Finding Mastery with Dr. Michael Gervais - How To Master Your Money and Live a Rich Life | Ramit Sethi

Episode Date: April 19, 2023

Why is talking about money so taboo? How does money affect our relationships? What role does psychology play in personal finance? Can you master your money?Ramit Sethi, a personal finance expert and best-selling author, joins the podcast this week to share his insights on the psychology of money, what living your “rich life” means, and the importance of creating systems to achieve financial success.Ramit Sethi is an American entrepreneur and self-proclaimed financial adviser. The founder of GrowthLab.com, owner of IWillTeachYouToBeRich.com, and owner and co-founder of PBworks, a commercial wiki website, he’s also the author of a 2009 New York Times bestseller called I Will Teach You to Be Rich.Ramit’s non-traditional messaging around money and his practical wisdom for generating wealth are now the subject of a new Netflix series entitled How To Get Rich, premiering April 18th, 2023. In it, he teaches that “you can’t live a rich life without taking control over your money,” but with the caveat that you don’t have to cut the luxuries you love in order to do so. The son of immigrant parents, from a middle-class upbringing, Ramit had to find a way to pay for college himself; this task led him down a path of trial, error and ultimate triumph when it came to lifelong financial strategy. Now with both an undergraduate and master’s degree from Stanford University, he’s helping people around the world learn about the psychology of money; how the perfect spreadsheet isn’t as beneficial as saying YES to a Rich Life._________________Subscribe to our Youtube Channel for more powerful conversations at the intersection of high performance, leadership, and meaning: https://www.youtube.com/c/FindingMasteryGet exclusive discounts and support our amazing sponsors! Go to: https://findingmastery.com/sponsors/Subscribe to the Finding Mastery newsletter for weekly high performance insights: https://www.findingmastery.com/newsletter Download Dr. Mike's Morning Mindset Routine! https://www.findingmastery.com/morningmindsetFollow us on Instagram, LinkedIn, and X.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Finding Mastery is brought to you by Remarkable. In a world that's full of distractions, focused thinking is becoming a rare skill and a massive competitive advantage. That's why I've been using the Remarkable Paper Pro, a digital notebook designed to help you think clearly and work deliberately. It's not another device filled with notifications or apps.

It's intentionally built for deep work. So there's no social media, no email, no noise. The writing experience, it feels just like pen on paper. I love it. And it has the intelligence of digital tools like converting your handwriting to text, organizing your notes, tagging files, and using productivity templates

to help you be more effective. It is sleek, minimal. It's incredibly lightweight. It feels really good. I take it with me anywhere from meetings to travel without missing a beat. What I love most is that it doesn't try to do everything. It just helps me do one very important thing really well,

stay present and engaged with my thinking and writing. If you wanna slow down, if you wanna work smarter, I highly encourage you to check them out. Visit remarkable.com to learn more and grab your paper pro today. With mastery, when you truly understand the craftsmanship of whatever art you're in, whether it's fitness, food, fashion, whatever, you start to see trends and temporal issues as merely blips. Masters do not respond to everyday changes in the wind. Okay, welcome back or welcome to the Finding Mastery podcast. I'm your host, Dr. Michael Gervais by trade and training a high-performance psychologist.

And I am stoked to sit down with Ramit Sethi. Ramit is an American entrepreneur, best-selling author, and host of the new Netflix series, How to Get Rich. And he's here to talk about, yep, you guessed it, money. We all know that money is a topic commonly off limits for its ability to invoke anxiety or shame and divisive opinions about basic management. And Ramit wants to change that.

His book, I Will Teach You to Be Rich, is a New York Times bestseller, and his new Netflix series, How to Get Rich, turns traditional money advice on its head. And he offers practical wisdom that can empower anyone to live what he calls a rich life, no matter their station or their bank account. And rich doesn't necessarily mean what you think it does. This conversation is really interesting. Ramit and I dive into the psychology of money and our complex relationship with it. We talk about money dials,

his framework for thinking about money and finances, how visions can inspire us, and why he advocates so strongly for spending on luxuries you love while cutting costs on the things that you don't. Yeah, you heard that right. And if you're enjoying this podcast and haven't already, just a quick reminder to hit the subscribe or follow button and to drop us a review wherever you're listening. It is the easiest and zero cost way to support the show. So with that,

let's find out how to spend only one hour a month on managing your finances with Ramit Sethi. Ramit, how are you? I'm doing great. I'm so stoked to have you on. I think that right now, the idea of finances and money is so important and so central in people's lives. And you've been at this industry for a long time. So I'm excited to sit down with you.

Yeah, thank you. And it's hopefully a new way of looking at money because most of us, when we think about money, we kind of cross our arms and we start shrinking and we go, oh God, is this guy gonna come on here and tell me to keep a budget and cut back on cucumbers? And I never wanted to live my life like that. I don't want anyone to live their life shrinking from money. So, you know, let's have a little fun.

Yeah. Okay. I love it. So if that is the case, we're not going to talk about that. What are we going to talk about? Like, what are the things that you love to talk about most often as just a general framing here? I love to talk about how to use money to live a rich life. It gets me excited, even if your rich life is different than mine. So I'll often ask people, what is your rich life? And they always have the same answer. Just about 85 to 90% of people give me the same answer. I want to do what I want, when I want. I'm like, did everybody read the same book? Because everyone has the same, and it's not a good answer, by the way. It's really generic. So I go, oh, okay, that's interesting.

What do you want to do? And they kind of stare at me because most of us have never deeply thought about what our rich life is. If anything, we have these generic words like freedom and travel. And when I work with somebody and I really get to the bottom of it, what is their rich life? They'll tell me something like this. I want to take a three-week trip to Italy. I want to be sitting on a rooftop drinking Italian wine, watching the sunset,

overlooking the Coliseum. And at the very end, I'm always asking, who are you bringing with you? And they say, I want to bring my mom. I want to bring my grandma, I want to bring my son, daughter, because at the highest level of personal finance, it's always about the who. So that is what I love to talk about is how to craft that, how to design that, and then how to use your money to actually get that. I love it. It's an awesome play on rich. And then let's double click there, right? What is your definition of a rich life? Well, a rich life can be traveling two months a year. It can be buying a beautiful-

No, no, no. You're going to sidestep it now. I want to know yours. I'll tell you mine, but it's important. I'll tell you mine. Mine right now at this season of life is to be able to work with the people who I like and respect. It's to be able to travel at least two months a year. And it's to have fun on a day-to-day basis. So those are my three right now. Those change over time. If you have kids,

if somebody gets sick, of course they change. But what I want to say is that a rich life can also be very, very vivid and specific. So it could be the travel, it could be a beautiful cashmere coat, it could be picking up your kids from school. And the beautiful part is the more you define it, the more your rich life looks bewildering to the rest of the world. If you actually double click on my, when I say travel two months a year, let me tell you a specific example. I spent more on traveling in one year than I've spent on cars in 20 years. And that includes gas, maintenance, the car itself, all of it.

That's crazy. If you're listening, you go, this guy's insane. But I happen to love hotels. I love hotels. I love traveling. And so I want to spend extravagantly on that stuff. And then I want to cut costs mercilessly on other stuff. Very cool. And I've heard you talk about, you know, your relationship with buying cars, which we'll get into in a minute. And so, okay. Yeah, good. So super tactically, like what are some of the hotels that you're like, okay, if you

save your chips and if you get into a place and you can afford it, or you just, you know, you've got millions rolling around in your bank account, like go check out this hotel or that hotel. Do you have a couple that would be fun? I do. Of course I do. I have a list all around the world. My favorite hotel, I love beautiful hotels. And the reason I love them is the service is like the Olympics of service at these hotels.

It is orchestrated down to the last detail. So some of my favorite hotels in the world, Oberoi Udaipur, which is in India. And you arrive on a boat and they greet you. And just one of my favorite memories from that arrival was we had arrived a little bit late. Our flight was late. And so we were going on the boat and we had mentioned it was like 9.30 PM. And we asked, what time is the restaurant open until? And they said, oh, you know, it closes at nine, but don't worry about it. And we were like, don't worry. What do you mean? When we got there, they took us straight to the restaurant and the chef came out and he said, don't worry, our staff will stay as long as you need to. I mean, it felt incredible.

And so that's one. And then of course, in Asia, I love Amman hotels. They are the top of the top and the service is beautiful. Another detail I love there is that you'll never be asked to sign a bill because they know you. There's such a small number of rooms that every staff member knows who you are. And so when you're done with your meal, you simply just get up. Now, if you're listening to this and you go, okay, that's nice, but do I want to pay 10 times what I would pay at another hotel? That might not be for you. It might not be valuable to you. You might not care. To me, I love that someone is being thoughtful and thinking about those little details. Okay. So I also love that you're putting a placeholder that this is something you love.

It's not for everybody. And why do you think people have a hard time thinking about the process of making money as being a grind. And then maybe one day later, it'll pay off. Like, where does that come from? And how do we get from underneath that idea? Well, we have a puritanical relationship with money in this country. It's actually an interesting dichotomy. On one hand, it's puritanical. You've got to work hard. If you're not working, you should feel guilty because you could be out there working. So there's that one side, which is save. Frugality is a virtue. And some of those lessons are good lessons, but they can be taken too far. On the other hand, we have a very consumerist culture.

Let's pull up our friends on Instagram and they're in Bora Bora on Wednesday. Why aren't we doing that? Let's go buy a brand new car because we want to. And so you take these two opposing views. And most of us are taught how to save, but we're never really taught how to meaningfully spend our money. And so what do we do? We end up just spending on whatever's in front of us. If our neighbors live in a certain type of house, we want to live in a certain type of house. If they go to a certain place for vacation, we want to do it. What gets me interested is hearing people meaningfully craft their rich life. So if they go, hey, I don't really care about clothes. It's actually not important to me, but I love having this type of food two times a week. I go, beautiful. In fact, let's turn that dial up. What if we could do more there? That gets me excited. And it's a different way to think about it because you have to actually be unapologetic about what you like and what you don't like.

When I hear the rich life, obviously as a sport and performance psychologist, I think about the psychology in that. Can I double click here and ask you how you think about a psychology or psychologically rich life? Oh, this is a great question. Wow. This is fantastic. So money psychology is something that most people don't think about at all. And when we think about money, we think it's numbers on a spreadsheet. But actually, the numbers themselves are quite simple. When I think about a psychologically rich life, I think about knowing what's important to you

and what's not, having a vision that can change over time, but it's a vision that is personal to you, and being competent and confident enough to move forward on that vision. So I'll give you a couple of examples. You'll hear phrases thrown around a lot about money. People will say things like, I'm not good with money. I'm like, okay, that's an interesting phrase. Do you say I'm not good with chopping an onion? Maybe, but you could learn that in a day. They'll say, I can't afford it. That's a phrase that usually we were taught by our parents. And when repeated 10,000 times, we really internalize it, even though the way we feel about money is highly uncorrelated with how much we've got in the bank. And we also say what you referred to earlier, which is, I'll save now and I can do that

stuff later. In my opinion, that is a chronic mistake to think, oh, okay. It's like making friends. You can't say, I'm going to grind right now and then make friends when I'm 50. You cannot do one after the other. They have to be done at the same time. That's the same way we've got to think about how to use our money as well as save it. I'm going to pause the conversation here for just a few minutes to talk about our sponsors. Finding Mastery is brought to you by LinkedIn Sales Solutions.

In any high-performing environment that I've been part of, from elite teams to executive boardrooms, one thing holds true. Meaningful relationships are at the center of sustained success. And building those relationships, it takes more than effort. It takes a real caring about your people. It takes the right tools, the right information at the right time. And that's where LinkedIn Sales Navigator can come in. It's a tool designed specifically for thoughtful sales professionals, helping you find the right people that are ready to engage,

track key account changes, and connect with key decision makers more effectively. It surfaces real-time signals, like when someone changes jobs or when an account becomes high priority, so that you can reach out at exactly the right moment with context and thoroughness that builds trust. It also helps tap into your own network more strategically, showing you who you already know that can help you open doors or

make a warm introduction. In other words, it's not about more outreach. It's about smarter, more human outreach. And that's something here at Finding Mastery that our team lives and breathes by. If you're ready to start building stronger relationships that actually convert, try LinkedIn Sales Navigator for free for 60 days at linkedin.com slash deal. That's linkedin.com slash deal for two full months for free, terms and conditions apply. Finding Mastery is brought to you by David Protein. I'm pretty intentional about what I eat, and the majority of my nutrition comes from whole foods. And when I'm traveling or in between meals, on a demanding day certainly, I need something quick that will support the way that I feel and think and perform.

And that's why I've been leaning on David Protein Bars. And so has the team here at Finding Mastery. In fact, our GM, Stuart, he loves them so much. I just want to kind of quickly put him on the spot. Stuart, I know you're listening. I think you might be the reason that we're running out of these bars so quickly. They're incredible, Mike. I love them. One a day, one a day. What do you mean one a day? There's way more than that happening here. Don't tell. Okay. All right. Look, they're incredibly simple. They're effective. 28 grams of protein, just 150 calories and zero grams of sugar. It's rare to find something that fits so conveniently into a performance-based lifestyle and actually tastes good. Dr. Peter Attia, someone

who's been on the show, it's a great episode by the way, is also their chief science officer. So I know they've done their due diligence in that category. My favorite flavor right now is the chocolate chip cookie dough. And a few of our teammates here at Finding Mastery have been loving the fudge brownie and peanut butter. I know, Stuart, you're still listening here. So getting enough protein matters. And that can't be understated, not just for strength, but for energy and focus, recovery, for longevity. And I love that David is making that easier. So if you're trying to hit your daily protein goals

with something seamless, I'd love for you to go check them out. Get a free variety pack, a $25 value, and 10% off for life when you head to davidprotein.com slash finding mastery. That's David, D-A-V-I-D, protein, P-R-O-T-E-I-N.com slash finding mastery. And with that, let's jump right back into this conversation. Okay. So finish this thought stem. Money is? Money is growth. Money is safety. Money is possibility. And money is

achievable. You can master it. Wow. That's a cool thought. You can master the process to make money. You can master the process of making it, spending it, and how you talk about it, think about it, and feel about it. Are you more interested in the relationship people have with money or the amount of money that they make relative to the amount of fun they have or the purpose in their life? What's the difference? Why are they separable? The relationship with money is like, how do I think about the money that I have, the way I'm going to make money, the way I'm going to save money, how I'm going to use my money.

And then that last part is this, the stitch here, which is the way that I use my money relative to purpose and meeting or relative to buying toys and experiences it's definitely a Venn diagram that I'm yeah my head that I'm playing with here but but if we if we vectored those out for just a moment are you more interested in helping people with the relationship with money or how they're going to use the money that they've acquired I think they're inextricably tied. Let's break it down by Venn diagram portion. So their relationship with money, as I mentioned,

is highly uncorrelated to how much they've got. That's one of the classic mistakes we make. We often believe if I make $5,000 more, I'll feel good. If I make $50,000 more, I'll feel safe. And actually, I talk to people all the time on my podcast. They're multimillionaires and they have millions in the bank and they still are worried. Some of them agonize over the grocery bill. And my job is not to sit there and pull out a spreadsheet and say, look, you can afford this in perpetuity. That

doesn't change anything. It's to dig into why they feel that way. So that's a relationship with money. Once they're able to change their relationship with money, which we all can, many of us grew up with a scarcity view. Many of us grew up simply not knowing about money because our family didn't talk about it. Then we can start to actually use it, deploy it, save it, pay off debt, all of those tactical things. Okay. So, but I want to stay with this thought is the relationship, I'm sorry, the conversations about money at the dinner table or the breakfast table. So if parents knew what you knew, how would you be, how would they be talking about money with their kids? Let me tell you what they would probably never say and instead what they would do proactively. They would never say, we can't afford it. They would never say money doesn't grow on trees

because what happens is kids hear that a thousand times and 30 years later, they end up talking to me on my podcast because they feel scarce about money. And even if they have a lot of money, so what they would do instead would be to treat it like any other part of their family that's important and a priority. For example, if food is important, parents go, hey, what should we eat today? Well, we ate chicken yesterday, so maybe we should try something different today. Oh, we don't eat too many snacks between meals because that's not healthy. We would do the same with money.

We would say, can you come over here and help me? We have to pay our credit card bill today. That's what helps us keep a roof over our head and keeps us being able to eat. Can you help me push that button? That's for a very young child. As they get older, which number should we pay? Should we pay the minimum or should we pay the full amount? And then as they get much older, let's say as a teenager, we're going to take a family trip. It's going to be a five-day trip. I would like you to plan two days of it. And you've

got this amount and you're responsible for creating an amazing experience that is how parents would talk about money to empower their children has very little to do with do you give them an allowance do it or don't that's irrelevant but having a healthy relationship where you talk about it openly it's not a secret it's not a source of stress but rather money is a normal part of our family we've got to talk about it and deal with it together i remember my son he was probably like i don't know eight or ten years old and just kind of out of the blue and i'm sure it was a conversation at school and out of the blue he's like uh we're both my wife and i were we're driving and he says how much money is in our bank account? I was like, huh?

What? And I, and reflexively, I'm like, I'm like, I just went into like, oh, that's a curious question. Like, why did you ask that? Because I don't know. I'm just kind of curious. And he didn't want to say like somebody else was saying that their, their family had billions or millions or whatever it was, you know? And so our response was like, you know,

that that's, and I wish I could have taken it back. You know, I was like, oh, we don't, we don't need to talk about that. Like, you know, like, cause I didn't want him running to school and saying dad's got $3,000 in his bank account or I'm joking, but like, I didn't, I didn't want that to be a narrative that he was sharing. Yeah. So if your kid pops that question or anyone in our community gets that question popped, like, how would you have answered that? Well, I love your first answer. Why did you ask that? That was brilliant. And so understanding that, um, I would say, what would it mean to you if it was $1,000? And what would it mean if it was $100,000?

And then it's really broadening the conversation. You know, there are different accounts, first of all. So just knowing how much somebody has in an account doesn't really tell you much. Somebody could have $1,000 here, but they might have a million dollars of debt. What's important with money is how much do you have, but also how do you use it? What do you think? How would you prefer to have it? And that broadens the conversation. Concretely, I'm imagining you wouldn't tell your eight-year-old or your 10-year-old how much money is in your account or accounts.

Is that fair to think through with you as well though? Yeah. I wouldn't tell an exact number because it lacks context. Yeah. So you would just keep probing and questioning and giving context and expanding the thinking as opposed to just giving a concrete number. Yeah. But I would be prepared if they really push because you don't want to seem evasive about money and say, you know what? In one account, we have $800. It's more than enough to make sure that we have enough food and that we can comfortably live. And there might be other accounts too, right? I don't want to seem evasive about money. I don't want to get stuck on the

parent thing, but I think it's so important because I think about the lessons I learned about money from my parents, which was like, we didn't talk about it, you know? And so then I learned something about it that way. And I explicitly, I remember my parents saying, you know, we do not talk about money. Can I ask, where did you grow up? What area? Yeah. So early days, I grew up on a farm in Virginia where it was like dirt roads, no streetlights. And then as a youngster, I think it was like fifth, fourth grade, moved to the city, the suburbs of San Francisco and then suburbs of Los Angeles. So interesting. The reason I ask is that I often find the Midwest, I find a lot of folks who I speak to who say, we never talked about money. And there's

a lot of phrases that go along with, you know, be seen, not heard, etc. And it tells you a lot about when parents did not speak versus did speak. I'll give you an example. We have a podcast episode where we had a young woman, episode 65, and she had been hearing about money since she was five years old. Her parents had talked about IRAs and investments and compound. Since she was five years old, she's been hearing it. Her boyfriend, his family never talked about money. Well, they arrived at this point where she was making $200,000 per month, $200,000 per month, and he was making $2,000 per month. Okay, well, a lot of issues arise, gender issues, socioeconomic issues, when you have difference in incomes like that and difference in expectations. But it was important to understand

if someone has grown up never talking about money in their family, can you really expect somebody to have started investing at the age of 15? No, I don't think so. I think we all start from different places. I didn't learn about deadlifting until I was in my late 20s. I wish I had. But we all have to understand where did we come from to understand where we are today. What tool would you help your children? I'm going to move on parenting in a minute here, but what tool, do you have kids?

I don't know. My wife and I do not. So what tool would you give kids if it was family members and or other to start playing with money? I've seen a bunch of different apps come online where they've got a couple hundred bucks in their bank account, a couple hundred thousand, or a couple thousand. A couple hundred thousand would be great. Yeah, that'd be nice.

But they can buy some stocks and some assets that way. They can see what they're spending. They've got some nonprofit that they can donate to. I've seen some of these apps that are great. And have you come across any that you like? I think a lot of the apps are fine. I think anything that gets a conversation started is good. But personally, I would suggest to parents,

and I have many times, that the single best thing, skill you can learn to help your children with money is for you yourselves to become highly competent at it. Because then you can actually explain to your kids, we've decided not to get a new car right now because our current car is still working and we can spread our costs out over eight years instead of six years. Well, that's a very complex concept. Most adults don't even understand that. But to be able to know that yourself and then to talk about it comfortably with your children, if they're old enough, that is way more effective than any app. Cool. Very cool. Okay. So some people listening are making $1,000 a week. Some people are making a million dollars a month. Does your advice change for those two types of people?

Or does your philosophy stay the same? Of course, some of the advice changes at the margins. So for example, I have a conscious spending plan that has specific recommendations for how much money you should be spending on fixed costs, savings, investments, and guilt-free spending. Okay. Let's say those four variables one more time. Fixed costs. I'll give you the numbers too. So fixed costs, a good guideline would be 50 to 60% of take-home pay. So let me tell you what's in fixed costs. That would be your rent or mortgage, your utilities, your groceries, auto payments, any debt, anything that is fixed every single month.

Okay. 50 to 60% for fixed costs. Next up would be savings. Five to 10% of take home is a good guideline. Savings would be money you don't need for one to five years, including an emergency fund. Three would be investments, okay? Five to 10% of take-home, although I'd love to see more because the more you invest now, the more you have later. And finally, my favorite one, guilt-free spending. 20 to 35%.

If you love wine, this is where you spend it. If you love eating out or travel or health and wellness, this is where it goes. And I like it especially because if you're out to dinner and you get a bottle of wine or whatever your thing is, you can get it guilt-free knowing that you've already covered your mortgage, your savings, your investments, all happening automatically. And this is one of the keys to actually feeling good about your money is setting up systems so it happens automatically. Very cool. Okay. So as we're heading into a potential recession, light recession, whatever it might be that's taking place across the United States right now, And I know there's

global impacts as well, but ear to the ground, we're thinking that in Q3, Q4 in the US that there is some sort of adjustment taking place. That being said, are you nervous and anxious about the future? Are you optimistic and bullish? And part two to that is how are you advising people to think about their money heading into a slight downturn? Well, this is the reason that I was so excited to talk to you because with mastery, when you truly understand the craftsmanship of whatever art you're in, whether it's fitness, food, fashion, whatever, you start to see trends and temporal issues as merely blips. Masters do not respond to everyday changes in the wind.

They don't because they have a system that works. And sure, it may adapt over time, but you're not responding to the whims of what's going on. So with inflation, for example, which is one of the top questions I get right now, I'm almost confused why people are asking about inflation. Because if they have a system that automatically invests and automatically saves, they're already handling inflation. And the real reason that they're asking about it is they see it in the news, they get scared, they have no system that they are centered around, and so they're simply reacting to the whims of whatever they hear about. That's a terrible way to go through life. So mastery is deeply related to personal finance because it's not about what's going to happen in the market.

Nobody knows. And honestly, you shouldn't try to predict. We know the research shows that you're going to fail over 80% of the time to predict where the market's going. Instead, let's master the psychology of money and our competence. And then let's stick to the system. Simple as that. Okay. No one does it alone. And I want to share a couple of sponsors that are making this show possible.

Finding Mastery is brought to you by Momentous. When it comes to high performance, whether you're leading a team, raising a family, pushing physical limits, or simply trying to be better today than you were yesterday, what you put in your body matters. And that's why I trust Momentous. From the moment I sat down with Jeff Byers, their co-founder and CEO, I could tell this was not your average supplement company. And I was immediately drawn to their mission, helping people achieve performance for life. And to do that, they developed what they

call the Momentous Standard. Every product is formulated with top experts and every batch is third-party tested, NSF certified for sport or informed sport so you know exactly what you're getting personally i'm anchored by what they call the momentous three protein creatine and omega-3 and together these foundational nutrients support muscle recovery brain function and long-term energy they're part of my daily routine and if you're ready to fuel your brain and body with the best momentous has a great new offer just for our community right here. Use the code FindingMastery for 35% off your first subscription order at LiveMomentous.com. Again, that's L-I-V-E Momentous, M-O-M-E-N-T-O-U-S, livemomentous.com, and use the code Finding Mastery for 35% off

your first subscription order. Finding Mastery is brought to you by Felix Gray. I spent a lot of time thinking about how we can create the conditions for high performance. How do we protect our ability to focus, to recover, to be present. And one of the biggest challenges we face today is our sheer amount of screen time. It messes with our sleep, our clarity, even our mood. And that's why I've been using Felix Grey glasses. What I appreciate most about Felix Grey is that they're just not another wellness product. They're rooted in real science. Developed alongside leading researchers and ophthalmologists, They've demonstrated these types of glasses boost melatonin, help you fall asleep faster and hit deeper stages of rest. When I'm on the road and bouncing around between time zones, slipping on my Felix Grey's in the

evening, it's a simple way to cue my body just to wind down. And when I'm locked into deep work, they also help me stay focused for longer without digital fatigue creeping in. Plus, they look great. Clean, clear, no funky color distortion. Just good design, great science. And if you're ready to feel the difference for yourself, Felix Gray is offering all Finding Mastery listeners 20% off. Just head to FelixGray.com and use the code FINDINGMASTERY20 at checkout. Again, that's jump right back into our conversation. And if you're going to get thrown off of the whatever cart and knocked sideways because of one blip, there's something else happening here.

Like you're probably getting knocked off or knocked around in life in a lot of ways. Exactly. And I don't know if you'll answer it concretely because it seems like a lot of the highly opinionated people in your field that they have something to say about whether it should be real estate or assets or stocks and bonds and, you know, like have debt, don't have debt. And that's like part two of the conversation is like whether it's a recession or not, do you have a general framing about, do you want to start with one of those like debt or do you want to start with real estate or like? Let's start with stocks because I love them. All right. So let me give you a general framework for my philosophy on money. Let's start with investing. I'm a huge fan of low cost, long-term investing. Those would be things like index funds.

So when my family asks me where they should invest, I tell them, pick a target date fund. A target date fund is just a fund that has a number in it, which corresponds to the year you'll retire. So if you're going to retire in 2050, you get a Vanguard 2050 or Fidelity 2050 or Schwab 2050 fund. That's it. One fund. All you got to do is put as much money as possible into it and don't even think about it ever again. It automatically rebalances over time. It's low fee. Boom. You will make a considerable amount of money, especially if you start young. Remy, is that my grandfather, he's no longer with us, but when I was 21, 21, he opened a Vanguard and he's like, Mike, how much money you got? I was like, not very much.

And he goes, put it in. Wow. So he's been sitting there. And like, of course, I've been aggressive, you know, in my adult years, but like, I'm so happy, Rami, that he was like, you know, in it, in my adult years, but like, I'm so happy that he was like, Hey, we're getting going on this thing. And he explained compound interest to me, like when I was like 18, I'm so happy right now. Yeah. Like it creates some space, doesn't it? And so your grandfather was well ahead of his time. That is, and for him to share

that knowledge with you, what, what an honor, what a privilege for you to have learned that. That's cool. That World War II generation, they were epic. All right. So when you say Vanguard, I'm like, right, got it. Okay. So low cost, long-term investing, kind of set it and leave it. Let me tell you why costs matter.

So costs matter because this is very counterintuitive. So for everybody listening, you may be shocked by the numbers you're about to hear. Some folks, especially older folks, have hired a financial advisor. I have nothing against financial advisors. I've actually hired one myself. You're a financial advisor. What do you mean? No, I'm not a financial advisor. You're not a CFA. Is that what it means? Certified financial advisor? I'm not a certified financial planner. I'm not certified. I have not taken those certifications on purpose, okay? Because I can't talk about what I talk about if I'm limited by the scope of a CFP, for example. Cool. All right, cool.

Okay. So I have nothing against financial planners or advisors. I've hired one myself. He was very good. I paid him a fixed fee and got a lot of value. Now, many folks are paying a financial advisor 1%. Now, most people, they go, oh, 1%. That's fine for somebody to be looking over my assets and da, da, da, da. Let me explain the numbers to you because they're highly counterintuitive. If you pay 1% AUM or assets under management, you will pay over the course of your life over 25% of your returns in fees. Let me say that again. 1% fee means 28% of your returns are going right into fees. You will never see that money. For most people, that's hundreds of thousands of dollars. If you pay 2% and 2% could be the advisor fee, the expense ratios, the front end, the

back end loads, all kinds of tricks that Wall Street plays, over 55% of your returns will go to fees. So isn't it ironic that we sit around and agonize over, oh, my cup of coffee, I feel so guilty. Oh, can I get that cheesecake? Meanwhile, you're having hundreds of thousands of dollars invisibly siphoned out of your account and you don't even know it. That gets me mad. And that's why I do what I do. I want people to take control of their money. Low cost matters. And you do not get better performance by paying a percentage to a financial advisor.

What's the question to ask a financial planner advisor? It's really simple. How are you compensated? If they say anything other than an hourly fee or a project fee, in other words, it should have a dollar sign in front of it, not a percentage walk away. I don't know if I've ever seen that relationship. I've been at a couple of different firms, large firms, and I haven't seen that. So now I'm starting to go, Hey, whoa, whoa, whoa. Okay. So everybody listening, yeah. Everybody listening should text or email your advisor. You're going

to see, Oh my gosh, it's going to be amazing. I do this all the time. So first of all, the ones who pay, who charge an hourly fee, they're going to proudly write back right away. They go, we charge 200 bucks an hour, even 400 bucks an hour. Fine. The ones who charge an AUM are going to give you a very cagey answer. They're going to say, well, you know, it's really, it's not about fees. It's really about total compensation. And if we can beat the market, then it really doesn't matter. I go, listen, just tell me the number. I want to see the percentage. And that number, when you calculate it out, because you can go online, type investment fee calculator, and you will see how much you've paid and how much you will pay in your later years. It is financially devastating. And you should know, you should know because they bury the

fees. I've swallowed that pill. I totally have swallowed that hook and all of the relationships I've had with my advisors is on this relationship. And it's cagey. It is cagey. And I like my team. They're really good, but it is a's cagey. It is cagey. Yeah. And I like my team. They're really good.

But it is a little cagey. It's a little like I have to squint to go. And they say exactly what you said, which is like, listen, we're going to be better. We're going to do our best to be better and be ahead of it. What does it matter? It's BS. Because you know the research. The research chapter six of my book, the most highly compensated folks, Wall Street, fancy

suits, they cannot beat the market consistently over the long term. And this is so counterintuitive. Everybody listening, they've got a little skepticism. I know that. Because in other parts of life, if you pay more, you get better results. I pay more for hotels, I get a better hotel. You pay more for food, you get fresher fish, et cetera. But in investing, unlike almost any other part of life, the more you pay, you do not get better results. In fact, you often get worse results. And that is how Wall Street makes so much money.

And that's why people listen, because they realize once they demystify the code of AUM and 85% of advisors fail to beat the market, they go, the emperor truly has no clothes. Okay. But the big firms are not going to go this way. The Black Rocks, the fill in the blanks, they're not going straight fees unless you're negotiating in some kind of way that they're going to break their model. You will not turn an advisor or an advisory company who charges a percentage into charging a fixed fee or hourly rate. That's right. They won't do it.

That's right. It's like me turning an armadillo into a dove. It's not going to happen. They're different animals. Where did that come from? Have you said that before? You've said that before. No, it's the first time ever. Where did that come from? Have you said that before? You've said that before. That is a weird analogy.

No, this is the first time ever. This will tell you a lot about my upbringing. My parents were at the beach and I was in a crib at the beach and my parents kind of dropped out from the system. And that's why they moved to a farm with like barely anything. So we're at the beach and I'm in a crib and an armadillo decides to crawl in. No way. Come on. My parents come back. Think about this for a minute.

Or like, how do you not notice that your child has an armadillo in the crib? And so at least that's the memory that I remember somehow from being a young one. So when you bring up armadillo, I said, oh, that's really funny. There's so many patterns with money. So many tells with money that we don't think about. For example, if someone's using a debit card, they're probably in credit card debt. There's a very obvious- Yeah, that's interesting. I don't know. I don't get the value of a debit card. I don't totally understand it. There's very little value. The only value is to someone who's in credit card debt,

and they know it. And when they're eating out, for example, they don't want to add to their credit card debt. I see. Yeah. Okay. It's very subtle, right? You wouldn't know it unless you talked to thousands of people. There's others who will say things like, I can't afford it. They'll say that.

I've got folks who have $800,000 of debt. I speak to them. I've got folks who have over $10 million in net worth. Interestingly, you will hear those phrases equally among people in huge amounts of debt and people with huge net worths. Why? Because like I said, it's highly uncorrelated with how much you got in the bank. So I can't afford a super yacht. So how would you course correct that thinking? There's no course correct. You cannot afford a yacht. As I said earlier, things break down at the super high high ends but if you said to me ramik my rich life is being able to take my family on a yacht

therefore i want to buy a yacht and i'm never successful until i buy a yacht this actually happened i had a young woman who said i want to buy a beach house right and my life is not successful until that i said okay what do you love about a beach house? And she told me when I was a kid, we went to the beach house, blah, blah, blah, blah, blah. I said, okay, so what is it that you would love about this beach house? And she painted the picture for me. It got very vivid to the point where I could feel like I was there. I said, okay, so it sounds like you want to have family. Hold on, hold on. Don't go any further. I love what you're saying right now. This is the underneath psychology bit is like, how clear can you get the image of whatever you think a brighter, better, richer future is?

And whether that's for you or for others, but to use the power of our imagination to see a future that doesn't yet exist, but is beautiful, that untapped resource and that power is available to every person that I've come in contact with. Maybe there's somebody that doesn't have imagination. I don't know, but this is, um, this is an unlock what you're talking about. And I think you're on it. I don't think this is a mystery what I'm saying to you. And maybe I'm speaking out loud with such vigor because I know it's an untapped resource that is dormant in most people. And to get quiet and to deeply focus on seeing and feeling a future that is beautiful and

amazing in your words, rich, which is a fun play on words for you, that that's what elite athletes do all the time. So much so that I had an athlete who was um he was the world's fastest athlete at the time and um we're talking about imagery and performance imagery and he goes yeah dude like my wife thinks i have a problem i go what what do you mean he goes why do my imagery in the shower and she always comes in i'm in there for like 10 minutes and this is before there was a water crisis in in you know the western states of the united states and he's this for like 10 minutes. And this is before there was a water crisis in the Western states of the United States. And this was like 10 years ago.

And he says, she comes in and she can't believe that I've got my arms up against the back of the shower and water's just rushing over me because she's convinced that I am playing with myself in a way that she doesn't think that's cool. And so she's like, she's convinced that I have a problem with masturbation. And so that, that, that, I love that. That's how much he does it. That's real. Because when we get dialed into our rich life and we are open with others and with ourselves about what we actually want, the rest of the world thinks we're weird. See, the world wants you to be vanilla. And the minute you turn vanilla, they abandon you.

So it's happened to me many times. People still to this day, they go, Ramit, can you stop cursing on your podcast? I go, no, that's real. That's how I talk. And if that's too much, that's okay. But that's me. I'm not going to turn vanilla. Oh, Ramit, can you write shorter emails? No, I got a lot to say and I like to write. Read them or don't. That's up to you. I'm writing for me and my readers. Okay. You got fire in there. Good. Come on. Keep going. The world wants you to be vanilla. Bring the beach house story home. Let me hear that part of this. Because your fire is noted. Oh, thank you. You tell me you want a yacht. This lady told me she wants a beach house. Oh, I don't really want a yacht. I know.

Just for clarity. So I asked her, tell me about the beach house. She clarifies. She paints a beautiful picture for me of going there with her family. They're sitting on the couch. They got the fire going. I said, I love your vision. I really love it.

And I sat there with her and I told her why I loved it. Most people have never been complimented on their vision because most people have never been asked about their vision. So here I am. I say, I love it. It's beautifully evocative. Somewhere in Monterey, you want to get the beach house. I can see it.

Then you go outside. It's a little cold. You all put your jackets on. I said, can I ask you a question? What if instead of waiting 30 years to get that beach house, you could actually do it three years from now? She goes, that would be amazing. I go, would you consider renting a beach house for five days?

And she looked startled. What she had done was she had conflated this beautiful vision she has with needing to own a house. And of course, in America, real estate is religion. And we think owning is the best thing always. And by the way, that's not true. Financially speaking, renting can often be way better than owning. But for this purpose, what I said to her was, what a tragedy to wait 25 years to maybe live this life. All your nieces and nephews are going to be grown up. They don't even want to go to the beach house with you. What if you could do it now? But it means one thing. You can't buy

it. You can rent a beautiful place though. And suddenly she started to unlock the possibilities of where she had blocked herself. That's how I would do it. So if you want a yacht, maybe you can rent it. But realistically, most people are not going to buy a private jet or a yacht. That's just not in the cards. Yeah, very cool. Okay. So let's go back to your philosophy. Low cost, long-term investing.

That's pillar one. Automation. Automation. Yeah. Do not try to save money. This is a very common. I hear people say, oh, I try to save money. I go, did you try to brush your teeth this morning?

They go, no, I have a habit. I go, saving money is even easier than that because you set it up once and you never think about it again. So a good guideline is you should spend less than one hour per month on your finances. That's what I do. And that means your money comes into your checking account and it's automatically dispersed to different accounts, saving, investing, spending, all of it. You should not be sitting there transferring money. That's a low value item. All right. So that's next. Third, really important is designing your crisp vision of a rich life. And there's a lot of exercises that we do, creating your money dials, creating your money

rules. There's lots of ways we can do that. We could even do it right now. And then using your money to live it. Wait, let's pause and get some of those in like just for context. Yeah. All right. Let's do one together, Mike. And then for everybody listening, play along. All right, Mike, what do you love spending money on? Travel and experiences.

Ooh, okay. I love how quick that was off the bat. Okay, beautiful. So let's call that a money dial. I call it a dial because we can turn it up or turn it down. By the way, the most common responses to that first question are eating out. That's the number one money dial. Travel is number two, so you're in good company. Number three is health and wellness. Number four is my personal money dial, convenience. And then there's a whole bunch of other ones. Okay. Question number two. four is my personal money dial convenience and then there's a whole bunch of other ones okay

question number two if you could quadruple the amount that you spent on travel what would it look like and feel like for you um i'm actually going to redact that because i'm traveling too much right now so i'm going to say experiences so So in my mind, I'm pulling back travel. And so I'm saying experiences. And then, so the question is, what does it look like and feel like? Finish it for me. If you quadrupled the amount you spent on that, what would it look like and feel like for you? Fun. Tell me more. Yeah. It would feel, there's a social aspect to it so there's a connection with relationships there's a buoyancy in the air there is good laughter there's flow there's

engagement uh there's some high stimulating activities like a little bit of uh on the edge risk stuff whether that's anything from like whatever, fill in the blank physical stuff that we can do. And, um, and then there's the commensurate, like putting your feet up and like really great recovery time. And so give me a specific example. So tell me an experience you do today and what you would do if you were to quadruple your spending. So, okay. So, uh, let's go snow skiing. Um, right now what I'll do is I'll, I'll hit a mountain and, um, get after it with family, friends. And then, um, afterwards it's like a nice, a pre-ski and just kind of roll out, stretch, relax, maybe movie dinner, uh, in the cabin. Okay. So if I quadruple that, I'm heliskiing. There's a masseuse at the probably British

Columbia. I see what you're doing. And I've got people that are, there's probably two helicopters and there's one for people that really get on their edges. And there's others that are just trying to figure it out and they're

let's call it intermediate. And so two helicopters, um, there's plenty of, uh, masseuse afterwards, you know, there's, uh, and you know, some great food and it's catered. Wow. Okay. I've never heard this answer. I love it. It reveals a lot about you. I just love it. Let me tell you what I heard. So first off, I heard someone who's physically active, already does skiing, has a certain skill level. Beautiful. What I heard with the quadruple question was, of course, there were some what changes in

there. I would have, you mentioned you'd have catered food, masseuse, multiple helicopters, like amazing. I love it. What I also heard buried in there was I would have loved ones with me. And I assume if you quadrupled 5X, 10X, maybe you'd even pay for them. Fantastic. No, yeah, yeah. It's like all covered, like whatever. Yeah, like the whole thing's done. Okay, amazing. So you and I share this love of bringing people together for experiences.

Now for everybody listening, that was a very advanced answer from Mike. Let me decompose what I typically hear. So I usually hear people say, my money dial is eating out. And I ask them, if you quadrupled your spend, what would you do? And they say the same thing usually.

They go, well, I'd probably have to watch what I eat because I'd be eating out four times a week. Ha, ha, ha. It's very linear thinking. The idea that if you quadrupled the amount of money you put towards something, you would just eat at the same places more. Okay. As if frequency is the only variable we've got. Sometimes I ask them, would you eat at this? Would you still eat at Chipotle?

And they go, oh, no. And one guy in DC, he had a very memorable thing he said. He goes, I actually have a list of every Michelin starred restaurant in the city I would go to. And I said, okay, who would you take with you? And he said, my family. And I said, why?

And he got very quiet. He said, because they can never afford to eat at places like that. So the point is not you got to eat at a Michelin starred restaurant or you got to go heliskiing. That's not the point. The point is you take the thing you already love spending money on and you clearly and vividly visualize what it would look like to turn it up. And it's not enough to say travel.

Oh, I would travel more. What does that mean? Where would you go? What seat on the airplane would you sit on? What would you eat? What would you not do? Like if I'm going to Italy on a luxury vacation, I'm skipping a couple monuments.

I'm not interested. But I'm going to have a behind the scenes design tour because I love that stuff. Now, what's the point of all this? The point of this is to understand what you love to spend money on and therefore how you can spend extravagantly on the things you love as long as you cut costs mercilessly on the things you don't. Maybe you can't afford two helicopters today, but you could certainly

afford a skiing trip and you can invite a couple of friends and treat them. You can also set up a savings goal so that in this exact month and year, you've got the money to take the dream trip. And when I work with individuals and couples like this, suddenly when they visualize, they get excited. Maybe they've even got a joint vision. Then we look at their spending and I go, okay, tell me which of these things you're spending on that's not serving that beautiful vision of a hella skiing trip. It's so easy. It's like a knife cutting through butter. They just start to eliminate things. But if I came to them and the first thing I said to them was, pull out your budget, which by the way, no one even keeps a budget. Let's find all the things you're doing wrong. That's not going to go anywhere. That's what personal finance has

done for the last 20 years. So we got to start with what we love and dive in before we get to what we want to cut. And now one final word from our sponsors. Finding Mastery is brought to you by Cozy Earth. Over the years, I've learned that recovery doesn't just happen when we sleep. It starts with how we transition and wind down. And that's why I've built intentional routines into the way that I close my day. And Cozy Earth has become a new part of that. Their bedding, it's incredibly soft, like next level soft. And what surprised me the most is how much it actually helps regulate temperature. I tend to run warm at night and these sheets have helped me sleep cooler and more consistently, which has made a meaningful difference in how I show up the next day for myself, my

family, and our team here at Finding Mastery. It's become part of my nightly routine. Throw on their lounge pants or pajamas, crawl into bed under their sheets, and my nervous system starts to settle. They also offer a 100-night sleep trial and a 10-year warranty on all of their bedding, which tells me, tells you, that they believe in the long-term value of what they're creating. If you're ready to upgrade your rest and turn your bed into a better recovery zone, use the code FINDINGMASTERY for 40% off at CozyEarth.com. That's a great discount for our community. Again, the code is FINDINGMASTERY for 40% off at CozyEarth.com. Finding Mastery is brought to you by Caldera Lab.

I believe that the way we do small things in life is how we do all things. And for me, that includes how I take care of my body. I've been using Caldera Lab for years now. And what keeps me coming back, it's really simple. Their products are simple. And they reflect the kind of intentional living that I want to build into every part of my day. And they make my morning routine really easy. They've got some great new products I think you'll be interested in. A shampoo, conditioner, and a hair serum. With Caldera Lab, it's not about adding more. It's about choosing better. And when your day demands clarity and energy and presence,

the way you prepare for it matters. If you're looking for high quality personal care products that elevate your routine without complicating it, I'd love for you to check them out. Head to calderalab.com slash finding mastery and use the code Finding Mastery at checkout for 20% off your first order. That's Caldera Lab, C-A-L-D-E-R-L-A-B.com slash Finding Mastery. And with that, let's jump right back into this conversation. It's cool. You know, as you're going through it, I love the process that you're doing because it's you're invoking imagination connected to feelings um

which is just a little bit closer to the clarity required to think i can i might be able to make that happen yeah and then but the thing that's happening for me is that i'm going let's like let's quadruple it one more time eight helicopters and i go no i like i'm having a problem with like what i just said with the, uh, the environment and like my, my system or my value system around like that. And that's like, that's not great. And then I love that. Yeah. And then I'm having another conflict, which is like, wait, hold on. Like the thing that the other thing that I love spending money on, cause I, somehow I got sucked into the conversation, like me. And then I naturally went to for others. But like my wife and I want, we've got like some life goals to send some people to college.

We've got, you know, some ideas that we, a number of people that we want to feed. And so like, that's where I want to really quadruple it. I can go, I would be better off. This is you and me, Rami, just speaking. I'd be better off skiing, you know, uh, in the traditional lift line stuff and then saying, oh, you know what? We, we've, we fed a thousand people. I love that. We put, we put our, our, our idea right now is one kid through college that we, we don't have a relationship with, but, um, maybe that four X's is like, yeah, four kids through college.

So anyways, like I would be better if I would have gone to that answer first, but somehow I got sucked into serving me in an extravagant way. Look, here's what I love about it. You're really searching for your intention. And a lot of times you can end up actually doing a lot more things than you think. If you start investing early, if you're highly strategic about where your money goes, you can do it. But what most of us do with our money is we simply drip it and drab it over to here and there. And then we get to the end of the month and we go, I guess I spent that much. And when we try to improve with our money, we think improving means cutting back 5% on everything. That's not inspiring. It's not effective. What I would rather have people think of is almost like dumbbells. Heavy weights on one side, the things you love.

And well, this metaphor breaks down with dumbbells, but heavy weights on the other side of things you don't care about. So in your mind, maybe it's skiing, maybe, or maybe it's sending kids to college. Beautiful vision. I love that. I went to college on scholarship, so that's meaningful to me. But regardless, it's you and your wife setting an intention and then making your money start to live that intention. Okay. I love where you're going. Two things. Where'd you go to college? Did I read it right?

Stanford. I read it. So you went to one of the best universities on the planet on scholarship from a private person said, I see you, Ramit. Yeah. Well, I had a lot of scholarships because my parents are immigrants from India. And they told us, they're like, look, we don't have any money to send you to college. So you got to find some scholarships.

They were just very candid about it. And I love systems. And so I built a system to apply to about 65 scholarships. And I had a manila envelope because back then we were not applying on the internet. It was a typewriter, most of them. scholarships. And I had a Manila envelope because back then we were not applying on the internet. It was a typewriter, most of them. And I ended up getting enough scholarships to cover undergrad and grad school at Stanford, which I'm eternally grateful for. Dude, that is awesome. That is awesome. I didn't know that second part. I knew on paper that you went to one of the best universities on the planet. I didn't know that you had one hustle to put yourself in that position from grades and fill

in the blank, but also that you didn't have the resources to make it happen. That's awesome. No way. I learned a lot from my parents about money. We all have these things I call invisible scripts. What do you call them? Invisible scripts. And they're beliefs that are so deeply held that they're invisible to us. So in America, one invisible script we have is that you've got to save money. We just kind of believe this wanton thing and like, oh, you got to save money. But I had a number of scripts from my parents. One was that education is good. I think that's a pretty positive script, although it can be taken too far. Maybe you stay in school for way too long. Another script that they taught me was, if you work really hard, the money will usually work

itself out. Again, I think it's a generally positive script, but it can go a little wrong like most. And so what they told me with college was, look, be good enough to get in. Okay, that's the major thing. That's the hard mastery work that you've got to do academically, which did take a lot of work, but I was also lucky. I was really lucky that I had parents super inspiring to hear that. And I think you work with couples a bunch, right? Like you love working with couples. And so what do you do when a couple has different ideas? They don't have a shared vision of how they want to spend their money. How do you navigate that? I always start off by asking them, tell me a time in the last month or two where you were not on the same financial page with money. And I do this for a very specific reason. I always start there because most couples speak in platitudes. They say, he always does this, or she always says that.

I'm not interested in platitudes. It's just stories we tell ourselves. So I want to know, okay, he invited me out to this Mexican restaurant. And when the bill came, I thought he was going to pick up the check because he invited me. But he didn't. And we had a big fight. And I go, okay, totally understand. Hey, walk me through that again. So when he invited you, what did he say? And I get really into the micro. Most of us, we are narrative creators. We create stories to rationalize the way we see the world. When people actually walk step-by-step through something that happened and they tell their story, a lot of times you can see their faces on the podcast. I have it on YouTube. You can see them realizing, oh, I didn't think of it like that. And then I asked their

partner, hey, what was your experience? Okay, so right there, I'm being super nonjudgmental. I'm just trying to get the basic building blocks of what happened. And right there, we often uncover a lot of interesting expectations about who should pay or how much money somebody has, et cetera. The next key building blocks are, I ask them how they learned about money when they were a kid. What conversations do they remember their parents saying around the dinner table? And right there, you learn a lot of socioeconomically, et cetera. I'll ask them what's their rich life today. And again, most have never thought about it. We spend some time there. And then, and only then, this is hours into the

conversation. I say, let's take a look at your numbers. And so I pull up their numbers. I've never thought about it. We spend some time there. And then, and only then, this is hours into the conversation. I say, let's take a look at your numbers. And so I pull up their numbers. I've got them all there, everything. And this is like one of the only shows where you can hear people's actual income, debt, everything, their net worth. And we walk through it. And you will discover things that are shocking.

Sometimes you want to scream at the screen because you hear two people fighting over a $200 a night hotel and they're multimillionaires. And it's easy to sit here on the sidelines and say, just pay it or just pay off the debt or just whatever. But what you hear is that these issues are real for them. And that's what I want to shine a light on is whether you've got a million in debt, 5 million in net worth, whether you've got cross-cultural differences, these are real issues that have never really been talked about until now.

In general, I know there's so many nuances what I'm about to say. In general, do you advise married couples to have separate or joint accounts slash decision making slash pooling of money? I'll tell you what I recommend. I'm going to tell you the counterintuitive reason why. So I do recommend the simplest setup is to have a joint account together and then a couple of separate individual accounts with no questions asked money. So your joint account would cover your mortgage or rent,

your car payment, everything that you use together. And then you each take a percentage and you can use it for massage, training, whatever it is that you love. No questions asked. Let me tell you why. Yeah, the system is nice and simple, but I talked to plenty of couples that have separate accounts and they also work it out. The key difference between successful couples with money and not successful couples has nothing to do with their account structure. It has to do with the fact that they talked about it. And when couples actually talk about it, they tend to create joint accounts, but you can be just as successful

if the two of you talk about it and you go, you know what? I think we should keep separate accounts. Fine. It's a great predictor of success. Has nothing to do with the accounts, but rather the fact that you actually talked about how you want to deal with money in your relationship.

It's cool. And the same line, like if one, if you're talking to a couple that's about to get married and one came into the relationship with a ton of money, like, and another is like, just doing okay. You know, like, I mean, sometimes it gets so silly, the amount of money that people come into a relationship with relative to the other person. And the conversation, I see it all the time in pro sport. You know, it's like the prenup conversation, which is, I think that's, I didn't have that. My wife and I started together when

we were really young. And so I think it's a really tough conversation to have with folks, you know, that like, do you have any guiding principles there for people that are like thinking about getting married and you know they don't necessarily want to have it yeah i had this conversation so that's one of the reasons i started the podcast because my wife and i sat down and we had a really kind of official conversation i still have the google calendar and we had different agenda items like uh you know do we different agenda items like, do we want to have kids? What do we want to name our kids?

Where do we want to live, et cetera. And then I brought up the fact that because I've started this business 20 years ago and through luck and hard work, I've accumulated a portfolio that it was really important to me that we discuss a prenup. So the conversation was going really well, our series of conversations until it got hard. And we just were not seeing eye to eye on how we should do this prenup. And I remember at one moment, my wife said, we should go see somebody because we need to have somebody else come in. This is not working. And I said, yes. We literally went on Yelp and searched for therapist near us. And then we just went there. And she was actually great. She asked us so many different questions. One of them I still remember. She goes, when you think of money, what comes to mind? And she looked at me first. I was like, oh, it's so easy. I know this answer. Growth. Like I could literally see the rule of 72 and compound interest in front of my eyes. It was, what an easy question. Then she

looked at my wife and asked the same question. And my wife said, safety. And I looked at my wife like, that's like saying metal. Like I don't understand how the two relate at all. And what a beautiful way for us to really connect on how we saw it. Suddenly I understood some of the things that were important to my wife that were just totally perplexing to me. And so during this whole process, which was a long time, I wished that I could listen to other couples and hear how they talked about money. The problem is this kind of stuff is not talked about publicly. Even the work you do with pro athletes, most of the real work happens behind closed doors with coaches and athletes,

right? Same with money. The most relevant, interesting stuff happens all behind closed doors in lawyers' offices. So I go, well, hey, I have a pretty big audience. Let me shine a light on this. And that was one of the reasons that I now bring couples on the podcast to talk about these incredibly intimate items that I wish I had had access to. That's awesome. I love that. And you're finding that they're being honest? Super honest. By the time they get to me, look, you got to go through a lot of hoops to talk to me. And so by the time they come on, they're not trying to hide. They actually want help. But when you hear some of the stuff that people say, I mean, you will scream at your screen. You will laugh. They cry very often because for a lot of us, money is so intimate,

but it's also so secret. We cannot talk to anybody about it. Most of us would rather talk about our sex lives than our credit card debt. There's actual research on this. And so when you finally get to actually say what you've been thinking for so long, oh, it's a big relief. Oh, very cool. Finding Mastery is brought to you by iRestore. When it comes to my health, I try to approach things with a proactive mindset.

It's not about avoiding poor health. This is about creating the conditions for growth. Now, hair health is one of those areas that often gets overlooked until your hair starts to change. That's when people pay attention. That's why I've been loving iRestore Elite. It's a hands-free red light therapy device that helps stimulate dormant hair follicles, helps to support regrowth.

It's a clinical grade device. It's simple to use. It fits right into the rhythm of my day, whether I'm meditating, reading, prepping for one of our clients here at Finding Mastery. It's really simple. Now, red light therapy has some pretty amazing research behind it when it comes to cellular energy, tissue repair, inflammation control, as well as healing. iRestore is using those same principles to help your hair thrive. I really like this product. I used it last night.

I use it on a regular basis. They also offer a 12-month money-back guarantee. So if you don't see results, they'll refund you. No questions. I love that. They have real confidence in their product. And because you're a member of the Finding Mastery community, right now they're offering our listeners huge savings on the iRestore Elite. When you use the code FINDINGMASTERY at iRestore.com slash FINDINGMASTERY. Again, that code is FINDINGMASTERY at iRestore.com slash findingmastery for exclusive savings. Finding Mastery is brought to you by Lisa. Sleep is one of the foundational pillars of high performance. There's no arguing that.

And when we have great sleep consistently and deeply, we give ourselves the best chance to operate at our best physically, cognitively, emotionally, sleep affects it all. That's why I care about the environment that I sleep in so much. And of course, a great mattress, it matters. One of our teammates here at Finding Mastery has been sleeping on a Lisa mattress for over a year now, and it's made a noticeable difference. They specifically chose one from their chill collection because they sleep hot, something I know many of us can relate to, myself included. What are they reporting back? Fewer wake-ups, deeper rest, and feeling more recovered when

they jump into their work here at Finding Mastery. Lisa has several models to choose from. So whether you're a side sleeper, a stomach sleeper, or somewhere in between, there's a fit designed specifically for you. And what I appreciate most is their purpose. They've donated over 41,000 mattresses to people in need. I love that. So right now you can get 25% off all mattresses at lisa.com plus an extra $50 off when you use the code finding mastery at checkout. That's lisa l e e s a.com. The promo code is Finding Mastery for 25% off and then plus an extra $50 on us because quality sleep is just too important

to leave to chance. Okay. Fun, fun, fun detours. Let's go back to your model. Low cost, long-term investing, automation, you know, like make your spending automated and then you're designing the vision for your rich life.

And then you're designing the vision for your rich life. And then close the spreadsheet and get on with your life. You do not need to be sitting there tracking the price of broccoli. That's a waste of time. You do not need to be updating your accounts every single day. That's a complete waste of time. You get out in the real world and you live your rich life. And the automation bit is based on the formula of 50% to 60% fixed costs, savings 5% to 10%. Is that what the automation is? Correct. Yeah. And things like, it's an interesting peculiarity of people that when I ask people, who handles the money in our relationship? Usually you have one person raise their hand and they go, I'm the money manager in this family. I go, oh, okay. What does managing money mean to you? And over 90% of people will say, making sure the bills are paid on time. That's not a mature way to look at money. There's a much better way. See,

paying bills is something that a robot can handle better than any of us. You don't need to be spending your time and effort on that. But usually people learn that from their mom and dad, you know, sitting around, making sure things were paid. We don't do that anymore. It's all automated. So we are often stuck asking $3 questions when we really should be asking $30,000 questions. People are stuck saying, should I buy this Coke?

Should I get the extra large value meal? Doesn't matter. The amount of coffee you buy is not going to change your financial life. What will is asking $30,000 questions like, what is my savings rate? What percentage? And can I increase that by 1% per year? That right there worth hundreds of thousands of dollars. What am I paying in expenses? That's worth hundreds of thousands of dollars. What am I paying in expenses? That's worth hundreds of thousands of dollars and a few other key big wins. So you have a Coke habit? No, I definitely do not. I heard Coke. I was like Coca-Cola. And then I think you said coat.

No, I mean Coca-Cola. Seriously, do you know how many people agonize over, oh, I don't know, I should buy this thing, like at McDonald's. It's like, this is below, in fact, I created a name for it. Every one of us should have a worry-free number. You remember when we were like 19, 20, 21, and we'd go to the grocery store and there's a pack of gum when you're checking out and you go, yeah, I'll get the pack of gum. It was like 59 or 99 cents. It's irrelevant. You just throw it on the cart. The irony is that as most of us become more

financially capable, we don't actually adjust our worry-free number. So that's why I talk to people who make, let's say $70,000 or $700,000. And they're still over here agonizing over, oh, what kind of headphones should I get? This one costs 50, but that one costs 90. I know what I'll do. I'll spend nine hours creating a spreadsheet and cross-tabulating all the different options on Amazon. I go, listen, you got to create a worry-free number. What is your number below which you're just not going to even worry about it? And as your net worth and cashflow increases, that number should go up. It could be a hundred bucks for you and your partner, which will ease a lot of fights. Could be 500. Depending on your wealth, it could be higher than that. So these are the kinds of systems we need to put into place for our finances. Do you also have a worry-free number for retirement?

Once there's X number in the bank, then I change my relationship with how I work. Or do you say, no, that seems like you're robbing Peter to pay Paul or whatever that saying is. You're planning for later as opposed to like adjusting the way you want to live now. So I believe you should live a rich life today and a richer life tomorrow. You do need to know your numbers. Okay. Like you can't just sit around and sing Kumbaya and then say, oh, it'll all work out. You got to know your numbers. So as a good guideline, you can assume just for very simple assumptions that you're going to spend the exact same amount in retirement. Keep it simple. Keep it conservative.

If we assume that and we assume you're going to live for about 30 years and you want to keep your principle, there's a rule called the 4% rule. It's a very basic rule. But what it means is if you have $100,000 total, you can safely take $4,000 a year and you can use it for living. Now, obviously, nobody can live on $4,000. That's why it's so important to start investing early. You also want to factor in social security, all this stuff. But just as a general guideline,

when I talk to folks and they'll show me their net worth and it'll be, let's say $785,000. I go, what do you think of that number? And you know what they tell me? They go, I don't know. Nobody knows because what does 785 mean? It's just a random number. Therefore, we got to get a little smarter about what's the context around. It's like asking somebody, oh, you benched 225 for 15. What does that mean? I don't know. Is that good? Is that bad? What does it mean? What kind of performance are you into? We got to add a little bit more context to know if it's good or we need work. Okay, cool. All right. Totally get it. If we, if we just, there's two pivots I want to make. One is it's about debt slash real estate. And I hear so many different conflicting ideas. I'd just love to have your philosophy about debt and that so that you could take this maybe one of two ways or take, I'm sorry,

maybe the way to think about this is that you could grab one of these two vines. The first vine is like, let's slide into thinking about business and small businesses and even executives that have ledger money and how to think about budget. That's one way I want to go. And then the other way is like, and this could be business or personal, is to talk about debt. And there's probably good debt, bad debt. I don't know if it's that simple, but where I get a little foggy is, and it's like I don't understand this game properly, is having debt, borrowing against that debt so that I'm not spending via capital gains, I'm spending via offsetting debt. So there's something in here. Dave Ramsey has something to say about this. Grant Cardone has something to say about this, which are voices in your profession. So

I don't have great clarity of this because it's still a little hazy to me about it. So if you could kind of take the baton. Probably the most controversial thing that I talk about with my personal finance philosophy is that sometimes renting can actually be a better financial decision than buying. Now, people hearing that often think that's like someone saying the sky is green. They tell themselves, well, doesn't real estate always go up? Isn't renting throwing money away? And what about equity? And I want to give some examples because I want people to know how to think about the

biggest purchase of their lives, a house, and also how debt fits into that. So first of all, the price of housing goes up and down. That needs to be said. In fact, price of housing is going down right now a lot of us treat real estate like religion we use simple phrases we repeat them over and over and we don't really interrogate them very much and also when people point out certain things that don't make sense people get really mad that's real estate in america so when i rented in san Francisco, New York, and LA, very high cost of living cities, it actually was way cheaper to rent and to invest the difference.

Let me give an example. The place I rented in Manhattan, I kept a very close eye on real estate values around me. There was a building right next door, right there, same view, same square footage, same number of bedrooms and bathrooms. If I had bought it instead of renting, it would have cost me over 2.2 times more to own when I factored in interest, taxes, maintenance, opportunity cost of the down payment, et cetera, et cetera. So let me just give an example. Let's say that I was renting for 3,000 a month. It would have cost over 6,000 a month to own. So you know what I did? I just took the extra 3,000 and I invested it in low cost index funds. I made way more with way less work by renting. Now, I'm not saying that you should never buy. I'm going to buy one day. It's going to be a

terrible financial decision, but I'll still buy. There are lots of reasons to buy. And there are lots of cities where it actually makes a lot of sense to buy. Okay. The key here is you've got to run the numbers and not simply believe these aphorisms. You know, they go like this. You're throwing money away on rent. I go, how come no one ever says that about you're throwing money away when you eat out at a restaurant. We go, oh, I'm getting value for it. You're paying your landlord's mortgage. Okay, well, you're paying your restaurant owner's mortgage. Are you angry about that? And what about equity? Well, you could get equity in lots of places like the stock market. Also, the cost of that equity is really important to understand. Again, these are complex topics, but all of us are kind of amateur real

estate buyers. We think if granny bought a house for 70K in Austin, Texas in 1970, and she sold it for 570K, she made half a million dollars. Granny did not make half a million dollars. Granny needs to factor in inflation, maintenance, interest, and a variety of other things. In fact, it's very likely granny lost money. So what does it mean? Number one, you got to run the numbers on the biggest purchase of your life. You should decide if renting versus buying is right for you, financially speaking, and also if you've got children, certain school district, whatever. Two, if you're listening to this and you're on the younger side or you're starting your

career out, never feel guilty about renting. Never. Housing is really expensive right now and it may turn out that it's actually a better decision for you to rent. That is what I want to share with people. You get some heat for this, I bet. Yeah. People lose their mind when I tell them, you should actually spend a couple of days running the numbers on the biggest purchase of your life. Again, you can tell, because I constantly battle with them on Twitter. You know, the rule of Twitter is like, don't engage with your trolls.

And I engage with every single one of them. And so- You're a troll lover. You love the troll. I love them. It keeps me sharp. And also I don't get the chance to engage with, you know, some extremely hyperbolic, often radicalized

people in my normal life. My friends are management consultants. They're not like these people. And so I love it. It keeps me sharp. I get to see what... Maybe I missed something in my argument. But as you unravel people's beliefs about real estate, you realize that deep down, ultimately,

there's a deep love for ownership in this country. It's fabled. It's mythologized. And I'm not going to argue, if you want to own something, be my guest. But if you're creating your rich life, you got to ask yourself, what do my beliefs cost me? And sometimes owning may be more expensive than you are actually willing to pay the price for. Let's talk about that. What do you think about that? That's like me asking, what do I think about food? It's a complex topic.

Let me give you the basic lays of the land for what I think about it. First of all, for credit card debt, it's simple. I have a no credit card debt policy. And you will find that most people who are in credit card debt, it's simple. I have a no credit card debt policy. And you will find that most people who are in credit card debt are there for behavioral reasons. There's the rare person who's there because of medical debt, although that can be crippling. But in general, when I speak to people with credit card debt, it's almost always behavioral. Mortgage debt.

Well, the fact of the matter is the vast majority of people need a mortgage in other words they need to take on debt to buy a house okay uh i would i will point out that almost nobody i talk to understands a simple amortization table let me explain what that is this is important to know because it's the biggest purchase of your life. You can't treat it like going out and buying chicken wings. It's not that simple. It's complicated and you've got to get good at this. So you take somebody who bought a $500,000 house and they think, oh, it cost me 500K and I'm going to sell it for 600K in X number of years. What they don't understand if they look at, they can Google amortization table, and they can look at their mortgage in the early days, like for the first 10 plus years, they're paying more in interest than they are towards the actual house itself, the principal.

This is quite shocking because that $500,000 house buyer realizes that they might actually spend a million dollars just on that loan with a 5.5% interest rate. Again, you need to understand these numbers before you make these huge decisions. So should you have debt? Well, if you got to buy a house and it's part of your rich life and you understand the numbers and it fits, go ahead. That's okay. It's your rich life, not mine.

I have friends of mine. I got a friend in New Jersey and they recently told me, hey, we read all your stuff. We ran the numbers. It's actually way more expensive to buy than to rent in New Jersey. We calculated it and we're doing it anyway because we have this family and we're willing to pay the price. I said, I love you. Good job.

You decided. You don't have to always let the numbers decide where you go, but you got to understand them. That is my philosophy with credit card debt and mortgage debt. Awesome. Okay. Awesome. Can you, can I give you a couple of quick hits? And I also want to celebrate your show that is on Netflix and just talk a little bit about

that. Can I give you just a couple of reductionist type of questions? Yeah. You want a quick answer? Yeah. Like one or two words just to kind of see where you naturally go with them. Cool? Let's do it. How do your friends describe you?

Funny and present. What's one word that cuts to the center of what you understand most? Psychology. What's one word that cuts to the center of what you understand most? Psychology. What's one word that cuts the center of who you are? Learning. Success is? Success is personal. The greatest limiter for most people is?

Structural. It all comes down to? It never comes down to one thing. The key to success is developing a powerful vision. My vision is Living a rich life and having fun doing it. Relationships are? The most important thing. Who tells you no? My team. Is that a pleasant experience for them? I guess so.

They seem to enjoy it. If you had a boat, flip the table here, and you had the chance of naming the boat, what would you name it? I'll never have a boat. I can tell you right now. You just have friends that have boats. Yes. That's good. Yeah, right.

Okay, good. That'd be a funny name for a boat anyways, double entendre there. But where do you want to belong that you don't quite belong? That is one of the best questions I've ever gotten. I have to think about that. I do not know the answer, but I've never heard that question before. That's a gift. Oh, cool. Play with that one. Yeah, play with that one. Okay, cool. Listen, I've had a lot of fun talking about money with you and listening and

learning about your frameworks and they're practical and very tactical and easily applied. And it feels like folks that are working with you or part of your community, you care. And so tell me about the Netflix show. Well, I got a new Netflix show. It's called How to Get Rich. I'm very excited about it. When we think of money,

usually we think somebody with a pocket protector coming around and looking at somebody's budget. That's not that. In fact, if you've heard this episode, you know, I like to have fun with money. And that is exactly what we did on the show. So the magic of the show, you can think Queer Eye for money or Marie Kondo for money is all I knew about these individuals and couples who I was going to help was I knew their name and I had access to all their financials. That's it. So I went to meet them.

That's all I knew. And so you, the viewer and me go into this together and we try to understand what's going on here. What is the problem? Is it too much debt? Is it afraid to spend? Is it lies in a relationship? And what's fascinating is we do not know where it's going to

go. People are people. Some people are ready to change. Others are not. And that's what you see in the show, How to Get Rich on Netflix. Oh, that's awesome. That sounds like right at the edge of the seat. I'm stoked to tune into it. And I bet you're absolutely right in your strike zone. I love it. So that is really cool. Yeah. What are you trying to get better at? I'm trying to get better at connecting with people.

Connecting means when I was younger in my 20s and I had just learned about money, I was very judgmental. You know, I would sit there and I would lecture somebody about, you need to open up a Roth IRA. And people's eyes glaze over. And it took me a lot of work, a lot to be more connective, more compassionate, more understanding. And I feel proud of how far I've come. But then once in a while, I will see my wife or a colleague of mine, and they will instinctively have a way of connecting that would take me another 10 years to get to. And on one hand, honestly, I'm like, how'd you do that? That's frustrating. How did

you have that natural talent? And on the other hand, I also know that I can work and I can learn. So I would like to be even more connective than I've gotten. And when I see the people around me who are, it's pretty inspiring. Oh, that's, that's brilliant. What are you reading that you're into that folks would be like, or what do you, what do you pass out the most? Like what are some books that you're like, these have been important to me? I read a lot of books on craftsmanship. I actually got this book. So I have a rule called Ramit's book buying rule. And the rule is if you see a book that looks even remotely interesting, just buy it.

Just don't even think twice, just buy it. Because to get an author's life work for 15 bucks is the best bargain on earth. I had a friend of mine who posted this on Twitter called The Male Midlife Crisis. Fresh starts after 40. It's by Nancy Mayer. Now, I don't know if I have a midlife crisis or not, but I am 40. And when I saw this, I was like, this is a great, what can I learn? So I'm reading this and I'm reading some books about real estate redlining history

in America. So how did you become so cognitively flexible, emotionally flexible as well? Or are you just playing that way and you're actually quite rigid? And if your partner is here, she'd be like, I'll tell you what she would say. I'll tell you exactly because we talk about this a lot. So, you know, we do these, um, rich life reviews. We talk about money once a month and we try, we have date night and all that stuff. And it's like a, it's a good way to connect and just talk about how things are going. What do we want to prove? All that stuff.

So she would say, um, that, uh, I have worked really hard to be much more vulnerable and emotionally connective. That would be the good. And then she would say that I am sometimes rigid and all that is a hundred percent true. I I'm a CEO of my business for 20 years. I like things the way I like them. Why do you think I like luxury hotels I love the detail the obsessive detail but I also know that if you take that too far it is not fun for the people around you you know what I mean and so it's like a beast inside that I want to harness not let control me where I go hey obsessive detail can be really helpful when you're creating a piece of art or a

product that can be good, but you've also got to be sensitive that you cannot unleash that everywhere because it's not fun for the people around you. There you go. You, you identify more with being an underdog than a sure thing. Uh, I don't know. I think, yeah, yeah i think so that's a great question too um i think so i i do realize over time that i have to cognitively adapt because you know where i started college kid on scholarship starting a blog because nobody would come to my events about money that was true underdog now i have a full-time staff and I have millions of people watching. I have a Netflix show. It's like, okay, Ramit, you've lost the right to complain about stubbing your toe on the desk or whatever minor thing. You got to appreciate where

you are. Awesome, brother. I appreciate you. Thank you for your time. Thank you for laying it on. And where do you want to drive people to the show, to your site, to social? Where do you want to folks go check out? And tell me, I'd love to hear from you. You can DM me, you can email me. I'm very publicly available. Tell me what you notice about the first three minutes talking about money. And that's How to Get Rich on Netflix. And you can find me all over social media and my podcast. All right. Appreciate you again. Thank you, Mike. All the best.

All right. Thank you so much for diving into another episode of Finding Mastery with us. Our team loves creating this podcast and sharing these conversations with you. We really appreciate you being part of this community. And if you're enjoying the show, the easiest no-cost way to support is to hit the subscribe or follow button wherever you're listening. Also, if you haven't already, please consider dropping us a review on Apple or Spotify. We are incredibly grateful for the support and feedback.

If you're looking for even more insights, we have a newsletter we send out every Wednesday. Punch over to findingmastery.com slash newsletter to sign up. The show wouldn't be possible without our sponsors, and we take our recommendations seriously. And the team is very thoughtful about making sure we love and endorse every product you hear on the show. If you want to check out any of our sponsor offers you heard about in this episode, you can find those deals at findingmastery.com slash sponsors. And remember, no one does it alone. The door here at Finding Mastery is always open to those looking to explore the edges and the reaches of their potential so that they can help others do the same. So join our community, share your favorite episode with a friend and let

us know how we can continue to show up for you. Lastly, as a quick reminder, information in this podcast and from any material on the Finding Mastery website and social channels is for information purposes only. If you're looking for meaningful support, which we all need, one of the best things you can do is to talk to a licensed professional. So seek assistance from your healthcare providers. Again, a sincere thank you for listening.

Until next episode, be well, think well, keep exploring.