Money For Couples with Ramit Sethi - 21. Part 2: “I want to trust my wife with our money, but what if she blows everything?”

Episode Date: December 7, 2021

This is part two with Charles and Michelle. He has a net worth of well over $10 million but still uses someone else’s Netflix password. After 21 years, Michelle has reached her limit with his relentless cheapness. Charles is trying to rewrite his internal money story, but after years of playing the “I’m not the kind of guy who blows money on X, Y, Z,” card, he still worries about extreme what-if scenarios, driving Michelle to consider divorce. As you listen, think about the areas you’re afraid to spend money on. Ask yourself what your worry-free number is. Now, let’s try to get Charles and Michelle to meet halfway.  Connect with Ramit Website Instagram Twitter Facebook YouTube Linkedin 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.

If you or your partner has fallen for a scam, I want to help, especially if you've recently fallen for an email or text scam, or you've gotten bad financial advice from someone who did not keep their promises, or maybe you just have not even told your partner because you are embarrassed. If this is you, I want to talk. Apply for free coaching with me by being on my podcast. Apply today at IWT.com slash apply. That's IWT.com slash apply. 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 a lot.

amazing vacations. That was one of my favorites where I shared how I 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. She would love if I said, honey, you have a blank checkbook Do what you want. Is that true, Michelle? I would love him to take enough money that he needs.

He said he needs $150,000. Take it. Give me the rest. I mean, literally, like, you only need $150,000. You're netting $80,000 a month. And you're questioning my audible $12 subscription every day. There's a problem here. You know, we file our taxes jointly, and I had to sign for taxes recently.

Couldn't believe my eyes. I didn't even know how much we made. I had to sign $175,000 per month. My yard is in shambles. There's no reason for this. When we fly, we fly as basic economy as we can. When we stay in hotels, like he said, it's the cheapest. Now, we're not in Motel 6 and we're not, you know, it's an dire straits,

but it's probably the quality if we made $100,000 a year. And there's nothing wrong with that. The problem is we make more. The reason why I'm not giving a list is because it comes down to the words that he said before, convincing, being thoughtful, being planful. I'm all those things. I'm analytical as well. I plan. I research.

I weigh the and measure. I don't just willy-nilly just say, hey, I want to buy a couch today. I'm doing research, et cetera. So, but those words are unacceptable and they shut me down. And when I hear those, I'm like, I'm not giving you a list because the minute I say, let's, do this, that's not being thoughtful, that's not being planful. Well, I'm just saying it. Give me a chance to think it out. So these are issues that everything that he's saying is fantastic. They make sense. They're logical, but in reality, it doesn't play out like that.

Do you think that it's going to happen? I don't know because I do believe that he wants to change. I do believe that he realizes the damage that has been done. I'm not optimistic that he can actually do it. I haven't seen change in this area of money. I get it. I get it. You're cautious about hope.

Welcome to I Will Teach You to Be Rich. I'm Rameit Say to your host. And this is part two of my conversation with Charles and Michelle. Last week, we started talking about what was going on between the two of them. Charles is a self-professional. Cheapskate, and he reached out to me with a message that said, we have a $10 million net worth, a $2.5 million income, and we still share Netflix password. Please help my wife of 21 years is threatening divorce. Last week was fascinating as we started to dive into what's happening

between Charles and Michelle. How do they treat their money? What have they not been able to do? Now the good news is that Charles and Michelle came to me with an open mind. Charles admits he wants to change. He knows that it's costing him a lot to hold the beliefs that he has in money. But old habits die hard. He is really struggling to come around on the idea of spending money. He has certain beliefs. They're very rational and analytical.

And they are causing him to look at money through only one. lens. Now, last week, we made some pretty good progress, but after 21 years of these types of conversations, Michelle does not believe that Charles is actually going to change. And every time we get close to him saying he's going to change, she doesn't believe it. We have a lot of scar tissue here, and this is not going to be easy. Please listen to part two of this conversation with Charles and Michelle. What I hear beneath the surface is this fear that if you take Michelle's approach, which you've described as being more intuitive, more spontaneous, that somehow you will lose the core of what made you successful. And that suddenly you're going to just lose it all.

And oh my God, I dropped $75,000 on dinner tonight. Can you see a reality where you ever spend $75,000 on one dinner, Charles? No. No, I don't think so. It would be very hard to do that. Can you ever see a reality where Michelle spends that much on a single dinner? For the two of us, no. Okay. So knowing that you have so solidly anchored your analytical self in,

what I would say is this fear of if I let go just a little bit, I'm going to turn into a pile of mush that just spends money everywhere. It's never going to have. happen. Never. In fact, I could work with you every single day for the next 20 years. It would still be very challenging for you to just go out there and conceive of money the same way Michelle does. I'm going to do a little guided conversation here. I can tell that if I let these two just talk to each other, it's going to quickly devolve into, you didn't let me do that and while I think this, there's so much resentment built up here that I'm going to have to micromanage this conversation a little.

maybe offer a little bit of training. Watch what I do. I'm going to ask a few questions. Listen to the questions and listen to her answers. Okay. Michelle, what is your absolute dream destination? Budget is irrelevant. Probably Italy.

Why Italy? What would you do there? I just think it seems like an exotic, you know, beautiful country. I would enjoy the food. and the scenery and the people. Fantastic. And what kind of foods are you thinking about having when you go there? Yummy pasta.

Uh-huh. What kind? Just bet it cheat. Well, if I'm not on my diet, betuccini and penny and pizza. Love it. What kind of weather are you imagining? Is it summertime?

Are you wearing a long coat? What are you thinking? It's more summery and more, you know, sun's out. Beautiful. Okay, great. Where are you staying when you're in Italy? A beautiful home, a beautiful resort-type field. Very nice.

And who do you have with you on this trip? Ideally, my husband. But if I'm going to, if the price of that is him belittling me for even wanting what I just described, then a girlfriend or so. No, no, no, no. This is Charles, who's fully bought in, fully. he's actually saying to you, babe, I made a special reservation tonight. Don't worry.

Put on something nice and let's go out to this place. How would that feel? It would feel great, but, you know, 21 years of not having that is tough to get over. I love it. And final question for you, when you get to the Italian airport and you get on your plane, which seat are you sitting in? I'm definitely in first class. that my vacation starts the minute I leave my door.

Very good. Okay. Charles, what did you hear in my questions? Your questions were geared around how this would make her feel and her experiences. And it really put her in the driver's seat, put her in complete control of planning and experiencing this vacation. Very nice. Wow, very good pickups on all those things.

Now, did you notice at one point, she kind of went a little negative. And did you notice what I did there? Yeah, you try to stay away from that. Let's set that aside for now. I think that's the scar tissue coming back. And she can't imagine me doing that after 21 years. And so that's what we need to overcome.

I agree. Do you think you could possibly do that after 21 years? Sure. Okay. I don't know if that's true. I hope it is. That will be for the two of you to decide, right? We have one conversation together.

The two of you have a lifelong relationship. And I want to totally acknowledge that is a lot of scar tissue 21 years. But I do think it's possible to change. I've seen it. It starts with little steps. It starts with just a series of questions like this. What did you not hear in our conversation? I was waiting for you to ask the money question.

There is no money question. Guess what? You won. You could do that entire trip. Guess how long it would take you to earn enough to pay for that entire trip. I don't know. How long? You tell me, yes. I mean, you're an investor. Give me a ballpark. So maybe that trip was going to cost maybe 20 grand. Okay. Take about a month. One day. Not really, but about a month. One day, one month. One day, one day.

Maybe two. Maybe two. You have approximately $11 million. dollars, interest is earning, you make a considerable income, one day, two days, hey, let's even be conservative, five days, five days, five days. And what happens if you were to spend that money? I think Michelle will be really, really happy. Yeah. Is it about the money? No, it's not about the money. What's it about? I think that, I think it's the fear of doing that vacation like three, four times a year. Yeah. That's the fear.

Play that out for me. So 20K times how many times a year? Let's say five times a year, 100K. Okay. Okay. 100K a year in vacations. What happens to you? I go back to the whole value compass where like, could that money be used?

elsewhere. Yeah, it could. It could. It could be invested. It could be put into a business. It could be spent somewhere else. Could be given to a charity. Could be given to a charity. But you can also do those things too. You have enough. So again, five vacations like that a year, 100K a year on vacations. What would happen? What's the worst that could happen? The worst that could happen is I could be a a hole on the vacation and ruin it because, and ruin it from Michelle. Wow. Okay. That was very perceptive. And what's the best that could happen? I could have a big, fat, smile on my wife's face. Or, or, and we could become closer in our relationship. All right. So I want you to take the same approach I took. Try it. It's going to be

uncomfortable, but I'm here with you. Take it with your living room furniture. Can you do it with the landscaping since we are? Okay. Yeah. Okay. Landscaping. So Michelle, landscaping. What's your vision for our front yard and our backyard? Like, what do you, what do you see as the complete vision? What would make you absolutely happy with if we got the front yard and backyard landscaped? Well, if for me, Meet asks that same question that I can answer it. Because coming from you, I'm like, uh, Michelle, I know you're tense.

I get it. And I know that there's a lifetime of beliefs right now that are just right at your throat and they're bubbling up. I totally get that. Charles is playing ball here, right? And he's doing some uncomfortable stuff. And so what I want to ask from you is that you play ball as well. And if it means really trying to acknowledge,

those feelings inside, but set them aside for just three minutes, that's what I would ask. I understand it's a bit contrived. I understand that me asking you to do this does not remove those feelings. They are there. They are real. But in order for us to move forward together, sometimes the best way to do it is to act as if. So let's start with the behavior and let's see if often our feelings can follow. 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

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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 remit to find and instantly book a doctor you love today. That's Z-O-C-D-O-C dot com slash Rameet. Zok-D-C-com slash Rameh. And I want to thank Zok-D-D-K-D-K for sponsoring this message. So my vision is just when you walk up the steps toward our home, you just want to be home. It's inviting.

It's plush. It's modern. It's well-cared for, maintain. It just would make me feel so good if I just drive home and walk up to a home I want walk into. The backyard, same thing. I just want to be able to walk outside of my house, feel really good about being outside. I would love to eat dinner outside, sit outside, just go outside to just think and just, I just want to see something pleasing. I just, all I could see is just a new deck and comfortable chairs and greenery. Just those are the things

that I'd love to look at. What are some of the things you'd love to do out there once we get it all fixed up. I just want to spend time out there. I just want to sit down on a chair and look out to the yard, look at the lemon tree, look at the apricot tree, look at plush grass. I just I just want a feeling of calmness. I don't need a party or anything. I just wanted for our family for now, just a place where I can go and retreat. And then when you think about the front yard, what are the things that you think will really kind of make the front yard pop? I just want it well maintained. You know, It hurts to see everyone around me, changing their landscape,

fixing up their yard, replanting if the plants have died, rearranging things. I just feel after 11 years and nothing has been done, you know, the rocks have slidding down the slope. I just want those things filled in

because the way it looks now, I don't want that to be a reflection of who I am today. Do you want this to happen right now? Do you want us to happen later on? Like, when do you want to make this happen? Well, I think it's long overdue. so the win would be right now.

And what can I do to help you make this become a reality? Loosen up the money, not control it in the sense that you decide how much is enough and just trust me that I'm not here to spend multi-thousand dollars on the project. I'm just here to get a nice update to the property. Would it be okay if I provided just a tainty, wimsy bit of feedback or input? into the landscaping. This will be an overall vision, but I'd like to have the opportunity

to have a little bit of input on the landscape. Would that be okay with you? On your terms, of course. Anything other than money and how much something cost. If you want to suggest bushes or tree arrangements, great, but nothing about how much, nothing around money. Okay.

So I am committed to being a partner in this, and not talking about money, not talking about how much. And I'm committed to giving you whatever vision you want for the front yard and backyard landscaping and to make it become a reality. I'm like grinning from ear to ear because I'm like, could this be real? Like, can we call you back if that doesn't work? Can we get this in writing? Michelle, you almost in disbelief over here.

Yeah. Yeah. Do you think that it's going to happen? I don't know because I do believe that he wants to change. I do believe that he realizes the damage that has been done. I'm not optimistic that he can actually do it. I haven't seen change in this area of money. I get it.

I get it. You're cautious about hope. I get that. Exactly. I like a little technique I call failure expectation. Let's plan for failure. Where is it going to go off the rails? And let's just deal with it right now. I think for me is I'm trying to do away with my internal money compass for what I think

of backyard landscaping should cost. But that's where it could go wrong where my internal compass comes to the surface and it doesn't kind of align with what the actual cost is. And I break my promise and say, ooh, that's kind of expensive. Michelle. Yeah. The failure expectation is the word or the words, how much? How much does this cost? that I don't agree. You know, some things in life are worth every penny. Charles, I think it would be a tragedy to live a smaller life than you have to.

I really do. And I think you are. I think that you and by bringing your wife along on, you know, flying economy, That's okay. There's nothing wrong with economy, but at a certain point, you earn the right to turn the page on your life. There's actually no virtue in living a smaller life than you have to. And that is very counter to our society. Our culture tells us, stay humble, don't get too big for your own britches and on and on and on. But at a certain point, there's a cost to it. In fact, it just becomes ridiculous, you know, to be flying economy when you could buy every seat on that plane for the that you made that day alone, it just starts to not make any sense. And then you start to hear your wife making very fair assessments like, hey, I can't do this for much longer. So Charles, I hear you loud and clear that you have your own issues that you're going to work through and you have been working through. And I would encourage you to continue doing that on your own.

Charles, I want you to imagine two scenarios here when Michelle comes and she starts working on the landscaping, she gets the landscape firm and they give her the bid. And maybe she shows you the bid or maybe not. It really doesn't matter to me. Now, you get this bid and you hold it in your hand and it has some number at the bottom with a certain number of digits. You have two choices here. Option one is, honey, I trust you. It's your call. you don't even look at it, you hand it right back to her. Option two, what's that option, Charles? You know that one very well.

This is, how much is this going to cost? It seems very expensive. And that phrase, what do you think that phrase saying that to Michelle will cost you? It's going to cost me quite a bit. It's going to totally devalue her efforts and it's going to deflate her balloon on this. So you have a choice.

Nobody can control you. It's up to you. You're obviously very successful, intelligent guy. But you have a choice and now you have it laid out. And we can let our feelings control us or we can acknowledge him and say, who do I want to be tomorrow? So you have plenty of time to think about how you want to run. Right. But one of my beliefs that I'm still struggle with is that I don't,

So first class is very comfortable, no doubt about it. But I feel bad. I feel like a pretentious prick in first class. I see people walking by me, and I don't want to be that guy. And so that's my money belief, and I got to get over that. But I just don't feel good about myself. So I have no problem sitting in first class while my husband is in economy. Okay.

All right. I love it. Charles, would you be willing to do that? Yeah. I mean, I like to travel together with my wife, and so I prefer not to. But if I have to make a choice between traveling together or separate, I'd travel together. So you would get the first class ticket next to her. If she's in first class, I want to travel together.

So I'd suck it up. But I just, I'd feel like this pretentious guy and feel like this whole lifestyle creep. It just doesn't match with my values too much. I get it. It's I'm not the kind of guy who flies first class. I'm not the kind of guy who stays at this hotel and orders rooms. I get it. I get it.

In fact, if I look at some of the things I spend on now, 18-year-old Rameith would be like, what? This is crazy. You don't waste of money. Exactly. But I'll tell you something. I met a guy in New York, and he told me, he said, I always told my friends, I was never going to get married.

Everybody knew I was the single guy. And then he puts up his ring finger and says, look at this. Married. I said, what happened? He said, well, I met this amazing girl. And I realized I had two choices. I could either keep living the same story I had told myself for 22 years of my life. Or I could change the story and I could marry this girl.

And that's what I did. Your story is yours. You can change it. So if you feel like a pretentious asshole, okay, that's inside of you. But if I saw you sitting next to me in first class, what do you think I would be thinking? This guy is just like me. He's kind of earned his win in first class. Yeah, or more likely nothing.

I'm not paying attention to you. I'm just paying attention to myself. That's it. Think about the story that you tell yourself about your relationship. What's that story? The relationship should be of the utmost important. And so say that. I should prioritize that.

Yeah, and say that story. You know, if I were single, I probably wouldn't fly first class, but finish the sentence for me. But I'm married now. If it makes my wife happy, I'm willing to do it. Nice. This is a big moment. This is a great opportunity to take the win. That's one of my principles.

Whenever you reach an agreement, no matter how small, celebrate it, do a high five. Get a piece of cake out. Go for a walk. This is awesome. It's so rare. It's a chance to celebrate. In this case, I'm going to keep going. But before we do, it's important that I explain what just happened about that first class ticket.

The point of my conversation with Charles was not to badger him into paying for first class. There's some people who simply don't value something and they consciously decide not to do it. Fine. But that's not what's happening here. too often people don't spend their money on something out of fear, and then they try to intellectually justify it by saying, I don't really value it. Here's how you can tell the difference. If someone has a net worth of $11 million and earns millions of dollars a year, that person can easily afford first class. If that person is deciding not to fly out of fear that he'll trip and fall and

spend $11 million, that's a red flag. And if that person's wife is threatening to divorce him for his money beliefs, that's one of the biggest red flags of all. That is why I felt comfortable pushing him into acknowledging that he can fly first class. Emerson has this quote that I absolutely love. A foolish consistency is the hobgoblin of little minds. Sometimes the story you've been telling yourself for 20 years needs to be rewritten. And now that I've secured this win, I'm going to push them even harder to get even more specific. 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 dreaming. 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 Facet 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 rich life goals. And they handle important things like investments, retirement planning, starting a family, becoming empty nesters, estate planning, all of it.

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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. This episode of Money for Couples is brought to you by Wild Graeme. Do you have someone in your life who always tries to one-up you? Like if you bake a cake, they'll ask, hey, have you tried using hand-milled flour? Because it just tastes so much better. You know, I prioritize my help.

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How is it currently structured? Is it in one account? How does it work? We have a joint account, joint checking account, joint savings account. She has a separate account. We have joint investment accounts, an individual investment account. We have individual retirement account. and we have jointly owned investment properties. Okay. Michelle, if you wanted to do the landscaping today, technically, you have access to money. You could pull it out of savings

or you could sell investments or whatever. Is that correct? You're asking me? Yeah. It's de facto, you know, it's a responsibility. It's not a real thing that I can take money out of. there would be ramifications if I just decided to take money out of the joint account. I would have to hear the words, you know, why to do that.

I mean, it would probably, he would probably be the one wanting to divorce if I touched a significant amount of money. If I just moved $20,000 instead, I just felt like doing that. I wouldn't say that. It'd be, I would say, I'd be upset. I wouldn't say at divorce, but I'd be like, let's not throw money around. necessarily. Let's make a plan. You know, it's funny, for other people listening to this 20K would be quite serious. You know, if somebody, if one partner took 20K out of their savings

account, that could be devastating. For both of you, that's what, like a day's worth of interest or something like that. Michelle, what would be an ideal financial setup for you? I think one that I truly have access to, and there's a set number that we have, and it has to be a number that we both agree on. Very good. I call it a worry-free number. Below this number, we're not going to worry about it. Okay. So if I go to the grocery store and I'm looking at two different types of lettuce, I don't care. And of course, the more successful you get, the bigger that number is. What would you say your worry-free number is? It's changed over the years, but now that we're at this stage in our our marriage, I would say five grand. I just don't want to hear much banter if it's less than that.

Okay. That's what you wanted to be. Is that what it currently is today? Not at all. Probably $500. I mean, if there's a charge on, it's not even the number. If there's a charge that he doesn't think is valuable, there's an argument about it. I'd say 500 bucks is a number where, you know, if we hadn't talked about it, like, hey, would you spend this on? I'd ask her about it. I don't know if it's an argument, but it's a question. We had that argument about $500. I bought my daughter a mattress for $500, and he said he found it on Amazon for $300.

And we argued about that for a week. And I took two weeks to research mattresses. And five, yes. I got one of those nectar or Casper real comfortable mattresses. And he literally did one search and said, you could have gotten that on Amazon. That's, it was 500. So we have established definitively that $500 is the current worry.

free number and it's not going well. Okay, fine. Charles, I'm laughing. We're all laughing, but Charles, knowing what you have heard today, how would you have handled that mattress situation? Well, it all bowled down to the internal compass. And that's where I think it went, wrong. I would have not said a word. I would have even said, I would have even complimented her and say, hey, hey, honey, you did a great job getting this mattress for our daughter. This is comfortable. It's safe, thank you for taking the time to do this. Okay. I love it. I love it. I like that you are recognizing your internal compass is a little off. I think that's really savvy. And boy, that takes a lot to look inside because your internal compass affects everything. It affects your lunch

bill. It affects your mattress. It affects your $20,000 vacation. And I think you're kind of acknowledging that, which is a beautiful beginning of a new journey for you. Okay. Awesome. what should that worry-free number be? Probably about a thousand bucks. How did you come to that number? If I look at our expenses, we have a lot of expense that come through the credit card. And I think if I look at the expenses, you know, the ones that come in above $1,000, I tend to sit that I'm not aware of that surprised me are the ones I kind of react to the most.

That seemed a bit like a tautology. These are the numbers that I react to. Therefore, the numbers should be this number. Right. Okay, that's certainly one approach. All right, fine. We all have our approaches. Let me suggest another approach. Is there somebody else on this call right now, somebody who may have just mentioned a worry-free number? What did she say? She said five grand. Okay, I'm not saying you have to agree with her, but I'm saying that she, who's equally valuable, has equal say in what's going on here, picked a number five times larger than your number. Does that surprise you a bit? No, it doesn't. Well, it should. Why? It should tell you that if one of you is five times different than the other, there is some massive, massive disagreement.

Somebody in some way is looking at this in a totally different way. It's not like I said, oh, let me get the appetizer for $10. Oh, I don't know, $12. No, five times a difference. So how do you want to use that information? What that number means is there's going to be just a complete cart blanche to spend whatever you want, wherever you want. Yes. And it's going to make our expenses kind of go up.

It's going to balloon. Whoa, whoa, whoa, whoa, hold, whole. We were almost there and then we just took a sharp left turn. Let me rephrase what I just heard because this is really important. So Michelle said, I think our worry free number should be $5,000. I don't really want to talk about it below that number. Charles, you said $1,000. and then we started comparing the two numbers and you go, you know what, we don't really spend

anything at $5,000. I said, okay, keep going. We're getting there. And then you go, so if I pick $5,000, the conclusion was Michelle is going to start spending $5,000 bills left and right, left and right. Has Michelle ever done that in 21 years? Ever. Yes. And so let me tell you how she's done that. So buying a house is one of the biggest purchase you can make. And Michelle dictated that process for the house we're in today. I thought it didn't meet my internal value compass, but we went ahead and did it anyway. And every single month, we're paying for that decision that Michelle made. One sec, Michelle, I got this one. So you bought a house. Okay, fine. And by the way, your house costs two point. No, can I, two and a half million bucks?

Can I just, I earned him money. The house was 1.5. It is now worth 2.6. So this so-called terrible decision that we made, I just earned him a million dollars. It's not about the money. It's really not. Charles, first of all, having a worry-free number of 1,000, 2,000, 5,000 is totally different than buying a house.

House is a big, big purchase. Both of you put a lot of time in analysis. I know that. Charles, do you think if you're worry-free, number was $2,500,000 that Michelle's going to be running around buying a ton of $2,500. No, but I think our expenses will go up. Let's put that aside for now. Is she going to suddenly turn into somebody who's just dropping $1,000 bills everywhere? I don't know. Do you think so? You know her better than anybody else in the world. Really, before you answer this, think carefully.

get out of your own head, look at her. Think about her as a mother, a partner. Is she going to spend $75,000 over the next few months, $5,000 at a time? I have to cut in here because this is really the crux of the entire discussion. You can hear Charles spinning in his own head. He's almost paralyzed by fear that if he increases their worry-free number from $1,000 to $5,000,

Michelle is suddenly going to spend all their money. This has nothing to do with Michelle. He's not even thinking about her as a person right now. He's not thinking about her as a wife, a mother, a partner. She is just a placeholder in his mind. We know this because she's given him zero reason to worry about her in this way. He's spinning because these are his own fears.

The problem is, well, there are two problems. First, he's unnecessarily restricting himself from a beautiful rich life that he's earned. Second, and much more importantly, Michelle is reacting to this. She feels accused, cornered, disrespected. I only wish you could have seen her face during this conversation. She really looked so hurt, fragile, so resigned. Charles's beliefs are causing serious damage, maybe irreversive. reparable damage. And for what? To save a few thousand dollars, a rich life is about more than money.

So let's go back to this heated conversation. Notice how quickly it moves now as they're both moving to their corners and preparing for battle. Well, I don't know. And the reason why I say I don't know is because we had talked about going on a vacation to Costa Rica. And a friend recommended this villa. and it looked great. And then we got to the price, and the price was $2,200 a night. That was total. That was total. That was total.

It was $2,200 a night. And I thought, wow, that's kind of crazy. That's expensive. That was my reaction. The sales reaction was, why can't we do it? And so I'm like, oh, so my concern is that in that case, if I said, okay, let's do it, we could have dropped like $25,000 on a vacation coastfuge event. It just didn't seem it was good value.

So my concern. Oh, so many things in that sentence. So, yeah, maybe it wasn't a good value. There's a lot of cheaper places in Costa Rica. I get that. And when I was a kid, I couldn't have afforded to stay at $2,200 a night. Is the purpose of going to Costa Rica to get a good value? No.

It's to have a good experience. Yeah. And when you thought back to that Italy trip, what did we not talk about? price and value. Yeah. And so I hear that you both discussed this Costa Rica thing, $2,200 total or per night. It doesn't really matter.

What I would like you to be able to do walking out of here is to critically look back at the stories you've told yourself. So Charles, when you had that discussion about Costa Rica, you said, oh, this sounds kind of crazy. It could be $25,000. That's not a good value. Okay, you did indeed say that. Now, knowing what you know today, how would you evaluate that Costa Rica trip?

Instead of having the exclusively priced lens on the Costa Rica trip, I would have the combination of a experiences lens on that trip to say, hey, will this be a good experience for my wife or my family? And then start to kind of factor in like Michelle does, you know, once we kind of factored all the things we want and then start looking at that price at that. at the cost of the trip and see if it fits into, we need to fit into. Yeah. Where I would like to eventually see the two of you is clearer black and white guidelines on who is making decisions. Charles, you do this at work all the time, right? It's not like every random person at work is like chipping in and offering their,

it's like, hey, if you want to give me some thoughts, fine, but I'm the decision maker. That's how it works at work. And at home, it's so porous. I can see it. She's getting excited about a Costa Rica trip. Then inevitably, you come in. Oh, what about this? What about that?

And it's always cost. It's like those people at work. They start speaking up and you already know what they're going to say. And they're always annoying. You're just like, oh my God, just shut your mouth. I don't need to hear from you again. By the way, this doesn't happen at my own company for any of the people listening. I love IWT employees.

You guys are awesome. We have a great team. But past companies. So what I would wish for you. you would be some clear rules. Okay. Here's a worry-free number. Below this, we're not going to talk about it.

Every six months, we're going to re-evaluate our money-free number to see if it needs to go up or down. Hey, we might have made a mistake. Let's give it six months. We'll fix it up then. So nothing to worry about. I would like to see some rules such as you are in charge of X. I have no say at all.

on these topics, I can recommend things, but you're the ultimate decision maker. On these ones, we have to do it jointly. We both have to be partners. We have to sign off. And then finally, for this one, I'm in charge. I don't want to actually hear anything from you. I'm the one in charge. Do you have any rules like that?

That is fantastic because the truth of the matter is, on the Costa Rica example, I wouldn't have even picked that one. I wouldn't, I would say that's ridiculous. So the truth of the matter is just because we look at one initial thing doesn't mean that's the one I'm actually going to go with. So should we come up with some rules right now? Yeah, I think that's a good approach. I think that we kind of have defective areas where like on the investment side, I've been largely the one driving the investments, for example. I think that I'd like to continue, but I want to have more of Michelle's input on the investments. And then I really like what you said about our worry some worry free money. it's not that it's every other week. I'll make separate purchases of $5,000. And even let's say the worst case scenario that happened. Let's reevaluate them in six months. Let's see if I actually did that. And then we can talk like way that was way too much. And that number won't kill us. If I did that every month, okay, let's reevaluate that. Let me give you a quick little tip on this little tactical tip. So right now you have a worry free number of 1,000 Charles. Michelle, you're at 5,000. Here's what I propose. I propose. I propose.

you meet in the middle at 2,500, and you can add a cap. A cap says between now and the next six months, what would be a maximum number of $2,500 purchases that either of you would make without talking to the other, right? And if it goes above this, I'll definitely bring it up. It basically escalates out of the worry-free category. And I say, you know what? I want to just give you a heads up. I've been making a lot. of these purchases and I want to make sure you're aware of it. Let's have a little conversation. So first off, do you both feel comfortable starting at 2,500 for a worry-free number? I'm good with that. I was thinking three, but, you know, I guess if... Charles, this is a $500 is potentially money very well spent for you.

Sure, that's fine. Do you feel comfortable with that? Yeah, yeah. Okay, $3,000. a little agreement goes a long way in these discussions. It really shows positive intent. Okay, 3,000. Lock it in, take the win. Great job. You both have created a great money rule. So below $3,000 for the next six months, you're not going to talk about it. Fair? So let's give some examples. What would be an example of something you might spend on Michelle and then Charles that you're just, not going to even bring up. Michelle, go ahead. I've been begging for a peloton for the last year since COVID. Done. Done. It's ordered tonight. What's next? For me? Yeah. Just got to jump in here for a second and say, wow, it really gives me great joy to spend other people's money. I think I just

ordered Michelle a peloton with Michelle and Charles's money. What a great job I have. My next podcast is going to be called, Rameith, spend my money for me. I would be the best in the world at that. I only have one wish. That wish is that one day someone comes on this podcast and says,

Ramith, I'm going to buy every program of yours from IWT.com slash products. All of them, the ones on money and starting a business and careers and psychology. What's the area of life

that you want to spend more on this year? A lot of people will say health, or relationships. Some people will say travel. Let's talk about food and health for just a second. For example, in my life, my wife and I both decided

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approved. But now you set up a simple rule. Both of you agreed to it. And now you have freedom to dream. Peloton. Love it. Amazing. Order it tonight. And you get on that Peloton, you're going to feel so good. It's going to feel like Charles feels getting into his Tesla. That's a beautiful thing. Charles, what are you going to spend this worry-free money on potentially? Nothing. If you're stuck, tell me, I'll be your lifeline.

So I think I'd like to go to a fantasy baseball camp, the Dodger. Rogers in Viro Beach and spent a week with the Hall of Famers. That's less than $3,000. No, but no, but I also like to get some autographed Mahamani Lee gloves signed and get a Jackie Robinson signed check. Get some sportsman. Where did all this stuff come from? All of a sudden you have this list of things you're going to get.

I love it. Where did this come from? I read your book and I started to kind of sketch up my rich life and this is on it. Okay, very good. So it sounds like two of those things fall under worry-free. And the third one probably need to be some kind of discussion, right? This Dodgers thing. Great.

Love it. Both of you starting to realize, okay, we spent this money. It did not change a single thing for us financially. In fact, it was just sitting here in this swamp, just sitting here in a savings account or a checking account, just sitting there doing nothing. And now every day I wake up, I go to the exercise room, I have a peloton. I feel joy. Love it.

But, let me ask you those. There are folks that have much more money than I do that end up going bankrupt. Like what happened to them? Okay. What do you think happened? You tell me. They didn't pay attention. And they started spending extravagantly.

And one day they realized that they kind of got, got themselves in trouble. Yeah, but they didn't go bankrupt buying pelitons. Do you know how many pelotones you can buy? Like, I can't do the math. The numbers are too many zeros in there. What did they go bankrupt buying? But they but they loosened the floodgates and they bought like vacations, cars, homes, all kind of stuff. You ever eat at a nice restaurant?

Uh-huh. What was the first nice restaurant you remember eating at? Benny Hannes, Beverly Hills. Very nice. Okay, very good. So in the frugality world, there's a lot of frugal people who love to say, I don't need to eat at a fancy restaurant. If I made $180,000, I wouldn't eat there. or I don't need to fly business class.

Even if I made X dollars, I would never do. I used to say that about business class. Ha ha, stupid people. Why are they doing that? Deep down, what that really means is I'm worried that if I eat at a nice restaurant once, I don't trust myself. And I'm afraid I'm going to slip and fall and eat there every single day for the rest of my life. Does that sound familiar, Charles?

Mm-hmm. Mm-hmm. First, it's a Peloton. Next, it's landscaping. Then it's a $7 million house in South Lake Tahoe. And then bankruptcy. Sound familiar? Yep. That's how it happens. So the solution has been nothing. Correct. The solutions are nothing because it's either one or all or nothing. Correct. It's classic all or nothing thinking. So here's what I will say. I'm going to give you a little suggestion, Michelle. This is something I learned from the fitness world. There are a lot of training.

and they were trying to figure out how to encourage some of their female clients to lift weights instead of just doing cardio. And the first thing that they would hear was, I don't want to get really bulky. I don't want to look like Schwarzenegger. And in my head, I was like, I wish it was that easy. It's really hard. So, you know, first they told them, ah, that doesn't happen. And muscles had a lot of work to develop. Finally, I heard the best answer I've ever heard. A trainer said, okay, I hear you, we'll stop before we get there. So Michelle, tell Charles that. Charles, before we ever got near bankruptcy or even near a space that would be, you know, detrimental to our net worth and our family's wealth, we'll stop far in advance. Let's talk

if you think I'm going in that direction after 12 months. Okay, fair enough. You two did it. You got married. You raised a beautiful family. you became wildly financially successful. And you're still really young, mobile. Everything's put together. You're great. It would be a tragedy to wait another 10 years, which would turn into another 10.

Yeah. The bitterness would deepen, possibly divorce. And we wouldn't get to enjoy all the hard work we went through to be in this financial position. It'd be a wasted opportunity. What I would like you to work towards, North Star is not just for you both to be spending more money. I don't really care how much you spend.

I want you to have a rich life. A rich life means, Michelle, you are happy in your beautiful home. I want that for you. You are traveling. Charles, a rich life for you is feeling like your money is not out of control, that you will have enough. and to know it, like deep down in your spreadsheet bones, and to be just a little more adventurous than you are today.

I have a wish that the two of you will become playful with money and that you kind of look back on this time and you say, I can't believe that I was sharing in Netflix past. What was I thinking? What did you used to call me? What all the kids called me? They used to call me cheap Charles? Not anymore.

Look at me now. Look at this shirt I'm wearing. Looking pretty nice, isn't it? it. Just these little jokes that really illustrate the fabric of a beautiful relationship. I have a wish that the both of you will get there. Thanks for listening to I Will Teach You to Be Rich. I'm Rameet Seity. Please follow the show on Apple, Spotify, or wherever you listen to podcasts. To find our entire back catalog of podcast episodes, go to IWT.com slash podcast.

I'm given away a signed copy of my book. me a screenshot. Show me that you're following my podcast on Apple or Spotify, and I'll pick one listener to send a free signed copy of my book right out to you. Here's what you'll find next week on the I Will Teach You to Be Rich podcast. I very much feel that whenever I want to spend money on myself, it is an asking for permission, and I'd rather not ask permission, so I just go without. I know there's things underneath the surface for both of us that we're not saying, to each other, we maybe just harbor a bit of resentment towards each other.