Money For Couples with Ramit Sethi - 127. “Our financial advisor almost cost us $800k. How do we fire them?”

Episode Date: October 24, 2023

Jeff is 50, he’s a specialized surgeon. Susan is 48, she stays at home with their two kids. Their discretionary spending has grown over the years, ballooning at an uncontrollable rate. But their biggest issue is that they’re being taken advantage of by a percentage-based financial advisor.  This episode is brought to you by: Facet | Get affordable, accessible financial planning with a flat fee membership. For a limited time, the $250 enrollment fee will be waived when you sign up at https://facet.com/ramit. Netsuite | Get visibility to everything in your business one one place. Sign up and defer payments, with no interest, for six months at https://iwt.com/netsuite. Fabric by Gerber Life | Protect your family today with Fabric by Gerber Life. Apply today in just 10 minutes at https://meetfabric.com/ramit. DeleteMe | If you want to get your personal information removed from the web, go to https://joindeleteme.com/ramit for 20% off. Connect with Ramit Get the Podcast Newsletter and exclusive Q&A about the show Get Money Coaching with Ramit  Download the Conscious Spending Plan Get my New York Times best-selling book Get my no-numbers journal Other episodes Instagram Twitter YouTube Submit a question for the newsletter iwt.com/askramit If you and your partner have a money issue and you want my help, I occasionally select a couple to work with, free of charge. Apply for my help here. Produced by Crate Media.

Let me share some of the coolest ways that my community has recently used money to live a rich life. One member did a month-long honeymoon in Europe after deciding she didn't want a big wedding. Another member bought a VW SUV that was their dream car that they've wanted for years. And another member made a rule that any time she buys a ticket for an event, she always buys a second so that she can bring a friend. These are just a few examples of how my money coaching members have built systems to use their money. Notice that there's no more anxiety, that they have a smooth running system.

They know when their debt's going to be paid off. They can feel comfortable spending on the things they love. They can actually spend less time on their finances while living an amazing life. In my money coaching program, members also get access to live events every month, including topics like money with aging parents and how to create amazing vacations.

That was one of my favorites where I shared how I saw, spend my money on travel, plus Q&A directly from me. If you want to start building your rich life today, join us and get instant access to our back catalog of years of live calls. Check out IWT.com slash money coaching to join now. That's IWT.com slash money coaching to join the program right now. That it's a waste of money, that we were fooled by it, that somebody sold it to us and we didn't know better then, but we know better now, and that we could make that money work for us

someplace else. So you don't like being ripped off? Right. I think that was the saddest part is seeing your salary and realizing we had so much debt and it didn't feel good and the money didn't fix the problem. Did you do this conscious spending plan together? We did. It was not the 20 minute version of the conscious family. Oh, how long did it take? About two and a half to three weeks, I believe. What, three weeks? Days, days. Didn't come close to 30. Let me tell you, it doesn't turn you on, I'll say that. We don't have a simple financial situation, I will say that. Can you just come here, Ramee? This week, I'm speaking with Susan and Jeff. Susan is 48. She's a stay-at-home mom. Jeff is 51, and he's a surgeon. They've been married for 19 years, and they have two kids, ages 12.

and 14. Now, if you know my book or if you've watched my Netflix show, you know that I talk about financial advisors occasionally. You know that I never want you to work with a financial advisor who charges you a percentage of assets or AUM. On the Netflix show, you saw me work with Natalie and she was going to end up paying millions of dollars right into her advisor's pocket, all in fees. So I get a lot of questions from people about this, including Jeff and Susan. And I understand that this is a complex topic, right? Should I hire a financial advisor? How do I find the right one? This is an important one. So I wanted to dedicate an entire episode to this issue. I wanted to show you what really goes into how financial advisors charge you money and also some of

the surprising psychology. When it comes to hiring a financial advisor, many of us feel good delegating our money to someone else. So for this episode, I collaborate. with a partner, facet, a service that offers affordable, accessible financial planning through a flat fee membership, not a percentage-based AUM fee. Today, you're going to see the look on Susan and Jeff's face when I show them how much they are paying in fees. You'll also hear me show them how to graciously get out of their advisor relationship, including a word-for-word email they can send. Notice what happens, by the way, when we go through their spending. Quick message before we dive in, I was reading this article about dating red flags.

For example, being a MAGA Republican or listening to Joe Rogan. These are real statistically valid answers that they took on a survey. That got me thinking, what would be the top financial red flags in a partner? Well, that's exactly what I'm going to share in my newsletter coming out this Saturday, October 28th. Make sure you're on the newsletter so you don't miss it. Iwt.com slash podcast newsletter. Now, let's get to Susan and Jeff. Susan, what's the biggest recurring disagreement that you have about money with Jeff?

The whole life insurance policy. Paint the picture for me. Where were you and what happened? So this has been recurring for a long time, even back when the policy opened 15 years ago. I remember hearing through Susie Ormond that whole life insurance policies are not investments, that you shouldn't have them. that most of the money goes towards paying the financial advisor's pockets, not really as an investment. And so before children, before we were even making any money, we started that policy. Yeah, I'm always bringing it up. Okay.

So tell me where you were when you brought this up again. At home, probably maybe even at the pool, trying to brunt it. What does that mean? Just he gets agitated about the possibility of, as Jeff says, we're so far in because we've been paying for it for 15 years. Why stop now? It's only a couple hundred a month. Yada, yada, yada. I'm like, it doesn't matter if it's a couple hundred a month. It's still a rip off. We could take that money and put it someplace else where it would actually make a bigger difference. But I don't know all the numbers. I can't say, well, you know, we've already put it. in this and this is what it's worth, you know, you would make X amount of money if you stick at someplace else. And plus there's a loan against it. We took out money against that. And I have the numbers for that for how much we owe back at an 8% interest rate. So that makes my head explode also that we owe money. And he go and Jeff says, well, that doesn't matter. I don't care about that

because that'll get paid off if the policy gets paid out. I don't know how true that is either. If the policy, meaning somebody dies? Is that what we're talking about? If he dies. I'm the somebody, yes. Oh, okay. I mean, technically that is true.

One day when you die, there will be a payout. All right. Okay, got it. So, Susan, when you bring this up, how did Jeff respond? Defensive. Of all the things to worry about, this is the least that we have a problem with in our financial picture. That's not the big picture.

Look at the big picture. This is a small percentage of what we have. Okay, got it. Do you agree? I mean, is the whole life insurance a small part of the big picture? Yes. I think as far as our monthly investment, yes. Okay.

So what is it about the whole life insurance policy that seems to get you upset? that it's a waste of money that we were fooled by it that somebody sold it to us and we didn't know better then but we know better now and that we could make that money work for us someplace else okay so you don't like being ripped off right all right got it Jeff same scenario three weeks ago at the pool do you remember this conversation um not in not it specifically no and I guess it's because it was sort of a rehash of other conversations that all had the same feel. So one doesn't feel necessarily significantly different than another. Okay.

I know we've had this conversation. And I think my answer since at least, you know, of recent years has been, if we really want to control our finances, we should focus on other things first because this isn't really a huge part of what will make a successful or failure. Okay. How long has this conversation been going on? 10, 12 years, I guess. Okay.

10 years or so of having this conversation. And is it the same pattern where Susan brings it up and then you respond and then like nothing really changes? More or less. Okay. All right. I mean, is it really a problem? You two are fine. I think you have kids, right?

Mm-hmm. How old are your kids? Almost 14 and 12. 12. Great. So you got a beautiful family. Is this a real problem? Yes.

Because it's why give them the money? Why can't we keep more of our own money to fund what we want to do? It's the same thing with moving the money out of the investment people that we have now that are charging us 1.24%. Oh, your advisors. Yeah. Is this part of the conversation as well? Not this one, but it has happened. Yeah, we pivot to that too. Hold on, hold on. Let's take it step by step. All right. So let me start by asking, what do each of you do for a living? I'm a domestic goddess, so I stay home. Great. Fantastic. And Jeff? I'm a surgeon. Okay, great. How long have you two been married for? 19 years in next month. Oh, congratulations. Thank you. When you met, what was the situation when you met? What was the situation when you met?

How did you meet? And what was your financial situation back then? Profoundly different. We met working together. We were both in science, basically technicians in a lab. At this point, I was already starting to consider the possibility of medical school, working full-time going to school part-time to make that happen. What were you making when the two of you were working in the lab? Gosh, I made maybe 28,000 a year. year. That was in 98, 99, 2000. Okay. Yeah, maybe I made a little more, but not much. So maybe the two of you combined made like, let's say, 100K or ballpark a little less than that.

Way less. Way less. Okay. Actually, like maybe 50. Yeah. In 2000. Yeah. Wow. Okay. All right. Okay. So that's good to know. Yeah. And there were times in med school where, yes, he had student loans, but I made 30,000 a year and I carried both of us. Yeah. Wow. Okay. So that's quite a bit different than where you are financially speaking today. Did the two of you ever talk about how your financial life would dramatically change one day? No. I didn't believe it. I had a, my psychiatrist who had an MD was like, you're going to have a lot of money. And I go, I am. I just didn't, didn't occur to me. It wasn't, I had no idea. It just didn't seem real. It didn't seem like a possibility because, I didn't have money, didn't have, you know, being with Jeff was the first time I could even dream of going on a vacation. It didn't occur to me that you would go around the world and see things and do things and have all these experiences because I was like, how would you do that?

That takes so much money. Why would, how does that happen? Jeff, what about for you? So I don't know, it just didn't occur to me to have that next jump to the conversation about, you know, what's going to happen in five or ten. years after, you know, we really start working and, you know, start getting paid what a physician will make, let alone a specialized physician. Yeah. I'm so curious what happened the first time you got the full paycheck, Jeff. Do you remember that exact moment? Okay, tell me about it. The prorated amount for the rest of the month plus the sign-on bonus and how much taxes came out of it. Kind of blew me away. I don't know if you remember that. Do you remember what you said?

I've never been so disappointed in $35,000. I was expecting with what I knew, you know, a gross monthly salary would be for the $380 that I signed on for, plus a $50,000 bonus. I was expecting, you know, probably at least $50 total. We didn't make discrete plans, but, you know, in the process of trying to get moved in this and that, we had already accrued some debts. You know, we borrowed money for my parents and, you know, that didn't feel very good, you know, going as a doctor and a specialized doctor and a surgeon have to borrow money from your parents to move, so to speak. Yeah. What age were you at this point, Jeff? 40.

Yeah, you were 40 when you were finally done. Okay, got it took until he was 40. So 40 years, 40 years old, you essentially started this chapter of your career as a surgeon where you were being paid a considerable amount. out. Yeah, absolutely. All right. There's a lot already going on here. Whole life insurance, financial advisors, the fact that Jeff's salary is very high, but that he only really started earning it at the age of 40. I don't yet know enough to figure out what's going on here, but I'm collecting the clues in my head. Now, if you were me, where would you take this conversation? What would you ask next? Think about it, because as you listen to this podcast, I want you to hone your own

skills as an investigator. We'll be right back. There's a pretty cool TikTok trend going around right now that I really love. It's called admin nights. Basically, you get your friends together, you get some snacks, maybe some drinks, and you do all the infrastructure stuff in life that most of us skip over. If you're going to set up an admin night, here's my suggestion for you. Use Zoc Doc to book your health appointments, and you will be done fast.

ZocDoc is a free app and website that helps you find and book high quality in network doctors so you can find someone you love. They have over 150,000 doctors across all 50 states in 200 plus specialties, including mental health, dental, primary care, whatever you need. Just filter for doctors based on insurance, location, ratings, even virtual care options. And Zoc Doc appointments happen fast, usually within 24 to 72 hours. You can look through your options, book an appointment, and you are done. If I needed to find a new doctor today, Zock-D-D-O-C-D-C-T is what I would use. Stop putting off those doctor's appointments and go to Zoc-D-C-com slash Rameet to find and instantly book a doctor

you love today. That's Z-O-C-D-C dot com slash Rameh. Zok-D-K-D-K-T. And I want to thank Zok-D-D-R-Mash. Just guess the average wait time to see a doctor in the United States. I'm not talking about a specialist, just a regular standard family doctor. You think it's a week, two weeks? Nope, it's over 30 days. So a lot of times whatever symptoms you have are going to be gone or maybe worse by the time you get to that appointment.

I don't want you to have to wait weeks to see a doctor. I want you to get seen faster by an in-network doctor using Zocdoc. Zocdog is a free app and website that helps you find and book high-quality in-network doctors so you can find someone you love. They have over 150,000 doctors across all 50 states in 200 plus specialties, including mental health, dental, primary care, whatever you need. Just filter for doctors based on insurance, location, ratings, even virtual care options. And Zoc Doc appointments happen fast, usually within 24 to 72 hours.

You can look through your options, book an appointment, and you are done. If I needed to find a new doctor today, Zoc Doc is what I would use. Stop putting off those doctor's appointments and go to Zocdoch.com slash remit to find and instantly book a doctor you love today. That's ZOC, doc, dot com slash remit. Zokdoch.com slash remit. And I want to thank Zok doc for sponsoring this message. Now, back to the show. I think that was the saddest part of seeing your salary and realizing we had so much debt and it didn't feel good.

and the money didn't fix the problem. We made $380,000 a year, and it was still like scrambling. Still couldn't do everything. I wasn't like rolling around in money. I didn't feel any better. I didn't, if anything, I was more scared because I was wasting it.

And I wasn't being intentional. And that was awful. Were you always scared of money? Yes. Yeah, didn't grow up with a lot of money because I had a single mom and my dad wouldn't pay child support. So we always had the house and we had food and I, you know, things like that. But we didn't do anything extra. We never went on vacation. We never went out. I didn't dream any. I didn't for dreams bigger. Even marrying Jeff knowing that he was going to be a doctor. It didn't occur that it would ever be kind of even like my money. I was still always still scared that I. I was going to have to be able to take care of myself and so be able to live within my means, like things like that. Yeah, couldn't dream big with it. What messages about money do you remember your mom teaching you?

I have to be very careful with it because there's no like pot of gold. There's no, you're not going to get, you're not going to have a lot of money. you're just not. Wow. And that's why I went, because of our money situation growing up, that's why I went to college because I didn't want to have to worry about money. Were you the only one in your family to go to college? Out of my entire family.

I mean, huge people. Yeah, thank you. Because I didn't want to live like that. I wanted to be able to have things. I kind of went, I thought my happiness would be in things and being able to buy. things and realize obviously now that that's not it, but the security of having money because my mom struggled and she couldn't do things for us and that hurt. What else did your mom teach you either explicitly or just through her own actions about money? She never really spent it on

herself because there wasn't a lot of extra. If she wanted to dye her hair or do her nails, she did everything herself. I see. Not and it wasn't even so that she could give it to us because there wasn't a lot of extra to give. But, you know, she was kind of last on the list. If she wanted to do Christmas, she would put it on a credit card and then have to borrow the money to pay off the credit card for my grandparents. My grandparents were very stingy with money, never did anything fun or good with it. Just kind of wanted to hoard it and hold on to it because what if you lose it? They were from the Depression. Where did you grow up? What area? Philadelphia. Oh, okay. Interesting.

You mentioned that your dad did not pay child support. Did your mom ever reference that as you grew up? Yes. What did she say? Well, what little that they would, I would ever see them talk on the phone and turn into a screaming match over him not paying anything. I mean, it was so bad he went to jail for not paying child support several times. And then for my college tuition, apparently there was, when they got divorced in 76,

when I was a year old, part of the contingency was that he would pay for my college. But he didn't pay for college. And so my freshman year of college, my mom had to take him to court to force him to pay. And he still didn't pay. How did you pay for college? Student loans. Okay. So sort of a tortured relationship with money growing up is what I hear.

Would that be fair to say? Yes. And then not knowing how to handle money and going through our 20s and middle 30s, just making lots of money mistakes over spending, not being conscious, having lots of debt. It was, you know, we've learned the hard way. Okay. We meaning you and Jeff. Yes, me beforehand.

And then I feel like I dragged him into the mess. He was very conservative when we started dating. So Jeff, what did you learn about money growing up? money in our family, you know, raised solidly middle class. But it was just, A, it wasn't discussed, but it was never an obvious problem to the kids, at least. And so I think that's just sort of how my mentality was, is that it just gets taken care of. And even if we don't have a lot, we find a way, again, I mean, you know, we were pretty solidly middle class. My mom was a stay-at-home mom. My dad worked.

What'd your dad do? He worked for the city of Philadelphia. We grew up in Philadelphia as well, sort of as a forensic accountant looking up, you know, crooked accountants and lawyers and things like that. Didn't ever really bring his work home. I don't know the details of his work. Is your dad still alive? Yeah.

Has he done a forensic accounting of all the fees you're paying? Yes, not. Although, you know, we've all, that he had a similar, maybe not so, similar, but he trusted some money to a person he shouldn't have as well. What? Wait, what happened? The story is a little complicated, but he ended up getting a large settlement from his accidental death of his previous wife and left it with his brother-in-law, who was a financial guy, who totally messed it up, and they lost a large portion of that.

Oh, my God. Yeah. I don't know the details of what a large portion of. means, but it doesn't sound like it was just a couple thousand. It sounds like it was tens of thousands, if not even more, perhaps. How old were you when that happened? Middle teens, 15, 14, something like that. That's pretty old. I mean, old enough to know.

To sort of get an idea of what had happened, yeah. He never really forgot about it. And his sister ended up dying suddenly as well from a sudden illness. and so almost lost contact with the brother-in-law as well for a time. And so there was some confusion around it and a little bit of chaos as well. What was your conclusion from that as a 15-year-old hearing the stories about your dad and his money? Well, you know, the easy answer would be said that, you know, safeguard whom you trust with your money. What do you make of Jeff's painful family lessons?

to be careful who you trust your money with. I'll tell you what I take away from it, that it's probably really hard for Jeff to admit he might have made a bad decision with their money. Specifically, I'm referring to the insurance and the financial advisor who's charging them 1.24% AUM. Is the primary disagreement about Whole Life Insurance and your financial advisor?

Is that what it is? I think so. I think it is. Yeah, I think so. Yeah, I think it is. Yeah, it's, I have questions about the loan, about the loan against the whole life policy. I have questions about money for the kids. I have questions about some other things that are, yeah, big like that too.

Well, I have questions about how you got into these products. That's what I wanted. So let's start. You know these people come to the hospital. Oh, they love doctors. And they look for the doctors. Young doctors in residency that are only making 60,000 a year. Let's just talk about why every financial services company loves doctors.

I have doctors in my family too. So first off, we should all acknowledge that doctors have a reputation as being the worst profession in the country with money. Let's talk about the dynamics here. So you have some 30-year-old doctor who's like a resident. they've been in school forever. All their friends are making good money for the last 10 years. They're sitting here making like $40,000 a year and they live in a cramped little apartment

and they work like 18 hours a day. And they're told that someday they're going to make money, but they never even think about it. And suddenly somebody comes knocking on their door with a free lunch, okay? And they go, oh, this is so cool. We'd love to help you organize so that you're the specialist at this. We specialize in that and you do what you do best

and we do what we do best. Jeff, any of this sound familiar? Absolutely. All right. So they come specifically for doctors because doctors have effectively a guaranteed high salary and it's not that risk of a profession.

Like if you're a doctor, you're probably going to be a doctor for many decades. They talk to you about these different products. How old were you when you got into the whole life insurance thing and the advisor? I was an intern. It was like my second year,

my formal intern. So, 2007, eight. Was it the same person, by the way, who got you into all these products? Yeah, I mean, it was a representative of one particular directional company. Chet. What company was it? All our disability, life insurance, kids life insurance, term insurance is all in your what?

How much insurance do you? Well, I know, Jeff, you have like professional insurance, but you have term, whole life. So we've got, what else? We've got $3 million a cover. I've got $3 million of coverage for me. 2.8 of that is term policy, a 20 year, 30 year term. I forget which. That's good. And then 200,000 is the whole life portion. So like I was saying, it is a very small portion of the life insurance coverage portion. It's the most expensive part of the life insurance, but it's still a small part. And then I've got basically three different disability own occupation disabilities. So if I can't operate. it kicks in long-term disability that will, you know, if enacted pay 15,000 a month, basically.

And then I think when, you know, the kids were born, they did sell us life insurance on the kids because of, you know, the health and, you know, pre-approval. And now they can never be denied life insurance thing. We were conned to that. I agree with that. Oh, you realize that. Of course. They sold you life insurance for like an infant. I do now. I didn't at the time. Well, toddlers basically, yes. Well, the idea with that is that if they would ever have some kind of diabetes and become uninsurable. They couldn't, then they always have coverage. They showed you all these cute little pictures of a baby eating out of a spoon. Yeah. I don't know how true that is.

I don't know if that's true. That's just what they told me. I don't read the policy. It's not true anymore. Right. It's not true anymore for sure. Right. I think maybe there was some component of that at some point, but that's long been not a thing. It probably wasn't even a thing at the time, honestly. As a general rule, anything coming out of an insurance salesman's mouth is a lie. That's just a general rule, all right? Generally speaking. Okay, they see a doctor, particularly a surgeon, and they go, that's my kid's college fund. That's really the way that doctors are looked at.

You're prey. And, you know, you don't know. And I have to emphasize one thing, which is really important to unlawful. understand the psychology here, which is, like, if I go to a doctor, I basically go, look, my back hurts or my ankles broken or something, can you fix it? I don't know anything about the situation. Maybe I printed out a couple docs from Google, but really, I'm putting myself in the doctor's hands. That concept is drilled into every doctor in med school, right? Go to the spine expert, go to the whatever type of doctor.

The problem is that that's not the same analogy in the financial world. Because, Jeff, if I had surgery, I might come to you. And even though you're not really involved with the billing, you're not going to charge me 1.24% of my total portfolio, are you? Unlikely. You know, your billing office might charge me, I don't know, 20 grand or 50 grand. Who knows? Right.

I don't know much about, you know. I do my thing and eventually somebody pays them and I get paid by them and so on and so forth. Exactly. It's very compartmentalized. And that's drilled into you since day one. Of course, if we actually dig into the nuances of how they're charging and what they're doing, which we will, we discover that a lot of it is either overcharged or just unnecessarily complex. I'm going to explain something right now that's going to blow your mind. consider that if you go to a doctor, you expect they're going to take care of you. They're going to put your needs first.

They even take the Hippocratic oath. I will do no harm or injustice to them. If you go to a lawyer, you expect that they're going to represent you. But if you go to a mortgage broker or a whole life insurance salesperson or even most financial advisors, could you expect the same? No. Most financial advisors are not legally required to put your interest first. Do you understand how insane this is?

And understanding why this is allowed is going to blow your mind even more. In finance, there's a term called the fiduciary standard. A fiduciary is someone who is required to put your interest first. Well, guess who opposes a fiduciary rule? Wall Street. In fact, they've actively tried to water it down and abutiary. it altogether. And along with their Republican cronies, the Trump administration killed the fiduciary standard in 2018. Do you understand what this means? It means if your mom or your dad or your grandparents

walk into a financial advisor's office, someone who's presumably supposed to help them, that advisor might sell them some larded up shi-insurance policy or fat fee mutual fund masquerading as a good investment. And actually, that's exactly what happened. After the Trump administration killed the fiduciary rule, sales of fixed indexed annuities soared by 40%. These are piece of shit products. As Bloomberg wrote, quote, a client would have foregone on average an estimated $54,000 in profit per $100,000 invested. Do you understand what I just said? The client would have lost over half their money to these horrible investments. This is why I say money is political.

And this is why I get so pissed off about what happens politically, especially when people go, remit, why are you talking about politics? Money is political. Some of you're out here worrying about the price of pickles while you are secretly letting thousands and thousands and tens of thousands of dollars be taken out of your account for terrible investments. Oh, and yes, there are these arcane discussions in the financial literature.

there's the fiduciary standard or the suitability standard. There's fee-only advisors versus fee-based. Can I be honest? Get real. Do you really expect the average person to understand all the nuances of these details? Of course not. Wall Street wants to make as much money as possible from you. That is why it is so important to avoid commission-based financial advisors.

Just as a general rule, their incentives are not aligned with yours. and that is why you should be paying a flat fee, not a percentage. And when I myself have used a financial advisor, who I once hired to check my asset allocation, I also paid a flat fee, not a percentage. We'll be right back. It's interesting when you can afford to buy lots of different things, what you actually choose to spend your money on. For example, I've tried these different shampoos.

At a certain point, I was just like, most of these are all the same. I'm just getting the one from the drugstore. I was talking to a friend about what type of meat we buy. He was shocked that we didn't buy the most expensive meat. And I think the lesson that I have taken, as I have made more money, is just because it's expensive doesn't mean it's right for me. That's why the mattress that I chose to sleep on every single night is from Lisa. Lisa offers many high-quality mattress models, whether you sleep on your side, your back, or somewhere in

between. From the first night, you're going to be able to feel the difference. They use premium materials, and it delivers full-body support. Every Lisa mattress is assembled in the United States. It comes with free shipping, easy returns, and a 120-night sleep trial. Wirecutter actually named them the best hybrid mattress. Go to Lisa.com for 20% off mattresses, plus get an extra $50 off with promo code remit, that's exclusive for my listeners. That's L-E-E-E-S-A-D-com, promo code remit for 20% off mattresses

plus an extra $50 off. Support our show. Let them know that we sent you after you check out. Again, that's Lisa.com, promo code Rameet. Just guess the average wait time to see a doctor in the United States.

I'm not talking about a specialist, just a regular standard family doctor. You think it's a week, two weeks? Nope. It's over 30. days. So a lot of times, whatever symptoms you have are going to be gone or maybe worse by the time you get to that appointment. I don't want you to have to wait weeks to see a doctor. I want you to get seen faster by an in-network doctor using Zoc Doc. Zocdog is a free app and website that helps

you find and book high-quality in-network doctors so you can find someone you love. They have over 150,000 doctors across all 50 states in 200-plus specialties. including mental health, dental, primary care, whatever you need. Just filter for doctors based on insurance, location, ratings, even virtual care options. And Zoc Doc appointments happen fast, usually within 24 to 72 hours. You can look through your options, book an appointment, and you are done. If I needed to find a new doctor today, Zocdoc is what I would use. Stop putting off those doctors appointments and go to Zocdoc.com slash Rameet to find and instantly book a doctor

you love today. That's Z-O-C-D-O-C dot com slash Rameet. Zok-D-D-com slash Rameh. And I want to thank Zok-D-D-K-D-C for sponsoring this message. Now back to Susan and Jeff. Susan, though, you said you don't like paying somebody else. You know, you could do it yourself. I mean, technically, when I pay somebody to change my oil, I could do it myself, but I don't. I follow your philosophy. I'm not going to do it myself. I want to pay somebody a flat fee. I generally feel as though most people are good and they're not trying to rip us off.

So that's what makes me upset even about the current financial advisors that we've switched to two years ago when I did ask them about their percentage. And they told me, oh, it's roughly around 1%. And I'll never forget. He kind of made this face like, oh, it's not that much. I know that face. And then I was thinking, and then I was thinking in my head, Like, you're saying 1%, but what is that really? But I remember thinking to myself, like, you're saying 1% because I'm thinking 1% of isn't that much, not 28% of the returns of what we're trying to grow. I know this look that people give you. It happens in luxury purchases. It's kind of a little, you don't really talk about fees in certain rooms.

Yes. And when you ask, here's the reaction. I will be the advisor who says, oh, it's, you know, 1%. But what's really important is blank, blank, blank. It's sort of a, we don't really talk about money here. That's inconsequential to us in this room. And by the way, let's pivot to something much more comfortable to talk about. Sound familiar?

Yes, that's exactly what happened two years ago. Okay. When did this financial advisor come around and what'd they say? So when we moved here, we needed a bank. We needed a mortgage. And our situation was a little more complicated because our house back at the old location didn't sell. So we didn't have the down payment that we were expecting.

So there was some complication to it, of course. And our real estate agent basically turned us on to this bank that we use, which overall we've been pretty satisfied with. Okay. I'm already hearing two red flags, but go on. When you said the word realtor, that was a red flag already. Anytime I'm within a city block of a realtor, my skin starts to tingle and my arm hair goes up. So that's number one.

And then number two, you said the word bank. I go, oh, oh, what bank was this? It's called first. We were referred by the banker we were using to the wealth management aspect of the bank. Wealth management. Oh, God. So you sit down and they got the nice suit, which appeared to be. be nice, but now in retrospect you realize it's not that nice of a suit. They gave you the nice

coffee and they said, tell me about your goals. And then so you said, you know, I'm a physician. One day I'd like to retire, maybe 60, 65. Oh, we could take care of that for you. We want you to focus on what you do. We focus on what we do. And then they took all your money and they said they were going to invest it. So we rolled over my retirement stuff from the old job into basically brokerage accounts run by them. Still retirement accounts for 401 and 457 basically. Four or four or three. I forget which it was. And so those are still functional. They're no longer with the original company. And now they were with.

Okay. Cool. So there you go. The money's in there. And presumably you're contributing to it regularly. It's growing. Not to that because I guess that was a rollover. That's basically we haven't touched it more or less since it rolled over. We have a separate account with my new employer. that's a retirement account that I, you know, I contribute about 1,200 or so a paycheck. We're paid biweekly now, so. Who's managing that? It's through the principal company, the company of the principal.

No one is specifically managing it. It's just like a computer, like an index fund. It's an index fund, yeah. Okay, great. Yeah, it's a target, I believe it's a targeted date. Target date fund. Great. Yeah.

Fantastic. Okay. All right. So now that I understand, you have the whole life policy, which is an area of contention. You have this money in the rollover retirement account, which is managed by an advisor, correct? Yeah, an advisor and maybe his team of whatever, but yes. Charging you approximately 1.2%, but you're not adding to that account.

Is that correct? Correct. Okay. All right. Is there anything else that's a contentious issue around the money? You don't like the annuity. Oh, God, you have an annuity too. They really got you.

One, two, three. I'm glad I. It's the Holy Trinity here. Oh, tell me. I don't even remember what that rollover was. He says it's only 30,000. He said we couldn't, you pulled it out of some account, and you said you couldn't put it into another account. It was a retirement account.

Was it the one from Vanderbiltz? Probably. Yes. And then you couldn't put it into something else because of taxes or something. So you put it into an annuity. So then my head exploded on that. And then there's also the long-term savings account that we have the $60,000 in that goes up and down. And I'm like, how's it a long-term savings account if it's losing money?

It's a brokerage account as well. That's through n-6 as well. Oh. We don't have a simple financial situation. I will say that. Can you just come here, Rameet? Well, you know, basically the dream of everyone who contacts me, I get like a thousand of these messages a day. What they really want is for me to come to their house, like, fix their, log into all their accounts, fix it,

rake the leaves in the front yard, vacuum and iron their clothes, and then leave. I go, I think I'll see. If you just stopped at the first part, I'll cook for you and you can hang out at the pool after you're done. Yeah, we pay people to do all the other stuff. Thank you. All right. Now you can see how hardworking, even very smart people can be sold into these type of financial products. Okay, let's now take a look at their CSP for some more context.

Their assets, $1.1 million. Their investments, $835,000, their savings $20,000. Their debt, $914,000. Total net worth, just over $1 million. Did you do this conscious spending plan together? We did. It was not the 20 minutes. version of the conscious spending.

Oh, how long did it take? About two and a half to three weeks, I believe. What, three weeks? Days, days. Let me tell you, it doesn't turn you on, I'll say that. What happened? We were fighting. We haven't lived on a budget in a while.

We just sort of lived our lives and hadn't really accounted for. After 150K,000 people stopped tracking money. That's pretty much what happens. All right. So, wait, so how did that start a fight? We were just arguing about the numbers. There's no way we could. He was like there's, yeah, he goes, there's no way guilt free spending is $13,000 a month.

Right. And I'm like, I don't know what to tell you. We have a teenage daughter and she won't stop going to Sephora and Lulu Lemon. You can start to understand how, gosh, like, it's actually totally realistic that we might be spending $100,000 a year and not even realize. Yeah. Right. Okay. That's good.

That created a little friction. That's awful. That's just reality. To me, when I hear that, like, I've had times where I look at my own spending. And I go, oh, my God, I can't believe that I spent that much in the last six months on this one thing. And again, assuming you have the cash flow to be able to make this a lesson, what's the best thing you can do? You can be like, oh, wow, it really got away from me. I need to put some controls in place.

Maybe I need to sell a couple of these things or stop. doing it. But let this be a lesson to me. Your groceries are 2,800. All right, so you like to eat well? We, we, that surprised us as well. Do your kids participate in the grocery shopping? Not much, rarely. Okay. All right. Uh, 2,800 is a lot. Dining out was outrageous. I think it was over $3,000 a month. Wasn't it, Jay? It was crazy. It was outrageous. And it was not, what's all this? So you're spending $2,800 at the grocery store and then $3,000 eating out. What, in the last two weeks, where did you eat out? Well, okay.

LeBerna Dan and Peter Lugar Steakhouse. But that was not most weeks. That's just a one up. How about the prior two weeks? Also Peter Lugar, but that's just a one off also. We were having, we would have date night. And if we have date night, it's not unheard of to spend $350,000. because of a bottle of wine and stuff like that.

And your subscriptions are $649 a month. What are these subscriptions? Everything. I have a list. The world wants to know. Patreon. So I filed backup Apple Music, Spotify, Roblox. We have several charities, but not enough.

We should be getting more, which comes up a very small amount. Hulu, ASPCA, Feeding America, Netflix, Crunchyroll, YMCA, SiriusXM, a second Spotify account, audible, 10% yearly subscription, Masterclass subscription, I-FIT subscription, Peacock, Car Wash, and then a yoga subscription and a spa on police subscription. All right, what do you think about that, as you say it out loud? I've already marked a few things that if I don't use them to get rid of them. Pets? How many pets do you have?

Oh, God. Five cats and a dog. I knew it. The dog required, the dog itself is $5.50 a month. What the hell kind of dog is this? It's like a mortgage payment for some people. She is a very sweet rescue and she had an ACL repair. Did Jeff do the repair?

No. And she needs antibiotics, which costs $450 a month. Okay. Look, listen, I understand. I'm not trying to ruin my own career. Fine. You love your dog. Great.

The kids' activities, kids are expensive. Fine. Again, you can afford it. Let's just get it all out on the table. Then we'll talk about what. What are the real issues? The problem, there's a few problems here. But just so you know, I'm not coming in here saying you can't ever have wine.

If you want to have a very nice bottle, be my guess. It's just that it's bloated, right? You're doing that, you're not thinking about it. There's sort of no vision and no strategy behind it. Right. I get comments from people saying, I was with you until you told me they made $250,000. Then I checked out.

I'm like, what? Do you seriously lack the ability to adapt someone's story to your own life? Guys, one of the points of this show is that people can feel guilty or anxious or fearful about money, whether they make $60K. or $600,000. People can have bad money habits at $50K or $500,000. In fact, if you feel bad about money of $50K, you're probably going to feel that way when you 10x your income. This is why I feature people who make $50K, people who make a million dollars a year. I want you exposed to everyone. And for some reason on the internet, there's this undercurrent of people who expect everything

to be tailored to their exact situation. Your income, your location, your number of kids, your spending, your tax rate, that's not going to happen. If you want that, hire an advisor. What I'm asking you to do is to turn off that voice in your head that says, they're nothing like me. If someone makes 10 times what you make, you could probably still learn something from them. I learn from people who make more than me, and I learn from people who make less than. And that is what I'm asking you to do.

So let's talk about income. Susan, go ahead and read me off the gross combined. income here. What do you see? $55,434. $665,000. That's Jeff's salary, right, Jeff? Yeah. And your take home is $426,000 a year. Okay. Very, very healthy salary. Great. Great. Great. All right. So 426,000. Let's acknowledge that at $426,000, the game is a little bit different, right? My wife is a personal stylist and she often goes into people's homes and she sees she does a closet clean out and she shows me before and after pictures and it's just it's quite revealing right people's closets actually tell you a lot about who they are and how they live what i'm seeing instead is a full closet

in your fixed costs is just a lot of stuff subscriptions pets groceries uh the car but not even the car but it's the tolls and the this and the don't on on. Yeah. Right. Okay. I'm seeing a lot of nods. It's just a lifetime of having a high income and being like, we make enough, let's get it, but not really saying, hold on a second.

We need to do a closet cleanse. Right. And after a while, it just kind of gets overwhelming. You're just like, I don't even know what is this stuff and how do we start over. I like your philosophy of spend extravagantly on the things that are important to you. and cut mercilessly the things that aren't. We tend to spend extravagantly on the things like travel. I mean, we were just in New York City and, you know, ate at a fancy restaurant,

a great steakhouse and did a couple of great things. But we just don't really do the cutting mercilessly parts. We just keep slowly adding on. Now, it's not an add-on, but it's adding on, nonetheless. You're spending 13,500 on just stuff that we don't really know, honestly. Okay, fine. Yeah. If you told me like, single biggest expense. What are the real issues? But see, but I rather cut from me. And I think that's part of the mental activity is that, or the mental

process is that, yeah, we make all this money. And yet, I'm not going to get my nails done for the next couple months because I don't want to spend the $200 a month on me. I rather spend it on something else. Do you know where that comes from? Yeah, childhood. I'm not worth it. I will sacrifice so that everybody else can have something. And plus picking and choosing, I can't, Jeff likes to say, you know, you can't do it all. And so I'm like, well, you know what, I think, you know, I had pretty nails all summer. Now it's fall. I'm, you know, I'm okay. I can't rationalize doing everything because when I added up the expenses to do everything, it's $1,800 a month just for me to spend on me. I hold back.

All right. I think it's savvy of you, Susan, to recognize that that nail issue is not simply a financial issue. Because truly, if you wanted to find 200 bucks or however much it costs, you could find it. It comes from childhood. It comes from watching your mom and maybe even your mom watching her mom sacrifice and even turn that into a virtue. You don't have to do that with your household income.

Okay. Great. All right. One of the things I want you to do when it comes to your job, spending is think about it in terms of percentages, not just how much a hamburger costs. Let me explain why. You know, we can get a hamburger for a couple bucks, all right, at a fast food place, but you can also get a hamburger for $24 in New York sometimes. Now, is it outrageous to spend $24 on a hamburger? I don't know. Is it a special occasion? Is it your anniversary? Is it a once-in-a-lifetime

thing? Do you make $10 million a year? We need to know these things. And that is why you'll hear people, often people who earn tons of money saying, oh, I just, I can't bring myself to spend, you know, $40,000 on a car. I go, you make $3.5 million a year. What does it matter to you? This is why you have to think about your spending in terms of the percentages that I represent on the conscious spending plan because you might actually be spending a very high amount on candy or bread or cars.

But if it fits in the conscious spending plan, you're fine. I think a lot of that is also just me not having boundaries with the kids on what to spend. I'm not very good at telling them we can't just go to Sephora and spend $125 every two weeks on makeup. And we can't just go to Lulu Lemon and we just drop $600. So what I'm trying to do because I can't, I don't want to say we can't afford it. So I want to, I'm trying to set up a limit of like, I'm going to give you $100 to spend here. How do you want to do it? Okay.

And does that work? She just showed me something today that she wants to order again. And I was just like, no, I'm not looking at it, you know? Because especially looking at the CSP, it adds up. It's every week. Yeah. We put everything on our Amex card, which is how I believe that. we overspend every month because yes, we pay off the MX every month, but then if we have an

$18,000 amex bill and we pay it off, well, now we just sold herself short for the rest of the month. And I have a hard time saying no. I have a hard time saying, like, you can't have it. Because she enjoys it and because I'd never got those things. And I'm trying to be very conscious of living my childhood through her. I want her to be able to have. opportunities, which is why she does whatever activity she wants to do and we don't look at the cost because just her activities are about $1,300 a month. And we don't put any budget on that because it's what she wants to do. So I'm trying to rein it in for myself and give her limits because that's reality. She's not going to have unlimited money as she gets older. She needs to learn to

work with a certain amount. Also, there's something poignant about you telling me your mom would go without, without dyeing her hair, et cetera, or doing her hair. And then your daughter seeing you go without you doing your nails while she essentially does whatever she wants. these things are passed down generation to generation in the subtlest of ways. What do you think about that? Yeah, I didn't realize that because I just got my dip nails taken off this week, and she's like, you're not going to get them done again. And I'm like, no, I don't need it for the rest of the year.

I did it for the summer. I'm good. But in the back of my head, I still think, well, if we had so much more money per month, then I could do all these other things on top of it, which is crazy with the take home. Yeah. And I recognize that in myself. Good. It's not a money issue.

Yeah. Right. It's this. It's me. Right. It's making myself a priority. Okay. I mean, again, these things just sort of built up over the years.

And we didn't get rid of one while still starting another kind of thing. Yeah. It just builds on each. You know, 50 years old, right? You've been in your careers for decades. Yeah. It gets a little sloppy after. well. But this is actually a great opportunity. It's like, okay, let's take a fresh take.

It's not like, again, with the income, all this stuff can be fixed and fixed quickly. The nails comment. I just have to point this out. This is a couple earning hundreds of thousands of dollars a year. And Susan is rationing doing her nails. It makes no sense. Worse, we see a common trend on this show and in the public at large of moms who give everything to their families, then they spend nothing on themselves, and they unconsciously teach that lesson to their daughters, which then gets transmitted generation to generation. It's literally happened multiple times on this podcast. Remember episode 31? Lindsay had shrunk her rich life down to shopping at Target. And while she really wanted a massage, she told herself she couldn't

do it. She wasn't worth it. And when I asked her what lesson she was teaching her daughter, she began to cry. If you want to teach your children about money, the best thing you can do is to have a healthy relationship with it. That means you dial in your conscious spending plan. You talk frequently about how you spend money, what you spend money on, why you spend money, including guilt-free spending. Teach your kids that it's okay to spend money on the things you love if you are saving and investing every single more. One of the most shocking things I've learned from this podcast is that almost all of the couples who come on my show with 10 out of 10 money problems have never read a single book

about personal finance. Not just my book, they never read any book about money. You'll note that when people talk about money, it is very easy to dream about what they want. And actually, I like dream. It's good. We should dream. We should come up with our rich life.

vision. But we don't just need dreams. We need a plan. So you can create that plan yourself and figure out how compounding works and when you'll be able to withdraw this money and on and on. Or if you need help building a specific plan for you, our partners at Fassett can help. Facet charges a flat membership fee for financial planning, never a percentage of your portfolio. You get access to a team of CFP professionals, always a CFP, always a fiduciary, who help you create a personalized financial plan for your life. rich life goals. And they handle important things like investments, retirement planning, starting a family, becoming empty nesters, estate planning, all of it. Your financial plan needs

to adapt as your life changes. Fassett makes getting professional financial advice more accessible without charging hidden exorbitant fees. As of the date of this recording, Fassett is waiving the enrollment fee for new annual members. And for my audience, Fassett is offering $300 into your brokerage account if you invest and maintain $5,000 within your first 90 days. You can head to facet.com slash remit to learn more about which membership option is best for you. Facet is an SEC registered investment advisor. I'm not a member of Facet and I have an incentive to endorse Facet as I have an ongoing fee-based contract for cash compensation based on this endorsement.

All opinions are my own and not a guarantee of a similar outcome. I have this email software that I love so much. I pay for it personally. and just 20 minutes ago, I used one of its AI tools. I'm currently doing a pitch to some journalists for this story that I want to run. And I said, go through my emails for the last two years, identify every top-tier journalist that I've interacted with, and then sort them based on this story that I want to pitch and pull their email addresses for me.

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We love it. And I think you will too. Turn your inbox into momentum. Sign up for Superhuman Mail today. Go to superhuman.com slash Ramith 3 and try it for yourself. That's superhuman.com slash remit 3, the number 3. All right. So here we have a basic investment fee calculator. We're going to start with $835,000, which is what is in your retirement account that is managed by somebody charging 1.24%.

So that's everything all said and done, I believe. I think it's like $460 that's in those two Burgridge accounts. Oh, great. Okay. Let's change it. 460,000. Okay, good. All right. Why don't we say we'll live to 85? So another 35. 35 years. Great. Then let's just see what happens to the fees. Your additional contributions to this account are zero. Correct? Yes. All right. And let's just assume you're getting, I think you're probably, let's assume like a 6% return because I saw it's moderate growth. It's probably even less. Maybe I'll even be conservative, no, 5%. All right. So 1.24% correct? Yes. That's the fee that this person's charging you. And then we're going to compare it to just 0%.

Because technically, you can effectively pay close to zero, you know, through any of these other brokerages. So let's go ahead and calculate it. All right. So the difference is, can you read that number out loud to me, Jeff, that I'm highlighting here? $863,000, $170, and $21. Yeah, $863,000. and fees is the difference. What do you all think about that?

Susan feels victorious. No, I just, I'm glad we know now versus 10 years down the road. That's the thing. You know, the best time to have done it was 10 years ago. Now's the best time again. Really puts things in perspective, like worrying about wine or something like that or like the order you got from the grocery store, sort of irrelevant compared to this decision alone.

That's the way I think about it. So Susan, I know you agree. Jeff, tell me about what you're thinking and what you're feeling right now. I knew there was a huge difference intellectually. I've never really looked at a calculator per se. I understood the idea of it changing the growth and it's not.

I could wrap my head around it without knowing the numbers, I suppose. But yeah, I mean, that's not a great feeling. Well, the good news is that's, you know, sure you've paid fees up until now, but that's behind us. That's a sunk cost. We can't do anything about that. This is looking at what's going forward.

And what's, to me, mind-boggling about these dynamics is the fees become increasingly expensive, the more your portfolio grows. Here's the way I think about it. You know that bottle of wine that you went and got, the nice bottle of wine? For everyone who's a wine person, what bottle of wine was it, by the way? Opus one.

Okay, great. That means nothing to me, but I'm sure it's very nice. So $350,000, great. Now, imagine you go to that same restaurant next year, and the bottle of wine is $500. Same wine. This is a bad example, because the price of wine actually does go up.

Forget the wine. Forget the wine. I wouldn't surprise me that were the case. Yeah, the mashed potatoes you got, okay? You go, wow, these mashed potatoes. This time at Peter Lugar, 25 bucks. Next time you go, it's 75, then 300, then 800 and on and on and on. You go, what the hell? Okay, it's Peter Lugar, but 800 bucks for a mashed potatoes. You're getting the same potatoes, but you're paying three times, four times, ten times more. Yeah. That's often what you get when you pay a percentage.

based fee. Right. Right now, it appears from what I could make of it, you're paying about $6,000 a year in fees. Yeah. Like, that's, first of all, that's a lot. That's basically $500 a month right there. Okay, the thing is you just don't see it. Right.

You don't see it. Yeah. So 500 bucks. We're not paying for it. Exactly. And the craziest thing is that, again, just like that mashed potatoes, that 500 turns into 700, 900, $1,800, and on and on. let me give you another crazy way to look at those fees.

They're currently paying $500 a month in fees. Now, let's just fast forward 35 years or 420 months. They'll have paid about $863,000 total in fees. That means that in 35 years, they won't have actually just paid $500 a month in fees. They'll have paid an average of $2,054 per month in fees. From $500 a month in fees to $2,000 a month in fees. This is what happens with a 1.24% fee on a modest $460,000 portfolio that's not even being added to. And if you're wondering how the math

works out, you can calculate yourself online, just search for investment fee calculator. That 1.24% fee seems modest in the early days, but it's backloaded. You see, most advisors may their money when your portfolio grows, which is why they love older people and wealthy people who specifically do not understand commission structures. As Jeff pointed out, they don't even see it happening, which is exactly why Wall Street loves to charge commissions. It's like being in a canoe and you're worried about running into that huge tanker three miles away, but you actually have 15 little holes in your canoe and you are slowly sinking. It's just the fees. and if you were to say I want somebody to look it over and, you know, check into it once a year,

I would totally support that. I just wouldn't pay a percentage base fee. All right. Fix it and your net worth will go up. Okay. All right. Perfect. The hardest thing is the non-confrontational part and, you know, just dumping the, you know, sounds easy on on Zoom.

Totally. Hey, with peace and love. We're just telling him this isn't in our best interest. Thank you very much. From the woman who can't say no to spending $500 at Sephora with $12. Yeah. We're like, you know, we're coming on retirement. We know this is the money we need.

Hold on. So what I would like, I think Jeff is making a really good point, which is like, hey, I think this is going to be hard. I hear you loud and clear. Susan, do you agree that that's going to be hard? Yes, I agree it's going to be hard, but I think you can say it in a loving manner. That's not like, you know, we're kicking you to the curb and you're a jerk. I can't believe you pulled up with this over on us and now we know better. I think it's just a matter of being like, hey, you know what,

we realize we're paying more fees we want to do. We're not comfortable with it. Thank you, but we're going to be moving the money. And, you know, and that's it. So, Jeff, I know it makes you uncomfortable. And I know there's some personal relationship with the person involved. What would be helpful for you? I think the first thing is just to know how much you're actually paying in fees. We did that today. Do you feel conviction that it's in your best interest to switch? Yeah. Yes. Just the practicality of doing it, honestly. First, the biggest step, 80% of the process is just realizing you need to switch. You did that today. now it's down to the details. And these are small but hard, hard if you've been doing it,

this for a long time. You can send an email to the person and you can say, hey, John, I wanted to let you know that I've decided to move my accounts. I'd like your help in switching the accounts over what paperwork is required. Thanks for your service. Sign your name. Now, of course, you're going to get back a very panicked email and probably a lot of phone calls. On a practical level, my suggestion is stick to email. You can just say that. I prefer we stick to email. Nothing personal, but I've decided to make a change because the fees that I'm paying are not part of my financial goals. You know, you're telling him the truth, but it's your goals. They're not part of my financial goals. he's required legally to transfer your accounts somewhere else.

You're going to transfer them in kind, in dash kind, so you're not selling them and triggering a taxable event. You're probably going to speak to a financial advisor. They can help facilitate the transfer of these, and they can help suggest what accounts would be good. But ultimately, you're going to have to tell this person that you are moving your accounts away. You can't just secretly do in the middle of the night.

So that's the practicality of it. And if you see this person in your neighborhood, that's a whole other issue. Is that okay, that's going to be a thing? In my line of business, I'm like, this is great. Let's have a conversation. This is easy. But I deeply understand that it's not easy for a lot of people, especially if you've known the person and they're in your community, all that stuff.

The fact is I have this philosophy just, my money is good money. That's the philosophy. that I really want for the two of you to have with your money. You want to go to a beautiful resort. You're going to pay top dollar. You're never going to negotiate. But you want great service, great room, right? I'm sure you embody this in parts of your life.

Emboddy it in your financial products. Your money is good money. And you should not be paying $800,000 in fees for something you could get the same result with low-cost ETFs or index funds and have that $800,000 in your pocket funding, your retirement. Well, that's how it goes. No need to pay hundreds of thousands of dollars in fees.

You can get assertive. You can be polite with your money and you can say, you know what? I think I can do this on my own. Now, in complex situations, you may want to use a financial advisor. But if you do, you want to pay a flat fee. Never a percentage.

That's one of the reasons I partnered with, facet, a service that offers affordable, accessible financial planning through a flat fee membership. So the whole life insurance policy, you've paid in how much? Oh, God. I mean, I could try looking it up real quick. It's okay. Just any, like, back of the napkin or any idea? So again, I mean. All my nought counts. 272 a month is what we pay. And what's this thing about borrowing against it? Why'd you do that?

Pay off a credit card. Was it? It was way back, yeah. What the hell? Yeah, back when making lots of money mistakes. And maybe it was like $10,000 and now the outstanding balance is $40,000. Is this for real? Yeah.

Oh, yeah. We borrowed from our money. Uh-huh. And so where are you paying it back? Oh, you're going to die. Right. We're going to die. Right.

And that's what he was saying. But if we had a huge amount come in for whatever reason, I would consider it if everything else was literally paid for kind of thing. It's called leverage. I'm going to leverage myself. I'm going to borrow against. Borrowing against anything is an extremely sophisticated strategy that 99% of people should not do. Anyway, they borrow against it. And then they don't understand the implications because it's very confusing.

Necessarily so. And then if you ask them like, hey, have you come? consider this, then their answer is like, no, I'm just going to die. Wait, what the hell? What kind of strategy is this? Now, you can carry it out because you actually have enough money. But this is what I'm talking about when I say you're making up for a lot of like bad financial behavior with just a lot of money.

So my question is, shouldn't we just cancel this policy now? I have to look at the paperwork. But this is actually a good conversation to have with an insurance specialist who's not an insurance salesman. But overall, conceptually, I don't personally see a reason, if I were in your financial situation, that I would be having a whole life insurance policy. You know, there may be tax implications that you need to consider. Yeah.

No, I mean, you know, it was, again, when I was an intern and it sounded like it made a lot of, it meant, it sounded like it made a lot of sense. Yeah. The whole life insurance salespeople, they sound good. Yeah. They're not good, but they sound good. So look, that was a mistake made in the past. It happened.

Luckily, the thing that really matters in your life is that your career has gone phenomenally well. You have a high income. Honestly, to correct a couple of mistakes here and there, even ones that are 50, 100K, okay, fix it. Move on. It's possible. Yeah, it's not existential to me at all. The only thing that is existential is acknowledging, like, hey, that probably wasn't a good move.

let's fix it and then let's redirect any money that we change into our rich life. Okay, let's talk about the kids because actually this is a key part of the whole thing. Putting aside, you're going to fix the insurance, you'll fix the financial advisor. Spending-wise, do you feel that the two of you are aligned today on your spending philosophy? For the kids, no. I don't want them to have fear. I don't want them to think that we're never going to have their back and that we're never going to help them. And I think that's part of, I want them to be self-sufficient, but no, they're never going to be alone, even financially.

Because looking at the budget that we spent $800 a month in clothing for just our daughter and $400 at Sephora a month on our daughter. And I thought, and it's not an anomaly that if I just said you get $400 a month to spend whatever way you want and let her make that decision, which I realize a lot of people would think like $400 a month for a 12 year old to just spend whatever she wants. Well, you know what? We're spending way more than that now between her Starbucks run and go in, you know, having lunch with a friend. Then it would be her choice to see how she wants to do the money. I like the philosophy. I want to set you up for success, so I'm just going to tweak a little bit of it, okay?

Even though 400 is a ton of money, she doesn't have the skills because you haven't taught it to her. The first point is the two of you have to build the skills together. If I were the two of you, I would do that privately for about a month, perhaps two,

just get aligned, focus on bringing your numbers down. You're going to have to learn new habits. Oh, maybe both of us don't need to go to the grocery store five times a week. Like, you do this, I do that. Let's meal prep. Whatever. You decide.

Once the two of you get a few wins under your belt, then the next step is for you to say, okay, let's talk about our kids. What's the vision here? We want to teach them this, this, this. Right now, if we're just brutally honest, they don't have any accountability. They're good kids. and we've given them too much, but it's going to be hard for us to,

we're not into confrontation. What are all the potential ways we can go about having these conversations? Map it out, just put it all out on the table just like you did the CSP. Eventually, you sit down with your kids. I would say this happens if everything goes really well,

six to eight weeks from now. The two of you have refined your spending. You haven't changed everything. It's going to be a long time coming, but you've gotten some wins. You sit down with them. You say, you know what? we've realized that we want to take better control of our money.

And tell them a story about how when you were working, you made $28,000 a year. And you were a waitress and a waiter and all this stuff. Like, tell them. I don't know how much they understand about your origin. Tell them about your mom. Tell them the things they don't know because I'm interested in you and I just met you.

Your kids need to know where you came from. Then the other thing I would say is get a, involved. They have a responsibility as part of your family. So you're doing all this grocery shopping. You got to tell them like, hey, we need help. We've realized dad and I or mom and I are actually spending way too much on groceries. And we've actually created our own grocery budget. And we need your help to go shopping. So here's how much we have. Of course, it's going to be a very generous amount, right? You can start off like with a lot of money and let everybody get a win and then slowly winnow that number down. But the fact is, you actually do need their help.

because you're spending like thousands. Yeah. So you're legitimately like, I seriously don't know where this money's going. Can you help us? Yeah. Give them a sense of control. Yeah.

I mean, especially with school shopping, I think we easily spend about $3,500 in a week. Yeah. Or two weeks for school shopping on top of whatever they got for the summer, on top of this or that. You know, I mean, he picks out a nice pair of shoes. And I just go, okay, because that's what he wants. That's because there's no trade-offs, right?

You haven't built the skill of trade-offs, so of course you haven't passed that skill to your kids. I'll tell you, in my observation from doing this for 20 years, the people who have the biggest challenges are the kids of wealthy parents who grew up. They themselves are not necessarily wealthy, and they were so used to buying all this nice stuff, and suddenly they're 23 years old and they have no money and they have no skills. Yeah. Yeah, I'm concerned about that. I want to be acutely aware of that because it's not reality.

They need to have those skills. Yeah, I agree. So this is the time, right? This is the time to do it. It'll be a little bit painful at first. But then I will say, remember, just a couple last things here. This is not all doom and gloom. You get them involved with groceries, which is actually fun because they like to eat and,

you know, get them to splurge on a couple things. Get them involved in planning your next vacation. All these things work together, grocery shopping, shoes, vacation. Now they are starting to intuitively understand tradeoffs, and they're going to realize the value of money. I guess we're going to be okay. I mean, I think once we're looking at the numbers,

that would take that panic away from me, that there isn't enough, which sounds ridiculous, but that's still the way that I feel, that I don't have enough to do it all. You know, what I always say is your feelings are highly uncorrelated with the amount in the bank. And here I am talking to a couple making $655,000 a year.

And you, like many people, making $50K, $100K, $200K, a million, say, I don't feel there's going to be enough. The key there is feeling. In order to be successful with money, you've got to do two things. Number one, you've got to know your numbers. And today, you've taken a really big step in knowing your numbers. You have your CSP. you've realized there's tons of fat.

There's literally thousands and thousands of dollars every month that could be redirected. And your quality of life actually won't even decrease. I actually think it will go up. Yeah. Like the nails are going to get done. You're not going to be managing the kids, like, minute expenses because they're going to be in charge of it. Groceries are going to be dialed in. Like, it's going to actually go up and be simpler.

Of course, you're not going to be paying all these fees. But the second part, beyond knowing your. numbers is you've got to work on your money psychology. Now, you've done that by listening to the podcast. You may want to talk to a therapist or a coach. There are lots of folks that you can reach out to for that, just to have a regular way to talk about money and sync up. Certainly a money meeting between the two of you would be a no-brainer. If you do those two things, you're going to be more than okay. You know, stay in touch. I'd love to, the thing I'm particularly interested in is the conversation conversations with your kids.

Because I think that's the magic. That's the crux of this whole thing. The two of you are smart. I have no doubt. The two of you are going to nail it. It's the one with your kids and changing your relationship with money and kids. That's going to be all the sign of success.

That's a lot of emotion there. Yeah. Yeah. Tell me the good. Tell me the bad. Just keep me up to date. I think over the next year, I think you're going to see

just dramatic changes in how you all feel and talk about money. All right? Yeah. Yeah, I can't thank you enough because I think we're in a different predicament than what I've heard on the podcast, but it's really helped us. And I'm not thinking about what I'm losing. I'm thinking about what's intentional and what I'm still gaining. Let me share some thoughts about my conversation with Susan and Jeff.

First, thanks to Susan and Jeff for coming on here and discussing your final so openly, most of us have never heard the fascinating wrinkles that you shared, a surgeon's salary, financial advisors, and the actual amounts they charge, and of course, spending that has gotten loose as you've started to earn more. Now, it's normal for households earning $150,000 plus to stop tracking spending. And actually, there's some logic to it. At higher incomes, it doesn't make sense to spend the same amount of effort tracking, like how much you spent on almonds versus when you were in your 20s. However, you can see what happens if you don't put in some basic controls. Thousands of dollars on food, disagreements about money. Susan's over here sacrificing,

getting her nails done when that really doesn't add up to much money at all. When you don't have control over your spending, you increasingly rely on feelings, which when divorce from the numbers themselves lead to choices that are not aligned with your rich life. And that brings me to the poor decisions around investments. I told you, doctors are known to be bad with money. And we talked about some of the reasons why, but that doesn't excuse it. To be worried about money, but to be paying 1.24% AUM and a whole life insurance policy is a mistake. Fortunately, a very high salary solves many money problems. So with a few tweaks, I'm very confident that Susan and Jeff are going to live their rich life. Now, let's hear from them. I think what I've learned is,

is that I can not worry so much about the money and having enough of it. I can relax that we're gonna have what we need for retirement. And I think what surprised me most is certainly by really going through the CSP, we were shocked at how much we spent in groceries and dining out. Also, we weren't saving enough and we're not giving enough.

And that is not in like, with what our values are to do with our money. And so we are definitely working that into the CSP. And the specific changes we're going to make is that we already have an appointment with a fee-based financial advisor. I'm going to call about the long-term savings accounts and move that into a different fund. And we're going to get out of the whole life insurance policy. and see what that's going to take, which is a little bit more detailed oriented since we have the loan against that.

I think we're also gonna start doing family meetings with the kids, which seems to be my biggest emotional crutch, is saying no to the children and finding out a reasonable way to still let them enjoy money also and learn how to manage money and not let my anxiety control that situation. And now, Jeff. Number one, what did we learn? I reinforced, or at least it was reinforced to me, that we're still in a pretty good place. We have a really big shovel to kind of dig

ourselves out of any holes we dug ourselves into, and so that is always helpful. We could certainly be better situated both in terms of our spending choices today, as well as our spending choices for the future, and we need to kind of titrate that both of those portions of the formula. But overall, I think we learned we're doing well. Next portion was what surprised me. I think the biggest thing was that Susan's ability to express her understanding in a way that I didn't see when she and I have conversed ourselves. She's always come across this sort of lost, and I think you describe it as the doze eyes

in your early podcast. when we discussed privately during our conversation with you, it was much more apparent that she understood more than she was willing to admit when the two of us were just discussing. So I hope that continues and that she's comfortable in that knowledge and ability to express her understanding of that knowledge. Not really surprised me about the conversation, but the subsequent times, the difficulty of trying to get a family meeting like we discussed.

And I loved the idea, and we intended to do that this week. but between activities and friends over and just finding some time to relax. It didn't happen. So it's on the schedule for next weekend. What are we going to change? And I think probably Susan expressed this best is my guess is we've changed some of our plans. We were looking at some renovations to the outside of the house and the outside living area, which we're putting on hold for the immediate and foreseeable future.

And instead of finding a way to pay for that, we'll move some money into more aggressive investing. So that was number one. Number two, we're scheduling a meeting with a financial advisor we trust to at least have the conversation and start moving in the direction of finding a fiduciary who's fee-based rather than percentage AUM-based. And so those are the two biggest steps that we're taking right now, and more remains to be. B.C. A couple of reflections. First of all, love the overall follow-ups. I'm a little surprised at Jeff's comment that Susan seems to not have been as open about her financial knowledge than when she

finally came on the podcast. I'm not sure what to make of that, but I'm hoping that this is a new chapter where they both have a mutual respect for each other when it comes to their money. The renovations, we didn't even touch on that. The missed money meeting is a red flag for me. One missed meeting turns into two, which turns into five. Of course, this can be fixed. Just make sure you put it on the calendar and keep it sacred. Jeff, Susan, don't lose your momentum to make real change. I feel confident if you get aligned and you make these changes consistently,

you're going to be much, much more comfortable with the considerable income and net worth that you have built. Thank you again, Jeff and Susan. If you are looking for a fee-based financial advisor, check out Facet. FASIT just created a new exclusive offer just for I Will Teach You to Be Rich listeners. They'll waive the $250 enrollment fee for new annual members. And for listeners of this podcast, they'll give you $500 in your brokerage account when you invest $5,000 within your first 90 days. Learn more at facet.com slash remit.

Sponsored by Fassett, Fassett Wealth, Inc. or FASID is an SEC registered investment advisor headquartered in Baltimore, Maryland. This is not an offer to sell securities or investment, financial, legal, or tax advice. Past performance is not a guarantee of future performance. Terms and conditions apply. Thanks for listening to I Will Teach You to Be Rich. I'm Rameet Sati. Please follow the show on Apple, Spotify, or wherever you listen to podcasts.

If you haven't read I Will Teach You to Be Rich, my book, pick up a copy. You can get it at any bookstore or any life. and it will show you the specific tactics for how to build the I Will Teach You to Be Rich system into your personal finances.