The Skinny Confidential Him & Her Podcast - Ramit Sethi Will Teach You To Be Rich, Renting Vs. Buying, Investing, Saving, & Financial Freedom

Episode Date: August 23, 2021

#385: On today's episode we are joined by Ramit Sethi. is an American personal finance advisor and entrepreneur. He Is also the author of the 2009 New York Times Best Seller, I Will Teach You To Be Rich. Today Ramit joins the show to discuss how we can work towards financial freedom. The differences between renting and buying, and how to invest and save.  To connect with Ramit Sethi click HERE To connect with Lauryn Evarts click HERE To connect with Michael Bosstick click HERE Read More on The Skinny Confidential HERE For Detailed Show Notes visit TSCPODCAST.COM To Call the Him & Her Hotline call: 1-833-SKINNYS (754-6697) This episode is brought to you by The Skinny Confidential  The Hot Mess Ice Roller is here to help you contour, tighten, and de-puff your facial skin and It's paired alongside the Ice Queen Facial Oil which is packed with anti-oxidants that penetrates quickly to help hydrate, firm, and reduce the appearance of fine lines and wrinkles, leaving skin soft and supple. To check them out visit www.shopskinnyconfidential.com now.  This episode is brought to you by BETABRAND and their Betabrand dress pant yoga pants. To try these pants go to betabrand.com/skinny and receive 20% off your order. Millions of women agree these are the most comfortable pants you’ll ever wear to work.  This episode is brought to you by Higher Dose Infrared therapy supports glowing skin, deeper sleep, and a balanced mood. And as your core temperature heats up, your brain releases a DOSE of happy chemicals, leaving you feeling euphoric after your sweat session. The blanket’s deeply penetrating heat instantly boosts blood flow, flooding your body with enviable benefits like radiant and youthful skin, higher energy, a boosted mood, and decreased bloat. Visit www.higherdose.com and use PROMO CODE SKINNY to save $75 Or just go to www.HigherDose.com/skinny to get your $75 off today This episode is brought to you by Prep Dish Prep Dish is our new secret weapon for healthy, stress-free meals! When you sign up, you’ll receive an email every week with a done-for-you grocery list and instructions for prepping your meals ahead of time. You’ll do your chopping and mixing ahead of time, leaving you with zero decisions to be made at dinner. You’ll feel like super mom when you serve amazingly delicious meals like Smoky Paprika Chicken Legs with a Trio of Roasted Vegetables or Turkey & Zucchini Lasagna. The founder, Allison is offering listeners a free 2-week trial to try it out. You can’t beat that. Check out www.PrepDish.com/Skinny for this amazing deal! Prep Dish has gluten free, Paleo & Keto options. Produced by Dear Media 

The following podcast is a Dear Media production. I'm Michelle Kwan. In 1996, the world was in the midst of a massive cultural movement that saw women finally taking center stage. Nowhere was this shift more apparent than at the 1996 Summer Olympics in Atlanta. This audience was the loudest thing I have ever heard in my life. The noise, everybody's cheering, and we see all these USA flags. It was the most important summer in women's sports history. And team after team after team,

the U.S. women kept winning. Basketball, soccer, softball, gymnastics. I just said, give me mine. Like, give me mine. Join me for Dear Media's Summer of Gold, presented by Together. Listen wherever you get your podcasts. She's a lifestyle blogger extraordinaire. Fantastic. And he's a serial entrepreneur.

A very smart cookie. And now Lauren Everts and Michael Bostic are bringing you along for the ride. Get ready for some major realness. Welcome to the Skinny Confidential, him and her. I love both of what you're saying. First of all, if you're in debt, most people who are in debt, when I ask them what's their rich life, their answer is, I just want to get to zero. It's not inspiring at all, but when you feel like you're underwater, you just want to be able to breathe. Listening to this podcast, I hope, is inspiring rather than depressing because, look, you don't have to fly eight times a year private, but maybe for you, it's one time in your life, business class. Welcome back to the Skinny Confidential, him and her show. For those of you that are new to the

show, my name is Michael Bostic. I am an entrepreneur and brand builder, most recently the CEO of the Dear Media Podcast Network. Across from me, my wife on her phone, not paying attention to me in the intro of this show. Lauren Everts, can you please pay attention to me? Please, Lauren, please. You want me to pay attention so bad because this episode is about money and finances, which is not my favorite subject in the entire world, which we get into our relationships with money. We actually go kind of personal here. Yeah. And you know, like this was, you know, this guest, Ramith, is a long requested guest, and we've waited to have him on because we wanted to kind of prep this audience and frame out the conversation around personal finance. If you've been listening to this show for a little while, a while back, I did a personal finance episode. That was episode

number 343 titled How to Achieve Financial Freedom, Invest, Save Money, and Understand Finances with yours truly. But by no means am I a finance guru. I'm not a financial advisor. I am very clear in that episode that you should definitely talk to a fiduciary or accountant, somebody who actually is a professional in this space, which Ramit is, and I'll get into that in a second. But that episode was received so well, just us sharing what we do with our finances, what we would personally advise if we were talking to our younger selves. And so I was actually pretty surprised because that episode blew the fuck up. It did really well. And I'm not saying that just because it was me. I just think we never really touched on that subject or

this subject on this show. And people are curious. Maybe it was me listening to it over and over and over so I could nail it into my brain about finances. Yeah. I mean, listen, I think this is an area that whether you like finances, whether you're a numbers person or not, whether money stresses you out or makes you excited, currency affects all of us. Obviously, money conversations affects everybody. So I just think it's an area that everybody should work to improve on because it's something that brings a lot of stress to people's lives with little understanding. I like this episode too, you guys, because it's really digestible. I always feel like money conversations can be so overwhelming. And if you're with me,

you'll like this episode because he breaks it down very simply and tells you how to make money. It's tangible tips and tricks that you can apply to your own life. So who is Ramit Sethi? Ramit Sethi is an American personal finance advisor and entrepreneur. He is the author of a New York Times bestselling book, I Will Teach You To Be Rich, which was my first introduction to him. When I read it, I was like, wow, this is really good stuff. It actually led me to read a lot more into the finance world. So it's a really good entry point. Ramit has a very digestible delivery. So with that, Ramit, welcome to the Skinny Confidential Him and Her Show. This is the Skinny Confidential Him and Her.

All right. I was telling you, I'm one huge fan. Read your book a while ago. I went into this whole deep dive where I had to read like every great finance book. And I think like yours is, you're at the top of the heap there. Like we, I really enjoyed it. And I think other people should, it's easy to digest, right? Like it's not this over, it's not like a walk down wall street or the intelligent investor. We're like, what the fuck is going on? You throw it away. So huge fan for me. Thank you for coming on the show. I told you we've touched a little bit in finance on this show, but out of like the 400 episodes,

it's maybe popped up like two or three times. So I think the audience is going to love this. To start, to give context, maybe just give a little bit more background on how you became so interested in the topic of money. First of all, for everyone listening who thinks I'm going to sit here and lecture you about how you can't afford lattes,

let's just get that out the window right now. I think you should buy as many lattes as you possibly want. You want to travel three months a year? Great. Let me show you how to do it. I got interested in this because I took my college scholarship money, at least part of it, and I invested it in the stock market thinking I was a genius. And in 1999, everyone was a genius. Very similar to how everybody on YouTube thinks they're a genius right now. You guys are not geniuses. You just have a YouTube channel. And so I lost half that scholarship money and I realized I need to learn how money worked. At the same time, I was studying human psychology at Stanford and I was realizing that most of the advice we get out there is all about restriction. It's no wonder that none

of us want to do anything with our money. Because all we do is hear some old guy lecturing us, nagging and saying, don't buy lattes, don't go on vacation. And maybe in 80 years, you can save up and take a trip to Europe. What kind of life is that? And my friends and I wanted to go out. We wanted to pick up a round of drinks. And then as I got older, my dreams expanded, right? I want to take more trips. And so what I learned about money was first, it's so confusing, right? We have words, HSA, 401k, compound interest, all that stuff. But just like in anything, whether it be fitness or fashion, yeah, there's some technical stuff. Yeah, you can learn it actually probably over the course of a week or two. But a lot of it in money is emotional and psychological.

Just think of the phrases that our parents used when we grew up. Actually, curious to hear from both of you. Were there any phrases like, we don't talk about money in this house? Or easy come, easy go. Were there any phrases you remember your parents saying growing talk about money in this house or easy come, easy go. Were there any phrases you remember your parents saying growing up about money? For me, I think money wasn't, we didn't give it so much energy. Now that can be a good thing or a bad thing because we, my family didn't lead with money. That's not what they led with. They really tried to, my parents tried to

push me to lead with my personality. So yeah, there wasn't, it wasn't, we couldn't talk about, we could talk about it all day, but it wasn't, money wasn't the end all be all. I'm very blasé like that though now, which can get me in trouble. So there's pros and cons of that. What do you mean it can get you in trouble? I don't have a huge attachment to money. I guess I should say this. I like to use money on my time. I have more of an attachment to my time. But being honest, like she doesn't, it's not that I don't think, cause that's a hard, everybody has some, everybody has some attachment to money cause you used to live, but she doesn't, she's not in the weeds look like

paying attention to where the money's going, where it's coming from. What's like she, like she tries to opt out of that area of our lives. And I've also done, even when I wasn't married, I'm not someone who checks my bank account obsessively. I think that when you put good things out into the world, money comes. It's like a byproduct of that. But let me tell you a funny story.

Every month her credit card statement comes out. She goes, oh my God, somebody stole my credit card. Look how much they spent. Something happened. The truth comes out. I'm really serious. I'm like, someone actually somebody stole my credit card. Look how much they spent. Something happened. The truth comes out. No, I'm really serious. I'm like, someone actually did steal my credit card. She's not saying that.

She's dead serious. And we audit every time. I'm like, nope, that was you. So like, that's one of the downfalls of never looking at it, maybe. And by the way, I appreciate hearing that. I actually think that if you set up your finances in my philosophy,

you spend less than an hour a month looking at it. My nightmare, I told my wife this when we met, my nightmare is 10 years from now, we're sitting there every month auditing how much we spent on lettuce at Safeway. I don't want to live that life. What I do want to do is set some basic rules. And those rules can be things like save 10%, invest 20%. They can also be really permissive rules like, hey, when I travel this distance, I want to fly business class. Or if my friends are doing a charity, I am always going to contribute, always. Or tipping X percent minimum. Those are really nice rules we can set for ourselves. So I love that the part about not being in the weeds about money. I do think you

should probably be aware of what's going on and we can talk about that. But no, I actually think people, I always say a rich life is lived outside the spreadsheet. You do not want to be sitting there looking at every line for the rest of your life. That's just not a good use of time. Michael grew up completely different than I did. Well, I grew up, my parents were first generation of, they grew up hard upbringings and they're the first generation of their families to like do well for themselves. And so, and my dad's an entrepreneur, like there's an emphasis always on like working hard, being successful. And at the end of that rainbow is obviously like a financial reward. So like

I grew up in a way of like, in the beginning of my career, my focus was money. How do I make more money? How do I like, regardless of like what it took. So when we started dating, it focus was money. How do I make more money? Regardless of what it took. So when we started dating, money was such a big conversation and I was like, what's happening? Because I didn't grow up like that. I was the poster child for what douchebags do with money when they get money.

You go into a nightclub, you're spending stupid money, you have a stupid watch, you're having this car. I'm sitting there with the most grumpy face, just getting dragged through it. I am glad there like with a, like the most grumpy face, like just getting dragged through it. I am glad I went through it though, because my relationship with money now is much different. I'm much, and I, we talked about a little, we can dive into it, but I don't use money anymore for any kind of external facing thing. Right. I don't like, I don't look at it as something that defines or represents me anymore. To me, it's, it's a tool for owning more time, for having more autonomy, for giving a little bit more comfort, for providing for family.

And also for building businesses. I've realized it's not really the money that's so enticing, it's the actual building and working with people and creating things. But it took me 10 years of beginning my career to figure that out and 10 years for me to say, okay, this... I had no understanding of what it really was. I think our goal today, and we have a hundred questions for you is I think what my goal and my goal is with money to have, like you just said, autonomy. That's the most important thing to us. Yeah. I hear that. Both of you mentioned money's a by-product and you like to buy your time back, your convenience. Let me share a concept for everybody listening. We can start off with talking about what people love to do with their money. This is a total reversal of what

almost everybody experiences with money, which is what not to do. If I were to ask the average person, this is an exercise that I do. I say, what do you love to spend money on? Everybody has an answer. They don't even need to wait. So the answer is, can you guess the most popular answer? Travel? No. Travel's up there,

but it's not number one. Car. No way. House. No. Materialism. Maybe. It's eating out.

They love to eat out. Okay, that's number one by far. Number two is travel. Okay. Number three is health and wellness, in la or new york and after that it drops off a sharp cliff you both have the same money dial i do i call it a money dial because you can turn it way up or you can turn it down mine is convenience so i have personal assistant. If you go into my place, everything's like perfectly laid out. I could go blind. I know where everything is.

I just love spending money on that. And it sounds crazy, right? I sound like a nut. Not to me. But exactly. To both of you, you're like, oh, I get it. I get it. Perfect. What I love to do then, so once they've told me I love to eat out, then I ask them this question. What if you could quadruple your spending on eating out or on that money dial? What if you could turn that dial up? So I remember I was on book tour in DC and I asked this young guy this. He said eating out. And people always have the same sort of, it's not that funny of an answer, but it's like a ha-ha joke. He goes, well, I guess I'd have to

go on a diet because I'd be eating out four times a week. Ha-, okay. But really? And he goes, you know what? I actually have a list of every Michelin star restaurant in the city. I said, okay, who would you take with you? And he gets really quiet. He goes, I would take my family. I said, why? He said, because they've never been able to afford to eat at places like that. That is a rich life. That is starting out with your money dial, the thing you love. And then for the first time in your life, actually envisioning what would it look like, feel like to spend more, to spend extravagantly on the thing I love. If I like to travel, awesome. Maybe I can take my family with me. Maybe I can take a friend. Maybe I can travel business class or order room service for the first time, whatever you want. And it's not just material things for yourself. A lot of

people say generosity is their money dial. Fantastic. New rule. You're going to tip a minimum $20 everywhere you go. Whoa, that sounds crazy. Okay, then make it 10, whatever the number is. You can use this concept of money dials to start spending extravagantly on the things you love. And what that allows you to do is then to look at the rest of your spending and say, you know what? I'm going to cut costs mercilessly on the things I don't care about. I have a quote. It's so funny you say that because one of the things I was going to ask you is literally a quote. It says, a rich life means you can spend extravagantly on the things you love as long as you cut costs mercilessly on the things you don't. My question is, can you explain? You just explained exactly that. Yeah. I want people listening to get rid of the guilt

if, for example, you love spending on clothes. So many of us are raised in this culture to think that that's frivolous. I really don't give a shit if you think it's frivolous. If you love spending on clothes. So many of us are raised in this culture to think that that's frivolous. I really don't give a shit if you think it's frivolous. If you love it, then let's talk about how to use your money to create that as part of your rich life. If you love convenience and you say like, I want everything color coded in my house, but people will think I'm a psycho. I don't care.

It's your rich life. Your rich life is yours. It's not mine. It's not your parents. It's not anybody else's. So I want everybody to start thinking of how they can actually spend more on the things they love. And that totally changes the way we think of money. Suddenly, it's not a source of guilt and overwhelm and restriction, but now it's a source of, oh my gosh, I love to travel. And you're telling me I can actually do that guilt-free,

maybe even spend a little more? Oh, now I'm interested in money. If you're busy and you value your time like me, then you're going to be obsessed with prep dish, especially if you're like Michael and I, and you like to sit down for dinner with your family. We are trying to do no phone. We're trying to eat earlier, like five or six o'clock. And I feel like prep dish is perfect for anyone who's like that. So normally we're running around, it's hectic, it's crazy. Before you know it, it's 5 p.m. and you got to make dinner. For us, we decided that we wanted something that was more organized and something that helped us prep meals ahead of time. So prep dish is the best way for busy people

to get healthy meals on the table without stress. Subscribers are going to receive an email every single week. I just got mine yesterday and it's an organized grocery list with instructions for prepping meals ahead of time. I am not the best cook, but to have something in front of me that I can make and I can tell Michael what we're eating. Like they have these shrimp tostadas that he's obsessed with. We also tried their slow cooker sausage and kale soup. Like they have these shrimp tostadas that he's obsessed with. And they also have this slow cooker sausage and kale soup. We had his parents over. We all had it. It was absolutely delicious. And it was kind of like I did it all. It was very effortless. You know what I mean?

I worked all day. I took care of the baby. And then dinner, it was on the table, ready to rock. Everyone was loving it. It was super quick, really easy every single day. They have tons of different meals. You can check them all out. They have meal plans. There's like this one called the super fast menu and it requires only an hour to prep the whole week's food. That's the one I like. Okay. So PrepDish and its founder, Allison is offering all skinny confidential him and her listeners a free two week trial to try it out. You guys check out prepdish.com slash skinny for this amazing deal. Again, that's prepdish.com slash skinny for your first two weeks free. This is a no brainer. And I'm telling you, you got to try these shrimp tostadas. They're absolutely delicious. And you'll have dinner effortlessly on the table at 5pm. A lot of what I think, first, what led me to your book and what led to these conversations

is we didn't always have this relationship with money. But at one point, it was a very stressful topic, at least for me, maybe not as much for Lauren. But it was this thing that was overwhelming. And I remember a certain period of time, I always focused on earning, but I never wanted to look at any of the accounts. I never wanted to face what was going on. Didn't want to look at any bills. Just go. I think there's a lot of people that are in that position where it's like, this thing is so

daunting. It's so overwhelming, at least in their minds right now that they just don't, they just don't address it. They don't look, they don't take it on. What can people do if they're in that position? And they're like, okay, I have never thought about money. I've never like, what is step one for these people when you start talking to to the money issues? Well, first off, I understand the overwhelm and the confusion. So I recently got some, I started a new podcast and I got some gear for my home office and I don't know, some sound equipment. I don't even know what it is. And it comes with this little instruction manual. It's like the size of the palm of my hand. It's like a child could read it. And I open it up and I have never been able to

put Ikea furniture together. I just can't do it. So I'm sitting here looking at this thing. I'm flipping the two and a half pages that it is. And I go, I can't figure this out. I'm doing it for 15 minutes. I cannot figure it out what it's going on. And I thought to myself, oh my God, is this what people feel like when they look at money? They see these words, asset allocation, and they're just like, I don't get this. Fuck it. I'm going to put this away and just go back to life. And I get that. We all have something in life that feels overwhelming, confusing, but we also have something in life where we feel really good about it. It could be you know how to cook or you're good at fitness or you're great at style, whatever. I would like people to really first start off by connecting with how you talk

about something that you love. So if you have a dog, right? I don't have a dog. I don't want a dog. If my wife is listening to this, she desperately wants us to get a dog. Babe, I love you, but I don't want to get a dog. Let me tell you something. As a married man, you're getting a dog. So every time she brings up this dog here's the first thing i bring up oh we gotta walk this dog and we can't travel and all this hair all over my sweaters and she's like yeah okay but we'll love him and but all i can do is think about the negative things now if you have a dog again you're listening to me saying this this guy's a psycho. But everything I said is true. That dog is going to shed, and it is going to be hard to walk, and this and that. But you have decided to look at the positive.

That's what I want you to believe is possible with money. So you're sitting here, you're overwhelmed. You feel like you don't understand all these acronyms. Fine. We'll take that step by step. What I find is that most people who feel overwhelmed with money have never spent one weekend reading a book about personal finance. Not one. Are you looking at me? I've never read a book on personal finance. I'm a huge reader. I read two books a week. I've never read a book on personal finance. That was, I'm curious. First of all, no judgment. How come? Because honestly, my husband's really damn good at it. And that's a horrible thing to say, but I'm being really honest.

I should probably know myself. But it's not the first topic that jumps out to me when I get to spend my time reading. Yeah, I get that. But maybe I should. I'm going to read yours now. Okay, I hope you do. I'll say this. I'll say two things about this.

First, the husband comment. I know. Because. I'll say this. I'll say two things about this. First, the husband comment. I know. So predictable. Well, no. When I got married, my wife and I had some really challenging conversations about money. And I have to tell you, especially in couples where there's one person who's more sophisticated about money or more experienced, maybe he's a higher earner, it's very easy for them to become the money person. And I think in any relationship we naturally are stronger at certain things and and he or she is naturally stronger at other things so we kind of take on our roles but i told my wife i said i don't want to be the only one i don't want to be the money person in this relationship for a couple of reasons one day i'm not going to be here i

might get hit by a bus. Who knows what can happen? The worst thing in the world would be that you are sitting there now in grief and you have to figure out how this money thing works. That's number one. And then number two, there's going to be a considerable amount of wealth here. I want you to feel comfortable to be a good steward of this money so that it's not just something that exists over there. It's like if the two of us go kayaking or something, you don't want to be the only one rowing. Both of you rowing in the same direction makes it more fun. You have some skin in the game and you're going towards a direction both of you want

to go. And when I explained it like that, my wife was totally in like, yeah, okay. And that didn't make it easy. We still had to have a lot of challenging conversations. But I do think that money, unlike washing the dishes or something like that, is something that fears now especially because we have a kid i'm like i don't i don't want you not to know what to do or where to go or where to find things i don't want someone else stepping in telling you what to do i want you to understand it but the the other part of that is i don't want to create a weird dynamic for us this i'm not saying this should happen with every couple but for us like money's not necessarily an issue because we look at everything as like this collectively it's completely equal like like we're not saying like this is mine this is yours like we like we're not saying like, this is mine, this is yours. Like we, like everything's on the board.

I don't want to create a power dynamic, which I think happens in a lot of relationships where I do become the money guy. And it's like, you have to come to me for the money and ask what you can spend. And I don't feel like it's ever been like that. So maybe that's maybe another thing why I make my own money.

He makes his own money. What's mine is his, what's his is mine. So that's, there's never, I don't think we've ever really gotten into a fight over money. So maybe that's why I haven't been pushed to read a book. I'll challenge you on this.

So it doesn't sound like that is really the issue. It sounds like you have been very successful. So it's not like you're fighting about how much can we spend at Target or something like that. So you've kind of checked the boxes on all the easy stuff. Now, let's talk about not playing defense, but going on offense. Yeah. That's what I need. That's why I need to read your book. So watch this. The two of you right now, let's use the kayaking example. Although I don't kayak at all. So this is going to be a horrible metaphor. So the two of you, you're,

you're rowing, you're not, but you're on a nice river and it's going really fast. So it's like pretty easy, right? Everything's good. Here's what I would say. I got to give up on this kayak metaphor because I don't know what the hell's going on. Let's just do this exercise together. Let's do it live right now. So in the next 10 years, what is on your bucket list? In the next 10 years, what's on your bucket list? And it can be for you each individually. And then maybe there's some overlap, some joint stuff as well. Let's try it. My bucket list is I want autonomy. That's number one important thing. What does that mean? Meaning that I am able to wake up and set my day, how I want to structure it entrepreneur wise. What time do you want to wake up and set my day how I want to structure it entrepreneur-wise.

What time do you want to wake up? Seven. Okay. I also want to be fluid. I don't want to stay in one house for my entire life. I want to be able to be like, oh, maybe we move here. Maybe we go here. I don't want a predictable life.

I want it to be spontaneous. So in the next 10 years, which city do you want to have a house in? I don't know that. I do know that I would want to be in a different city than we are now, just because I don't want to be attached to a city. Great. By the way, I'm pushing and probing here because I want specifics. A rich life is all about the details.

So when you say, I want to wake up when I want, I say, what time? You say, I want to travel to Bali. I say, what airline seat do you want to sit in? I want that level of detail because that's a vivid, rich life. Anything else? It'd be nice to have our own form of transportation. I'd love to travel and do what I want to do when I want to do it. So where do you want to go? I don't know. Maybe we spend three months in Europe. Maybe we spend three months in Australia. I don't want like this predictable life. I want it to be very spontaneous. So give me a number for how much you want to travel in a given year. Two months? I'd say three.

I'd say three. Okay. Love it. Now, don't worry. You're setting your own life goals. So if it changes and it's one, fine. But if I'm traveling and I want to wake up and I want to work that day, then I can do that too. I don't want to be... I just don't want to have a structured, predictable life.

Yeah. I can hear you. You like fluidity. You don't want to feel boxed in and you want to construct a life around that fluidity love it okay what about for your next well my bucket list things are a little bit more straightforward like i would like to be able to be able to go when we travel this is like some people may not like this answer i would like to be able to use any form of transportation that i want what does that mean meaning if i want to fly private or if i want to go, no, I don't necessarily want a jet, but if I want to charter

something or if I want to fly business with the kids, I want to be able to bring my family if I want to. I like the idea of dual locations. For me, it's all about like you said, comfort and convenience. I don't need to do things in a flashy way, even though like private transportation is flashy, but it's all about comfort because lugging a bunch of kids on a plane through the airlines, especially now with everything that's going on is an absolute fucking nightmare. And by the way, notice that what you just said maps directly to your money dial, which is convenience. So it makes perfect sense. I'd like to be able to, if we are traveled somewhere, I don't want to be constrained,

but like we have to check in now and we have to leave now. If like something goes wrong, we feel like we need to stay, we could sit. It's not like this. He loves convenience. Yeah. It's comfort, right? Like there like there's some time you know like when you're on a trip and you're like damn i wish i like i either want to leave early because it's not going like it's not what i want it or i'm like i'm really enjoying i want to stay but you got to get back because you have applications i want to be able to just go where i want when i want with okay so when I moved to Austin I really wanted to create a lot of wellnessy spaces around my house I call them grounding stations and one of those stations that I've shared on Instagram story is

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skinny to get $75 off today. You know, one of my friends told me about a trip he took to Australia and he was there with his girlfriend and they were in this beautiful area. They had an infinity pool and they were just loving it. And then that night they had to go to sleep early because they had to wake up, take a boat, then a bus to their next place. And he said to her, he said, what if we just don't? And she was like, what? And she really liked to go with the itinerary. And he was like, what if we just don't do that and just stay here for a couple more days? And I thought to myself, that's one of the ultimate luxuries in life, which is to change your decision on the fly. And it sounds like both of you would love to be able to do that. Okay. So we've done this bucket list, rich life exercise. And I heard a few things. What I would do, I did this with my wife and we sat down and we had some interesting things.

My wife said she wants to learn another language in the next 10 years. And I said, I want to write another book at a really nice hotel. That's just something I want to do. So we had these independent things. And then we had a couple that we want to do together. One of them was we were inspired by some of our friends who had a 10-year wedding anniversary in another country. And we thought, wow, we love celebrating. We need to celebrate more. We want to have a 10-year wedding anniversary. So we said, okay, that's a big rich life item for us. Let's share that jointly. And so we then said, okay, I asked my wife,

how much do you think that's going to cost? Total ballpark. And she was kind of uncomfortable because she didn't know the numbers. I said, you know what? Let's each just come up with our own number and then let's just compare. So she came up with a number. My number was like five or 10 times higher. And that's fine, right? In a relationship, you might have one person who dreams bigger or has bigger numbers. That's okay.

And I said, look, this is going to be like multiple years from now. We have lots of time to save and invest for it. And if we're going to go with any number, let's go with the bigger number, right? Let's just do that. Let's dream big. So what we did was we then took that number and we knew that it's going to be approximately eight years from now. And we put that into our financial system. So this is a big goal. Like for you, it would be like flying private. Okay. So what I might say for both of you is how many times a year do you want to fly private? Let's just make up a number here. I have a number. Okay. Eight, but that's also, it's not eight. It's not eight. It's not,

it's not eight. It flowed right off the tongue. It's not eight. It's four round trip. So eight legs. Great. How much ballpark does it cost? Well, I think that's the thing. It depends on, I've done some research. It depends if you're going light jet. Just pick a number. Let's just say it costs, and I don't want to overwhelm people. Let's just say round trip or anywhere domestically in the US, you're talking 30K. Okay. 30K. So 30K times four, 120. Yeah. All right, fine.

Maybe let's just call it 150 to be like, it's a huge number. Great. Okay, great. Now for everyone listening, by the way, if you're like, oh my God, 150, this is so unrelatable. Pick a number that is... Keep in mind, this is the 10 year, like this is the 10 year map. It's not today. Totally. It could be, I want to eat at a really nice restaurant once a year but also why not just dream like why not think big my thing is no matter if you're listening if i was i used to be a bartender if i was a bartender i'd be thinking like in these terms too but think but hold on there was a period in my life i want to remind that like the goal was maybe i can fly business like so yeah these like these goals get bigger and bigger yeah and it's okay i i love i love both of what you're saying. First of all, if you're in debt,

most people who are in debt, when I ask them what's their rich life, their answer is, I just want to get to zero. It's not inspiring at all. But when you feel like you're underwater, you just want to be able to breathe. But you also, listening to this podcast, I hope is inspiring rather than depressing. Because look, you don't have to fly eight times a year private, but maybe for you it's one time in your life, business class, or maybe it's eating at a restaurant that you love and it's like the best meal, right? Omakase, whatever. Whatever it is, I want to push people to think a little bigger. It is so easy when I ask people their rich life, you know what they say? They go, you know, I'd like to have a house one day.

It doesn't have to be that big. It does not to be in a nice, it's fine. I'm like, why are you minimizing your dreams? Tell me the beautiful vision. And then we can figure out if you can get there and maybe you can't get a hundred percent there. Maybe you can get 80% there. Well, you know, it's like, let me, let me think of an example here. You know, when someone's like, how much money do you want to think? I want to be a billionaire, but it's like before, it's like, let me think of an example here. You know, when someone's like, how much money do you want? I want to be a billionaire, but it's like before,

like, okay, let's focus on 100. Yeah, I always tell them like, okay, how much do you have now? They're like, I have $100. Why don't you focus on a thousand? Like when we started this podcast, Lauren and I started it out of our living room, out of our kitchen.

We thought it'd be great if like one day we can get 10,000 listeners. One day we could do that. And it'd be great if we can maybe make a little bit of money doing this on the side. It's obviously grown grown over the years to this and then this network. But I want to remind everybody that some of these big visions that I have now, there was a period of time where I'm like, man, if I could make $10,000 a month, if I can make $5,000, it started

much, much smaller. And during that time when I was learning my relationship with money, that was probably aligned. It's like, how do I make it so I'm never in debt? And like, I think it wasn't like I, when I started my career, I was like, I need to fly in a huge private jet. And like, that's still my like a 10 year vision. And it's mostly like, I would never want to take a jet by myself. But I think now that I have children and the craziness of travel in the world and a wife and like the chaos of lugging infants around, like to me, it's just a convenience

thing. It's like jumping a car. I love it. I love a big vision. So for everyone listening, when I grew up, we were very middle class. We ate at a pizza place once every six weeks with a coupon. And there were places in our town. I was like, that place isn't for people like me. We don't go in there. And I have disabused myself of that now. If there's something I see that's interesting to me, I'm like, if I wanted to, I could get that. I could work hard. I may not be able to afford it or get it or have the time or whatever, but no more do I think that's not for me. I say, that's interesting. I'm going to check it out. And if I want it, I'll find a

way to get it. I also think people tell themselves a story and they have this narrative. What you just said, it's like, oh, I can't eat there. That's not for people like me. I think that you should flip it and say, when I eat there or I'm going to eat there, I think the way that you think really, really can control a lot. Yeah. The way we talk about ourselves. So back to the private jet example or whatever rich life thing it is for you, what we did then to make it a reality and to make both partners engaged with money was we said, okay, that's going to cost, I don't know, 100K a year, 150, whatever. How much do we need to be saving each month in order for that to happen? So now you both have a reason to take at least 15 minutes a month and say, how are we doing towards our rich life goal, which both of us feel really good about? That is the way you get both partners on the same page. Now, if you're listening to this and you're not going to have this big of a goal, fine. Here's what I'd recommend.

Pick a place you want to go in the next six months with your partner, your friend, or even by yourself. It could be a restaurant. It could be vacation, whatever. Pick a number of how much it's going to cost, right? Be conservative with the number. So you're not on vacation and you're having to check every single price of everything and start saving towards it. Automate your money. Use the chapter five of my book. And whether you're putting $100 a month aside, 500, 5,000, whatever the number is, now you have something motivating you to actually

want to engage with your money every month. So let's talk about that for a minute and maybe get pretty tactical here. So a lot of what your book and other books did for me was taught me how to think about managing money, what to invest, what to save, what to set aside. If I'm working towards a goal, what that looks like. But I think so many people, again, they're sitting there, maybe they have a bunch of credit card debt. Maybe they're not saving at all. Maybe they're going paycheck to paycheck. What are the tactical things that when you're starting out that you can do to start putting yourself in a better position to either earn more, save more, afford more? So part of it is getting your financial infrastructure right. I'll name names

because I found this useful. I used to watch Oprah and Oprah would tell us, you know, her favorite cars and this and that. And I just want to know what Oprah likes because I trust Oprah. So I'll just tell you the accounts that I use and the ones I like and the ones I don't. I'm not, by the way, partnered with any of these companies at all. So I think getting your financial infrastructure in place is the step one. So that is your money should be flowing into your checking account, which is like your email inbox. And for that, I use a Schwab account, right? Again, I'm being very tactical so you know exactly what I use. From there, you set up automation so that part of it goes towards saving. And there are lots of great savings accounts. There's Ally,

Marcus, there's a whole bunch. They're basically commodities at this point. Part of your money is drawn out automatically, and it goes to an investing account. Lots of great investment accounts like Vanguard is where I use. We use Fidelity. Yeah, they're great. There's lots of low cost ones. I don't like these day trading bullshit apps that are out. We're going to talk about that. All right. And by the way, the banks I hate, Bank of America, I hate you. Wells Fargo, I also hate you. They are predatory. Do not use these banks. I don't care if your mom and dad opened your account at 13, get out. There's also sub

savings goals. So remember a lot of, you know, you always hear people, you got to save more, you got to save more. For what? Why am I saving? Nobody ever talks about that. Here's the answer. You're saving for your trip to Thailand. You're saving for perhaps a down payment on a house. You're saving for this great dinner, this huge dinner with your whole family. There are sub-savings accounts you can set up and it automatically flows. And then at the end, pops out your fixed expenses, your rent, mortgage, whatever, and also your guilt-free spending. So under my automation system, when you go out to a restaurant, you never have to feel guilty because you already

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And I'm like, well, I don't feel guilty about it at all because the automation set up, already set the money aside for savings, already set the money aside for investing, already covered the living expenses. This money that is set aside for guilt was specifically for that. What do you tell the person that's like, okay, Ramit, this sounds good. It's great, but I'm in debt and I have credit card debt and I'm spending every single dollar every month and still being in debt. Because they're probably, they're sitting there saying, I can't invest. I can't save. I got to

clear my debt. What do you tell them? Well, I ask them a couple of questions. I say, first of all, how much debt are you in? Do you know that 90% of people I ask that question to do not know how much debt they're in? Why would you want to? It's depressing for a lot of people. So that's number one. We got to know how much debt we're in. By the way, funny thing, people are equally stressed by being in $15,000 of debt as $450,000 of debt. Just think about how bewildering that is. People come to me, oh, Rameed, I'm in a ton of debt. There's no way I'm going to ever get out. I go, okay, tell me how much. It's a lot. Okay. I've heard it all. Nothing fazes me anymore. $15,400 of debt. I go, what the fuck? I could show you how to pay that off in a matter of months.

Let's go. But the same person comes to me with $450,000. Okay, that's going to take a little longer. We're going to have to make some different choices here, but people are equally stressed out. So number one, I want them to know how much debt they're in. Number two, then I ask them, what's your debt payoff date? I want to know the exact month and year your debt's going to be paid off. 95% of people do not know this answer. Nobody knows this answer. Imagine this. Imagine that you're in debt, but you know that every month it's automatically being paid off. You know the exact month and year where you're going to be free. I mean, how does that feel? It's empowering. It's amazing. You have a light at the end of the tunnel.

So first things first in chapter one, I show you how to do that. And then once you have that system down, you have lots of options. For people who have big student loan debt, often paying 50 or a hundred bucks a month can save you tens of thousands of dollars in interest. So there are lots of options there. Then there's other things like, should you be investing at the same time? Actually, yes. I encourage you, even if you're paying off debt, even at a relatively high interest rate, I do like people to start investing even 50 bucks a month. Why? Because the behavior is there. And once your debt is paid off, you're going to look at your investment account and be like, oh my God, I have 5,000 bucks in there or 10,000 bucks. I'm just going to keep turning that number up now.

And to clarify, and I don't want to interrupt, but I want to interject. When you say invest, because a lot of people are saying like, what are these guys talking about? What investments? Where do we get access? How do we do it? Yeah. I think that you guys are saying things like this and even I'm confused about investing. We're going to clarify. Oh, let's talk about it. He's going to clarify. Explain exactly.

I want you to explain how easy and how accessible it is to everybody with the strategies that actually both of us implement. Yes. So let me start off with what investing is not, because this is all this nonsense you see on TV. Investing does not mean you have to wear a suit and tie and be looking at 15 screens with green letters rolling across. It's all bullshit. Real investors are not checking their accounts every day. Do you know how often I advise people to look at their investment accounts? Once every six months. It's boring. It's not a TNT drama, okay? You want to have fun? Get HBO. This is not that. Investing is you set it up once, you automatically have money sent from your checking account every month, and it just, that's it. That's it. And you

can actually mathematically predict exactly when you will become a millionaire or have 500K or 5 million. So what kind of investments are we talking about? In my opinion, the investments that I have put most of my net worth into are simple, low cost index funds. Let me tell you what an index fund is. Most people think investing is like picking stocks. No, it's not. Even Wall Street professional investors, when they pick stocks,

they fail to beat an index fund over 80% of the time. So an index fund is basically a collection of different stocks. Imagine those planters peanuts you get, you know those ones? Instead of just getting, trying to pick out peanuts, you get the planters mixed nuts. It's got the almonds and the pecans and all that stuff. That's an in-disk fund. It's got a whole bunch of different stocks in it. When you invest, you do not have to become an expert in these companies. All the simplest thing you can possibly do to start investing today is to get something called

a target date fund. Now, let me tell you why this is so easy and how it works. Let's pretend that you are, I don't know, 30 years old, let's just say. And that means that we can assume you're going to retire in 35 years. So what you do is you go over to Fidelity or Vanguard or any of the places that I talk about in my book, and you open up a target date fund. The target date fund is going to be like a 2050 fund or whatever the number is that corresponds to when you retire. All it is, is one simple fund. It's like a pie chart. And all you do is just send money in there every month. Now, when you get this target date fund, again, we're talking about how do I start investing? When you invest in a target date fund, it's low cost. It's really cheap. And all you're

doing is picking one fund. It's automatically diversified. So your only job is just to put as much money as you possibly can into it. And as you get a little older, it will automatically become conservative and you can predict because we know the historical returns of the market, which are about seven or 8% per year. You can actually predict when you will become a millionaire. And I think it's worth caveating and noting that this is not to be used as a checking account. Correct. Your money's going in there. And you're not touching it.

Is there a specific, let's say someone makes a hundred grand a year. Yeah. How much of that, if it were you, would you be putting into an index fund and which one would you do? Great question. I will give you specifics on what I would be doing. I have a personal rule for myself. I want to be investing 20% of my gross income. Okay. So 20K. Now, again, I've already saved a considerable amount of money. You might hear that and go, ah, shit, I can't do that because my rent is too high or what my expense is. Fine. I've got debt. Okay. Lower it down to 18% or even 10%. But in my opinion, 10% is the

minimum that I would be putting in. If you find you cannot put more than 10%, it's time to take a look at your expenses. So every single person listening to this podcast, you would advise to do at least 10% of your gross income a year. Yeah. Minimum. And if they're not doing that, what would you say? And be honest. No, I'll give them a big hug. You know, I'm a teddy bear deep down. I would say, look, it's okay if you haven't done it until now. I have a lot of friends. One of my friends is basically 40 years old and he's like, I don't know anything about investing. What should I do? Is it too late? I didn't start doing it till about 30. And I regret that because I learned about compounding. And I realized that's a whole nother thing, but it's not too late. No, it's never too late. At 40, I said, look, you did miss out on some years of compound growth,

which is really important, but it's not too late. And I went to Google. I said, okay, let me show you how this works. I Googled for compound interest calculator and I showed him, okay, let's assume he makes a hundred K a year. I said, all right interest calculator and I showed him, okay, let's assume he makes a hundred K a year. I said, all right, great. You're going to be putting in approximately 10 K per year. It's about a thousand dollars a month for him. He was like, oh, it doesn't look like that much in the first year. It's like nothing. Okay. The year two, it's like nothing. It takes him a little while to get to a million bucks, but I showed him exactly when he would become a millionaire. And after that, it took like a matter of a few years for him to get 2 million. Compound

growth is hard for the human mind to factor in. You make a lot of money, but the earlier you start, the better. You better get our daughter's index fund set up tomorrow, bitch. Oh my God. I'm just kidding. For whatever reason, and I said, my parents were first generation my God. Listen, I think for whatever reason and I said, you know, my parents were first nobody ever talked. I think so many parents in schools, they don't teach people

about this stuff. No, they buy savings bonds. It's crazy. Why doesn't schools talk about it? I found some saving bonds that when I was born and I looked them up

to see how much they were worth, they weren't worth anything. They were worth nothing. Why doesn't school teach us this? You know, I'll tell you something.

This is a common thing. A lot of people say, I wish they had taught us this in school. So I have a couple of thoughts about this that are somewhat controversial. First of all, some of this stuff was taught in school. Kids really do not care about it that much when they're in high school. Why would they? They're not earning any money. It's not relevant. I have found it very challenging to connect even with college students because they're not in the mindset. Second, think of this. Who would be the person teaching it?

Some teacher who's overburdened already. And who would be creating the curriculum? I can guarantee you it would be some shitty bank like Wells Fargo promoting all kinds of nonsense. So I actually, believe it or not, do not think that this is the first thing we should be doing in our schools because there's tons of different interests at play you can't expect some local teacher to be a master of personal finance but I think now if you were listening to this if you're if you follow some people who you trust about personal finance there's an amazing amount of blogs some actual

good youtube stuff podcasts out there like you're hearing today, where you can start to say, "'Oh my gosh, I'm taking control of my money now.'" I think what you have to learn too about school, you're so smart, what you just said, is like you have to go self-educate yourself every single day. You have to make it a priority

to gain knowledge from other sources. Yeah, I will say, I do wish it was a little easier. I think it's hard. You get to work and you have to look at this complex document about 401ks. I wish they just automatically enrolled people. And we know from the data that when you do that, people's savings rates go way up, their contribution rates. I wish that by default, these banks made it easier for you to just click a number and your money gets into a savings account. I wish. And so I'm trying to work on that myself. I'm trying to educate people so they can do that. But just like being healthy, it's hard in this country to be healthy, right? You have to go out of your way to look for the right food, et cetera. And I wish it was just a little easier for us. Yeah. I think like what I got from your book and many things, this is so overwhelming because I

think people think it's so complicated, but when you really look at it, like once I understood, I'm like, man, this is kind of boring, right? Like my strategy is kind of boring. It just, this goes here, this goes here. You go like, it's not like this exciting thing. I want to circle around at some point and talk about the day trading stuff. But before like one of the hottest topics that we get and one of the biggest questions after we put out a little finance episode was renting versus buying. I know you have a very interesting perspective on this. And I want to caveat that saying that outside of some investment properties in the past, this is the first time Lauren and I have ever bought a home.

And the large part in that decision was one, we moved different states and I wanted to homestead, but two, we just had a child. And three, we got to a position where fortunately, after a lot of years of work, the down payment wasn't something that was extremely stressful and interest rates are low. But for the previous 10, 15 years, we exclusively rented for a number of reasons. I just wanted you to talk about it because sometimes people feel maybe they're failing by renting. And I think we both probably disagree with that. Correct. You should not feel guilty about renting. Just to start this off, I rent by choice. I could go out and buy a place today, cash. I don't. Why? Well, in America, we have been taught that

buying is what real people do, real Americans. And if you're renting, you're pretty much a second-class loser. And in fact, we have these trite little phrases. I don't want to throw money away on rent, or I don't want to pay my landlord's mortgage, which is ridiculous because what if I asked you, when you go out to a restaurant, do you feel bad about paying the restaurant owner's bill? No, of course not. When you are renting, you are paying in exchange for value. And there are some benefits to renting. In fact, if you look at many different real estate markets, including New York City, where I rented for over 10 years, LA, the Bay Area Area and certain parts of Seattle, et cetera, it's actually a better deal to rent by far. Now, again, people listening are like, this guy is

crazy. Most of the people have not done a simple analysis, buy versus rent, which you can find on the New York Times and variety of places. And you realize you can actually make way more money in certain markets, renting, taking the money you would have spent owning and investing it in the market. Now, again, if you don't know what investing is, this can sound very complicated. As you start to interrogate this idea, you start to peel the layers apart and you realize your parents probably told you that you need to buy a house. Your teachers probably told you, oh, the renters live over there. They're not involved in the community. Even the government gives people tax advantages, which in my opinion is highly

overrated so that people will own. What I would say is you should think about what your rich life is. And for the biggest purchase of your life, you better run the damn numbers. Do not go into it thinking, oh, buying is always better because it always appreciates. Not true. In fact, me renting for the last 15 plus years has been a phenomenal financial decision. I made way more money than I ever could have made owning real estate. And I lived in even better places than I would have bought in. So if you have a flexible schedule, if you're not sure where you're going to live 10 years from now, which is basically the minimum you should know before you buy, if you don't have a 20% down payment, not saying you

have to put 20 down, but you should have 20% down available, then you're not ready to buy. Don't feel guilty. Renting is a perfectly valid reason for lots of people to do. Well, people forget too on that 20% down. Now, a lot of times, especially with what's going on, they're asking for more and you got all these closing costs and fees. And was it you or, if it wasn't you, I apologize if it was you, I'm remembering, that said, renting's the least you'll compare. Renting's the least you'll pay, mortgage is the least you'll pay. Renting is the most you'll pay. Mortgage is the least you'll pay.ages. No, no. Renting is the least you'll pay. No, renting is the most you'll pay. Mortgage is the least you'll pay. That's a common phrase in the world. So let me give an

example of that. Let's say that you've got two equivalent properties next door to each other. One is a thousand bucks a month rent, and one is a thousand bucks a month mortgage. Which one would you choose? Now think about this. A lot of people jumping right to the mortgage. Why? Oh, here they go. I'm going to build equity. The same person who can't even decide if they're going to eat at Red Robin this weekend is suddenly becoming a long-term 40-year investor talking about equity. Where did they get this concept from? They don't even know. Let's break this down. If you pay $1,000 a month for rent and your fridge breaks, you're texting your landlord, hey, the fridge is broken. That's going to get fixed. No cost to you.

What happens if you do it over here with your mortgage? You're paying. You're also paying what I call phantom costs. And they are a lot. You have interest, you have maintenance, you have taxes, you have all kinds of additional fees that you're going to be paying, transaction costs like realtors. And most people, we're not cognitively wired to factor all those in. So all we do is look at the price. We go, whoa, it's a thousand bucks on building equity. No, it's more complicated than that. And yes, I do expect you to get educated about the biggest purchase of your life. One last thing. I know I'm going to get a million people writing me. They're going to go, Rami, landlords wouldn't do it if they couldn't make a profit. Can I please just get rid of this whole thing so I don't get 10 million DMs and messages? Landlords

do not charge what their costs are. Landlords charge what the market will bear. Yes. So some landlords are making a profit and good for them. Some landlords are not making a profit. Most landlords don't even know how much profit they're making because it's quite complex. Real estate is very complicated. Again, my point is you can rent if that's what you choose for your rich life. You can buy, you can do one or the other. I know people who are real estate investors, but they rent their own house. It's totally up to you. I'm not against buying. I will buy one day myself with my wife,

but there's way too much propaganda telling people that buying is the only way to do it for real Americans. And that if you're renting, you're a loser. It's not true. And I want you to run the numbers. I agree with that. I mean, Lauren and I, fortunately, like we're never, we never kind of like believe like, like we were never in a rush to buy something at some point, like the child changed a few things and also the move to Texas. But like, speaking of phantom costs, like we had that crazy storm there. We just bought the house. I had to replace the whole pool here. How much? It was like five grand just to replace out of nowhere. Keep going. I love this. Trees fell down the other day, knocked our fence out. I don't know. I got to get an arborist, I guess, to get out there

and figure this out. An arborist. 4,000. Okay, I keep going. I'm writing the numbers. What else? The AC broke at one point. 2,000.

Then one of the plumbing, one of the- All new furniture. Oh, 500. What are we talking about? I don't know. Let's not talk about it. Okay, that's a big number.

Let's just say. The baby's bathtub was, the plumbing was fucked up and went down. How much? That one, I think I made the previous, the builder fix

because it was so close. Lauren doesn't like aesthetics for certain things. So we need to actually get in and have construction. I have to expand. Priceless. This is the best moment

of my life right now. I had to expand the driveway. Three grand. Of course. I had to, what else did I have to do? I have to put up a pool fence because the baby.

What do you mean? Our lawn, the herbs. I want a fountain. I want the whole lawn done and architected. Listen, like the point is, is I think at this stage, like again, it's like I'm looking at it fine. We're doing this because it's convenience, comfort. It's where we want our child to be raised.

Like there's a few. I'm like, it's probably not the best financial decision. If I was talking to somebody who was trying to make the best financial decision, I'd say, maybe don't do this. That's not why we made this decision. If I was talking to somebody who was trying to make the best financial decision, I'd say, maybe don't do this. That's not why we made this decision. Great. Okay. I didn't buy this for like, this is a financial decision. Let me reflect on what you just said, because it's very important and very counterintuitive. So again, most people have been taught and they believe that real estate is the best

investment of all. In America, real estate is religion. Guys, you got to interrogate this stuff. There's actual numbers around this. So first, if you believe it's an investment, I want you to show me, show me, is it going to do better than 7% or 8% in a Vanguard fund, which has a 0.1% expense rate? If you don't know what I mean, then you're not ready to buy a house. Okay. You can learn about that in chapter seven of my book. The second thing I would say is there are also lots of other reasons to buy besides an investment. It can be because you have a child, you want to be in a certain school district, you want to renovate, whatever. Fine. I have no judgment about that. The third thing I'll say is some people look at real estate as an investment.

Usually they're not that sophisticated. Some people look at it as a purchase. This is just a purchase. Like I buy a vacuum cleaner. This is just a really expensive vacuum cleaner. When my wife and I buy our house one day, we don't even look at it as either of those. We're looking at it as you do. It's a luxury. Yes. A luxury. That's why you should feel totally comfortable that you're doing the driveway and the arborist and all that stuff. It makes no financial sense. I'm not counting on it making any money or losing money. I'm just counting it as a convenience

and a luxury. And that's okay. But don't you think it's nice later on if we want to make it an income property and have people rent it out? That would be great, but I don't know your exact location. We could look it up.

But many people who rent out their houses, I will say two things about it. One, it's a lot of work. Okay. So it's not just like, oh, it's just passive. It does take some work. And two, some, though not all, some people do not make enough to cover their costs as a landlord. So you should know. Oh, and one final thing for you, since you have a, not just a purchase, but actually a luxury, you're going to have some pretty nice things in there. The question is, do you want to rent that type of property out? And typically the very wealthy do not. They're just like, we don't want to make a few thousand bucks. We'll just let it sit empty. So could you- Wow. That actually makes sense what you're saying. Because now that I'm starting to think about that- You want some rando on your couch?

I don't even want my husband to sit on my couch. I'm not even allowed. I have to wipe everything. He's not even allowed to sit down. I just walk by the living room and wave at him. I don't want anyone. I don't even want the dog to put its dewclaw on my couch. I don't want anything on my couch.

But the reason I wanted you to talk on this, because I could sit and I will get a tax and I don't have the authority, either it is Lauren to speak on this from an educated perspective, but I want people to not feel ashamed or like a loser because I actually think honestly, and honestly, part of the reason that we could afford this luxury is because we rented for so long and we lived in places that didn't, that weren't stressful. And anytime, like what I was,

like anytime we maybe did a little better financially, we stayed in the same place and we didn't increase the cost. I never stressed about the payment. Let me give two specifics right now for people so that you can use for your decision and also for some peer pressure that you will invariably get. First off, there are some helpful numbers and guidelines. The typical guideline is that you want your housing expense to be less than 28% of your gross income. So again, I will give you a simple example. Let's say you make 100K per year, easy math. You want your housing total to cost less than $28,000 per year. Now, okay, if you live in New York City, people typically pay more because housing is very expensive, LA as well. But that's a good sort of guideline. If you're paying 60% right now,

you got a problem. One, your expenses might be too high. Two, you may be living in an area that's too expensive for you. Now, you can use this number if you think about buying a place and you can say, okay, right now I'm spending thousand bucks a month. What are my real expenses going to be? Oh my gosh, I didn't realize I'm going to have to renovate that bathroom. That's going to cost $6,000. That's a lot more than I projected, et cetera. The second thing is if you get some peer pressure from people, I want everyone, my dream, my wish for you listening here today is that you become comfortable with your vision of a rich life. And if that's renting, great. If it's buying, also great. If it's buying, also great. If it's buying

beautiful sweaters or taking a trip two months a year, whatever your rich life is, I want you to be totally comfortable in your own skin. Here's what you can say if somebody says to you, why are you not buying? You're wasting money by throwing it away on rent. This is exactly what I say. I say, you know what? I i appreciate that i ran the numbers and it just doesn't make sense for me to buy right now now you have to say for me because they can't attack you if i say what i really want to say which is i ran the numbers it makes no sense don't you think anyone though that's going to attack you is insecure about their own decision because i would never no matter what i agreed with i would never attack someone else's vision. Well, everyone in America is insecure about

their money. They don't know anything. So the only thing they fall back on are these trite cliches, which they were taught by their parents who were taught by their parents who were taught by the government, which is real estate is the best investment of all. It's trite. Sometimes it is, sometimes it's not. Certain situations, when you have a child, it could change. We want to get more sophisticated. And this is what part of mastering money looks like. You need to be able to slice and dice these complex questions. And it's not that hard. You can learn it in a book, but you got to do it. I'm never making a purchase unless I'm calling my friend Ramit. Well, you could text me anytime.

You're going to have to go through Ramit before we make any kind of big purchase. Wait, wait, wait. Pick a minimum. I don't want getting your target questions. No, no, no. You won't. I'm talking about like big, huge. Oh, yeah, yeah, yeah. I love that stuff. Let's pivot because I want to talk about something that I think is important, especially as

we come up on time for and I would have fallen in this, like I said, all the douchebags, I would have fallen in this camp years ago. There's a lot going on with these quick money apps, these day trading things, like different platforms, people saying, get on, you know, I don't want to call any out by name, crypto, all these things, this get rich quick schemes. And I have been very adamant that I am not a fan of any of these. I don't invest in crypto, but maybe I'm missing the boat. I'll figure that out later. I don't invest in the one-off stocks. I don't do the GME, the AMC. I don't do any of that stuff. And the reason I don't is I don't need, I know

where are like, I don't need the stress and the gamble of like potentially putting myself in a bad position at this stage in my life. I think there's a lot of young people that are being enticed by people online to take and risk money that they shouldn't be risking on these platforms. I wanted to get your take on it because I think a lot of people are jumping into it and I don't think that they realize how detrimental it could be to their financial situation. One of my greatest joys in life is observing trolls online. I love them. I know the rule is you're not supposed to engage with trolls, but I engage with every single one of them. And to this day, I've been waiting for

at least one intelligent troll in this entire planet. I haven't found them yet, although my eyes are wide open. So I remember these trolls. So Charlie Munger is this really famous, super- Icon. Icon. He's Warren Buffett's partner. And he hates crypto. He hates it. He said it's like evil and toxic, et cetera. And they're all guys on Twitter. They have like the avatar of like a frog. And then another one has the avatar of Hercules bicep. And they're on Twitter anonymously saying, have fun staying poor to Charlie Munger, one of the richest people in America. I'm like, this is the greatest day of my life. We have Twitter losers telling Charlie

Munger to have fun staying poor. Let me break down how this fits into your rich life. Once you have a well-diversified portfolio, which means whether it's a target date fund, as I talk about in chapter seven, or you want to pick your own index funds because you think you're a little bit more sophisticated, fine. Once you have a well-diversified portfolio and your money's flowing, if I ask you, what percent is going to this? You know the answer. If I say, when can you afford to take that trip to Norway? You can tell me that. When you have that, you're all good, all flowed. You're using IWT or whatever you're using. And you decide, Ramit, I want to take 5% of my money and invest it in speculative assets. I say, God bless you. All right? Pat on the back. Go for it. You want

to invest in your degenerate friend's bar? Go ahead. You want angel investing. Angel investing. That's how I look at angel investing. Perfect. you're probably going to lose your money i know you think you're superior to everybody else that's fine whatever maybe you make a lot probably lose it fine it's fun money once you get pretty good at this financial stuff you go okay this is kind of boring maybe i want to have a little fun with it and i'm all for it but you gotta have your diversified portfolio set up now when you say this to these crypto guys i'm 39 years old by the way they go old man that might have worked in the past but this is the new time that's code for a phrase we all make fun of in personal finance which goes this time it's different it's never different. They said that in 2000 and 2001.

Oh, tech is taking over. All these other valuations are out. It was not different. That crashed. 2008, oh, different. Real estate, that crashed. They say it every time. It's never different. It's kind of a running joke among sophisticated investors. Again, if you choose to invest in crypto, which I would call a very speculative asset, awesome. Make sure that you've got a well-diversified portfolio first. And what about some of these things, like these single stocks, like the GME, the AMC? Those would fall under the same exact thing. Yeah. And I have to say, there's this whole meme stock thing that's going on. And really, when you dig into it, there's two things. The first layer is, fuck the man, and there's no way for us to make it in America anymore. Therefore, we're taking this on ourselves.

We're going against the man. You're not going against the man by investing in a meme stock, okay? You're basically the prey, and other people are going to be making money off of you. So that's one. I don't like to see people turned against their own interests. I'm here for the little investor. That's the reason I'm here. That's why I'm not promoting some deal that I have with anybody. I want you to know how to take control of your money. The second thing is if you really probe, there's a deeper layer, which is basically, I want to get rich quick. Yes. And so when people, they may not come out and say it because they know that it's politically incorrect. But when you say, dude, why are you putting like 99% of your net worth into this highly speculative movie theater stock? And they'll say all these words, oh, fuck the man,

hedge funds, da, da, da, da, da. And ultimately the truth is they want to get rich quick. Which is kind of lazy because I think what it takes to become wealthy is patience, time, routines, putting the work in, shipping away. You know what their response, I love what you said, but you know what their response is?

What? I don't want to wait till I'm 65 to have money. That's for losers. That's for old Luddites. And I got a couple things to say to that. First, you actually don't have to wait till you're 65. I believe in living a rich life today, not waiting to only live it tomorrow. Most of these folks who say that have never run a compound interest calculator on Google.

Never. They don't even know how much they could make through compound interest. And the second thing is, deep down, they don't believe that they can do it. They don't. So they go hyper-leveraged, hyper-speculative, and they put it all on the line. And they actually say it. Either I'm going to make it big or I'll be total broke. LOL. That's not investing to me. That's speculation. And that's not a game I want to play.

I never had a credit card until I was like 31. I just got a credit card a couple years ago. I just never had one. I don't know. I just decided to spend what I had. I was a bartender, so I would get cash tips. I would get my paycheck. I would spend that, which is not a good strategy. And then I would move on to the next night where I made cash tips. So I just never thought I could handle it. I thought I would spend too much. Is a credit card a bad thing or a good thing or is it neither? I believe that I advocate for people to have a credit card and to use it wisely. I'll tell you why. Okay. I don't believe in depriving ourselves of something because we're afraid of what we're going to do. I would rather you become stronger,

stronger enough to deal with whatever the world throws at you. Okay. So with a credit card, yeah, you're going to face some temptation. I want to show you how credit cards work, chapter one and chapter two. And I want to show you actually the benefits of having a credit card. So there are a lot that a lot of people don't know. Did you know I could take this phone, if I just bought it, spill coffee on it, and my credit card will write me a check? Most people didn't know that. Did you know that when I it, and my credit card will write me a check? Most people didn't know that. Did you know that when I buy this, my credit card automatically doubles my warranty? No, most people didn't know that. So there's a whole bunch of benefits. As well, it allows you to automatically track your spending in your money flow, right? So that whole thing I said earlier

about you want to be only spending 15 minutes, maybe an hour on your spending, part of that system is having a credit card. Now, there are some downsides. These interest rates on credit cards are really high. I especially hate store credit cards. Man, it drives me crazy. You're at Gap or whatever waiting in line, and they're trained to say, would you like to open a card 10% off your purchase? In my head, I'm like, shut up, Rameed. Don't say anything. Don't say it. Be nice. But in my head, I'm screaming, don't open that credit card. Store credit cards are the worst. They're the worst. I don't like them. They get you for high interest rates, even if you're late on another card, et cetera. So don't do that. But there are some great cards. They give you great rewards. Cashback. I like a- Like what?

I like a Fidelity 2% cashback card. It's a great card. Simple, 2%. I don't want to be sitting there when I'm at a restaurant being like, oh, do I need to have my 2% cashback or my 1.5 and the one for gas? I don't want that shit. Convenience. Simple 2% cashback card is great. If you travel, the best travel card out there right now is Chase Sapphire Reserve. It has about a $500 or $600 annual fee. So you do need to be spending enough and you can Google Chase Sapphire Reserve spending calculator to see if it makes sense for you. I kind of love that. And then I will say that I do have a luxury card just because I have Amex Platinum. It makes no financial sense. I think the annual fee is four or 500 bucks, but I have it because I like the lounges. That's it. Did you copy him on the Chase Sapphire card? No, he knows what he's doing. I see. I know that. You got to respect this guy. The Amex used to be like, I think the best travel

card until that one came, right? Yeah. There was a couple others and then Chase really has taken the market. So you know what you're doing. Well, I told him I'm a fan. A lot of people, where your book helped kick off my financial literacy and understanding was just like pointing out how simple some of these things are, how you can automate so many things and just like looking at it and getting your arms around it. Because now I don't have to even barely pay attention to it. If you were to leave our audience with one piece of advice when it comes to money, say you're talking to your son or your daughter, what would

it be? Super simple, super digestible. I would say, tell me your vision of a rich life. And I would probe them. Where do you want to go? Why? What do you want to eat? What's the smell like? Who are you taking with you? And then once they paint that picture for me, I would say, okay, what of that vision can you do in the next six months? And I want everybody to have a taste of that. If you can't afford to fly with 10 of your friends to Greece, that's okay. But where can you go? Maybe you can treat everybody to a nice dinner. And I want people to get a taste of their rich life. Once you taste it, you have to feel it. You have to smell it. It's tactile. But once you do that, you suddenly connect money with your rich life. And that is really the beginning of the journey. Once you do that, then you're

going to be ready to receive things like the tax benefits of a Roth IRA. But nobody's going to sit here and convince you to open up a Roth IRA until you know why you're doing it. And to put 10% to 20% of, that's something that I got out of this today. 10 to 20% of your income yearly gross. Yeah. Into savings and investments. Got it. And what I found with that is it kind of almost becomes a game and you're like, oh, if I can do 10, maybe now I can do 12. Maybe I can do 15. I'll tell you what.

It becomes addictive. Yes. Here's a fun little math. I know that already sounds like crazy, but let me give you just a couple of quick things that'll blow your mind about math. You will make more money increasing your savings rate 1% per year than you would doing almost anything else. So if you're currently investing, for example, 15%, okay, $15,000 out of $100,000. Next year, you make it 16 and next year, 17 And next year, 18. That number turns into tens of thousands or even hundreds of thousands of dollars over your lifetime. Forget lattes.

It's bullshit. $3, $5, it makes no difference. Just that little one change, 1% more per year is tremendous to you. You know what else it does for me personally is it's really limited the impulse buys, the stupid, like, I don't need that impulse buys because every time I do it, I'm like, oh, maybe I could like, if that's a thousand, maybe I can put an extra thousand or maybe I can put an

extra 300 or 500. Yeah, you have a reason. Yeah. I'm like, I don't like it because sometimes when you're just sitting on hot cash, right? You're just like sitting there and it's burning a hole in your pocket. But if it's out of sight, out of mind, like, oh, I didn't even really need that stupid thing. I just, you know, save. I will say your growth when I first started dating you to being in clubs to now is you don't really shop for yourself. What if this whole time I've just been saving to go to one last hurrah. In Mykonos. Yeah, yeah. One last. No, I'm just kidding. It's done. I have to say, listening to just some of the things you've kind of casually mentioned, you know, you've got the Fidelity stuff, Chase Sapphire Reserve, low cost. These are the signs of someone who is and will be incredibly

wealthy. I married him. I'm a total fucking gold digger. I appreciate that. But I think what I did was I probably had three midlife crises before I hit 30. And I went through all this stuff. So I'm not as... Listen, I hope everybody finds success. And I hope along the way, you also get your ass kicked and contextualize what real success is. Because if I would have continued on that path, this would not be... It would not have been a pretty picture. I just ended up finding hopefully the right path earlier than later. Yeah. You are a wealth of knowledge, literally. Where can everyone find

you? Pimp yourself out. Maybe we can do a giveaway with your book. Tell us about your podcast, everything you're doing. So I have a new podcast called I Will Teach You To Be Rich by Ramit Sethi. You actually get to listen to real couples who have big fights and discussions about money. I take you behind closed doors and you can actually hear some of these stories. You've never heard stories like this before. My website, IWillTeachYouToBeRich.com and I share a whole bunch of stuff on money and psychology on my newsletter. And then I'm on Instagram and Twitter at Ramit. And your book? My book, I Will Teach You To Be Rich. It's on Amazon. It's got tons and tons of reviews and

New York Times bestseller. That's the place if you say, you know what? I want to take this seriously. Okay. I like what they were talking about today. And I want to figure out what to do with my money. Get the book, get it from a library, get it from a bookstore, any bookstore, and you will be able to change the way you think and behave with money in a matter of days. Yeah. And it's very digestible. Your book is going to pop my financial cherry. I am 100% reading it. We will do a giveaway. Maybe we can get a signed copy.

Yeah, of course. That's okay. Okay, we'll do it after this episode. Stay tuned. Thank you so much for coming on. You're incredible. That was really, really informative. Thank you.

Thanks, man. Thanks for coming on. Do you want to win a copy of Ramit's book? All you have to do is copy of Ramit's book? All you have to do is tell us your favorite takeaway from this episode. There were so many on my latest Instagram at Lauren Bostic and someone from the team will slide into your DMs. I mean, I want to win his book. So I feel like everyone should enter this so easy.

And with that, we'll see you next time.