Pod Insights Money For Couples with Ramit Sethi 198. “I work 7 jobs but can’t get ahead. Are we doomed?” About this episode Juan (43) and Amber (40) feel behind on their retirement plans after years of prioritizing travel and expensive hobbies over investing.
Juan, who grew up poor, struggles with a scarcity mindset—undercharging for his work and financially supporting his family. Amber, now earning less, believes they should be doing better.
With financial pressure mounting, they’re considering merging finances but need to align on their money mindset first. Can they change their spending habits, boost their income, and get on track for their Rich Life?
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Transcript 17,913 words · 3 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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2:10 Speaker 01 At one point, I had almost 50,000.
2:12 Ramit Sethi? In savings? What happened to it? Don't say the motorcycle.
2:14 Speaker 01 We have five motorcycles.
2:16 Ramit Sethi? Five motorcycles? I don't even have five books I wrote. Why do you have five motorcycles?
2:21 Speaker 01 This is your fault. This is my rich life.
2:24 Ramit Sethi? What happened the first time you met?
2:25 Speaker 01 Amber tried to tell me how to run my business.
2:27 Speaker 02 Yeah, he was doing it all wrong.
2:29 Speaker 01 I didn't have a good role model for money growing up. I am so far behind on any kind of savings. Amber's behind as well. We really need to step up how much we're putting away.
2:41 Ramit Sethi? What did you do with that money?
2:42 Speaker 01 I bought a lot of weed with that money.
2:46 Speaker 01 I was not a good sibling. I was not a good son. Caused a lot of heartache and a lot of grief. I'm forever trying to make up for that.
2:52 Ramit Sethi? Have you ever had to declare bankruptcy?
2:55 Speaker 02 In college, I got in over my head. The collections agencies were following up with me and I tried to pay them a smaller amount and they refused.
3:03 Ramit Sethi? Did you think that bankruptcy was serious?
3:13 Ramit Sethi? I'm about to open up Wanted Amber's Conscious Spending Plan, which breaks down their net worth, income, and where they spend their money. This is a simple one-pager. You can download the template for free at IWT.com/csp.
3:29 Ramit Sethi? All right, I'm looking at the CSP here. Forty-three years old and 40 years old. Assets of $65,000. Investments of $80,000, okay? Savings of $28,000 and debt of $74,000. Total net worth of $98,000. Interesting. Let's look at the income. That'll tell me a lot. So their gross monthly income is $16,000. $560, that's a lot of money. That's $198,000 a year. Why do they only have 80K of investments at the age of 40 and 43? Also, why do they only have $28,000 of savings?
4:11 Ramit Sethi? Now, one possibility is that they just started earning this kind of money. That's possible. Let's take a look at what else. Fixed costs are at 57%. That's really good. Their rent is at $230. What? $115 each? This is a typo? Alright, fine. So basically, they're not paying much for housing at all. Insurance is a little high at $1,000. Car payment at 923. You know what's interesting? As I work my way down this list, I'm like, if you are paying basically no housing costs or very little, then how is your fixed cost at 57%? Shouldn't it be more like 25 or 30%? So where is the heavy expense under fixed costs? There it is. Debt payments at $2,581.
4:56 Ramit Sethi? Wow, that's pretty aggressive. They have artificially low fixed costs because they're not paying housing costs, but they've artificially raised their fixed costs by probably overpaying towards debt. Alright, fine. Groceries are fine. Nothing else really stands out. At 57%, personally, I think that number should be lower, but I'd be curious to hear more about what's up with the debt payment. Investments are at 10%. At 40 and 43, though, they need to be doing more. I can tell you that right now. Especially because they only have $80,000 invested and they are not going to own a house on this trajectory. They will need to dramatically increase their investments. Savings are at 7%.
5:40 Ramit Sethi? They're putting 200 bucks a month away for gifts. No way. That needs to go to investments. Long-term emergency fund at 400, fine. Family at 200. We'll have to see what that's about. And then guilt-free spending at 25%? No, no, no, no, no. That needs to come way down. At age 40 and 43, if you haven't started investing aggressively by that point and you are not on track to own a house, then you've got to be investing aggressively. So just off the bat, I would take like, instead of 25%, that would be down to 15%. All that would be going into investments. I need to talk to the couple to understand what's actually going on here.
6:19 Speaker 02 Juan and I do a really good job at like living our rich life today, but because of that approach, we're not really well set up for retirement.
6:30 Ramit Sethi? Okay, so you two are not married, correct?
6:33 Speaker 01 Mm hmm.
6:33 Ramit Sethi? You live together?
6:34 Speaker 01 Mm hmm.
6:35 Speaker 02 Yep.
6:35 Speaker 01 Yeah.
6:35 Ramit Sethi? How long you been together?
6:37 Speaker 01 Three and a half years.
6:38 Ramit Sethi? Okay, all right, cool. Juan, you said in your application, "I have not been able to stop thinking about preparing for the future, but instead of it being a bright outlook, it's often thought of with worry and fear." What do you mean by that?
6:57 Speaker 01 Everything I learned about money and savings, I learned from Amber. I didn't have a good role model for money growing up. So the things that I learned about how important it is to save and to leverage money and credit and things like that, I learned from Amber. And the more that I learned about those things, and because of the place where I'm at in my life now, I can see that I am so far behind on any kind of savings that would have me feeling comfortable about retirement age. And that's just the worry that I feel for myself.
7:37 Speaker 01 But I also have an incredible amount of guilt and worry about being able to take care of my family.
7:43 Ramit Sethi? Which family?
7:44 Speaker 01 My mom, my brother and my sister. And I really, really want to be there for them. But I think, you know, Amber once showed me like a calculator that showed if we put away this much money, this is how much we can expect to have. And I was like, yeah, that's, that's not gonna happen. I don't even think we can help ourselves with the amounts that were shown on there. I'm really behind. It sounds like Amber's behind as well. We really need to step up how much we're putting away. And the number just seemed insurmountable to me.
8:16 Ramit Sethi? I see.
8:17 Speaker 01 Yeah.
8:17 Ramit Sethi? Okay. You're forty-three years old.
8:19 Speaker 01 Mm-hmm.
8:19 Ramit Sethi? So you said that the only things you've learned about money have come from Amber.
8:24 Speaker 01 Mm-hmm.
8:24 Ramit Sethi? And since you've been together for three years, that means you really started learning about money around the age of forty. Is that correct?
8:31 Speaker 01 Mm-hmm.
8:32 Ramit Sethi? Amber, any of this surprise you?
8:34 Speaker 02 No. Yeah, we've talked about it a lot. I think, you know, there are definitely a lot of things that Juan and I will sometimes have trouble discussing, but money has always been something that we talked about pretty openly. To hear that level of worry come from him was a bit surprising because I think, um, and this also kind of touches upon, you know, me wanting us to be on the same page and have the same goals is that historically Juan has always been the one that's like, you know, th- this level of stuff is enough. We can live within this small amount and, and do just fine. And I've always been the one that's like, no, let's, let's elevate things. Let's earn more. Let's experience more. Let's do this.
9:16 Ramit Sethi? The way you're talking about it sounds like things have changed, but have they?
9:21 Speaker 01 I have slowly come around to the idea of the rich life, which Amber had introduced me to. And sometimes it can be a point of friction between us because I am really conservative in a lot of the way I live, partially because I have never really learned how to leverage my skills for the amount of money that they're worth. So the idea of abundance really scares me.
9:43 Ramit Sethi? Hmm. Amber, are you surprised to hear him say the word scared?
9:48 Speaker 02 Yes, very surprised.
9:50 Ramit Sethi? Why is that?
9:51 Speaker 02 These are not things that, that he'll openly share.
9:55 Ramit Sethi? Why is it that a guy like me, who has struggled connecting to my own emotions, comes on here for five minutes and suddenly we're talking about words like scared and behind and sharing our feelings for the first time in three years? What is happening right now?
10:11 Ramit Sethi? I don't know, but I love it. I'll tell you that. Sometimes we do need just somebody else to make us more comfortable sharing what we have been feeling.
10:21 Ramit Sethi? For years. So I appreciate that you're letting me be that person today. Of course, my hope is that I give you some tools, some suggestions so that you two can continue that even when I'm not here. Juan, you said you want to be there for your family. What does that mean for you?
10:39 Speaker 01 We're a small family, so we're pretty tight knit. I have a younger brother and a younger sister and then it's just my mom. So it's a single parent family. And I think we're there for each other emotionally. We know how to support each other in that way. But the thing that really pulls at me is, is the financial stuff. My mom has worked seven days a week for decades. And she currently still works seven days a week and she's well over 60. And enough's enough, you know? She, she is at retirement age. And because of the sacrifices that she made in order to have us succeed, she is not set up. The only savings that she has set up is,
11:23 Speaker 01 once Amber taught me about money, I immediately opened up an IRA for her. And every month, her and I contribute to it together. But we're talking about only a few years of contributing to this IRA. And I don't expect her to be able to make up decades worth of, of missed income. And I don't have any illusions of taking care of all three or all four of us. I also have my partner to think about. But if, if my brother and sister were to need something that I could pitch in with, I want to be able to comfortably say like, yes, I have this to give to you.
11:57 Ramit Sethi? Okay. Let me understand a little bit more about your family and what it was like growing up when it comes to money. What do you remember about money as a kid?
12:08 Speaker 01 Four years old is, I think, a great place to start because that's when I immigrated to the United States. So I was four, my brother was two, my sister was not yet born. We're seven years apart. But the the level of poverty that we experienced upon arriving to the United States was to the level of like having to go to the church and to ask for stipends to be able to purchase things like milk and like basic necessities. I have a really vivid recollection of a tree with dates of um going to a park and collecting a bunch of those so that we could have like little snacks and stuff to kind of hold us over sometimes between meals. And we didn't live that type of poverty for very long, thankfully, but it was enough to make an impression that we didn't have
12:50 Speaker 01 enough and that also we shouldn't be a burden and ask for more because it was hard enough to have just what we had at the moment. But I saw my mom fight tooth and nail and work dust till dawn to get us out of that situation as quickly as possible, moving us up into middle class by any means necessary.
13:09 Ramit Sethi? How did she take you to the middle class as a single mom of three while working crazy amounts of hours?
13:19 Speaker 01 So my mom's specialty is is cleaning, but she did everything. She would clean offices at night graveyard shift and then come home in the morning, sleep a couple hours and then go to a construction site and put up drywall. And then after that, then she would go and clean houses or she would get a job in the apartment complex that we had cleaning out vacant apartments to earn more income. And so it was basically just a few hours of sleep in between jobs here and there. Sometimes she would take us to the movies just so she could take a nap during the movie and then be ready to to go to work.
13:52 Ramit Sethi? Wow. Were there any phrases she ever said about money?
13:56 Speaker 01 There were never any phrases about money because we we just didn't talk about it. And she just never wanted us to go without. I think even though we understood that this was a huge undertaking and so we didn't ask, she also wanted to make sure that we didn't go without. So anything that we needed for school, for clothes, for anything like that, once we had the the means, then it was always provided for us.
14:25 Ramit Sethi? That's pretty amazing. She sounds like an amazing lady.
14:27 Speaker 01 My hero. There's no nobody I would hire.
14:31 Ramit Sethi? Wow.
14:33 Ramit Sethi? When you got a little older, let's say thirteen, fourteen, fifteen, did you get a job?
14:39 Speaker 01 I did, yeah.
14:40 Ramit Sethi? Okay, what was the job?
14:42 Speaker 01 McDonald's.
14:43 Ramit Sethi? Yeah, nice. Okay, cool. What did you do with that money?
14:47 Speaker 01 We can say whatever on the podcast?
14:49 Ramit Sethi? Yeah.
14:52 Ramit Sethi? He's like, I bought drugs. I bought cocaine.
14:55 Speaker 01 I bought a lot of weed. I bought a lot of weed with that.
15:01 Ramit Sethi? That is so funny. I thought he was gonna be like, I gave it to my mom. Mom, here you go. I love you. He's like, I bought a ton of weed, bro.
15:09 Speaker 01 Yeah.
15:12 Ramit Sethi? Well, that's real. This is a real show. Alright, so you did that. Alright, fine.
15:18 Speaker 01 I know we're laughing about buying a lot of weed, but part of the guilt that comes with wanting to make sure that I'm there for my family is that in those pivotal years, fourteen to eighteen, when I was just trying to make sense of the world and trying to understand like how I fit into everything. I was not a good sibling. I was not a good son. I caused a lot of heartache and a lot of grief. And that was before knowing anything about what life was like and what it, what it cost. And so I'm forever trying to make up for that.
15:49 Ramit Sethi? I hear you on that.
15:49 Speaker 01 Yeah.
15:50 Ramit Sethi? Do you ever tell them that, your family?
15:52 Speaker 01 I remember just talking to them kind of one by one, you know, and, and just saying like, hey, I remember it took me a long time just to tell my brother, I'm really sorry, man, for just being such a jerk to you when we were little. And my sister too, you know, I just, I wasn't a jerk to my sister because she was, she was so much littler than I am, but just not setting a good example and just not being there for anything that she might have needed. And by the time I was really old enough to start figuring any of those things out and the impact that they had, I'd already moved away. Cause I moved away right at eighteen. So I couldn't even make up for the fact, you know? And so I've just spent my entire adult life trying.
16:29 Ramit Sethi? And what did it feel like for you to say that, maybe for the first time?
16:33 Speaker 01 Yeah, you know, it's definitely like a, a burden off, off the shoulders, for sure. Felt like relief. I think, I think it's easier for them to forgive me than it is for me to forgive myself.
16:44 Ramit Sethi? That's very insightful.
16:46 Speaker 01 I just wanna say like, hey, like I was to you for a period of time when you probably really needed my help and guidance, cause I'm the oldest. And I will, I'll freaking let you down, you know? So, so if you need something, I won't be able to give that to you.
17:00 Ramit Sethi? Okay, that's cool. I appreciate that. It sounds like your family really appreciates it. Amber, before I ask you about your family, did anything that Juan just said surprise you?
17:12 Speaker 02 No. I mean, that's also one of the things that I really love about him. I love how family oriented he is. And like, you can just tell Juan is such an amazing person. And his family is amazing. And I also agree. I want us to do well so that we can take care of them. And that's also why I'm continually harping on Juan sometimes to be like, we need to think bigger.
17:35 Ramit Sethi? When you say the word harping, what does that mean?
17:38 Speaker 02 Even from the first time we really hung out and we started getting to know each other. I came in-
17:44 Ramit Sethi? Wait, what does that look? Hold on, Juan just broke into a big old smile. What happened the first time you met?
17:50 Speaker 01 Amber tried to tell me how to run my business.
17:52 Speaker 02 Yeah, he was doing it all wrong. I was like, you need to charge-
17:55 Ramit Sethi? Wait, okay, hold on, hold on. Take me back. Where'd you meet?
17:57 Speaker 02 We had a mutual friend who was setting us up. And so we had a group dinner coordinated at Juan's apartment. And then these friends conveniently had to leave early.
18:07 Ramit Sethi? Whoa!
18:08 Speaker 02 Just the two of us.
18:09 Ramit Sethi? Matchmakers. All right, respect to all the matchmakers out there. So you end up having dinner. And then was it like 12 minutes into the conversation, you're like, pull out your whiteboard and diagram your business model?
18:21 Speaker 01 Were you there? Were you there that night?
18:25 Ramit Sethi? Amber, is this what happened?
18:28 Speaker 02 More or less.
18:30 Ramit Sethi? My God. This is what half the FIRE community recommends on a first date. They're like, you have to talk about everything. Break it down.
18:39 Speaker 02 I think we were both thinking, this is not a match. And I kind of remember getting in my car and laughing like, huh, I just spent the last 40 minutes telling this man how to run his business.
18:50 Speaker 01 But we won't not again, and unbeknownst to you, you were an integral part of the beginning of our relationship.
18:57 Ramit Sethi? Me?
18:57 Speaker 01 Yeah.
18:58 Speaker 02 Yeah.
18:58 Ramit Sethi? Oh.
18:59 Speaker 01 Yeah. Yeah. Can I tell them about our, our second date?
19:04 Speaker 02 Sure.
19:06 Speaker 01 So I, this, this motorcycle on, I was like, hey, can I pick you up on my bike? I'll take you out for, on this date. And I think all the stars aligned for this date. I picked her up. It was beautiful. No rain, clear skies, stars are out, full moon. We're on the floating bridge, having a picnic, and we're just having these really awesome conversations. And I'm just like, yeah, a kiss is gonna happen. And we're like inching closer together and I didn't realize that she was just leaning in so that she could look me dead in my eye, dead in my eye, and ask me what my credit score was and if, if I had any debt.
19:45 Ramit Sethi? Is this for real right now? Amber, is this seriously what happened?
19:50 Speaker 02 Yeah, yes, this is seriously what happened.
19:54 Ramit Sethi? Hold on. I'm, I'm trying to, I'm trying to get a grasp of this. And um, this is like freaky, like, I never heard anybody ask this on a second date. Did you get the answer you wanted, Amber?
20:06 Speaker 02 It was really funny because I had, you know, I'd been married before. I had just gotten out of a divorce and I was like, oof, that was a lot. Like, wow, I never want to get myself in a bad situation again. And so, yeah, I needed to know what I was working with and where things stood and I figured I would just be upfront, figure things out right away.
20:29 Ramit Sethi? Cool. Well, I appreciate it. All right. So it worked. You two connected. I love that. I have to say, I love hearing from couples that talk about money early in their relationship. And I'm flattered to be able to play just a small part in the early days of their courtship. I also want to jump in here and point out a couple of clues I heard. When Juan described his childhood, did you notice anything about the words he used when he described his early relationship with money? He used words including poverty, guilt, worried, and scared. And when he described his current goal of saving more money, he used the word "insurmountable." The words we use to describe money are very telling.
21:13 Ramit Sethi? And the common thread here is that they're all negative, which tells me Juan has a negative relationship with money. Just listen to your own language. When you talk about it, do you use words like stressed, overwhelmed, guilty, shame, never enough, too far behind? That's very telling. It's hard to feel good about money when you are constantly using negative words. I also want to point out that this is a common theme I've noticed among many immigrants, and certainly children of immigrant parents. The idea is that if you want to have money, you have to work hard for it. Not just hard, you have to be exhausted. You have to give everything you've got. It shouldn't be easy, it should be hard. And in Juan's case, he watched his mother give up sleep
21:56 Ramit Sethi? to take on as many jobs as possible to provide for her kids. So it's easy to come to the conclusion that he did, which is you have to suffer to have money. What's interesting is that this very same line of thinking is preventing him from reaching his financial goals. And now that we know a little bit more of the root cause towards his mindset around money, now we can work on changing it. We'll dig into Amber's background with money after a quick break to support our sponsors. You know, I have a program where I teach people how to start and grow their businesses. It's called Earnable. And in that program, I ask the students to text a friend saying, "Hey, what do you think my top five talents are?"
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25:14 Ramit Sethi? Now, back to one and Amber. Amber, I want Wonder if I can learn a little bit about what growing up was like for you as it relates to money. You remember any phrases, any things your family said about money when you were a kid?
25:28 Speaker 02 Well, I grew up primarily with my dad, who was basically raising me as a single dad because my mom was living elsewhere. And so my dad was just a lot like one, actually, just really hard worker, big heart. But he would often work two jobs just to provide for us. And, you know, we lived very simply. But my dad made enough money to eventually buy his own house and he's been living there ever since. And I'm from Hawaii, so cost of living there is exceptionally high. There was a lot of things that I went without in my childhood that maybe other kids got to do.
26:05 Ramit Sethi? And did anything change as you got a little bit older?
26:07 Speaker 02 You know, I think a lot of kids, as they grow up, they sort of have this mindset that like, oh, my family's going to pay for college. My family's going to provide me a car. They're going to do all of these things. And, you know, my family didn't have the means to do that. So I knew from the get go, like, if I'm going to go to college, I got to figure that out for myself. So there was a lot of like overachieving. I was part of all the clubs and like trying to apply for all the scholarships and taking all the AP classes and just really trying to position myself so that I wouldn't have to take on so many student loans getting out. It was always just this attitude of like, okay, I've got to be responsible for myself.
26:46 Speaker 02 But, but also again, I was a teenager, so I didn't really feel that strongly about money and saving back then. And then on the other hand, my mom was kind of always the big spender in her relationships. And so as a result, I think she's filed for bankruptcy once or twice.
27:07 Ramit Sethi? Okay. Can we fast forward to today? In this relationship, who's the spender?
27:13 Speaker 02 Oh, me for sure.
27:14 Ramit Sethi? Oh, okay.
27:15 Speaker 02 Yeah.
27:16 Ramit Sethi? Who is the nice person who works hard, sometimes has two jobs?
27:21 Speaker 02 Oh, I mean, one has what, seven jobs? How many are we at right now?
27:25 Speaker 01 A lot of jobs.
27:27 Ramit Sethi? How much of your family's relationship, Amber, do you see in your current relationship?
27:33 Speaker 02 Yeah, I think there's definitely some patterns playing out. I think just this sense of not having like a really solid plan with my dad. He and I never talked about finances. I think my mom would talk to me more about her lack of finances and where she was at. But I never got a lot of input from my dad, except for, you know, save your money, save your money, save your money.
27:57 Ramit Sethi? Do you remember what my question was?
27:58 Speaker 02 No.
28:00 Ramit Sethi? Okay. My question was, what patterns from your family upbringing do you see being recreated in this relationship? And your answers were one, two, three examples of patterns that are not being recreated in this relationship. Can I tell you what I see?
28:19 Speaker 02 Yeah.
28:19 Ramit Sethi? Okay. So you mentioned your mom was the spender. In this relationship, you're the spender. You said that your dad was the nice guy who would basically grind it out. If he needed to work more, he would work more. You parallelized that with Juan, who is a nice guy. He's willing to work more. In fact, he has not two, but maybe seven jobs. And what I take away from that is your dad probably worked hard. That was what he knew. If he needs something, he will go and get another job and work extra hours for it. He will grind it out. Maybe did not understand money as well. The game of investing, the game of compound interest, those kinds of things.
28:59 Speaker 02 Right.
29:00 Ramit Sethi? Probably relatively similar to Juan until recently. Fair?
29:04 Speaker 02 Yeah, totally fair.
29:06 Ramit Sethi? Okay. The reason that I'm kind of pushing on this is I always say, if you want to live a rich life, you have to be honest with yourself and the people around you. And you can't change a pattern if you don't recognize it. Then we decide do we live a rich life? Like the patterns or do we want to change them? Do you want to change any of those two patterns that I just described?
29:28 Speaker 02 I would love for there to be, I guess, more balance in the relationship. Maybe spending a little less or just being a little bit more intentional, I think, about where my spending is going. And having a situation where one doesn't feel like he needs to have seven jobs.
29:47 Ramit Sethi? Okay, love it. We could definitely talk about that. Also, is this really seven jobs? Is that for real?
29:55 Speaker 01 Yeah, I work as a personal trainer for a boxing gym.
30:00 Ramit Sethi? Okay.
30:00 Speaker 01 Also, personal train for rock climbers.
30:03 Ramit Sethi? Two.
30:04 Speaker 01 Then I also do some translating of documents from English to Spanish for a company that deals with human resources.
30:11 Ramit Sethi? Three.
30:12 Speaker 01 Yeah, then I also manage the building that we live in. It's a hundred unit apartment complex.
30:18 Ramit Sethi? Four.
30:18 Speaker 01 And then I just got a job also teaching boxing classes at the gym that Amber and I weightlift at.
30:25 Ramit Sethi? Five.
30:26 Speaker 01 I also guide outside for rock climbing. So I train climbers indoors, but then I guide outside.
30:31 Ramit Sethi? Six.
30:31 Speaker 01 Yeah, it's it's six jobs. Yeah.
30:33 Speaker 02 I feel like we're forgetting one. There's there's gotta be more.
30:36 Speaker 01 Oh, oh, oh, the the social media stuff that I do for.
30:40 Speaker 02 Oh, see, I knew it. I knew that there was more.
30:43 Speaker 01 Yeah, that's right.
30:44 Ramit Sethi? Why do you have so many jobs?
30:46 Speaker 01 This is a product of like how I grew up. So I'm influenced by the way that that my mom made it so that we could stay in that middle class zone. The model that I had for money as it pertains to like savings, I had always learned it was like you put it under under the mattress. Like that's how that's what I knew about savings. And then and then the other thing I learned is that you have to work hard for the things that you want. And if you want something and you don't currently have enough to get it with the job that you have, that you get another job.
31:21 Ramit Sethi? Whoa.
31:22 Speaker 01 Yeah.
31:23 Ramit Sethi? That is quite interesting. Do you think that most people grew up with that message?
31:27 Speaker 01 I don't think so. I don't, I don't think so.
31:30 Ramit Sethi? They didn't. That's good to know, though. Sometimes, you know, like, we grow up and we meet other people. Maybe it's in college, maybe it's a coworker, and you start talking about stuff you just take for granted. And then you realize, oh, my God, the stuff that I thought was totally normal in my family is actually not that common. And I think we can see that here. You know, you grew up with your model of your mom getting more and more and more jobs, and she just grinded it out. And that's what you've done.
31:54 Ramit Sethi? Okay, that's very interesting. Let me come back to Amber for a second. Amber, you mentioned that your mom declared bankruptcy once, maybe more times. Have you ever had to declare bankruptcy or any extreme financial decision?
32:09 Speaker 02 Yeah, for sure, in college. I got in over my head, and it was such a small amount. It was like $3,000, I think. So the collections agencies were following up with me, and I tried to work with them to pay them a smaller amount, and they refused. And they said, no, you've got to pay us X amount. And it was just such a high amount that I wasn't able to pay it and also pay for my living expenses.
32:35 Ramit Sethi? Did you think that bankruptcy was serious?
32:39 Speaker 02 Yes.
32:40 Ramit Sethi? You did?
32:41 Speaker 02 Yeah. Yeah, but I spoke to a lawyer, and the lawyer was like, you are young enough, you're going to bounce back. I would file for bankruptcy.
32:49 Ramit Sethi? Did you talk to your mom about it?
32:51 Speaker 02 No.
32:52 Ramit Sethi? Why is that?
32:53 Speaker 02 We weren't close at the time. I think that might have been during a period where we actually were estranged for a bit.
32:58 Ramit Sethi? I see. Okay. All right, so you declared bankruptcy.
33:02 Speaker 02 Uh huh.
33:03 Ramit Sethi? And wiped that credit card debt away.
33:07 Speaker 02 Right.
33:08 Ramit Sethi? But your credit was affected, et cetera. What were the effects over the next seven years?
33:13 Speaker 02 Definitely made getting an apartment difficult, right? And so I remember moving into a different place and just having to really tell my sob story to the landlords to see who would be willing to rent to me with my credit being so low. But it definitely refocused me quite a bit, and so I think I was able to bring it back up within a year and a half, I want to say.
33:38 Ramit Sethi? Wow. That's impressive. I appreciate that. What'd you learn from that entire experience?
33:44 Speaker 02 That it was just really important to be aware of things and not get myself into trouble.
33:49 Ramit Sethi? You carry that lesson with you today?
33:51 Speaker 02 I've never had that issue come up again. I've just made sure that I'm not like getting myself into massive amounts of debt. Credit card wise. And right now, my, my credit score is 820, something like that.
34:04 Ramit Sethi? When, when you had that second date and you asked about the credit score, et cetera, was, was this what was behind that?
34:12 Speaker 02 I think that was part of it. And also in prior relationships, I've just been the person who had to support my partners. And I just didn't wanna play that role anymore.
34:23 Ramit Sethi? It's interesting because one, you said that you didn't really know anything about money until you met Amber. So Amber, how did he pass that test or that question that you asked?
34:33 Speaker 02 Yeah, I mean, his answer was that he didn't really have any credit. And, but he also didn't have any debt. And so I was like, I can work with this.
34:44 Ramit Sethi? That is very interesting.
34:45 Speaker 01 I would have never asked Amber that because my approach has always been, I, I come in with what I have and that's, and that's mine to either deal with or spend. And you have what you have. I don't need to know about your debt because I'm not taking care of your debt. You're taking care of your own debt.
35:02 Ramit Sethi? Question, have you been in a serious relationship before?
35:05 Speaker 01 This is the most serious relationship I've ever been in.
35:08 Ramit Sethi? Okay, that's what I thought. No judgment, just because when you first come into it, it's like yours is yours, mine is mine. And if there's some crossover, we'll figure it out. But as you get deeper and deeper intertwined, whether there's kids involved, whether there's a house involved, elderly parent involved, things necessarily become intertwined. They have to. Money is not just some peripheral thing. It's central to a relationship and who we are. And so I told Totally understand Amber's question. I get it, and I think that the deeper you go with this relationship, the more you're gonna realize,
35:50 Ramit Sethi? oh my God, getting on the same page with money, truly becoming teammates, is actually one of the best things we could have done. One thing that I'm trying to figure out with both of you, you've both gone through a lot in the way that you were brought up with money. Lots of things that most of us cannot imagine. And you're here, and I'm thankful that we get a chance to explore and talk about this together. Juan, you grew up with a lot of scarcity around money, and a model that if you need something, you get another job. It sounds like you have adopted what you grew up with, which was, if I need something, I'm gonna work harder. You say, I live a conservative life. I can cut my spending, I don't need to spend a lot. It's very analogous with how you grew up with your family.
36:35 Ramit Sethi? Amber, you grew up with a mom who was a spender, a dad who grinded it out. Work hard, if you need something, like college, you're gonna have to find a way to do it. You adopted a lot of that, you worked hard, you took AP classes, you figured it out. You made some financial mistakes, similar to your mom. Now, you have a job, you have money. But what's interesting is, even with all the scarcity, all the things that you went through, you described yourself as the spender. So the two of you had kind of similar childhoods at a high level when it comes to money. But one of you chose to be very frugal, and the other calls herself the spender. How did that happen?
37:19 Speaker 01 I just always assumed that because I didn't go to college and I didn't have a degree, that an abundance of money was just not going to be something that was going to be available to me. But I didn't want that to stop me from being able to have experiences. So I just learned every which way I could to be able to do that at the most basic level, but not deny myself the experience.
37:44 Ramit Sethi? Okay, I appreciate that. What about you, Amber?
37:46 Speaker 02 For me, my family always kind of had that attitude, or my dad did anyway, of like, save your money, be frugal. And I kind of swung the other way and was like, no, I refuse. I want to have a much bigger, better life. I think that's why I don't mind spending more money on things to get like a higher quality experience or a higher quality item. Juan and I both really love traveling, and so that's something that we spend a lot of our resources on. And one of the arguments that came up from one of our trips that we took last year is we went to Turkey. And so, you know, we had like this budget in mind for our accommodations.
38:27 Ramit Sethi? Hold on, let me guess. Let me guess. Um, $5,000.
38:32 Speaker 01 Well, it's pretty close.
38:34 Speaker 02 No, that was not the budget. The budget was much less.
38:37 Ramit Sethi? How much?
38:38 Speaker 01 Three.
38:39 Ramit Sethi? Three, okay. All right. And what ended up happening?
38:43 Speaker 02 Well, we spent a lot more.
38:44 Ramit Sethi? Like how much?
38:45 Speaker 02 I think it was six. Yeah.
38:53 Ramit Sethi? Hello?
38:55 Speaker 02 Yeah.
38:55 Ramit Sethi? All right.
38:56 Speaker 01 This is where some of that friction comes in, though.
38:58 Ramit Sethi? Tell me, what happened?
39:00 Speaker 02 So he had set in his mind the budget for the accommodations, and I was like, all right, fine, we'll dial it back. We'll stay at like the hostels and whatever. But when we were going to Cappadocia, I was like, no, we're only going to be here one time in our lives, probably. I want to stay in this really nice place. And so I sprung for the difference in price to get us this nice hotel. And I told Juan it costs a lot less so that the amount that we split was much closer to the budget we had set. And then we went there and Juan was like, this place is amazing. And I'm like, yeah, I know.
39:36 Speaker 01 Yep. That was without me knowing how much it costs.
39:40 Ramit Sethi? Then what happened? Did it change any of your dynamics around spending?
39:44 Speaker 02 No, I don't think so.
39:46 Ramit Sethi? But you did get the most important thing in a relationship. Which is to be able to say, I told you so.
39:51 Speaker 02 I was right, yeah.
39:55 Ramit Sethi? I love this story because it perfectly illustrates how differently their spending dynamics show up in everyday life. It's interesting to me how two people with similar upbringings can take such different approaches to scarcity. For one, scarcity is what he knows. He's most comfortable there, and so he is frugal. Amber is on the opposite side, for her scarcity is uncomfortable, and so she says, I want more. I see this a lot. I will see two people raised in very similar upbringing, sometimes siblings, raised in the same household, same parents, and yet their approach to life, certainly to money, is completely different. One will
40:40 Ramit Sethi? overspend dramatically, saying, oh, money comes, money goes, there'll be more tomorrow. Another is fearful and frightened of money. And you ask yourself, how did this happen? And truthfully, nobody knows. Human beings are puzzles, and we can't predict everything about how people are going to react. That is why I love my job. Everybody's a puzzle. Everybody has a story, and I get the chance to try to figure out what's going on. I am curious how their opposing views show up in other areas of their life. So after a short break, we'll come back and find out more. You know, I have a program where I teach people how to start and grow their businesses. It's called Earnable, and in that program, I ask the students to text a friend, saying,
41:24 Ramit Sethi? hey, what do you think my top five talents are? After they start getting responses in a few minutes, they are shocked at all of the things they're good at, and they didn't even realize it. Having someone reflect back can change everything. That's what growing feels like. That's why I recommend getting therapy so often on this podcast. And Grow Therapy can help you find the right therapist for you. Grow is therapy that works, covered by insurance. Grow connects you to thousands of high-quality licensed therapists across the US that work with
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43:20 Ramit Sethi? traveling in retirement, estate planning, all of it. Your financial plan should match up with your rich life vision, and Facet can help make that possible without the exorbitant fees. As of the date of this recording, Facet is waiving the enrollment fee for new annual members. And for my audience, Facet is offering $300 into your brokerage account if you invest and maintain $5,000 within your first 90 days. Head to facet.com/ramit to learn more about which membership option is best for you. Facet is an SEC-registered investment advisor. I'm not a member of Facet and have an incentive to endorse Facet as I have an ongoing fee-based contract for cash compensation based on this endorsement. All opinions are my own and not a guarantee of a similar outcome.
44:02 Ramit Sethi? Welcome back, listening as I ask Juan about a common phrase that he uses in everyday life. Juan, you've used this phrase before. It could be worse.
44:12 Speaker 01 I always say that because you gotta know when enough is enough, you know? Sometimes you have this, this thing that is, is good. And if you look like kinda downstream, it could be worse.
44:27 Ramit Sethi? Is that your code, Juan, for let's appreciate what we have because it could be worse?
44:33 Speaker 01 Yes.
44:33 Ramit Sethi? Okay.
44:34 Speaker 02 Yeah, for sure.
44:35 Ramit Sethi? Okay, alright, I understand that. And then Amber, how do you respond to that?
44:39 Speaker 02 But it could be better, meaning there's also so much more that we could be experiencing. And let's not limit ourselves.
44:48 Ramit Sethi? Do you say that because when he says it could be worse? That's basically putting a box around where you are. And it's saying, this is where we are, it could be so, we could have cockroaches running all over us. But we're here and you're saying, well, I'm not even thinking about cockroaches. I'm thinking about we could have this view or we could have this excursion or whatever.
45:11 Speaker 02 Right, exactly.
45:12 Ramit Sethi? Okay, that's interesting. Okay, I understand both perspectives. Both seem valid to me. How do you resolve that when that comes up?
45:24 Speaker 01 Yeah, this is, this is where Amber got me drinking the Kool-Aid about the rich life.
45:28 Ramit Sethi? Uh oh.
45:29 Speaker 01 Yeah.
45:29 Ramit Sethi? What'd she say?
45:30 Speaker 01 This is where I was saying that you, you play a pivotal point in the beginning of our relationship. Because on our third date, she tried to throw that book at me that you got back there. And I didn't know anything about you.
45:40 Ramit Sethi? I Will Teach You To Be Rich? How did you not hear about this book before? Alright, that's my marketing work on that. So she gives you the copy of the book and then she says what? Read this and report to me on the financial scams outlined in chapter six.
45:53 Speaker 01 Yeah, I gotta be honest, man, I, I saw that title and I thought this is snake oil. And I was like, I'm not reading this. I didn't even take it.
46:01 Speaker 02 Hey, like, no, I don't need that.
46:02 Ramit Sethi? I have to tell you, it never gets old hearing how people reject my advice. Like, there's no, there's no end to it. People go, this sounds like a scam. Covers ugly. I don't like the pepper in the book. Like there's, I've literally heard thousands of reasons people hate me and my work. And for some reason, it never gets old. I'm like, okay, what'd you say then? You said it was a stupid book that sounds like a goddamn scam? Yeah. What happened next?
46:33 Ramit Sethi? All right. And then what happened?
46:35 Speaker 01 Amber and I were going on a trip to Benjen and on the way there, and without telling me, she just put on a podcast episode with you and this other guy named Tim Ferriss. I listened to this episode grudgingly and man, I was sold, like 100% sold on, on the idea of a rich life because it dawned on me that I will teach you to be rich wasn't like, I will teach you to be rich millions, like, like pyramid scheme rich is like, I will teach you how to make the most out of your life at any level that you're at. And, and that really spoke to me because that's the way I teach climbing. That's the way I teach boxing.
47:17 Speaker 01 That's the way I guide when I take people out. That's the way I treat people, like meeting them at their level. Right?
47:23 Ramit Sethi? Love that.
47:24 Speaker 01 And it just resonated with me so much that then I was like, what do we do? What do we do? How do we, how do we, I've been lost all this time. And that, that's what started this, this whole thing about having us really take a look at how we agree and disagree with money, how, how we're thinking about our futures.
47:44 Ramit Sethi? First of all, I really appreciate that. Amber, I especially appreciate you not giving up. Not just because, you know, you're sharing my material, which is very meaningful to me, but also because this is obviously something that's important to you. And now that I understand your family and your childhood, I can understand why. And what I love is that
48:05 Ramit Sethi? You have been clear since date one, date two, about what's important to you. And like any good partner, there are things that are important to one person, and the other person might not connect with them. Maybe it's the wrong time, maybe it's the wrong source of information, whatever. You didn't give up. And it turns out, in order to connect with Juan, we just need two bros sitting down, being slightly fratty, and speaking for hours about a rich life. And boom, now the two of you have a common language. So I love that. Thank you, Amber. And I love that, Juan, you're open to hearing it, listening, and then participating. I think that's really cool.
48:48 Speaker 01 I am seeing the error of my ways, you know, and I need to turn this around. But how do we work together to do that?
48:55 Ramit Sethi? Well, let's do this. Let's take a look at your numbers.
48:57 Speaker 01 Okay.
48:58 Ramit Sethi? You have the CSP that you sent me. Before I put those numbers on screen, what was it like doing this CSP together?
49:06 Speaker 02 For me, it always feels like a little anxiety inducing, because I always feel like, ah, we're behind, or this number should be higher, this one should be lower.
49:15 Ramit Sethi? Okay. What about for you, Juan?
49:17 Speaker 01 It's easy enough to plug the numbers in, but I just don't know how to make sense of it all. I just know that somehow we're not in debt, but somehow we're also not increasing our savings at a rate that's going to work for what we're trying to do.
49:37 Ramit Sethi? Fair enough. Let's take a look. Amber, can you read off the word in bold, and then the full number next to it? And let's just work our way down this box. Go ahead, Amber.
49:48 Speaker 02 All right. Assets: 64,795. Investments: 80,063. Savings: 28,674. And debt: 74,847. And total net worth: 98,685.
50:08 Ramit Sethi? Okay, cool. What do you think about those numbers?
50:10 Speaker 02 I would love to get rid of the debt and increase savings and investments. I think that for our age, that those numbers need to be a lot higher.
50:19 Ramit Sethi? I love your answer, Amber. I'd like the good one to go higher, and I'd like the bad one to go away.
50:26 Ramit Sethi? Juan, what about you? What do you think about those numbers?
50:28 Speaker 01 I'd like the same things.
50:30 Ramit Sethi? All right. Let's continue. All right, let's talk income. Juan, will you give me the combined gross monthly income?
50:38 Speaker 01 Yeah, it's $16,560.
50:42 Ramit Sethi? That means combined, the two of you make $198,720. Did you know that?
50:49 Speaker 01 No.
50:49 Ramit Sethi? Okay, he says no. Amber?
50:52 Speaker 02 No, that number's not accurate because we get a rent credit that inflates that number. There should be less. It should be 24,000 less.
51:01 Ramit Sethi? Yeah, okay. So you're saying you actually make 175K?
51:07 Speaker 02 Yeah, that's more realistic.
51:08 Ramit Sethi? Okay, fair enough. We'll keep that in mind. You get a rent credit. Is that because you're the handyman, so you don't pay for rent?
51:16 Speaker 01 Right.
51:17 Ramit Sethi? All right, fine. Your net is 11,282, probably a little bit less if we take out that rent thing. Fine. Your fixed costs are? Who can read this number out loud to me?
51:28 Speaker 02 57%.
51:29 Ramit Sethi? All right. So I'm thinking to myself, they're paying no rent. So how is their fixed cost 57%? There must be one massive expenditure. And it turns out, yes, there is. Your debt payments are $2,581 a month. Whoa, there's like a lot of debt here. Let's break it down. You have $74,847 of debt. How much of that is student loans?
51:53 Speaker 02 50,000.
51:54 Ramit Sethi? All right. So then you have $25,000 of credit card debt?
52:00 Speaker 02 No, my car debt is 18,000.
52:03 Ramit Sethi? Okay, 18K for car loan.
52:05 Speaker 02 Mm-hmm. And then my credit card debt right now is 2,000.
52:09 Ramit Sethi? And that's trips, etc.
52:11 Speaker 02 Yeah, because we just took a trip last month, basically.
52:14 Ramit Sethi? How much is the interest rate on the car loan? And what kind of car?
52:18 Speaker 02 I have a Subaru Forester and the interest rate is 4%.
52:23 Ramit Sethi? Alright, I don't have hate in my heart for a Subaru. I don't mind it. So let's move on. Your rent slash mortgage is $230, which is like, nothing. We're talking about like, utilities, whatever. It's some minor thing. It doesn't even matter. Utilities $154, amazing. Insurance is $1,037? Huh? What's that for?
52:46 Speaker 02 I'm a freelancer and I have to pay my own insurance, so my insurance alone is like $650 a month.
52:53 Ramit Sethi? Alright, fine. So one person has a $645 car payment plus gas and all that stuff. And then another person has $278? Is that you, Juan? What kind of car you have?
53:04 Speaker 01 I took out a personal loan to purchase a motorcycle.
53:07 Ramit Sethi? What kind of motorcycle and how much?
53:09 Speaker 01 It is a 2020 CB500X and the personal loan I took out was for $7,000.
53:16 Ramit Sethi? What's the interest rate?
53:18 Speaker 01 I don't know.
53:18 Ramit Sethi? You don't know. I also wish I hadn't asked what kind of motorcycle it was, like as if I [bleep] know. I don't even know. There's like 10,000 types of Harleys. Why am I even asking this question? Okay, you have a motorcycle, fine. Um, paying off a ton in debt. I'm curious, Amber, why are you paying so much towards this debt?
53:37 Speaker 02 Trying to get rid of it. Uh, last year I paid off one of my student loans, so it was actually higher.
53:41 Ramit Sethi? Okay. Pet care is a hundred bucks. What do y'all have, a dog or a fish or something?
53:45 Speaker 02 A dog.
53:47 Ramit Sethi? Alright. Phone is $135 and subscriptions are $421. What's that?
53:52 Speaker 02 Gym memberships.
53:53 Ramit Sethi? Aren't you a boxing coach? Don't you get a free membership?
53:56 Speaker 01 Uh, I do at the boxing gym.
53:58 Ramit Sethi? Oh, you got another gym?
53:59 Speaker 01 It's part of that for like weight training with Heather and all that stuff, Amber?
54:02 Speaker 02 Yeah, but not the personal training because we took that out last month.
54:06 Speaker 01 We had decided that once we knew that Amber's income was going to change pretty dramatically and that it was going to be unstable at best.
54:13 Ramit Sethi? What happened with the income?
54:16 Speaker 02 I've had one client that's been my primary source of income and they're pretty unstable at the moment, so I can't rely on having the same high level of of income that I've been having.
54:29 Ramit Sethi? So right now, the income breakdown is sixty five hundred a month for Partner One. Is that one?
54:37 Speaker 02 Yes.
54:38 Ramit Sethi? And then Partner Two makes ten thousand a month. That's you, Amber, but you're saying that number might drop?
54:43 Speaker 02 Yes.
54:44 Ramit Sethi? Has it already dropped?
54:46 Speaker 02 Yeah.
54:47 Ramit Sethi? How much? From ten thousand to what?
54:49 Speaker 02 Five thousand and seventy five hundred.
54:52 Ramit Sethi? Whoa.
54:53 Speaker 02 Yeah, big difference.
54:54 Ramit Sethi? What happened when you did that?
54:56 Speaker 01 So the moment that that happened, I started looking for more jobs.
55:01 Speaker 02 Yeah.
55:04 Ramit Sethi? Okay. And what about you, Amber?
55:07 Speaker 02 Yeah, I mean, I also took on extra gigs, pet sitting, those kinds of quick fixes. But then again, you know, looked at where we could really cut most of our expenditure. And that's where I cut out like the personal training that I was having every month.
55:20 Ramit Sethi? Good job reacting. That's really smart. You all saw a change happening. You instantly made moves. That's a great decision. All right. Again, your fixed costs are at fifty seven percent, which is overall good. But now that we see, number one, you're paying basically no housing costs. So theoretically, your number should be way lower than that. And second, your income might actually be going down, which means that fixed cost number will go up. Let's continue on to investments. Investments at ten percent post tax and maybe a little pre tax from what I can see. Is that accurate?
55:59 Speaker 01 Yeah.
56:00 Ramit Sethi? All right. So you're putting a little bit of way into like a 401k, things like that. That's good. You're investing aggressively. We can talk about how much more we want to put in there. But overall, we have a nice baseline for your investments. Savings are at seven percent. You have zero for vacations. Come on.
56:19 Ramit Sethi? You have 400 bucks a month for an emergency fund. Okay, 200 bucks a month for family. I assume this is where you're funding that Roth IRA and helping family out, things like that. All right, 200 bucks a month for gifts for a total of 800 bucks a month. I want to note that you have $28,000 in savings, which is almost five months of an emergency fund. Is there other reasons you have that much in savings?
56:47 Speaker 01 Well, most of that is Amber's. 8,000 of that is mine, but at one point I had almost 50,000.
56:53 Ramit Sethi? In savings? What happened to it? Don't say the motorcycle.
57:00 Ramit Sethi? I [bleep] do it. Tell me.
57:03 Speaker 01 We have five motorcycles.
57:05 Ramit Sethi? Five [bleep] motorcycles? I don't even have five books I wrote. Why do you have five motorcycles?
57:11 Speaker 01 This is your fault.
57:13 Ramit Sethi? Oh, tell me.
57:14 Speaker 01 This is my rich life.
57:16 Ramit Sethi? Don't [bleep] me on this. God [bleep]. How many people take my, my advice, rich life? Then they twirl around three times, they go, rich life, rich life, rich life. And then they just buy whatever the [bleep] they want. That's not how the concept works. You know this.
57:30 Speaker 01 This was the only thing I allowed myself. I was like, I love bikes.
57:34 Ramit Sethi? Oh, me, I'm such a martyr, me. Oh, little old me, I only allowed myself [bleep] motorcycles.
57:42 Ramit Sethi? What the hell? Let me ask another, I got a series of questions about these motorcycles. When you go to get these bikes, what type of numbers do you run before you make these purchases?
57:54 Speaker 01 None.
57:55 Ramit Sethi? No numbers? Okay.
57:56 Speaker 01 I mean, I just, I'm like, do I have enough in the bank to pay for a cash? Yes, then I go and buy them.
58:02 Ramit Sethi? What the [bleep] is this? Everybody sees a guy like me and then I use the word rich, they go, rich? I want to be rich. Rich life, I'll just buy whatever I want. Guys, that's not how it works. How many freaking times, how many books do I have to write where I talk about saving, investing, automating, no credit card debt? Do I need to write a whole book saying, don't misinterpret my [bleep] philosophy? Of course I don't, because you're not going to read that book. You see the cover, it says the word rich, you go, rich, I'm [bleep] rich. Let me buy everything. Don't do this. Don't intentionally misinterpret my philosophy and then use it to justify your random discretionary purchases. That's not how it works. We're building a rich life and a rich life involves a clear vision, involves discipline, involves knowing your numbers.
58:47 Ramit Sethi? God, what the hell am I doing on this podcast? I will say, it is a little funny that he blames me. You're gonna blame me for your spending decision? Okay, that's certainly one approach. I wouldn't do it, but all right, that's interesting. What's really going on here, besides totally misunderstanding what I talk about, is an unsophisticated account setup. One had a bunch of cash sitting in a savings account. And because it had no clear purpose, no direction, he spent it. And actually, this is really common. This is exactly why I recommend setting up your accounts correctly. In his case, the money could have been flowing to investments. It could have been flowing to specific sub-savings accounts called Tahiti vacation,
59:31 Ramit Sethi? or motorcycle fund, or even family, family love with a little heart. And that would make it more specific. Trust me, you're not gonna dip out of your family love account to buy your freaking Yamazaki. Okay, I don't even know if that exists anymore. It did when I was a kid. When your accounts are truly aligned with your rich life vision, it suddenly becomes very easy to see where your money should go. And you can find everything you need about opening up your accounts in chapter nine of my new book, Money for Couples. You know, I have a program where I teach people how to start and grow their businesses. It's called Earnable. And in that program, I ask the students to text a friend saying, "Hey, what do you think my top five talents are?" After they start getting responses in a few minutes,
1:00:15 Ramit Sethi? they are shocked at all of the things they're good at, and they didn't even realize it. Having someone reflect back can change everything. That's what growing feels like. That's why I recommend getting therapy so often on this podcast. And Grow Therapy can help you find the right therapist for you. Grow is therapy that works, covered by insurance. Grow connects you to thousands of high-quality licensed therapists across the US that work with your schedule. Virtual, in-person sessions, nights, weekends, they have an option that will work for you. You can search by what matters, by identity, specialty, availability, insurance coverage. You can find a therapist. Who's the right fit for you?
1:00:58 Ramit Sethi? Grow makes it easy to book an appointment in minutes and begin sessions in as little as two days. See if you could pay as little as $0 for therapy in seconds at growtherapy.com/ramit. That's growtherapy.com/ramit. Growtherapy.com/ramit. Availability and coverage vary by state and insurance plan.
1:01:22 Ramit Sethi? Let's go down to guilt free spending. So your guilt free spending is 25%. $2,835 a month. Is that accurate?
1:01:31 Speaker 01 I've never seen it.
1:01:33 Speaker 02 Yeah, I don't know where that goes.
1:01:35 Ramit Sethi? Ah, okay, so you don't actually have any idea.
1:01:38 Speaker 01 I just know that we can do all the things that we want to do. We've been able to do all the things that we want to do. I know that every month I pay my credit card off 100%. But I don't have like this tangible money.
1:01:51 Ramit Sethi? I totally understand your confusion. You're like, hey, this freaking spreadsheet says $2,835 a month in guilt free spending. Where's my money? I want 2,800 bucks in my hand every month. But that's not how it works. This is simply a way of looking at the money that is flowing in and out of your accounts at different times. So because money comes in, it comes out, it all gets a bit confusing. So this is just basically a way of putting on a set of lenses, the conscious spending plan, that allows you to visualize on a monthly basis, where's our money going? Okay? And what the real magic of the conscious spending plan is, is it allows the two of you to decide where do we want our money to go?
1:02:34 Ramit Sethi? If you love traveling, amazing. If you love motorcycles, let's figure out a way to support that. But what I find is that most people, they say, I love this thing or that thing, but their conscious spending plan actually does not match up. So for example, Juan, you mentioned to me, you want to support your family. You want to quote, be there for them. I love it. It's laudable. I'm all for it. Where on this CSP can I find that?
1:03:04 Speaker 01 Just under the $200 for a family.
1:03:07 Ramit Sethi? I agree. You're putting money aside, which I respect. That's more than most. I love it. You're also putting more than 10 times that amount towards guilt-free spending. What do you think of that?
1:03:18 Speaker 01 My guess is you're pointing that out because you're like, oh, if you want to support your family more, there's a bunch of these things out here that you can cut out and you can give more to your family, right?
1:03:26 Ramit Sethi? It's your money, but yes, you could do that.
1:03:30 Speaker 01 Definitely. Do you want to do it? Yeah.
1:03:32 Ramit Sethi? Do you want to do it so much that you'll sell one of your bikes?
1:03:36 Speaker 01 Yes, I would. I would sell four out of five.
1:03:42 Ramit Sethi? Guy was about to leave it all on the field. I would sell every, ah, let me keep one of them. I love my family, but I gotta have that bike.
1:03:49 Speaker 01 I gotta keep one because that's how I get around.
1:03:51 Ramit Sethi? Okay, all right. Okay, that's good to know. That's good to know. Hey, how much would you get if you sold all those bikes?
1:03:57 Speaker 01 I think 20.
1:03:58 Ramit Sethi? 20 grand. All right, cool. Is it offensive if I call a motorcycle a bike? It's like calling a ship a boat?
1:04:06 Speaker 01 No, no, they're bikes, yeah.
1:04:08 Ramit Sethi? I'm gonna, I'm gonna be, I'm gonna learn so much on this Godforsaken show that I'm gonna be able to interact with every single different subculture on the planet. I'm gonna roll up to a bunch of grizzled old motorcycle bros.
1:04:22 Speaker 01 Just gearheads.
1:04:23 Ramit Sethi? Yeah, gearheads. I'm gonna, I'm gonna have a fake tattoo. You know those ones you put on for Halloween? You get them on, you know, the Halloween. And I'm just gonna roll up with my jacket or whatever. Obviously, I don't even know what I'm talking about. I can't even say the right word. But they're gonna be like, damn, this is the first Indian guy I ever saw, you know, looking like this.
1:04:40 Speaker 01 Camp shafts and spring and forks.
1:04:44 Ramit Sethi? Okay, I don't even know what any of those are, but I'm gonna do that. All right, good. So, so here we are. We have the CSP. Now, the two of you have not combined your finances. Is that accurate?
1:04:57 Speaker 01 We haven't, and that is something I'm super interested in because I've never done it before. We watched the Netflix special and there was a couple on there where the guy was like, we should combine income. And I was like, whoa, I had never have thought about something like that. But, but that's actually like what it was with me and Amber when, when she was making a steady income. She was making 10, I was making three and my whole thing was like, you work hard for that money. I don't want to take any piece of your money. But when it got cut down to five, I was like, okay, now it might make more sense because you make five and I make three, but together we make eight.
1:05:33 Ramit Sethi? That is powerful to realize that as a team, you have an ability to do things financially that you couldn't do alone. You know, and if you think about it, one way or another, if you're living apart, you're each going to pay for internet. You live together, there's some savings to be had. You probably don't want to combine everything. I would keep things separate until you get married. I think that is important. That's healthy, but it's sure good practice to have this joint expense. And I'm going to say one other thing. In my opinion, I would pay proportionally. The person who earns more pays more. So you can add the numbers up and you can divide them. One of you makes, I don't know, 70%, the other makes 30%.
1:06:16 Ramit Sethi? The person who makes 70% pays 70% of the joint expenses. That is proportional. And I think for joint expenses, when you're not fully together, especially when you have a disparity like this, that can be a little bit more fair.
1:06:31 Speaker 02 Okay.
1:06:32 Ramit Sethi? All right. So what that would do is that would increase the amount that you, Amber, are paying. And I think it would probably cause you to think about how much you're paying towards debt. Because you're paying a lot and I respect that, but you may dial that back if you have to pay a little bit more proportionally. That would also allow you, Juan, to have more money each month for whatever you choose to. And considering you're scared of being behind, if I were you, I would put all that money into investments. We'll get back to the finances in a minute, but I do want to ask about the income because it's really striking. So Juan, you work seven jobs and you make $6,560 per month gross. What does that tell you?
1:07:17 Speaker 01 That I'm, I'm working too much for not enough money.
1:07:21 Ramit Sethi? Yes. Do you agree with that?
1:07:24 Speaker 01 This is a sore spot, but the answer is yes.
1:07:27 Ramit Sethi? What's that smile on Amber's face? That smile like, I'm so glad Ramit gets to talk about it because I've been talking about this for three years. Is that it?
1:07:35 Speaker 01 Exactly what that is.
1:07:36 Speaker 02 Yes.
1:07:38 Ramit Sethi? So what is that? Why do you have seven jobs? You're making less than a thousand dollars a month per job.
1:07:43 Speaker 01 For a long time, I didn't know how to monetize my skills for like, for what they were actually worth. I've been a climber for 25 years. There's this term of endearment that exists among climbers called dirtbag climber. The mentality of the dirtbag climber is that you live on as little as possible so that you can just have enough gas to make the trip to the next destination. And I, I just saw the world through that lens. I just assumed that everybody else was also in the same boat that I was with like, not a lot of income. And so then, even though I have perfected and, and really honed these like really good skills that I can then pass on to people through all the trainings that I do.
1:08:27 Speaker 01 I always see it through the lens that they might also not have enough money to afford it. And so I usually price things like super, super low.
1:08:36 Ramit Sethi? Okay. I appreciate that honesty and I hear you loud and clear. Like that, that way of looking at the world, that's real. Now, here's my question for you. Are you good with that worldview?
1:08:49 Speaker 01 I'm good with the feeling it gives me in my heart, but it conflicts with the reason that Amber and I are here today, speaking with you.
1:08:56 Ramit Sethi? Which is?
1:08:57 Speaker 01 We want to make sure that we're comfortable for the rest of our lives and, and to be able to help our, our families.
1:09:06 Ramit Sethi? Would you be okay if being comfortable for you and your families meant that you might not be able to be that dirtbag climber anymore?
1:09:17 Speaker 01 It requires like a shift in my way of thinking, but I am open to that or I wouldn't have applied.
1:09:23 Ramit Sethi? Okay. What kind of shift do you think it requires?
1:09:28 Speaker 01 I just have this ingrained mentality about like what I have to give is worth. For example, at the boxing gym, the owner of the boxing gym, when she asked me to work for her, she was like, I'd love you to do private lessons here. She's like, the gym rate is $65 an hour. And that's the first time that I realized I could potentially be worth $65 an hour.
1:09:48 Ramit Sethi? I wonder if I walked in your gym as a client and I tell you, I never put on a pair of gloves. I'm unathletic. I haven't done any of this stuff since I was in high school. What would you tell me?
1:10:01 Speaker 01 It's a point of personal pride for me to make sure that you feel good and successful about the session that you and I are going to have together in the gym. And you may come in thinking that, but you won't walk out thinking that for sure.
1:10:14 Ramit Sethi? Wow. Love the confidence. Okay. I love that philosophy. It's very inspiring. Let's flip that. I want you to coach yourself right now. What would you tell you?
1:10:24 Speaker 01 I would say you've spent a lot of time honing skills. You've gone through a lot of trial and error. You have done really well at figuring out formulas and making things approachable and presentable to people, and that is worth something.
1:10:40 Ramit Sethi? Love that. Amazing. Hold on. Round of applause. So good. So good. How did that feel? It felt, it felt very natural hearing it. How did it feel for you saying it?
1:10:50 Speaker 01 Uncomfortable. It's not that I don't believe those things. I think I'm just so tied to the mentality that I want to make sure that everybody has a chance to be able to benefit from these things that I've amassed and I'm able to teach.
1:11:05 Speaker 02 I feel like there's also a sense of like good and bad happening too, though, because you also regard all of your clients as friends as well. And there's a part of you that feels like it's bad for me to ask my friends to pay more money for my services. So I'm going to continue to undercut myself.
1:11:26 Ramit Sethi? That's a vision of money that is very, very deep. The idea that paying money is bad. You're my friend. I don't want to cause you harm. So I'm going to charge you the least I can get away with. I'm going to give you a different philosophy on money. The very best clients love to pay more. Have you ever met a client that loves to pay more? Juan?
1:11:51 Speaker 01 I don't think so because I never asked for more.
1:11:54 Ramit Sethi? Yeah, it's not even a figment of your reality. Okay, well, you're talking to one. I'm a client. I love to pay more. Why do you think I like to pay more?
1:12:04 Speaker 01 The thing that comes to mind is the experience. What you're paying for is connection and somebody that really is invested in your success. Right?
1:12:14 Ramit Sethi? All that could be true. It's a little vague. I'm going to tell you why I pay more.
1:12:19 Speaker 01 Okay.
1:12:20 Ramit Sethi? I pay more because I want somebody who's going to be there. When I get to the gym, they're already there. I'm not waiting around for them to show up three minutes late. My time is too valuable. When we start, we have a program. In fact, we have a program mapped out for the entire year. We're not just like randomly doing whatever today. They map it out. Oh, you're going to be traveling these two months? Perfect. We're going to work around that. We'll add a cut here, there, blah, blah, blah. Mapped out. They're tracking sets, they're tracking reps. They're writing it down. They're doing photos, check-ins, weigh-ins, all that kind of stuff. So what do I, the client, get to do? Show up and lift. But I know that every single other thing is taken care of at a highly professional level. Now, let me ask you a question. How long have you been doing this?
1:13:05 Speaker 01 Training climbers for almost 20 years.
1:13:08 Ramit Sethi? 20 years? How much you charge for that service?
1:13:13 Speaker 01 75. Well, that's just until recently because I was charging 35.
1:13:18 Ramit Sethi? Thirty-five per hour? Juan, that's the way you grew up. Having to pay was bad. Money was scarce. And so you always believe paying less is better. But there's a whole world of people out there who actually can pay a premium rate or even a luxury rate because they're not seeing the world by how little they can pay. They're seeing the world by how many results can I get? How pleasant can the experience be? Do I like this coach? And do I believe he or she is invested in me? And when you get to that level of connection, then the price in many cases becomes a mere triviality. Do you see a future where you could learn to believe that?
1:13:59 Speaker 01 I really, really enjoy the people that I work with. That's why I call them friends and not clients because they're just so incredibly cool. So the question is, say like tomorrow, I'm going to charge 125. But now I'm working with people that I don't necessarily connect with. Is that worth it? Is it worth it to go up and then, and then hate what you do for a living? Or have it be just a job? Or stay a little bit on the lower side and enjoy the work that you do?
1:14:26 Ramit Sethi? I'm going to go to Amber's phrase, which is, it could be better. Let me tell you what I mean by that. If you raise your rates, let me tell you what's going to happen. Some of your clients are going to stick with you because deep down, they know they're getting a deal and they love you. And an extra 20 bucks or 30 bucks an hour is nothing to them. Okay? But they're also people who are price sensitive. You're going to lose them. That's okay because it could be better. Your future is bigger ahead of you. And what I mean by that is there's lots of amazing people out there who will be a fit for you charging market rates. Some of these people are going to be incredible. You're going to build new friendships.
1:15:11 Ramit Sethi? Some of them are going to be clients. Maybe you won't like them. You don't have to take every client. In fact, when you limit your availability and raise your rates, you can actually be more selective about who you choose. If you've been doing this for 20 years, you actually get to work with the best, the clients you like, the ones who show up, the ones who are serious. So I'm borrowing Amber's phrase, "It could be better." Because you asked a really good question, but it was all focused on, "What if it gets worse? What if I raise my rates and I get worse clients and everybody leaves and I have no friends?" The better question is, "What if it gets better? What if I make almost double the money? What if I'm working less? What if I can stop working some of these jobs that are taking up all this time and actually making no money?
1:15:57 Ramit Sethi? Spend more time with my family who I love? Work with higher quality clients? Get better results?" And it goes into an upward spiral. It's a different way of looking at the world. And deep down, it really comes to you valuing yourself and realizing like, "I'm worth it." And it's probably not normal to be working seven jobs. If I'm working seven jobs, making less than $7,000 a month, I probably should take a really tough look at, "What are my goals? So what do I need to change?" Well, the most obvious one is you need to charge what you're worth.
1:16:27 Speaker 01 Basically, just listen to Amber.
1:16:31 Speaker 02 Yes.
1:16:31 Ramit Sethi? I'm not gonna say this.
1:16:32 Speaker 02 Validation.
1:16:37 Speaker 02 All right. We're done here. We can pack up.
1:16:41 Ramit Sethi? How do you feel about hearing all this, Amber? I know there's a bit of like, "I told you so." I get that. But what else do you feel hearing this?
1:16:47 Speaker 02 It's one thing to hear your partner saying that, but to have other people share this and say like, "Hey, with your level of experience and your skillset, it's okay for you to charge more." And I think that perspective is super helpful. I also think that, you know, Juan's framework of how he doesn't want to burden his friends or these other clients by charging more also kind of makes the assumption that everybody's operating from that same mindset, which is not the case.
1:17:15 Ramit Sethi? That's so right. That's such a great way of looking at it. Not everyone's operating the way you are. In fact, you have a very unique upbringing, which in many ways made you so self-reliant, Juan. But it also has given you a bit of a distorted view on... The industry you work in, the industry you work in is a luxury industry. Luxuries cost more. Nobody's walking in to hire a personal trainer or a guide who doesn't have discretionary income. Those are expensive industries, people know that. So I'll tell you something, it actually in a way is a little bit weird. If I walk in and a trainer or a coach is like, oh, I'll charge you like 25 bucks an hour or something like, what the?
1:17:53 Speaker 01 Yeah, it's just ways of looking at things that that I'm not used to and that I don't think about myself.
1:17:59 Ramit Sethi? My suggestion, first off, one is to get comfortable with realizing that charging money is not a bad thing. It's actually a good thing. People want you to charge them fair, premium, sometimes luxury rates, and to deliver them an amazing experience. If you can deliver them an amazing experience, it makes perfect sense for you to charge accordingly. Amber, can we talk about your income for a second?
1:18:29 Speaker 02 Sure.
1:18:31 Ramit Sethi? So your income may drop 25 to 50%.
1:18:34 Speaker 02 Yeah, and it has already.
1:18:36 Ramit Sethi? All right, what are you gonna do?
1:18:38 Speaker 02 Well, so now I've got to hustle and find some other clients.
1:18:41 Ramit Sethi? How are you gonna do it?
1:18:43 Speaker 02 I set up a LinkedIn, but I've also been putting out feelers to friends who are also running their own businesses and I've got a couple of leads so far.
1:18:54 Ramit Sethi? What do you do?
1:18:55 Speaker 02 I help businesses become more profitable and successful.
1:18:59 Ramit Sethi? Whoa, great. Okay, I love it. That was a great answer.
1:19:04 Speaker 02 All right.
1:19:04 Ramit Sethi? If we want to make the big bucks, we got to act accordingly in everything we do. We show up early, we describe ourselves correctly in an enticing way. Like, that's how we do it. It's everything we do. I have no problem with people charging above-market rates, but I always insist you deliver above-market returns for the people who are paying for your service. Right? So that's how we're gonna do it. Okay, I love that. If you want to know how to start a business and grow it, go to iwt.com/earnable. I teach the same techniques I use to grow my own business, which has been around for over 20 years. That's iwt.com/earnable.
1:19:43 Ramit Sethi? How confident are you that you can replace your income and bring it back up to $10,000 a month?
1:19:51 Speaker 02 Very confident.
1:19:52 Ramit Sethi? How many outreaches would you need to do in order to close a new client?
1:19:57 Speaker 02 I don't even know, but I know it would be a numbers game. So I would probably just have to start reaching out to at least, I don't know, 10 to 30 leads a week, maybe?
1:20:08 Ramit Sethi? Okay, alright. I think that's a good start. Can we get back to the numbers for a second?
1:20:12 Speaker 02 Yeah.
1:20:13 Ramit Sethi? So, there was a lot of Talk One, especially that you said about taking care of your family. And right now, you're putting $200 a month aside in a Roth IRA for your mom, which I think is great.
1:20:23 Speaker 02 What about the money that goes to your siblings?
1:20:26 Speaker 01 I didn't put that down.
1:20:27 Ramit Sethi? How much?
1:20:28 Speaker 01 It's probably around $300.
1:20:31 Ramit Sethi? Why are you sending them hundreds of dollars a month?
1:20:35 Speaker 01 It's actually my sister. My sister just didn't set herself up very well.
1:20:39 Ramit Sethi? Is she in a relationship?
1:20:41 Speaker 01 Yeah, she's married.
1:20:42 Ramit Sethi? And is it possible that she has a discussion with her partner and she's able to have some financial relief from there?
1:20:51 Speaker 01 I would love for that to happen. One of the things that frustrates me is on her husband's part, I just don't understand why it's not possible for their finances to be enough. It's not my business. It's just when my sister is, hey, she's like, we're short this month. Can you help me? I just cannot say no.
1:21:10 Ramit Sethi? Okay, how often does that happen?
1:21:12 Speaker 01 Semi-regularly, I'd say every other month.
1:21:14 Ramit Sethi? How long has it been going on?
1:21:16 Speaker 01 Couple of years, three years, four years. I wish it wasn't that way. I just wish that they were in a better position. Also, that guilt comes back, you know? I just was not a good role model. I wasn't there for a lot of things that they could have used help and guidance with.
1:21:30 Ramit Sethi? Are you being a good role model when you send cash every other month for years?
1:21:35 Speaker 01 I do think it's a good role model.
1:21:37 Ramit Sethi? Okay, because?
1:21:39 Speaker 01 Yeah, because, you know, it's, blood is blood, and if they need help, then you should be there to, to help them.
1:21:48 Ramit Sethi? Could be. I'm never going to tell you not to take care of your family. I do think that if your family member is asking for financial help every other month, there's probably a deeper issue here. And if you were multimillionaire, I would say just send the money. But you're not. You don't have a ton of extra money. Right now, you're making 6,400 a month gross, working seven jobs, and you only started investing at the age of 40. You have some serious investing to do just for yourself. In addition to that, you have partner Amber, who wants to live the life together with you
1:22:26 Ramit Sethi? that you're co-creating, and you have your mom. So I don't think you're being a good role model for Amber. I don't even know if you're being a good role model for your sister when you simply say, "Yes, here you go" every single month. I think there might be a different approach. The approach might be, "Look, happy to send you some money to help, but I'm also going to send you a copy of this book. I would like you to read it, and I want you and I to talk about it a couple of weeks from now." That's an easy option. Another option is, "Hey, I'm happy to send this money to you, but if you want to talk about your spending plan, love to sit down with you and work through yours." A third option, a little bit more aggressive, is, "Hey, happy to send this to you.
1:23:12 Ramit Sethi? Here's how much I can send you every year. This is what I can do. It's up to you how you spend it, but once I send that money, that's it." What do you think?
1:23:23 Speaker 01 Option number two intrigues me the most because it opens up a path. I think what that would do is enable us to kind of like further deepen our relationship, and she can see that I'm just trying to help her so that it doesn't have to be this revolving thing where like, "Hey, we don't have enough. I gotta ask my brother."
1:23:41 Ramit Sethi? Do you think that she would be receptive to that?
1:23:44 Speaker 01 Yeah, I just need to make sure that I can do that and phrase that in a way that shows a clear white flag to help.
1:23:51 Ramit Sethi? Let's just practice right now. I'll be your sister, you be you. Let's do it. Hi, hermano. Sorry to have to...
1:24:03 Ramit Sethi? Sorry to have to ask again, but we're a little short this month. Can you help?
1:24:08 Speaker 01 Yeah, happy to. Just give me a couple of minutes. I'll send the money over via Venmo. And also, I wanted you to know that Amber and I had been working on this thing called the Conscious Spending Plan, and it has really helped us kind of organize our finances. If you want, I can help you guys plug some numbers in so you can see how your money's working and where you can make some changes to maybe have ends meet month to month.
1:24:35 Ramit Sethi? Okay, amazing. Good job. And now I'm gonna make it a little harder for you. I'm gonna be your sister, but watch my reaction. I want you to play along. We're still in the role play now. That sounds really good, but right now, there's just a lot going on. Maybe in a couple of years, when I have more time, I can look at that, but right now, honestly, I just need just this, just to tide us over for now.
1:24:55 Speaker 01 Yeah, I don't know what to do, man. We just give them money.
1:24:58 Ramit Sethi? Okay. Do you want to keep doing that?
1:25:01 Speaker 01 I love the idea of empowering them to get their things in order a little bit more. Because there might be an event where I can't do it.
1:25:11 Ramit Sethi? What would happen then? If you were sick from work, for example, for a month or two, you got injured, you couldn't collect money, and then your sister asked for money, you couldn't give it to her. What would happen then?
1:25:20 Speaker 01 It would default to my mom.
1:25:22 Ramit Sethi? So they would take it from your mom, who's in her 60s or 70s, working seven days a week?
1:25:26 Speaker 01 Seven days a week.
1:25:27 Ramit Sethi? And your mom would send it to them because she can't say no, correct? And then what would happen?
1:25:32 Speaker 01 It'd probably happen again.
1:25:34 Ramit Sethi? Yeah. So do you see that by simply Venmo-ing them, you're not actually empowering her? It's been happening every other month for two years. It's probably gonna keep going on for years and years. There's gotta be something else besides just continuing to feed that, wouldn't you say?
1:25:49 Speaker 01 I'm lucky in that I had Amber to start me on this journey about being curious and learning more about money. And I think what you've just done is presented an opportunity for me to be able to at least try to open that door for them. It's about them being able to like figure out a way to make things work. It doesn't matter the circumstances that they find themselves in. Yeah, because we're doing that.
1:26:13 Ramit Sethi? Do you see that the same lesson your mom taught you is the same lesson that your sister also learned? You've got to take off these lenses that you grew up with and put on a different pair of lenses. The lenses, in her case, is probably, hey, we need to talk about what's our money situation. They probably need to read both of these books together. They need to have a reason to change. But right now, with you just answering the call every other month and Venmo-ing money immediately, there's actually no reason for them to change. So that's something that I would really consider. It's also something, if I were you, I would encourage you to talk to a therapist about, because setting boundaries, really hard, really, especially with family.
1:26:56 Speaker 01 I appreciate the guidance, for sure.
1:26:59 Ramit Sethi? Let's take a look at the investments. You currently have $80,000 in investments. Whose money is that?
1:27:09 Speaker 02 $48,000 is mine.
1:27:12 Ramit Sethi? Ah, and the remainder is yours, one? Wow, okay, that's great. It's basically equal. Let's just call it equal for easy math, huh? Okay, $80,000, I'm gonna plug it in this calculator. And how much are you adding every single year?
1:27:29 Speaker 01 I have $500 automatically deducted from my property management job, and that goes into, what did you call it, Amber? The 408p or something?
1:27:39 Speaker 02 I think that's what it was called, yeah.
1:27:41 Ramit Sethi? $6,000 a year, plus the Roth IRA. That's another, let's just say...
1:27:44 Speaker 02 It's a seven.
1:27:45 Ramit Sethi? Yeah, seven, okay.
1:27:46 Speaker 02 Mm-hmm, and then my seven.
1:27:49 Ramit Sethi? All right, 20K a year. Years to grow, 22, shall we say? All right, 7%, factors in inflation, et cetera. It's a nice conservative number. 1.4 million. That would be about $56,000 per year. In income. And we should factor in that y'all would not own a house. And you also are underpaying right now. You're dramatically underpaying because you pay no rent. So this is not nearly enough. What does this make you feel when you hear this number?
1:28:20 Speaker 01 That makes me nervous, scared actually.
1:28:23 Ramit Sethi? Why? You would just do what you've always done, which is just keep working. So why are you scared? That's the future that you always thought you would have.
1:28:30 Speaker 01 I'm scared because now I've been shown that there are other possibilities. And if we want those other possibilities, they're not going to happen on 56,000 a year.
1:28:38 Ramit Sethi? That's correct. There's no way you could survive on 56,000 because you'd have to pay rent. Your rent alone might be a significant percentage of that. So should we make some changes?
1:28:50 Speaker 01 Yeah.
1:28:50 Ramit Sethi? Okay. Do you all see now that these seemingly small expenses that you choose to pay will actually add up to tens of thousands, even hundreds of thousands of dollars? Who can name some of those seemingly small expenses that you both pay for routinely?
1:29:09 Speaker 01 Trips.
1:29:10 Ramit Sethi? Okay, that's one.
1:29:11 Speaker 02 I'll do DoorDash.
1:29:13 Ramit Sethi? Great. DoorDash is two.
1:29:15 Speaker 01 Motorcycle stuff?
1:29:17 Ramit Sethi? Motorcycles. I love how he's like, I don't know, coffee. Guy has freaking 20K of motorcycles he could sell tomorrow. All right. Agreed. What else?
1:29:27 Speaker 02 Amazon purchases.
1:29:28 Ramit Sethi? Great. That's four. What else? Anything relating to family perhaps?
1:29:33 Speaker 01 300 every other month. Yeah, that family stuff.
1:29:36 Ramit Sethi? That right there is 1,200 bucks. There's money for the mom, sister. I'm sure there's some holiday stuff. There's gifts and on and on and on and on. Thousands. Now you all want to see what this looks like? I'll show you the calculation. Just pick one. Let's go and do the calculation for gifts. What do you say you spend on gifts per year?
1:29:55 Speaker 01 Let's say 10,000.
1:29:56 Ramit Sethi? Let's say you give no gifts anymore for the foreseeable future. You go, look, we can't give gifts. We're trying to build our financial future. So instead of $20,000 a year, we're doing $30,000 a year. Now watch what happens to the math. At $20,000 per year invested, you have 1.4 million dollars. By just increasing that number to $30,000 a year.
1:30:19 Ramit Sethi? You now have 1.9 million dollars. And instead of 56,000, $77,000 a year in income. What do you all think?
1:30:32 Speaker 01 To take Amber's phrase, it could also be better, so.
1:30:35 Ramit Sethi? Oh, okay, I'm giving up for that. Let's make it better. You want to make it better?
1:30:40 Speaker 02 Yeah.
1:30:40 Ramit Sethi? Let's make it better. I agree, it could be better, but we're going in the right direction. Would you agree?
1:30:45 Speaker 01 Yeah.
1:30:46 Ramit Sethi? All right. So let's get rid of these bikes. 20K. Shall we just put them away? 20K, sell them.
1:30:53 Speaker 02 Yep.
1:30:54 Ramit Sethi? All right, so instead of 80K, I'm gonna make this 100K. So instead of 1.9 million at your age of 65, we now have $2,016,000. Not bad, not bad. We're getting there. Candidly, I don't think you're in the position to be spending $10,000 a year on gifts. I definitely don't think you're in the position to have all these motorcycles. There's just no way. You can't afford it. Where else do you think are the big levers that you can pull to be able to really get to a rich life?
1:31:26 Speaker 01 Charging more.
1:31:28 Ramit Sethi? Oh, charging more? Like how much more?
1:31:31 Speaker 01 If I was charging $85 an hour, and I chose like every six months to raise the rate by a percentage amount, would that be a good strategy?
1:31:43 Ramit Sethi? If you were to raise your rates, let me tell you what would happen.
1:31:47 Speaker 01 Okay.
1:31:48 Ramit Sethi? Naturally, you would start making more. You would realize, hey, it actually makes no sense for me to be doing this social media thing and this thing, because I'm not making close to what I'm making over here. So you're gonna start naturally working more on the higher value, higher return thing, which you enjoy. You'll probably end up having one, maybe two jobs. If you're charging 85, 95, 110 an hour, why do you need two jobs? Crush it. Do an amazing job. Over-deliver to your clients. How much more do you think you could be earning per year?
1:32:22 Speaker 01 Man, I'm terrible at math, but.
1:32:24 Ramit Sethi? Let's just approximate it. Right now, gross, you make $78,720 a year. Let's just say 79,000. How much more could you earn?
1:32:35 Speaker 01 I'd love it if it was a six-figure salary that was comfortable.
1:32:38 Ramit Sethi? Love it.
1:32:39 Speaker 01 So Amber was making, so like 100,000, 110,000?
1:32:42 Ramit Sethi? Honestly, that's only $2,000 a month more.
1:32:47 Ramit Sethi? That's not much. I'll run the math for you. 2,000 bucks divided by, what are you gonna charge per hour? 85? That's 23 hours of client work. Divided by what? Four? That's like six hours a week extra of that high value stuff. I mean, very simple here. It might be that some of your clients come back more often because you offer them something. This is totally doable. Amber's smiling over here. She's excited, but Amber, let's talk about you. How much more can you make?
1:33:19 Speaker 02 I could easily get to 160 a year.
1:33:24 Ramit Sethi? So 40K more?
1:33:26 Speaker 02 Yeah.
1:33:27 Ramit Sethi? I love it. Tell you what, let's be conservative. Let's say that the two of you make 50K more per year. One of you might make more this year, the other makes more next year, whatever. I like to be conservative with our estimates, but all I can see right now is you're dramatically undercharging, Juan. Let's say you're making 50K more. We'll say 30K of that you're gonna invest. Okay, I don't know if this is realistic because this number is freaking huge, but I just want to show you what it looks like, okay? It's really big. Instead of 30K, I'm making it $60,000 a year invested. That's a lot. Wouldn't you agree?
1:34:05 Speaker 02 Yeah, that's a lot.
1:34:06 Ramit Sethi? I mean, that's
1:34:07 Speaker 01 That's a salary.
1:34:08 Ramit Sethi? What we've just, yeah. In this example, though, what we've seen, if I came to you at the first five minutes of this call, I was like, you guys need to invest $60,000 a year. You'd be like, fuck off. This guy doesn't know what he's talking about. He doesn't know us. But what we just did was we really broke it down. We're like, hey, here's what you're currently doing. In order for you to have 30K more to invest per year, that means each of you needs to do this. You need to break it down. It's all math. It's not magic. And we realized this is feasible. In fact, I think you could probably do this in 12 to 18 months. Okay, let's take a look at what the math says. Are you all ready?
1:34:47 Ramit Sethi? All right. We're starting with a hundred thousand dollars because we sold those bikes. We're investing sixty thousand dollars a year, twenty-two years to grow. Watch this. Three point five million dollars. What do you all think? A lot of nods around the room. What's going on right now?
1:35:02 Speaker 01 That's a great number.
1:35:03 Speaker 02 Yeah, I think that's closer to where we need to be.
1:35:06 Ramit Sethi? That's a hundred and forty-three thousand dollars a year in safe withdrawal.
1:35:11 Speaker 02 Wow.
1:35:12 Ramit Sethi? Now, that is what I'm talking about.
1:35:14 Speaker 01 Yeah.
1:35:15 Ramit Sethi? So what, what do you need to do in order to get there?
1:35:18 Speaker 01 We have to make obviously like some adjustments to the spending habits. And we have to sell some of the things that we don't entirely need right now or charge more.
1:35:27 Ramit Sethi? Core your business income. I agree. Yes. Amber, what do you see?
1:35:32 Speaker 02 Yeah, same thing. And also getting more clients, finding how you're paying clients.
1:35:38 Ramit Sethi? The way you both are talking, I, I have a hundred percent confidence you can knock that out. What's the stuff you're not talking about? What are the skills you need to develop that you are not talking about?
1:35:51 Speaker 02 I think we'd have to have more of a structured plan. I mean, even between the two of us. Where we're actually sitting down and talking about how do we want to allocate our resources this month? Setting better boundaries with family and what that looks like.
1:36:08 Ramit Sethi? First time I heard that word today. Boundaries, because you can't get where you're going if you have no boundaries. You've got to have boundaries. That means that the skill you have to build is knowing what is your rich life? And what is not part of your rich life? Maybe you want to support your family in some way. Love it. I'm all for it. But how much? There has to be a number. You have to decide proactively. It can't simply be when somebody calls me. That affects my finances and our finances. You can't let somebody else control your rich life. You've got to set a boundary.
1:36:51 Ramit Sethi? The rich life is about deciding what do I want? What do we want? And then using your money to live that. You two come from a lot of sacrifice. You went through a lot in the way that you grew up with money. You also come from scarcity. So it's like, especially Juan, your family. So when they call, it's like, I'm here to help. I'm here to help. I'm here to help. But there's so many ways to help besides writing a check or Venmo. So many ways. One of those ways is to actually become an amazing role model with money. The rich life is your decision together. It can't simply be what other people in the world want from you.
1:37:34 Speaker 02 Makes a lot of sense.
1:37:35 Speaker 01 Yeah, that's a good message.
1:37:37 Ramit Sethi? Thank you to Juan and Amber for sharing the details of their story so openly and so vividly. They both have a lot of work to reach their retirement goals. But given that they both run their own businesses, there's actually no limit to how much they can earn. If they commit to increasing their client list and Juan increases his prices, I actually have a lot of confidence they can get there, which is why I offered to share my business program with them to help them get to their goals faster. I wish them the best, Juan and Amber. I'd love to stay in touch. Please keep me updated. In the meantime, let's hear about the changes they have made since we spoke just a few weeks ago. First up is Amber.
1:38:17 Speaker 02 One thing that really surprised me was how receptive Juan was to this discussion around his money mindset. It's something that he and I have talked about a lot over the years, but something about this conversation with you really clicked for him. And it was amazing to see him finally start to believe that it's okay to charge more for his services. He's an exceptional coach and he's really effective at what he does and he deserves to be paid more. And so we started making changes almost immediately from how we collect payments to what he's actually charging. And it's already making a difference.
1:38:53 Speaker 02 Another thing that I found really helpful was our discussion around gifts. Having that perspective shift really motivated me to find more creative ways to show that I care besides just spending money. Oh, and the credit card is officially paid off. Wasn't too worried about it because I had the money, but it does feel good to start the month off with no balance. I've also scaled back on aggressively paying off my student loans so that I can divert those funds instead to building up our cash savings. So yeah, lots of positive changes already.
1:39:25 Ramit Sethi? And now, Juan's follow-up video.
1:39:28 Speaker 01 Hey, Ramit. First, I just wanted to thank you. I think it was great that you let us know that we were on the right track with the things that we had already started, but also gave us a really objective view and opinion on the things that we could be doing better and things that we hadn't yet thought of, which were really, really helpful. Speaking of one of those things, my sister did reach out for some income recently, and I was happy to provide her with that income, but I also took the opportunity to bring up the spreadsheet as if she would be comfortable going over that with me to see if maybe I could help her get into a better place with her finances. And she was super receptive to that. I really appreciate you bringing that up in a way that made it comfortable for me to bring it up with my family. You'll also be happy to know that we put three of the five motorcycles up for sale.
1:40:13 Speaker 01 You helped me see that it is really important right now, at this moment in time, to prioritize setting money aside for retirement, especially if we want to take care of our families the way we say we want to. So it was no problem to put the bikes up for sale. I know that in time, we'll get back to that rich life experience. So I'm happy to make those changes now.
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