Money For Couples with Ramit Sethi - 88. “We own 7 properties. Why can't we pay for groceries?”

Episode Date: March 28, 2023

Natalie and Travis are in their 40s, living in SoCal with their four kids. Travis is a career military man, imprinting him with some pretty understandable tendencies toward conservatism with money. He’s saved and invested heavily for decades, but it’s left him without the muscle memory to enjoy what he’s built. This episode is brought to you by: BetterHelp | Visit betterhelp.com/ramit today to get 10% off your first month. Fabric by Gerber Life | Protect your family today with Fabric by Gerber Life. Apply today in just 10 minutes at meetfabric.com/ramit. DeleteMe | If you want to get your personal information removed from the web, go to joindeleteme.com/ramit for 20% off. Links mentioned in this episode • Netflix show BTS newsletter (limited time only) • Get Money Coaching with Ramit  • Get my New York Times best-selling book Connect with Ramit • Download the Conscious Spending Plan • Get my no-numbers journal • Other episodes • Instagram • Twitter • YouTube 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 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. The same 10 things I put in my cart a year ago are not the same

price and there's so much higher. So we're not going to go out to eat this week or we're not going to get your new shoes till next month. Ah. So are you spending down your savings every month? Yes. Okay. And how does that feel to both of you? Awful. Natalie, I'd like for you to start with the net worth section. Just say, okay, assets and then read me the number next to it. Assets, $890,000 includes property, income property, investments that we have. How many properties? Seven. Seven properties?

And you guys are arguing about $20 on Amazon? What world am I in right now? Is that enough? It could be enough. But does it feel like enough? No. There is no guilt-free. There's always guilt to the spending.

single time. Where does the grind stop and where does the enjoyment begin? I'd like to introduce you to Natalie, who's 42 years old and her husband Travis. He's 48. Travis is in the military. Natalie stays at home with their four children and runs the household. And they live in Southern California, which is very expensive. Now, they reached out to me initially because they disagree about the way to spend money. And you're going to hear about very specific examples like their son's birthday party. But as we dig, not surprisingly, you're going to discover that there's something much deeper beneath the surface. As you listen today, I'd like to remind you of a couple of things. First, it helps me if you rate and review this podcast on Apple Podcasts.

Leave a little written comment. I read them all. I appreciate it. Second, watch this episode on YouTube. You can see the full episode and you can see Natalie and Travis and their body language. which is quite revealing, just go to YouTube and search for Ramit Sati and follow me there. Now, let's get to the episode. Our son's birthday party that happened last month, turned 11.

Okay, congrats. And he's our youngest of four. And we initially set out to have a budget of $250. And I'm sure that we doubled, triple, quadrupled that. And with no thought, no conversation, or like, nothing afterwards. about the amount spent. Who came up with the number 250? Usually for our children's birthdays, it's around 200, 250.

When we were good at our budget, we would put money away for that, but we have not looked at budget in months. And so when it came time to plan his party, I wanted to plan it at the skate park, found out that that was $500, so canceled that, postponed it to the next weekend where we could do it outside for free. So Travis actually doesn't know what we spent on the budget, but we were under 250 for that birthday party. But to him, he thinks that we went over. Wait, what? Travis said you may have quadrupled the budget and you're telling me it was under the budget? Absolutely. Okay, this is a good example. How much did you end up spending on this birthday? Exactly.

So far, I've spent about $180 for his birthday. I just grabbed a couple Costco pizzas and some of his favorite sparkling waters and a couple cookies and went to the skate park with 12 of his buddies. So it was a pretty cheap birthday. Sounds like a great birthday. This is already fascinating. So many of the stories we tell ourselves with money are just that stories. We'll say, I'm not good at money, or I'm afraid of losing money. Or in this case, Travis literally tells himself that they quadrupled the budget for their son's

birthday party. Now, it's tempting to think that presenting the facts will change people's feelings, but it won't because these are feelings and facts rarely change feelings. This is why so many people feel like investing is gambling, even though it's not. I can show them a compound interest chart and point to 100 years of history, and it will not change a thing. That's the point of this podcast. Emotions matter. Psychology matters. Compound interest charts and spreadsheets matter a lot less. and people think. All right.

Travis, what do you think about hearing that the birthday may have been under budget? I think it's fantastic. Superbook. That's a big smile. I see that. All right. Yeah, it's great.

Then I'm going to add the $70 to $90 for the fishing trip, and then we're back where we're over. Not quadruple, but we're over. You're over by 20, 30, 40 bucks or so. Okay. And does that trouble you, Travis? It's just the I have no problem. I know that you, me like hate budgets.

I have no problem spending every single piece of every penny every month. But as long as we know where each penny goes, I don't care. Yeah. Right. And when we can't have money for the frivolous, what's the term that you call it? Guilt free spending. It's not frivolous. It's guilt free.

Guilt free. There is no guilt free. There's always guilt to the spending. every single time because it doesn't we didn't allocate its work prior to it being spent okay who feels the guilt i do you do okay Natalie do you feel it I feel it I feel guilt from Travis because I guess we're not on the same page and we don't communicate monthly as to hey this is what's coming up this month do we have the money to pay for that or do we need to borrow from our savings to pay for this you know we're really good at certain things like budgeting the car registration

and those things, but it's the random things that come up that we don't communicate completely about where the money's coming from. So I do feel a little bit of guilt when I do spend it because he's not on board with me communicating and planning that part of it. Okay. All right. And when you say it's the little things that you may be over on, you're talking about birthday parties, groceries, what are we talking about? So we are definitely over on our groceries. The other small things that I feel like nickel and dime us, what I say to Travis, is the kids have birthday parties that they're invited to or, you know,

the girls high school sports need an extra $100 for this or that. And we don't talk about where that's coming from. We don't plan for that large of the nickel and diming to come out. And I think that's what's feeding our budget. So let's talk about that. She comes to you and she says, what, I need $100 for uniforms or something? thing? Right. All right. What do you do? I would take it out of the budget and then in my mind trying to spend less the next time I go to the grocery store. Does that work? No, it hasn't. That's

why I'm here. And Travis, you're shaking your head. What's your take on this? It's just after the fact, right? Like I have alerts on my phone for Amazon, Amazon, Amazon, Amazon. And I'm like, we don't even have a budget for Amazon and it keeps getting lumped into the food budget. and household things and food and household. And like that we can't. That's not a, like we're violating the very principle of money that we should be enforcing and like employing ourselves. Is it possible for the two of you to be financially compatible?

Absolutely. I think we can. I think we definitely have to mesh on some common goals. Do you know anyone else, any other couples who see money differently, but they are meshed? Um, yes. Tell me about them, Natalie. What comes to mind when you think about them? So from the outside, one of our couples wants to, you know, save nickel and dime savings and not spend it on those things.

Like, oh, well, you know, let's make him a card or let's do something like that. And the other person in this couple is wanting to use their money to invest it for it to grow. All right. By the way, you said nickel and dime in a really interesting way. When you say nickel and dime, is that a positive thing or a negative thing for you? For me, it's negative. Like, we're nickel and diming our way to death. Is that how you use it?

To death or yes. I picked up that you also had a positive view of it. Like, nickel and dime is interchangeable with saving. I think that we can be. It can be a form. I've seen other people do it, and I feel like, you know, living in Southern California where things are so expensive and everybody has the best of everything, I feel like in my mind, because I am the biggest spender in the family,

I mean, Travis doesn't go to the market. He doesn't buy the kids' socks or shoes. So a lot of this I feel is heavy on my shoulders because I want to get better at making him feel that I'm confident and competent in leading this family financially and not spending money that's not needed to be done. So I would like to get better at not nickel and dining. And I think if I, I feel like I do do. these things, but to Travis, all he sees is spending.

Like the Amazon, this is a perfect example, the Amazon packages that come. To me, I would rather push a button and order those new socks on Amazon that are the same price at Walmart instead of driving my car, five to ten miles to go pick it up. So I'd rather do that. And that's why a couple Amazon packages come each week rather than driving to go do it. Whereas Travis is the type. If he needs a tool for the lawnmower or something, he'll stake out three different stores, find the best price and bring it home. Well, I feel like he just wasted a ton of gas and

time, which time is very valuable to me, um, doing that. Just to clarify, time is valuable to you. Why? If I can save time going, shopping, physically going out there to get it when I don't need to even drive down that street or that area, I can use it more wisely as doing household chores or preparing a meal for my family or. Or what about just enjoying the time? That would be a fantastic way to do it. Okay. All right.

When was the last time you just enjoy the time? It's been a while. In college, I majored in something called STS, science, technology, and society. And one of the things we studied was the emergence of technology in the home, like irons and dishwashers and vacuum cleaners. The promise was always that suddenly, magically, once you buy this technology, you will be free to enjoy your leisure time. In reality, expectations simply went up, and now you spent approximately the same amount of time on housework. From the perspective of designing a rich life, if you let these things consume your time, they will.

Just as if you let all your random expenses consume your money, they also will. But if you are in charge of your rich life, it's your job to fight back by designing what your rich life is and then prioritizing those things first. As an example, when you hear the phrase pay yourself first, this is exactly what they mean. You set a target savings goal, let's say 10% of gross income, and you pay yourself first. That money goes into a savings account. Then you take the remainder of the money and use it to cover your spending. In other words, you put the important things first or they will never get done.

You can apply this to travel. You can apply this if you really want a nice car and it's part of your rich life to be able to afford it. Fantastic. That's how you do it. Now, let's explore how they both think about money. 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

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That's Z-O-C-D-O-C dot com slash Rameet. Zok-D-D-com slash Rameh. And I want to thank Zok-Dak-D-K for sponsoring this message. When you think about money, what are the first two or three words that come to mind for you? Let's start with Travis, then Natalie. Money is a tool. Money is a method to pursue greater things. Selfish and selfishly and selfishly.

selflessly. You know, for example, I've got about three or four years left in the military. And when I retire, I don't want a W2 job. And so I want to be able to spend my time supporting communities locally and abroad, doing whatever, teaching English in Indonesia to clearing a trail and, you know, up and top over three or four months. Like, that's what I want to do selflessly. The first words that came to my mind when you asked that question were safety and saved. Tell me. Yeah, I want to feel like I have enough money. to do the things that we need to do for now and for our future. Okay. This is very helpful for me to understand where you're coming from. I am curious about Amazon. So you make a really good point, Natalie, that your time is valuable, and you've got four kids in this household that you are in charge of.

So make sense to me, you'd prefer to order something from Amazon and have it delivered rather than drive. Travis, I heard you say that, first of all, You get a notification when there's an Amazon order. Is that true? Yes. Why do you have notifications turned on for Amazon purchases? I don't know.

Can we just like turn that off? I don't have notifications for anything else on. Are you serious? Serious. So Travis, can you turn off these Amazon notifications, please? I will note that. Okay. All right.

I feel like family harmony has already increased 15% just from turning off Amazon notifications. Okay, the job is done. Travis, I'm curious, though, knowing that you will turn off those notifications. When you see those things come across your phone, what's that feeling you get? Just absolute, like, gut-punching dread. Like, you're going over, and we're going over, and we're going over. That's what I see it still every time.

And do you even see the amount, or is it just the icon? I see the amount. Okay. So, like, what's a typical amount? that you might see? 20 to 40 bucks, 50 bucks. Okay. 10 to 50 bucks on a given day.

You're feeling existential dread from seeing 20 bucks on your phone. Okay, that's a problem. Stupid, I know. I'm feeling dread because it's, it wasn't, it all goes back to allocating money to, so the money has a job. If the money is this, if we have a budget that said,

or a allocation of money that says, hey, this much money is going to go to Amazon, I don't care. Okay, fantastic. All right. And Travis, you said something in your application. You said, we're loose. We're not tight right now. We're loose with our money. When you said that, it deeply resonated with me because there are parts of my life where I want things just completely tight. I want them dialed in, you know, whether it's workouts or my calendar or whatever. And then when it's important to you and you can feel it's getting a little sloppy, you go, oh, God, I just feel out of control. Is that how you feel about it? 100% true. Travis is a born optimizer. When things aren't in their place, it drives him nuts.

And he's also in the military, which tracks perfectly. I'm an optimizer too, so I understand how he feels. But I also know that if I let my optimizer feelings take a front seat with my finances, my life can become extremely numbers oriented. And it can be really hard for a partner to deal with. So that's what you're hearing when he talks about gut punching dread. It might sound like hyperbole to you, but to him, he genuinely feels it. Okay, doesn't mean it's right.

Doesn't mean I agree with it, even though I totally get it, Travis. Doesn't mean it's helping his relationship, but that is how he genuinely feels. Okay. So tightening it up or dialing it in for you would be every dollar has a job. It's assigned to something. We agree on that. And then I don't care about the execution of it. Is that correct?

It's correct. I don't have a problem doing that because I know that he wants every dollar to have a place to go. I think the problem is that, A, we don't plan it each month. And B, we haven't changed our allowed budget in over a year. You know, with inflation the way it's gone and everything else. So I think that's a big part of why he feels the way he does. I feel it as well, but I also am the one shopping and seeing that the same 10 things I put in my cart a year ago are not the same price. And they're so much higher.

So I try to make the adjustments with our shopping and I see that. And then I try to make up for it in other ways. It's not spending, we're not going to go out to eat this week or we're not going to get your new shoes until next month or, you know, things like that because I'm the one going out and actually spending it and seeing the difference. I see. Okay. And can I go out on a limb and make a guess here? You haven't updated it in a year. Is that because something changed and you started to feel worse about money and now it's just this sort of thing in the closet nobody wants to really tackle? Yeah. We're kicking the can down the road because we haven't figured out the principles yet that were violated. And you believe the principle is the day-to-day spending?

Just allocating our money. Okay. But why haven't you allocated it in a year? I guess tired. Okay. That's an honest answer. The thing is, we're not robots. I'm not surprised you haven't done this in a year.

But I'm also not surprised that now you want to talk to somebody like me. Because sometimes we need a little nudge to get it tight again. Travis and Natalie are stressed out by money, enough that they've come on this show in front of millions of people to share their story and their actual numbers. But notice that they haven't updated their numbers in over a year. I got to tell you, I've got a lot of compassion for people who aren't on top of their money

every single day of their lives. We have family obligations. We get busy with work. Or we're confused about a certain investment term and we need to find somebody to ask for help, but then life gets in the way. One of my goals for this podcast is to introduce you to couples who really want to improve their relationships with money, but for whatever reason, they're stuck. The reasons might seem silly or

trivial to you, but they are nonetheless real to them. And the truth is that each of us has something in our life where we know we should be doing better, but we're not. That is real life. And out of curiosity, have you had budgets before? Yes. And how long did those last? Look at Travis's face right now. Look at that. Sometimes that's all that needs to be said.

Go ahead, Natalie. How long did those last? I don't know if I could put a word on it. After that luck, it didn't last very long. That's shocking. I'm utterly shocked. All right. Let's look at the numbers.

The net worth. Okay, you know what, Natalie, I'd like for you to start with the net worth. section, just say, okay, assets and then read me the number next to it. Okay, assets, $890,000, $341. Okay, great, $890,000 in assets. And what are those assets includes? It includes property, income property, investments that we have.

How many properties? Seven. Seven properties? And you guys are arguing about $20 on Amazon? What world am I in right now? All right, we're going to get to that. Seven properties. Are you actually cash flow positive on these?

Everyone. Yes. What am I doing here right now? Investments. What's the next number? 323. Okay. All right.

And of course, that does not include your properties. You count those as assets. Fine. Savings? $119,000. Okay. And debt? $401.

Okay. What is that? Mortgage. the mortgages on some of the properties. Okay. That's our only debt. We don't have any debt on anything else. All right.

You guys are pretty financially conservative in that way. That's good. So what's that total net worth you see there? 931,000. All right. What do you think about that number, Natalie? I like it. I think that it's a good number to have,

but I feel like we're crippling ourselves in our personal versus, are investing our business that were not as well disciplined. I see. So your business, I can hear a lot of pride. You've got multiple properties. They're all cash flow positive. I can hear that. It seems pretty dialed in.

The personal side seems to be different. Is that a fair assessment? Yes. Accurate. All right. Fine. Great. At least we're honest.

That's the step number one. Travis, talk to me about the income. So the income is what I make were a one income military family earner. That includes the housing allowance that we get because we live on base. And it also includes a, it's called BAS, which basic allowance for sustenance. So it's like an extra $280 that the government just throws you because I have dependents, right? And so when you, the $10,000, you subtract $3,400 for the housing that they put in and then take out. and so like technically we have like 5,800 that they uh and then and then we have the TSP that comes out

of that which is right at 20% so right around 1350 a month okay so just to summarize you make a gross amount every month of 10,523 that's great and do you have a pension at after 20 years of 50% of the base pay which my base pay right now is like 7200 700. 200 a month. And so 20 years will be when? Next year. December. Oh, sorry, this December. Great. So you're close to getting 50% of pay if you retire. Correct. And when do you plan to retire? Ballpark. If someone that asks me right now, probably I've got another three years-ish, so probably three or four years from now. Great. I've already ran those numbers. So it'll just at that point, with my, if I get 100% disability, which for tours, that will definitely happen.

But that'll be basically $8,000 net just for waking up. $8,000 net? That's double what you make right now. Correct. Okay. And that's in three years? Yes. You guys are making my job too easy for me.

They have seven cash flow properties and he makes good money and is likely to make even more soon. It seems like they should have plenty to be able to spend. Let's work down the rest of it. Fixed costs. Just out of curiosity, what's that big old number in blue on fixed costs? Natalie, what do you see there? 86%.

Now, out of curiosity, what is the recommended guideline for that? I believe it's 50 to 60%. 50 to 60%. You guys are at 86%. You're actually way over that because you should add your mortgage or your rent in there. So it's like, I don't know, 100. Basically you're spending. It's 100%.

Yeah. What does that tell you that your fixed costs are essentially 100% of your take home? It tells me that I have no guilt-free spending. That is correct. And what was that, Natalie? Just that we're spending too much money. Maybe. I'm not sure I would take that conclusion.

You may be spending too much money, yes. But really the problem is a structural problem, which is your fixed costs are just too high. So let's just take a breath on that. Hearing that, what does that feel like to you, Natalie? It's sad. Why? It's sad because how can we succeed if our plan is a failure. So no wonder that we, you know, mumble under our breasts or the sigh happens when he gets a text from Amazon or it's like, why would we not be surprised?

Because it's exactly what we planned for. Now that is very accurate. Travis, what about you? It's frustrating. The final section of the conscious spending plan is your guilt-free spending at negative 29%. I don't know if I've ever seen a number like that on a conscious spending plan. You're welcome. You're in the Hall of Fame.

So what does that mean? Negative 29%. What does that mean to you? That means our kids are getting shoes and jerseys and birthday parties. and everything else out of our savings. Ah. So are you spending down your savings every month? Yes.

Okay. And how does that feel to both of you? Awful. And I'm now having income of, like, my paycheck is $55, $6,000 a month. Well, then I should be employing the extra money, either through securities, paying down debt, finding another investment property, something, like making that money make more money. money. Okay. What about spending some of it?

Sure. Yeah. I don't know if you really believe that. Spending some of that money would be like celebrating to win, right? I don't, I am very, as a Marine like I'm driven, right? Like, that's the mission. I accomplish it, it is crushed it, it's devastated on the next mission, right? Like, the joy that I get is not celebrated because I'm focusing on the next target, the next mission and the next property or the next like, you know, moving my TSP percentages around between the different funds to make sure that we're maximizing. It's just like always moving forward. So I don't celebrate that. You know, I just got promoted to Chief Warrantle for four and we got our paycheck and it was backdated a month and I'm like, all right, that's an extra

$50, $500. Put it over here instead of let's go and get ice cream for the day. Like, yeah, I need be better about that. Okay. Natalie, you want to chime in here? I 100% agree. Yeah, I agree. But I also agree that celebrating is a really important skill. And it's not just a skill with money.

It's a skill with family, you know? When you really look back on your family, you know, you don't remember the type of salt your mom or dad used. You remember the rituals. You remember the random celebrations, the dinner, eating, dinner together or going out for ice cream. You know, there's an art and a science to living a rich life. The science is what most people focus on. They think money is strictly about the numbers, and it's true. The basic nuts and bolts of money are a key part of a rich life. But that's where

most people stop. And you can hear Travis admitting that. He even says he wants to use money to what? To buy more investments. There's a lack of understanding. the psychology of money, which is the second key skill in a rich life. That means understanding how you behave with money, how you talk about money, and how you feel about money. Travis won't celebrate their financial wins. That's his story. And now that you understand this lens that he uses, you can understand why he thought that Natalie overspent on their son's birthday party. You can even understand why when he learned that she didn't, he quickly pivoted to another worry about money. I dig into their CSP and I notice that they invest 29% of their take-home pay and they only spend $50 a month for vacation.

That's for a family of six. It's a little unusual that you only put $50 a month aside considering you have seven. Cash flow positive properties. Anyone else here think that's a little weird? I talk a lot about the $3 versus $30,000 questions that so many of us are obsessed with. And that same principle applies to kids too. It's really easy to get caught up in the small stuff.

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Start this year smarter and safer with Delete. You'll get 20% off all consumer plans when you go to join delete me.com slash remit and use promo code remit at checkout. That's join delete me.com slash remit code remit for 20% off. Well, there's history behind why we, uh, we lost six properties in the recession 20 years ago. Okay. And, um, I was deployed. Natalie was a young mother doing the you know doing all the property management stuff on her own and

we you know we end up having to short sell them and regards of how much money we had saved it didn't matter and so we were doing the classic day ramsie beans and rice because we had nothing else and you know what we short sold the last house in 2011 that's my fourth deployment and it was like that was a big wound for us. There's still that lingering thing of like we don't have enough money saying. You got to say more money because we don't know what the future is going to hold. And even though we have all of our stuff for CAPEX, we've got what we're a year plus, that money just comes in and counts and sits there because, you know. Something might happen. We need to have it. Yeah. I don't feel scared about it.

Travis was deployed every other year and I was the one having kids and dealing with what happened in 08. So I'm not scared. I just want to have a plan for it. And I think that's why, you know, Travis is a lot more aggressive in his investing to where I want to make sure that we do have six months reserved for each of the properties if the renters move out or if something were to happen or we need a new roof. Like there's that number that I'd like to see in the bank to feel comfortable about what we have because that's why things crumbled in 08. But it taught me a lot about I always want to make sure that there's enough in case something happens. And how much is enough for you now? We have to have at least 40 to 50,000 in the bank just for our family. Okay. You have triple-manum. Minimum. Okay.

You have that. Is it enough? It is unless I start taking from it every month. Well, you said you need 40 to 50,000 minimum. You have 119,000 in savings. Assuming you take $1,000 a month, you could go many, many, many, many years, basically the rest of your life before you got down to 50,000. Is that enough? Why do it get so quiet in here?

Yeah. Weird. What do you think? I think it could be enough. But does it feel like enough? No. I'd like to take 30,000 and put it under my mattress. So then that takes us down to about 60,000, you know, or 70,000. And I'd like to go and buy another 30,000.

gold coins and have that in case the economy blows up. Like I've got all these things in my head to really make me feel completely safe and to travel. Hold on. Take me out of your head. Okay. Because putting money under your mattress and buying $30,000 of gold, I can tell you right now is not going to change the way you feel. Do you believe me? I can see that.

I feel like, yes, I guess so. I guess because it's, it's, I feel like to me it's more diversified. and then I feel like, okay, if one area falls. That's up here. Diversified. You are diversified. You have cash. You have investments.

You have real estate. You're diversified. Yeah. Take me out of here and take me to hear. What would safe feel like? If we had money left in that account before the next paycheck came. Oh. Why would that feel safe?

Because if that was the case, then I'd feel like, We were telling our money where to go instead of our money telling us, you know? It's up here, but when we get to here, it's actually quite simple. It's, I want my husband to trust me, and maybe I want to have the freedom to be able to breathe, to go for a walk, to get my nails done, to not deplete our savings account and take from it every month. Anything else? I think that's right on. Isn't this interesting? Natalie could have gone the rest of her life believing that she needed another $50,000 to feel safe.

But the way you feel about money is highly uncorrelated with the amount you have in the bank. You heard it yourself. First she said she needed $50,000 to feel safe. I said, you have that. Then she said minimum. I said, you have three times that. Then she pivoted to, well, I don't want to draw from it. I said, you can actually draw from it for decades.

Then she said, I'd like to buy gold and stick cash under a mattress. And then she wanted to talk about diversification. I'm going to say something respectfully here. Natalie didn't even really know what she was saying. This is nothing against Natalie personally. But we as humans are natural storytellers. We really think we know what is going to make us feel a certain way. Of course, in our culture, especially in the West,

we are individualistic. We believe we are in control of ourselves. But we are also storytellers. Our minds are what's called adaptive. If something doesn't make sense, we will naturally create a story to make it make sense. That's what children do when you hear them talking to their toys, trying to make sense of the world. But guess what? Adults do it too.

Natalie genuinely believes that she needs all kinds of financial instruments in order to feel safe. She was sitting there talking about diversification. But none of that is actually true. It's like me saying, excuse me, my car is on fire. I think I need to create a spreadsheet comparing alternative options for a new car that I might buy. But I definitely want to factor in depreciation. No, I need a fire extinguisher. And sometimes you need somebody to help you understand what you really need.

What Natalie needs is to know that her husband trusts her. And she needs to be able to go and buy something nice every once in a while without worry. The point of life is to enjoy, right? The point of it, I want to create a legacy of something for my posterity, something that allows my kids and their kids and their kids, you know, the opportunity to enjoy life. And money allows the life to be achievable because it's a tool. It's not, I don't need, my goal is to make $10 million. That's not my goal. My goal is to live a selfish and selfish life by impacting communities local and abroad. That's my burning why. Right. That's what I want to do. I want to go with my kids on summer break when they're out of college and go somewhere and

like build a house in Mexico. Like these are like events and episodes. Like we've kind of backed off of Christmas gifts under the tree because we want to go and have an experience. We took the kids to Maui. Deere was that last year or 2020? 2020. We went to Maui. A part of our vacation. there we went and did service for an hour two hours at this woman's house because I call the local church and like hey who in your congregation needs help and so we went to some random woman's house motor grass picked her yard she ordered pizza we hung out never met the woman in our life but we left it was a great experience that's what I want to I that's what we want to teach our kids that's we want them to have it and you

know and we learned that lesson because we went to Thailand we saw a family of 12 living in a 10 by 10 corrugated metal building, you know, there's so many things that our kids have been exposed to, like, money's not the end all. And we live in Orange County where it's very easy for high school kids to drive their parents, Tesla, or their dad's raptor to high school. We get it. But that's not what we're trying to do. So many things I love about what you just said, you know, you have a personal vision. You've clearly thought about it. That's powerful. That's leadership. I mean, what you did on vacation is amazing.

Just that alone, I hope inspires every single person who's listening and watching this to realize that their vacations can have even more of layers to it than just eating and seeing things. I think that's incredible. I also recognize when you said that we've backed off of Christmas gifts because we want to spend more on other things. Totally aligns with my philosophy. Spend extravagantly on the things you love and cut cost mercilessly on the things you don't. what if I were to talk to your kids right now and I were to ask them what lessons have you learned about money from your parents what would they say to invest it okay what else it's a really good

question I hope not to fear it I know that the kids have heard Travis and I talk about different ways of spending or investing and they know that we have difference of opinions on some of it. How do they know that? We involve them in some of it. Okay, good. You know, ask them how they feel about it or what they do. Wow, very advanced.

That's very impressive. Most people don't even talk about money and to involve their kids. That's great. I know that they've said on occasion like, hey, are we poor? Oh, wow. Why can't we go do that? Why don't we have, right? And that might be reinforced by me because, you know, we have, we are surrounded by seven and eight digit earners.

And the, when they find out that their friends are going here, and like, hey, can we go do that? I'm like, no, we can't afford to do that. And as a father, as a provider of the family, like, that is, like, that's far worse than ever getting an Amazon text message. It touches me to the very, like, core of a man, right? And provider and a patriarch of, like, you should never have to say that. And so that is, like, that is one of my daily drivers, so you don't have to say that to your kids. Well, your youngest is 11 years old, right? I mean, they're leaving soon enough.

Yeah. And would you say that you've taught them good values? Yes. Would you say that you've taught them how to make their way in the world? Yes. Okay. So I don't think they need seven figures. Because they will become financially independent.

I have no doubt about that. You're going to start them off young. You're already teaching them about cash flow. Great. I just think it would be a tragedy if they end up pursuing the very thing that you both do not want to teach them, which is the blind pursuit of money without realizing that your rich life is actually, actually lived along the journey, not at the destination itself. There's so much truth to that.

You know, we teach them about enjoying the journey and so many other things, but we're really not living it right now, you know. I think that my struggle with that is where does the grind stop and where does the enjoyment begin, right? And I'm not talking about enjoying the little things, the ice cream or the dinner after something. Right. I'm not talking about that, but I'm saying like we know like we have our cash flow amount that we want to have each month, preferably from real estate. Because it's now, it's me, don't have to wait until I'm 59 and a half to withdraw.

And while that has a monetary amount, once we get to the monetary amount, once we get to the monetary amount, like we're good like in my opinion I don't need to keep it's not it's not a number of doors it's not a seven-digit number that I need to get to it's just like hey my finances are this much if I can make that much with the real estate cash flow then then the paper assets the pension the retirement all that stuff is just all gravy right all gravy and then the gravy becomes the the rich life let me ask it a different way you asked a really great question when does the grind stop?

What a fantastic question. If you have been grinding your whole life and it has gotten you to this where you're very successful, it's not just an intellectual question. It is part of you. So let me ask you, if I were in the military

and I were to say to you, when does the training stop and the competence start? What would your answer be? Those are training never stops. Exactly. Never, ever. So nobody's going to stop the grind from you.

I can't take it out of you. I cannot extract it. What I can do is to help you add on another layer to your identity. And that would be enjoyment, the rich life, using it now while continuing to grind. And it may turn out over time that one layer becomes a little bit large. larger than the other. I actually hope that you can, you know, add that layer on at this point in your life. But the fact is you're never going to turn that grind off. It's you. And that's okay. You're picking up clues, your financial friend, these numbers, your pension. And it's starting to

dawn on you that, oh my God, I did it. But like, what now? One does not come after the other day. They are beautifully intertwined. If I can share one message with you, it's that I want you to live your rich life today and tomorrow. You and I already intuitively understand that some things must be done at the same time. Like if you're cooking, you have to add in peppers and onions and gar- ah, God, I don't even know what this analogy is where it's going. Let's take kids. Let's take kids as spoken by a non-parent. Listen, you don't first teach your kids how to read and then later teach them how to be a good person. You do it all at the same time. Yes, it's hard. That's how it's supposed to be.

We intuitively understand this. But when it comes to money, we stop listening to our intuition and we develop magical thinking, the kind that says, first I'll invest, later I'll enjoy it. Wrong. You might get sick. Your partner or your family might get sick. You'll definitely never develop the muscle of living a rich life until you're in your 60s or 70s.

And by then, for most people, it's too late. I'm not telling you anything revolutionary here. What I am asking you to do is to connect your money habits with the other parts of life where you intuitively understand that you have to do them today. Live your rich life today and live an even richer life tomorrow. This is important. I have this email software that I love so much. I pay for it personally.

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slash remit three, the number three. Why is it that people who tell me I'm stupid on social media always have the profile picture of a jar of mustard? You think I'm going to take your advice about investing when your username is Pontiac Plummer 48? No, thank you. Instead, I trust professionals when I need help with my business like you can do using Gelt this coming tax season. Gelt is a modern CPA firm that helps you take control of your tax strategy ahead of time. They'll help you think strategically, like how to structure your business, where to maximize key deductions, and how to use the tax code to your benefit. Plus, their platform makes it easy to stay organized, working with your tax team year-round, not just when deadlines hit.

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the kids are going to be leaving the household at some point. Three years from now, that income jumps up. You could wait. It would be very typical to grind. And then wait, and you go, ah, okay, we really made it now. We got the properties. Maybe we acquired another one. We got the pension and this and that.

And I think if I left you alone and we stopped this call right now, you would do that and you would do it very successfully. Fair? Fair. Okay. Here's my question for you. Can we change that trajectory? You're going to get that pension three years from now one way or another. It's going to happen.

what would it look like if you were to actually love the journey from here until then? I'm talking about both of you. Natalie, let's start with you. What would it look like, financially speaking, if you were to love the next three years instead of merely be okay? Yeah. I think it would look like making money available to create the memories before the people we want to make the memories. memories with are gone. Those are your kids?

Yeah. Okay. I love that. I think learning to communicate better with Travis about our common goal as to what, what are we doing? What is the purpose? Why are we spending? What do we want us?

You know, I just think that there's a lack of detailed communication that we're missing. Okay. Those two would be good. What about for you personally? Just you. I probably have my nails. done. Thank you. I would schedule time to do the things that I love and fill the rest in with all the

things that I need to do. How much time per week? For myself, I think I should have at least a couple hours a day. Couple hours a day, okay, all right, 10 hours a week, okay. And a couple hours a day. Let's just take, let's say a Monday. A Monday, what would those couple hours be? I would love to make time for myself to do something enjoyable, whether it is a beach walk or discovering a new hike or sitting in silence in the backyard. I love silence. I love just listening to the world and and I don't do that. It's a beautiful vision. You two are clearly very aligned in so many parts of life. It's just this money thing that's gotten a little loose. I totally get it. But it is so clear that you're actually both generally pointed at.

the same direction. Love having this conversation because we can tweak a few things, change the way you look at the world and money, and it just brings you like a magnet, two magnets coming together as they should. It's really a beautiful illustration of what money can do. Part of the inability for the two of you to talk about money and Natalie, for you to not feel like you're failing every single week and to have to preemptively call your husband and say, hey, I just bought something for Amazon, don't freak out. That's a structural issue. It doesn't mean you're bad people.

It just means that the structure you've set up is not serving you. It's actually reducing you down to a series of tactical maneuvers. One person orders something. Natalie, you order something with the best intentions in mind, but then you have to call him. He's already got this existential dread in his chest. And both of you are just like, ah! And by the way, the funniest part is this is all over $20.

I'm like, huh? That's what the system is accomplishing. It's actually making you dream smaller. So let's change that. What do you think the problem is here? I think it's kind of what Natalie brought up is that we need to reduce our amount we invest. Maybe. That is a course of action.

I may not be the only one, but it is worth mentioning. Very good. I love that, Travis. Let's put them all out on the table no matter how crazy. and then we can decide, yes, you can reduce your investments, which are currently 29% of take home. Very impressive. Absolutely.

Okay, that's one thing you could do. Your savings are 14% of take home. Again, for everybody listening, they're going, how is this guy telling them to consider reducing their investments? Let's not forget, you have a pension in three years that's going to pay you 50% of your income. and you've got seven income-producing properties. So your financial situation is a little different than other people's.

We've got to take that into account. You know, it sometimes blows people's minds to hear that you can over-save or you can over-invest. And it's true. It's relatively rare in our culture, but it's a real problem for some people. And the truth is, there is virtually nothing that caters to people in this scenario. What I'm really trying to teach you through this podcast is that most of the problem. of society teaches you a one-dimensional view of money.

Safe, safe, save, save. Invest, invest, invest. But once you understand money, it has nuance. There's an art and a science to it. There's a rhythm to it. There are rules. And sometimes you can even break those rules. Let me give you a few examples.

There are times where you should invest aggressively. But there are other times where you can ease off the gas, like the first year of having kids or in Travis and Natalie's case when you have more than enough and $20 purchases are causing relationship problems. You know, the advanced level of personal finance is not investing in private equity and venture capital. It's knowing how and when to vary the basic fundamentals of money to suit your needs today. All right. What are the other potential strategies? Reduce the investments, reduce to savings goals. What else? We could take some of the net income from our income properties and offset our income. We could increase our income from the rental properties.

Hold on. Let me get this straight. You can take this very profitable business you've created, buying seven properties, being very disciplined, and you can actually use the money to make your household run more smoothly? What do you think? Say it ain't so. sounds like a pretty good idea to me. I actually think that those three things right there, those levers, are your key levers. When I looked at your conscious spending plan, the first thing that jumped out to me was that your gross monthly income was 10K and your net monthly income was 4,700. I now understand that you really should probably deduct your real estate costs and move them to fix costs and all that stuff. But the point is when I look at, you know,

having a family of six, it's tough on $7,000. It's tough. It's just very tough. Especially then I find out you live in Southern California. All that stuff is tough. So if you didn't have the pension, the real estate, we'd be having a very different type of conversation, right? We'd be seriously looking at the grocery bill. But the fact that you've got basically this secret treasure over here. To me, the obvious answer is to start using it. There is a method to why we are investing the way, or at least why we have been, it doesn't say that we're too rigid and not expanding those options.

We want to actually make today magical and enjoyable. That's the purpose of money. Yeah. I think it sounds wonderful. It would feel good to just leave the house every day to go to work. And knowing that we're not only is our bank account growing, but we're growing closer together with. I would love to plan our future in a positive way together. And I'm more excited about it now than I ever have been. Ditto.

Here's what Natalie and Travis sent me in a follow-up. Quote, our biggest takeaway from the call was that Rameet actually asked us to invest less build the skill of spending money meaningfully together and family. Give trust by not asking about spending. What surprised us most was that we did not recognize there was a structure problem. We can grind and enjoy symbiotically. We also updated our CSP. The biggest changes we made were, number one, did not add any new income to investing.

Number two, we moved our insurance to only renter's insurance. The business pays all our other insurance payments. Number three, added 15% to miscellaneous on our fixed costs. Number four, added savings goals for vacation and gifts. Natalie went and got her nails done the day after the call. Here's the calendar block she created for herself. Every night, meditate and gratitude journal before bed. Monday, 8.30 to 10, workout, lunch with friends at noon, family trip to tide pools.

Tuesday, 8.30 to 10, workout, date night with Travis. Wednesday, beachwalk, 830 to 10. Thursday, 8.30 to 10, workout. Friday, 8.30 to 10, workout, nail appointment at 11. Well, Travis and Natalie, fantastic work. Thank you so much for appearing on this podcast and sharing your story with us. For everybody listening, I have three ways that you can help me and also get help for yourself. The first one, this is strictly for me.

Go on Apple Podcasts and rate and review this podcast. It helps a lot. I appreciate every time you leave a review. Second, you can watch this episode in full on YouTube. Just go there, search for my name, and you will see the body language and the facial expressions of Natalie and Travis and all of our guests. And number three, you can design your rich life on your own.

You can get help with my book or you can get the most help directly from me in my money coaching program. Go to IWT.com slash money coaching. Join a community of hundreds of other people as well as me. I do a live call every single month where I will answer your questions. That's IWT.com slash money coaching. 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 library, and it will show you the specific tactics for how to build the IWTOP, will teach you to be rich system into your personal finances.