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Ramit Sethi: Never Split The Bill, It's A Red Flag & Renting Isn't Wasting Money! — Transcript

by The Diary Of A CEO · 21,172 words · 2,879 segments · language en · Watch on YouTube

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0:00how can you talk about renting you're
0:01just throwing money away BS should I
0:04just dismantle these arguments once and
0:05for all because there's some shocking
0:07math behind a mortgage and most people
0:09don't know this let's get into it the
0:11meet safy the financial expert and
0:13entrepreneur is back to teach you how to
0:15take control of your money and confront
0:17the financial problems that hold us back
0:19most people fall into four money types
0:21that I've identified number one is
0:23avoiders and they'd hate talking about
0:25money but if your partner simply will
0:26not talk about money that's a huge red
0:28flag because % of the people I talk to
0:31do not know their household income 90%
0:33who are in debt do not know how much
0:35debt they're in and 100% of the people I
0:37talk to in credit card debt also have
0:40trouble with that is shocking next up
0:43Optimizer they can get you to a very
0:45good place they'll be investing we love
0:47to live in a spreadsheet but it can be
0:48taken too far and then the dreamer who
0:50believes that success is one deal away
0:53and they tend to fall into crypto coin
0:56scams like all this BS finally worriors
0:59they love to worry are we going to have
1:00enough what if we run out of money
1:02typically they picked up worrying from
1:03their parents who said stuff like money
1:05doesn't grow on trees and the problem is
1:07you can take it a little too far and
1:08they become cheap and become so obsessed
1:10with $3 questions like agonizing over
1:12buying a coffee but everybody listen
1:14closely cuz I want to break down how you
1:15can change any of these types so Remy
1:18the only investment most couples make is
1:20buying a house what is the alternative
1:22this is where real wealth is created
1:24let's simplify the whole thing and I
1:26have four numbers that everyone should
1:27be talking about the first off is your
1:32this has always blown my mind a little
1:33bit 53% of you that listen to the show
1:36regularly haven't yet subscribe to the
1:38show so could I ask you for a favor
1:40before we start if you like the show and
1:41you like what we do here and you want to
1:42support us the free simple way that you
1:44can do just that is by hitting the
1:46Subscribe button and my commitment to
1:48you is if you do that then I'll do
1:49everything in my power me and my team to
1:51make sure that this show is better for
1:52you every single week we'll listen to
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1:58continue to do what we do thank you so
1:59much
2:01[Music]
2:02much
2:04REM if someone's just clicked on this
2:09conversation please explain to me
2:11exactly why they should stay and listen
2:13to what we're about to discuss on the
2:15basis that we're about to talk about the
2:17things you've written in this
2:18book if you are single and dating if you
2:23are engaged or if you have been married
2:26for 25 years money is one of the central
2:30parts of our lives and most of us think
2:34about money as something to be avoided
2:36it's something we only talk about when
2:38things have gone
2:40wrong what a terrible way to live and
2:43there is a different way which is we can
2:46use money as a source of connection
2:48possibility and joy and that is what
2:51we're going to talk about today I had a
2:54conversation a couple of days ago
2:55actually with um James ston who's the
2:57divorce expert he's a divorce lawyer by
2:59trade but he knows more about divorce
3:01than anybody else and he said to me
3:02there's two things which cause people to
3:05end up in his office going through a
3:07divorce number one is cheating in
3:09infidelity and the second thing is money
3:12problems in the relationship so I find
3:14it especially sort of pertinent to have
3:16this conversation with you about
3:18couple's relationship with money um
3:20because clearly one of the things that
3:21is most likely to end my relationship or
3:24or I guess prevent me getting into one
3:26is this financial avoidance that most of
3:28us engage in you've interviewed hundreds
3:30and hundreds of couples about money on
3:31your podcast what have you learned about
3:34our relationship with money in
3:35relationships from that I've learned
3:38that 50% of the people I talk to do not
3:41know their household income 90% of the
3:44people I talk to who are in debt do not
3:47know how much debt they're in and 100%
3:51of the people I talk to in credit card
3:53debt also have trouble saying no to
3:56their children isn't that shocking of
4:00those things 50% do not know how much
4:02income they make because most of us are
4:05simply living by looking at our checking
4:07account and that's it the debt part kind
4:10of makes sense why would you want to
4:12know how much debt you owe you don't
4:13really want to think about it so you
4:15ignore those emails and envelopes and
4:18the credit card debt part that is really
4:21interesting the idea that if you can't
4:24say no to spending so you've racked up a
4:27bunch of credit card debt the same
4:29princip principle applies to saying no
4:31to
4:31kids for me when I discover these I find
4:34them absolutely fascinating but the good
4:36news is you can also change these things
4:38and what's the difference between men
4:39and women in terms of spending habits in
4:41a relationship secrecy avoidance
4:45arguments well let's start with the
4:47roles men always describe themselves as
4:51providers always that's what we are
4:54taught it's exists in culture the
4:57problem is of course what happens when
4:59are not the top earner which is happen
5:03happening increasingly more now so when
5:05I often ask them who are you financially
5:08speaking if you're not a provider and
5:10they're just stumped but there's got to
5:13be something more than simply being a
5:14provider you can be a provider and you
5:17can be a nurturer you can be a provider
5:20you can be a helper a leader there's so
5:21many different ways um often what you'll
5:24see with women is discussions about a
5:27secret bank account keep a little money
5:30aside just in case we have to remember
5:33that in the
5:34US many grandmothers were not allowed to
5:37open up their own bank accounts that
5:40happened in two generations ago and so
5:44there has been a rightful message that
5:48has been passed down Orly keep a little
5:51bit of money aside just in case whether
5:53it be physical abuse Financial abuse
5:55divorce Etc and I totally respect that
5:59message I don't think you should have a
6:01secret account I do think you should
6:03have an account that is yours only but
6:06no secrets in a relationship what about
6:08arguments as it relates to money and
6:10relationships what are the the cause of
6:13the arguments is it someone spending too
6:15much is it hiding money is it something
6:17else it's usually not hiding money
6:19that's very small extreme the biggest
6:23phrase that I get from couples is he or
6:26she's a spender and I'm a saver so it's
6:30creating this identity that they're a
6:31spender I'm a saver or they don't want
6:34to talk about money ever why can't I get
6:36them to finally sit down with me and get
6:39on the same page that's a phrase that's
6:41tossed around everywhere when I ask them
6:44what is getting on the same
6:46page the answer is I don't know I just
6:48want to talk about it so when it comes
6:51to money yes there are the numbers that
6:53we need to understand of course but what
6:55I often tell people the way you feel
6:57about money is highly un correlated to
7:00the amount in your bank account that is
7:02why I speak to so many
7:03multi-millionaires who still worry about
7:05money they think if I just have 50,000
7:08more 500,000 more $5 million do more
7:10well guess what I've had all those folks
7:12on my podcasts and they still worry
7:15about money that means there's two
7:17things you need to do to master your
7:19relationship with money one you got to
7:21know your numbers this is a language you
7:23have to learn the basics of personal
7:24finance two you have to master your
7:27money psychology that means you need to
7:30change the way that you talk about money
7:33and behave with money so that you can
7:35ultimately change the way you feel about
7:37money you do those two things you're
7:39going to have a very healthy
7:40relationship with money we'll go into
7:43all of those things and how you do them
7:44um on this point of gender roles
7:47obviously Society has changed in the
7:49last couple of decades in terms of
7:51equality and more women are in work at
7:53higher level positions in corporations
7:55in the SE Suite earning much more money
7:58this has caused
8:00a shift I should say in the sort of
8:04typical gender roles and assumptions of
8:07what what each gender is supposed to be
8:08doing in couples and I'm wondering now
8:11with more women earning more money in
8:13many cases they're going to be earning
8:14more than their husband in heterosexual
8:17relationships have you seen new Dynamics
8:20and new issues created because of this
8:22in terms of like I don't know insecure
8:24men feeling emasculated or the woman not
8:27being happy that she's contributing more
8:29and I asked this because I had someone
8:30on my podcast a couple of uh months back
8:32who said to me that I think it's 70 or
8:3580% of women expect that their romantic
8:38partner will earn more than them but
8:41that Gap is closing now because women
8:43are earning more and more money I'm just
8:45wondering if you've seen in those
8:45couples scenarios where the woman ears
8:47more and it's causing problems I've seen
8:49it all the time I've seen it all the
8:51time I think that we see different
8:53gender Dynamics um I recall one episode
8:57where I spoke to uh a young woman woman
8:59and her boyfriend she was around 40
9:01years old she made way more than her
9:05boyfriend care to guess how much she
9:06makes per
9:08month
9:10$20,000 $200,000 per month she has a
9:14business it's doing very well she's
9:16around the age of 40 now her boyfriend
9:19was never taught about money when he was
9:21growing up most people are not he never
9:23learned about investing certainly no one
9:25was telling him about a Roth IRA when he
9:28was 12 years old
9:30and he had started his own business and
9:32he was on the upswing he's making a few
9:34thousand dollar a month good for him
9:36she's making 200 Grand a month her
9:39parents started talking to her about
9:40investing when she was 5 years old so
9:43here we already see a difference not
9:44just in gender but in socioeconomic
9:46status okay and over time that
9:49progressed so they come to me and she
9:52says I want him to pay for dinner
9:56occasionally fine super reasonable he
9:59even said no problem I want to so he
10:02would take his credit card out and he
10:04would offer to pay and she would say no
10:07I want you to contribute more to your
10:09IRA so in many ways she wanted him to
10:12pay she wanted to feel taken care of
10:14which is totally reasonable but when he
10:17offered she said no so this is the kind
10:20of thing that I often see which is I
10:23think I want one thing but when I get
10:25that thing I don't actually want it it
10:27doesn't make me feel the way I thought
10:29it would I want to earn 50k more I think
10:33that'll make me feel safe oh my God I am
10:35earning 50k more it doesn't actually
10:37change the way I feel so I worked with
10:40this couple and I helped them understand
10:44why they both felt this way about money
10:46and you know from the outside it's like
10:48this is so irrational if you make more
10:50just pay more if I were in that
10:52situation etc etc none of that stuff
10:54matters when you are in the couple in
10:57that relationship you will feel a
10:59certain way and we got to work with you
11:01individually not what everybody else
11:02says in the end the conclusion that they
11:05came to was she wanted him to
11:08occasionally pay for dinner but she also
11:10wanted him to fill up his Ira so this is
11:12what they did every so often before they
11:14went out to dinner she would give him
11:16her credit card and she would say here I
11:19want you to pay for tonight and he said
11:21cool he understood it they went out and
11:24that's what they did now to us sitting
11:26here we're like this dance makes no
11:29sense why don't they just do it this way
11:31or that way guess what every single one
11:34of us has some irrational thing we do
11:36with money every single one of us and I
11:39think that we are ready to actually have
11:41conversations about how we are
11:43irrational money is not just dollars and
11:45cents on a page that's why you don't
11:48feel good about money even when you have
11:50more than you ever thought you would
11:51that's why you worry about money but you
11:53have never read a single book on
11:54Personal Finance we are all irrational
11:57including me and when you get into a a
11:59relationship you got to acknowledge that
12:02and then you got to say hey what is our
12:03vision of a rich life together let's
12:06build that if it means we do a little
12:08dance about the credit card once every
12:09two months fine do we both feel good is
12:12it fair then I'm good with it what's
12:15going on there with her because it it
12:17sounds like there's this battle between
12:19her mind and maybe her heart or it's
12:22almost like the social expectation is
12:24coming in but then her her brain is
12:25saying no invest in the IRA and in Ira
12:27for anyone that doesn't know in other
12:29it's a retirement account a retirement
12:30account so she's saying invest in the
12:31future but also buy my dinner well it's
12:33the same it's the same we all have these
12:35things that Society has told us but then
12:39we don't quite agree and we're not sure
12:41what to do last time I was here we
12:44talked about how you don't necessarily
12:46need to buy a house in order to live a
12:48rich life and in my case I have rented
12:50for the last 20 years by choice and I
12:53made more money renting and investing
12:55the difference than I would have by
12:57buying a house and this is shocking to
12:59people like we saw the comments last
13:01time people went berserk how can you
13:03talk about renting you're just throwing
13:05money away on rent and this is something
13:07we have been fed constantly for
13:10Generations that in order to be
13:12successful you must buy a house so when
13:16somebody like me comes around and says
13:18actually you should run the numbers
13:19because sometimes renting can be
13:21better people are shocked same thing
13:23with um if you want to be taken care of
13:26or you want someone to treat you or you
13:28want someone to pay for the first first
13:29date same thing when men come and they
13:31talk about being a provider but in
13:34certain relationships where they
13:35actually earn less I'll say to them if
13:39we look at the numbers you're not the
13:40provider so who are you and they're
13:43stumped and that is when we need to
13:45start grappling with the idea that maybe
13:47what we were told is not exactly true
13:50for us in our situation today and that's
13:53okay do you think it causes more
13:55problems when the in terms of the
13:58relationship Dynamics and that sort of
14:00masculation and you know that the man
14:02not feeling like a provider when the
14:03woman earns more money than the man from
14:05what you've seen not necessarily I think
14:07that it is a different framework than
14:10we're used to yeah when we think about
14:12my parents for example my mom stayed
14:14home with us my dad went to work single
14:16earner simple everybody knew where they
14:20stood what the roles were it was very
14:22simple it's very difficult to do that
14:24today housing is historically expensive
14:27healthc care is expensive especially in
14:29the US and so you have two people
14:32earning in in urban cities you have
14:35young women earning more than men in
14:37their
14:3820s a lot of us are trying to figure out
14:41what does this role mean for me and for
14:44my partner and for our relationship that
14:46makes it tricky I wonder if a lot of men
14:47are just choosing to remain single until
14:50they've kind of worked on themselves
14:52because I think actually that's probably
14:53the path I would have taken if I'm being
14:54completely honest well I kind of did
14:57take is I didn't have a relationship
14:59until I was able to really provide oh
15:03the p word yeah and where did that word
15:05come from provide like watching my
15:07father watching movies everything
15:09exactly yeah no one ever says like you
15:12are a provider but we learn it from a
15:14million different uh perspectives and
15:17yeah I hear a lot of guys I mean when I
15:19uh was living in New York and I had a
15:21lot of single friends topic of
15:23conversation was I'm not ready to get
15:25married I need to get to a certain point
15:27in my career first you have all these
15:29words for it and deep down there's a
15:34feeling that we're often expressing you
15:35know maybe I'm not ready maybe I'm not
15:38enough maybe I need to do XYZ before I
15:42do the thing that I want and so part of
15:45what we talk about when it comes to
15:47relationships and money is like let's
15:48actually shine a light on that let's not
15:50be shy about it if you want someone to
15:52pay for your dinner fine that's totally
15:54fine let's have that conversation if you
15:56want to be the sole earner in your
15:59household okay let's see what it would
16:01take and too often we don't have those
16:04conversations we just dance around them
16:06for 50 years who should pay for the
16:07first date then my answer is doesn't
16:11matter it would be nice if the person
16:13who suggested the date pays but I think
16:16we spend way too much time focusing on
16:18the first date and way too little time
16:21thinking about the next
16:2314,622 days it's like a couple who's
16:27obsessed with the wedding fine you want
16:29a nice wedding great what about the
16:31marriage same thing with money first aid
16:34okay we can have that conversation but
16:36aren't you more interested in how your
16:38partner thinks about money and talks
16:41about money are they a cheap skate are
16:43they generous are they abundant did they
16:45grow up the same or different than you
16:47that is something we don't talk about
16:49meanwhile we have five million YouTube
16:50videos on who's going to pay on the
16:52first date we are missing the real point
16:55the point of money in a relationship is
16:57not just about the first date that's fun
16:59for clicks but it's about do we see
17:02money the same way do we connect are we
17:04going to be rowing in the same direction
17:06or are you going to be doing that and
17:08I'm doing this and we can never get
17:11aligned you can only make a first
17:13impression once right and if you are a
17:16guy this is just how I feel anyway if I
17:18go on a date a first date with a woman
17:21and we have a wonderful date you know
17:23it's a nice restaurant and then it gets
17:24to the end of the day and then I turn to
17:26her and say should we split the bill I
17:29couldn't even say it with a straight
17:30face frankly I couldn't I definitely
17:32couldn't ask her to play yeah I just I
17:35just could never and if I think if you
17:38anonymously pulled 10 of my female
17:40friends and said how would you feel if
17:42on the first day the guy asked you to
17:44pay I think privately they would say
17:47that's a bit of a turnoff that's a red
17:48flag that's an ick I think probably
17:50that's true and again goes to the power
17:52of socialization right like culture is
17:56very difficult to change we got to admit
17:59that we got to acknowledge that and when
18:01I was dating I paid for dates so I don't
18:04have a problem with it I like to be
18:06generous I think that when you are in a
18:09relationship you like to know that your
18:11partner is generous too now generous
18:13comes in lots of ways it could be paying
18:15for dates it could be planning a trip it
18:18could be being thoughtful and you know
18:19buying extra toothpaste because we're
18:21running low there's so many different
18:22ways to be generous but generosity for
18:25me would be a value paying for a date
18:28sure I paid for dates I'm happy to I
18:30like to do it but generosity to me is
18:33way more important to talk about that in
18:35a relationship versus the date itself
18:37because chivalry you know this this idea
18:40that the man is to lead um in that
18:42regard and to you know open the door
18:46yeah and open the car door and pull out
18:47the chair yeah but think about it I
18:49agree with all that stuff I I'm I
18:51support it but think about what message
18:54that sends when you tell Men You're
18:55supposed to be chalous but there's no
18:57real context no real around it and let's
18:59say you have a 26-year-old guy now who's
19:03earning less than his girlfriend so he
19:06wants to be chivalrous but for him he's
19:09like well look at our bank accounts and
19:11so what I want to emphasize to people is
19:13you can be chivalrous you could be
19:15generous money is just a small part of
19:18that let's not over fixate on who's
19:20paying for top us okay and let's
19:23actually think about the important
19:24things when it comes to money we are so
19:26obsessed with $3 questions people are
19:29obsessing over should I buy this coffee
19:31can I afford this appetizer on and on
19:33and on about $3 questions we totally
19:37neglect the $30,000 questions or the
19:40$300,000 questions is this person
19:42financially aligned with me how do I
19:44even find out am I investing 5 to 10% of
19:49take-home pay every month are we doing
19:51it together um do we talk about money
19:55regularly and proactively and positively
19:57those things matter and they're actually
19:59worth hundreds of thousands of dollars
20:01these $3 questions including who's
20:03paying for appetizers or should I buy a
20:05latte irrelevant fact get get the big
20:09answers in life right and you can buy
20:12all the appetizers you ever want what
20:14are the financial red flags in a
20:15relationship then number one is they
20:17don't want to talk about money if you
20:19don't want to talk about money red flag
20:22the biggest red flag of all because we
20:24could differ on how we see money we can
20:27even have different values for a few
20:29things but if your partner simply will
20:31not talk about money you have a huge
20:34problem why if you can't talk about
20:37money then you can't even understand
20:38where they're coming from and they are
20:40not curious about what you want so how
20:43are you ever going to get on the same
20:45page think about this a lot of people
20:48think we need to have the conversation
20:50about money the con as if it's one
20:53conversation would you have the
20:55conversation about raising kids no
20:58you'll will have thousands in your life
21:00that's the way it should be money is
21:03very much like parenting not like uh
21:07should we play pickle ball or tennis
21:08today irrelevant so we want to have lots
21:12of conversations about money and that
21:14means we need to first of all be willing
21:15to talk about it and then we need to
21:17find a way to have fun doing it why
21:19don't we and who doesn't is it men is it
21:21women that don't do it more more or
21:23who's not talking about money and why
21:25aren't they talking about it it's not
21:26about gender couple it has nothing to do
21:28with gender terms of who does or doesn't
21:29talk about money there are avoiders
21:32that's one of four categories uh money
21:35types that I've identified avoiders hate
21:38talking about money and they will use a
21:40series of conscious and unconscious
21:42techniques to avoid talking about money
21:45they'll say things like um uh why why do
21:48you always have to talk about money
21:50can't we just have a nice night out or
21:53you're so much better at this you just
21:55handle it you're just so much savier at
21:58this stuff that's an avoider do they
22:00know their own financial situation no so
22:03they don't know their own financial
22:04situation and they don't want to talk
22:05about it correct we and by the way we
22:07all have something like this it could be
22:09our fitness it could be our relationship
22:11with our parents there's something in
22:13our life that we know we should deep
22:16down but we avoid it yeah and there's no
22:19there's no immediate consequence like if
22:21I don't call my college friend it's fine
22:25I could probably call him tomorrow and
22:26you can go on and on and on like that
22:27until one day you can same thing with
22:29our fitness it's very easy to
22:31procrastinate on Fitness or money
22:33because it's not like your house is
22:35being taken away or even your cables
22:37being shut off it'll probably be fine
22:41until one day you hit this brick wall
22:43and it's
22:45not so that's the avoider that's the
22:47first money type yep next up Optimizer I
22:51have a soft spot because I am an
22:52Optimizer optimizers we love to live in
22:55the spreadsheet it's like let me sit and
22:58calculate this and what if I run a
22:59compound interest calculation a Monte
23:01Carlo calculation and what if we do this
23:04but not that I love calculating
23:07everything and left alone I would sit
23:09there and do that for the rest of my
23:11life okay the problem is you can take it
23:13a little too far now I don't think I've
23:15taken it too far perf I think I'm
23:18perfect on my spreadsheets but my wife
23:20has taught me enough's enough we we've
23:23won that part of life let's focus on
23:26another part connection and fun and
23:28experience are these people often
23:29thought of as boring yes they are they
23:32are deep down they are boring I was
23:34boring when I was sitting there thinking
23:37money is only about numbers it's not
23:40money is about Adventure and possibility
23:42and generosity and you will often find
23:44optimizers I'll give them a challenge
23:46I'll give him a $100 challenge Al you
23:47have to take $100 in the next week and
23:49spend it on yourself they cannot do it
23:52they will spend it on their dog they'll
23:54spend it on their kid they'll spend it
23:55on their partner but they will not do it
23:57for themselves and I go go why didn't
23:58you do it they go R do you know that if
24:01you put $100 in the S&P 500 and you
24:04compound that for the next 45 years
24:05it'll turn into this much I go I don't
24:07give a spend the money because
24:10money is not simply meant to be hoarded
24:13right it's meant to create a rich life
24:16and when you have
24:18optimizers the thing is they can get you
24:20to a very good place they will probably
24:22have your account set up dialed in
24:24they'll be investing great they're going
24:27to be very proud look at the compound
24:28interest returns all that is fantastic
24:32but it can be taken too far these are
24:33the people that die and then you figure
24:35out that they had like $9 million some
24:37saving account what a waste they never
24:39tasted the caviar but they've got yeah
24:41like people send these newspaper
24:43articles around like oh local librarian
24:46discovered to have $9 million and I go
24:48what a tragedy what a tragedy to live a
24:51smaller life than you have to I want you
24:53to save I want you to invest but I also
24:56want you to try a nice meal or if you
24:58don't like nice food or you don't want a
25:00nice t-shirt also fine get super
25:03generous give that money surprise the
25:06people around you tip 50% so those are
25:09optimizers the third category is
25:12worriors they love to worry typically
25:15they picked up worrying from their
25:17parents almost always and their entire
25:20relationship with money is worry are we
25:23going to have enough what if we run out
25:25of money what if we don't have enough to
25:27pay at the gas station
25:28and often times it's very surprising
25:31because I told you that 50% of couples
25:33don't know how much they make right so
25:36they'll say like we need more we don't
25:38have enough right now and I'll ask them
25:40how much do you think you make this just
25:41happened a couple of weeks ago on a
25:43podcast episode they thought they made
25:45around $70,000 a year okay we add up all
25:49their stuff they make $120,000 a year so
25:53I go well here you go you you wanted to
25:55make an extra 40K you actually make 50K
25:58more than you thought do you feel any
26:00better and she
26:02goes no because the way you feel about
26:06money is highly uncorrelated to the
26:08amount in your bank account so worriers
26:11worry that's how they relate they can't
26:14imagine any other relationship to money
26:17and my job is to help them realize first
26:20of all let's actually look at your
26:21numbers let me help you understand what
26:23it means do you have enough what does it
26:25take to have enough and then can you
26:28start to develop a new relationship with
26:30money it's almost like a new taste bud
26:33I'm never going to tell you to eat
26:35tomatoes if you hate Tomatoes but I am
26:37going to teach you maybe you like okra
26:39and we can develop a new taste for
26:41that finally the
26:44dreamer the dreamer believes that
26:47success is one deal away if we just
26:50close this deal if I just get this thing
26:53and they tend to fall into get-rich
26:55quick schemes lots of scams ml m a lot
26:59of crypto shitcoin scams like all this
27:02BS but they are extremely resistant to
27:07calm lowcost long-term investing in
27:10other words the way that most people
27:11build real wealth they think it's boring
27:13they even have little phrases like uh I
27:16don't want to be stuck in a ninetto five
27:17like those suckers I'm like that sucker
27:19makes 10 times what you make what are
27:20you talking about but they have simply
27:23been surrounded with the idea one more
27:25deal and I'll finally make it they must
27:28be hard to be married to it's impossible
27:30it's really really difficult they don't
27:33not only do they not want to talk about
27:35money when they finally do talk about
27:36money they're almost living in a
27:38different world often you will find that
27:40dreamers can only dream because they are
27:43being subsidized by someone in their
27:45life usually their partner and if their
27:47partner were to leave for example the
27:50House of Cards would collapse and
27:53actually that's usually the only thing
27:55that gets them to truly change so if
27:57we've got these four money types um the
28:00avoider the optimizer the worrior the
28:01dreamer in your view who lives a happier
28:06life you can live a happy life with any
28:08of these also you can change any of
28:10these types but on average one person's
28:12going to probably I mean I I'm the
28:14optimizer and I'm pretty happy so is
28:16that is that the answer yeah optimizers
28:19are great they love their spreadsheet um
28:22I think that uh the warrior clearly is
28:24not going to live the happiest life the
28:26dreamer is actually quite happy yeah the
28:28dreamer is quite happy they live in
28:29optimism yeah they're living in a world
28:31that's not real it's subsidized by
28:32somebody else they're always optimistic
28:35about what's going to happen next week
28:37next month next year never realizing the
28:40catastrophe that they are leaving behind
28:42them that's that's the whole issue this
28:44the reason I wrote the book is it's one
28:46thing to treat money in a certain way on
28:49your own when you're single you can be
28:51irresponsible you can be an Optimizer
28:55but when you're in a relationship it's
28:57not about you anymore it's about the two
28:59of you as a unit and so you have to
29:01deeply understand yourself and then you
29:04have to be willing to communicate with
29:06your partner and really create a rich
29:08life vision for the two of you most
29:10couples I talk to have no vision for
29:13their money that's why they fight over
29:14who spent $50 at Target I go who gives a
29:17about Target financial problems are
29:19almost never about overspending at
29:21Target the biggest problem with couples
29:23and money is they have no Rich Life
29:26vision what is money to us what do we
29:29want to use money for how do we want to
29:31feel about it so they're confronted with
29:34a thousand different decisions with
29:35their money every week and they have no
29:38vision to guide them this is for us this
29:40is not for us one of the things I've
29:43always wondered in relationships
29:45is how many couples know how much money
29:49the other couple has in their savings
29:51account and their total sort of
29:52Investment Portfolio because I've never
29:54been in a relationship where I mean I've
29:56only really been in two relationships
29:58you could say but I've been with you
29:59know dated people over the years and
30:02been with my current partner for many
30:03many many years but even my current
30:05partner has no idea how much money I
30:06have zero IDE when will you have that
30:08conversation probably never should we
30:10bring them out right now let's bring
30:11them
30:12out I've just never had the conversation
30:16if we if you need something we can get
30:17it yeah and it's just always been like
30:19that in my life okay so I I made a
30:22mistake in my own relationship I was uh
30:25dating my now wife for many years and at
30:28one point she had asked some question
30:30about her 401k or something and I said
30:33well there is a book called I will teach
30:35you to be rich here's a copy of it and I
30:37was joking around with her and so it I
30:39ended up learning all about her finances
30:41so I knew about her entire Financial
30:44picture it didn't occur to me to talk
30:47about my own and a little while later
30:51she she very assertively said this
30:54doesn't feel fair you know everything
30:55about my finances but I don't know about
30:57yours
30:58and I realized I violated my own rule in
31:02chapter n of my first book which is talk
31:05about money early on talk about it
31:07regularly so we talked about it we
31:10talked
31:11about is actually one of the most
31:13memorable conversations we had because
31:16talked about the numbers talked about my
31:19pride in how hard I had worked to build
31:22my business and invest for 20 years 25
31:25years and um and then we talked about
31:29what it meant for us like what kind of
31:30Life do we want to have do we want to
31:32live here do we want to live there do we
31:34want to have kids do we want to eat this
31:37type of food travel like that
31:39conversation about possibility is the
31:42conversation I want every couple to have
31:45because it's about
31:46possibility and you can start to dream
31:49and that dream is important you can get
31:51to the logistics of course we'll get to
31:54that but so few of us still
31:58dream with our money but you know that I
32:01think for someone like you who is the
32:03optimizer and who's probably quite proud
32:05of the system you've created love
32:07systems but there's going to be so many
32:09people listening now that are in a
32:11relationship and they are maybe early in
32:14the dating process and maybe they've
32:17been with a person six months they've
32:19taken them out on lots of nice dates and
32:21they have $1,000 in their savings
32:23account and their partner has no idea
32:26and they're thinking
32:28if I tell my partner what's in this bank
32:30account she is going to be shocked or he
32:32is going to be shocked and they are
32:34going to leave me so I'm keeping this
32:36a secret because they are living
32:38under ill an
32:40illusion that I have more than I
32:42actually have yeah but remember this
32:44just because you don't have as much
32:46money as you want doesn't mean that you
32:48are less of a person what could be more
32:51completely agree I completely agree what
32:53could be more appealing than saying you
32:57know what
32:59would you be open to talk about our
33:01finances we're getting a little bit
33:02serious you know I know we're kind of
33:04talking about taking the next step I
33:07think money is going to be an important
33:09part of it I know it is for me and I
33:10wonder if we could sit down and talk
33:12about it first just being proactive how
33:15many people watching and listening are
33:17like I wish my partner whether they're
33:20dating or my partner of 20 years would
33:22come to me and say can we sit down and
33:24talk about money but the part of that is
33:26is shameful about financial situation
33:29yes if I run it back 10 years just over
33:3110 years ago I was living in an area
33:34called um Rush Holm I was in a
33:38shared house with living with some um a
33:42few people who had come to the UK
33:44legally okay um I didn't have a carpet
33:47in my room I was in a single bed didn't
33:49have duvet or bed sheets or anything and
33:52every day I woke up and thought to
33:53myself how am I going to eat today so
33:56I'd find different ways to find food at
33:58the same time I was dating this girl
33:59called Ruby this girl called Ruby had no
34:01idea she'd never seen where I lived she
34:03wasn't aware that I was looking behind
34:05uh Sofas in takeaways for pound coins
34:09there is no possibility in the world
34:10that I would have ever told Ruby the
34:13financial situation I was in yeah I like
34:16so I don't know what to do in that
34:17situation and I'm sure I'm sure I would
34:19assert that maybe 30% of people
34:22listening right now don't want to tell
34:24their partner their financial situation
34:26because they're deeply embarrassed still
34:27shameful to the point that they think
34:29their partner might leave like them less
34:33be less attracted to them if they really
34:34knew the truth I totally agree I totally
34:36agree it's crazy how much shame we have
34:40around money and it's uh a young guy not
34:43having enough it's um a young woman who
34:47has $188,000 of credit card debt it's
34:50all over the Spectrum that's the second
34:53point which
34:55is if you want to talk about money talk
34:58about money don't wait for your partner
34:59to do it bring it up yourself even if
35:01you feel embarrassed or ashamed okay if
35:04you're planning to make a life with this
35:06partner you got to be able to talk about
35:08this because you're going to be talking
35:09about a lot of other personal sensitive
35:11things over the course of your life the
35:13second thing is what could be more
35:15attractive than somebody saying you know
35:17when I was in my
35:1820s I moved to the city I spent a lot of
35:21money going out and I wasn't super
35:24responsible I racked up a lot of credit
35:26card debt I've paid it down from 18,000
35:29to 6,000 it's going to be paid off next
35:32year and I just know that I'm never
35:34going back there
35:35again oh my God someone who acknowledges
35:39what they did has a good reason for it
35:41and then most importantly has a plan
35:44huge turn on so what I'm begging all of
35:47us to do is to realize just because you
35:48have more or less money does not make
35:50you a better or worse person I want to
35:53take shame away because we all have
35:56something that we are ashamed of but not
35:58talking about it and putting it in the
36:00corner in the darkness that doesn't
36:01solve it that's why I love talking about
36:03the most taboo of taboo subjects money
36:07gender prenups dating these are things
36:10that nobody's talking about so when you
36:12hear couples on the podcast and they're
36:14talking about being married for 15 years
36:16and they've never actually had one
36:18conversation about money I want you and
36:21everyone watching to be inspired because
36:24stuff doesn't have to be shameful and
36:25doesn't have to be kept in the dark
36:28and what do you think about prenups then
36:29do you think they are a good thing for
36:31all couples do you think all couples
36:32should initiate a prenup no no not all
36:34couples there are some couples who
36:36should have one my wife and I have one
36:37so we went through this process and um
36:40who should get a prup is if one or both
36:43partners are bringing substantial
36:46premarital assets to the marriage
36:48meaning before they get married they
36:50have a large Investment Portfolio a
36:53business rental property or a house like
36:56you should have AE up but most people
36:59should not because when most people get
37:00married they don't have substantial
37:02assets what if your partner turns around
37:04if I turn to my partner say babe ra told
37:06me to go get a prenup yeah and she goes
37:09absolutely not well that's not a good
37:11introduction I wouldn't say that
37:12although I don't mind if you throw me
37:13under the bus oh this guy raid he said
37:15this thing fine how to bring it up is an
37:18art so when I was um deciding on a
37:21prenup I asked for lots of advice from
37:24lots of friends and um some of the
37:27advice out there especially online is
37:29not great um one of the most common
37:31pieces of advice is blame it on your
37:35lawyer I'm like get real you're about to
37:38build a life with your partner and you
37:40can't be honest about this thing this in
37:42the grand scheme is a minor topic so
37:45I'll tell you exactly what I said to my
37:48wife we sat down and um we I said uh I
37:53want to talk to you about something um
37:56you know that because of how long I've
37:59been in business I've been very lucky
38:01I've been fortunate I worked hard I've
38:03built this business up and I'm really
38:05proud of what I've accomplished and
38:07saved and you also know my lifestyle I
38:10don't drive around in a Lamborghini uh I
38:12like to travel I like to wear nice
38:14clothes and I like to save money and
38:17it's important to me that as we are
38:20getting closer in our relationship to
38:22getting married that we talk about a
38:25prenup and my heart was p pounding I had
38:29planned it I had thought about it I had
38:30talked to so many people what I knew is
38:33I wanted to take responsibility it's not
38:36some lawyer that wants it it's me it's
38:38important to me I wanted to bring up the
38:41topic and I wanted to reassure my wife
38:45that I'm not going to change overnight
38:48when we get married into someone who's
38:49blowing all of our money it's just
38:52important because of the business that I
38:54built in her response I was like
38:58like how is she going to respond because
39:00bringing up a prenup is very
39:01fraught she's the best she said okay I
39:05wasn't expecting that but I'm willing to
39:07learn more about it that's as good of a
39:11response as I could have hoped so we
39:13started the series of conversations we
39:15both had lawyers it was going well at
39:17first until it wasn't and we were
39:21talking about numbers that to me seemed
39:23astronomical I started to feel resentful
39:27she didn't feel listened to she didn't
39:29feel heard she started to feel resentful
39:32and these conversations were were like
39:35so difficult I would say they were some
39:36of the most difficult conversations of
39:37our relationship at one point she said
39:40we should go see a therapist because
39:43these conversations are not good and I
39:45was like you're right so we went to see
39:46a therapist we sat in that therapist
39:48office I still remember therapist asked
39:50us a bunch of questions including how do
39:53you see money and she turned to me I was
39:56like how do I see money
39:57growth I could literally see numbers
40:00floating in front of my eyes the
40:02optimizer in me was talking about the
40:03rule of 72 it was like so obvious what
40:06an obvious question then she turns to my
40:08wife how do you see money and she said
40:12safety so what sa safety to me that was
40:16like saying charcoal like the two words
40:19don't relate at
40:20all but it started us on A New Path of
40:24realizing that we were seeing money
40:26completely differently me and that was
40:28exactly when I realized I wish there
40:30were other couples talking about money
40:32from behind closed doors that exactly
40:35was the Genesis of me doing my podcast
40:37and my Netflix show to show people not
40:40just tell them but to show them how real
40:42couples deal with money what was the
40:45resistance between you two in sort of
40:48more specific terms she she wanted a
40:51different arrangement to the one that
40:52you wanted yeah the terms are are super
40:54technical in prenups it's um so with a
40:57prenup you have a variety of different
40:59rules or technicalities which would be
41:02like what if you separate in 6 months
41:05what if you separate in 25 years but
41:08there are children involved who gets the
41:11house what if you have a house what if
41:12you have two houses what if you have
41:14this much in your joint investment but
41:16each of you has this much in individual
41:18investment and so what happens is it's
41:20not even just the numbers themselves
41:22it's the fact that the process is set up
41:25to be adversarial mhm so they have a
41:28lawyer we have a lawyer we're
41:30communicating through lawyers when it
41:32comes to this topic when normally you're
41:34just talking to your fiance or your
41:37girlfriend and there's an art to also
41:40managing the lawyers see the lawyers
41:42want there's nothing bad we had great
41:44lawyers I'm happy with them but lawyers
41:47job is to look over every freaking
41:49contingency and make sure that nothing
41:51is left a chance and I think a good
41:53reminder for anyone considering a prenup
41:55is to remember you manage your lawyers
41:57and your job is to come to an agreement
41:59with your partner for the rest of your
42:00life so sometimes you can be generous
42:02you can be willing to let up on a few
42:04things here and there as long as you are
42:06looking at the Northstar we're going to
42:07be together we want these premarital
42:09assets to be protected and in case
42:11something goes wrong we both want to
42:12feel good about what the arrangement is
42:14and there is a 60 odd percent chance
42:16that you will break up if you look at
42:18the marriage statistics so well those
42:20statistics are a little skewed that
42:21includes second marriages that also
42:23includes all different socioeconomic all
42:26everybody else if you break it down for
42:27example just by having a bachelor's
42:29degree or certainly an advanced degree
42:31that goes way down first marriage goes
42:33down and in fact the divorce rate has
42:35been decreasing for decades so this 50
42:3860% thing that's kind of tossed around
42:40not quite accurate but whatever the
42:44statistic is what's more important is if
42:47you should always think about how can
42:49things go right and also how can they go
42:51wrong and I think with money A lot of
42:53times uh we only think about one or the
42:55other we buy a house never asking
42:58ourselves like what if one of us loses
42:59our job and we get married without ever
43:02asking like what if we separate so you
43:05want to be able to play both what
43:07happens if things go right incredibly
43:09right and what happens if things go
43:10wrong let's make a plan what are the
43:12other red flags then we mentioned the
43:14first being they don't want to talk
43:16about money ah um they have a money guy
43:20a money guy is so common everybody talks
43:23about I have this money guy your money
43:25guy is probably uh whole life in
43:27insurance salesman charging you 1.25%
43:29AUM let me explain what that means so
43:32many people in America do not want to
43:35learn the basics of money and so they
43:38hire a financial adviser now I don't
43:40have anything against financial advisors
43:42in general but a money guy that they're
43:44typically referring to is someone who
43:46charges them a percentage of their
43:48assets so if I have a $100,000 portfolio
43:52they'll charge or let's say a million
43:54dollar portfolio I might be paying 1% 1%
43:57doesn't sound like a lot but if you
43:59actually run the math you will pay about
44:0228% of your lifetime investment returns
44:06in fees that's not $10 or $100 that's
44:10tens of thousands or sometimes hundreds
44:12of thousands of dollars so it's a red
44:14flag if someone has an advisor that
44:16they're paying a percentage based fee to
44:19I would much rather you pay an hourly or
44:22project or that type of fee too
44:25okay um they're
44:28cheap I can help a lot of people but I
44:30can't help cheap cheap
44:34is cost is the first and last thing they
44:37always consider so you might come home
44:40you're so happy oh my gosh look at this
44:41beautiful thing I got for the kids how
44:44much was that and it just sucks the life
44:47out of every room cheap people are
44:50obsessed with cost cheap people rarely
44:53recognize the effect they are having on
44:55their loved ones and cheap people
44:57find it very very difficult to change
45:00they don't want to change they actually
45:03reinterpret their behavior and call it a
45:06virtue oh I'm not that I don't need that
45:09fancy wine I'm perfectly happy with this
45:11well what if your partner wants one
45:12glass of wine they seem like a miserable
45:15group yeah I don't like cheap people I
45:18don't like cheap people I don't like
45:19cheap tippers and their Partners don't
45:21like them so it's it's one I'm not
45:23saying everybody has to go out and spend
45:24a million dollars but you got to use
45:26money to live your rich life the point
45:28of money is not to just hoard it and
45:30save it that's why when you create a
45:31rich life Vision you ask yourself what
45:34do we want to spend extravagantly on not
45:37just a little bit but extravagantly and
45:40what do we want to cut cost mercilessly
45:42on you have to be able to play different
45:44notes like you're in a symphony if your
45:46only note is spend less that's a
45:50miserable existence are there any more
45:53red flags I want to go into why people
45:55and where they develop these
45:57relationships with money but are there
45:58any other sort of standout red flags
46:00that we should be looking for well if
46:01they if they follow Robert kosaki that's
46:03a huge red flag I mean the guy
46:05once Robert kosaki wrote this uh
46:08well-known personal finance book and the
46:10guy has really lost it in the last few
46:11years he literally I'm not joking he
46:13literally told people the best
46:15investment you can have is a can of
46:17tuna I'm not joking and I replied to him
46:20Robert I sold everything in my portfolio
46:23and bought 3 million cans of tuna um is
46:26this a good investment but sadly I never
46:28heard back so beware of Beware of
46:31charlatans let me put it that way
46:33personal finance and money is filled
46:35with people who will promise you get
46:37rich quick who will tell you that the
46:39sky is falling and when it comes to
46:43money we want to be balanced we want to
46:45have fun we want to be have a healthy
46:47relationship with money it's very
46:49similar to Fitness lots of people making
46:51promises you want to find the people who
46:53are giving you long-term advice you know
46:56these cheap people that you mentioned
46:57mhm and you know any of them I a couple
47:00come to mind tell tell the camera who
47:02they are right now so we know who are
47:03these cheap people they also fit into
47:04the category of the Warriors in my
47:06experience so someone who's a bit of a
47:08warrior can also be quite quite cheap
47:10and I was just wondering in the hundreds
47:11of couples that you've sat down with an
47:13interviewed does there tend to be a
47:16origin story which links to their Friv
47:20their FR frugalness with money and
47:22they're penny pinching yes okay always
47:25when I talk to people um I asked them
47:30what do you remember your parents saying
47:32about money when you grew up always and
47:36they'll tell me they are very conversant
47:38they remember and usually the parents
47:40said stuff like we can't afford it and
47:43uh money doesn't grow on trees we don't
47:45talk about money in this family these
47:47are the type of things that people said
47:49but you will often find um usually when
47:52kids are
47:53teenagers when there's something really
47:55tragic that happens and it's of often
47:57that um Dad lost his job and that meant
48:00that they completely changed
48:02socioeconomically often they had a big
48:04house they had to really like shift into
48:06Grandma's apartment that kind of thing
48:08that affects people in a huge way now it
48:11affects people in one of two ways and
48:13you cannot predict how some people go
48:16I'm never going to let that happen to me
48:18therefore I'm going to have a high
48:19savings rate I'm going to invest I'm
48:20going to start a business and they
48:21develop a really healthy relationship
48:24with money others go the Direction
48:27you're suggesting which is they become
48:29incredibly cheap incredibly worried
48:32about money anxiety is common and they
48:37often do not see the connection at all
48:40until I point it out to them and when
48:42you talk about making this Rich Life
48:44vision together what exactly does that
48:46mean we start off in the book just
48:48talking about let's have our first
48:50positive conversation about money okay
48:52you have to remember most people have
48:54never had a positive conversation about
48:55money money is the the only way it comes
48:57up is why did you spend that much at the
48:59gas station last week that's it so we
49:01start off by just saying I give him an
49:03agenda literally an agenda you can read
49:04off these words and start it off it's
49:06like why this is going to be awesome
49:08here's how I feel about money today how
49:10do you feel here's how I want to feel
49:12about money how about you high five I
49:14love you we're good that's it part of
49:17having conversations about money
49:19is this philosophy of declare Victory
49:23and go home you don't need to talk about
49:25it all at once make it short make it fun
49:28and at the end always say I love you
49:31that's it over time you're going to
49:33associate talking about money with
49:36positivity and that's what we want when
49:39it comes to a rich life Vision this is
49:41where it's really fun so I have some
49:43fill in the blanks um where you fill it
49:46in like I wish we spent more money on
49:48and then you fill it in I think we could
49:51probably cut back on and then you fill
49:52it in then you compare your notes my
49:55wife and I did this really fun exercise
49:57which I would encourage everyone to do
49:59and it is the 10-year bucket list so
50:02imagine you sit down with your partner
50:03and you go let's each take a piece of
50:06paper write down what would make the
50:08next 10 years incredibly Rich meaningful
50:11to to me and to us so you write it down
50:14and then you compare notes this is
50:15exactly what we did and you get excited
50:18you oh you want to learn Spanish amazing
50:20do you want to do it online or do you
50:22want to go to Mexico City oh you want to
50:24go skydiving ah that one's not for me
50:27but I'll meet you at the ground right
50:29have fun and you just get excited you
50:32encourage the other person and then you
50:34find one that you both want to do that's
50:37meaningful for both of you so maybe it
50:40is we want to um create an art studio in
50:43the garage love it maybe it is we want
50:47to take a round the world trip at some
50:49point in the next 10 years okay great
50:51the difference with this exercise is
50:53you're actually going to make it happen
50:55so right there on the spot you estimate
50:58how much it would cost take five minutes
51:00don't take more than that you can
51:01estimate it within 80% like that decide
51:04when you want to do it maybe if there's
51:06kids involved you're going to want to go
51:07in summer winter Etc and then all you do
51:10is take the rough amount divide it by
51:13the number of months and that's how you
51:15know how much you have to save for it we
51:17did this and for us what was really
51:20meaningful is to have a 10year wedding
51:22anniversary so we know where we want to
51:24do it we know the exact place we know
51:25all the friends and family want to have
51:27with us and we knew when it was going to
51:28happen so we we had a funny experience
51:30because we each sat down and estimated
51:32the cost and I think the number I picked
51:34was something like three times bigger
51:36than hers and in those cases I say go
51:39with the bigger number okay it helps you
51:41dream a little bigger if you can't save
51:43that much money per month that's okay
51:46shrink the dream a little bit right
51:48narrow the scope or maybe extend it a
51:50little longer until you have to do it
51:52but suddenly every single month when you
51:54sit down and talk about money it's like
51:55a video game you're like oh we're 3%
51:58closer to that goal that is how you
52:01start to build a vision for money and
52:03have fun along the way and do you
52:05subscribe to this idea that you should
52:07have like a joint bank account and then
52:09separate bank accounts or because right
52:11now I just have my bank account and how
52:13does it work how does it work for you so
52:15do you just you just pay for most things
52:18I have to give context on what my
52:19partner's like she really doesn't care
52:23about material things so she's avoider
52:27she just doesn't she doesn't care about
52:30whether we fly first class or economy
52:32she doesn't care about if we stay in
52:33that hotel or this hotel right she
52:34doesn't care if we stay in the 70th
52:37floor Penthouse we live there or or if
52:39she stays in a studio she doesn't care
52:40what does she care about she cares about
52:42quality time with me she likes having
52:44nice experiences she likes going to
52:45places doesn't care how she gets there
52:47or where she stays she likes traveling
52:49and exploring and she likes her simple
52:51thing she's a very simple person if I
52:52didn't get her birthday present or
52:54Valentine's Day present or Christmas
52:55present or if I just made her a
52:56scrapbook every year she'll be thrilled
52:58okay so I am the one that wants the
53:02nicer you want the okay I'm the same I'm
53:03the same to to a large extent but we
53:05have a like we you know life it costs
53:06money so
53:09um I pay for most things okay and you're
53:12cool with that it's fine right yeah I've
53:13always been cool with it okay cool so
53:15I'm particularly cool with it because
53:17she doesn't care right right does that
53:19make sense yes it makes there's no
53:20resentment because she doesn't care I'm
53:22the one that's making sure she travels
53:24this way yeah I have to intervene and I
53:27have to fight to make sure that her
53:29plane ticket is booked here or that the
53:31hotel she's staying in isn't going to be
53:34dangerous I've got so many stories of
53:36her booking it herself and then me
53:37having to rescue her because it's super
53:40dangerous yeah so so you and I have a
53:43similar um Dynamic at least in this way
53:46um I think my wife does have her money
53:49dials money dials are the things you
53:51love to spend money on and you can turn
53:53that dial up but when we met she was not
53:56into hotels at all I'm a hotel guy I
53:58love hotels and so we had to have some
54:02conversations at first I'm just like oh
54:04yeah like of course I'm paying and then
54:06when we merged our finances which I
54:08recommend couples do well suddenly it's
54:11not my money it's our money yeah and so
54:14now we are forced to talk about that
54:17stuff and come up with a way like she's
54:19like I don't need to stay there and like
54:21personally I don't really think it's
54:22worth it for our money and I'm like well
54:25like have you seen have you seen the
54:27suite at this place and do you know what
54:30type of wood they use and that she
54:31doesn't care so so how does that work
54:34you said you merge your finances when
54:36you say you merge your finances do you
54:37mean you're paying into the same bank
54:38account correct so and this is what I
54:41recommend for most for for almost all
54:43couples um you take your paychecks or if
54:46you're we're both business owners you
54:48take whatever money comes in put it in
54:50the joint checking account that joint
54:52checking account then pays a variety of
54:54different accounts it pays our joint
54:56expenses like our rent and if we eat out
54:59it pays for our joint credit card bill
55:01the money also is paid out from the
55:03joint checking to her individual
55:05checking and individual savings which
55:08she has her money no questions asked if
55:11she wants to spend it on something like
55:12she loves
55:13self-care what am I going to ask it's
55:15her money it also sends some money over
55:17to me that's no questions asked money
55:19that I same money yeah the money that
55:21came in from us two together is
55:24processed in the joint checking account
55:26account and an amount goes to each of us
55:29the same amount goes to both of you good
55:31question it could be the same 50/50 I
55:33think is actually great but once in a
55:36while if you have somebody who's earning
55:37like let's say 10 times more okay you
55:40may decide to make it proportional right
55:42so like one the higher earning partner
55:44might get more because imagine just for
55:46argument sake imagine you're earning a
55:48million dollars a month easy
55:50math and um suddenly you're getting like
55:54$22,000 a month for guilt fre spending
55:56you're like um what the hell this this
55:58doesn't make sense usually partners are
56:01totally cool with that but I will tell
56:02you this I used to be on the
56:05proportionality train meaning
56:07everything's proportional Etc my wife
56:09and I did this for many
56:11years it's really complicated it gets
56:14really really complicated and what's
56:17more important is you want to set your
56:18accounts up so that they drive the right
56:21Behavior just like when you hire people
56:23you set the right incentives to drive
56:25the right Behavior when our moneyy was
56:27separate and we were doing all this
56:29proportionality calculation all these
56:31different accounts we didn't see the
56:33money as ours now all the money goes
56:36into that pot it's ours so we sit down
56:39every month we look at our numbers and
56:40we go what's worth it do we care about
56:43this hotel do we care about that etc etc
56:47we really love that let's keep spending
56:49on that and find a way to do that it's
56:51about us and of course we have our own
56:53individual money so why didn't you just
56:57the money coming in Why didn't it just
56:58go to you individually and then you pay
57:00into the joint account why did you make
57:02that's what we did at first and it
57:03became really complicated so the money
57:05came into each of us and then we because
57:07we each run businesses that are each
57:09variable we wanted it to be proportional
57:11well guess what if it changes every
57:12single month we had to recalculate the
57:15proportionality every single quarter
57:17what a mess so we're we're literally
57:19calculating every 3 months and then it
57:21changes and then at the end of the year
57:23we have to reconcile all this stuff
57:24we're like what is this marriage or a
57:26freaking multi-national conglomerate so
57:30part of a philosophy around a rich life
57:33vision is one of our values is fight for
57:37Simplicity fight for it because I talk
57:40to couples who have more complicated
57:41Financial setups than we do shouldn't be
57:45the case most people's setups should be
57:48very simple all your money comes into a
57:51joint checking account from there it is
57:54it pays out to individual accounts
57:56and it pays all your joint expenses your
58:00life is together your rich life is
58:03together that's it we're married we're
58:05going to be married forever our future
58:08is together so let's set our accounts up
58:11accordingly so then if you end up
58:12getting a divorce that joint checking
58:14account do you just split it in half or
58:16yeah so this is a this is a good
58:18question when you are married the money
58:20that is earned is community property so
58:24let's just say we put $100,000 in that
58:27checking account and we were to get
58:29separated tomorrow
58:315050 yeah that and that's reasonable
58:35right it's community property the prenup
58:37is only concerned with what happened
58:39before the
58:41marriage so you're in the camp of not
58:44caring too much about the small expenses
58:47the coffee it's a waste of time why is
58:49it a waste of time because the they are
58:51$3 questions if you actually add it up
58:54how much they actually cost you it's
58:56actually not that much it's the simple
58:58joy that you enjoy in the morning and
59:00you could spend your entire life
59:02agonizing over buying a coffee but when
59:04I ask people okay so you stopped buying
59:06coffee for a month how'd you feel they
59:09go oh I felt okay I go what' you do with
59:11the money you saved they go I don't know
59:13it's in my checking account not only do
59:16you have to make the decision every
59:17single day to save on these tiny little
59:19things you then have to properly invest
59:22that money and you have to do this every
59:23single day for the rest of your life
59:25what if we just got five critical
59:26decisions correct for the rest of our
59:28life and didn't have to worry about
59:29coffee why are we playing so small oh
59:33let's decide do we have enough money to
59:34buy this Saran Wrap who cares let's talk
59:37about are we investing properly do we
59:41have a a Target rate that we are doing
59:43watch this I bet you so many couples
59:45watching this right now have had
59:47arguments about why did you spend so
59:48much at the grocery store why can't you
59:50stop spending so much on the kids and on
59:52and on but have they ever had
59:53conversations like this what is our
59:56savings rate is it 4% 6% 7% what is our
1:00:00investment rate is it 6% 8% whatever the
1:00:03number is Let's Make a rule that every
1:00:05December we increase it by
1:00:071% if you just did that if you increase
1:00:11your investment rate meaning the
1:00:13percentage of your net income that you
1:00:15invest every single month I always
1:00:18recommend people start off at 5 to 10%
1:00:20let's say you're at six if you make a
1:00:22rule every December we're going to
1:00:23increase that by 1%
1:00:26it will be worth hundreds of thousands
1:00:28of dollars to you more than all the
1:00:30coffee you ever buy in your entire life
1:00:33so why the hell would you focus on
1:00:35coffee when you can make one decision
1:00:37per year and make way more than all
1:00:39those coffees combined most couples when
1:00:41they think about investing or their
1:00:43investment rate the only investment most
1:00:45couples make together is buying a house
1:00:48yeah well and that that's questionably
1:00:50not even an investment most people think
1:00:52renting is wasting money yeah and the
1:00:55the logic goes well if my rent is $2,000
1:00:58a month or £2,000 a month my mortgage is
1:01:00only going to be £2,000 a month and we
1:01:04so we might as well buy a house because
1:01:05then we get to keep the asset are you
1:01:07trying to get me mad right now I'm
1:01:08starting to Swit just hearing this
1:01:09because you're right that's what they
1:01:11say should I just dismantle these
1:01:13arguments once and for all right now
1:01:15sure okay renting is not throwing away
1:01:18money just like going to a sushi
1:01:21restaurant is not throwing money away on
1:01:23Sushi you're paying for something you're
1:01:25getting value you it's fantastic the
1:01:27next argument they use is um you're
1:01:30paying your landlord's mortgage I go
1:01:33okay aren't you paying the sushi owner's
1:01:34mortgage when you go there and get sushi
1:01:36funny we never think about it like that
1:01:38we only think about paying the
1:01:39landlord's mortgage finally we have to
1:01:43understand that buying a house can be a
1:01:46good financial decision it can be but
1:01:49renting and investing the difference can
1:01:51also be a good decision and right now in
1:01:53the US in the top 50 US Metro cities it
1:01:57is cheaper to rent than to buy so let me
1:02:00give you some math let's say because I
1:02:02lived in New York close
1:02:04by if the rent was let's say 3,000 bucks
1:02:07a month to own the equivalent property
1:02:10right next door would have been 6,600 a
1:02:13month that's
1:02:14$3,600 per month more just to own so
1:02:19most people don't know this they don't
1:02:20factor in Phantom costs like maintenance
1:02:22taxes transaction opportunity cost they
1:02:25simply look at a number that says uh
1:02:273,600 or whatever the number may be and
1:02:29they go great investment we have got to
1:02:32get more sophisticated with the biggest
1:02:35purchase of Our
1:02:37Lives I'm just looking at some of the uh
1:02:39comments on our last conversation oh
1:02:41yeah what did they say it's a balancing
1:02:43act there's there's two groups of people
1:02:45here there's a group of people who
1:02:46attest to the fact that they bought a
1:02:48house and it's the single best thing
1:02:49they did yep um this person said I
1:02:52bought a house it's the best thing I
1:02:53ever did it's launched my mindset and
1:02:55New Direction
1:02:56remember that having your own space has
1:02:58profound psychological impacts and can
1:03:00change your life that's a good comment
1:03:03okay let's talk about that first I love
1:03:05that comment we have to remember that
1:03:07life is not just about a spreadsheet
1:03:09it's not so when it comes to a major
1:03:11purchase like a house or a car we got to
1:03:13start with the numbers okay we have to
1:03:16start by running a buy versus rent
1:03:18calculation by running an amortization
1:03:20chart I have a whole bunch of stuff on
1:03:22buy versus rent and then we we need to
1:03:23know can we afford it is this part of
1:03:26our Rich Life vision what if one of us
1:03:27loses our job and on on on but then
1:03:30second we need to say what kind of
1:03:33Lifestyle do we want if we love to
1:03:35decorate that's probably worth something
1:03:37we should maybe we need to buy a house
1:03:39if we want our kids to be in a
1:03:40particular area maybe we need to buy
1:03:43there's so many non-financial reasons to
1:03:45buy or to rent and so we can't just do
1:03:48one or the other but my main argument is
1:03:50this most of us never run the numbers we
1:03:53will spend a million dollars in toal
1:03:55cost of ownership for a house and we
1:03:57won't run one calculation so we got to
1:04:00play multiple notes doing the financial
1:04:03and non-financial parts I think that's
1:04:05what a lot of people are actually saying
1:04:06a lot of people are saying you know I
1:04:07bought a house and this person is saying
1:04:09I used to be I used to live in a caravan
1:04:12I finally bought a house and I don't
1:04:14care about being rich necessarily but
1:04:16having my own house means the world to
1:04:18me great great non-financial reason they
1:04:20want stability I totally value that I
1:04:24would all also ask did you run the
1:04:26numbers I think the key thing is most
1:04:29people when they buy the house they see
1:04:30it as an investment and they see it as a
1:04:32good investment I think in part because
1:04:33they don't really know any other way to
1:04:35invest totally right so we we grow up we
1:04:38think okay the minute you get enough
1:04:39money the first thing you have to do is
1:04:41buy a house I mean there's a real
1:04:42sequence of of events in our lives that
1:04:44are given to us which is go to school go
1:04:47to college or university or something
1:04:48like that there get the degree get the
1:04:50job buy the house get married have the
1:04:53kids and then move to Florida get skin
1:04:56cancer die oh retire okay have your
1:05:00pension die we don't have pensions
1:05:02anymore that was in the 60s but yes and
1:05:05actually that's a pretty good life if
1:05:06you think about it it's actually a very
1:05:08good life especially the way that our
1:05:10parents generation grew up where you
1:05:13know they could buy a house on a
1:05:14reasonable salary one salary but that
1:05:17doesn't exist right now housing is
1:05:19historically expensive um and not
1:05:22through any fault of young people by the
1:05:24way I there's a lot of this um stuff
1:05:26thrown around the media young people are
1:05:29buying too much avocado toast they're
1:05:30always buying the new iPhone that's not
1:05:32why housing is expensive housing is
1:05:35expensive because people who bought
1:05:37their houses in the 60s 70s and 80s
1:05:40bought a house and then systematically
1:05:42prevented everyone else from building
1:05:44more housing so it is it's called
1:05:46nimbyism not in my backyard they have
1:05:50allowed almost no housing to be built
1:05:52particularly in the US that's why if you
1:05:54only have a limit Li mited Supply guess
1:05:56what happens to the price it goes way up
1:05:59that's changing slowly housing prices
1:06:01will in certain cities like Austin even
1:06:04Santa Monica have come down in certain
1:06:06areas it's really important to be able
1:06:08to build more housing so that young
1:06:09people middleclass people poor people
1:06:12can afford housing we should not have
1:06:14people unable to afford rent or buying
1:06:18housing it's a big problem so are you
1:06:20saying that the average couple if
1:06:22they're looking to make a financial
1:06:23return yeah on their joint savings count
1:06:26account they shouldn't invest that money
1:06:28in a house I personally would not
1:06:31consider my primary residents to be a
1:06:34great investment because it has massive
1:06:37costs right massive um maintenance
1:06:41opportunity cost of that down payment
1:06:43let's say you put down 50k or 100K that
1:06:45could have been invested it has all
1:06:47kinds of uh Phantom costs and then you
1:06:51have to stay there for until you pay it
1:06:53off presumably 30 years most people
1:06:55don't stay for 30 years there's some
1:06:57shocking math behind a mortgage like
1:06:59most people don't realize that they will
1:07:01be paying more towards their uh interest
1:07:05than towards principal for 21 years let
1:07:09me say that again most people when they
1:07:11take a 30-year mortgage right now with
1:07:12interest rates the way they are they
1:07:14will be paying more towards interest
1:07:18than they are towards the mortgage in
1:07:20year 1 2 5 10 year 20 until till finally
1:07:26year 21 when they are finally paying
1:07:28more towards their mortgage their
1:07:31principal rather than interest so you
1:07:33know that phrase I don't want to throw
1:07:35money away on rent we might more aptly
1:07:38say I don't want to throw money away on
1:07:41interest so if I'm in a couple I'm in a
1:07:43relationship and me and my partner have
1:07:45managed to save I don't know 50k what is
1:07:47a better use of that 50k to drive a
1:07:50financial
1:07:51return okay so let's simplify the whole
1:07:54thing I have a conscious spending plan I
1:07:56have four numbers that couple should be
1:07:57talking about okay the first off is your
1:07:59fixed costs those should be roughly 50
1:08:02to 60% of your take-home pay and what's
1:08:05the fixed cost fixed cost includes your
1:08:06housing or uh that could be rent
1:08:09mortgage your utilities your car payment
1:08:12any debt payment anything that is
1:08:14consistent even groceries that you need
1:08:18to live every single month so 50% of my
1:08:21monthly income go straight to those
1:08:22fixed costs monthly take-home post tax
1:08:25post tax okay 50 to 60% is the number
1:08:27you want to be targeting right there is
1:08:30um is the Crux of why couples are
1:08:33stressed out about money it's because
1:08:35they are spending too much on fixed
1:08:37costs and within that there's two areas
1:08:39they spend too much on you know what
1:08:40they are housing is number one because
1:08:42it's so expensive and they don't
1:08:43calculate number two is cars usually
1:08:47trucks we love trucks trucks and SUVs in
1:08:51America the cultural script is oh we're
1:08:54having a kid we need to get a big house
1:08:56and a big SUV uh because we do so that
1:09:02right there is where people get stressed
1:09:04out about
1:09:05money next number is your savings this
1:09:09should be 5 to 10% minimum this includes
1:09:12your emergency fund this includes saving
1:09:14for a down payment anything you're
1:09:16saving for money you don't need for
1:09:18between 1 to five years basically okay
1:09:21next up is Investments this would be 5
1:09:24to 10% minimum this is where real wealth
1:09:27is created and this is where couples
1:09:30neglect they they talk about saving and
1:09:32they'll say oh we try to save I don't
1:09:34try to brush my teeth I don't try to
1:09:36save I make it automatic that's what I
1:09:38want couples to do that's what I cover
1:09:40in the book and then finally my favorite
1:09:42category of all guilt-free spending this
1:09:45is going out for drinks concerts travel
1:09:5020 to 35% of take-home pay that's a lot
1:09:54that's a lot if you look at it people go
1:09:56wow yes and when you get down to that
1:09:58number and you're out and you're having
1:10:00drinks with your friends or you're out
1:10:01to a beautiful experience you don't have
1:10:04to worry about anything else you don't
1:10:06have to feel guilty or anxious because
1:10:08you're already handling all these other
1:10:11three numbers you know you're set and
1:10:13you have this money set aside and you
1:10:14can enjoy it guilt free so this 10 this
1:10:17sort of 10% that is automatically
1:10:20invested would you set up some kind of
1:10:23system that automatically invests it
1:10:24always always you should not be doing
1:10:27any of this manually so your investment
1:10:30should be happening automatically and
1:10:32for a couple you actually get to
1:10:34celebrate it every month you have a
1:10:35monthly money meeting where you talk
1:10:38about money every month most couples
1:10:39don't do this you will now after
1:10:41watching this and you talk about it you
1:10:44look at how your Investments are doing
1:10:45you give each other a high five a big
1:10:47hug congratulations and once you do this
1:10:49for six months a year you really start
1:10:52to see how it adds up fast what if your
1:10:55partner wants to buy a house and you
1:10:57don't o that's tricky how would you
1:10:59handle it um it depends on my level of
1:11:03conviction about the decision I think
1:11:04you got to pick your battles and
1:11:05relationships but um I am probably more
1:11:09financially
1:11:10aware than my partner because my brother
1:11:13is he's been an investment banker for 13
1:11:15years he works for me full-time he's my
1:11:16money guy yeah okay he's my older
1:11:18brother where does he charge you 1.5% uh
1:11:20he doesn't charge me a percentage on my
1:11:22P so happy no he works full-time in the
1:11:24business so he
1:11:26he manages much of my money but he would
1:11:28make the case to me of pretty much the
1:11:30case you've made yeah so based on an
1:11:32opportunity cost basis I a lot of people
1:11:35don't even know what opportunity cost is
1:11:36I'm going to Hazard a guess I'm going
1:11:37try and explain it which is essentially
1:11:39all the things you could have done with
1:11:40this money instead yes so based on all
1:11:42the opportunities you have available to
1:11:44you Steve is buying this house a good
1:11:46use of that money and the answer was
1:11:49actually no when I bought my first house
1:11:51it was no unless this is a emotional
1:11:54decision
1:11:56because you and your partner want a
1:11:59psychological feeling of safety to bring
1:12:01up the kids whatever it might be just a
1:12:03then if it is Steve if that's why you
1:12:05want to buy it and you think you're
1:12:06going to stay there for a considerable
1:12:08amount of years then go ahead we're
1:12:10going to kind of section this as a
1:12:11different rationale than the rest of
1:12:13your Investments what you do I did
1:12:14exactly what he said you bought it
1:12:16knowing it was an emotional decision
1:12:17yeah I bought it knowing it was a bad
1:12:19decision I love this yeah okay this is
1:12:22amazing everybody listen closely cuz I
1:12:24want to break down what you just said in
1:12:25in a different term first off you got to
1:12:28run the numbers yeah always for the
1:12:30biggest purchases in your life you need
1:12:32to calculate carefully what's my buy
1:12:34versus rent what's my opportunity cost
1:12:36what's it going to amortise at all these
1:12:37things that most people are not familiar
1:12:39with learn it it's not that complicated
1:12:41second you need to factor in the
1:12:42non-financial hey why am I doing this do
1:12:44I just feel this certain way there's
1:12:45nothing wrong with feeling irrational
1:12:48about money nothing you want to buy this
1:12:50thing and it's a bad financial decision
1:12:52okay first can I afford it if so we can
1:12:54continue the conversation and then you
1:12:56buy it Eyes Wide Open saying I know it's
1:13:00not an investment I know it's not even a
1:13:03good Financial DEC fact it's a terrible
1:13:04financial and I'm still going to do it
1:13:07when I when my wife and I go to buy a
1:13:09house one
1:13:10day it will be the worst financial
1:13:13decision of Our Lives we already know
1:13:15that but we will probably still do it
1:13:18anyway same as you because there's more
1:13:21to life than just what's in a
1:13:23spreadsheet but you have to know know
1:13:25all the pieces on the board before you
1:13:28make these big decisions and you have to
1:13:29be able to do it with your partner you
1:13:31know it'd be very easy for you to do
1:13:33things unilaterally it'd be very easy
1:13:35for me to do it as well what I've
1:13:36learned and what I emphasize on my
1:13:39podcast every episode is just because
1:13:41you may be the higher earner or have
1:13:43more money it's actually your obligation
1:13:47to bring your partner in and to get them
1:13:50involved and they may not be as Savvy or
1:13:53even as interested but you have to find
1:13:55a way to bring them into this world and
1:13:57get them connected with you with my wife
1:14:00and me of course I know more about
1:14:03Investments so I'm doing our investments
1:14:06but we're still talking about them we're
1:14:08saying like hey here's the numbers we
1:14:09chose are we still good with that let's
1:14:11take a look at it high five you know
1:14:13here's what we're thinking for next year
1:14:15that's the level we're talking about
1:14:17these are these are exactly the kind of
1:14:19conversations you want to have and I I'm
1:14:21actually really thrilled you shared that
1:14:22example because I celebrate that you
1:14:25made a bad financial investment because
1:14:28it wasn't an investment it was just
1:14:29something you wanted and you could
1:14:31afford
1:14:32it yeah and we're both aware me and my
1:14:35partner we had the conversation we're
1:14:36both aware that um this is one of the
1:14:40worst things we could have spent the
1:14:41money on if our objective if our kpi our
1:14:44key performance indicator was to make
1:14:46more money this was a terrible decision
1:14:47to make yes but we're also aware we just
1:14:50didn't care we thought you know it's
1:14:52there's a lot of non-monetary things
1:14:54that are going to be beneficial about
1:14:56this decision and I think that's what
1:14:57most people don't realize actually and I
1:14:58just think about my friends I think most
1:15:00of my friends believe that when they buy
1:15:02their house they're doing so because
1:15:04they don't know they don't know any
1:15:05other way to invest Society hasn't given
1:15:07us an alternative so what is the
1:15:09alternative simple lowcost long-term
1:15:13index funds are fantastic ways to invest
1:15:16I'll explain what they are the myth
1:15:19about investing is that you have to sit
1:15:20there and look at PE ratios and things
1:15:22like that no you pick often one One Fund
1:15:25there's a simple example called a Target
1:15:27date fund you pick the year you're going
1:15:29to retire in like if I'm going to retire
1:15:30in 2050 I pick a Vanguard 2050 fund or
1:15:34Fidelity or Schwab 2050 fund all I do is
1:15:37literally send money every single month
1:15:40I set it up so it happens automatically
1:15:42it could be $50 a month 500 500,000 per
1:15:46month and that's all I do I just send it
1:15:49there it automatically buys the stock
1:15:52market it automatically diversifies and
1:15:55gets more conservative over time and
1:15:57that's it so you know the Fitness World
1:15:59you've I've seen you training you you've
1:16:01learned about Fitness when you first
1:16:04start off so much information and so
1:16:07many different people giving you
1:16:08different pieces of advice right it's
1:16:10like oh my God how am I supposed to know
1:16:12what about my genetics and this and that
1:16:14and then over time you realize oh it's
1:16:15actually pretty simple once you cut
1:16:18through the noise that's the same thing
1:16:20with money that's the same thing with
1:16:21investing you have to cut through the
1:16:23noise and it actually becomes
1:16:25shockingly simple oh my God this is the
1:16:27way that real wealth is created it's
1:16:30about consistent investing it's about
1:16:32time it's about low fees that's it and
1:16:35you start to wonder what's all this
1:16:36stuff that they publish all the time in
1:16:38these magazines and newspapers and on
1:16:41Tik Tok it's just noise do you know when
1:16:44you sat down with those 180 odd couples
1:16:47you've spoken to about money in their in
1:16:48their relationship have you not had
1:16:50moments where one of the partners was
1:16:52shocked always for better in F us yeah
1:16:57yeah actually yes um sometimes they are
1:17:02shocked before they meet me because I
1:17:04have them prepare their document with
1:17:06their financials and one of them has
1:17:08never actually looked at their
1:17:09financials sometimes both and they
1:17:11realize it's much worse than they
1:17:13thought or it's much better sometimes
1:17:15we're talking and a one of the partners
1:17:19will actually talk about how they feel
1:17:21for the first time ever and the other
1:17:23partner will be crying give me some
1:17:25examples of the moments that you
1:17:26remember that shocked you the
1:17:29most I think
1:17:32about one of the most shocking examples
1:17:36was a woman who was around the age of
1:17:40mid-40s maybe 50 and she had had a
1:17:43double lung
1:17:44transplant and um she had successfully
1:17:47had the transplant and she was alive um
1:17:50she was healthy but she knew that she
1:17:53would live five or 10 more years that's
1:17:57what the doctors told her and she said I
1:18:00want to share this time with my
1:18:01daughters they were around 11 and 12 her
1:18:05husband and um I want to do that I said
1:18:09okay what's stopping you and she said um
1:18:12well I still have a job and I looked at
1:18:14her financials they were
1:18:16multi-millionaires they had saved
1:18:18consistently doing index funds over time
1:18:20nothing fancy just consistent investing
1:18:24they she could stop working tomorrow and
1:18:26they would have enough
1:18:28money
1:18:29forever she couldn't stop she said I
1:18:32like to work I like knowing that I have
1:18:34a job I like the consistent income so
1:18:39most people are used to getting an
1:18:41income and that's why they find it so
1:18:44difficult to retire among other reasons
1:18:46because the income will stop even though
1:18:48I can point out to them the Investment
1:18:50Portfolio you've built and Social
1:18:51Security and all these things will
1:18:52actually pay you people are terrified of
1:18:55not seeing that money come into their
1:18:57checking account in this case she had a
1:19:00ticking clock we all have a clock but
1:19:02she knew how long hers would go for she
1:19:05found it incredibly difficult to quit
1:19:08her job and spend time with her
1:19:09daughters now if we're listening to this
1:19:12it's like just quit it's so obvious to
1:19:15all of
1:19:16us but we're not the ones making the
1:19:18decision that was quite shocking to hear
1:19:21how difficult it can be even in cases of
1:19:23life or death
1:19:25wanting to have a stable income can
1:19:28affect us and what about earning like
1:19:32what role does earning play like just
1:19:33earning more money playing all of this
1:19:36stuff because I think I did I'm gonna be
1:19:38honest I had a bias when I was 18 19
1:19:39years old um I was fairly Reckless with
1:19:43money and I had these four credit cards
1:19:46I maxed out the credit cards I blew the
1:19:48money I got two ccjs which is a county
1:19:50court judgment in the UK okay had huge
1:19:52debts of thousands of thousands of
1:19:53pounds and and in my head I thought it
1:19:57will be fine if I just earn more no
1:20:01because I'm G to earn so much money that
1:20:03I'll just outpace this problem and that
1:20:06was like my bias my bias was like I'll
1:20:07just earn loads of money and when I
1:20:10figured out what a credit score was and
1:20:11that mine was destroyed I thought that
1:20:12won't matter because I'll always pay in
1:20:13cash yeah classic um every couple I
1:20:17speak to who has a spending problem they
1:20:20always say the same thing they go we
1:20:22just need to earn more and these are the
1:20:23very same couples when we crunch their
1:20:25numbers they'll often realize they were
1:20:26earning way more than they thought and
1:20:28you can see their faces cuz I have the
1:20:30whole thing on YouTube and it's this
1:20:32realization that oh my God the story
1:20:35I've been telling myself if we just earn
1:20:37$25,000 more and then they realize we
1:20:40actually are earning 25k more and they
1:20:43don't know what to do with it what I
1:20:44tell them is you could be making
1:20:46$300,000 more right now and it would not
1:20:49make one bit of difference because
1:20:50you're you have a hole in your bucket
1:20:52and all the money is going out
1:20:55the next thing I ask over Spenders is um
1:20:58do you want to make no change small
1:20:59change or big changes 100% of them say
1:21:02big changes I go all right I take them
1:21:04at their word and then we start going
1:21:06down the list and they find it
1:21:09incredibly difficult to strip out even
1:21:12the most minor of spending so we have a
1:21:14couple here that will be in literally
1:21:16hundreds of thousands of dollars of debt
1:21:18okay it's like I'm having a heart attack
1:21:20watching them and they're very calm it's
1:21:23because I understand interest rates and
1:21:24I know what situation they're in and so
1:21:27they go big changes suddenly 10 minutes
1:21:30later we're debating whether they can
1:21:31keep their Netflix subscription or not
1:21:34and I go guys I'm not here to berate you
1:21:36I'm not the teacher who's telling the
1:21:38kid you've been a bad kid which deep
1:21:40down a lot of them want a lot of us want
1:21:42an authority figure to tell you you've
1:21:45been bad now we got to be good and
1:21:48that's just not what I do I help them
1:21:50realize it themselves and it goes slower
1:21:53it takes a long time but if they realize
1:21:56it themselves they're able to make the
1:21:58change every couple says they want to
1:22:00make big changes when it gets down to
1:22:02the spending is really difficult that's
1:22:04why you have to be incredibly careful
1:22:06which lifestyle purchases you make that
1:22:10are tied to your identity so if you are
1:22:13a car person and you're driving a
1:22:15Rolls-Royce really fancy car it will be
1:22:19incredibly difficult for you to
1:22:21downgrade that car because it's part of
1:22:22your identity right meanwhile like if
1:22:25you have to get cheaper paper towels
1:22:26whatever nobody cares but you have to be
1:22:28very careful about what you allow to
1:22:31become part of your identity I'm not
1:22:33saying don't buy nice things and couples
1:22:36you should buy nice things but do it
1:22:38when you know that you can afford to do
1:22:39it forever don't just do it because oh
1:22:42we want to buy private school this year
1:22:44but we don't know how to pay for it next
1:22:45year so do you think that couple should
1:22:48make a
1:22:50budget uh I don't like budgets I don't
1:22:53think they work I think they look
1:22:54backwards whereas a conscious spending
1:22:57plan looks forward but most couples
1:23:00think deep down we just need to create a
1:23:04budget isn't a budget the thing you gave
1:23:06me like the 50% 60% different a budget
1:23:09is couples tracking every last line item
1:23:14they're tracking how much they spent on
1:23:15corn they're tracking how much they
1:23:17spent on diapers someone has to create
1:23:20and track this laborious spreadsheet and
1:23:22then at the end of the month they look
1:23:23at it and they go
1:23:25uh I guess we spent that much what are
1:23:28you supposed to do with that most
1:23:30couples have no idea does this budget
1:23:32tell you when you're going to be a
1:23:33millionaire does it tell you what your
1:23:35net worth is does it tell you if you
1:23:38have
1:23:38enough no it doesn't stack up to
1:23:41anything it's just a bunch of numbers
1:23:43tracking budgets Look Backwards a
1:23:45conscious spending plan looks forward so
1:23:47a conscious spending plan allows you to
1:23:50zoom out and say what is the vision for
1:23:53our RIS rich life how do we pick the
1:23:57things we want to spend extravagantly on
1:24:00and cut cost mercilessly on the things
1:24:02we don't so I give you these numbers 50
1:24:03to 60% for fixed costs it's up to you
1:24:06how you want to hit the number if you
1:24:07love your house you want to spend more
1:24:09on your house do it maybe it means you
1:24:11spend less on your car payment if you
1:24:14want to um go to concerts but you don't
1:24:17care about eating out fantastic take the
1:24:19trip go see Taylor Swift so it's up to
1:24:22you to make the tetris pieces fit but
1:24:24you decide and all your money flows for
1:24:27those four
1:24:28numbers how do we go about teaching our
1:24:31kids about money my my older brother and
1:24:33the one that works in our company he has
1:24:34three kids under the age of six and I'm
1:24:37wondering because he's such an Optimizer
1:24:38are they going to end up being
1:24:39optimizers is there a relationship
1:24:41between our parents and our kids and if
1:24:43I want to when I do have my kids how do
1:24:45I make sure that they aren't worriors or
1:24:48avoid is the number one thing that the
1:24:51couples in financial trouble say is when
1:24:54they were growing up their parents never
1:24:56talked about money never there was an
1:24:59episode on our podcast with this uh
1:25:01couple living in Kansas in a low cost of
1:25:04living area and um they were making
1:25:08$130,000 a year that's a very good
1:25:10income especially for their area they
1:25:12should have had tons of money tons of
1:25:15savings but their daughter came home one
1:25:18day with um food from the school because
1:25:22she had told her school we don't have
1:25:24have enough money to eat now they had
1:25:27plenty of money why because her mom and
1:25:30dad were always saying we don't have
1:25:32enough we can't afford it daughter took
1:25:35that message to school and was given
1:25:37free food this was horrifying to the dad
1:25:40horrifying and what he realized at that
1:25:43moment was the way that I'm
1:25:45communicating about money is not
1:25:47working see most parents deep down
1:25:50believe that money is something to
1:25:52protect kids from they think it's bad
1:25:55deep down most Americans we we have a
1:25:58LoveHate relationship with money but
1:26:00parents think their kids let them be
1:26:03kids but you would never teach a kid how
1:26:05to ride a bike by saying we don't talk
1:26:07about bikes in this
1:26:09family you would get them a bike you
1:26:12would get them on you would show them
1:26:14how to do it you would let them fall and
1:26:15then you would help them get up again so
1:26:17imagine this with your kids imagine that
1:26:19they are three years old young you pull
1:26:23them up sit them you say look can you
1:26:25help me push this button we're gonna pay
1:26:27for the rent this is for our beautiful
1:26:28house help me push that button yay give
1:26:31them five okay getting them involved
1:26:34right from the get-go and this is if
1:26:36they're living with two parents this is
1:26:37Mom and Dad you want them to see both
1:26:40because too often people only see um Mom
1:26:44worrying about the bills and so they
1:26:46come to associate mom with worrying and
1:26:49therefore if it's their daughter they
1:26:51think they are supposed to worry as well
1:26:53now imagine the kid is uh 8 10 years old
1:26:56you say hey we have to go to the grocery
1:26:58store here's $100 we need to get all
1:26:59these things how should we do it let
1:27:02them let them make mistakes they're
1:27:03going to forget about taxes let them
1:27:05learn right they get a little older
1:27:08they're planning uh pizza or a
1:27:10restaurant for the family here's $100
1:27:13for dinner problem is they're going to
1:27:15pick some place like Chili's it's
1:27:17horrible but you got to go let them
1:27:18learn their lesson by the time they are
1:27:2016 years old they have planned a family
1:27:24vacation they are aware of tradeoffs
1:27:27taxes tips all kinds of stuff they have
1:27:29helped the family buy its new car this
1:27:32is how you prepare kids you don't simply
1:27:35say we don't talk about money in this
1:27:37family you let them learn about money
1:27:40and you tell them what you've learned
1:27:42about money that's how you teach them
1:27:44I'm somewhat scared of my kids being
1:27:45sport brats and I say to my partner
1:27:47sometimes I'm like if when we have kids
1:27:50should we be putting the kids in like
1:27:53the back of the l oh yeah you know what
1:27:55I mean or should we should they be
1:27:57upfront with us like what's the deal
1:27:59well I'll tell you what I I um I went to
1:28:01Public School uh my entire childhood and
1:28:05then I got a bunch of scholarships and
1:28:07went to a private school and for college
1:28:10and at that college I remember in the
1:28:13first week so many of the beliefs I had
1:28:16about money and kids were shattered I
1:28:18had always assumed that if you went to a
1:28:20private school you were spoiled and you
1:28:23didn't really like to to work within 3
1:28:26days I realized that was totally untrue
1:28:28like some kids are spoiled some are not
1:28:31the correlation with private school not
1:28:33really there it's about parents it's
1:28:37about how they were taught and it's also
1:28:38about some element of luck as well but
1:28:40can you teach kids not to be spoiled yes
1:28:43there are so many wealthy kids who grew
1:28:46up not entitled appreciating what they
1:28:48have and the parents were still like hey
1:28:50I want to go to a nice hotel how how do
1:28:52you raise kids that AR spoil what you
1:28:54think so what start at the very
1:28:56beginning when you're teaching them
1:28:57about let's do this together money is
1:29:00something that we all do together now
1:29:02imagine that when you're talking to your
1:29:03family just the same way we talk about
1:29:05creating a healthy relationship with
1:29:06food right how do you teach your kids to
1:29:08have a healthy relationship with food
1:29:10you talk about it all the time you go to
1:29:12the grocery store together you cut
1:29:14carrots together and potatoes and you
1:29:15say this is why we're putting potatoes
1:29:17in this thing but we never do that with
1:29:19money so you have a healthy relationship
1:29:21with money by shining a light on it by
1:29:23talking and asking them questions do you
1:29:26know how we afford this house um what's
1:29:29a good thing to do with credit cards and
1:29:31what's a bad thing to do with credit
1:29:33cards hey what do you think that we have
1:29:36200 bucks and we want to give it to a
1:29:38worthy cause how should we do it how
1:29:40should we pick these are the kind of
1:29:42conversations that families should be
1:29:44having and when kids start to engage
1:29:47with money and they see parents doing it
1:29:50and they realize it's not something to
1:29:51be ashamed of or hidden from they go oh
1:29:54my gosh like I have some agency over
1:29:57this some control that's how you prevent
1:29:58them from being spoiled have you got
1:30:00kids yet no when you have kids if your
1:30:03kids come to you and they say Dad um I
1:30:05want to be rich mother love it I would
1:30:08say what does rich mean to you it means
1:30:10being able to have Financial Freedom so
1:30:11not having to look at Price tags when I
1:30:13go into restaurants or shops or when I'm
1:30:15browsing Amazon I can just take care of
1:30:17myself I can live somewhere nice drive a
1:30:18nice car go on a holiday when I want
1:30:20it's freedom and what is the most
1:30:23important thing that I should be
1:30:24thinking about to create that wealth and
1:30:27preserve it so that I can be
1:30:30rich well you'll first noticed that when
1:30:33this hypothetical kid said I want to be
1:30:35rich what was my response what you mean
1:30:38by Rich yeah amazing what do you mean by
1:30:41Rich so excitement and curiosity the
1:30:45opposite would be why do you want to be
1:30:47rich you don't need to be rich that's
1:30:48not for People Like Us squashing those
1:30:51dreams so when um like my nephew um a
1:30:55few thanksgivings ago he was young and
1:30:57he said um I want to buy a
1:30:59Rolex amazing where'd you get that tell
1:31:02me what kind of Rolex how you going to
1:31:04do it how much is it going to cost how
1:31:06much do you have to save to put that
1:31:07aside that's encouraging kids now they
1:31:10can figure out these trade-offs later
1:31:12but just encouraging them first off is
1:31:14the first thing we do with kids when
1:31:16they talk about money kids are smart
1:31:18they notice by age three four or five
1:31:22how their parents feel about money I
1:31:24talk to parents all the time and I speak
1:31:26to my own family and their parents of
1:31:28younger
1:31:29kids they will tell me my four-year-old
1:31:32is already worried about money every
1:31:33time she gets a little bit of money she
1:31:34puts it in an envelope and saves it
1:31:36because she's always worried about
1:31:37having enough I go wow that's tough um
1:31:41where do you think she got that from and
1:31:43then Mom starts crying always I can have
1:31:48a very um difficult financial situation
1:31:52uh two parents they'll be in $150,000 of
1:31:55credit card debt they're stoic about it
1:31:58they ignore it we talk about it they
1:32:00engage but the minute I bring up the
1:32:03kids tears and the reason for that is
1:32:06that you can take on a lot of Burden
1:32:09yourself but when you realize that your
1:32:11behavior is being passed on to your kids
1:32:14that is really difficult and that's why
1:32:17couples can get on the same page and
1:32:19build a healthy relationship for their
1:32:21kids as well so what would you say then
1:32:23to your kid says Dad I want to be rich
1:32:24you said amazing great love it y tell me
1:32:26what it means and they say what are the
1:32:28principles for wealth creation dad in
1:32:30keeping that money so that I can be
1:32:31financially free it would be number one
1:32:34you have to find something you love to
1:32:36do work hard you have to love to work
1:32:38okay in your own way whatever it is
1:32:41two automatically invest every single
1:32:44month right that's great and number
1:32:46three you have to enjoy money enjoy it
1:32:51not just making it not just managing it
1:32:54but also spending it and if they said
1:32:55Dad should I get credit cards I said
1:32:57sure of course when the time is right
1:32:59you should get a credit card you should
1:33:01always pay it off every month but you
1:33:04should get a credit card and when you
1:33:05start to spend enough probably get a
1:33:07rewards card you can get some free trips
1:33:09or cash back out of it notice that I'm
1:33:12not being restrictive if they say I want
1:33:14to buy coffee every day I would say
1:33:16fantastic let's talk about how you can
1:33:18earn enough so you never have to worry
1:33:20about coffee if they even said to me I
1:33:22want to buy a Lamborghini I'm not a
1:33:24Lamborghini guy I couldn't care less I
1:33:26would say amazing how do you think you
1:33:28could do that and what if they said oh
1:33:30um you know I want to be a school
1:33:32teacher I would say okay you know have
1:33:34you talked to any school teachers and
1:33:36asked them how much they make then
1:33:37calculate how long it would take you to
1:33:40buy a Lamborghini kids are smart they
1:33:42can do these things we just have to
1:33:45challenge them they say Dad I've only
1:33:46got my pocket money so how am I going to
1:33:48become an investor I don't have enough M
1:33:50money yet how much do you need to invest
1:33:52I assume you need like, of pounds what
1:33:55if I told you you only need to start
1:33:56with $100 I don't have $100 I have S
1:33:59pound pocket money have you asked anyone
1:34:02else how you could make an extra
1:34:05$93 no okay what could you do to ask
1:34:08them to make $93 what could you do clean
1:34:11the cars in the street keep going I
1:34:13paper around and on and on and on so
1:34:15here I'm not giving them the answer I'm
1:34:17challenging them to learn how to think
1:34:18for themselves and to make $93 for a kid
1:34:21you could do it it won't happen in one
1:34:23day but you could do it very very
1:34:24quickly how much money do you think you
1:34:26need to start investing you should start
1:34:28investing as soon as you can you could
1:34:30start investing with 50 bucks a month my
1:34:33my dad helped me open up a custodial
1:34:35account when I was 14 years old so I
1:34:37started investing then and my dad
1:34:39immigrated from India so I was very
1:34:41lucky that he pushed me um but if you're
1:34:44a parent you should definitely be
1:34:46getting your kids to invest early even
1:34:4950 bucks a month makes a huge difference
1:34:51so you invested at 14 yeah and I've been
1:34:53investing ever since and how did that do
1:34:55for you fantastic you know why because I
1:34:57sold I never sold almost anything it
1:35:01just
1:35:01stayed every single investment every
1:35:04single month no magic no random like
1:35:07amazing stock picks except for a couple
1:35:09lucky ones it's just basically almost
1:35:12all index funds just every single month
1:35:15what about
1:35:15crypto I mean if you want to have it as
1:35:18one to 5% of your portfolio as
1:35:21speculation fantastic the problem is
1:35:24that crypto investors I talk to don't
1:35:26believe in diversification they will
1:35:28often have all their money in it and
1:35:30they don't really they don't follow
1:35:33classic principles of investing and the
1:35:35worst part is it's hard to argue when
1:35:38it's done so well so people go like what
1:35:41the do you know 7% that sucks
1:35:43Grandpa and I go all right fine it has
1:35:47performed incredibly well at least in
1:35:49certain parts of crypto but you do not
1:35:52want to have the majority of your assets
1:35:54in one thing and it's the problem with
1:35:56crypto as well is you only hear when
1:35:57it's doing well exactly so whenever the
1:35:59the bare Market comes in everybody goes
1:36:01quite quiet they get very quiet where'd
1:36:03you go guys sometimes I follow with them
1:36:05on Twitter half the time their account
1:36:06is
1:36:08deleted that's called survivorship bias
1:36:10you only hear about things when they're
1:36:12good the minute it's bad account deleted
1:36:15never heard from them again what about
1:36:17gambling you must see some gambling in
1:36:19relationships I'm not sure how legal
1:36:20gambling is in every state over here in
1:36:22the USA but in the UK gambling is legal
1:36:25so yeah it's often an issue in
1:36:27relationships a quiet issue yeah it is a
1:36:30quiet issue I think um I don't hear
1:36:32about it too often I suspect that um
1:36:35gamblers simply don't want to talk about
1:36:37it yeah which is actually the worst of
1:36:39all maybe I need to find a way to reach
1:36:41some gamblers I mean we do hear some
1:36:43really tragic stuff we hear about um
1:36:45folks who have lost money on bad
1:36:48Investments late in life we hear about
1:36:50parents whose kids are bleeding them dry
1:36:53but we also hear about some really
1:36:55positive things you know couples who who
1:36:57have quietly accumulated money over time
1:37:01and they just don't realize we made it
1:37:04and sometimes I get to do the very
1:37:06pleasant thing of saying like hey you
1:37:07two clearly love each other you've done
1:37:10this together you made it have have you
1:37:14ever seen marriages fall apart because
1:37:16of these issues we've had couples break
1:37:19up directly after our podcast marriages
1:37:22of course I get emails all the time the
1:37:24reason that we broke up was money but
1:37:27you know what's interesting research
1:37:29shows which I cite in the book that um
1:37:32when couples fight they don't fight
1:37:34about money you know what they fight
1:37:36about
1:37:37kids chores and
1:37:40communication money is rarely talked
1:37:44about it's only talked about when
1:37:47there's a fight but it's the least of
1:37:49what people are typically arguing about
1:37:52kids chores communication that's what
1:37:54gets fought about unromantic though
1:37:56isn't it seen as being you know there's
1:37:59a stigma don't talk about money and yeah
1:38:00which is crazy I I encourage couples to
1:38:03have a monthly money meeting I even give
1:38:04them an exact agenda here's the Google
1:38:06Doc work it out adapt it for your own
1:38:08needs start off with a compliment you
1:38:10know I really appreciated that you
1:38:12planned that trip for us to the
1:38:14grandparents like the you did such a
1:38:15great job with flights start off like
1:38:17that people look at me like I'm speaking
1:38:19cling on to them an agenda for my wife
1:38:24or my husband I go what they go that's
1:38:26weird I go I think it's weird for you to
1:38:28go 40 years fighting about money never
1:38:31talking about it never creating a
1:38:34vision instead of using an agenda it's
1:38:37so interesting because you know much of
1:38:39the issues in my household growing up
1:38:40were money related so between my my
1:38:42mother and father and there is no way
1:38:46that my mother had any idea how much
1:38:48money my dad had or how much money the
1:38:50household had wow and I really as you
1:38:52were saying it now I thought God if they
1:38:53just sat down once and had that
1:38:56conversation like how much money do we
1:38:58actually have here God our childhood
1:39:00would have been so drastically different
1:39:04let's pause for a minute to talk about
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1:39:09think how lucky we are to live in a time
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1:39:18technology a couple of years ago I
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1:39:32when I used to drink my stress levels
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1:39:48let me know how you're getting on do you
1:39:51know you said you are at a point where
1:39:52you now think you have enough yeah but
1:39:55you're still striving for more and still
1:39:56investing and still earning and still
1:39:58waking up every day and driving then
1:40:00why I like it I love what I do I love
1:40:03working I um the more that I make the
1:40:08more that it is a sign I'm creating
1:40:11value that's it but I
1:40:13systematically earn more like I have my
1:40:16rules so for example unexpected income
1:40:19that comes in 70 to 90% of that will be
1:40:22invested right meaning like I'll take
1:40:2410% and have a good time but I'm
1:40:26primarily investing unexpected income
1:40:29question then if you got a$ 100 million
1:40:31windfall yeah how would your life
1:40:35change it's hard to say I have a very
1:40:38good life i100 million comes in what you
1:40:41going to do with
1:40:45it I
1:40:46mean it's going to change almost nothing
1:40:49I would I would it would accelerate some
1:40:52of my plans for
1:40:54charity um for a house because I would
1:41:00have the house drawn up even though I
1:41:02don't even want to buy a house anytime
1:41:03soon I would probably have the house
1:41:04drawn up and then I would say call me
1:41:07when it's ready to move in and don't
1:41:09call me before then I I want nothing to
1:41:11do with building it I don't want to see
1:41:12a piece of wood go over there why would
1:41:16you buy a house purely because what else
1:41:18are you going to do with the money of
1:41:19course
1:41:20giveaway you got to spend the money
1:41:22somehow but
1:41:23a why house what else you going to do
1:41:25with it just save it I already saved it
1:41:28I already invested it see what happens
1:41:31is when you start to as you know you
1:41:33start to hit your numbers and exceed
1:41:35them bigger than you ever thought
1:41:37possible you start to realize that so
1:41:39much of our life is spent playing
1:41:41defense with money that's the
1:41:42relationship that most of us have with
1:41:43money will we have enough at the grocery
1:41:45store will we have enough to fix the
1:41:47window will we have enough to get a car
1:41:50and most people live that way but if you
1:41:53start to save automatically and you
1:41:55start to invest and you really make it a
1:41:56focus to earn and understand how money
1:41:58works at a certain point you go oh my
1:42:00gosh objectively speaking looking at our
1:42:02numbers we don't ever have to worry
1:42:05about the price of a chicken bowl again
1:42:07so then what then what is the point of
1:42:10it all give it away I guess this is
1:42:12where I think um this is the real
1:42:13Challenge and you know a lot of retirees
1:42:15they get to the point where they have
1:42:16accumulated money and but they never
1:42:19really thought about the point of it all
1:42:21what is the point of it all I tell
1:42:23sometimes people um surprise me by how
1:42:26uncreative they are with money I'll give
1:42:28you an example I ask people what is your
1:42:30money dial what do you love to spend
1:42:32money on and um people they usually have
1:42:35a pretty good answer the most common
1:42:37answer is um food the next common answer
1:42:41is uh travel then health and wellness
1:42:43and there's a bunch of other money dials
1:42:45so one guy once told me um I like
1:42:48coffee that that's his money dial coffee
1:42:51I go what do you mean he goes I order
1:42:52different beans from whatever I go can I
1:42:56be honest with you I'm bored I'm bored
1:42:58by your answer cuz he he was doing very
1:43:00well I like okay you buy a $20 bag of
1:43:02coffee beans all right you have way more
1:43:04money and he's just like he was a little
1:43:06insulted that I said it but I was trying
1:43:08to shake him because I was bored some
1:43:10person with that much money should not
1:43:11be telling me that the thing they love
1:43:13to spend money on only is coffee so I go
1:43:16listen you like making your own coffee
1:43:18he goes yeah I have my Aro press and
1:43:20this and that I go what if if you
1:43:23considered hiring the Barista from your
1:43:26local place to come to your house and
1:43:28show you how to fine-tune that coffee
1:43:30what if you really learn how to spend
1:43:33money on that experience and deepen the
1:43:35experience it's not about buying 10 more
1:43:37coffee bags it's about going deeper a
1:43:40year later or two years later we talked
1:43:42he had done that and he got really into
1:43:45coffee he was now traveling to go to
1:43:47different locations Colombia Rwanda all
1:43:50these places where he had started to
1:43:53appreciate the coffee so sometimes we
1:43:56need to get more creative you don't have
1:43:57to spend thousands of dollars but if you
1:44:00and your partner love this thing think
1:44:03about how you can spend money to
1:44:05appreciate it even more and your
1:44:07strategy is to then stop spending money
1:44:09on the things that you don't appreciate
1:44:12yeah so this why your Rich Life vision
1:44:13comes in what do we care about what do
1:44:14we want to spend extravagantly on and
1:44:17then what do we want to cut cost
1:44:18mercilessly on we always start with what
1:44:20do we want to spend more on so when I
1:44:23people I have a variety of exercises I
1:44:25walk them through like what's your
1:44:26perfect week I'll tell you that uh I've
1:44:28done this with many many people not one
1:44:30person has ever said my perfect week
1:44:31involves doing
1:44:33laundry cool could we pay that out and
1:44:37if you can't afford to do that today
1:44:38that's okay put it on your vision and
1:44:40say when we get to this number we're
1:44:43never going to do laundry again
1:44:44fantastic but it also gives you
1:44:46something to look forward to you know
1:44:48it's thrown around that once household
1:44:50income equals x number then people are
1:44:53happy or at least that there diminishing
1:44:55returns is it yeah that $75,000
1:44:58number first of all that was already
1:44:59like 10 years ago so we have to factor
1:45:01in inflation but second more recent
1:45:04research has show uh shown that actually
1:45:06happiness continues increasing there's
1:45:08also self-satisfaction so there's a
1:45:10variety of different variables basically
1:45:12don't believe that $75,000 number that's
1:45:15tossed around it doesn't make any sense
1:45:17what's more important is you create a
1:45:19vision together and you go what would
1:45:22make this week this year this next 10
1:45:25years amazing for us let's just put it
1:45:27all out there it doesn't even matter if
1:45:29we know how we can afford it or not then
1:45:31let's talk about it do we know our
1:45:33numbers do we have enough can we pay for
1:45:36our kids college or not can we buy an
1:45:39extra iPhone charger so we don't have to
1:45:41run to the bedroom every day and you
1:45:42start to create and design your rich
1:45:45life together that's the way you do
1:45:49it very interesting topic and it's
1:45:51particularly pertinent to me because you
1:45:53know as I said I spoke to a divorce ly
1:45:54the other week and he told me that it's
1:45:56the one of the top two reasons couples
1:45:58get divorced is because of money
1:46:00problems and I really didn't know what
1:46:01he meant I thought maybe it's one of the
1:46:03partners loses all of their money and it
1:46:05causes arguments or maybe it's just that
1:46:08there's a lot of resentment and
1:46:10frustration built up because there's
1:46:12opaqueness surrounding the subject of
1:46:14money and it's kind of like the elephant
1:46:16in the room that has never been
1:46:17addressed and this is exactly what you
1:46:19try and do in this book and you do it so
1:46:21masterfully your first book is sold you
1:46:23know seven figures worth of copies and I
1:46:25understand why and I have a sneaking
1:46:27suspicion that this book is going to be
1:46:29equally successful because it is the
1:46:30elephant in the room in most
1:46:31relationships the fact that you know
1:46:33when I saw that you'd written a book
1:46:34about money for couples it immediately
1:46:37made me realize I go Chris we've never
1:46:38talked about that in our relationship
1:46:40and why not and it's a whole complex
1:46:42Myriad of reasons and Trauma and uh
1:46:46emotions and insecurities and shame but
1:46:50like all things in my relationship the
1:46:51more talking I did about it the better
1:46:53it became and the less of a an issue it
1:46:55became and you know there's almost a
1:46:57correlation in relationships isn't there
1:46:59between the amount you talk about an
1:47:01issue and how big the issue is um and
1:47:04that relates to all things whether it's
1:47:05sex or if it's the in-laws or it's
1:47:07friendships or whatever it might be so
1:47:09it's a really well-timed book and I've
1:47:11really not discovered one quite like it
1:47:13so I highly recommend everybody goes and
1:47:14checks it out it's out in December um
1:47:17the link is below so if you're listening
1:47:19to this now you should be able to
1:47:20pre-order this book right now and
1:47:21hopefully this can form the Foundation
1:47:23of a conversation that you very much
1:47:24need to have in your relationship one
1:47:26that might just save your
1:47:27relationship such a pleasure we have a
1:47:30closing tradition on the podcast where
1:47:31the last guest leaves a question to the
1:47:33next in the diary of the CEO and the
1:47:35question that's been left for
1:47:38you is what can you do to improve
1:47:42humanity and the life of
1:47:48people I think in my world the best
1:47:51thing I can do is
1:47:54uh set an example of someone who
1:47:58publicly speaks about the things that
1:48:00are important to them who wakes up every
1:48:03day and has a great time teaching loves
1:48:05what I do
1:48:08and models having a loving relationship
1:48:11with the people around
1:48:15me yeah leading by example in every
1:48:17sense of the
1:48:19word thank you so much such a pleasure
1:48:22to speak to you and you've open my eyes
1:48:23to so many things and every time I have
1:48:24these conversations I hope that uh I
1:48:26walk away with some kind of actionable
1:48:28insight into something that matters in
1:48:30my life and that's certainly the case in
1:48:31this conversation so thank thank you so
1:48:32much for coming coming back today thank
1:48:34[Music]
1:48:39you every single time you eat you have
1:48:42an opportunity to improve your health
1:48:44and that's why I love Zoe because Zoe
1:48:46helps me to make the smartest food
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1:48:51guys will know by now Zoe is a sponsor
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1:48:56I highly recommend you do because Zoe
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1:49:54[Music]

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