationship. She earns more. She manages the money. It turns out that they have spoken to three financial advisors, but they are still paralyzed with the question of if they can retire. I’m kind of wondering, what are they coming here for? Are you advisors shopping to try to get the answer you want? That’s actually why I enlisted the help of Fassett to give them even more specific scenarios about what their future looks like. Let’s take a look at their conscious spending plan. Assets $2.1 million. Investments 4.3 million. Savings $133,000. Debt $510,000. Total net worth $6.1 million. What am I doing in my life right now? What is my job? That I’m sitting here talking to a couple worth $6.1 million, wondering if they can retire? I suspect this question is less about the numbers and more about how they feel. You want to find out? Let’s meet Meg and Joe. I’m not a member of facet, but I have an incentive to endorse them as I have an ongoing fee based contract for cash compensation based on this endorsement. These opinions are my own and not a guarantee of a similar result. Fassett is an SEC registered investment advisor. So, Meg, you wrote on your application, you said, I’m ready to retire. I’m afraid that my wife’s nervousness will keep me at my job longer than necessary. And what do you mean by that? Longer than necessary.

 

(00:02:36) Meg: I mean that we have been to a couple of financial advisors and ask them about retirement. And those financial advisors have said, yeah, you’re good to go. And Joe hasn’t believed them. And Joe says, I’m not sure maybe we can do that, but maybe that would mean I would have to work longer than I want to. And so it never kind of goes past that is very frustrating and a little demoralizing for me.

 

(00:03:15) Ramit: Okay. What would it mean to you if you had to work longer than necessary?

 

(00:03:19) Meg: I think it would feel. I’d feel resentful. Towards the world, but also Joe, because I feel that we’ve been told that we can retire. And then there’s this continual worry about not being able to.

 

(00:03:37) Ramit: Joe, when you hear Meg say that she does not want to have to work longer than necessary, and that if she had to go through that, she would feel resentful. What’s your reaction to that?

 

(00:03:50) Meg: That feels terrible.

 

(00:03:51) Jo: I want Meg to have everything that she wants, maybe to a detriment to our relationship. Sometimes I want Meg to retire.

 

(00:04:00) Ramit: Okay. And what about for you? Do you want to retire?

 

(00:04:02) Jo: I would actually like to retire at 60. And so that’s in two years.

 

(00:04:07) Ramit: Okay, so you want to retire at 60, and in two years, you will be like 65, 66. Okay. Quite interesting. And do you both agree on that? If you could you would retire in two years.

 

(00:04:19) Jo: Yeah. Retire tomorrow.

 

(00:04:21) Ramit: Really?

 

(00:04:21) Jo: Oh, yeah.

 

(00:04:23) Ramit: If that’s the case. Have you had a conversation where you both said we want to retire in the next two years? What will it take for us to do that?

 

(00:04:33) Jo: We’re starting to have that conversation. We’re putting more practical things in place. Like as opposed to having it be theoretical thinking, like, okay, well be good to have this amount of cash and this amount, you know, here’s how we would handle, okay.

 

(00:04:46) Ramit: Are you able to do it? Can it work?

 

(00:04:48) Jo: Part of it does come down to a lifestyle question. Yeah, I’m not 100% sure.

 

(00:04:52) Ramit: Okay. You’re not sure? Is it a yes or no?

 

(00:04:54) Jo: But can I tomorrow know.

 

(00:04:55) Ramit: Two years from now?

 

(00:04:56) Jo: Two years.

 

(00:04:58) Meg: Yes.

 

(00:04:59) Jo: Okay. But that’s where kind of the question of the level of retirement and it comes into play.

 

(00:05:04) Ramit: Got it. What do you think, Meg? Yes or no? If I had to pin you down.

 

(00:05:07) Meg: I think so, because I’m willing to have a lower standard of living in order to retire. Got it. Yeah.

 

(00:05:14) Ramit: Okay. Helpful to know. Actually, pretty cool that you both agree that you could retire. Question is, is it the type of retirement you want, etc. but to know that two years from now you could if you wanted to is really cool. Let me understand a little bit more about both of you. How long you’ve been together? How long have you been married? Are there any children? Tell me a little bit more.

 

(00:05:33) Jo: We got together in 2005. We got married in 2012, and then again in 13 when it was legalized. No kids.

 

(00:05:40) Ramit: To understand a little bit more about your relationship dynamics, how do you to operate as a team? I’m talking about money, but also maybe. Are there other parts of life work? ET cetera. Where you can just tell me a little bit more about your team dynamics.

 

(00:05:57) Jo: That don’t believe we’re a team around money? A dynamic that is persisted for most of our relationship is that I’m like the gatekeeper, and Meg will be like, I want to go on vacation, and I’ll be like, can I, can we afford that? And Meg’s like, I don’t know, because Meg really had very little to do with our finances. So Meg’s a social worker and I work in finance, so I think when she moved in with me, it became kind of a natural division of labor for me to just take the finances. My finances were significantly more complicated than Meg’s. And so, you know, I took it on and she was happy to.

 

(00:06:32) Ramit: Let me. And you just kind of glided into that. Yeah. Okay. This is very reminiscent of every straight couple that I talked.

 

(00:06:39) Meg: To you.

 

(00:06:39) Ramit: It’s like exactly the same.

 

(00:06:41) Meg: It’s totally.

 

(00:06:41) Ramit: The same. Like, hello. Do we need to do the whole emotional labor thing? I don’t think so. All right. You slid into it like every couple does. This is great. Yeah. Meg, were you okay with that? I was you were like, she’s got it. She makes more. She’s better at this. I’m gonna let her handle it. Is that what your approach was?

 

(00:06:59) Meg: Partially, yeah. And also, she made three times what I made when? When we started living together. Needless to say, my lifestyle was a lot more simple. You know, I really never dealt with property or a lot of tax issues. It just was, like, very straightforward. I balanced my checkbook and that was it.

 

(00:07:25) Ramit: When you came into this relationship and I’m guessing your lifestyle, Joe was elevated compared to Meg’s. Okay. Was that any an issue at all?

 

(00:07:35) Meg: I had ambivalence about it. I’m kind of a do gooder. I’ve been working in social work, you know, most of my life. And I’m a Quaker. There’s a lot about simplicity. And I was a little uncomfortable with the shift up.

 

(00:07:53) Ramit: I mean, like, which part?

 

(00:07:54) Meg: I love it now. I mean, don’t worry. I’m good with it. I, you know, I just was, like, a little uncomfortable with the amount of money that we were spending.

 

(00:08:07) Ramit: What’s an example?

 

(00:08:08) Meg: We just get all these Amazon boxes. Like every day there would be Amazon boxes coming to our door. I was just thinking, what what are we going to do with all this stuff? I was just sort of flabbergasted at the ability just to spend money because something caught your eye. That was really weird to.

 

(00:08:33) Ramit: Me, because the way you were raised was what?

 

(00:08:35) Meg: It wasn’t really the way I was raised, but the way I was living before I was really going paycheck to paycheck.

 

(00:08:41) Ramit: Got it. So you were carefully considering how much something cost before buying it, right? Got it. And here you just like, whoa, there’s like, five boxes at the door. Yeah. Got it. Okay. Did you talk about this?

 

(00:08:52) Jo: Yeah. I remember we had a date in Santa Cruz. Do you remember that? We were sitting on the beach and my TV broke, and I’m like, oh, yeah, I’m just going to go buy a new TV. And you’re like, well, that must be nice. And I’m like, it’s a TV.

 

(00:09:07) Ramit: Two different languages.

 

(00:09:08) Meg: Two different language.

 

(00:09:09) Ramit: Totally. That’s quite amazing. Like, the TV is not even the thing, it’s just the object. But it’s actually how we were raised, what money means to us, how much we’re making all of it. That’s quite a profound example. Okay. How does money work in your house today? Where does it flow? Who manages this in that part? Who spends it? Can you walk me through that?

 

(00:09:33) Meg: We have joint bank accounts. Everything’s joint. And both of our paychecks go into the joint account. Joe is the money manager. Keeps track of stuff. Now that we have a CSP, we’re setting aside guilt free spending pots and stuff like that. And we talk about large purchases.

 

(00:09:53) Ramit: How large?

 

(00:09:53) Meg: Large. Well, right now it’s like over $200.

 

(00:09:57) Jo: Which might be a little low. It’s not keeping up with inflation. Maybe. Maybe we could bump it up a little. That’s a separate conversation.

 

(00:10:05) Ramit: And what about the investments? Who handles that, Joe? Okay. Do you talk about it?

 

(00:10:11) Jo: I try.

 

(00:10:12) Meg: To, but.

 

(00:10:13) Jo: Then I kind of glaze over and I’m like, okay.

 

(00:10:16) Ramit: Got it. And is that you’re not interested or you don’t understand? Or all of the above.

 

(00:10:19) Meg: I’m not as interested in investments. And and it might be because I don’t understand them. Well, about six months ago Joe said, I really need you to be more of a partner in our finances. And she asked me to bone up on personal finance. So we both read money for couples together. And then I got finance for dummies. And I, you know, I have a very rudimentary knowledge of investments. The other thing is Joe is very interested in investments and curious and gets excited about certain investments. And that’s not my jam.

 

(00:11:09) Ramit: Okay. What do you think that she said, I need you to get involved as a partner. Six months ago.

 

(00:11:14) Meg: She was feeling very stressed about our money, and we were having these discussions about retirement where I was saying, I want to retire, right. And I think she wanted me to have something to back that up with. Yeah.

 

(00:11:30) Ramit: Nice when she said that. How did you receive it?

 

(00:11:33) Meg: I don’t think I went in enthusiastically. I mean, it wasn’t like she’s going to divorce me, but it was a little bit of an ultimatum, and I felt that it was required of me as partner to do this, and so I did.

 

(00:11:52) Ramit: Joe, what’s your take on that? Do you agree with how Meg characterized it?

 

(00:11:56) Jo: I do. I do agree that I you know, I said said this is what I needed. And Meg took some definite steps. And now it is really helpful that we go through our spending together. I think the way I feel is that Meg has made a good start, and I fear that Meg thinks she’s done.

 

(00:12:17) Ramit: Can I first just say, like, I find this to be incredibly mature and very rare? Very. It’s very impressive. Truthfully, the fact that you 20 years ago had this disparity in finances and understanding of money and you made it work. And just recently, Joe, you express yourself and said, hey, this is what I need from you. I need you to become a partner in this. That’s hard enough to say, okay, most never say that, Meg. You then received it. And although it doesn’t really feel great to hear that kind of stuff, but you were like, okay, you read multiple books, you learn how this stuff works. You recognize that if money is a core part of your relationship, you have to be conversant on it. You have to be conversant on any basic part of a relationship. And then you both did it. So I just want to take a second and really celebrate that you are both doing it. Like double thumbs up. Amazing work. Okay, I wish more couples did that. Is there more to do? I’m sure there is. And we can talk about what that looks like, but I don’t know so far. I’m just like wow, wow. Really cool. It might seem a little absurd to watch hand-wringing over retirement. It’s like, isn’t that what everybody wants? You work all these years so that eventually you can retire and relax. You have to understand that if you have been working for 30, 40, 50 years, it is really difficult to just turn that off. People are good at what they do. They like being wanted. They like being needed. They also like the cash of knowing that every single month I’m getting a paycheck. So when you take all of that away all at once, it’s incredibly scary. And that’s why a lot of people keep pushing their retirement date just one more year. But when you don’t have a clear vision of how much enough is, it’s easy to just keep pushing it. I just need an extra $100,000. I just need to work an extra two years. When you don’t know how much enough is, it’s never enough and you just keep working. If we can’t get these two on the same page with retirement, I’m worried they’ll never retire. Here’s my plan of attack. I know a lot of financial advisors and how they run their meetings. They’re really good at running this complex analysis and giving you a binder and saying, here you go and look at the drawdown. I’m not going to do any of that. I want to ask them so many questions that they feel more understood than they have ever felt before. I actually want them to discover insights about each other right here in these chairs that they have never known before today. That is how I get them to open up to me, to each other, and to actually connect over the vision that they have for the life they want to live. If I can get Meg and Joe to really get specific about what their fears are, what they want, then we can make the numbers support that. Almost always, if somebody tells me exactly what they want and they are honest about it, we can figure out what they need to do in order to make that happen. The problem is that most people don’t actually know what they want. They have no knowledge or control over their numbers. So when you try to put it all together, it just becomes this mush. But I think based on talking to Meg and Joe, that they have a pretty good command of what they want and their numbers. So I need to tweak a little bit at the edges, get them to open up, and then I will try to help them with their money, get where they want to go. One of my rich life rules is that I am happy to pay to learn from the best. That’s why I have personally paid for Masterclass. This episode sponsored one class I really enjoyed taking was prepared to be unprepared with Amy Poehler. I’m always interested in trying to improve my speaking skills. This was a great class where I learned a ton about the rules of improv and how to apply that to my life so I can be more adaptable on the fly. I use a lot of these principles actually, when I’m talking on my podcast. Unlike other platforms, Masterclass puts you in the room with the people who defined their fields. They’re not just experts, they are the best in the world. Masterclass has plans starting at $10 a month, giving you unlimited access to over 200 classes taught by the world’s best business leaders, writers, chefs and even me talking about financial wellness. There’s no risk to joining. Every new membership comes with a 30 day money back guarantee, so you can try it out before you commit. Masterclass keeps adding new classes, so there’s never been a better time to get in right now. As a listener of this show, you get at least 15% off any annual membership at Masterclass. That’s 15% at Masterclass. Head to Masterclass to see the latest offer. I recently got a comment on my podcast asking if I really use the products that I say I do, and the answer is yes. If I tell you that I personally use and pay for a product or service. I do. That’s why in so many delete me ads that I have hosted on this podcast. I tell you I pay for this myself. I do and I have for years. I love this service. That’s why I work with them and that’s why I want you to check them out. To delete me as a subscription service that removes your personal data from the internet. We’re talking about things like your full name, email, phone number, address, even your parents names all found and removed. They’ve been the leading expert in personal information removal for the last 15 years. They were recently named Wire Cutters Number one Data Removal service, and I personally use and pay for delete me. And I love it and I know you will too. You’ll get 20% off all consumer plans when you go to join, delete Mi.com and use promo code at checkout. That’s join delete Mi.com meet code remote for 20% off. Here’s my question for you today. Do you know exactly what you need to do to reach your first $100,000 in investable money? Most people don’t. That’s why I created the road to 100 K, a step by step program that shows you exactly what to do, where to focus, how long it’s going to take to get to 100 K, and even how to accelerate your timeline. You can learn more at 100 K based on the two of you now having a common language. Are you working towards the same goal when it comes to your money?

 

(00:18:53) Jo: I think we’re on the right track to be working toward the same goal.

 

(00:19:01) Ramit: A bit of hesitation from both of you. What’s the hesitation?

 

(00:19:03) Meg: Right now, the goal is to have a nice retirement. And I do feel we’re both working towards that goal. And I’m not sure what other goals Joe might have in mind.

 

(00:19:18) Jo: Joe, one of the goals is, is for Meg to stay engaged, and I don’t trust that that will happen. So Meg will be eligible for a pension. And so basically she’s going to keep getting a paycheck, in essence, and I’m going to have to transition into drawing down our investments. And so there’s a lot of decisions to be made around that. And that’s where a lot of my anxiety comes from around retiring. And I feel like without better engagement, like that’s going to be just on me for like the next 30 years to, like, handle that emotional labor of like dealing with the fear and dealing with like, advisors. And so the thought of doing that by myself feels very lonely.

 

(00:20:03) Ramit: Okay. And if you could resolve that, what would it mean for you?

 

(00:20:07) Jo: I think it would mean that a lot of the pressure would feel like it’s off. Getting a paycheck and doing whatever with it is not hard to decide necessarily, but the next phase feels hard.

 

(00:20:19) Ramit: Got it. Okay, that’s very helpful. Can I understand a little bit more about how you both grew up? Because I strongly suspect it influences how you both treat money today. Meg, what do you remember your family saying about money when you were young?

 

(00:20:37) Meg: I got instruction in how to write a check. I got a bank account when I was 15, 16. My mom taught me how to write a check. Pretty much. That was all the education my parents gave me about money, except my dad, who was born in the 20s, always said to me, if you have a dime, you should be able to buy a Coke.

 

(00:21:02) Ramit: That’s the lesson you got?

 

(00:21:03) Meg: Pretty much.

 

(00:21:04) Ramit: What does that tell you?

 

(00:21:05) Meg: You should be able to spend your money if you’ve got it.

 

(00:21:07) Ramit: That’s the takeaway. If you have your money, you should be able to spend it as opposed to.

 

(00:21:12) Meg: I was never taught to save. Nobody ever taught me anything about credit cards, which got me in a lot of trouble in my 20s.

 

(00:21:21) Ramit: Your dad, who grew up in the 20s. He did not talk about saving. That’s surprising to me.

 

(00:21:26) Meg: He grew up middle class. My mom was very poor and she was an accountant. I don’t know why she didn’t teach me more about money.

 

(00:21:37) Ramit: Why do you think?

 

(00:21:38) Jo: Well, you’re supposed to find a husband, right?

 

(00:21:40) Meg: Right. Thank you.

 

(00:21:41) Ramit: Thank you.

 

(00:21:41) Meg: Joe. That was it.

 

(00:21:43) Ramit: The idea being.

 

(00:21:43) Meg: Getting a rich husband.

 

(00:21:45) Ramit: Yep. Get a rich husband.

 

(00:21:46) Meg: A lot of my education was how to make guys interested in me.

 

(00:21:54) Ramit: From your mom? Yeah. Well, yeah. So what does that look like? How to dress, make up, hair, that kind of stuff.

 

(00:22:01) Meg: Maybe dressing, but more like learn about sports so you can talk about basketball with them.

 

(00:22:07) Ramit: Really?

 

(00:22:08) Meg: Yeah. And then he’ll be interested in you.

 

(00:22:10) Ramit: This is like, very old fashioned Superbowl fashion when you’re learning this. Because I’m presuming you’re like seven years old. Eight, ten years old. Like, how are you receiving this information? Are you, like, I’m not going to really need this. Like, how are you taking it?

 

(00:22:26) Meg: I didn’t really know I was a lesbian until, like, late high school, so I just thought my mom had a lot of opinions about relationships and how you act in them, and was trying to brush them off because they were weird to me.

 

(00:22:47) Ramit: Got it. She’s still alive?

 

(00:22:49) Meg: No.

 

(00:22:49) Ramit: Okay, so you didn’t learn much about money. You didn’t even learn to save, which is like, actually one of the only things that parents tell their kids in America. They don’t even take it seriously either. Like, they’ll be out at an amusement park and they’ll be like, here we are at Disneyland anyway. You should save your money, kids. Let’s go on the ride. Like they don’t even take it seriously. But at least they say it, you know? Yeah, I’m actually kind of refreshed. I’d rather just don’t say it. Don’t even bother lying. Nobody’s taking this seriously. I kind of refresh by your parents. Hey, you got a dime by a Coke? Fine. But the problem is that you end up later in life unaware of how to manage money.

 

(00:23:30) Meg: Totally. I really had no education. They managed the money pretty well. Really? Actually, they had a nice little nest egg at the end. They outlived it, but that wasn’t their fault. I mean, I just feel like my mom’s just lived a really long time.

 

(00:23:51) Ramit: And what happened, financially speaking, when they outlived it?

 

(00:23:54) Meg: When my parents went into a residential facility that had a continuing care contract. So they basically bet on your dying before you run out of money. But if you don’t. They pay for you.

 

(00:24:11) Ramit: So they won the best.

 

(00:24:12) Meg: So yeah, my mom did.

 

(00:24:14) Ramit: Got it. And did you take any lessons away from that?

 

(00:24:18) Meg: I feel like we really need a lot of money because I may live a very long time. Yeah.

 

(00:24:26) Ramit: Isn’t that kind of Joe’s.

 

(00:24:28) Meg: And Joe, too?

 

(00:24:29) Ramit: Okay? Isn’t that kind of Joe’s point? Like, I’m not sure if we have enough. Yeah, but you are also like, I just want to retire.

 

(00:24:36) Meg: Yeah. We’ve had some discussions where Joe said, I think you feel entitled to retire. And I said, yeah, I do feel entitled to retire.

 

(00:24:48) Ramit: I love the honesty of this conversation. Yeah, I love that. I wish more couples were just like, I think. And you’re like, yeah, yeah, great.

 

(00:24:55) Meg: I’ve worked for, you know, all my life. Okay. I feel like I don’t, but that comes from my parents too. I think.

 

(00:25:03) Ramit: Because they retired and then a long time. Okay. So I love the honesty of like, yeah, I feel entitled to retire. And then the next sentence in that conversation, I would presume is, well, if you retire at this age, this is the lifestyle that you are going to live or we’re going to live. Is that where that conversation goes?

 

(00:25:25) Meg: Yeah. And then I say, well, you know, well, how about if we get back and then Joe says, I don’t think we can cut back.

 

(00:25:34) Ramit: Oh, you can’t cut back.

 

(00:25:36) Jo: I don’t have a lot of confidence in us cutting back. It gives me a little panicky feeling, the idea of cutting back and also not 100% sure. I think Meg truly wants to cut back.

 

(00:25:51) Ramit: Did you ever do, like, a trial, like let’s trial Living or something for like three months?

 

(00:25:56) Jo: Yeah. It didn’t it didn’t last very long.

 

(00:25:58) Ramit: Really? You did it.

 

(00:25:59) Jo: Well, I mean, we’ve tried to, like, drastically reduce spending months.

 

(00:26:04) Ramit: What did you do?

 

(00:26:05) Jo: We tried to do door to no DoorDash for a month and I hadn’t.

 

(00:26:08) Meg: That worked. So it’s like.

 

(00:26:09) Jo: Well, can’t give up DoorDash.

 

(00:26:11) Ramit: Oh, man. All right.

 

(00:26:14) Meg: Although we have been doing a lot better when we started on the money for couples journey and we actually got a CSP, we decided how much money we wanted to spend on things and we have really been sticking to it.

 

(00:26:28) Ramit: You have.

 

(00:26:29) Meg: We have, we have. Yeah.

 

(00:26:31) Jo: Yeah. Wow. Maybe a month by month, but it evens out. Yeah. For sure.

 

(00:26:34) Ramit: That’s amazing.

 

(00:26:35) Jo: CSP is magic. I mean, and, you know, I’m not being paid to say this.

 

(00:26:39) Ramit: Tell the straight to the camera. Tell them what you need to know. That’s so cool. Yeah. So you got this new tool. You both did it. Yeah. Together. And you created a vision. This is what we want to spend. You redirected your expenses, and now you’re doing it month to month. That’s the way.

 

(00:26:57) Meg: We are doing it. It’s been successful.

 

(00:26:59) Jo: It has been.

 

(00:27:00) Meg: Yeah. Yeah.

 

(00:27:01) Ramit: This is giving me a lot of clues. Because you’re telling me through your past actions that it is very likely if you set a specific goal, some numbers and intention, you’re going to follow through your, your future performance. The best predictor of that is your past. And your past is telling me you got the CSP, you started using it. This is exactly why I do what I do. Great. Okay. Thank you for walking me through your childhood. Very helpful. Joe. Same question. What do you remember your family saying about money when you were growing up?

 

(00:27:34) Jo: My family was more the save everything. Don’t spend anything. We’re not going to tell you what to do with the money you save. But my parents are immigrants and extremely dysfunctional around money. They’ve had separate money their entire lives, and my mom is going through some dementia. So my dad asked me to take over her finances, and I had to go through boxes of stuff and walk into banks and be like, does my mother have an account here? And so it’s finally all straightened out, but they have no idea what the other has. And so now we know what my mom has, but I still have no idea what my father has.

 

(00:28:11) Ramit: You didn’t ask him as you were going through this process.

 

(00:28:13) Jo: Oh. They won’t.

 

(00:28:16) Meg: That’s not it. He says we have enough.

 

(00:28:19) Ramit: Yeah. Which country?

 

(00:28:21) Jo: My dad’s German and my mom’s from Ireland. And my dad grew up, like, solidly middle class. Although, you know, he was a child the end of World War two. And my mom grew up poor in Ireland.

 

(00:28:32) Ramit: How did that show up in your childhood? That your mom was poor in Ireland?

 

(00:28:37) Jo: My mom.

 

(00:28:37) Meg: Is.

 

(00:28:37) Jo: Extremely, extremely frugal. She was really the one saying, you know, save your money, save your money. And also some lessons. That tells me now more about their marriage. Like she was like, don’t get married until you’re 30 at least. She she.

 

(00:28:53) Meg: Was.

 

(00:28:53) Jo: 29, actually. And she’s like, don’t get married until you have your own money. Make sure that you know you are fully able to support yourself. You know, some pretty radical ideas at the end of the 70s.

 

(00:29:06) Ramit: What do you think she said that?

 

(00:29:08) Jo: Well, because I think she felt trapped in her relationship.

 

(00:29:11) Meg: She also told her not to have kids. Oh, yeah. Kids. Kids will ruin your life.

 

(00:29:15) Ramit: Always nice to hear that from your mom.

 

(00:29:17) Meg: And she’s like, oh, I don’t mean you. And I’m like. I mean.

 

(00:29:23) Ramit: I want to say it’s not funny, but it is kind of funny. It’s funny when you think about what parents in the past generations said and like how completely on PC that is to. Yeah, like just absolutely. Here’s how to talk about sports so you can meet a man to your soon to be coming out lesbian daughter. I mean, what world is this? Yeah, but but you got to laugh. I mean, what else? Right. You mentioned that she was extremely frugal. Your mother. Do you remember her saying anything about money? Like we don’t need a lot to live on or things like that.

 

(00:29:58) Meg: Refrain of my childhood was $100,000 is nothing. $100,000 a year. And now, keep in mind, this would be like 1980. I mean, that was a lot of money in 1980.

 

(00:30:08) Ramit: Yeah. So I can’t do the math in my head, but that’s like, let’s say $500,000 today, right? Which is a huge amount of money.

 

(00:30:14) Meg: Huge amount of money. And my parents, my dad was a chef and my mom was a waitress. I mean, so these are not.

 

(00:30:20) Ramit: So she’s kind of just making these numbers up.

 

(00:30:21) Meg: Yeah, totally.

 

(00:30:22) Ramit: Here’s the number that we could never make. And by the way, that’s nothing.

 

(00:30:25) Meg: And that’s nothing.

 

(00:30:25) Ramit: Yeah. What do you think she was really saying when she said that?

 

(00:30:29) Meg: I think it was really, really. It was a roundabout way of telling us to really prioritize security. It was very much like, you’re going to college, you’re going east to college, and you’re going to be a lawyer. You’re going to get like a high paying job. I think that was very much the focus.

 

(00:30:48) Ramit: And do you find yourself bringing some of the messages that you grew up with to this relationship as it relates to money?

 

(00:30:55) Meg: Yes. For sure. I’ve worked in the same job since 1993. I just have like a layer of stability, which I think is actually good in some ways. I mean, I think that’s like outside of money, even the kind of providing like an emotional stability. But also I make safe choices. Meg is a very safe partner for me. I guess the best example of that is my parents, like, never told the truth. Like, everything was a lie. Everything was gaslighting. And Meg, as a Quaker, does not lie. And so it’s very clear. Like this is why.

 

(00:31:29) Ramit: That’s a very interesting answer. I did not expect that. It’s kind of beautiful, actually. Meg is a safe partner because she tells the truth. And I was surrounded with lies. That’s quite that’s quite beautiful. Okay. Thank you for helping me understand that. What’s fascinating is that Joe is so confident at work, but predictably, she has brought that scarcity into her relationship with money. By the way, notice that she redefines it. I like security, but a lot of it is just another, maybe slightly more elevated form of scarcity. Did you catch Joe’s comment that she doesn’t want to have to feel lonely managing the retirement drawdown for the next 30 years? And when she said that to me, I kind of looked around like, why would you why would you even have to worry about that at all? To me, that’s like worrying about painting the porch every single day for the next 30 years. First of all, I’m not painting a porch. Somebody else is going to come do that for me. And second of all, it’s going to be one and done, or maybe once every ten years. Done. I think deep down, Joe just is worried about money, and she’s finding ways that seem rational to keep her stuck. Well, who’s going to have to take on the emotional labor of doing this for the next 30 years? Not you Joe. You can find people to help you, or better yet, just automate it because a computer can do this for you. We don’t need to let these things in our head keep us stuck. And here’s a little framework that you can use for yourself. When you’ve got something that is trapping you, stopping you, you ask yourself this. What if this were easy? What if this were just so easy? How would it feel? How would it look? And finally, last of all, what would I do? Joe doesn’t need to do this alone. There are plenty of other people, computers, tools that can do this for her. This is not a reason to stop for even five minutes. Much less years. More of working. I think it’s really interesting the language that parents use on my podcast. They’ll use words like, I want to give them everything I didn’t have. It’s deep rooted messaging that often I find makes people hyper focus on small things, but I don’t find them paying as much attention to the big picture stuff. For example, protecting your kid’s future. If something were to happen to you and our friends at Fabric by Gerber, life can help. Fabric by Gerber. Life is term life insurance you can get done today. It’s made for busy parents like you all online on your schedule, right from your couch. You could be covered in under ten minutes, often with no health exam required. If you’ve got kids, especially if you’re young and healthy, now is a great time to lock in low rates. They have flexible, high quality policies to fit your family’s needs, all with a 30 day money back guarantee. And even if you have life insurance through your employer, it may not be enough to protect your family, especially if you leave your job or you get let go. Join the thousands of parents who trust fabric to help protect their family. Apply today in just minutes at Meet Fabric. Meet fabric and use my link so they know I sent you. Policies issued by Western Southern Life Assurance Company not available in certain states. Prices subject to underwriting and health questions. It’s kind of interesting how people react differently to caffeine. Some people get super jittery with coffee, some people prefer tea. I’ve found it to be really fun to try to test different sources of caffeine and find what works for me. Sometimes it’s a black coffee, sometimes it’s matcha, and there’s a new way for you to try out a different source of caffeine, one that will not cause you to have a massive energy crash. That’s elements. New Lemonade Iced Tea element is a tasty electrolyte drink mix and sparkling electrolyte drink made specifically to replace essential electrolytes lost throughout the day. It’s used by professional sports teams, Navy Seals, Olympic athletes and my wife loves it. Now element has launched their Lemonade Iced tea made with full spectrum black tea extract, not isolated caffeine added in later. It’s built on the same formula as elements core drink mix with a meaningful dose of electrolytes. No sugar, no artificial colors, no other weird ingredients. Get a free eight count element sample pack with any purchase at drink LM now. That’s drink LM. Try a totally risk free if you don’t like it, they’ll give you your money back, no questions asked. Meg. What money messages from your childhood do you think you bring to this relationship around money?

 

(00:36:14) Meg: I think I bring a middle class attitude. I had everything I wanted and usually my parents would buy it for me. I don’t really want a lot of expensive things. I wasn’t trained to want them.

 

(00:36:33) Ramit: You mentioned a middle class sentiment. What does that mean to you? Middle class.

 

(00:36:38) Meg: Very stable. Privileged. I have the feeling I’ve been wrong many times in my life about the optimism that I have around being able to afford things. I really have the feeling that the money is going to be there. Okay. Yeah.

 

(00:37:02) Ramit: Are you middle class today?

 

(00:37:04) Meg: I don’t believe so. No.

 

(00:37:06) Ramit: What are.

 

(00:37:06) Meg: You, mildly wealthy?

 

(00:37:09) Ramit: Okay, Joe. What are.

 

(00:37:10) Meg: You, rich? Most places. Upper middle class. Where we live. Got it.

 

(00:37:16) Ramit: Upper middle class. Okay. All right. Meg, you mentioned something else that caught my eye. You mentioned being raised a Quaker. I don’t know much about Quakers. Can you tell me a little bit about that?

 

(00:37:26) Meg: Yeah, it’s a Protestant sect. The branch that I go to. People sit in a circle. There’s not a lot of distractions. And we sit in silence for an hour. And if people feel called by God to say something, then they minister. There’s no one person like ministering to us. And there’s a lot of testimonies, simplicity, nonviolence.

 

(00:37:53) Ramit: Does it resonate with your lifestyle today?

 

(00:37:55) Meg: That’s part of the discomfort I had when I moved in with Joe. It wasn’t as simple a life. Once I moved in, I had a Quaker friend come in and the first thing he saw was this huge television on this huge stand, and he just started laughing. He was that is a big television. So I was just it has caused some, you know, uncomfortable.

 

(00:38:27) Ramit: Sometimes I.

 

(00:38:29) Meg: Can see that. Joe had a BMW. She used to vroom up to meeting and pick me up, and everybody else is driving their Priuses.

 

(00:38:39) Ramit: And have you two talked about what your rich life is?

 

(00:38:42) Meg: Yes.

 

(00:38:43) Ramit: We have. Good. What’s the gist of it? With 2 or 3 specifics?

 

(00:38:48) Meg: Comfortable travel. It’s being in a position of having fewer worries, like in terms of valuing stability. The more our net worth grows, the more it’s like there’s less that can take us out. If that makes sense.

 

(00:39:01) Ramit: Feel safer.

 

(00:39:02) Meg: Feel safer. Yeah. And being able to do fun stuff and not have to worry about it.

 

(00:39:07) Ramit: What’s an example like?

 

(00:39:09) Meg: I like to learn things, so I want to be able to take any class I want.

 

(00:39:14) Ramit: Can you do that today?

 

(00:39:15) Meg: Yeah, it’s mostly more time is the issue okay.

 

(00:39:19) Ramit: What do you say? Anything else that Joe missed?

 

(00:39:20) Meg: I don’t think so.

 

(00:39:21) Ramit: Good. Okay. Can I get really specific with your rich life vision? If we fast forward x number of years, let’s say late 60s, what does a Wednesday look like in your rich life? Go ahead. Meg.

 

(00:39:39) Meg: I would be wandering around a botanical garden looking at birds. Might have lunch with a friend.

 

(00:39:46) Ramit: Where?

 

(00:39:48) Meg: Anywhere.

 

(00:39:49) Ramit: Okay.

 

(00:39:50) Meg: Be able to have nice dinners out with Joe once a week or a couple of times a month.

 

(00:39:58) Ramit: Okay, I’m going to ask a few probing questions. If any of these connect with you, speak to them, and if not, you can just ignore them. What are you wearing? Who are you seeing? What are you driving? What is in your house?

 

(00:40:12) Meg: I think we’d be down to one car.

 

(00:40:16) Ramit: Were you helping?

 

(00:40:17) Meg: I would like to get involved in some volunteer work. I’ve seen some mentorship programs that help middle school kids. Right. Cool. Better.

 

(00:40:28) Ramit: Okay.

 

(00:40:29) Meg: Yeah.

 

(00:40:29) Ramit: It’s a very beautiful vision. I love it. It actually is all congruent with what you’ve told me about yourself. It’s very congruent. Thank you Joe. Same question Wednesday. In your late 60s, what is your rich life look like?

 

(00:40:41) Meg: I have this idea that in retirement, I’d like to spend month long chunks in big cities in Europe. But if I’m home, maybe the gym and then some woodworking and then see some friends, maybe like go for tea or go for a walk. And really, I like being at home. So picture being in our house.

 

(00:41:01) Ramit: The one you have.

 

(00:41:02) Meg: Now, the one we have now. I’d like to renovate it. Go. It’s half renovated. Like to renovate the other half. I picture having enough time for the things that I want to do. Great.

 

(00:41:12) Ramit: Yeah. And just a quick question. If you were traveling on this given Wednesday, where would you be staying?

 

(00:41:17) Meg: An Airbnb. And then the idea is to go do one thing a day.

 

(00:41:22) Ramit: Love it. That’s great. We are now. My wife and I are at one big thing every two days. It’s like really slow, but we give ourselves a long time and if we stumble across something, we’ll do it. But some days we’re just like, let’s just wander or chill. And it feels really abundant. So okay, cool that Airbnb that you might stay at in today’s dollars. How much would you pay for an Airbnb when you travel? Just so I.

 

(00:41:47) Meg: Know when I think of it now and I kind of look on Airbnb, maybe $5,000 for the month.

 

(00:41:52) Ramit: For the month. Yeah, great. Okay. What do you notice about your answers?

 

(00:41:58) Meg: They don’t require a huge amount of money.

 

(00:42:02) Ramit: Agreed. What else?

 

(00:42:04) Meg: Low key.

 

(00:42:05) Ramit: Yeah. And when you say that. What do you mean?

 

(00:42:08) Meg: Not a lot of moving parts.

 

(00:42:10) Ramit: There’s tea. There’s lunch with a friend. It’s like. Like you said, low key, quite easy to make. Work feels great. I also notice that it feels very congruent with what both of you have told me. Joe, you mentioned you like to travel. Travel is in there. You also mentioned like to stay home. A lot of the rich life is at home. I feel that they are quite amenable and they’re agreeable with each other. All great. I actually think that in general the two of you are quite agreeable, which is really nice to speak to, but I’m going to give you a challenge. I would like for you to find an area of your rich life that you disagree on specifically, you disagree on.

 

(00:42:56) Meg: Well, probably remodeling the house. I have been talking a lot about moving into a rental and and leaving home ownership behind. Joe has been talking about renovating the house, and I’m not sure it’s worth it to put all that money into the house. I feel we could live in a smaller place and not have to think about all the upkeep.

 

(00:43:26) Ramit: That’s the disagreement.

 

(00:43:27) Meg: That is one.

 

(00:43:28) Ramit: Yeah. Okay. And have you resolved it? No. Okay.

 

(00:43:32) Meg: It’s funny, if I’m going to be honest, this is where our dynamic comes into play. Because as the person who’s historically made the decisions, we’re not moving out.

 

(00:43:41) Ramit: Wow. Yes.

 

(00:43:42) Meg: Yeah.

 

(00:43:43) Ramit: That’s pretty straightforward.

 

(00:43:45) Meg: Now that I’ve said that’s.

 

(00:43:46) Ramit: How do I get more straightforward couples like the two of you.

 

(00:43:49) Meg: It was her house. So I know I moved in.

 

(00:43:53) Ramit: So are you comfortable knowing that she’s made the call? You two are going to renovate.

 

(00:44:00) Meg: I don’t think she knows. I made the call. No. I had never heard that before.

 

(00:44:05) Ramit: And what’s your reaction to it?

 

(00:44:06) Meg: I just think it’s funny. I think, you know, I think we will discuss it. Joe has said she was open to renting, so I don’t know what that means, just having heard that. But I wouldn’t force us to move if it meant that much to Joe. But I don’t really like all the responsibility that comes with home owning.

 

(00:44:35) Ramit: Is there a way for you to absolve yourself of the responsibility and somebody else manages it? Because, like, I don’t like it either.

 

(00:44:46) Meg: But you rent.

 

(00:44:47) Ramit: I rent, but let’s pretend that I, I buy, I will one day. I’m sure it’s not like I’m going to be sitting around with a wrench. You know what I mean?

 

(00:44:56) Meg: Oh, we hire people to do stuff, but you still have to find. Find the guy.

 

(00:45:00) Ramit: Who has to find that person. You.

 

(00:45:02) Meg: A lot of times it’s me.

 

(00:45:04) Ramit: Does it have to be?

 

(00:45:05) Meg: I think Joe feels that she holds the finances. So I should hold the household stuff. That’s not that. She makes the money. So then I have to be the drudge.

 

(00:45:19) Ramit: Okay.

 

(00:45:20) Meg: Joe has a hard time when she is holding a lot of things in her head, and she feels that she needs to hold all the stuff in her head. And I think this is part of what what she was asking me about with the finances was, I need somebody else to be thinking about this stuff. And I think that that’s kind of what I’m talking about with the division of the household. I take mostly take care of the cars and the cats and the house, but Joe does some of the house stuff too.

 

(00:45:55) Ramit: Joe, would you agree with that? Is that accurate?

 

(00:45:57) Meg: Yes. I think if I were to categorize like what? I think one of the biggest issues in our relationship is, is that I feel I do more of the emotional labor, and I feel like I really hold a lot and it’s it’s hard. And then I feel a little resentful when I feel like Meg just kind of skates through.

 

(00:46:18) Ramit: And as it relates to money. How does that play out?

 

(00:46:20) Meg: I guess as it relates to money and it ties into the you know, I agree with the feeling of entitlement.

 

(00:46:26) Ramit: The she feels entitled to retire, right? Does she feel entitled to anything else around money?

 

(00:46:31) Meg: We used to have these arguments before, like, you know, or she would say something, I want to go on vacation, I want to do this thing. And I would feel like I had to decide whether or not we could do that. And then I would say, can we afford it? And then she would say, of course we can. And I’d be like, well, what do you base that on? And she’d say, I don’t know, vibes. So that made me feel like I really did the emotional work around the money.

 

(00:46:57) Ramit: That’s quite interesting. It’s actually very illuminating. Let me repeat it back in from a different perspective. It’s almost like we’re watching a movie right now, and I’m just going to rotate the camera around just slightly. Tell me how this strikes you. I’m Meg. I grew up, you know, not learning anything about money. I don’t need much. In fact, the way I was raised, I shouldn’t really be particularly flamboyant with money. Meet my partner. She makes three times what I make and lives like a different level of lifestyle with a big TV, etc. and I kind of vaguely uncomfortable with this, but I love her. And so we move in and we get together, and I kind of like ordering from Amazon now. I kind of like being able to go out to restaurants. I don’t need all this fancy stuff, but gosh, it feels good to be able to do it, especially because we do it together. And gosh, it’s I’m getting older now and I’ve been working a long time doing social work and I’m ready to retire. And also we have a lot of money. I mean, surely we do look at our house and and look at the car and once in a while we take these vacations and so like, I want to go on vacation. Can we afford it? Yeah. How do you know? Just look around. I mean, there’s money. It’s here. I don’t know how much. I’m not connected to the money at all. I don’t know about our portfolio, but surely there’s money. We can always afford it. And now it’s. It’s time for me to retire, and. And I think I am entitled to it. I’ve worked a long time. We have a lot of money. And so why are we even talking about this? How does that strike you, Meg?

 

(00:48:39) Meg: I think most of it was accurate.

 

(00:48:42) Ramit: How did it feel hearing it?

 

(00:48:44) Meg: A little uncomfortable, I do believe from conversations we’ve had with financial advisors that we have money to retire with. I don’t think we don’t need to talk about it.

 

(00:49:00) Ramit: Agreed.

 

(00:49:00) Meg: Yeah, okay.

 

(00:49:02) Ramit: I agree 100%.

 

(00:49:03) Meg: That’s why I applied. To. This, Joe.

 

(00:49:05) Ramit: Yeah, I appreciate it. I’m so glad you both did. I’m having a great time learning more about you. Hearing that the part about I don’t need a lot the way I grew up is actually not encouraged to have a lot. And now I walked into this and, and and I kind of do like spending money once in a while. Yeah. Did that strike you?

 

(00:49:21) Meg: Absolutely.

 

(00:49:22) Ramit: Okay.

 

(00:49:23) Meg: I like it.

 

(00:49:24) Ramit: There’s nothing wrong with that. I actually love hearing you say that. Yeah. I wish more women were unapologetic about. I like money, I like spending it, I like I like it all. That’s actually awesome. We are. We in general are too timid around money. We shrink ourselves. In particular women. It’s like, well, like, yeah, I like my sweater, but like, I got it on sale, TJ Max. And I’m like, I didn’t ask you how much it costs. I just like that you look great in it. And so I love hearing you say, I like money. Yeah, that’s really cool. Okay, Joe, how did it here? Hearing that camera rotated around as I went through that exercise.

 

(00:49:59) Meg: It felt like. Yes.

 

(00:50:01) Ramit: Really? Why?

 

(00:50:04) Meg: I mean, I think I think it’s pretty accurate. It’s less so now, but there was this kind of tension between I don’t need to pay attention to the money because I don’t need nice things, and I could live a simple life. So if you want to live like a fancier life, well, like, you could figure it out, you know? And then meanwhile, I’d be like, okay, like you’re not buying Chanel bags, but you want to stay at Post Ranch in. So, I mean.

 

(00:50:25) Ramit: It’s very nice hotel.

 

(00:50:27) Meg: Which we are still debating. Yeah. Okay. Unlike anything over Saint Regis is a waste.

 

(00:50:33) Ramit: Yeah. It’s very interesting that your response was like, yes. I don’t get the sense that the two of you are doing any sort of jabbing. I sometimes see that when I speak to couples, to me, I can see that where it’s like you kind of benefited from not really paying attention to money and also experiencing this nice life. I think that’s fair to say. And I also think I would have done the same thing if I walked in and I had grown up. Same with you. And and my wife had more money and she had different tastes, and I would just totally his natural to be like, wow, it is sure nice to be able to go to the grocery store and get whatever I want. What I love is that you have recognized this in recent times mag. You’ve started learning about money. You’re having conversations. That to me is very promising. I don’t think you can erase what? Like the way that you grew up and how you related to money. For 15 years. You didn’t pay attention, okay? You didn’t have to. Joe was taking control. Obviously that wears on her. She said that? Am I reading it correctly that you both recognized that? And now you agree? You both need more of a financial partnership. Is that accurate or no?

 

(00:51:51) Meg: Yeah, I think so. And the teasing is is affectionate. I’m not I don’t have any. There’s no like I just think it’s funny. Yeah.

 

(00:51:58) Ramit: Do you see it that way. I do. Okay.

 

(00:52:00) Meg: Yeah. The truth is, if I didn’t have to learn more about our finances, I wouldn’t. I mean, truthfully.

 

(00:52:09) Ramit: That’s another honest statement.

 

(00:52:10) Meg: But I want to, because it’s important to Joe. And, you know, I might not be doing it as much as Joe wants. So I have a little attitude change. I think I need.

 

(00:52:23) Ramit: To part of that attitude change, I will encourage you, is that it is great to do it because Joe wants you to and she needs a partner. I agree, but also it’s important for you because if Joe gets hit by another BMW and we know BMW drivers are horrible, you are left with a somewhat complex financial situation that a middle class upbringing is not prepared for you to succeed in.

 

(00:52:52) Meg: Yeah.

 

(00:52:53) Ramit: And she’s handled a lot of this burden for decades. And so it’s actually really important that you become conversant. You don’t have to be to the skill level that she is. She works in a different industry and she’s been doing this. That’s not that’s not the expectation. But in the same way that I once told my wife when we were talking about money early, I said very similar thing. I said, look, you have to get better at this. We’re talking about money scarcity and money abundance. And we’ve talked about this. We’ve been through it and with love, with affection like this is a problem. It’s causing us problems. And you have to get good at this. And she took that like that. Doesn’t feel good to hear she took it. She learned she attended some money psychology class. I still haven’t asked her because I’m afraid I’m gonna get too mad if I find out what. Who else was she learning about money psychology from besides her husband? But okay, she did it. And? And it wasn’t just because I needed a partner in the same way that you, Joe. It’s that I know that one day something might happen, and I need her to be equipped.

 

(00:53:58) Meg: Yeah, that is actually a fight that we had pretty recently. We had signed up for the the course. Meghan agreed that she would kind of be the one who drives it forward, and it didn’t really happen. And then we were we were driving back from LA and we were saying, well, should we drop it? Should we? And she’s like, well, I have all this stuff going on, so I can’t do it right now. And I said, okay, well when you when this stuff is over. Will you do it? And she goes, probably not. That’s when I tried that. Well, you know, I feel like if nothing else, it’ll set you through. Like how? Like it’ll walk you through. Everything is set up, and then you’ll understand in case something happens to me. And then this is where I think the stubborn optimism comes in. And just like, well, I’ll figure it out.

 

(00:54:42) Ramit: So is the implication. If something happened, I’m stubborn enough that I could figure it out and make things work out.

 

(00:54:47) Meg: That’s, I think, how I feel deep down inside. Yeah. But definitely we’ve been paying for your coaching class and we have not attended a single session.

 

(00:54:59) Ramit: You all know it’s not like a gym. Like I actually want you there.

 

(00:55:02) Meg: Yeah.

 

(00:55:02) Ramit: No. Don’t come. You just want the round. You. I really want you there. I want to see you on these calls. Okay?

 

(00:55:09) Meg: It’s it’s my. It was my job and I did not get it. Yeah. Together.

 

(00:55:15) Ramit: This is very. I’m glad you shared this example. This is super revealing. Finding the why of why this is important. You know, Joe’s told you, like, hey, I need a partner, okay? And that that helped you to a certain point. But going all in to the level because we’re talking about some pretty serious stuff. We’re talking about real money. We’re talking about your within years of retirement, it kind of requires all hands on deck. You need to be kind of hitting your marks and things need to be happening. The days of like, well, we’ll figure it out later. Like they’re sort of here. Yeah. Especially because Meg, I know you’re the one who wants to retire. So I’m seeing the point. And I think Joe’s request for you to step up as a partner is totally fair. And I think you demonstrating that and reminding her, like, here’s what you said, here’s what I’ve done. And in fact, I’m even doing one, two and three next would go a huge way. Isn’t it interesting looking at the gender dynamics in this same sex couple? It’s one of the reasons that I love my same sex guests that come on the show, because they really challenge our beliefs about what gender is and how we relate to each other with money. Very often you will find that something that exists in heterosexual relationships is actually almost identical in same sex relationships. And then you go, wait a second. So this isn’t about a man. This is about maybe the person who earns more. Wow, I never thought about that. Here we have Joe. Earning more has been earning more for decades. And what does she do? She naturally takes over managing the money. Haven’t we heard this story before? Then we have the other partner, Meg, who’s earning less. And what does she do? She goes, it’s fine. Joe’s got it. She’s better at this anyway. Haven’t we heard this story a million times? One of my greatest joys on this podcast is to show you the gender dynamics that exist in America. Also, the assumptions that we make. Oh, this has to be something that a woman does or a man does. And then finally, to allow you to choose what role you want to play in your rich life doesn’t have to be that way just because your mom did it or your dad did it. You can choose. We get that gift. Take advantage of it. If you want beautiful flowers on your desk, get to flowers. If you want to be the one who manages the investment portfolio, great! Just make sure that your partner is involved and knows what’s going on. It does not have to be something that just because your dad did it, you did it just because your mom did it, you did it. You get to choose. And that is the beautiful part of your rich life. It’s yours. Nobody else’s. When I was starting my business, if someone had told me about infrastructure and systems, I would have just ignored them, honestly. But years later, I can look back and see the wisdom of having simple business systems. I have literally spent millions of dollars disentangling bad systems that we put into IoT along the way. So if you have the chance to start your business in a simple way, I recommend checking out NetSuite. Net suite is the AI powered business management suite that securely connects all of your data. Trusted by over 43,000 customers, NetSuite brings your financials, inventories, commerce, HR, and CRM into a single source of truth. And now with NetSuite next, you can automatically surface custom insights with AI agents working alongside you to solve problems, answer questions, and even handle routine work. NetSuite is customized for a wide range of industries, so it supports the way your business works, whether your company earns millions or even hundreds of millions. It’s time for NetSuite next, where your business meets AI. If I’d had this system back when I was building IoT, it would have changed everything for me. For the first time ever, you can try NetSuite next for free. If your revenues are at least in the seven figures, go to NetSuite AI built for every industry. Ready for every boardroom. Net AI. If you had to describe your mindset with your money today in a word or two, how would you describe happy?

 

(00:59:26) Meg: I just swing wildly back and forth between terrified and elated.

 

(00:59:32) Ramit: That’s interesting. So we have happy and elated, which is a nice combo. And then also terrified. I would have said, Meg is the optimist and Joe is the worrier. Would that be accurate?

 

(00:59:48) Meg: Totally, yes.

 

(00:59:50) Ramit: That’s interesting. Okay, if those are the rules today, will those rules work for you in retirement?

 

(00:59:55) Meg: I don’t think so. How come? Well, Joe’s already said it doesn’t really work for her to be the only one who worries about it. Yeah, yeah. So, no.

 

(01:00:06) Ramit: But it would be great for you, though, right?

 

(01:00:08) Meg: Oh, sure.

 

(01:00:09) Ramit: Just like. Yeah, it’s fine. It’ll be fine. Okay. So that won’t work. What roles would work for the two of you in retirement?

 

(01:00:16) Meg: I don’t want Meg to worry, but meeting more in the middle, I. Need to be. Both less elated and less terrified.

 

(01:00:25) Ramit: So, like, you want to bring it into the middle?

 

(01:00:27) Meg: I want to bring it in the middle.

 

(01:00:28) Ramit: Where you’ve been at the same place for a long time at work. Are you worried? No, I don’t think so. I don’t think you’re worried about work.

 

(01:00:35) Meg: No worry. I have no thoughts about my job when I’m not there.

 

(01:00:38) Ramit: Are you good at your job?

 

(01:00:39) Meg: Yes, very.

 

(01:00:39) Ramit: Look at how fast you said that. That’s amazing. So you’re not worried about your. Are you concerned? Is that the primary descriptor of you at work? Concerned?

 

(01:00:49) Meg: No. At work. I’m good at it. And I’m bored.

 

(01:00:52) Ramit: Whoa.

 

(01:00:53) Meg: Yeah.

 

(01:00:54) Ramit: Leave the board part out of it for just my example. Good at it. Yes. Can you do the same with money?

 

(01:00:59) Meg: Objectively speaking, I’m pretty good.

 

(01:01:01) Ramit: At it. So then why worry?

 

(01:01:03) Meg: So, you know, I do compliance work, so I’m.

 

(01:01:05) Ramit: Kind of explains everything.

 

(01:01:06) Meg: Yeah, right.

 

(01:01:07) Ramit: Where can I go wrong?

 

(01:01:08) Meg: And it’s for Bank of America.

 

(01:01:11) Ramit: If I’d known that, I wouldn’t have accepted you on the podcast. No.

 

(01:01:14) Meg: I disclosed that in the interview. And I was told it was okay because it wasn’t Wells Fargo.

 

(01:01:20) Ramit: That’s all right. Okay. So go ahead.

 

(01:01:24) Meg: I wanted to say something because I think we left out something about when we got together. We were together and apart for about four years. And then the crash happened, and I was living in my own apartment, and Joe had her house, and she had just had a breakup. She had the full mortgage at the house, and we decided that we were going to move in together. I had some problems with my apartment, and we just decided I could put my rent towards Joe’s mortgage too and help her out, and then we would be living together, which we wanted to do anyway. But the crash was pretty traumatic for Joe, and I think some of these anxiety that we have here comes from that time. Joe was really riding high when I met her in 2005 and 2009, it was just Joe. It was it was really bad. So I just I wanted to let you know about that, because I think that informs a lot of the fear.

 

(01:02:40) Ramit: Yeah. Thank you for sharing that. So the crash happened. Finances were really tight. How else do you think it showed up for Joe?

 

(01:02:48) Meg: I believe she lost a bunch of her savings in the crash and be of a was a villain and not exactly sure about this. So checking in with you about this. But she finally had her single family home and she’d had it for a few years, and then she was really struggling to pay the mortgage. And I think there was some feeling of failure around that.

 

(01:03:15) Ramit: Yeah, yeah, Joe.

 

(01:03:17) Meg: I mean.

 

(01:03:17) Jo: It was traumatic just because it was a horrible time in the, in the industry and, you know, it was just so much bad news. And then I had bought the house kind of at the top, and I took $100,000 pay cut. I mean, it was it was a good chunk of my income was gone. And then there were no layoffs. I mean, I wasn’t laid off, but I could have been at any moment. And then we merged. We were forced to buy Merrill Lynch, and then we were merged. And that was terribly uncomfortable. It was just it was not a good time. Right. And just like being a public menace.

 

(01:03:52) Ramit: Yeah. Does that stay with you today? What happened? That feeling in zero nine.

 

(01:03:56) Jo: Perhaps it’s like a little bit of a trauma response to, like, to the point of, like, losing my house and somebody or stability and security is.

 

(01:04:05) Ramit: Important.

 

(01:04:06) Jo: For me. Yeah.

 

(01:04:07) Ramit: Yeah.

 

(01:04:07) Jo: Okay.

 

(01:04:08) Ramit: It’s very helpful. Thank you. These things really affect the way that we handle our money. And so often I speak to guests and they come on here and they are acting irrationally with money. And I’m putting big quotes around irrational because all of us are irrational with money. It’s totally human. And you just look at them and you go, what are you doing? Like, this is so obvious, but one of the reasons that I love this, being able to spend hours with you, is that I get to understand your story all the way back to childhood, and those things echo for decades, decades. Something that mom said, which actually was just from grandma. And then we’re behaving this way. And something that happened as recently as 20 years ago is actually like, in many ways, so visceral and vivid to us that we still operate as if it was yesterday. So very helpful. I would now like to take a look at the numbers. What was it like putting the CSP together for both of you?

 

(01:05:05) Meg: I think it was a little exciting. It was fun. Yes.

 

(01:05:09) Ramit: Yeah. Good.

 

(01:05:10) Meg: It taught me a lot about our finances.

 

(01:05:12) Ramit: Good. Yeah. That’s great. That’s the entire purpose, I love it. Not too complicated. Gives you the core insights of what you need, and allows you to make some good decisions about what your rich life is. Cool. Let’s take a look. Joe, can you read the word in bold and the number next to it for this entire net worth box, please.

 

(01:05:34) Jo: Assets 2,173,000. Investments 4,397,368. Savings 133,300. Debt 510,400. Total net worth 6,193,268.

 

(01:05:54) Ramit: Great. What do you think about these numbers?

 

(01:05:56) Jo: I won capitalism.

 

(01:05:58) Ramit: Wow.

 

(01:05:58) Jo: I mean, the not scared part of me thinks like I did as well as really could have been expected for me.

 

(01:06:05) Ramit: Is this the first guest on this show who’s ever acknowledged that they are wealthy? This is. Wow. Although you did qualify by saying in our area we are upper middle class. Yes, yes, which is not true. You’re wealthy, but well done. You did win at capitalism, I agree. Actually, both of you won at capitalism. What do you think about these numbers?

 

(01:06:22) Meg: I think they’re very good.

 

(01:06:24) Ramit: Great. How do you feel looking at them?

 

(01:06:26) Meg: A little flabbergasted.

 

(01:06:27) Ramit: Why?

 

(01:06:28) Meg: I never in my life before I met Joe thought I would be in the seven figures.

 

(01:06:39) Ramit: Multiple seven figures. Yeah, yeah. So what does it mean to you that you are?

 

(01:06:44) Meg: Maybe it means I could retire. Perhaps it means Joe did a lot for us. Because this is mostly Joe.

 

(01:06:55) Ramit: That’s powerful. Mostly Joe. Okay, that that could be true. And you, do you see your role in these numbers as well?

 

(01:07:04) Meg: Not a lot. I’m in the 401 stuff. I put a couple hundred thousand dollars away.

 

(01:07:12) Ramit: I speak to a lot of couples that often the man is and and his wife, she might be earning or she might stay at home, stay home permanently or with children when they’re young. And many of them have done really well, too. And when I asked them about their finances, it’s much more common that she sees herself in these. And she goes, yeah, I was at home taking care of the kids and I was maintaining our lifestyle, planning the calendar, etc. she may not have been earning as much as he was, but she sees herself. Does that connect with you at all?

 

(01:07:51) Meg: I think that I have been a very good emotional partner, and I think that I have supported Joe through all the stuff, not always in the way that she asks for, but I am part of the household.

 

(01:08:12) Ramit: You’re also investing $20,000 a year? Yeah, that’s quite a bit. Yeah. Okay, good. I love that you have acknowledged Joe had a lot to do with these numbers. I think that’s true. I think, Joe, you would acknowledge that as well, right? Yeah. I just love the confidence. Like when I asked you like, are you good at your job? You’re like, yeah, I’m really good. Yes. And I know that you’re really good with money. Yeah. And but what I also want to emphasize is not just Joe, it’s the two of you. Partnership does not mean that each has to earn the same amount. In fact, one partner can earn zero and still be an important part of the rich life. Yeah. Cool. Joe, how do you feel looking at these numbers?

 

(01:08:50) Meg: I feel.

 

(01:08:50) Jo: Good about it.

 

(01:08:51) Ramit: No, my wife doesn’t allow me to use the word good because I also like. I’m like, I don’t know how to talk about my feelings sometimes, so I use the wheel of emotions. She’s like, you need to give me a word. Besides. Good. We’re talking about $6 million here.

 

(01:09:04) Meg: I feel I feel proud.

 

(01:09:06) Jo: Yeah, yeah.

 

(01:09:06) Ramit: Tell me more.

 

(01:09:07) Jo: That’s not anything I ever expected. I also, I made a lot of financial mistakes in my youth. I spent for dopamine. I gambled like an addict. Wow. I mean, I did some crazy stuff in the stock market. And it’s really also a testament to you can kind of get together, like you say, like a big salary solves.

 

(01:09:29) Meg: A lot of problems.

 

(01:09:30) Jo: But also it could have gone badly and it didn’t because and I think also, Meg, having a stabilizing influence has been really helpful in that.

 

(01:09:40) Ramit: I love that, yeah, I love these little gestures that you give each other. It’s noticed I appreciate it. I also think one of my favorite answers when I ask people how they feel is when they say, I feel proud. I really love that. That’s how I feel. When I look at our numbers, I feel proud. I feel proud of knowing all these decisions I’ve made since the age of 14. I feel proud of the risks I took. I feel proud especially that my wife is extremely conversant with money like that, took a lot of work and it took partnership. So I feel proud. So I love hearing you say you’re proud to.

 

(01:10:15) Meg: Say I love that too.

 

(01:10:19) Ramit: Let’s go to the income. Meg, can you read your combined gross monthly income, please?

 

(01:10:24) Meg: 34,166.

 

(01:10:29) Ramit: Great. You make $409,000 a year as a household. Did you know that?

 

(01:10:35) Meg: Yes.

 

(01:10:35) Ramit: Joe knew it. Did you know it?

 

(01:10:36) Meg: I did, but Joe feels that I should cop to that. I’ve only known it for the past three months.

 

(01:10:44) Ramit: Since that doesn’t count. You did not know it.

 

(01:10:46) Meg: That’s how.

 

(01:10:46) Ramit: I thank you, Joe. Come on. You did three months ago. Everybody cleans their house before the house cleaner comes over. Everybody does their numbers before they talk to me. All right, so you’re netting, just so everybody knows. You’re netting $236,000 a year, which is a phenomenal salary. That’s awesome. Your fixed costs are at 71%, a little higher than I would expect. But I believe you have a home equity line of credit. Is that correct? Yes. And when is that paid off?

 

(01:11:10) Jo: 16 months. And then we dropped to 41% I think.

 

(01:11:14) Ramit: Amazing 41% is like way. It’s one of the lower numbers, especially with that high of an income. It’s fantastic. Great. No questions. I don’t have any questions. When someone has a 41% fixed cost, you could do what you want. Investments are at 5%. Although we should note that you are contributing $4,000 a month to your 401 K’s. Great. So you’re just contributing a ton of money. That’s awesome. Your savings are at 15%. I want to note that you have money set aside for vacations 650 a month. You have money set aside for family travel, and you have money set aside for large purchases. What would that be?

 

(01:11:55) Jo: We’re saving for remodel, and we’ll probably need a new car in the next three years.

 

(01:12:00) Ramit: Amazing. I want everybody to notice how wealthy people do it. They set money aside for what is important to them, and it is obvious. I can see your fingerprints all over this CSP. I can see the kind of life that you like to live. That’s what I want to see. I want it to be so obvious and personal that I’m like, this could not be anyone else’s. But the two of you great.

 

(01:12:23) Meg: CSP helped us with that. We did not have buckets before for certain things. We just had a lump. And this has been very helpful, especially to me, because when I look at $400,000. I’m just like, okay, yeah, that’s a lot of money. But if I see that we have, you know, $5,000 saved up for a vacation, then I know what we can spend for a vacation.

 

(01:12:54) Ramit: It’s clarity. Yeah. It’s the difference between having a junk drawer versus a specialized drawer for your utensils. And in your case, it’s bigger than a junk drawer, because 400 K is a ton of money. So it would be more like a junk pantry. And you’re just like, what the hell is even in there? But now you’re breaking it down and you can tune things. Hey, I want more on a vacation or less on a car? No problem. It’s just a matter of flipping the switch finally down to guilt free spending. What’s left is 9% or $1,845 a month. I should emphasize that you’ve already been putting money aside in savings for things like vacations, travel, large purchases. So here we have what’s left, which I’m going to assume is eating out random classes, things like that. Is that what this is?

 

(01:13:39) Jo: Yeah, because the vacations already covered.

 

(01:13:41) Ramit: Great. Would you say that this number is accurate? More or less. More or less. Yeah. Maybe. Within what, like 1000?

 

(01:13:47) Jo: Oh for sure. Okay. I mean, because some of the kind of slop goes in like the 15% extra that you add on, which then becomes a big number when the fixed costs are high.

 

(01:13:57) Ramit: So that’s right. Your miscellaneous at 15% is $1,800, which is a lot. But that is just because your overall income is very high. So yeah, a little bit of slop is okay. It’s really important for people to hear that after about 150 K, people stop tracking stuff and I don’t really need them to track the price of apples. It doesn’t matter when you make a 150 K, but all that I ask is you’re hitting your major buckets. If you are hitting your major buckets, you really don’t need to track tiny minutia. So if you got a little bit of slop. Fine with me. Cool. What do you notice about the CSP as I go through it? Anything catch your eye?

 

(01:14:36) Meg: I mean, we have debt.

 

(01:14:37) Ramit: You do have debt. That is your house, right?

 

(01:14:40) Jo: The house and the hillock.

 

(01:14:41) Ramit: Yeah, yeah. And the Heloise, which is again paid off soon. Okay. A lot of people, particularly the middle class version of what they’ve been told is like debt is bad. And in general, I think that’s a wise lesson. I don’t think the average person should be taken out debt with the exception of a mortgage, maybe a car loan. Yeah, but it’s a good lesson. However, what’s the number? Right below debt.

 

(01:15:05) Meg: Yeah.

 

(01:15:06) Ramit: 6.1 million. Do you have a mortgage and you have a home equity line of credit. But I would encourage you not to approach this with the with like somebody making $55,000 a year who’s in 20 K of credit card debt. That’s not this. You all are well managed here. I have no concerns. I have no critiques over your CSP. In fact, take it off the screen. We don’t even need this CSP on screen. There’s nothing to talk about. You have millions of dollars. Yeah, and you’re saving 4050 K a year. We got nothing to talk about on that. What we should talk about is the primary question of retirement. What do you think the answer is? Can you retire? Yeah. Okay. She says yes. The optimist.

 

(01:15:45) Meg: Yes.

 

(01:15:45) Ramit: Okay. And Joe.

 

(01:15:48) Jo: Meg 100%. The question is when can I.

 

(01:15:52) Ramit: Okay. And is it today?

 

(01:15:56) Jo: No.

 

(01:15:56) Ramit: A couple of years.

 

(01:15:57) Jo: Fingers crossed. Five years. Oh, for sure. I mean, if I worked until 65, we’d have more money than we knew what to do with.

 

(01:16:05) Ramit: Oh, I don’t want that. I don’t.

 

(01:16:06) Jo: I’m serious. No, I agree. I don’t want that either.

 

(01:16:09) Ramit: So. So we want to find the balance.

 

(01:16:10) Jo: We want to find.

 

(01:16:11) Ramit: The balance. Okay. The number where you have enough comfortable with a nice room to clear, but not where you have so much. You’re like this. What’s the point? Right? We all agree.

 

(01:16:20) Meg: Some of the discussion that we have around retirement is Joe saying, if I retire at 65, then she may have to work longer than she wants.

 

(01:16:30) Ramit: And do you want that?

 

(01:16:31) Meg: I don’t.

 

(01:16:32) Ramit: You okay with it?

 

(01:16:33) Meg: I don’t want her to work longer than she wants to.

 

(01:16:37) Ramit: So yeah, because you’re saying, hey, we can we don’t need to spend all this money on all this stuff. Yeah, retire. And let’s spend our time together. All right. Meg and Joe are the perfect example of a couple that has not gotten on the same page about money, and instead, they are letting fears stop them from living their rich life. They both want to retire. They’ve said that they are both ready to live their rich life. They’ve articulated that. So what is stopping them? What if it’s not actually money? And what if you ended up in this very yourself? Most people, this is unimaginable because their entire life worldview is I don’t have enough money, so they just assume that for the rest of their life, I’m not going to have enough money. So I’m always going to have to check the prices at the grocery store and worry about, can we retire and are we going to have enough? Many of you have not accepted that at some point you are going to have more than enough. You haven’t accepted it because you don’t understand your numbers, you haven’t run projections, you don’t use the CSP and you go by feelings and vibes. And that is what I am desperately trying to change on this podcast. But once you do and you embrace it and you understand that you’ve put your money aside, it’s growing. It just needs time to cook. One day that you can predict down to the month, you will have more than you know what to do with. And my question for you is, are you going to change the way you feel about money then? Because allow me to be the bearer of very bad news. You’re not you’re not going to change the way you feel about money unless you start working on it right now. That is what we are seeing with Meg and Joe. They are allowing this huge, likely very irrational fear to stop them from living a life that they both want to live. Let me see if I can help them get out of this. Okay, now I have to ask a question about these financial advisors. Are you all financial advisors? Shopping. You know how people doctor shop. They they expect a diagnosis and then they go to the doctor. Doctor’s like, you’re fine, like taking Advil and go to sleep. And then they go to the next doctor and they go the next doctor. Like if you’ve seen three financial advisors. But then you came to me. Joe, what are you hoping for here?

 

(01:18:43) Jo: The financial advisors. I liked our first one a lot, but she moved out of state. And so we kind of did an advisor for kind of different stages. So the first one was like, we don’t know anything. Then we lived with her plan for a while. And then as I got more serious about thinking, I really don’t want to work till 65. Then we spoke to somebody else, and now the third one is actually an e-money subscription, so I don’t really count them as an advisor, but it’s so that I have access to the software.

 

(01:19:13) Ramit: Why don’t you just get a real advisor?

 

(01:19:15) Jo: Yes, that is actually next.

 

(01:19:18) Ramit: Because you.

 

(01:19:19) Jo: Need need help. I don’t know, it’s hard to find one and.

 

(01:19:22) Ramit: It’s okay. Well, I’m just glad. I’m glad it’s not advisor shopping, so that’s good. Great. We spoke to our partners at facet. And as you know, they have a lot of CFP and fiduciaries. They’re all fiduciaries. And we had them run some scenarios.

 

(01:19:38) Meg: Exciting.

 

(01:19:39) Ramit: Yes. I love a good scenario because then you can choose okay. And so no, there’s no one’s going to tell you what to do. It’s your money, your rich life. But I like to have different scenarios just so I can understand some trade offs. And when it comes to money, I find that very few of us think in terms of scenarios. We’re like, I want a car or I want to renovate or whatever, but like, what does it mean for me five years, 20 years down the line? So if you don’t mind, I’m going to give you three scenarios and you can tell me your initial reaction after each one. And then we’ll get to the end and we can talk about it.

 

(01:20:17) Meg: Exciting.

 

(01:20:18) Ramit: So we gave our partners at facet, your CSP, your investment portfolio breakdown, your Social Security statements, as well as some loose parameters on what we understood about your retirement goals. And I’m going to show you three versions of your future. Every single one of these scenarios is financially viable.

 

(01:20:40) Meg: Great.

 

(01:20:40) Ramit: The question is which one? The two of you actually want the assumptions for each of these scenarios. End of plan. Age is 95 years old. Okay, it’s quite late in life because of what we know about parental history. And that’s end of plan. Age is 95 for Joe. Okay? Meg’s pension begins as soon as she steps away from work. That’s right. Both filed for Social Security at age 70. Spending is based on your current CSP growing at 3% per year. Okay. That’s inflation. And when the mortgage is paid off, that cost disappears. Those are our assumptions. I think they’re all pretty reasonable. Scenario one you each retire at age 65. That means Meg retires in roughly two years. Joe retires in about eight years. Spending stays as listed on the CSP today 16.8 per month net worth at Joe’s age of 95, $14.1 million. Whoa, what’s that reaction, Meg?

 

(01:21:55) Meg: I don’t know how that could be possible.

 

(01:21:58) Ramit: Does that seem higher or lower than you thought?

 

(01:21:59) Meg: Oh, higher. Way, way higher. I mean, we have 6 million now, so I’m. I’m just assuming that it would go down.

 

(01:22:10) Ramit: But it’s actually going up.

 

(01:22:12) Meg: Right.

 

(01:22:13) Ramit: And that’s with Joe living to 95. Joe what’s your reaction to that?

 

(01:22:17) Jo: That’s dumb. I don’t want to die with $14 million.

 

(01:22:21) Meg: Yeah. We don’t we don’t have anybody to give it to.

 

(01:22:24) Ramit: Okay. Wow. Already. This is quite interesting. Let’s keep going. So in this case, Joe, you’re working for eight more years to potentially die with $14 million. And your reaction to that was.

 

(01:22:37) Jo: That’s dumb.

 

(01:22:37) Ramit: That’s dumb. Yes. Okay, where would the money go?

 

(01:22:42) Jo: Nieces and nephews and charity. They can have some, but not. No, they don’t need $14 million. Yeah.

 

(01:22:48) Ramit: This is very savvy. Like, I like them. I like these charities. I love my nieces and nephews, but like $14 million, that’s that’s a huge amount of money. This is good. My observation on this plan, this is just my personal opinion, is that this is the most financially responsible plan. It builds up way more than you ever possibly could use or need. And primarily that comes from Joe continuing to work for eight more years. So that’s how it happens. I think it’s also probably the one most likely to produce more resentment, because if I’m going to work and I’m like, what’s this money for?

 

(01:23:30) Meg: Totally.

 

(01:23:31) Ramit: It’s just like, why? So that’s scenario one a very good option. Great. Scenario two Meg retires at 65. Joe retires at 60. That’s roughly two years from now that you both retire. And we are going to add $60,000 a year in discretionary spending starting next year at the age of 95. For Joe, you will have $5.6 million. What do you think?

 

(01:24:05) Jo: That actually feels pretty good because we do have I mean, your mom was 98 when she died. Yeah. And my parents, my family lives a long time and my mother has dementia. So that gives, like, an insurance policy for needing some nicer end of life care.

 

(01:24:22) Ramit: Lot you can do with 5.6 million, especially in terms of, you know, there’s reverse mortgages and all kinds of complex financial instruments available for people in your situation. Some things I want to note is that in your final years of working, Joe, your bonuses would really help cover those one time expenses. The health car, large trip home renovations, and then you’re out. That’s it. Retired life. Quite a good life. I think that’s option two. Let’s go to scenario three. Scenario three. Both of you step away and retire at the end of this year. Joe’s smiling. I haven’t even gotten to the numbers yet. Meg. Meg looked a little anxious. Meg, what do you say?

 

(01:25:08) Jo: Things like, don’t get me too excited.

 

(01:25:12) Meg: Yeah, that’s great. I I’m a little anxious. But also there’s two things. One is Joe would love to step away right now, which is awesome. And the other thing is the other financial advisors have said to us, you could retire right now and you’d be fine. So I’m just hearing that again, sort.

 

(01:25:35) Ramit: Of is feeling like what? Good. Oh, yeah. Happy. Okay, good. Like a second opinion? Yeah. Okay. Let’s keep going. Scenario three you both step away at the end of this year. Yeah. Starting next year, you add $90,000 a year of discretionary spending. Joe, at the age of 95, you will have $3.5 million plus. Of course, any equity that you have in the home could be leveraged as necessary. Any rental equity, that kind of stuff. Joe, you can still access your 401 using the rule of 55, and you would need more portfolio withdrawals in early years before Social Security kicks in at age 70. And there is a risk of a market downturn during that time. A lot of times, retirees will use dynamic management, like they’ll be like, oh, things are bad. We’re just going to cut our spending for those years. There’s lots of ways around it. But just to let you know, that’s a real risk. And of course, you could file for Social Security earlier. You could pick up a part time job. You could, as I said, reduce your discretionary spending, lots of levers you could pull. I want to make an observation that in this scenario. Scenario three your assets are depleting over time. So you end up with less. But at the age of 95 to end up with $3.5 million, right?

 

(01:27:00) Jo: It’s a lot.

 

(01:27:01) Ramit: It’s a ton of money. And of course, you have a lot of control over that. If you feel it’s getting too close, which you know what’s to close to 3.5, you could always decrease your spending a little bit. Let me jump in here, because I know we’re throwing around a lot of complicated terms, like the rule of 55 and dynamic management. And when it comes to people approaching retirement, a lot of them have 1 or 2 big looming questions do I have enough? What if the market takes a downturn? And you should definitely account for all of those questions when you are planning your own retirement. Now, you can do this yourself by having several different levers to pull to prepare for when times get tough, and they will at some point during a retirement. Or you can enlist the help of an advisor to help you do this, such as our partners at facet, and they can help set you up for success. Now, when you make this plan, you can start to mitigate risk. You can make sure that you are allocating your assets correctly so that even if there is a market downturn, you’re okay. Now before Meg and Joe decide on which scenario is right for them, let me refresh your memory on what each scenario means. Scenario one Meg and Joe each retire at 65 years old. Their day to day spending stays the same as it is today about $16,800 a month. And when Joe is 95, their net worth is $14.1 million. Scenario two Meg and Joe retire in two years and spend an additional $60,000 per year. That translates to about $21,800 total per month, a big jump from scenario one, and their net worth at Joe’s age 95, is still $5.6 million, more than enough. Scenario three Meg and Joe retire at the end of this year, 2026, and increase their spending to an additional $90,000 a year, which is roughly $24,300 per month total. Joe’s net worth at age 95 $3.5 million still plenty of money. Notice that with each scenario, we’ve dramatically increased their discretionary spending and we’ve reduced the time until they each retire. This is by design, because I want them to really understand the point. The only thing preventing them from retiring. It’s not the numbers, it’s how they feel. Now let’s see what they want to do. What do you feel about these three scenarios?

 

(01:29:23) Meg: I always assumed our money was going to decrease, and possibly we would just use it all up by the end, like my parents did. They didn’t have that much money. But I don’t understand how we can increase our discretionary spending and still end up with 5 million in the second scenario, or 3 million in the third.

 

(01:29:47) Ramit: Joe, what’s the answer?

 

(01:29:48) Jo: The assets will just continue to grow faster than we’re drawing them down. Like it’s kind of like a snowball. As the numbers get bigger, it’s just harder and harder to spend them make.

 

(01:29:59) Ramit: Does that connect with you or you still feel confused?

 

(01:30:01) Meg: I understand that, then my confusion is why is Joe worried about our retirement?

 

(01:30:09) Ramit: It’s very good question.

 

(01:30:10) Jo: That’s very good question, Joe. It’s a very good question. I just wanted to actually clarify something that I don’t have any doubts about you being able to retire at all. I think when we would have these conversations before and I would kind of drag my feet and I would ask the question, can we afford for you to retire? I think I actually even said in a way, to get you involved, like pitch it to me, like, not so that I like am saying yes or no, but like take a look at what would you get like net from your pension. And when you average out all the other stuff that you wouldn’t be paying, like what kind of impact would it have, like on our finances? And so that’s what I was really hoping you would do, because I wanted you to like, engage with it. But I think you read that as me saying like, well, maybe we can’t. And what I’m saying is like, God, I wish you were a partner in this. And not just like asking me if it’s okay. Right? Because that’s kind of what I would love to get past, like in this next financial. Like, I don’t want to be the one who says like, it’s okay or it’s not okay. Like as the final answer, right? We’re kind of maybe having two different conversations about that.

 

(01:31:26) Ramit: What do you think, Meg.

 

(01:31:27) Meg: I hear that.

 

(01:31:28) Ramit: Yeah. Yeah, it’s interesting to me because I find the two of you to be surprisingly direct most of the time, but that was really indirect.

 

(01:31:40) Jo: That was super.

 

(01:31:40) Ramit: I would not have picked up on that at all. And I think realistically, to expect Meg, who kind of grew up not really connected with the knowledge of money and then for the last 15 plus years, is kind of like you’ve handled it in this dynamic that the two of you have, like to expect somebody to, like, come up with scenarios including pension withdrawals and drawdowns. It’s like not realistic. I do think saying, hey, I need you to be a partner. That is fair. And actually when you said that it worked. So that part I respect, I actually think you two are at your best when you are direct. It is so cool to see. I think you are not at your best when you are indirect.

 

(01:32:23) Jo: I think.

 

(01:32:23) Meg: That’s true. Fair. Yeah, yeah.

 

(01:32:26) Ramit: Okay, cool. So we’ve got three scenarios without choosing one. How does it just feel to hear these scenarios? Meg. Yeah.

 

(01:32:37) Meg: Yeah.

 

(01:32:38) Ramit: That’s really cool. Like all of them work, they’re all conservative and you end up with millions of dollars. Yeah, like you won. How about for you, Joe? How does it feel to hear these scenarios?

 

(01:32:50) Jo: It feels really good because it kind of balances my desire to retire and still have a nice life and still feel safe. So it’s good.

 

(01:32:59) Ramit: That’s great.

 

(01:33:00) Jo: Yeah.

 

(01:33:01) Ramit: Do do you want to choose one? It doesn’t have to be in stone. But I just kind of want to know, like, what are you going to choose?

 

(01:33:07) Meg: I may not actually be ready to retire at the end of this year. I have some things I need to do my job to get ready.

 

(01:33:17) Ramit: So you’re suggesting what?

 

(01:33:19) Meg: The one where I retire at 65.

 

(01:33:21) Ramit: Okay.

 

(01:33:22) Meg: Yeah, okay.

 

(01:33:23) Ramit: That’d be roughly two years from now.

 

(01:33:25) Jo: Yeah, yeah, yeah.

 

(01:33:26) Ramit: Okay. Wow. Joe.

 

(01:33:27) Jo: I think also scenario two, just because of what I’m learning there kind of needs to be a ramp up to planning for this. And I we have not started planning.

 

(01:33:37) Ramit: I totally respect that. It’s a big life change. Yeah. It’s everything from finances to like what are we going to do all day? Right. What’s our lifestyle going to be if we’re going to do a renovation? Do we do it now or later? There’s like a lot of questions to ask. But just like mentally. Yeah. And emotionally. Yeah. Are we ready to embrace this new chapter?

 

(01:33:55) Jo: Actually, next week we’re starting couples counseling because because it’s such a large transition. Good to be our our retirement.

 

(01:34:03) Ramit: You’re doing this before you retire. You didn’t even know when you were going to retire, but you’re like, hey, we got to start talking about this. It’s no surprise that you are so successful financially. People who are very successful plan for things before they need it. That is awesome. That’s awesome. I love hearing this. Yeah, I feel grateful to be involved in this conversation, but truthfully, I feel that you would have found a way anyway. I’m just a little grateful that I could maybe nudge you in the right direction. You know, that always feels good for me.

 

(01:34:37) Meg: Feel grateful.

 

(01:34:38) Jo: Yeah, I feel very peaceful about it.

 

(01:34:41) Meg: Yeah.

 

(01:34:42) Jo: Yeah, I think I’m still feeling a little adversarial coming in. Maybe a little worried that one of us is going to get yelled at for whatever reason.

 

(01:34:53) Meg: Especially you. Those scenarios. Are they fleshed out? I mean, is it something that we can look at? And of course.

 

(01:35:02) Ramit: We can send you more specific details. And of course, I would encourage you, if you engage with facet, they can pick it right back up there. Or if you run your own scenarios, which I think you two should, then you will be able to fine tune some of the details. I think one of the benefits as you get closer to retirement, it becomes less hand wavy, like, hey, we’re putting aside, you know, like 18% invested. That’s great. In your in your 20s, 30s 40s like you’re going to crush it. But as you get closer, you want to really start fine tuning these scenarios with like, what year are we going to withdraw from Social Security? Should we take 401 first or Roth withdrawals first? Like it becomes somewhat complex. And when you have millions of dollars, we’re talking about like big money here. That’s why for a very specific group of people, I say like, hey, if you want to work with a financial advisor, great, just don’t pay AUM. It makes no sense. But like, getting this stuff right and fine tuned makes a lot of sense. Yeah, yeah. By the way, Joe, you mentioned that Meg is still going to get her pension forever, but you will have to figure out these drawdowns. And there was some question about the emotional labor of that. Yeah. One suggestion I want to make to you is that our partners at Fassett, they also do basically a simulated paycheck. So they take a look at where all your money is and then find out how much you need. And then they will basically pay you a paycheck from your money every month. So you don’t have to deal with this stuff.

 

(01:36:37) Jo: Oh, I like that.

 

(01:36:39) Ramit: Basically, when you have millions of dollars, as they say, if you have a problem that money can solve, you don’t really have a problem, right? I would not let you walk out of this room thinking you have 30 years of emotional labor, of figuring out where the money’s come. Don’t do that. Somebody else can do it for you. It can happen very easily, and you all should just be spending it and enjoying it. That would be my dream.

 

(01:37:01) Meg: That would be lovely for you. I mean, for me, but I mean, yes.

 

(01:37:07) Jo: That would be great.

 

(01:37:07) Ramit: As you go back home and you start to plan a little bit more carefully, you have scenario two is kind of like a base case. Maybe you test it and you go, hey, instead of 18 months, let’s make it 16 months or 20 months. Do you have any concerns about getting derailed from your plan?

 

(01:37:26) Meg: I’ve been known to drop the ball. I think maybe calendaring in not only our money meetings, but other money tasks. Good. Might be might be helpful to me.

 

(01:37:41) Ramit: Definitely, yes. What else? What I want you to do here is embrace your role as somebody who has over $6 million. How would that person behave?

 

(01:37:55) Meg: That person would need to know a lot more about their investments. Great.

 

(01:38:02) Ramit: So what would they do?

 

(01:38:03) Meg: Their money meetings? Maybe find out more from Joe.

 

(01:38:06) Ramit: So you’d ask your partner. Okay, good.

 

(01:38:08) Meg: That’s my partner.

 

(01:38:08) Ramit: What else?

 

(01:38:09) Meg: And then take a look at all the accounts. And then what would I do?

 

(01:38:15) Ramit: Can I give you a metaphor.

 

(01:38:16) Meg: I would love?

 

(01:38:17) Ramit: Okay, so when you grew up, if you wanted to have some people over for dinner or lunch or something, what would you serve them?

 

(01:38:25) Meg: Probably sandwiches or salad. Yeah, great.

 

(01:38:27) Ramit: What if you, as a partner who has $6 million, if you want to have a couple of friends over. What might your options be?

 

(01:38:37) Meg: Oh, anything that I wanted.

 

(01:38:40) Ramit: Yeah. You could make sandwiches, make.

 

(01:38:43) Meg: Or get a catered or have a chef come in and do it.

 

(01:38:47) Ramit: All of the above. Yeah. Great. Love it. Okay. Yeah. Now apply the same thing to your.

 

(01:38:55) Meg: I’m drawing a blank. Okay. I don’t know what.

 

(01:38:58) Ramit: To do. That’s okay. So right now what you have done is you’ve done it all yourself. As if you have to solve everything yourself. As if you have to make the sandwiches. Yeah. No you don’t.

 

(01:39:06) Meg: Okay.

 

(01:39:07) Ramit: Joe can help. But I actually think that Joe has done a lot. And I think it’s time for you to use some of your resources and become really good at this. So what could you do? You could hire a coach. You could attend our money coaching program, do a Q&A. You could read the book, you could get an accountability buddy and read the book together. You could run it through AI, and then you could speak to the advisors at Fassett or whatever advisor you chose. And before you come to the money meeting, you could say, Joe, here are the scenarios I came up with. Tell me what you think. Let’s let’s stress test this. All of this shows me two things. Number one, you don’t have to do it alone. Yeah, okay. You can get help. Coaches, books, advisors, all the above. And second, it shows something really positive to Joe that you would take the initiative to go do that. Yeah. What do you think?

 

(01:40:05) Meg: She would love that.

 

(01:40:06) Ramit: Yeah.

 

(01:40:07) Meg: Yeah, she would really love that.

 

(01:40:09) Ramit: I actually think it’s time for you to spend a little money on your education. Yeah, it’s time to do it. That’s what the money is for. Okay. And I know Joe’s going to love it because she loves classes.

 

(01:40:19) Jo: To love.

 

(01:40:19) Ramit: So what I’m asking you to do, I think, is step into your wealth. It’s all the stuff that you’ve implicitly learned over the last 15 or 20 years, but now it’s with your money. How does a wealthy person act? And I’m like, I’m putting on a new shirt. I’m putting on a new set of glasses. I’m looking at the world differently because yes, I was raised that way. But through luck and through fortune and hard work, we are at this place and I accept who we are.

 

(01:40:48) Jo: Can I add a piece to the homework? Yeah. I would like to feel like if something happened to me that you could step in because a the thought of you muddling through, well, like, grieving is just terrible since the portfolio is more complicated than, you know, you grew up with, I think, like respecting your journey through it and respecting the assets like is important to kind of honor the work that went into us creating it. And I think that would make me feel better knowing that you would be not just okay if something happened to me.

 

(01:41:26) Meg: So being able to step in would be honoring that. That’s what you’re saying?

 

(01:41:32) Jo: I think. So, yeah. I think that’s respectful of like our legacy and creating it. It’s respectful of the asset itself. Obviously you wouldn’t do everything the way. Like my instinct would be to do it. But to know that like, you know, enough to not make, like, dumb mistakes.

 

(01:41:46) Ramit: How would Meg show you that she feels comfortable in case something happen to you?

 

(01:41:51) Jo: I think we need to do, like, an SOP, and we need to have, like, a repository of these are the accounts. These are the passwords. This is who you talk to. And then showing that you understand basic terms and basic concepts I think would be enough to show that because, I mean how terrible to muddle through like after such a big life change. Do we need a trust? Yes.

 

(01:42:17) Ramit: Good question. These are the kind of questions that is respecting money. Yeah. Do we need to trust? What if I, Meg, die first? What if you are in the hospital and you’re unconscious? But I have to make all these. Where do I pay the bills? Like, because I can’t have you sign something. Yeah. You’re unconscious. These are the kind of question, actually. I love that you asked that. Ask 50 more questions like that. Yeah. Remember, you don’t have to solve the answers yourself. Even Joe doesn’t have to solve the answers yourself. You’ll have access to advisors and other people who can help you. You’re in a very common situation. You have money. You’re about to retire. Cool. Let’s put the plan together. I totally agree, I love the word respect. Respect money. So often we do not respect it. We just spend it. We make it, we spend it. But when my wife and I were talking about money seriously, early on, it was like, we. It’s important for us to be good stewards of this money, respect it. And that can mean spending a whole bunch of money on stuff we love. Great. But I want us to talk about our values. I want us to know that if I go, you are not just going to be worried about money and you know what to do with it. So, so much similarity here. I just, I feel exactly what you are going through. Meg, keep asking those questions. Definitely create an SOP, run through it once a year, put it on the calendar and just then you know it’s there one day. If we ever need it, we’re good. Yeah. Okay. How do you feel now compared to how you felt when you walked in? Meg?

 

(01:43:51) Meg: A lot less nervous. I feel that we have an opportunity to move forward with a shared understanding of our money. And I know that I have work to do to to make that understanding more shared. But that’s really feels great to me that we that there’s a basis for moving forward.

 

(01:44:17) Ramit: Beautiful opportunity. What a great word. Yeah. It’s not a drudgery. It’s not like an obligation. It’s like an opportunity. It’s beautiful. Cool. Joe, how do you feel now compared to when you walked in?

 

(01:44:29) Jo: Oh, much more at ease. Yeah. Just like mellow.

 

(01:44:34) Ramit: Yeah, I like that ease. That’s how I want people to feel with their money. I want a sense of ease. If I go out and I see a burrito I want to get, I can get it. It’s not going to affect me materially. If I am about to buy a house or a car or something super expensive, I’m going to slow it down, carefully calculate things, check in with my wife and others, and and then we’ll make a decision when ease. It’s a good way to think about a theme for money with the two of you. Joe, what surprised you about today’s money conversation?

 

(01:45:10) Jo: How easy it was to get on the same page, or at least in the same chapter, by looking at it from a different perspective and having a third party do a reframe. And so that actually also really speaks to like when we feel stuck, it’s good to step outside and we’re fortunate enough to be able to do that.

 

(01:45:36) Ramit: Nice. Meg, what about you? What surprised you?

 

(01:45:38) Meg: What kind of financial future is possible for us?

 

(01:45:44) Ramit: It’s actually way bigger than I think the two of you have ever conceived of. For me.

 

(01:45:49) Meg: For sure.

 

(01:45:50) Ramit: One thing that that got me excited was when I asked what your rich life is, and you told me, and I really loved it. It was quite, as you said, like laid back. But since I’ve seen your numbers, I’m like, oh, they they don’t realize yet what’s possible. And to me that’s like possibility opportunity. So it’s like, yeah, we want to go to the, the local garden and we want to make a $2,500 donation.

 

(01:46:17) Meg: Yeah.

 

(01:46:19) Ramit: We want to go to this Airbnb, and we want to hire an archeologist to take us around and a photographer to follow us around for a half afternoon, like all the things you already want to do, but just elevate it and more meaningful for the two of you, for the people you love.

 

(01:46:36) Meg: I feel excited because I have been wanting to do more financial giving, and this seems to me that that is very possible when we retire.

 

(01:46:51) Ramit: I think you will probably be the leader in your relationship around that.

 

(01:46:56) Meg: I think that’s probably true.

 

(01:46:58) Ramit: Probably a great way to get started taking that role on chief philanthropist out of the two. That’s really cool.

 

(01:47:06) Meg: I’m going to make a plaque for my desk.

 

(01:47:09) Ramit: I feel very confident in Meghan Jo. The way they talk to each other, the realizations that they both had, the acknowledgments they made towards each other. I’m like, this couple is solid. I think Meg is going to take on some of the financial labor that Joe has been working on for so long. I actually think they’re going to connect more about money, especially in a way that Joe is going to reveal more of her fears around money. And my hope like this would be extra credit. A plus is that they recalibrate their relationship. Right now, Joe has been the gatekeeper, the one who decides if they can go on vacation, and Meg has been the one asking and also saying, hey, I feel entitled to retire. I want to go on vacation. Of course there’s money. I would love for that relationship to be recalibrated, for them to both be partners, coming to each other with proposals, making a plan, discussing with an advisor if that’s what they choose. Really approaching this as one of the core parts of their relationship going forward. Honestly, I love speaking to them. It was a total pleasure. I can’t wait to hear their follow ups. Speaking of which, let’s take a look at those now.

 

(01:48:20) Meg: Hi. This is Meg checking in three days after our wonderful session with me. My biggest surprise in the session was that we have enough money in savings to retire when we want to, and to not worry about running out of money, even if we live a long time. That’s a super relieving thought to me. My biggest takeaway was invitation for me to step into my wealth that I have with Joe, and I’m thinking of it like owning it. And my next step is to get conversant with all of our finances, all of our investments, and to understand them so I can be a competent co-manager of our finances with Joe. Thanks again for this great opportunity. I really enjoyed meeting the whole team.

 

(01:49:30) Jo: Hiram Eaton.

 

(01:49:31) Meg: Team.

 

(01:49:31) Jo: Thank you so much for taking the time to.

 

(01:49:33) Meg: Speak with us.

 

(01:49:33) Jo: It was a lot of fun and gave us a lot to think about. My initial takeaways are that my thoughts don’t always match my reality, and I need to figure out how to balance having my fears keep me sharp, but have my decisions be governed by a strong plan that can balance safety and reality? Since my job is not my passion. It would be a shame to work much longer than necessary. I think we finally reached the point where we have more money than time. So as for next steps first, Meg will retire next year when she turned 65. And as for me, rather than relying on vibes, I’ve set a retirement date of my 60th birthday, which is a little over two years from now. So knowing that there’s a firm date in the future and that I could walk away from my job today if I really wanted to. It’s very liberating and makes it easier to go to work for sure. I’m going to put together a map of what I need to do before I stop working, to set us up for success, and definitely seek professional input along the way. Then we’re going to plan a massive vacation. Thanks for now.

 

(01:50:35) Meg: It’s been about eight weeks. Since we saw a meet. What really stuck out for me in our session was that I need to be an equal partner with Joe in managing our finances, and I have been listening to I.T. coaching sessions and also been going back to fundamentals and listening to very rudimentary finance classes so that I can really get a good basis for the work that we need to do together. Honestly, it’s been pretty liberating to be able to understand what Joe’s talking about when we are planning our finances and to have some agency in our financial future.

 

(01:51:29) Jo: I have to give Meg props because last.

 

(01:51:31) Meg: Week.

 

(01:51:31) Jo: She explained what a Roth conversion was, which was very exciting in the evolution of our financial relationship. We had a very helpful session with John at Fassett, who kind of built on the issues that we discussed on the podcast about the psychology of finance, and what was really helpful was a discussion of, for me, like what would make me comfortable and how will I know what is enough. And and that was that gave me a lot to think about. We’ve also been working on our communication kind of preemptively before this enormous life change. We’ve gone back to couples counseling, which is hard in times, but has also been a tremendous amount of fun. And we’re really leaning into the idea that the biggest part of our rich life is having a rich relationship. And so we want to really go into this new chapter just with as many tools as we can.

 

(01:52:26) Meg: Thanks again for everything. Thanks to the whole team.

 

(01:52:32) Ramit: I want to give a huge thank you to this episode sponsor facet. If you are thinking about your own retirement, if you are getting closer to retirement, if you want specific scenarios on what your life might look like, or if you’re dealing with a complex portfolio, go to facet. What you saw today takes the guesswork out of these huge decisions. When can I retire? How much will I have? What does it all mean? As of the date of this recording, facet is waving their enrollment fee for new annual members and for my audience. Fassett is offering $300 into your brokerage account. If you invest and maintain $5,000 within your first 90 days. Head to facet to learn more about which membership option is best for you. Offer Ends December 31st, 2026. Im not a member of facet, but I have an incentive to endorse him as I have an ongoing fee based contract for cash compensation based on this endorsement. The facet develops scenarios are for education purposes only, are not advice, and do not guarantee a similar outcome. They are based on industry standard assumptions and inputs provided by Joe and Meg. As of the date of this recording, Joe and Meg are not members of facet, nor were they compensated for their appearance. These opinions are my own and not a guarantee of a similar result. Facet is an SEC registered investment Advisor. If you want to know the exact month and year that you will have $100,000 in your investment portfolio, sign up for my new program, road to 100 K. I’ll help you hit that number fast. Go to 100 K to sign up.