Habits and Hustle - Episode 130: Ramit Sethi Part 2 – Personal Finance Advisor, Author of I Will Teach You To Be Rich

Episode Date: August 24, 2021

Ramit Sethi is a Personal Finance Advisor, NYT best-selling author of I Will Teach You To Be Rich, and Host of the “I Will Teach You To Be Rich” podcast. He’s back! We heard how much you loved his previous episode so we had to have him again, especially now that he’s updated his book and is basically doing couple’s money therapy on his new podcast. Of course, again, Ramit charms and guides us through the daunting waters of finance, investing, and “living your rich life.” He has no shortage of dynamic and important information even going so far as to try forcing our host, Jen, into buying the $7 organic blueberries she’ll never let herself have. If you’re looking for a smooth-talker who can back it up with the success and details you need for your own “rich life” settle in for another brilliant episode with Ramit Sethi. Youtube Link to This Episode  Ramit’s Instagram Ramit’s Website ⭐⭐⭐⭐⭐ Did you learn something from tuning in today? Please pay it forward and write us a 5-star review on Apple Podcasts. 📧If you have feedback for the show, please email [e-mail]  📙Get yourself a copy of Jennifer Cohen’s newest book from Habit Nest, Badass Body Goals Journal. ℹ️Habits & Hustle Website 📚Habit Nest Website 📱Follow Jennifer – Instagram – Facebook – Twitter – Jennifer’s Website Learn more about your ad choices. Visit megaphone.fm/adchoices

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Hi guys, it's Tony Robbins. You're listening to Hab and hustle, fresh it. All right, you guys today on habits and hustle, we have somebody who has been here before because he was so popular the first time to meet Stati. I said it right, right? Yep. Good. And for those of you who don't know who he is, he is an author of the New York Times best seller,

I will teach you to be rich. He has helped tens of millions of people live a rich life with their money, careers, businesses, and psychology. He hosts over a million readers on his site. I will teach you to be rich.com. It's got a newsletter. It's also on social media. And of course, he has a new podcast called I Will Teach You to

Be Rich by Remete. He actually speaks to lots of couples, real couples behind closed doors to see how they are kind of dealing with their money, in which I love because I think, like I said, you off camera, it's kind of like you're like a psychologist to these people because you're actually seeing you're kind of peaking behind the curtain to see exactly what people are really doing and they are always fighting about money is kind of like the number one thing why people divorce, isn't it? Well, I think I think a lot of people have never heard other couples talking about money. And I mean, really talking.

You've seen it in movies, but it's 10 seconds long. You've seen it dramatize. But if you're in a relationship, you've had a heated discussion about money. It could be a fight. It could just be a disagreement. It could be a different way of looking at how you want to spend money versus your partner. But you feel very alone because you're like, am I the only one who thinks this way?

How am I supposed to bring this up? He's an overspender or she's an overspender. I prefer to spend money on this. He or she prefers it on that. How are you supposed to navigate those? And as I went through my own relationship in terms of getting married, going through some really challenging discussions,

I honestly wished there were some conversations I could just listen to, and hopefully someone helpful, they're guiding those conversations, because I wanted to know how to have better conversations myself. I agree, I'm actually surprised it took this long for a podcast like this to happen,

because to your point, like everybody deals with this. It's one of those things where it's so obvious and yet nobody's ever peeled that curtain hat. Well, do you know why? Well, why? So first, it's extremely hard to get people to have these conversations and share real numbers.

So on my podcast, you're hearing about couples, for example, who are two months away from going bankrupt or who have millions and millions of dollars in net worth and they still drive over town looking for the cheapest blueberries. Okay, that's number one. It's really hard to get people to open up. But it has been telling you that.

But you know what, they trust me. So they will share their numbers. And then number two, it's really hard to find somebody who knows how to navigate relationships and understands money. Those two typically do not overlap. There's some great people in the relationship world. There's some really good people in the financial world, but it's really rare to see that crossover. That's so, and that's why I like you because you kind of do blend that background of finance, obviously, and the psychology and you kind of like make it. So that's why I like you because you kind of do blend that background of finance obviously and the psychology and you kind of like make it so that's why I said to you again off camera.

You make it very relatable to like the average person in layman's terms and you also incorporate like people's psychology behind money because like your whole thing before, well, it still is, but about the money dial and about what people are like going crazy over, try to spend $5 over a lot today. Do I not? And like the the head game that they're playing with you and you're like, that doesn't even make a difference. Yeah, it makes no difference. I mean, the whole latte thing, you should just buy all the lattes you want.

$3 a day or $5 a day is candidly going to make very little difference in your financial world. Those very same people should really be spending time on the five to 10 big wins in life. And if you get those right, you can buy all the lattes and appetizers you want. So things like, have you automatically set up investments every single month?

Do you invest properly? Do you have the right asset allocation? Most people don't know what that phrase means. Have you negotiated your salary? That a single negotiation in your 20s can be worth over half a million dollars. How many lattes is that gonna cost you? So if we get these five, 10 things right,

we don't have to ever worry about these mind minute little expenses that consume us. And I would rather live that kind of life. Let me get the big things right and then get on with my life. No, it's amazing. Name it a couple more. I like that because those are two really big ones. Yeah.

Two more. So again, having a vision of a rich life, what are you actually working for? And when I ask people, what is your rich life? The answers are very unsatisfying. They will typically say to me, I wanna do what I want when I want. I say, okay, what do you want? They never actually thought about it.

Right, I would rather they say, I want to travel two months a year. I would say, okay, where do you wanna travel? Oh, you know, around Japan, Bali, what seat on the airplane do you wanna sit in? What kind of food are you gonna get? Who are you gonna bring with you?, around Japan, Bali, what seat on the airplane do you want to sit in? What kind of food are you going to get? Who are you going to bring with you? A rich life is textured and it's lived in the details. So that's the first thing is a big win is actually knowing what your rich life is. And by the way, a rich life can be extravagant. It can be buying beautiful

cashmere clothes. It can also be simple. Being able to pick up your daughter from school at 3 p.m. every day. That's a rich life as well, but it's up to you to define it. Negotiate your salary as I mentioned. Automate your savings and investments. Know when enough is enough. Have a good credit score if you're planning to buy a house eventually. Oh, and speaking of buying a house, actually run the numbers on the biggest purchases of your life. Most people don't. They blindly go and think, oh, buying a house is a great investment, not necessarily true. And so I want people to become more educated about this. So then you can choose your rich life.

And that's amazing. I love talking to you because you kind of drill it down to something that people can actually take and incorporate. But can I ask you one question before we even go into that stuff because we're in a very strange time right now, right? We're kind of in a pandemic still. The whole market has shifted and changed. Can you kind of just explain what good investing can be right now, this Bitcoin, this crypto, this NFTs,

it's so confusing. Okay. First off, when you think about investing, what are the things that come to mind for you? What are some of the things that you've heard when you think about investing? Like, basically buying Tesla, buying Apple, buying these things or buying crypto, because that's a huge trend right now.

I'm actually what I do is I have people who are much smarter than me in that space telling me where I should put my money and I blindly just put money into this thing. Oh my God. Okay. So, hold up. I have so many questions and I'll tell you what investing actually is because it's not that. How much do you pay these people? So interestingly enough,

what I have a fidelity account and I don't really pay anybody actually. I don't have a financial advisor. I have people who are friends in mind who will take my, who I just listened to because they are doing exceptionally well. Okay. And I'll say, okay, here's X amount of dollars, put that into or whatever you're doing. Yeah. Take this amount of money and just do it for me. And they're, so they're not charging you. They're not charged. But my friends, let me say, I have, I'm fortunate to have people

who will do that for me for free. However, a lot of my friends are doing the same thing I'm doing, which is just like plopping money where they're financial advisor or they're, you know, richer friends or telling them to. Okay. Let me break this down. This is going to be a quick, very high level overview, but I'm going to get into specifics as well. So when you think about investing, most people think I got to have five computer monitors in front of me. Some green text scrolling around on the screen, and I got to pick some stock with some PE ratio.

This is all bullshit. This is not how individual investors actually invest. Real investing is not exciting. It's not a TNT drama. It is picking a single or simple investment strategy, setting it up to happen automatically. And then that's it. And you just, it's like watching paint dry. It's boring. In fact, you shouldn't even be checking it more than every couple of months, maybe every

six months. A very simple investment strategy for sophisticated individual investors would be a target date fund. It's really simple. It's one fund. So you basically look at your age and you say, I'm just going to pick some easy numbers. Let's say somebody's 30 years old. Thank you. And they go, I'm going to retire at 65. Again, just easy numbers. So 35 years from now, I'm going to be 65. I'm'm gonna retire. Perfect, there's a fund out there called Vanguard, 2015 fund or whatever it is, all you do is get that one fund and you funnel as much money as you possibly can

into it every month. That's it, now why that? Why not picking Tesla and Apple and all that shit? Well, because most people, again, they think investing is picking stocks, but that's just what you see on TV. Real investing is boring and it's diversified. So something like a target date fund is basically a pie chart and it includes some equities.

It includes a lot of the stocks that you know about. It includes many you don't. It includes some bonds for diversification. And as you get older, it will slowly become a little bit more conservative. Now that's really important. That word is called rebalancing. Most people have never heard this word.

And it's actually way more important than you think. Anybody know Granny or Grandpa who in 2008 lost 40% of their money, that should never happen if you're properly diversified. So as I talk about in chapter seven of my book, you can pick a very simple strategy. One fund, it's automatically diversified, and that's it.

If you want to get a little fancier, you can pick individual index funds, which are fine. And if you really want to get, you want to have a little fun, you go, hey, I've already done what Rumi said, I'm diversified, I actually really believe in this stock or I believe in crypto.

Okay. If you are diversified, you want to have some play money or have some fun with 5% of your portfolio. I say go for it. Unfortunately, many people do not have a diversified portfolio and they start by having fun. They will lose hundreds of thousands of dollars over their lifetime. That's great. I mean, so you said rebalancing.

I never heard that before. The most important concepts in investing are the very same things that people have never heard. So they've heard words like stocks. Yeah. But they never heard words like asset allocation, which is actually more responsible for how much money you'll have.

If you understand what I talk about in chapter 7, it will be worth more to you than any amount of lattes you could ever buy in your life. Just that one concept alone. So real investing is actually not what you see on TV with all these people running around and hitting bells. That's not it. That's made for TV. Yeah. Real investing. The friends of mine who are extremely wealthy and going to be even wealthier, it's boring. It's like a utility. It's like turning on their lights. Okay. My money goes in to this investment account. It's automatically sent. I don't do anything else. And their rich life is actually lived outside the spreadsheet.

It's their traveling. It's eating at restaurants. It's being generous with tipping and with charity. That's the rich life. It's not sitting here picking stocks. So what is then, I heard you mentioned this before in an interview, what is wealth accumulation strategies? Or is that what we're talking about? Is that like the rebalance to asset? Well, yeah, wealth accumulation is the strategies

you use when you're on the way up when you're accumulating wealth. So that would be like very basic way would be, are you saving any money every month? Right. This is like very sort of elementary level. Most people, well, most people are not saving that much, but even if they're saving, they go,

oh, okay, good, like I saved, you know, a hundred bucks or a thousand bucks this month, good. And that is good, no doubt. Right, right, right. But I would thousand bucks this month. Good. And that is good. No doubt. Right, right, right. But I would like to flip that. There's two problems with that. Number one, saving should not be something you struggle to do.

It's just like working out. If you were like, ah, yeah, I made it to the gym today. I mean, that's good. But I would rather it's not even a choice. It's just something that is a habit like brushing. I don't go, yeah, I brush my teeth today. I just do it. It's a habit.

Same thing with working out. Same thing with saving. That's number one. Number two, saving is not enough. And this is really counterintuitive. Many people, they are okay at saving because it feels safe to them. It's sitting in cash.

We're actually losing money every day because of inflation. And when I say, hey, how come you haven't started investing? The answers are always the same. It feels like gambling. I don't want to lose anymore. But they're actually losing a little bit of money every single day. So when you start investing, the money, you know, at the first year, it's not that much.

Oh, I put in a hundred bucks a month or even 500, maybe even five thousand bucks a month. Oh, it's not that much. It's not that much. Oh, I put in a hundred bucks a month or even 500 maybe even five thousand bucks a month It's not that much. It's not really adding up, but when you look at how it grows at seven or eight percent a year At a certain point you're making way more from your investments than you even make from your salary That is a magical moment a lot of people. Well, you talk about money rules a lot, and I know everyone has different ones. So, first of all, I want to ask what your money rules are, and is it important when you are with somebody, you're like, you know, when you are getting married, to find somebody who has similar money rules? Okay.

Well, first of all, most people don't have any money rules at all. I know what that is. I was going to say, but like, maybe they should have that conversation before. Definitely. So, what are money rules? You know, when you think about the thousands of financial decisions you face every year, right? It could be as small as, should I get that dessert, should I get to Diet Coke? It could be as large as should we pay for our kids' college or should we buy that house? There's a vast amount of decisions you have to make. And when

I ask people, how did you make that decision? A lot of times it's like, eh, I don't know, just, I don't know, I just didn't. There's no rubric, there's no logic. It's just how did I feel? And feelings are important, but when it comes to big money, you also want to have the numbers run.

It would be like trying to meet somebody if you're single. And you know, you meet, you go on 100 dates and after a while you're going to go, I need to have some sort of guideline, some rubric. You know, what do I want this person to do or feel or what are their values? Otherwise, you're just meeting all these randoms. So true. Yeah. So, you know, you talk to people who got married, have a great relationship, whether married or not,

how did you meet this person? Oh, well, you know, after many dates, I learned what I really value. Same thing for money. So if you come to me and you go, remeath, I'm kind of embarrassed, but I really like nice clothes. You know what I'm gonna say?

I fucking love it! Tell me more, why do you like those clothes? What brand? Wow, what if you could spend twice as much? Oh my God, that's crazy. I would have all this cool stuff. I love it. I'm not gonna judge you for it.

I wanna hear why you love it and what you could do if you could spend even more. Then I want you to develop some money rules. So I'll give you some examples. I rolled up all of my knowledge of money into these 10 rules. These are my rules. For everybody listening, if you're about to yell at me

because you don't like my rules, just send your email straight to the trash. Because these are my rules, not yours. I want you to develop your own rules. So I have some financial rules. One of them is save and invest a minimum of 20% of gross income. That's sort of a standard one.

And hey, if you're listening and you're like, hey, I can't do that much, okay, do five, right? Start at 10, whatever. But then I have some others that are really fine. They're not just safe, safe, safe. For example, I give myself permission for unlimited spending on books, on health and fitness, and on friends' charities.

Like, if your friends have ever run a 5K, if they come to me and they go, hey, I'm raising X dollars, here you go. Okay, why? Because when I raised money for charity with my wife, it was so meaningful to us when our friends came and they were like, oh, here you go. And they gave more than we asked.

I'll never forget that feeling, right? And at a certain point, you can afford to be generous. I have another rule which is I want to work with people that I like and respect. That's not really directly tied to money, but because I earn enough, that is something that I can do. So for everybody listening, I would challenge you, what are your money rules? Is it, for example, I will always get an appetite,

like I've unlimited spending on appetizers. That's weird. Why, why? And of all my 10 rules, why appetizers? Because when I was a kid, we couldn't afford to buy appetizers. So now it feels very rich and freeing. And, you know, there's some luxury ones in there as well. You can Google Remeats 10 Money Rules.

But my challenge for you listening is, what are your money rules? It could be always get the blank or never get the blank, but I would challenge everybody. In fact, maybe we can listen to yours right now. What would be some of your money rules? First of all, it's interesting, because I, you said something funny

at the beginning of the podcast about the blueberry situation, about like I will drive like literally 45 minutes to go get blueberry. Is this for real? For real, I'm not joking. Why do you do that? That's why I swear when you said,

I'm like, did my, my, everyone laughs at me and makes fun of me, like everybody. Okay, so let's break this down. Let's just do a little exercise. So why do you do that? Okay, because I, I feel because I was never, I kind of worked for everything I've had. So like every dollar that I earned is because I worked hard for it. That I have probably some kind of mentality around just spending frivolously. So I wouldn't say I was cheap, but I'm cheap over stupid things.

Just like a penny wise, a pound foolish, right? Well, cheap people never admit that they're cheap. Until I asked them two questions and then everything crawled. I know, I know, I know. It's funny that you said that. That's why. But so but one of my money rules is I will I don't I do my my time is extremely valuable. So I'm not negotiable for me as I will I won't I won't I won't chip out on quality food. I will only work around people that I like. I'm very particular about who is around me.

Those are like more like life rules though, I think. I don't know if it's much, it's money rules. Let's probe into that one, because you say your time is valuable, and yet you drive 45 minutes for various reasons. Well, that's the thing, but that's where the disconnect becomes, right? There's a disconnect. But that's the thing, but that's where the disconnect becomes, right? There's a disconnect.

But that's the most interesting part of personal finance, the disconnect, right? Oh yeah, like I know I should save money, but I don't. Oh, you know, it's really important to me to spend time and to spend the time and attention and money on my family. But the last time I did that was six years ago. To me, that's the most interesting part of it. Okay, I'll give you an example, okay?

Like, Galson's down the street for me, right? And Galson's is like crazy, expensive, era one's another one, right? And a lot of my friends have even loved era one or Galson's whatever, because convenience or its quality, I will literally not walk the five minutes to Galson, I'll walk the five minutes, but I won't buy the food at Galson's because the principal of that they want to charge me that kind of money for whatever it is, I will literally drive a half an hour because the organic blueberries are in sale at Sprouts. Do you know what I'm saying? It's like, we call it mischievous in, like, in, in Yiddish.

I know what you're saying, what I want to understand is why. What do you get out of that? I don't know. I feel it's like feel it's like a satisfaction that they didn't get one on me or something. They're taking advantage of me. They're taking advantage of neighborhood or the people or where we're living

and all this other nonsense. This is nonsense. So if they did, quote, get one over you. What would that mean? It means literally nothing. And I heard this. No, no, no, I mean something to you. It's not that. It means literally nothing. And I heard this. No, no, no, it means something to you.

It's not that. I'm embarrassed, but it's the truth. Like I will not, like I refuse to shop at Galston's, even though it would be way more convenient, it would like save me so much time and energy and efficiency, which it was the disconnect is I try to be as efficient as possible, but when it comes to like that type of thing It just like gets under my skin

Maybe you should come on my podcast. We can really get into this It will take about two and a half hours to unravel this, but I guarantee there's an answer there I can tell you that more than I heard on your own you're talking to some girl or you're talking about it and someone's podcast about how Some girl we she wants to be able to shop at whole foods. That's like her thing, right? her rich life so I asked her what is your rich life and Her answer was I want to be able to shop at whole foods without worrying about the price right and you know a know, a lot of people, they go, yeah, that's so cool. And I'm actually not impressed by that answer at all. Okay.

At all. Because what a dim dream. That's it. That's your entire rich life is to be able to spend an extra $30 at Whole Foods. This person was not in poverty. She was doing very well. I believe she's, you know's part of a very successful couple. And that's it.

That's as far as you can dream, is whole foods? No. And so I pushed her. What else? And what you learn, one of the principles you learn in the podcast is that people who are in debt find it very difficult to think more than 50 steps ahead. 50 feet ahead. It's like driving in the fog. And if I say what's beyond the fog, they have no idea.

They're like, I'm just trying to make it down this road. I'm just trying to pay off my debt. But the irony is you're going to be more successful in paying off your debt and you're gonna feel better about it if you know what is beyond the debt pay off. So let's say you could be $5,000 of debt or I spoke to a couple with $550,000 of debt.

It doesn't matter. The point is what are you going to do after and what you will almost always find is that the people in debt cannot think beyond getting to zero. And that's a mistake. You have to be able to think beyond that, because otherwise nothing's gonna get you up in the morning and say, yes, I wanna pay this off. I wanna be aggressive about it.

It's just like, if I'm really successful, then I get to zero. It's not exciting. No, it's not. And say for whole foods, oh, that's it. And so what you discovered when she listened was That was kind of a flippant answer. If you want to pay off the whole foods without worrying fine. That's easy. What else? A rich life is much more detailed. It's much bigger than that and I consider it a tragedy to live a smaller life than you have to

Keep coming back. You got plenty of space a smaller life than you have to. Keep coming back, you got plenty of space! Oof, not how you would have done that. You like working with people you can rely on, like USAA, who has helped guide the military community for the past 100 years. USAA, get a quote today. Vitamin water just dropped a new zero-sugar flavor

called with love. Get the taste of raspberry and dark chocolate for the all warm. All fuzzy, all self-care, zero self doubt you. Grab a with love today. Vitamin water, zero sugar, nourish every you. Vitamin water is a registered trademark of glass O. Now that's a really good point and And I, I agree, but people don't really think beyond that. That's why that's why I was

interesting when I was listening to some of the episodes. But like, the truth is, and that's what I said to you earlier, it's like, how do you, how do you change somebody's psychology that their mentality around money? So like, and if, especially like people like who don't need to be that cost Efficient in terms of like you know going a block versus like 45 minutes like how do you is there a way to tweak? Yeah, there is but there has to be a reason right now. You don't have a reason. I do it's efficiency No beyond busy and it's still I can't get over that hump. You could. You want to do it right now? Sure.

Okay, just pull out your phone. Okay. Just pull it out and you have a postmates or something. I will not use it because I think it's again, it's a print. I rather drive to the place to get it than like you use this post. It's like, and missha, Gus, you know, have you heard that word? Yes. Let me say this. There's a book by Marshall Goldsmith and he talks about the excessive need It's like, and miss you, Gus, have you heard that word? Yes, let me say this.

There's a book by Marshall Goldsmith and he talks about the excessive need to be you. So whenever we talk about efficiency, do you notice that you go right back to, that's not me, I will never do that. But the only thing stopping you from doing that is in your fingers right now. So do you have an app like Postmates?

I do, it's not probably not, yeah, I do. Okay. Okay. Now what? Go to the store that we're talking about. The one that as you put it overcharges you. Oh, like there's so many. There's Erwa. There's like the most expensive one. Are you kidding me right now? Well, can you afford it? First of all, I wanna ask that. I'm not trying to put you in an uncomposed seat. Yeah, no, no. Can you afford one package of organic blueberries?

Yes, I can. Okay, go ahead. I can. Okay, are you sure? Yes. Or can I, I also like La Scala. Okay, more like a chopped salad from there. No, this is not lunch, order time.

This is time to break through your psychological barriers Lunch okay, five five five. I'd like a topo chico as well and no hold the tomatoes. Okay. No, it's not salad time Oh my god, I wasn't sure if you're like what the I thought the point was to make me do something I would normally never do blueberries Okay, I'm trying to okay, let's pretend I it's not working. While you're ordering it, don't worry, I can take care of the mic, don't worry. I can fill any amount of empty air time. We can talk about anything. Let me just say, I can't find it.

All she's ordering, what kind of lunch would I ask her to order if we were doing lunch orders? Let me think. Yes. I would definitely get Mexican food because after living in New York for over 10 years, I'm missed it. It's going to take me forever.

I'm telling it's not working. Do you want to do it for me? Like, look at this. Galicins is not coming up. What? Okay. Is Erwan? It's in, I think my internet's pretty bad here.

I think that's the problem. Oh wow. It's called self-sabotage. I swear to you. She put it on airplane mode. Oh, I don't know why my internet's not working. This is so crazy. I don't know.

I'll have to figure it out later. OK, you figure it out later. But what do you think is behind this challenge? Oh my god. I think it's to make me get over the help by doing it something that I would normally not do to kind of realize I'm going to be OK. Exactly.

And when you say OK, play that out for me. That it's not gonna, it's not gonna deter my life, it's not gonna kill me. I'm gonna be fine. Your identity is still going to be preserved. You're still going to be you, even if you order a $7 organic blueberry pack. You're still gonna be you.

I know, it just seems weird to me because this is one point to you though. Is there a way? So that is the way when you speak with these couples, is that how you can change somebody's personality? No, that's one way. What we just did and what I would really like for you to send me a picture of this delivery. Okay, please do. I will. What we just did, the principle there was, behavior first, attitude second. A lot of people believe first you gotta change your attitude. And sometimes that works, that's a tool that I use when I work with people. But sometimes you know what the fastest thing you can do

to change your attitude is just change your behavior. For example, if someone says, I'm not the kind of person who works out, what would you tell them? Yeah, I guess that is true. You would say, look, let's go together. Yes, or just like stars. The star is always the most difficult. A three-minute walk on the treadmill at 1.0. That's it. Doesn't matter. But that's it. Suddenly, when you walk for three minutes, guess what? You are a person who works out. You change your behavior first, then your attitude followed. So for a lot of us, and especially the ones

who tie our identity to our spending, right? I'm not the kind of person who does that. That was me, right? And sometimes I change my attitude. It was you? Yeah, when I was younger, I told you, we grew up very frugally, we had to. And I remember when I would go on an airplane,

I would walk past the people in the front. And I would actually scoff like, I'll stupid people, like, they're paying four times the amount and we're all getting to the same place. Ha, ha, ha, ha. I was very, I felt very superior, very judgmental and righteous.

And I think a lot of us do that with money. Oh, that person's so frivolous, they buy clothes, or if I had that much money, I would never buy a house that size. We love to talk about what we wouldn't do if we had that much money. Well, guess what? What I should have done instead of disparaging those people

would be to get curious. I call it the D to C principle. Instead of saying they're stupid, I should have said, wow, if they can afford that, why do they choose to spend four times the amount on a seat upfront? What are they getting out of it? And once I understood that, then I could say that's for me or that's not for me. But instead by disparaging them, by saying that's so stupid and judging, I just closed the whole conversation off. Now that I know why people fly first class or eat at certain restaurants, some of the stuff I do, I love it and some of the stuff I don't because I just don't care, right?

I love nice hotels. I spend a lot on that. But my car is my car, whatever. It's just not important to me, I have an old car. Computers, I run my entire business off an old computer, no big deal, but when it comes to traveling with my family or whatever else, really important to me. I love that.

In your rich life, you should spend extravagantly on the things you love, but cut costs mercilessly on the things you don't. And so for you, there are lots of different ways you can do it. But whenever you find that you're incongruous, that you say one thing and you do another, you know, I like efficiency. And yet, I'm driving 45 minutes. To me, that's a beautiful opportunity to dig it and non-judgmentally say about yourself, why? What am I getting out of this? What's it preventing me from doing? What if I changed? What would it look like? Wow, suddenly you can align your money with your values.

That is so true. That is excellent. I'm telling you, you should be a psychologist too, while you're kind of are in this. No, I'm not a psychologist, but I enjoy what I do, so thank you. No, but that makes such a perfect sense, though. And it's so true, like while you're kind of on this. No, I'm not a psychologist, but I enjoy what I do. So thank you. No, but that makes such a perfect sense though. And it's so true, like while you're saying it, I'm like, why am I doing this? It's like a neuroses that I have to kind of get over because it is stopping other things. Yes, but notice when you call it a neuroses,

is that a positive word? No, it's not. Would you ever say that I have a neuroses? Would you say it to my face? Maybe. If you, I don't think you would. I would probably use a euphemism for the word. Yes.

Oh, that's really interesting. Yeah, right? Yeah, exactly. But it's interesting that you talk to yourself that way. And I bet if we pulled on this for about five more minutes, you would say other words, you know, that's just stupid. That's embarrassing. And I don't really like to talk to myself. That's embarrassing. And I don't really like

to talk to myself that way. And I don't like to hear you talk to yourself. I would rather you say, wow, that's an interesting habit. And it's not really serving me. You know what? I have been doing that habit a little too long. I think it's time to change it. I'm going to turn the page and change my habit. Non-judgmental, accepting of yourself, we all have habits we do that aren't serving us. That's okay, no big deal. But let's go ahead and acknowledge it and change it. No judgment. No, I think that, I like you.

I'm so glad you came on the podcast today. So then you're saying that a people can't, so people can shift their mindset around money if they want to. If they want to, If they want to. If they have a reason. For example, cheap people that come talk to me, I can fix a lot of things.

I can help people with a lot of different things. Typically, the most common ones are my partner and I don't see eye to eye, I'm not a spend. Or I make five times more than my partner, or he or she makes five times more than me, et cetera. That stuff is relatively straightforward. You know the hardest one of all? What?

Cheap people. Cheap. I can't fix cheap. Because cheap people don't believe it's a problem. So these are people who have hundreds of thousands through dollars. In some cases, on the podcast, listen to the episodes. Millions of dollars, and they

agonize over ordering steak instead of chicken when they eat out, or blueberries, et cetera, et cetera. And when we talk about why, they say the same things you said, actually, it's an identity issue. And I said, look, is this a problem? And they go, yeah, you know, I don't like it. I go, okay, keep going. And we talk, talk.

And ultimately, what I often find is that they don't consider it a real problem. And not enough to change. And so I fast forward with them and we go and we say, look, I tell them, this is exactly how much money you're gonna have in 15 years. We can do the math right there on the spot. You know, in one case, one of the couples

they were gonna have over $15 million when they retired. That is a lot of money, right? And they're, what? They're going to be, what, bargain shopping? Why? What's the point? And then, you know, what they'll often say, oh, no, no, no, no, by that point, I'll stay at nice places and I'll, I'll tip generously. I said, okay, so when you have 15 million, you'll tip generously, but at four million, you won't. What's the number and what you discover very quickly is that it's not a number, it's a feeling. And if they don't believe that it's causing them any problems,

they won't change. On the other hand, if, for example, you're cheap and like one of the couples I spoke to their wife is threatening to divorce them, they may be able to change very quickly. Right. So there has to be some big reason that or something that they'll lose if they don't change. Yeah, or something they want to gain. So what happened? Okay, so do you think, okay, there's a bunch of couple questions I have here. So you do think that people do couples, do you believe that couples should be working on this prior

to getting married because it will cause a lot of problems or doesn't, or? Well, I mean, I wish I started deadlifting when I was 17 years old, but I didn't. So, you know, I was reading spelling books, so, I mean, it would have been nice. I would have been pulling some heavy weight, but you start when you can.

Right, you start when you can. And then what happens when one partner is the main contributor and the other one isn't. And there's like a huge, like a, like a, like a, like a control situation. Well, that's very common. You know, a lot of times there's couples where one person earns five or even 10 times in one more than the partner. Sometimes the partner is it stay at home parent. And so these are real situations, right? Yeah. Um, what I work with them to do is to first understand what's going on. And a lot of times they don't know they've just gotten into a habit. And you'll see, for example, in one of the conversations, somebody her, her 10 out of 10 win was to be able to go to target and not have to

ask for money. That's it, that's what she wanted, that's it. Target. And I said, how much at Target? Are we talking like 15 grand? No, no, no, no, 50 bucks. Great. Now that we have it out on the table

and we turned to him, hey, can we just make it a blanket rule that she doesn't need to ask for anything less than blank or better yet she doesn't even need to ask for anything less than blank or better yet. She doesn't even need to ask you to talk about it proactively. He goes, yeah, done. So it took a while to get to that, but it turns out only 50 bucks was the challenging notion. For other couples, there are questions of contribution.

You know, hey, I may not be earning, but I want to be contributing and what does that look like? Each couple is different. There's no formula that fits every single one. A winning solution is one where both people are part of their joint rich life. And sometimes it could be contributing monetarily. Other times it could be time, energy. Honestly, there are times where you may not be able to give anything, right?

Sometimes your partner is injured and I use that term loosely. They may not be physically or mentally available. They may have just had a child. And there are times where we need to basically say, you know what? We're partners. I got you on this. Let me take care of things for a while. And I know there's going to be times in my life where I'm down and this. Let me take care of things for a while. And I know there's gonna be times in my life

where I'm down and I need you to take care of me. Fine, but if you have this strong foundation, then those minor things in the grand scheme are just blips. Right, well, I think also it can also change. Because well, I think when one's making more, they automatically have the control in a way, right? Because money equals sometimes control, in some marriages.

But think about this, you're right that by default. By default, that's what it's worth. That's what it's worth. By default. And I don't love that at all. I'll tell you a couple of things. When my wife and I started talking about money, the day-to-day operations of our money,

it would have been very easy for me to do all the money stuff in our relationship. Yeah, I would imagine you would be. Aren't you, you don't do all this? No, no, no, let me tell you why. I could do it. I was earning more. And this is what I do for a living,

so it's very easy. Yeah. But I said to her, I said, I want us to both be involved in this. Why? Because one day I might be hit by a bus. I might not be here. And the last thing I want is for you to be

sitting there in grief, trying to figure out what to do with this money, okay? That's number one. Number two, I think it's a lot more fun if we're both rowing in the same direction. It sucks. If you're there, you're rowing one way and the other person's rowing in the opposite direction or just doing nothing. It starts to feel bad for you. It feels bad for them and you have

this dynamic that emerges of power. Not good. So I said, you know, it's going to be harder for us to go down this route where we both have to do money. It was harder because she had to learn some of these skills she had not done before. And she had to change some of her mindset about money. It was also hard for me because I had to learn how to communicate differently. It's easy when you're alone. Oh, I'm doing it on my own. Boom!

I do it my way. Now, I have to do it our way. Right. But she does too. So that was really hard. But when you finally break through and the two of you are like, Oh my God, we're rolling the same direction. We're starting to read each other. We get it. Now it's a real partnership. Yeah. That's worth it. That's actually, I know, that's true.

I, you know, because you're right, you would, I automatically assume that you would be taking care of all of that stuff because this is what you do when you're a master at it. But it makes sense why that is that you guys are kind of contributing, not maybe contributing the same amount of money, but you're both involved. You know what's happening. Yeah. And I think it's fundamentally different than something like doing the dishes or watering the plants.

In any relationship, of course, there are certain things that one person is better at or they just do. it's a habit, fine. No problem, if one person naturally does the laundry or the paint fine, but money is different. It's one of those unique things, money, taking care of children, that it's very unlikely to work well if just one person is doing it. It cuts across everything.

Money, again, I talked about how you have a thousand financial decisions you make every month. And with your partner, it's everything from what brand of ketchup do we buy? Right. Two, how much are we saving? What kind of lifestyle? Can we afford to get a pool or to go on vacation? Do you really want to be having 10,000 discussions like that?

Fighting over ketchup? That sucks. You know my nightmare, my worst nightmare in life, I told my wife this when we first started. I said my nightmare in life is 10 years from now. We're sitting here talking about money and we're looking over some safe way, grocery receipt and critiquing, oh, you spend too much on that head of lettuce. Oh, we should really get broccoli on sale. I don't wanna live on a planet where I have to do that.

Therefore, let's come up with a proactive set of rules. How much do we wanna spend every year on food, on vacation, on gifts? Let's do it right up front, right ahead of time. And then we don't ever have to worry about critiquing the price of sour crowd never That's a good so basically you're saying people should put together

Their money rules right up front or what's like non-negotiables for them right up front to help with these alleviate or or just Not get into these problems down the road. Yes, start talking about what's important to you. It's, you probably won't come up with these crisp money rules on day one, because it's a lot of work. It's hard. And it takes time for you to even know what your own rules are. Right, when I ask people,

what are your money rules are like, what the fuck are you talking about? What's the money rule? Well, they don't know what it is. They don't even know, they know nothing about money. Right, so how can they come up with rules? But that's okay. You can Google, remit money rules.

You can see what mine are. Hey, borrow some of them if you like. And as you start to talk to your partner, you know, hey, when you were growing up, what your parents talk about when it came to money? Like what they spend on, were they in debt? How do they think about it? You know, my parents, this is what they did. And so, you know, now I'm, I'm kind of nervous about X or,

you know, I noticed that I kind of overspend on why and really open it up. This is a multi-month conversation. Chapter nine of my book, I show you the questions to ask. And as you do that, you're going to start to be like, oh, that's also in your book. Yeah. Chapter nine. And so everything's in this book. I mean, you start to go, whoa, instead of judging my partner, I'm actually understanding them more. For example, I can start to understand, not judge, but understand why you have this blueberry thing.

It's not stupid, there's probably a very good reason for it. Yeah, there is, I'm sure. And so we, and then I do the same. I'm vulnerable, I open up, and then over time we go, oh my gosh, like, hey, we're both just trying to figure this out. Let's do it together. Right. And let's come up with some money rules together

and let me come up with my own on the side and maybe we can make them all work together. Well, don't they usually come from your past, like from how you grew up, like you grew up poor, so you saw your mom do something, your dad do something, so you kind of just inherited it, not you, I'm talking in general.

Well, me too. Right, you did the same thing. I know. A lot of us are guided. I call them invisible scripts. We are guided by these invisible scripts. So some of them, the most common one in America, one of them is buying a house is a great investment.

Okay? Yes. The Americans love it. You guys love these trite phrases that make no fucking sense and you go around repeating them every day, ho ho, throwing money away on rent. I don't want to pay my landlords a mortgage. Really? Do you say the same thing when you go out to eat at a restaurant?

Oh, I'm paying this restaurant tour's a mortgage on what a waste. You're literally shitting out the food that you paid money for. It makes no logical sense, but you love it because you heard it from somebody else and you heard it from your mom and your dad and your grandparents, but you never sat down and ran the numbers. Just as an example, I could buy a house right now.

Funny. And I rent by choice. Why? You still rent? Yes. It's a great financial decision. Now, I will buy one day and in fact, in my money rules, one of the things I wrote down was when I go to buy,

I want to be able to pay all cash. Okay, so it doesn't mean I have to put all cash down. I thought, why though? That's not one of your things, right? I thought you need to, no, paying cash because don't you want to build up? Well, this is a great question. Okay.

So by the time this is one of my own personal money rules. Yeah. When I go to get something that is really important for me, I want to have enough money that cost is irrelevant. Okay. Now again, this is a very fortunate position to be in. And most people are like, hey, must be nice. But it started off with, I I wanna be able to buy appetizers

without looking at the price. And then I built my business and grew my investments. And so now I can think about things like a car or even a house. But for most of us, it's, hey, what's important to me? And my philosophy is, I would rather just save and invest. And then when I go to get something, price is not gonna be the first factor or the second factor. I'm going to get what I love. And I want to make sure I have enough that financially, it's not a question. Same for a house. And so I rent happily. My wife and I love it. If something breaks,

we send a text message. It's fixed in 24 hours. Love that. And yet one day, you know, because I like design, I'd like to design something myself, one day we will buy, but when we buy, I've already know it's not going to be an investment, it's not even gonna be a purchase, it's gonna be a pure luxury. So I will lose tons of money on the house that I one day buy. I will, I already know, I will lose tons, and that's fine.

Well, you just said something that was so key, right? Like you're not looking at your house as an investment. Yeah, for most, I should say, many primary residences are not a great investment. Some are, but in cities like LA, New York City, etc., inexpensive markets, and even in some other markets, it's cheaper to rent and then to take the money you would have spent on a mortgage and invest it. Again, this is crazy. People listening, I already know what they're saying.

You're throwing money away on rent. What about the tax benefits? That's crazy. You wanna end up at 70 with no house, but they don't understand that there's a totally different way to look at money. And my suggestion for everybody listening is not that buying a house is a bad decision.

That's not my argument at all. It's that for the biggest purchase of your life, you should run the numbers. Yeah. And in cities that may surprise you, you will discover that it's actually cheaper to rent. You can build up a massive portfolio that grows relatively predictably.

And if you decide to buy, if and when, you'll be in a great position to do so. Now such a great, it's such a different perspective than everybody has, especially living in LA, we both live here, and people are like, well, the prices and real estate are so extraordinary. And they're keep on rising. They're like they keep on rising Yeah, so that the the argument is well if you keep on waiting. Yeah, it's gonna be even double

That's right. Yeah, that's a good that's like a third-grader argument. That doesn't make any sense You know that they're greater. No, it's not it's not you know, I'm not blaming you That's an argument that a lot of very smart people make no, I told you agree with you I think it's interesting. You sound like my husband. I said it's you last time you're on the podcast. It's like unbelievable. Well, I mean, you know, it's funny.

It's a very middle class belief that you need to buy a house. And there are historical reasons for it, right? Generational wealth, et cetera. But what people don't understand is if you look beneath the surface, for example, right? Generational wealth, et cetera. But what people don't understand is if you look beneath the surface, for example, in California, almost nobody knows why our price is so extraordinarily high in California.

They're just like, oh yeah, it's expensive. That's not an answer. Why? And almost nobody knows the historical connections to things like prop 13, NIMBs, et cetera, et cetera. Those are driving the prices up in California and causing a real affordability crisis. Now, I think houses should be,

housing should be way more affordable. I'm all for mixed use development. Now we start to get into the political world which is why personal finance is deeply political. If you are a young person in a city like Manhattan or in LA, it is extremely hard for you to afford to buy a house. Extremely hard.

Your parents could have done it on one income and young people can't even do it on two. It is crazy. So there should be, in my opinion, much, much looser restrictions on development, allowing young people to be able to afford housing instead of all the wealth flowing up to older rich nimbis. And I say that as a guy who could go out and buy a place tomorrow. It's not right that you have to be super rich to be able to buy in California. That's crazy. But putting all that aside, I want people to run the numbers.

And you can find out how in chapter nine, it's not simply prices always go up, so let me buy. That's not how housing works at all, and I want people to get smarter about it. Well, you always have a unique perspective, which I think is why I like talking to you, because you make people think in a different way. So you said something about LA, I just wanted to kind of finish close the loop. I thought

people LA is very expensive because they're not, it's a very, people want to live here. It's a very, people want to live here. It's a, it's like a very, people come from all over the world. They're not, they're not building more in like the, near the beach or the ocean. I thought those are the reasons why. Okay, you just said two really important things. So let's correct those apart. First of all, tons of demand. Yes. There's weather, it's a beautiful area.

Not supply. Not enough supply. Yes, and not enough supply. And why is that? Why are they not building near the beach or frankly anywhere in California? Why? What do you think? It's because the homeowners, the people who own homes

hate the idea of more housing. They're called nimbis. Those are the, that's what's gonna say. First of all, what is a nimbis? Fuck nimbis, okay. I hate them. Nimbis, not in my backyard. They've been using the same arguments since the 60s

and the arguments go like this. There's gonna be too much traffic. What about parking requirements? And as you unravel and unravel what they basically mean is we don't want other people, especially dark colored people to be living in our neighborhoods. That's what NIMBYs are.

By the way, NIMBYs interestingly are both Republicans and Democrats. Home home owners because of the perverse way we've set up housing in America. Homes are one of the largest assets that people own. Right. So they go, oh shit, if we vote to allow more housing, what's gonna happen to the price of our house? Right.

It's gonna go down as there's more supply. Right? When supply goes up, prices go down. Right. And so they go not in my neighborhood, not in my backyard. And meanwhile, leaving one group of people out in the cold, young people, people who can afford it, people who don't have enough money. And so it's really, really tragic because you get these people who bought in the 60s and

70s. They just sat and squatted on their house, made tons of money because they limited supply. They basically made it into the castle and pulled up the drawbridge behind them and now they're not letting anybody else buy. It's tragic. And so what we see in many other countries is let's build mixed-use development. Let's have apartment complexes. Young people would love to live there, okay?

You could still have your house, fine. No problem, have your house cool. But some people who have a house are gonna build a second property on it. Let another family live there. And so on the same lot that one family lives, you could house 10 families, 12. The homeowner can make a ton of money

selling part of their backyard off and everybody wins. Now, the NIMBYs have been against this for a long time. This is a bit of a historical thing because of Prop 13, etc. But that's changing. And it's changing in California. There will be more housing. There's lots of people angry about it, but let them screech. Let these N nimbis screech. It's time for young people to have a chance at having affordable housing. And that's exactly what's happening. I didn't even know that was happening right now with that. Then why?

I thought, because also, you know, right now, was Florida, everyone, a lot of people, not everyone, a lot of people from California are moving to Texas and to Florida. There's like, it was like a surge of, do you know why? Because they don't want to be here. Why?

Because of the politics. Nope, that's not why. Nope, that's bullshit. That's a right-wing talking. And also for taxes. Taxes are another misnomer. Okay, this is great. I'm so glad you brought this up.

This is really personal finance. A lot of people think it's about budgets blah, blah, blah. And they think keep, keep, remain. Don't talk about politics. Personal finance is a lot of people think it's about budgets, blah, blah, blah. And they think, keep, keep, Remy, don't talk about politics. Personal finance is political. Yeah. And so I'm so glad you're bringing this up. First of all, many of the people who move to Texas from California are actually conservative. So they're not, it's not that they're fleeing purely because of politics.

Also there's a great book on the myth of millionaire tax migration. Turns out this concept we have, that millionaires, they just go for lower taxes, is not entirely true. People who are millionaires tend to be older, they have community roots, they don't just pack up and leave to save 50 grand a year. They're fucking millionaires, they don't need to do that. People are leaving California, primarily for affordability. They can't afford it. It's too expensive. And why can't they afford it?

Because of housing. And why is housing so expensive? Well, we just talked about nimbies, not allowing more development. So you limit the supply of something. There's a massive demand to living California because it's a beautiful place. Everybody has, there's lots of job opportunities. And what happens? Prices go sky high, which is what you said.

Prices seem to always go up. Well, that's not usual. They shouldn't always go up. They should, how can you expect people to afford housing when the price is always going up? It makes no sense. Right, well, yeah. That's why.

And so, even though the prices are going are sky high, there's still people moving to California. What Yimbees want to do, yes, in my backyard, is to loosen that a little bit. Loosen that tight supply, build a little bit more, make it more affordable, and that will allow an entire new generation to come to California.

Well, I thought, well, isn't that kind of like the, if you can afford it or not afford it, it's still a tax thing, right? Like you can't afford the tax or you can't afford the cost of living. Well, prop 13, you just don't wanna spend it. So, there are many places including Texas that have higher property taxes than California.

A lot of people don't know that. They go, oh, wait, I'm gonna move to Texas and save a ton of money. Then they buy a house and then they're like, what the fuck? The taxes are so high here. New Jersey, very high taxes. It's a blue state. So taxes are interesting.

I'll tell you this prop 13 thing. If you're listed. Florida. Florida is a low tax state. You sort of, in many times you get what you pay for. You have states where, for example, in Texas, where they do have high property taxes, but very low other taxes,

and you get politicians that are not necessarily looking out for you, right? As we saw with the freezing snow, and then Florida right now with COVID. It's like a peach redish over there. Yeah, and that's really unfortunate. So in California way back in the 70s, there was a thing called prop 13. I won't get into the whole thing. You can look it up if you're interested, but let's put it this way. Grandma who lives next door to you is paying essentially nothing in property taxes, but the young person who moved in

and bought a house next door to him or her is paying massive amounts of property taxes. That is a boon, someone say boon doggle for the old and the wealthy in this state. And that's another reason that prices have gone sky high in California. So again, what's the point of all this stuff? It's to show you that in some ways personal finance is within your control. You can create a conscious spending plan. You can negotiate your salary. You can start investing right now. Yes, you can do all those things. That's what I believe. But I also want to show people that some of these things are out of your hands. That personal finance is not just

pull yourself up by your bootstraps. No, there are political things going on around you that you as an individual person have very little chance of affecting. And so when we say to young people, this drives me insane. Why don't you just work harder than you can buy a house? How can you buy a house when a law that was passed, proposition was passed 40 or 50 years ago has constrained the supply of housing and has made it virtually impossible for most young Californians to buy. Right.

So some ways we can take control and I believe that you can simultaneously acknowledge personal responsibility as well as systemic problems that need to be changed. Right. That's such good information. Because it's just, you know, to, you just end up mimicking what you hear over and over again, and, you know,

kind of just saying it over, right? And I'm, I'm like, kind of at fault for that, right? No, I appreciate you bringing it up. People come to me and they go, repeat, they're fleeing California because they're taxing them too high. I go, you're talking to a millionaire who moved to California.

Why don't you ask me why I moved here? And they go, what? You, what? I go, yeah, millionaires are not, they're not exclusively concerned with paying an extra 3% or 5%. There's a whole book on it. Read the census data.

Also lifestyle. Exactly. If you are a millionaire, you want to go someplace, it's some do. And hey, if you want to go to Texas and you love it, God bless. That's awesome, right? Your rich life is yours. It's not mine. But you're totally right that many people repeat these

phrases without ever asking themselves, is it true? For example, is it true that people are leaving California for political reasons? Is it true that millionaires are just going away if you raise taxes? And if you raise taxes, they're going to flee taking all the jobs with them. Actually, no, that's not true. So buying a house, I want people to go deeper beneath these phrases, discover the truth, and look and say, you know what? I do want to live in Florida. Fine, I do want to live in California.

Also, fine, your rich life is yours, but don't do it because of some phrases been repeated for 50 years. Do you ever do anything like about these myths? Like, you should do something on your podcast. I do it. You do it. Yes, and people get very mad on your podcast. I do it. You do it. Yes, and people get very mad at me and I love it.

I mean, yeah, well, I never hurt. You don't hear it on Instagram, right? Let me come close on it. I can do it on Instagram. Where do you do it? Should I pause or should I? Hold on, just like the doors, like. Okay, so do you kind of do something where you kind of take these myths and kind of break them down?

I do, I love it. So some of the myths I cover in my book, many of the myths I love showing you all the math and the examples behind it. I cover those on my newsletter, Iwt.com. You can sign up for my newsletter there. And you can see, for example, where I talk about the myths of taxes and many other myths that we have about money.

And it gets people angry, in some cases, because they have believed it and repeated it their whole lives. That's okay. I don't mind if they get a little angry. I want cases, because they have believed it and repeated it their whole lives. That's okay. I don't mind if they get a little angry. I want them to think they may decide they disagree with me. Also okay. What I want is for people to see that some of these things that we take for granted that

seem so simple are actually quite complex. For example, the reason of housing going out in California, nobody knew is because of a 50-year-old proposition. Once you understand that, you start to go, oh my gosh, what else did I not understand? How can I go deeper on this and really understand what's going on around me? We always like this, like as a kid,

did you think, were you always interested in this stuff? No, I always did feel like there were certain things that I was just absent the day they taught it, like working out to tell you the truth. I was like, how does everybody know how to go to the gym and all these machines? Like I never learned that. Could you put you busy learning the other things?

You know, I guess so, but it made me have more of a sense of compassion. Like I felt so lost when I was learning about fitness. Well, before I even learned, I used to just joke, like, oh, I'm a skinny Indian guy because I was learning about fitness. Well, before I even learned, I used to just joke like, oh, I'm a skinny Indian guy because I was really skinny. And I just thought that was my destiny. I was 127 pounds at six feet. And I just thought it was like, that's who I am.

Kind of like what you said earlier about the blueberries, right? And then over time, I had friends and teachers and trainers who taught me, actually, there's a way to change this. And although I will never be an NFL linebacker, I learned that, no, I actually can change a lot of things about myself in a direction that I like. So with money, that came a little easier to me, I think, because I just kind of grasped the compound interest part of it, the fact that there are some simple things you can do, and that it doesn't have to be that complicated. And then once I started to see how you can use money, then it became very exciting. Yeah, well, you're just so good at just really breaking it down and explaining it. I know I've said that a hundred times,

but I have a few other questions that I kind of just forgot about. I'm going on to down this rabbit, but because I heard you talk about a couple of things, I'm like, I want to ask them about that, because I think people would find it interesting, which is a hundred dollar challenge. Okay, so when you, when we talk about money,

a lot of people go, okay, great, but what can I do today? Yes. Exactly. Exactly. I issue a $100 challenge to everybody listening. And what this is is, in the next 48 hours, I want you to spend $100 on yourself. I want you to spend it on something you love.

Now, here are the rules. It can't be on your kids, your dogs, or for charity. Okay. It's got to be for you and you alone. And if $100 is too much for you, pick $10. If $100 is too little for you, like the couple I speak to on my podcast, you have $8 million. Pick something more. The point is that it should feel meaningful, and it should be something you love. Now, if you can do it with your partner, even better. You each spend whatever amount is comfortable and you come back and talk about it. Hey, this is why I did this. I've always wanted to get this, but I just never got

around to it. Okay, I finally did it. And like, I love it. I want you to see money as a source of possibility, excitement, not anxiety and overwhelm. And what I will ask people is to send me a picture of what you bought. Send it to me on Instagram, on Twitter, get on my email list and you'll get my email address. I want to see what you bought and why is it meaningful to you? That's the $100 challenge. Wow, so how did you think of this?

Just because, like, what was the impetus for that? Because so many people struggle to spend money. There are a lot of people who are overspenders. We're not talking about that. I know, I know. Although, overspenders, they just tend to spend on stuff that's in front of. Stuff, exactly.

Oh, I got it. Like, they'll tell me, you know, my closet's packed. I have so much stuff in there. I say, what brands? And they just tell me all these random brands. I said, let me guess, are you on all their email newsletters? Yeah. Do you follow them on Instagram?

Yeah. I go, if you could buy any brand, would you buy those brands? They go, no, I would buy a different brand and which is more expensive, better quality, but I wouldn't have all this stuff crowding up my closet. Then on the other hand, there are people who struggle to spend money at all. They accumulate, accumulate, accumulate.

And as I say, everybody teaches you how to save, but nobody teaches you how to spend. And that's the point of this challenge. I want you to know how to spend in a way that's meaningful to you. So somebody could decide, I'm gonna buy the, really, I don't know, a nice tie that they've seen. I don't know, who the hell wears a tie anymore?

I don't know, not me. Or a really beautiful piece of cake, right? One that costs like, I don't know, in LA, $18. Who knows? The point is not that it's extravagant. The point is that you're actually putting money towards something meaningful to you. And then is it the point to also then do that

on the regular to kind of get used to doing it? Yeah, so I will teach a bridge book and you see in chapter four, conscious spending, I say, spend extravagantly on the things you love. Most people don't know how to do that. So now we're kind of building that habit. But once you do that, it becomes a lot easier to cut, cost mercilessly on the things you don't. So you reflect on it, you go, oh my god, I love that cake. I can't believe I bought that. You

know what? I would love to get that piece of cake once a month. Okay, awesome. In order to do that, why am I spending on this and that and this, it's actually not that important to me. So it's gonna be easy for me to stop spending there because I know that the cake or the trip or the whatever is gonna be more meaningful to me. Right, that makes sense. I have a couple other questions about the couple situation. Do you think couples should have a separate account,

the same account and join account? Like I wanted to ask that and then we got like, do you railed a little bit? I think that one good way that I've seen of setting it up is a joint account and two individual separate accounts. So the joint account is, right, the money flows there and you, what goes into joint account? So things like rent or mortgage, food and groceries,

even date night, things that you plan for. Other things that my wife and I put in the joint planning would be gifts. So we already plan for the whole year ahead what gifts are we going to give and how much are we going to give. You plan that ahead? Yeah, because in December we sit every year when we kind of look at, okay, what happened last year with our finances? Where did we go over under? What are we gonna do this year? For us, it's important to travel.

So we put that and plan for that ahead of time. And then we say to ourselves, okay, which friends and family gifts are gonna come? And we're never exactly right. You don't have to be exactly precise, but let's just say, I'll pick a number. Let's say it's 10 people, and let's say that we are giving 50 bucks each. Again, I'm just making these.

But you people should be putting that like number like they'll say I'll put 20 dollars a month, you put $10 a month, like, right? Exactly. And then add 10% because you know, there's going to be a friend you forgot about. Right. Just give yourself, be a little conservative. Those are what we put in joint. You mentioned something just now 20 versus $10. If people are earning different amounts of money, how do you handle that? Well, that was my next question. Proportional is a really good way to do it. So if one person earns twice as much, they can pay twice as much on the expenses. You can be loose about that. You know, one person may say, well, you know what? I don't care about really nice hotels.

You do. So maybe that person can pick up the delta between a normal hotel and a really nice one, whatever. But in general, proportional spending is a pretty simple straightforward way to do it. So, I'm hearing a lot of communication has to be taking place. That's the key to actually talk about these things,

communicate about it upfront, so it doesn't lead to bigger problems down the road. Yes, I wish everybody listened to what you just said, because you have a couple problems that happen. One, the common problem is most people actually hate the idea of talking about money. They hate it. Why? Because they idea of talking about money. They hate it. Why?

Because they actually don't like money. It makes them feel guilty, overwhelmed, anxious, and so they ignore it. Uncomfortable. So it feels like it's such a taboo. I know. That's why I started the podcast because I want you to see, no, we should be talking about money.

We should be talking about your impending death. You're all gonna die. One day, let's get a will. Nobody wants to talk about that. No need to hide it. Everybody's gonna die. Let's just talk about it. Let's be open about it.

That's my belief with money. We have all have money and we all need to figure out how to spend it, manage it, grow it. So let's not hide from it. It's real. Let's tackle it. So you go and you start having these communications and the first group of people, they just tackle it. So, you go and you start having these communications and the first group of people, they just ignore it

and they wait until a big fight blows up. They go off, this sucks. They fight, they paper over it and then they bury it until it comes up again. That's one way. The other extreme is what I did, which was I just wanna get into the Excel spreadsheet. This is what I do with my wife when we first started to,

I was like, let's build a coolest model on earth. It's gonna be so sophisticated and it'll flow was I just wanna get into the Excel spreadsheet. This is what I do with my wife when we first started talking. I was like, let's build a coolest model on earth. It's gonna be so sophisticated and it'll flow. And she was like, what the fuck are you talking about? And what I got, I skipped, talking about what money meant to us. Okay, so I made as big of a mistake as the other person who ignores it, I just wanted to jump right into the numbers. I felt so comfortable, you know,

Excel, it's so logical. But I skipped over all that stuff, which caused us problems. And so I had to learn how to communicate with her in a way where we were both connecting. So don't make either of those mistakes. A simple way to do it is once a month, set a 30 minute meeting, and you two throughout the month, you can add anything to the agenda is once a month, set a 30 minute meeting, and you two throughout the month,

you can add anything to the agenda, treat it seriously, treat it like a business meeting, right? And start off by celebrating. Hey, what's something that was really good this month? Oh, you know what, I love that restaurant we went out to. Great, celebrate, clap, give each other a hug, celebrate, and what's something we're looking forward to.

Yeah, you know, I'm really looking forward to our anniversary coming up or Christmas, I can't wait. Okay, let's talk about some other things. Like what's on your mind? Can we look at the numbers if you've built up a conscious spending plan? And if you haven't, that's okay. Hey today, let's tackle this one piece of it.

And over the next three, six months, you both will become much more aligned because it's part of your regular monthly time routine. Also, it becomes very, it becomes habitual, like you're used to it, and that becomes easier to do. But why is there such a taboo about talking about, like talking about money with friends, like, how much did you make? How much can I make? It's like you can, you can never bring that topic up. It's very like kind of like the pink elephant in the room. Yeah. Yeah. I mean, in America, is it just America, you think, like North America? Do you think it's happening all over the

place? In different ways. But America has its own unique perspective on money. We are at once puritanical and Instagrammable. We love to post about, look at this cool club I went to or look at this awesome nobu Malibu. We love that, but the minute you start talking about other things like, how'd you afford to put a down payment on a house? Or like, hey, how much are you getting paid?

Everybody claims right up. And that's our puritanical side. So if you try to explain how American culture thinks about money to somebody from a different country, you would start to realize, this makes no sense at all. We are so open about certain things. In fact, we go out of our way,

look at my new Tesla, whatever. And then at the same time, we will never talk about other things like how much credit card debt do you have? Okay, in one study, I decided in my book, more people were likely to talk about their sex lives than the amount of credit card that they have. Oh, for sure.

You think so? A hundred percent. Well, now it's become so, like it's not even like, rescuing anymore. Like people are saying the most, like just the most, like it's most personal things beyond that.

I mean, it's getting more and more. Yeah, so I don't think you have to share everything. I don't think that if you don't want to, you don't have to share how much money you make or how much you network is. You don't have to. You're not under any obligation to what I would like. I was with the sex stuff.

People are much more open to like talking about that. Like then of course. And there's nothing, but you ask them how much they make a year, also with the sex stuff. People are much more open to like talking about that. Like then of course. And there's nothing. But you ask them how much they make a year, they like never tell you. It's like they'll be so offended and shocked that you'd even ask that question. Yeah.

What I would like to start having conversations and showing people that it's okay is, you know, hey, how do you think about money? Hey, like what do you spend on that you really love? And like what, you know, do you spend on that you really love? And like, what, you know, do you have you set up investing? These are questions that are not talked about that often. So everybody feels alone. Right. Exactly. But deep down everybody else around who's wondering the same exact things. Or they feel judged or it's like becomes like

whoever makes more money. They feel like they're not worthy. Are there such a power again? I know, I hate that too. It's just money, it's just one thing. And yet, people's relationships are based on it, friendships are based around it. You're right, money is power. It's perceived to be power in America. But I will tell you that when I talk about

the concept of a rich life, I always say money is a small but important part of a rich life. There are people who concept of a rich life, I always say money is a small but important part of a rich life. There are people who are living a rich life, making $45,000 a year. So true. And there are people living a rich life, making $650,000 a year. It's not simply a number. It is intention. Do they actually know what their rich life is? It is about having the time to do what they want. It's about perhaps surrounding themselves with loved ones and on and on and on. Just thinking that if you make less, you're not rich

and if you make more, you are rich, that's a very old style way of thinking about it. Now of course, money helps. All right, and it drives me nuts when I hear people, they're like, oh, I make 400 grand a year. I just don't feel rich. I'm like, well, you make way more than the median person in your entire state.

So you're doing very well financially. Right. But your feelings are very uncorrelated with the amount in your bank account. And that is one of the things we explore on the I Will Teach to Be Rich podcast. No, I totally agree. Do you know this whole stat about people saying that

as long as you're making $70,000 a year or whatever your, I don't know the number, I think it was that, then people's level of happiness and doesn't change, really? It's a myth. That's a myth. That's another myth. Oh, is it? Because think about it. First of a myth. That's a myth. That's another myth. Always it.

Because think about it. First of all, you can search $70,000 money study myth and you will discover why it's a myth. Okay. Okay. 70K in LA versus 70K in Kansas. Very true. 70K at age 20, 70K at 65. It's totally different.

True. And in fact, the statistics that the research shows the opposite. So life satisfaction goes up. And in fact, the statistics, the research shows the opposite. So life satisfaction goes up. And in fact, happiness. There's a whole bunch of research about that too. So. So you did cover this before. And did you ever cover this in your newsletter?

I did. And if you subscribe, you will get other insights. Things that, again, we take for granted. Like, a lot of people listening have heard that 70K stat. Yeah. And they go, 70K. Yeah. so like, you know, it's fine. I don't need to make more because I won't be happy. You should actually understand the research itself, which is not what people believe.

And now there's even newer research out. What is a newer research? It shows that that statistic is not correct for a variety of reasons. Again, search $70,000 money study myth and you will see. Okay, I'm going to do that. I'm also going to, I thought I was, I thought I did get your newsletter, but now that you're talking about this stuff, I haven't. So I gotta go get it myself. IwT.com, you can sign up for the newsletter right there. Can you tell people all your information? Like how to find you? Because I mean, when you come back

again, I just love watching you. I never got to rant about Prop 13 as long as I did. So listen, you gave me a gift, so thank you. Oh, I love it. You're so welcome. Yeah, you can find me on my website, iwt.com. Make sure you sign up for the newsletter there that has a lot of my best material on money, business, careers, and psychology.

I'm on Instagram, at Rameet, Twitter, at Rameet, and I have a podcast called I Will Teach You Be Rich with Rameet, Twitter, at Rameet, and I have a podcast called I Will Teach You Be Rich with Rameet's CT. And I'm going to listen. I'm going to keep on listening because I just, I really like it. Thank you so much for coming on. I really appreciate it. And when you're going to write another book, I mean, I get you, I get, I get, I get that

set all the time. Don't ask me that question. I mean, I love having my book out. It's been, it was printed for a second edition, 10 years after it first came out. And, you know, I was very flattered. It was in Times Square and all these things. But the process of writing it is so hard. Yes. So I'm still like, you know, I'm like, I don't know someday. But, you know, and then information, honestly, is still very like relevant. I mean, even though it's older. Yeah, I updated it.

So now everything is completely modern. It includes references on crypto and what happens when you make more money. So there's a whole bunch of updates. Oh, good to know. Well, that's good then. Well, thank you so much. I appreciate it.

Bye. This episode is brought to you by the YAP Media Podcast Network. I'm Holla Taha, CEO of the award-winning digital media empire YAP Media, and host of YAP Young & Profiting Podcast, a number one entrepreneurship and self-improvement podcast where you can listen, learn, and profit. On Young & Profiting Podcast, I interview the brightest minds in the world and I turn their wisdom into actionable advice that you can use in your daily life. Each week, we dive into a new topic like the art of side hustles, how to level up your influence and persuasion and goal setting.

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