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

Master your money, revolutionise your relationships, and live a rich life with personal finance expert Ramit Sethi. Ramit Sethi is the host of the Netflix series ‘How to Get Rich’ and author of the best-selling book, ‘I Will Teach You to Be Rich’. He is also founder of the podcast, ‘Money For Couples’. In this conversation, Ramit and Steven discuss topics such as, how to create your vision for a rich life, why you should rent rather than buy a house, the best money talks to have with your partner, and the top 3 money red flags in a relationship. 00:00 Intro 01:35 Why People Should Care About This Conversation 02:25 What Has Ramit Learned About Money And Relationships 04:10 Differences Between Men And Women's Spending Habits 05:40 What Are The Sources Of Arguments In Relationships 07:14 Women Earning More Causes Problems 11:47 You Don't Need To Buy A House To Be Successful 14:18 Should Men Remain Single? 15:39 Who Should Pay For The First Date? 18:09 Should Men Be Chivalrous? 19:45 What Are Financial Red Flags? 20:51 The Money Types – Avoider 22:17 The Optimizer 24:31 The Worrier 26:14 The Dreamer 27:29 Which Money Type Lives A Happier Life? 29:14 Do You Know How Much Your Partner Makes? 31:32 Should You Keep A Bad Financial Situation A Secret? 36:00 Are Prenups A Good Thing? 42:44 Do We Need A "Money Guy"? 43:59 Red Flag: They're Cheap 45:24 Robert Kiyosaki's Advice Is Rubbish 46:36 What Makes A Worrier? 48:14 What Is A Rich Life Vision? 52:32 Merging Finances As A Couple 58:15 Should You Sweat The Small Stuff? 01:00:13 Is Buying A House Financially Savvy? 01:03:59 Why Is It Hard To Buy A House In 2024? 01:07:13 A Better Use Of Money Than Buying A House 01:14:04 Alternatives To House Buying For Investments 01:16:16 Uncovering Finances And The Shock It Can Have 01:22:19 Should You Make A Budget? 01:24:01 How Do We Teach Our Kids About Money? 01:27:16 Should We Let Our Kids Enjoy Our Wealth? 01:28:23 How To Raise Kids Without Spoiling Them 01:29:34 How To Educate Your Kids If They Want To Be Wealthy 01:31:54 The Principles Of Wealth Creation 01:33:57 How Much Money Do You Need To Start Investing? 01:35:27 Gambling In Relationships 01:36:46 Money Issues Destroying Marriages 01:38:09 Steven's Parents' Money Mystery 01:39:23 If You Have Enough, Why Continue? 01:40:01 What Ramit Would Do With A Surprise $100M 01:41:55 What People Love To Spend Their Money On 01:47:01 The Guest's Last Question Follow Ramit: Instagram - https://g2ul0.app.link/36K8W7SVBNb Twitter - https://g2ul0.app.link/A0YgzpVVBNb Website - https://g2ul0.app.link/UyeTgBYVBNb You can pre-order Ramit’s book, ‘Money For Couples’, here: https://g2ul0.app.link/L532luaWBNb Watch the episodes on Youtube - https://g2ul0.app.link/DOACEpisodes My new book! 'The 33 Laws Of Business & Life' is out now - https://g2ul0.app.link/DOACBook You can purchase the The Diary Of A CEO Conversation Cards: Second Edition, here: https://g2ul0.app.link/f31dsUttKKb Follow me: https://g2ul0.app.link/gnGqL4IsKKb Sponsors: WHOOP - https://join.whoop.com/CEO Colgate - https://www.colgate.com/en-gb/colgate-total Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Ramit Sethi?

  How can you talk about renting? You're just throwing money away. BS. Should I just dismantle these arguments once and for all? Because there's some shocking math behind a mortgage. And most people don't know this stuff. Let's get into it. Rameed Sadi. The financial expert and entrepreneur is back. To teach you how to take control of your money.

• 0:16Steven Bartlett?

  And confront the financial problems that hold us back.

• 0:19Ramit Sethi?

  Most people fall into four money types that I've identified. Number one is avoiders, and they hate talking about money. But if your partner simply will not talk about money, that's a huge red flag. Because 50% of the people I talk to do not know their household income. 90% who are in debt do not know how much debt they're in. And 100% of the people I talk to in credit card debt also have trouble with. That is shocking. Next up, Optimizer. They can get you to a very good place. They'll be investing. We love to live in a spreadsheet, but it can be taken too far. And then the dreamer, who believes that success is one deal away. And they tend to fall into crypto cryptocurrency scams, like all this BS. Finally, worry-ers. They love to worry. Are we gonna have enough? What if we run out of money? Typically, they picked up worrying from their parents,

• 1:04Ramit Sethi?

  who said stuff like, money doesn't grow on trees. And the problem is, you could take it a little too far. And they become cheap and become so obsessed with $3 questions, like agonizing over buying a coffee. But everybody listen closely, because I want to break down how you can change any of these types. So.

• 1:18Steven Bartlett?

  Rameed, the only investment most couples make is buying a house. What is the alternative?

• 1:22Ramit Sethi?

  This is where real wealth is created. Let's simplify the whole thing. And I have four numbers that everyone should be talking about. The first off is your fear.

• 1:36Steven Bartlett?

  Rameed, if someone's just clicked on this conversation, please explain to me exactly why they should stay and listen to what we're about to discuss on the basis that we're about to talk about the things you've written in this book.

• 1:51Ramit Sethi?

  If you are single and dating, if you are engaged, or if you have been married for 25 years, money is one of the central parts of our lives. And most of us think about money as something to be avoided. It's something we only talk about when things have gone wrong. What a terrible way to live. And there is a different way, which is we can use money as a source of connection, possibility and joy. And that is what we're going to talk about today.

• 2:25Steven Bartlett?

  I had a conversation a couple of days ago, actually, with James Sexton, who's the divorce expert. He's a divorce lawyer by trade, but he knows more about divorce than anybody else. And he said to me, there's two things which cause people to end up in his office going through a divorce. Number one is cheating, infidelity. And the second thing is money problems in the relationship. So I find it especially pertinent to have this conversation with you about couples' relationship with money. Because clearly, one of the things that is most likely to end my relationship, or I guess prevent me getting into one, is this financial avoidance that most of us engage in. You've interviewed hundreds and hundreds of couples about money on your podcast. What have you learnt about our relationship with money in relationships from that?

• 3:10Ramit Sethi?

  I've learned that 50% of the people I talk to do not know their household income. 90% of the people I talk to who are in debt do not know how much debt they're in. And 100% of the people I talk to in credit card debt also have trouble saying no to their children. Isn't that shocking? Each of those things, 50% do not know how much income they make. Because most of us are simply living by looking at our checking account, and that's it. The debt part kind of makes sense. Why would you want to know how much debt you owe? You don't really want to think about it, so you ignore those emails and envelopes. And the credit card debt part, that is really interesting.

• 3:54Ramit Sethi?

  The idea that if you can't say no to spending, so you've racked up a bunch of credit card debt, the same principle applies to saying no to kids. For me, when I discover these, I find them absolutely fascinating. But the good news is you can also change these things.

• 4:10Steven Bartlett?

  And what's the difference between men and women? In terms of spending habits in a relationship, secrecy, avoidance, arguments?

• 4:18Ramit Sethi?

  Well, let's start with the roles. Men always describe themselves as providers, always. That's what we are taught. It exists in culture. The problem is, of course, what happens when they are not the top earner? Which is happening increasingly more now. So when I often ask them, who are you financially speaking if you're not a provider? And they're just stumped. But there's got to be something more than simply being a provider. You can be a provider and you can be a nurturer. You can be a provider, you can be a helper, a leader. There's so many different ways. Often, what you'll see with women is discussions about a secret bank account.

• 5:01Ramit Sethi?

  Keep a little money aside just in case. We have to remember that in the US, many grandmothers were not allowed to open up their own bank accounts. That happened two generations ago. And so there has been a rightful message that has been passed down orally. Keep a little bit of money aside just in case. Whether it be physical abuse, financial abuse, divorce, et cetera. And I totally respect that message. I don't think you should have a secret account. I do think you should have an account that is yours only, but no secrets in a relationship.

• 5:40Steven Bartlett?

  What about arguments as it relates to money in relationships? What are the cause of the arguments? Is it someone spending too much? Is it hiding money? Is it something else?

• 5:50Ramit Sethi?

  It's usually not hiding money. That's very small extreme. The biggest phrase that I get from couples is, he or she's a spender and I'm a saver. So it's creating this identity that they're a spender, I'm a saver. Or they don't want to talk about money ever. Why can't I get them to finally sit down with me and get on the same page? That's a phrase that's tossed around everywhere. When I ask them, what is getting on the same page?

• 6:19Ramit Sethi?

  The answer is, I don't know, I just want to talk about it. So when it comes to money, yes, there are the numbers that we need to understand, of course. But what I often tell people, the way you feel about money is highly uncorrelated to the amount in your bank account. That is why I speak to so many multimillionaires who still worry about money. They think if I just have fifty thousand more, five hundred thousand more, five million dollars more. Well, guess what? I've had all those folks on my podcast and they still worry about money. That means there's two things you need to do to master your relationship with money. One, you've got to know your numbers. This is a language, you have to learn the basics of personal finance. Two, you have to master your money psychology.

• 7:02Ramit Sethi?

  That means you need to change the way that you talk about money and behave with money so that you can ultimately change the way you feel about money. You do those two things, you're going to have a very healthy relationship with money.

• 7:15Steven Bartlett?

  We'll go into all of those things and how you do them. On this point of gender roles, obviously, society has changed in the last couple of decades in terms of equality and more women are in work at higher level positions in corporations, in the C-suite, earning much more money. This has caused a shift, I should say, in the sort of typical gender roles and assumptions of what each gender is supposed to be doing in couples. And I'm wondering now, with more women earning more money, in many cases, they're going to be earning more than their husband in heterosexual relationships. Have you seen new dynamics and new issues created because of this? In terms of like insecure men feeling emasculated

• 7:58Steven Bartlett?

  or the woman not being happy that she's contributing more? And I ask this because I had someone on my podcast a couple of months back who said to me that I think it's seventy or eighty percent of women expect that their romantic partner will earn more than them. But that gap is closing now because women are earning more and more money. I'm just wondering if you've seen in those couples scenarios where the woman earns more and it's causing problems?

• 8:21Ramit Sethi?

  I've seen it all the time. I've seen it all the time. I think that we see different gender dynamics. I recall one episode where I spoke to a young woman and her boyfriend. She was around forty years old. She made way more than her boyfriend. Care to guess how much she makes per month? Twenty thousand dollars? Two hundred thousand dollars per month. She has a business, it's doing very well, she's around the age of forty. Now, her boyfriend was never taught about money when he was growing up. Most people are not. He never learned about investing, certainly no one was telling him about a Roth IRA when he was twelve years old.

• 9:02Ramit Sethi?

  And he had started his own business and he was on the upswing, he's making a few thousand dollars a month. Good for him. She's making two hundred grand a month. Her parents started talking to her about investing when she was five years old. So here we already see a difference, not just in gender, but in socioeconomic status, okay? And over time, that progressed. So they come to me and she says, "I want him to pay for dinner occasionally." Fine, super reasonable. He even said, "No problem, I want to." So he would take his credit card out and he would offer to pay, and she would say, "No, I want you to contribute more to your IRA." So in many ways, she wanted him to pay.

• 9:45Ramit Sethi?

  She wanted to feel taken care of, which is totally reasonable. But when he offered, she said, "No." So this is the kind of thing that I often see, which is, "I think I want one thing, but when I get that thing, I don't actually want it. It doesn't make me feel the way I thought it would. I want to earn fifty K more, I think that'll make me feel safe. Oh my god, I am earning fifty K more." It doesn't actually change the way I feel. So, I worked with this couple. And I helped them understand why they both felt this way about money. And, you know, from the outside, it's like, "This is so irrational. If you make more, just pay more, if I were in that situation, etc., etc." None of that stuff matters. When you are in the couple, in that relationship,

• 10:30Ramit Sethi?

  you will feel a certain way, and we gotta work with you individually, not what everybody else says. In the end, the conclusion that they came to was, she wanted him to occasionally pay for dinner, but she also wanted him to fill up his IRA. So this is what they did. Every so often, before they went out to dinner, she would give him her credit card. And she would say, here, I want you to pay for tonight. And he said, cool. He understood it. They went out and that's what they did. Now, to us sitting here, we're like, this dance makes no sense. Why don't they just do it this way or that way? Guess what? Every single one of us has some irrational thing we do with money. Every single one of us.

• 11:11Ramit Sethi?

  And I think that we are ready to actually have conversations about how we are irrational. Money is not just dollars and cents on a page. That's why you don't feel good about money, even when you have more than you ever thought you would. That's why you worry about money, but you have never read a single book on personal finance. We are all irrational, including me. And when you get into a relationship, you gotta acknowledge that. And then you gotta say, hey, what is our vision of a rich life together? Let's build that. If it means we do a little dance about the credit card once every two months? Fine. Do we both feel good? Is it fair? Then I'm good with it.

• 11:47Steven Bartlett?

  What's going on there with her? Because it it sounds like there's this battle between her mind and maybe her heart. Or it's almost like the social expectation is coming in, but then her her brain is saying, no, invest in the IRA. And an IRA for anyone that doesn't know in in other parts.

• 12:01Ramit Sethi?

  It's a retirement account.

• 12:02Steven Bartlett?

  A retirement account. So she's saying, invest in the future, but also buy my dinner.

• 12:05Ramit Sethi?

  Well, it's the same. We all have these things that society has told us. But then we don't quite agree and we're not sure what to do. Last time I was here, we talked about how you don't necessarily need to buy a house in order to live a rich life. And in my case, I have rented for the last 20 years by choice. And I made more money renting and investing the difference than I would have by buying a house. And this is shocking to people. Like, we saw the comments last time. People went berserk. How can you talk about renting? You're just throwing money away on rent. And this is something we have been fed constantly for generations that in order to be successful, you must buy a house.

• 12:48Ramit Sethi?

  So when somebody like me comes around and says, actually, you should run the numbers because sometimes renting can be better. People are shocked. Same thing with if you want to be taken care of, or you want someone to treat you, or you want someone to pay for the first date. Same thing when men come and they talk about being a provider. But in certain relationships where they actually earn less, I'll say to them, if we look at the numbers, you're not the provider. So who are you? And they're stumped. And that is when we need to start grappling with the idea that maybe what we were told is not exactly true for us in our situation today. And that's okay.

• 13:27Steven Bartlett?

  Do you think it causes more problems when the, in terms of the relationship dynamics and that sort of emasculation and, you know, that the man not feeling like a provider when the woman earns more money than the man, from what you've seen?

• 13:38Ramit Sethi?

  Not necessarily. I think that it is a different framework than we're used to.

• 13:44Steven Bartlett?

  Yeah.

• 13:44Ramit Sethi?

  When we think about my parents, for example, my mom stayed home with us. My dad went to work. Single earner. Simple. Everybody knew where they stood, what the roles were. It was very simple. It's very difficult to do that today. Housing is historically expensive. Healthcare is expensive, especially in the US. And so you have two people earning. In, in urban cities, you have young women earning more than men in their twenties. Lot of us are trying to figure out, what does this role mean for me and for my partner and for our relationship? That makes it tricky.

• 14:19Steven Bartlett?

  I wonder if a lot of men are just choosing to remain single until they've kind of worked on themselves. Because I think actually that's probably the path I would have taken, if I'm being completely honest. Or what I kind of did take is, I didn't have a relationship until I was able to really provide.

• 14:34Ramit Sethi?

  Oh, the P word.

• 14:36Steven Bartlett?

  Yeah.

• 14:36Ramit Sethi?

  Yeah. And where did that word come from? Provide.

• 14:39Steven Bartlett?

  Like watching my father, watching movies, everything.

• 14:42Ramit Sethi?

  Exactly. Yeah. No one ever says like, you are a provider, but we learn it from a million different perspectives. And yeah, I hear a lot of guys. I mean, when I was living in New York and I had a lot of single friends. Topic of conversation was, I'm not ready to get married. I need to get to a certain point in my career first. We have all these words for it. And, deep down, there's a feeling that we're often expressing. You know, maybe I'm not ready, maybe I'm not enough, maybe I need to do X, Y, Z before I do the thing that I want. And so, part of what we talk about when it comes to relationships and money is like, let's actually shine a light on that. Let's not be shy about it. If you want someone to pay for your dinner, fine, that's totally fine.

• 15:27Ramit Sethi?

  Let's have that conversation. If you want to be the sole earner in your household, okay, let's see what it would take. And, too often, we don't have those conversations. We just dance around them for 50 years.

• 15:39Steven Bartlett?

  Who should pay for the first date, then?

• 15:41Ramit Sethi?

  My answer is, doesn't matter. It would be nice if the person who suggested the date pays. But I think we spend way too much time focusing on the first date, and way too little time thinking about the next 14,625 days. It's like a couple who's obsessed with the wedding. Fine, you want a nice wedding, great. What about the marriage? Same thing with money. First date, okay, we can have that conversation. But aren't you more interested in how your partner thinks about money? And talks about money? Are they a cheapskate? Are they generous? Are they abundant? Did they grow up the same or different than you? That is something we don't talk about. Meanwhile, we have 5 million YouTube videos on who's gonna pay on the first date.

• 16:25Ramit Sethi?

  We are missing the real point. The point of money in a relationship is not just about the first date. That's fun for clicks. But it's about, do we see money the same way? Do we connect? Are we gonna be rowing in the same direction? Or are you gonna be doing that, and I'm doing this, and we can never get aligned?

• 16:44Steven Bartlett?

  You can only make a first impression once, right? And if you are a guy, this is just how I feel anyway. If I go on a date, a first date with a woman, and we have a wonderful date, you know, it's a nice restaurant, and then it gets to the end of the day, and then I turn to her and say, shall we split the bill? I couldn't even say it with a straight face, frankly. I couldn't, I definitely couldn't ask her to pay.

• 17:06Ramit Sethi?

  Yeah.

• 17:07Steven Bartlett?

  I just, I just could never. And if, I think if you anonymously polled ten of my female friends and said, how would you feel if on the first date, the guy asked you to pay?

• 17:17Ramit Sethi?

  Mm hmm.

• 17:17Steven Bartlett?

  I think privately, they would say, that's a bit of a turn off. That's a red flag. That's an ick.

• 17:22Ramit Sethi?

  I think probably that's true. And again, goes to the power of socialization.

• 17:26Steven Bartlett?

  Yeah.

• 17:27Ramit Sethi?

  Like, culture is very difficult to change. We gotta admit that. We gotta acknowledge that. And when I was dating, I paid for dates. So I don't have a problem with it. I like to be generous. I think that when you are in a relationship, you like to know that your partner is generous too. Now generous comes in lots of ways. It could be paying for dates. It could be planning a trip. It could be being thoughtful and, you know, buying extra toothpaste because we're running low. There's so many different ways to be generous. But generosity for me would be a value. Paying for a date, sure, I paid for dates. I'm happy to. I like to do it. But generosity to me is way more important to talk about that in a relationship versus the date itself.

• 18:10Steven Bartlett?

  Because chivalry, you know, this, this idea that the man is to lead in that regard and to, you know, open the door.

• 18:18Ramit Sethi?

  Yeah.

• 18:18Steven Bartlett?

  And open the car door and pull out the chair.

• 18:20Ramit Sethi?

  Yeah, but think about it. I agree with all that stuff. I, I'm, I support it. But think about what message that sends when you tell men you're supposed to be chivalrous, but there's no real context, no, no real teaching around it. And let's say you have a twenty six year old guy now who's earning less than his girlfriend. So he wants to be chivalrous, but for him, he's like, well, look at our bank accounts. And so what I want to emphasize to people is you can be chivalrous, you could be generous. Money is just a small part of that.

• 18:50Steven Bartlett?

  Yeah.

• 18:51Ramit Sethi?

  Let's not over fixate on who's paying for tapas. Okay? And let's actually think about the important things. When it comes to money, we are so obsessed with three dollar questions. People are obsessing over, should I buy this coffee? Can I afford this appetizer? On and on and on about three dollar questions. We totally neglect the thirty thousand dollar questions or the three hundred thousand dollar questions. Is this person financially aligned with me? How do I even find out? Am I investing 5 to 10% of take-home pay every month? Are we doing it together? Do we talk about money regularly and proactively and positively? Those things matter, and they're actually worth hundreds of thousands of dollars.

• 19:34Ramit Sethi?

  These $3 questions, including who's paying for appetizers or should I buy a latte? Irrelevant. In fact, get the big answers in life right, and you can buy all the appetizers you ever want.

• 19:46Steven Bartlett?

  What are the financial red flags in a relationship then?

• 19:49Ramit Sethi?

  Number one is they don't want to talk about money. If you don't want to talk about money, red flag, the biggest red flag of all. Because we could differ on how we see money. We could even have different values for a few things. But if your partner simply will not talk about money, you have a huge problem.

• 20:07Steven Bartlett?

  Why?

• 20:08Ramit Sethi?

  If you can't talk about money, then you can't even understand where they're coming from, and they are not curious about what you want. So how are you ever going to get on the same page? Think about this. A lot of people think we need to have the conversation about money. The conversation, as if it's one conversation. Would you have the conversation about raising kids? No, you'll have thousands in your life. That's the way it should be. Money is very much like parenting. Not like, uh, should we play pickleball or tennis today? Irrelevant. So we want to have lots of conversations about money. And that means we need to, first of all, be willing to talk about it, and then we need to find a way to have fun doing it.

• 20:51Steven Bartlett?

  Why don't we? And who doesn't? Is it men? Is it women that don't do it more? Or who's not talking about money, and why aren't they talking about it?

• 20:58Ramit Sethi?

  It's not about gender. It has nothing to do with gender in terms of who does or doesn't talk about money. There are avoiders. That's one of four categories, money types that I've identified. Avoiders hate talking about money. And they will use a series of conscious and unconscious techniques to avoid talking about money. They'll say things like, Uh, why, why do you always have to talk about money? Can't we just have a nice night out? Or you're so much better at this. You just handle it. You're just so much savvier at this stuff. That's an avoider.

• 21:32Steven Bartlett?

  Do they know their own financial situation?

• 21:34Ramit Sethi?

  No.

• 21:35Steven Bartlett?

  So they don't know their own financial situation and they don't want to talk about it?

• 21:38Ramit Sethi?

  Correct. We, and by the way, we all have something like this. It could be our fitness. It could be our relationship with our parents. There's something in our life that we know we should deep down, but we avoid it.

• 21:49Steven Bartlett?

  Yeah.

• 21:50Ramit Sethi?

  And there's no, there's no immediate consequence. Like if I don't call my college friend, it's fine. I could probably call him tomorrow and you can go on and on and on like that until one day you can't. Same thing with our fitness. It's very easy to procrastinate on fitness or money because it's not like your house is being taken away or even your cable's being shut off. You'll probably be fine until one day you hit this brick wall and it's not.

• 22:18Steven Bartlett?

  So that's the avoider. That's the first money type.

• 22:20Ramit Sethi?

  Yep. Next up, optimizer. I have a soft spot because I am an optimizer. Optimizers, we love to live in a spreadsheet. It's like, let me sit and calculate this and what if I run a compound interest calculation or Monte Carlo calculation and what if we do this, but not that? I love calculating everything. And left alone, I would sit there and do that for the rest of my life. Okay. The problem is you can take it a little too far. Now, I don't think I've taken it too far. Perfect, I think I'm perfect on my spreadsheets, but my wife has taught me enough's enough. We, we've won that part of life. Let's focus on another part, connection and fun and experience.

• 23:01Steven Bartlett?

  Are these people often thought of as boring?

• 23:03Ramit Sethi?

  Yes, they are, they are, deep down, they are boring. I was boring when I was sitting there thinking money is only about numbers. It's not. Money is about adventure and possibility and generosity. And you will often find optimizers, I'll give them a challenge, I'll give them a hundred dollar challenge. Also, you have to take a hundred dollars in the next week and spend it on yourself. They cannot do it. They will spend it on their dog, they'll spend it on their kid, they'll spend it on their partner, but they will not do it for themselves. And I go, why didn't you do it? They go, Ramit, do you know that if you put a hundred dollars in the S and P 500 and you compound that for the next forty five years, it'll turn into this much? I go, I don't give a shit. Spend the money. Because money is not simply meant to be hoarded, right? It's meant to create a rich life.

• 23:48Ramit Sethi?

  And when you have optimizers, the thing is, they can get you to a very good place. They will probably have your account set up, dialed in. They'll be investing. Great. They're gonna be very proud. Look at the compound interest returns. All that is fantastic, but it can be taken too far.

• 24:06Steven Bartlett?

  These are the people that die and then you figure out that they had like nine million dollars Yeah, what a waste. in some saving account.

• 24:11Ramit Sethi?

  What a waste.

• 24:11Steven Bartlett?

  They never tasted the caviar, but they've got.

• 24:13Ramit Sethi?

  Yeah, like people send these newspaper articles around like, oh, local librarian discovered to have nine million dollars. And I go, what a tragedy. What a tragedy to live a smaller life than you have to. I want you to save. I want you to invest, but I also want you to try a nice meal. Or if you don't like nice food or you don't want a nice T-shirt, also fine. Get super generous. Give that money. Surprise the people around you. Tip 50%. So those are optimizers. The third category is worryers. They love to worry. Typically, they picked up worrying from their parents, almost always. And their entire relationship with money is worrying. Are we gonna have enough? What if we run out of money?

• 24:58Ramit Sethi?

  What if we don't have enough to pay at the gas station? And oftentimes, it's very surprising because I told you that 50% of couples don't know how much they make, right? So they'll say like, we need more. We don't have enough right now. And I'll ask them, how much do you think you make? This just happened a couple of weeks ago on a podcast episode. They thought they made around seventy thousand dollars a year. Okay? We add up all their stuff, they make a hundred and twenty thousand dollars a year. So I go, well, here you go. You, you wanted to make an extra 40K. You actually make 50K more than you thought. Do you feel any better? And she goes. No, because the way you feel about money is highly uncorrelated to the amount in your bank account.

• 25:42Ramit Sethi?

  So, worryers worry, that's how they relate. They can't imagine any other relationship to money. And my job is to help them realize, first of all, let's actually look at your numbers. Let me help you understand what it means. Do you have enough? What does it take to have enough? And then, can you start to develop a new relationship with money? It's almost like a new taste bud. I'm never gonna tell you to eat tomatoes if you hate tomatoes, but I am gonna teach you, maybe you like okra, and we can develop a new taste for that. Finally, the dreamer. The dreamer believes that success is one deal away. If we just close this deal, if I just get this thing.

• 26:25Ramit Sethi?

  And they tend to fall into get rich quick schemes. Lots of scams, MLMs, a lot of crypto shitcoin scams, like all this BS. But they are extremely resistant to calm, low-cost, long-term investing. In other words, the way that most people build real wealth. They think it's boring, they even have little phrases like, "Ugh, I don't wanna be stuck in a nine to five like those suckers." I'm like, "That sucker makes 10 times what you make, what are you talking about?" But they have simply been surrounded with the idea, "One more deal, and I'll finally make it."

• 27:01Steven Bartlett?

  They must be hard to be married to.

• 27:02Ramit Sethi?

  It's impossible, it's really, really difficult. Not only do they not wanna talk about money, when they finally do talk about money, they're almost living in a different world. Often, you will find that dreamers can only dream because they are being subsidized by someone in their life, usually their partner. And if their partner were to leave, for example, the house of cards would collapse. And actually, that's usually the only thing that gets them to truly change.

• 27:29Steven Bartlett?

  So if we've got these four money types, the avoider, the optimizer, the warrior, the dreamer, in your view, who lives a happier life?

• 27:39Ramit Sethi?

  You can live a happy life with any of these.

• 27:41Steven Bartlett?

  Yeah.

• 27:41Ramit Sethi?

  Also, you can change any of these types.

• 27:43Steven Bartlett?

  But on average, one person's gonna probably lead.

• 27:45Ramit Sethi?

  Well, I mean, I'm the optimizer and I'm pretty happy. So is that, is that the answer?

• 27:50Steven Bartlett?

  Yeah.

• 27:50Ramit Sethi?

  Optimizers are great. They love their spreadsheet. Um, I think that, uh.

• 27:56Steven Bartlett?

  The warrior clearly is not gonna live the happiest life.

• 27:58Ramit Sethi?

  The dreamer is actually quite happy.

• 28:00Steven Bartlett?

  Yeah.

• 28:00Ramit Sethi?

  The dreamer's quite happy.

• 28:01Steven Bartlett?

  They live in optimism.

• 28:02Ramit Sethi?

  Yeah, they're living in a world that's not real. It's subsidized by somebody else. They're always optimistic about what's gonna happen next week, next month, next year. Never realizing the catastrophe that they are leaving behind them. That's, that's the whole issue. This is the reason I wrote the book is it's one thing to treat money in a certain way on your own. When you're single, you can be irresponsible, you can be an optimizer. But when you're in a relationship, it's not about you anymore. It's about the two of you as a unit. And so you have to deeply understand yourself. And then you have to be willing to communicate with your partner and really create a rich life vision for the two of you. Most couples I talk to have no vision for their money.

• 28:46Ramit Sethi?

  That's why they fight over who spent fifty dollars at Target. I go, who gives a shit about Target? Financial problems are almost never about overspending at Target. The biggest problem with couples and money is they have no rich life vision. What is money to us? What do we want to use money for? How do we wanna feel about it? So they're confronted with a thousand different decisions with their money every week. And they have no vision to guide them. This is for us, this is not for us.

• 29:14Steven Bartlett?

  One of the things I've always wondered in relationships is how many couples know how much money the other couple has in their savings account? And their total sort of investment portfolio? Cause I've never been in a relationship where, I mean, I've only really been in two relationships, you could say. But I've been with, you know, dated people over the years. Um, been with my current partner for many, many, many years. But even my current partner has no idea how much money I have.

• 29:38Ramit Sethi?

  Hmm.

• 29:39Steven Bartlett?

  Zero idea.

• 29:40Ramit Sethi?

  When will you have that conversation?

• 29:41Steven Bartlett?

  Probably never.

• 29:42Ramit Sethi?

  Should we bring him out right now? Let's bring him out.

• 29:46Steven Bartlett?

  I've just never had the conversation. If you need something, we can get it.

• 29:50Ramit Sethi?

  Yeah.

• 29:51Steven Bartlett?

  And it's just always been like that.

• 29:52Ramit Sethi?

  Yeah.

• 29:52Steven Bartlett?

  In my life.

• 29:53Ramit Sethi?

  Okay, so I made a mistake in my own relationship. I was dating my now wife for many years. And at one point, she had asked some question about her 401k or something. And I said, well, there is a book called I Will Teach You To Be Rich. Here's a copy of it. And I was joking around with her. And so I ended up learning all about her finances. So I knew about her entire financial picture. Didn't occur to me to talk about my own. And a little while later, she very assertively said, this doesn't feel fair. You know everything about my finances, but I don't know about yours. And I realized I violated my own rule in chapter nine of my first book, which is talk about money early on.

• 30:38Ramit Sethi?

  Talk about it regularly. So we talked about it. We talked about. It's actually one of the most memorable conversations we had. Because talked about the numbers, talked about my pride and how hard I had worked to build my business and invest for 20 years, 25 years. And then we talked about what it meant for us. Like, what kind of life do we want to have? Do we want to live here? Do we want to live there? Do we want to have kids? Do we want to eat this type of food? Travel? Like, that conversation about possibility is the conversation I want every couple to have. Because it's about possibility and you can start to dream. And that dream is important.

• 31:23Ramit Sethi?

  You can get to the logistics, of course. We'll get to that. But so few of us still dream with our money.

• 31:32Steven Bartlett?

  But you know, I think for someone like you, who is the optimizer and who's probably quite proud of the system you've created.

• 31:39Ramit Sethi?

  I love systems.

• 31:40Steven Bartlett?

  But there's going to be so many people listening now that are in a relationship and they are maybe early in the dating process. And maybe they've been with a person six months. They've taken them out on lots of nice dates and they have a thousand dollars in their savings account. And their partner has no idea.

• 31:58Ramit Sethi?

  Yeah.

• 31:59Steven Bartlett?

  And they're thinking, Remy, if I tell my partner what's in this bank account, she is going to be shocked or he is going to be shocked. And they are going to leave me. So I'm keeping this shit a secret. Because they are living under an illusion.

• 32:13Ramit Sethi?

  That I have more than I actually have.

• 32:14Steven Bartlett?

  Yeah.

• 32:15Ramit Sethi?

  But remember this, just because you don't have as much money as you want, doesn't mean that you are less of a person. What could be more-

• 32:24Steven Bartlett?

  I completely agree.

• 32:24Ramit Sethi?

  Yeah.

• 32:25Steven Bartlett?

  I completely agree.

• 32:26Ramit Sethi?

  What could be more appealing than saying, you know what? Would you be open to talk about our finances? We're getting a little bit serious, you know? I know we're kind of talking about taking the next step. I think money's gonna be an important part of it. I know it is for me. And I wonder if we could sit down and talk about it. First, just being proactive. How many people watching and listening are like, I wish my partner, whether they're dating or my partner of 20 years, would come to me and say, can we sit down and talk about money?

• 32:57Steven Bartlett?

  But the partner that is shameful about their financial situation.

• 33:01Ramit Sethi?

  Yes.

• 33:02Steven Bartlett?

  If I run it back 10 years, just over 10 years ago, I was living in an area called Rush Home. I was in a shared house with, living with some, a few people who had come to the UK legally.

• 33:17Ramit Sethi?

  Okay.

• 33:18Steven Bartlett?

  I didn't have a carpet in my room. I was in a single bed, didn't have duvets or bed sheets or anything. And every day I woke up and thought to myself, how am I gonna eat today? So I'd find different ways to find food. At the same time, I was dating this girl called Ruby. This girl called Ruby had no idea. She'd never seen where I lived. She wasn't aware that I was looking behind sofas in takeaways for pound coins. There is no possibility in the world that I would have ever told Ruby the financial situation I was in. I like, so I don't know what to do in that situation. And I'm sure, I'm sure, I would assert that maybe 30% of people listening right now don't wanna tell their partner their financial situation because they're deeply embarrassed or shameful to the point that they think their partner might

• 34:03Steven Bartlett?

  leave, like them less, be less attracted to them if they really knew the truth.

• 34:07Ramit Sethi?

  I totally agree. I totally agree. It's crazy how much shame we have around money. And it's a young guy not having enough. It's a young woman who has $18,000 of credit card debt. It's all over the spectrum. That's the second point, which is-

• 34:28Ramit Sethi?

  If you want to talk about money, talk about money. Don't wait for your partner to do it. Bring it up yourself, even if you feel embarrassed or ashamed. Okay? If you're planning to make a life with this partner, you've got to be able to talk about this because you're going to be talking about a lot of other personal sensitive things over the course of your life. The second thing is, what could be more attractive than somebody saying, you know, when I was in my twenties,

• 34:52Ramit Sethi?

  I moved to the city, I spent a lot of money going out, and I wasn't super responsible. I racked up a lot of credit card debt. I've paid it down from eighteen thousand to six thousand. It's going to be paid off next year, and I just know that I'm never going back there again.

• 35:09Ramit Sethi?

  Oh my God, someone who acknowledges what they did, has a good reason for it, and then, most importantly, has a plan? Huge turn on. So what I'm begging all of us to do is to realize just because you have more or less money does not make you a better or worse person. I want to take shame away because we all have something that we are ashamed of. But not talking about it and putting it in the corner in the darkness, that doesn't solve it. That's why I love talking about the most taboo of taboo subjects. Money, gender, prenups, dating. These are things that nobody's talking about. So when you hear couples on the podcast and they're talking about being married for fifteen years and they've never actually had one conversation about money,

• 35:52Ramit Sethi?

  I want you and everyone watching to be inspired because stuff doesn't have to be shameful and doesn't have to be kept in the dark.

• 36:00Steven Bartlett?

  And what do you think about prenups then? Do you think they are a good thing for all couples? Do you think all couples should initiate a prenup?

• 36:06Ramit Sethi?

  No, no, not all couples. There are some couples who should have one. My wife and I have one. So we went through this process. And who should get a prenup is if one or both partners are bringing substantial premarital assets to the marriage. Meaning, before they get married, they have a large investment portfolio, a business, rental property, or a house. Like, you should have a prenup, but most people should not. Because when most people get married, they don't have substantial assets.

• 36:36Steven Bartlett?

  What if your partner turns around? If I turn to my partner, I say, babe, Ramit told me to go get a prenup.

• 36:40Ramit Sethi?

  Yeah.

• 36:40Steven Bartlett?

  And she goes, absolutely not.

• 36:42Ramit Sethi?

  Well, that's not a good introduction. I wouldn't say that. Although I don't mind if you throw me under the bus. Oh, this guy, Ramit, he said this thing. Fine. How to bring it up is an art. So when I was deciding on a prenup, I asked for lots of advice from lots of friends. And some of the advice out there, especially online, is not great. One of the most common pieces of advice is blame it on your lawyer. I'm like, get real. You're about to build a life with your partner, and you can't be honest about this thing? This, in the grand scheme, is a minor topic. So I'll tell you exactly what I said to my wife. We sat down, and I said, I want to talk to you about something.

• 37:28Ramit Sethi?

  You know that because of how long I've been in business, I've been very lucky, I've been fortunate, I worked hard. I've built this business up, and I'm really proud of what I've accomplished and saved. And you also know my lifestyle. I don't drive around in a Lamborghini. I like to travel, I like to wear nice clothes, and I like to save money. And it's important to me that as we are getting closer in our relationship to getting married, that we talk about a prenup. And my heart was pounding. I had planned it, I had thought about it, I had talked to so many people. What I knew is I wanted to take responsibility. It's not some lawyer that wants it, it's me. It's important to me.

• 38:12Ramit Sethi?

  I wanted to bring up the topic, and I wanted to reassure my wife that I'm not gonna change overnight when we get married into someone who's blowing all of our money. It's just important because of the business that I'd built. In her response, I was like,

• 38:31Ramit Sethi?

  like, how is she gonna respond? Because bringing up prenup is very fraught.

• 38:35Ramit Sethi?

  She's the best. She said, okay, I wasn't expecting that, but I'm willing to learn more about it. That's as good of a response as I could have hoped. So we started the series of conversations. We both had lawyers. It was going well at first until it wasn't. And we were talking about numbers that to me seemed astronomical. I started to feel resentful. She didn't feel listened to. She didn't feel heard. She started to feel resentful. And these conversations were were like so difficult. I would say they were some of the most difficult conversations of our relationship. At one point, she said, we should go see a therapist because these conversations are not good. And I was like, you're right. So we went to see a therapist.

• 39:19Ramit Sethi?

  We sat in that therapist's office. I still remember. Therapist asked us a bunch of questions, including, how do you see money? And she turned to me. I was like, how do I see money? Growth. I could literally see numbers floating in front of my eyes. The optimizer in me was talking about the rule of seventy two. It was like so obvious. What an obvious question. Then she turns to my wife, how do you see money? And she said, safety. I said, what? Sa- safety? To me, that was like saying charcoal. Like, the two words don't relate at all. But it started us on a new path of realizing that we were seeing money completely differently.

• 40:00Ramit Sethi?

  And that was exactly when I realized I wish there were other couples talking about money from behind closed doors. That exactly was the genesis of me doing my podcast and my Netflix show to show people, not just tell them, but to show them how real couples deal with money.

• 40:17Steven Bartlett?

  What was the resistance between you two? In sort of more specific terms, she she wanted a different arrangement to the one that you wanted?

• 40:25Ramit Sethi?

  Yeah, the terms are are super technical in prenups. It's so with a prenup, you have a variety of different rules or technicalities, which would be like, what if you separate in six months? What if you separate in twenty five years, but there are children involved? Who gets the house? What if you have a house? What if you have two houses? What if you have this much in your joint investment, but each of you has this much in individual investment? And so what happens is it's not even just the numbers themselves. It's the fact that the process is. Set up to be adversarial. So they have a lawyer. We have a lawyer. We're communicating through lawyers when it comes to this topic, when normally you're just talking to your fiance or your girlfriend.

• 41:10Ramit Sethi?

  And there's an art to also managing the lawyers. See, the lawyers want, there's nothing bad. We had great lawyers. I'm happy with them. But lawyer's job is to look over every freaking contingency and make sure that nothing is left to chance. And I think a good reminder for anyone considering a prenup is to remember you manage your lawyers and your job is to come to an agreement with your partner for the rest of your life. So sometimes you can be generous. You can be willing to let up on a few things here and there. As long as you are looking at the North Star, we're going to be together. We want these premarital assets to be protected. And in case something goes wrong, we both want to feel good about what the arrangement is.

• 41:46Steven Bartlett?

  And there is a 60 odd percent chance that you will break up if you look at the marriage statistics.

• 41:52Ramit Sethi?

  Well, those statistics are a little skewed. That includes second marriages. That also includes all different socioeconomic, all, everybody else. If you break it down, for example, just by having a bachelor's degree or certainly an advanced degree, that goes way down. First marriage goes down. And in fact, the divorce rate has been decreasing for decades. So this 50, 60% thing that's kind of tossed around, not quite accurate. But whatever the statistic is, what's more important is if you should always think about how can things go right? And also, how can they go wrong? And I think with money, a lot of times we only think about one or the other. We buy a house, never asking ourselves like, what if one of us loses our job? And we get married without ever asking like, what if we separate?

• 42:37Ramit Sethi?

  So you want to be able to play both. What happens if things go right, incredibly right? And what happens if things go wrong? Let's make a plan.

• 42:44Steven Bartlett?

  What are the other red flags then? We mentioned the first being they don't want to talk about money.

• 42:49Ramit Sethi?

  Ah, they have a money guy. A money guy is so common. Everybody talks about, "Oh, I have this money guy." Your money guy is probably a whole life insurance salesman charging you 1.25% AUM. Let me explain what that means. So many people in America do not want to learn the basics of money, and so they hire a financial advisor. Now, I don't have anything against financial advisors in general, but a money guy that they're typically referring to is someone who charges them a percentage of their assets. So if I have a $100,000 portfolio, they'll charge, or let's say a $1 million portfolio, I might be paying 1%. Now, 1% doesn't sound like a lot, but if you actually run the math,

• 43:33Ramit Sethi?

  you will pay about 28% of your lifetime investment returns in fees. That's not $10 or $100. That's tens of thousands, or sometimes hundreds of thousands of dollars. So it's a red flag if someone has an advisor that they're paying a percentage-based fee to. I would much rather you pay an hourly or project or that type of fee to. Okay?

• 43:59Ramit Sethi?

  They're cheap. I can help a lot of people, but I can't help cheap. Cheap is... Cost is the first and last thing they always consider. So you might come home, you're so happy, "Oh, my gosh, look at this beautiful thing I got for the kids." How much was that? And it just sucks the life out of every room. Cheap people are obsessed with cost. Cheap people rarely recognize the effect they are having on their loved ones, and cheap people find it very, very difficult to change. They don't want to change. They actually reinterpret their behavior and call it a virtue. "Oh, I'm not that... I don't need that fancy wine. I'm perfectly happy with this."

• 44:43Ramit Sethi?

  Well, what if your partner wants one glass of wine?

• 44:46Steven Bartlett?

  They seem like a miserable group.

• 44:49Ramit Sethi?

  Yeah, I don't like cheap people. I don't like cheap people. I don't like cheap tippers. And their partners don't like them. So it's one, I'm not saying everybody has to go out and spend a million dollars, but you gotta use money to live your rich life. The point of money is not to just hoard it and save it. That's why when you create a rich life vision, you ask yourself, what do we want to spend extravagantly on? Not just a little bit, but extravagantly. And what do we want to cut costs mercilessly on? You have to be able to play different notes like you're in a symphony. If your only note is spend less, that's a miserable existence.

• 45:24Steven Bartlett?

  Are there any more red flags? I want to go into why people and where they develop these relationships with money, but are there any other sort of standout red flags that we should be looking for?

• 45:33Ramit Sethi?

  Well, if they, if they follow Robert Kiyosaki, that's a huge fucking red flag. I mean, the guy once, Robert Kiyosaki wrote this well-known personal finance book, and the guy has really lost it in the last few years. He literally, I'm not joking, he literally told people, the best investment you can have is a can of tuna. I'm not joking. And I replied to him, Robert, I sold everything in my portfolio and bought three million cans of tuna. Is this a good investment? But sadly, I never heard back. So beware of, beware of charlatans. Let me put it that way. Personal finance and money is filled with people who will promise you get rich quick, who will tell you that the sky is falling.

• 46:13Ramit Sethi?

  And when it comes to money, we want to be balanced. We want to have fun. We want to be, have a healthy relationship with money. It's very similar to fitness. Lots of people making promises. You want to find the people who are giving you long-term advice.

• 46:28Steven Bartlett?

  You know these cheap people that you mentioned?

• 46:30Ramit Sethi?

  And you know any of them?

• 46:32Steven Bartlett?

  A couple come to mind.

• 46:33Ramit Sethi?

  Tell the camera who they are right now, so we know. Who are these cheap people?

• 46:36Steven Bartlett?

  They also fit into the category of warriors, in my experience. So someone who's a bit of a warrior can also be quite, quite cheap. And I was just wondering, in the hundreds of couples that you've sat down with and interviewed, does there tend to be a origin story which links to their frivol, their frugalness with money and their penny pinching?

• 46:55Ramit Sethi?

  Yes. Okay. Always, when I talk to people, I ask them, What do you remember your parents saying about money when you grew up? Always. And they'll tell me, they are very conversant, they remember. And usually the parents said stuff like, we can't afford it. And money doesn't grow on trees. We don't talk about money in this family. These are the type of things that people said. But you will often find, usually when kids are teenagers. When there's something really tragic that happens. And it's often that dad lost his job. And that meant that they completely changed socio economically. Often they had a big house, they had to like shift into grandma's apartment, that kind of thing.

• 47:40Ramit Sethi?

  That affects people in a huge way. Now, it affects people in one of two ways. And you cannot predict how. Some people go, I'm never gonna let that happen to me. Therefore, I'm gonna have a high savings rate, I'm gonna invest, I'm gonna start a business. And they develop a really healthy relationship with money. Others go the direction you're suggesting, which is they become incredibly cheap, incredibly worried about money. Anxiety is common. And they often do not see the connection at all until I pointed out to them.

• 48:14Steven Bartlett?

  And when you talk about making this rich life vision together, what exactly does that mean?

• 48:19Ramit Sethi?

  We start off in the book just talking about, let's have our first positive conversation about money.

• 48:24Steven Bartlett?

  Okay.

• 48:25Ramit Sethi?

  You have to remember, most people have never had a positive conversation about money. Money is the, the only way it comes up is why did you spend that much at the gas station last week? That's it. So we start off by just saying, I give them an agenda, literally an agenda, you can read off these words and start it off. It's like, why, this is gonna be awesome. Here's how I feel about money today, how do you feel? Here's how I want to feel about money, how about you? High five, I love you, we're good. That's it. Part of having conversations about money is.

• 48:53Ramit Sethi?

  This philosophy of declare victory and go home. You don't need to talk about it all at once. Make it short, make it fun, and at the end always say, I love you. That's it. Over time, you're gonna associate talking about money with positivity. And that's what we want. When it comes to a rich life vision, this is where it's really fun. So I have some fill in the blanks where you fill it in like, I wish we spent more money on. And then you fill it in. I think we could probably cut back on. And then you fill it in and you compare your notes. My wife and I did this really fun exercise, which I would encourage everyone to do. And it is the 10 year bucket list.

• 49:34Ramit Sethi?

  So imagine you sit down with your partner and you go, let's each take a piece of paper. Write down what would make the next 10 years incredibly rich, meaningful to me and to us. So you write it down and then you compare notes. This is exactly what we did. And you get excited. You, oh, you want to learn Spanish? Amazing. Do you want to do it online or do you want to go to Mexico City? Oh, you want to go skydiving? Ah, that one's not for me, but I'll meet you at the ground, right? Have fun. And you just get excited. You encourage the other person. And then you find one that you both want to do. That's meaningful for both of you. So maybe it is we want to create an art studio in the garage. Love it.

• 50:18Ramit Sethi?

  Maybe it is we want to take a round the world trip at some point in the next 10. Okay, great. The difference with this exercise is you're actually going to make it happen. So right there on the spot, you estimate how much it would cost. Take five minutes, don't take more than that. You can estimate it within 80% like that. Decide when you want to do it. Maybe if there's kids involved, you're gonna want to go in summer, winter, et cetera. And then all you do is take the rough amount, divide it by the number of months. And that's how you know how much you have to save for it. We did this and for us, what was really meaningful is to have a 10 year wedding anniversary. So we know where we want to do it. We know the exact place. We know all the friends and family we want to have with us. And we knew when it was gonna happen.

• 51:01Ramit Sethi?

  So we, we had a funny experience because we each sat down and estimated the cost. And I think the number I picked was something like three times bigger than hers. And in those cases, I say go with the bigger number. Okay, it helps you dream a little bigger. If you can't save that much money per month, that's okay. Shrink the dream a little bit, right? Narrow the scope or maybe extend it a little longer until you have to do it. But suddenly, every single month, when you sit down and talk about money, it's like a video game. You're like, oh, we're 3% closer to that goal. That is how you start to build a vision for money and have fun along the way.

• 51:37Steven Bartlett?

  And do you subscribe to this idea that you should have like a joint bank account? And then separate bank accounts?

• 51:42Ramit Sethi?

  Yes.

• 51:43Steven Bartlett?

  Because right now I just have my bank account and.

• 51:46Ramit Sethi?

  How does it work? How does it work for you? So do you just, you just pay for most things?

• 51:50Steven Bartlett?

  I have to give context on what my partner's like. She really doesn't care about material things.

• 51:57Ramit Sethi?

  So she's. Avoider?

• 51:59Steven Bartlett?

  She just doesn't, she doesn't care about whether we fly first class or economy. She doesn't care about if we stay in that hotel or this hotel.

• 52:06Ramit Sethi?

  Right.

• 52:07Steven Bartlett?

  She doesn't care if we stay in the 17th floor penthouse. We live there or if, or if she stays in a studio. She doesn't care.

• 52:13Ramit Sethi?

  What does she care about?

• 52:14Steven Bartlett?

  She cares about quality time with me. She likes having nice experiences. She likes going to places. Doesn't care how she gets there or where she stays. She likes traveling and exploring and she likes her simple things. She's a very simple person. If I didn't get her birthday present or Valentine's Day present or Christmas present, or if I just made her a scrapbook every year, she'd be thrilled.

• 52:30Ramit Sethi?

  Okay.

• 52:31Steven Bartlett?

  So I am the one that wants the nicer things.

• 52:34Ramit Sethi?

  You want the, okay, I'm the same, I'm the same to a large extent.

• 52:37Steven Bartlett?

  But we have a lot with, you know, life, it costs money. So um, I pay for most things.

• 52:44Ramit Sethi?

  Okay, and you're cool with that, it's fine, right?

• 52:45Steven Bartlett?

  Yeah, I've always been cool with it.

• 52:46Ramit Sethi?

  Okay, cool. So.

• 52:48Steven Bartlett?

  I'm particularly cool with it because she doesn't care.

• 52:50Ramit Sethi?

  Right.

• 52:51Steven Bartlett?

  Does that make sense?

• 52:52Ramit Sethi?

  Yes, it makes.

• 52:52Steven Bartlett?

  There's no resentment because she doesn't care. I'm the one that's making sure she travels this way.

• 52:57Ramit Sethi?

  Yeah.

• 52:58Steven Bartlett?

  I have to intervene and I have to fight to make sure that her plane ticket is booked here or that the hotel she's staying in isn't gonna. Be dangerous. I've got so many stories of her booking it herself and then me having to rescue her because it's super dangerous.

• 53:13Ramit Sethi?

  Yeah.

• 53:14Steven Bartlett?

  So.

• 53:14Ramit Sethi?

  So you and I have a similar dynamic, at least in this way. I think my wife does have her money dials. Money dials are the things you love to spend money on and you can turn that dial up. But when we met, she was not into hotels at all. I'm a hotel guy. I love hotels. And so we had to have some conversations. At first I'm just like, oh yeah, like, of course I'm paying. And then when we merged our finances, which I recommend couples do, well, suddenly it's not my money, it's our money.

• 53:46Steven Bartlett?

  Yeah.

• 53:46Ramit Sethi?

  And so now we are forced to talk about that stuff and come up with a way. Like, she's like, I don't need to stay there. And like, personally, I don't really think it's worth it for our money. And I'm like, well, like, have you seen, have you seen the suite at this place? And do you know what type of wood they use and that? And she doesn't care. So.

• 54:05Steven Bartlett?

  So how does that work? You said you merge your finances. When you say you merge your finances, do you mean you're paying into the same bank account?

• 54:11Ramit Sethi?

  Correct. So, and this is what I recommend for most, for, for, for almost all couples. You take your paychecks, or if you're, we're both business owners, you take whatever money comes in, put it in the joint checking account. That joint checking account then pays a variety of different accounts. It pays our joint expenses, like our rent, and if we eat out, it pays for our joint credit card bill. The money also is paid out from the joint checking to her individual checking and individual savings, which she has. Her money, no questions asked. If she wants to spend it on something, like she loves self-care, what am I gonna ask? It's her money. It also sends some money over to me. That's no questions asked money that I.

• 54:52Steven Bartlett?

  The same money?

• 54:53Ramit Sethi?

  Yeah, the money that came in from us two together is processed in the joint checking account and an amount goes to each of us.

• 55:01Steven Bartlett?

  The same amount goes to both of you?

• 55:03Ramit Sethi?

  Good question. It could be the same. Fifty fifty, I think is actually great. But once in a while, if you have somebody who's earning like, let's say, ten times more, okay? You may decide to make it proportional, right? So like, one, the higher earning partner might get more. Because imagine, just for argument's sake, imagine you're earning a million dollars a month. Easy math. And suddenly you're getting like $2,000 a month for guilt free spending. You're like, um, what the hell? This, this doesn't make sense. Usually partners are totally cool with that, but I will tell you this. I used to be on the proportionality train, meaning everything's proportional, et cetera. My wife and I did this for many years. It's really complicated. It gets really, really complicated.

• 55:48Ramit Sethi?

  And what's more important is you want to set your accounts up so that they drive the right behavior. Just like when you hire people, you set the right incentives to drive the right behavior. When our money was separate and we were doing all this proportionality calculation, all these different accounts. We didn't see the money as ours. Now all the money goes into that pot. It's ours. So we sit down every month, we look at our numbers and we go, what's worth it? Do we care about this hotel? Do we care about that? Et cetera, et cetera. We really love that. Let's keep spending on that and find a way to do that. It's about us and of course we have our own individual money.

• 56:27Steven Bartlett?

  So why didn't you just? The money coming in, why didn't it just go to you individually? And then you pay into the joint account. Why did you make?

• 56:34Ramit Sethi?

  That's what we did at first and it became really complicated. So the money came into each of us. And then we, because we each run businesses that are each variable, we wanted it to be proportional. Well, guess what? If it changes every single month, we had to recalculate the proportionality every single quarter. What a mess. So we're, we're literally calculating every three months and then it changes. And then at the end of the year, we have to reconcile all this stuff. We're like, what is this? A marriage or a freaking multinational conglomerate? So part of a philosophy around a rich life vision is one of our values is fight for simplicity. Fight for it. Because I talked to couples who have more complicated financial setups than we do. Shouldn't be the case.

• 57:18Ramit Sethi?

  Most people's setups should be very simple. All your money comes into a joint checking account. From there, it pays out to individual accounts and it pays all your joint expenses. Your life is together. Your rich life is together. That's it. We're married, we're gonna be married forever. Our future is together. So let's set our accounts up accordingly.

• 57:44Steven Bartlett?

  So then if you end up getting a divorce, that joint checking account, do you just split it in half?

• 57:48Ramit Sethi?

  Yeah, so this is a good question. When you are married, the money that is earned is community property. So let's just say we put $100,000 in that checking account and we were to get separated tomorrow. 50/50. Yeah, and that's reasonable, right? It's community property. The prenup is only concerned with what happened before the marriage.

• 58:15Steven Bartlett?

  So you're in the camp of not caring too much about the small expenses, the coffee?

• 58:20Ramit Sethi?

  Yeah, it's a waste of time.

• 58:21Steven Bartlett?

  Why is it a waste of time?

• 58:22Ramit Sethi?

  Because they are $3 questions. If you actually added up how much they actually cost you, it's actually not that much. It's the simple joy that you enjoy in the morning and you could spend your entire life agonizing over buying a coffee. But when I ask people, okay, so you stopped buying coffee for a month. How'd you feel? They go, oh, I felt okay. I go, what'd you do with the money you saved? They go, I don't know, it's in my checking account. Not only do you have to make the decision every single day to save on these tiny little things, you then have to properly invest that money and you have to do this every single day for the rest of your life. What if we just got five critical decisions correct for the rest of our life and didn't have to worry about coffee? Why are we playing so small?

• 59:05Ramit Sethi?

  Oh, let's decide, do we have enough money to buy this Saran Wrap? Who cares? Let's talk about, are we investing properly? Do we have a target rate that we are doing? Watch this. I bet you so many couples watching this right now have had arguments about, "Why did you spend so much at the grocery store? Why can't you stop spending so much on the kids?" and on and on. But have they ever had conversations like this? "What is our savings rate? Is it 4%, 6%, 7%? What is our investment rate? Is it 6%, 8%? Whatever the number is, let's make a rule that every December, we increase it by 1%. If you just did that, if you increase your investment rate, meaning the percentage of your net income that you invest every single month.

• 59:50Ramit Sethi?

  I always recommend people start off at 5% to 10%. Let's say you're at 6%. If you make a rule, every December, we're going to increase that by 1%. It will be worth hundreds of thousands of dollars to you, more than all the coffee you ever buy in your entire life. So why the hell would you focus on coffee when you can make one decision per year and make way more than all those coffees combined?

• 1:00:13Steven Bartlett?

  Most couples, when they think about investing or their investment rate, the only investment most couples make together is buying a house.

• 1:00:20Ramit Sethi?

  Yeah, well, and that's questionably not even an investment.

• 1:00:24Steven Bartlett?

  Most people think renting is wasting money.

• 1:00:26Ramit Sethi?

  Yeah.

• 1:00:27Steven Bartlett?

  And the logic goes, "Well, if my rent is $2,000 a month or £2,000 a month, my mortgage is only going to be £2,000 a month. And so we might as well buy a house because then we get to keep the asset."

• 1:00:39Ramit Sethi?

  Are you trying to get me mad right now? I'm starting to sweat just hearing this because you're right. That's what they say. Should I just dismantle these arguments once and for all right now?

• 1:00:48Steven Bartlett?

  Sure.

• 1:00:48Ramit Sethi?

  Okay. Renting is not throwing away money. Just like going to a sushi restaurant is not throwing money away on sushi. You're paying for something, you're getting value. It's fantastic. The next argument they use is, "You're paying your landlord's mortgage." I go, "Okay, aren't you paying the sushi owner's mortgage when you go there and get sushi?" Funny, we never think about it like that. We only think about paying the landlord's mortgage. Finally, we have to understand that buying a house can be a good financial decision. It can be. But renting and investing the difference can also be a good decision. And right now in the US, in the top 50 US metro cities, it is cheaper to rent than to buy.

• 1:01:32Ramit Sethi?

  So let me give you some math. Let's say, because I lived in New York, close by. If the rent was, let's say, three thousand bucks a month, to own the equivalent property right next door would have been sixty-six hundred a month. That's three thousand six hundred dollars per month more just to own. So, most people don't know this. They don't factor in phantom costs like maintenance, taxes, transaction, opportunity cost. They simply look at a number that says, uh, three thousand six hundred, or whatever the number may be, and they go, "Great investment." We have got to get more sophisticated with the biggest purchase of our lives.

• 1:02:10Steven Bartlett?

  I'm just looking at some of the comments on our last conversation.

• 1:02:13Ramit Sethi?

  Oh yeah, what'd they say?

• 1:02:14Steven Bartlett?

  It's a balancing act. There's two groups of people here. There's a group of people who attest to the fact that they bought a house and it's the single best thing they did.

• 1:02:22Ramit Sethi?

  Yep.

• 1:02:24Steven Bartlett?

  This person said, "I bought a house. It's the best thing I ever did. It's launched my mindset in new directions. Remember that having your own space has profound psychological impacts and can change your life."

• 1:02:35Ramit Sethi?

  That's a good comment. Okay, let's talk about that for a second. I love that comment. We have to remember that life is not just about a spreadsheet. It's not. So, when it comes to a major purchase like a house or a car, we gotta start with the numbers, okay? We have to start by running a buy versus rent calculation, by running an amortization chart. I have a whole bunch of stuff on buy versus rent. And then we need to know, can we afford it? Is this part of our rich life vision? What if one of us loses our job and on and on and on? But then, second, we need to say, what kind of lifestyle do we want? If we love to decorate, that's probably worth something. We should, maybe we need to buy a house. If we want our kids to be in a particular area, maybe we need to buy. There's so many non-financial reasons to buy or to rent. And so, we can't just do

• 1:03:20Ramit Sethi?

  one or the other. But my main argument is this: most of us never run the numbers. We will spend a million dollars in total cost of ownership for a house, and we won't run one calculation. So, we gotta play multiple notes doing the financial and non-financial parts.

• 1:03:37Steven Bartlett?

  I think that's what a lot of people are actually saying. A lot of people are saying, you know, "I bought a house," and this person's saying, "I used to be, I used to live in a caravan. I finally bought a house, and I don't care about being rich necessarily, but having my own house means the world to me."

• 1:03:51Ramit Sethi?

  Great, great non-financial reason. They want stability. I totally value that. I would also ask, did you run the numbers?

• 1:04:00Steven Bartlett?

  I think the key thing is, most people, when they buy the house, they see it as an investment, and they see it as a good investment. I think in part because they don't really know any other way to invest.

• 1:04:08Ramit Sethi?

  Totally right.

• 1:04:08Steven Bartlett?

  So we grow up, we think, okay, the minute you get enough money, the first thing you have to do is buy a house. I mean, there's a real sequence of events in our lives that are given to us, which is go to school, go to college or university or something like that, there, get the degree, get the job, buy the house, get married, have the kids.

• 1:04:26Ramit Sethi?

  And then move to Florida, get skin cancer, die.

• 1:04:30Steven Bartlett?

  Oh, retire.

• 1:04:31Ramit Sethi?

  Okay.

• 1:04:32Steven Bartlett?

  Have your pension die.

• 1:04:33Ramit Sethi?

  We don't have pensions anymore. That was in the sixties. But yes. And actually, that's a pretty good life, if you think about it. It's actually a very good life, especially the way that our parents' generation grew up, where, you know, they could buy a house on a reasonable salary, one salary, but that doesn't exist right now. Housing is historically expensive, and not through any fault of young people, by the way. There's a lot of this stuff thrown around, the media, young people are buying too much avocado toast, they're always buying the new iPhone. That's not why housing is expensive. Housing is expensive because people who bought their houses in the sixties, seventies and eighties, bought a house and then systematically prevented everyone else from building more housing.

• 1:05:18Ramit Sethi?

  So it is, it's called NIMBYism, not in my backyard. They have allowed almost no housing to be built, particularly in the US. That's why if you only have a limited supply, guess what happens to the price? It goes way up. That's changing slowly. Housing prices will, in certain cities like Austin, even Santa Monica have come down in certain areas. It's really important to be able to build more housing so that young people, middle-class people, poor people, can afford housing. We should not have people unable to afford rent or buying housing. It's a big problem.

• 1:05:51Steven Bartlett?

  So are you saying that the average couple, if they're looking to make a financial return

• 1:05:56Ramit Sethi?

  Yeah.

• 1:05:57Steven Bartlett?

  on their joint savings account, they shouldn't invest that money in a house?

• 1:06:01Ramit Sethi?

  I personally would not consider my primary residence to be a great investment, because it has massive costs, right? Massive. Maintenance, opportunity, cost of that down payment, let's say you put down fifty K or a hundred K, that could have been invested. It has all kinds of phantom costs. And then you have to stay there for Until you pay it off, presumably thirty years, most people don't stay for thirty years. There's some shocking math behind a mortgage. Like, most people don't realize that they will be paying more towards their interest than towards principal for twenty-one years. Let me say that again. Most people, when they take a thirty-year mortgage, right now with interest rates the

• 1:06:45Ramit Sethi?

  way they are, they will be paying more towards interest than they are towards the mortgage in year one, two, five, ten, year twenty, until finally year twenty-one, when they are finally paying more towards their mortgage, their principal, rather than interest. So you know that phrase, "I don't want to throw money away on rent"? We might more aptly say, "I don't want to throw money away on interest."

• 1:07:14Steven Bartlett?

  So if I'm in a couple, I'm in a relationship, and me and my partner have managed to save, I don't know, fifty K. What is a better use of that fifty K to drive a financial return?

• 1:07:24Ramit Sethi?

  Okay, so let's simplify the whole thing. I have a conscious spending plan. I have four numbers that couples should be talking about, okay? The first off is your fixed costs. Those should be roughly fifty to sixty percent of your take-home pay.

• 1:07:37Steven Bartlett?

  And what's a fixed cost?

• 1:07:38Ramit Sethi?

  Fixed costs includes your housing, or that could be rent, mortgage, your utilities, your car payment, any debt payment, anything that is consistent, even groceries, that you need to live every single month.

• 1:07:51Steven Bartlett?

  So fifty percent of my monthly income goes straight to those fixed costs?

• 1:07:55Ramit Sethi?

  Monthly take-home. Post-tax.

• 1:07:57Steven Bartlett?

  Post-tax, okay.

• 1:07:58Ramit Sethi?

  Fifty to sixty percent is the number you want to be targeting. Right there is the crux of why couples are stressed out about money. It's because they are spending too much on fixed costs. And within that, there's two areas they spend too much on. You know what they are? Housing is number one, because it's so expensive and they don't calculate. Number two is cars, usually trucks. We love trucks, trucks and SUVs. In America, the cultural script is, "Oh, we're having a kid, we need to get a big house and a big SUV, because we do." So that, right there, is where people get stressed out about money. Next number is your savings.

• 1:08:41Ramit Sethi?

  This should be five to ten percent minimum. This includes your emergency fund, this includes saving for a down payment, anything you're saving for money you don't need for between one to five years, basically. Okay? Next up is investments. This would be five to 10% minimum. This is where real wealth is created. And this is where couples neglect. They, they talk about saving and they'll say, oh, we try to save. I don't try to brush my teeth. I don't try to save. I make it automatic. That's what I want couples to do. That's what I cover in the book. And then finally, my favorite category of all, guilt free spending. This is going out for drinks, concerts, travel. 20 to 35% of take home pay.

• 1:09:25Ramit Sethi?

  That's a lot. That's a lot. If you look at it, people go, wow. Yes. And when you get down to that number and you're out and you're having drinks with your friends or you're out to a beautiful experience, you don't have to worry about anything else. You don't have to feel guilty or anxious because you're already handling all these other three numbers. You know you're set and you have this money set aside and you can enjoy it guilt free.

• 1:09:49Steven Bartlett?

  So this 10, this sort of 10% that is automatically invested. Would you set up some kind of system that automatically invests it?

• 1:09:57Ramit Sethi?

  Always, always. You should not be doing any of this manually. So your investments should be happening automatically. And for a couple, you actually get to celebrate it every month. You have a monthly money meeting where you talk about money every month. Most couples don't do this. You will now after watching this. And you talk about it. You look at how your investments are doing. You give each other a high five, a big hug, congratulations. And once you do this for six months, a year, you really start to see how it adds up fast.

• 1:10:27Steven Bartlett?

  What if your partner wants to buy a house and you don't?

• 1:10:29Ramit Sethi?

  Whoa, that's tricky. How would you handle it?

• 1:10:34Steven Bartlett?

  It depends on my level of conviction about the decision. I think you've got to pick your battles in relationships, but I am probably more financially aware than my partner because my brother is, he's been an investment banker for 13 years. He works for me full time. He's my money guy.

• 1:10:49Ramit Sethi?

  Yeah, okay.

• 1:10:50Steven Bartlett?

  He's my older brother.

• 1:10:51Ramit Sethi?

  What is he charging? 1.5%?

• 1:10:52Steven Bartlett?

  He doesn't charge me a percentage on my portfolio. No, he works full time in the business, so he he manages much of my money, but he would make the case to me of of pretty much the case you've made.

• 1:11:03Ramit Sethi?

  Yeah.

• 1:11:04Steven Bartlett?

  So based on an opportunity cost basis, I for a lot of people don't even know what opportunity cost is, I'm gonna hazard a guess, I'm not trying to explain it. Which is essentially all the things you could have done with this money instead.

• 1:11:13Ramit Sethi?

  Yes.

• 1:11:14Steven Bartlett?

  So based on all the opportunities you have available to you, Steve, is buying this house a good use of that money? And the answer was actually no, when I bought my first house, it was no, unless this is a emotional decision. Because you and your partner want a psychological feeling of safety to bring up the kids, whatever it might be, just a. Then if it is, Steve, if that's why you wanna buy it, and you think you're gonna stay there for a considerable amount of years. Then go ahead, we're gonna kind of section this as a different rationale than the rest of your investments.

• 1:11:46Ramit Sethi?

  What did you do?

• 1:11:47Steven Bartlett?

  I did exactly what he said.

• 1:11:48Ramit Sethi?

  You bought it knowing it was an emotional decision?

• 1:11:50Steven Bartlett?

  Yeah, I bought it knowing it was a bad decision.

• 1:11:52Ramit Sethi?

  I love this.

• 1:11:53Steven Bartlett?

  Yeah.

• 1:11:53Ramit Sethi?

  Okay, this is amazing. Everybody listen closely, cuz I wanna break down what you just said in in a different term. First off, you gotta run the numbers.

• 1:12:01Steven Bartlett?

  Yeah.

• 1:12:02Ramit Sethi?

  Always, for the biggest purchases in your life, you need to calculate carefully. What's my buy versus rent? What's my opportunity cost? What's it gonna amortize that? All these things that most people are not familiar with, learn it, it's not that complicated. Second, you need to factor in the non-financial. Hey, why am I doing this? Do I just feel this certain way? There's nothing wrong with feeling irrational about money, nothing. You wanna buy this thing and it's a bad financial decision? Okay, first, can I afford it? If so, we can continue the conversation. And then you buy it eyes wide open, saying, I know it's not an investment. I know it's not even a good financial decision, in fact, it's a terrible financial decision, and I'm still gonna do it.

• 1:12:39Steven Bartlett?

  Yeah.

• 1:12:39Ramit Sethi?

  When I, when my wife and I go to buy a house one day.

• 1:12:44Ramit Sethi?

  It will be the worst financial decision of our lives. We already know that. But we will probably still do it anyway. Same as you, because there's more to life than just what's in a spreadsheet. But you have to know all the pieces on the board before you make these big decisions. And you have to be able to do it with your partner. You know, it'd be very easy for you to do things unilaterally. It'd be very easy for me to do it as well. What I've learned and what I emphasize on my podcast every episode is just because you may be the higher earner or have more money, it's actually your obligation to bring your partner in and to get them involved. And they may not be as savvy or even as interested, but you have to find a way to bring them into this world

• 1:13:29Ramit Sethi?

  and get them connected with you. With my wife and me, of course, I know more about investments. So I'm doing our investments, but we're still talking about them. We're saying like, hey, here's the numbers we chose. Are we still good with that? Let's take a look at it. High five, you know, here's what we're thinking for next year. That's the level we're talking about. These are, these are exactly the kind of conversations you want to have. And I, I'm actually really thrilled you shared that example because I celebrate that you made a bad financial investment because it wasn't an investment, it was just something you wanted and you could afford it.

• 1:14:06Steven Bartlett?

  Yeah, and we're both aware, me and my partner, we had the conversation. We're both aware that this is one of the worst things we could have spent the money on. If our objective, if our KPI, our key performance indicator was to make more money, this was a terrible decision to make.

• 1:14:20Ramit Sethi?

  Yes.

• 1:14:21Steven Bartlett?

  But we're also aware, we just didn't care. We thought, you know, it's, there's a lot of non monetary things that are going to be beneficial about this decision. And I think that's what most people don't realize, actually. And I just think about my friends. I think most of my friends believe that when they buy their house, they're doing so because they don't know it. They don't know any other way to invest. Society hasn't given us an alternative. So what is the alternative?

• 1:14:42Ramit Sethi?

  Simple, low cost, long-term index funds are fantastic ways to invest. I'll explain what they are. The myth about investing is that you have to sit there and look at P E ratios and things like that. No, you pick often one fund. There's a simple example called a target date fund. You pick the year you're going to retire in. Like if I'm going to retire in 2050, I pick a Vanguard 2050 fund or Fidelity or Schwab 2050 fund. All I do is literally send money every single month. I set it up so it happens automatically. It could be fifty dollars a month, five hundred, five hundred thousand per month. And that's all I do. I just send it there. It automatically buys the the stock market.

• 1:15:25Ramit Sethi?

  It automatically diversifies and gets more conservative over time, and that's it. So you know, the fitness world, you've I've seen you training, you you've learned about fitness. When you first start off, so much information and so many different people giving you different pieces of advice, right? It's like, oh, my God, how am I supposed to know what about my genetics and this and that? And then over time, you realize, oh, it's actually pretty simple. Once you cut through the noise, that's the same thing with money. That's the same thing with investing. You have to cut through the noise and it actually becomes shockingly simple. Oh, my God, this is the way that real wealth is created. It's about consistent investing. It's about time. It's about low fees. That's it.

• 1:16:07Ramit Sethi?

  And you start to wonder, what's all this stuff that they publish all the time in these magazines and newspapers and on TikTok? It's just noise.

• 1:16:16Steven Bartlett?

  Do you know when you've sat down with those one hundred and eighty odd couples you've spoken to about money in their in their relationship? Have you not had moments where one of the partners was shocked?

• 1:16:26Ramit Sethi?

  Always.

• 1:16:26Steven Bartlett?

  For better and for worse?

• 1:16:28Ramit Sethi?

  Yeah, yeah, actually, yes.

• 1:16:32Ramit Sethi?

  Sometimes they are shocked before they meet me because I have them prepare their document with their financials. And one of them has never actually looked at their financials, sometimes both. And they realize it's much worse than they thought, or it's much better. Sometimes we're talking and one of the partners will actually talk about how they feel for the first time ever, and the other partner will be crying.

• 1:16:57Steven Bartlett?

  Give me some examples of the moments that you remember that shocked you the most.

• 1:17:03Ramit Sethi?

  I think about.

• 1:17:06Ramit Sethi?

  One of the most shocking examples was. A woman who was around the age of mid forty's, maybe fifty. And she had had a double lung transplant. And she had successfully had the transplant and she was alive. She was healthy, but. She knew that she would live. Five or ten more years. That's what the doctors told her. And she said, I wanna share this time with my daughters. They were around eleven and twelve. Her husband. And. I wanna do that. I said, okay, what's stopping you? And she said, well, I still have a job. And I looked at her financials. They were multimillionaires.

• 1:17:49Ramit Sethi?

  They had saved consistently doing index funds over time, nothing fancy, just consistent investing. They, she could stop working tomorrow and they would have enough money.

• 1:18:01Ramit Sethi?

  Forever. She couldn't stop. She said, I like to work. I like knowing that I have a job. I like the consistent income. So, most people are used to getting an income. And that's why they find it so difficult to retire, among other reasons, because the income will stop. Even though I can point out to them, the investment portfolio you've built and social security and all these things will actually pay you. People are terrified of not seeing that money come into their checking account. In this case. She had a ticking clock. We all have a clock, but she knew how long hers would go for. She found it incredibly difficult to quit her job and spend time with her daughters. Now, if we're listening to this, it's.

• 1:18:45Ramit Sethi?

  Like, just quit. It's so obvious to all of us. But we're not the ones making the decision. That was quite shocking to hear how difficult it can be, even in cases of life or death. Wanting to have a stable income can affect us.

• 1:19:02Steven Bartlett?

  And what about earning? Like, what role does earning play? Like, just earning more money play in all of this stuff? Because I think I did, I'm gonna be honest, I had a bias when I was eighteen, nineteen years old. Um, I was fairly reckless with money. And I had these four credit cards, I maxed out the credit cards, I blew the money, I got two CCJs, which is a county court judgment in the UK.

• 1:19:23Ramit Sethi?

  Okay.

• 1:19:24Steven Bartlett?

  Had huge debts of thousands and thousands of pounds. And in my head, I thought, it will be fine.

• 1:19:30Ramit Sethi?

  If I just earn more.

• 1:19:32Steven Bartlett?

  Yeah. No, because I'm gonna earn so much money.

• 1:19:35Ramit Sethi?

  Oh, okay.

• 1:19:35Steven Bartlett?

  That I'll just outpace this problem. And that was like my bias, my bias was like, I'll just earn loads of money. And when I figured out what a credit score was and that mine was destroyed, I thought that wouldn't matter because I'm always paying cash.

• 1:19:46Ramit Sethi?

  Yeah, classic. Um, every couple I speak to who has a spending problem, they always say the same thing. They go, we just need to earn more. And these are the very same couples, when we crunch their numbers, they'll often realize they were earning way more than they thought. And you can see their faces because I have the whole thing on YouTube. And it's this realization that, oh my God, the story I've been telling myself, if we just earn twenty five thousand dollars more. And then they realize, we actually are earning twenty five K more. And they don't know what to do with it. What I tell them is, you could be making three hundred thousand dollars more right now, and it would not make one bit of difference because you're, you have a hole in your bucket and all the money is going out.

• 1:20:28Ramit Sethi?

  The next thing I ask overspenders is, um, do you want to make no change, small change, or big changes? A hundred percent of them say big changes. I go, all right. I take them at their word, and then we start going down the list. And they find it incredibly difficult to strip out even the most minor of spending. So we have a couple here that will be in literally hundreds of thousands of dollars of debt. Okay, it's like I'm having a heart attack watching them, and they're very calm. It's because I understand interest rates and I know what situation they're in. And so they go, big changes. Suddenly, ten minutes later, we're debating whether they can keep their Netflix subscription or not. And I go, guys, I'm not here to berate you.

• 1:21:09Ramit Sethi?

  I'm not the teacher who's telling the kid, you've been a bad kid, which, deep down, a lot of them want. A lot of us want an authority figure to tell you, you've been bad, now we gotta be good. And that's just not what I do. I help them realize it themselves. And it goes slower, it takes a long time. But if they realize it themselves, they're able to make the change. Every couple says they want to make big changes. When it gets down to the spending, it's really difficult. That's why you have to be incredibly careful which lifestyle purchases you make that are tied to your identity. So if you are a car person and you're driving a Rolls Royce, a really fancy car,

• 1:21:50Ramit Sethi?

  it will be incredibly difficult for you to downgrade that car because it's part of your identity, right? Meanwhile, like, if you have to get cheaper paper towels, whatever, nobody cares. But you have to be very careful about what you allow to become part of your identity. I'm not saying, don't buy nice things. And couples, you should buy nice things, but do it when you know that you can afford to do it forever. Don't just do it because, oh, we want to buy a private school this year, but we don't know how to pay for it next year.

• 1:22:19Steven Bartlett?

  So do you think that couples should make a budget?

• 1:22:23Ramit Sethi?

  Uh, I don't like budgets. I don't think they work. I think they look backwards, whereas a conscious spending plan looks forward. But most couples think, deep down, we just need to create a budget.

• 1:22:37Steven Bartlett?

  Isn't a budget the thing you gave me, like the fifty percent, sixty percent?

• 1:22:40Ramit Sethi?

  Different. A budget is couples tracking every last line item. They're tracking how much they spent on corn, they're tracking how much they spent on diapers. Someone has to create and track this laborious spreadsheet. And then at the end of the month, they look at it and they go, uh, I guess we spent that much. What are you supposed to do with that? Most couples have no idea. Does this budget tell you when you're gonna be a millionaire? Does it tell you what your net worth is? Does it tell you if you have enough? No, it doesn't stack up to anything. It's just a bunch of numbers tracking. Budgets look backwards. A conscious spending plan looks forward. So a conscious spending plan allows you to zoom out and say,

• 1:23:24Ramit Sethi?

  what is the vision for our rich life? How do we pick the things we want to spend extravagantly on? And cut costs mercilessly on the things we don't. So I give you these numbers, fifty to sixty percent for fixed costs. It's up to you how you want to hit the number. If you love your house, you want to spend more on your house? Do it. Maybe it means you spend less on your car payment. If you want to go to concerts, but you don't care about eating out? Fantastic. Take the trip, go see Taylor Swift. So it's up to you to make the Tetris pieces fit. But you decide and all your money flows for those four numbers.

• 1:24:01Steven Bartlett?

  How do we go about teaching our kids about money? My, my older brother, and the one that works in our company, he has three kids under the age of six.

• 1:24:08Ramit Sethi?

  Ooh.

• 1:24:09Steven Bartlett?

  And I'm wondering, because he's such an optimizer, are they going to end up being optimizers? Is there a relationship between our parents and our kids? And if I want to, when I do have my kids, how do I make sure that they aren't warriors or avoiders?

• 1:24:22Ramit Sethi?

  The number one thing that the couples in financial trouble say is when they were growing up, their parents never talked about money. Never. There was an episode on our podcast with this couple living in Kansas, in a low cost of living area. And they were making a hundred and thirty thousand dollars a year. That's a very good income, especially for their area. They should have had tons of money, tons of savings. But their daughter came home one day with food from the school because she had told her school, we don't have enough money to eat. Now, they had plenty of money. Why? Because her mom and dad were always saying, we don't have enough. We can't afford it.

• 1:25:06Ramit Sethi?

  Daughter took that message to school and was given free food. This was horrifying to the dad, horrifying. And what he realized at that moment was, the way that I'm communicating about money is not working.

• 1:25:21Ramit Sethi?

  See, most parents, deep down, believe that money is something to protect kids from. They think it's bad. Deep down, most Americans, we have a love-hate relationship with money. But parents think their kids, let them be kids. But you would never teach a kid how to ride a bike by saying, "We don't talk about bikes in this family." You would get them a bike, you would get them on, you would show them how to do it, you would let them fall, and then you would help them get up again. So imagine this with your kids. Imagine that they are three years old, young. You pull them up, sit them, you say, "Look, can you help me push this button? We're gonna pay for the rent. This is for our beautiful house. Help me push that button. Yay."

• 1:26:03Ramit Sethi?

  Give them five, okay? Getting them involved right from the get-go. And this is, if they're living with two parents, this is mom and dad. You want them to see both. Because too often, people only see mom worrying about the bills. And so they come to associate mom with worrying, and therefore, if it's their daughter, they think they are supposed to worry as well. Now imagine the kid is eight, 10 years old. You say, "Hey, we have to go to the grocery store. Here's a hundred dollars. We need to get all these things. How should we do it?" Let them. Let them make mistakes. They're gonna forget about taxes. Let them learn, right? They get a little older, they're planning a pizza or a restaurant for the family. "Here's a hundred dollars for dinner."

• 1:26:46Ramit Sethi?

  Problem is, they're gonna pick someplace like Chili's. It's horrible, but you gotta go. Let them learn their lesson. By the time they are 16 years old, they have planned a family vacation, they are aware of trade-offs, taxes, tips, all kinds of stuff. They have helped the family buy its new car. This is how you prepare kids. You don't simply say, "We don't talk about money in this family." You let them learn about money, and you tell them what you've learned about money. That's how you teach them.

• 1:27:16Steven Bartlett?

  I'm somewhat scared of my kids being sport brats. And I say to my partner sometimes, I'm like, "If, when we have kids, should we be putting the kids in, like, the back of the plane?"

• 1:27:27Ramit Sethi?

  Oh, yeah.

• 1:27:28Steven Bartlett?

  You know what I mean? Or should we, should they be up front with us? Like, what's the deal?

• 1:27:31Ramit Sethi?

  Well, I'll tell you what. I, um, I went to public school my entire childhood. And then I got a bunch of scholarships and went to a private school, and, uh, for college, and... At that college, I remember in the first week, so many of the beliefs I had about money and kids were shattered. I had always assumed that if you went to a private school, you were spoiled and you didn't really like to work. Within three days, I realized that was totally untrue. Like, some kids are spoiled, some are not. The correlation with private school, not really there. It's about parents, it's about how they were taught, and it's also about some element of luck as well. But can you teach kids not to be spoiled?

• 1:28:15Ramit Sethi?

  Yes, there are so many wealthy kids who grew up not entitled, appreciating what they have. And the parents were still like, hey, I want to go to a nice hotel.

• 1:28:24Steven Bartlett?

  How? How do you raise kids that aren't spoiled, you think?

• 1:28:27Ramit Sethi?

  So start at the very beginning when you're teaching them about, let's do this together. Money is something that we all do together. Now imagine that when you're talking to your family, just the same way we talk about creating a healthy relationship with food. Right? How do you teach your kids to have a healthy relationship with food? You talk about it all the time. You go to the grocery store together. You cut carrots together and potatoes, and you say, this is why we're putting potatoes in this thing. But we never do that with money. So you have a healthy relationship with money by shining a light on it, by talking and asking them questions. Do you know how we afford this house? What's a good thing to do with credit cards? And what's a bad thing to do with credit cards? Hey, what do you think that we have 200 bucks and we want to give it to a worthy cause?

• 1:29:11Ramit Sethi?

  How should we do it? How should we pick? These are the kind of conversations that families should be having. And when kids start to engage with money and they see parents doing it, and they realize it's not something to be ashamed of or hidden from, they go, oh, my gosh, like, I have some agency over this, some control. That's how you prevent them from being spoiled.

• 1:29:32Steven Bartlett?

  Have you got kids yet?

• 1:29:33Ramit Sethi?

  No.

• 1:29:34Steven Bartlett?

  When you have kids, if your kids come to you and they say, Dad, I want to be rich.

• 1:29:39Ramit Sethi?

  Love it. Love it. I would say, what does rich mean to you?

• 1:29:42Steven Bartlett?

  It means being able to have financial freedom, so not having to look at price tags when I go into restaurants or shops or when I'm browsing Amazon. I can just take care of myself. I can live somewhere nice, drive a nice car, go on a holiday when I want. It's freedom. What is the most important thing that I should be thinking about to create that wealth and preserve it so that I can be rich?

• 1:30:03Ramit Sethi?

  Well, you'll first notice that when this hypothetical kid said, "I want to be rich." What was my response?

• 1:30:10Steven Bartlett?

  What do you mean by rich?

• 1:30:11Ramit Sethi?

  Yeah, amazing, what do you mean by rich? So, excitement and curiosity. The opposite would be, "Why do you want to be rich? You don't need to be rich. That's not for people like us squashing those dreams." So, when, like, my nephew, a few Thanksgivings ago, he was young and he said, "I want to buy a Rolex." Amazing! Where'd you get that? Tell me, what kind of Rolex? How are you gonna do it? How much is it gonna cost? How much do you have to save to put that aside? That's encouraging kids. Now, they can figure out these trade-offs later, but just encouraging them, first off, is the first thing we do with kids when they talk about money. Kids are smart. They notice by age three, four, or five, how their parents feel about money.

• 1:30:56Ramit Sethi?

  I talk to parents all the time, and I speak to my own family and their parents of younger kids. They'll tell me, "My four-year-old is already worried about money. Every time she gets a little bit of money, she puts it in an envelope and saves it because she's always worried about having enough." I go, "Wow, that's tough. Where do you think she got that from?" And then, mom starts crying, always. I can have a very difficult financial situation. Two parents, they'll be in $150,000 of credit card debt. They're stoic about it, they ignore it. We talk about it, they engage, but the minute I bring up the kids, tears.

• 1:31:37Ramit Sethi?

  And the reason for that is that you can take on a lot of burden yourself, but when you realize that your behavior is being passed on to your kids, that is really difficult. And that's why couples can get on the same page and build a healthy relationship for their kids as well.

• 1:31:54Steven Bartlett?

  So, what would you say then to your kid? Says, "Dad, I want to be rich." You said, "Amazing, great."

• 1:31:58Ramit Sethi?

  Love it, yep. Tell me what it means.

• 1:32:00Steven Bartlett?

  And they say, "What are the principles for wealth creation, Dad, in keeping that money so that I can be financially free?"

• 1:32:04Ramit Sethi?

  It would be, number one, you have to find something you love to do. Work hard. You have to love to work, okay? In your own way, whatever it is. Two... Automatically invest every single month, right? That's great. And number three, you have to enjoy money. Enjoy it, not just making it, not just managing it, but also spending it.

• 1:32:27Steven Bartlett?

  And if they said, Dad, should I get credit cards?

• 1:32:29Ramit Sethi?

  I said, sure, of course. When the time is right, you should get a credit card. You should always pay it off every month, but you should get a credit card. And when you start to spend enough, probably get a rewards card. You can get some free trips or cash back out of it. Notice that I'm not being restrictive. If they say, I want to buy coffee every day, I would say, fantastic. Let's talk about how you can earn enough so you never have to worry about coffee. If they even said to me, I want to buy a Lamborghini. I'm not a Lamborghini guy, I couldn't care less. I would say, amazing, how do you think you could do that? And what if they said, oh, um, you know, I want to be a school teacher? I would say, okay, you know, have you talked to any school teachers and asked them how much they make? Then calculate how long it would take you to buy a Lamborghini.

• 1:33:14Ramit Sethi?

  Kids are smart, they can do these things. We just have to challenge them.

• 1:33:18Steven Bartlett?

  They say, Dad, I've only got my pocket money, so how am I going to become an investor? I don't have enough money yet.

• 1:33:23Ramit Sethi?

  How much do you need to invest?

• 1:33:24Steven Bartlett?

  I assume you need like thousands of pounds.

• 1:33:26Ramit Sethi?

  Oh, what if I told you you only need to start with a hundred dollars?

• 1:33:30Steven Bartlett?

  I don't have a hundred dollars, I have seven pounds pocket money.

• 1:33:33Ramit Sethi?

  Have you asked anyone else how you could make an extra ninety-three dollars?

• 1:33:39Steven Bartlett?

  No.

• 1:33:39Ramit Sethi?

  Okay, what could you do to ask them to make ninety-three dollars? What could you do?

• 1:33:43Steven Bartlett?

  Clean the cars in the street.

• 1:33:44Ramit Sethi?

  Keep going.

• 1:33:45Steven Bartlett?

  A paper round.

• 1:33:46Ramit Sethi?

  And on and on and on. So here, I'm not giving them the answer. I'm challenging them to learn how to think for themselves. And to make ninety-three dollars for a kid, you could do it. It won't happen in one day, but you could do it very, very quickly.

• 1:33:57Steven Bartlett?

  How much money do you think you need to start investing?

• 1:34:00Ramit Sethi?

  You should start investing as soon as you can. You could start investing with fifty bucks a month. My, my dad helped me open up a custodial account when I was fourteen years old. So I started investing then, and my dad immigrated from India. So I was very lucky that he pushed me. But if you're a parent, you should definitely be getting your kids to invest early. Even fifty bucks a month makes a huge difference.

• 1:34:24Steven Bartlett?

  So you invested at fourteen?

• 1:34:25Ramit Sethi?

  Yeah, and I've been investing ever since.

• 1:34:26Steven Bartlett?

  And how did that do for you?

• 1:34:28Ramit Sethi?

  Fantastic. You know why? Because I sold, I never sold almost anything. It just stayed. Every single investment, every single month, no magic, no random, like, amazing stock picks, except for a couple lucky ones. It's just basically almost all index funds, just every single month.

• 1:34:47Steven Bartlett?

  What about crypto?

• 1:34:49Ramit Sethi?

  I mean, if you want to have it as one to five percent of your portfolio as speculation, fantastic. The problem is that crypto investors I talk to don't believe in diversification. They will often have all their money in it and they don't really, they don't follow classic principles of investing. And the worst part is it's hard to argue when it's done so well. So people go like, what the fuck do you know? Seven percent, it sucks, grandpa. And I go, all right, fine. It has performed incredibly well, at least in certain parts of crypto. But you do not want to have the majority of your assets in one thing.

• 1:35:27Steven Bartlett?

  And it's the problem with crypto as well is you only hear when it's doing well.

• 1:35:30Ramit Sethi?

  Exactly.

• 1:35:31Steven Bartlett?

  So whenever the bear market comes in, everybody goes quiet.

• 1:35:34Ramit Sethi?

  They get very quiet. Where'd you go, guys? Sometimes I follow them on Twitter. Half the time, their account is deleted.

• 1:35:41Ramit Sethi?

  That's called survivorship bias. You only hear about things when they're good. The minute it's bad, account deleted, never heard from them again.

• 1:35:49Steven Bartlett?

  What about gambling? You must see some gambling in relationships. I'm not sure how legal gambling is in every state over here in the USA, but in the UK gambling is legal. So it's often an issue in relationships, a quiet issue.

• 1:36:02Ramit Sethi?

  Yeah, it is a quiet issue. I think, I don't hear about it too often. I suspect that gamblers simply don't want to talk about it.

• 1:36:10Steven Bartlett?

  Yeah.

• 1:36:10Ramit Sethi?

  Which is actually the worst of all. Maybe I need to find a way to reach some gamblers. I mean, we do hear some really tragic stuff. We hear about folks who have lost money on bad investments late in life. We hear about parents whose kids are bleeding them dry. But we also hear about some really positive things, you know? Couples who, who have quietly accumulated money over time and they just don't realize we made it. And sometimes I get to do the very pleasant thing of saying like, hey, you two clearly love each other. You've done this together. You made it.

• 1:36:46Steven Bartlett?

  Have you ever seen marriages fall apart because of these issues?

• 1:36:50Ramit Sethi?

  We've had couples break up directly after our podcast. Marriages, of course, I get emails all the time. The reason that we broke up was money. But you know what's interesting? Research shows, which I cite in the book, that when couples fight, they don't fight about money. You know what they fight about? Kids, chores, and communication. Money is rarely talked about. It's only talked about when there's a fight, but it's the least of what people are typically arguing about. Kids, chores, communication, that's what gets fought about.

• 1:37:27Steven Bartlett?

  Unromantic, though, isn't it? Seen as being, you know, there's a stigma, don't talk about money.

• 1:37:32Ramit Sethi?

  Yeah, which is crazy. I encourage couples to have a monthly money meeting. I even give them an exact agenda. Here's the Google Doc. Work it out, adapt it for your own needs. Start off with a compliment. You know, I really appreciated that you planned that trip for us to the grandparents. Like, you did such a great job with flights. Start off like that. People look at me like I'm speaking Klingon to them. An agenda for my wife or my husband? I go, what? They go, that's weird. I go, I think it's weird for you to go 40 years fighting about money, never talking about it, never creating a vision, instead of using an agenda.

• 1:38:09Steven Bartlett?

  It's so interesting because, you know, much of the issues in my household growing up were money related, so between my mother and father. And there is no way that my mother had any idea how much money my dad had or how much money the household had.

• 1:38:23Ramit Sethi?

  Wow.

• 1:38:23Steven Bartlett?

  And I really, as you were saying it now, I thought, God, if they just sat down once and had that conversation, like, how much money do we actually have here? Wow, God, our childhood would have been so drastically different. Let's pause for a minute to talk about today's sponsor, which is Whoop. I often think how lucky we are to live in a time where we can so easily access information on how our body is performing. But it also makes me wonder how many of us are really utilizing this technology. A couple of years ago, I started wearing Whoop, a device that monitors how activities and behaviors affect my sleep, my training, my recovery and my stress. I'm currently midway through Whoop's Sober October Challenge. And this month, if I compare it to a time when I used to drink, my stress levels are significantly lower.

• 1:39:08Steven Bartlett?

  If you're like me and you're aiming to be the best version of yourself, then you have to go and check out Whoop. Head to join.whoop.com/CEO to start your free trial today. And if you're already a Whoop member taking part in this challenge, do me a favor, send me a DM, a message, and let me know how you're getting on. Do you know you said you are at a point where you now think you have enough?

• 1:39:26Ramit Sethi?

  Yeah.

• 1:39:27Steven Bartlett?

  But you're still striving for more and still investing and still earning and still waking up every day and driving. Then why?

• 1:39:34Ramit Sethi?

  I like it. I love what I do. I love working. I, um, the more that I make, the more that it is a sign I'm creating value. That's it. But I systematically earn more, like I have my rules. So for example, unexpected income that comes in, 70 to 90% of that will be invested, right? Meaning like, I'll take 10% and have a good time, but I'm primarily investing unexpected income.

• 1:40:01Steven Bartlett?

  Question then, if you got a $100 million windfall.

• 1:40:04Ramit Sethi?

  Yeah.

• 1:40:06Steven Bartlett?

  How would your life change?

• 1:40:09Ramit Sethi?

  It's hard to say I have a very good life. I...

• 1:40:12Steven Bartlett?

  $100 million comes in, what are you going to do with it?

• 1:40:18Ramit Sethi?

  I mean, it's, it's going to change almost nothing. I would, I would, it would accelerate some of my plans for charity.

• 1:40:29Ramit Sethi?

  For a house because I would have the house drawn up. Even though I don't even wanna buy a house anytime soon, I would probably have the house drawn up. And then I would say, call me when it's ready to move in and don't call me before then. I have, I want nothing to do with building it. I don't wanna see a piece of wood go over there. Why would you buy a house? Purely because what else are you gonna do with the money? Of course giveaway. You gotta spend the money somehow, but. So why a house? What else are you gonna do with it? Just save it? I already saved it. I already invested it. See, what happens is when you start to, as you know, you start to hit your numbers and exceed them bigger than you ever thought possible. You start to realize that so much of our life is spent playing defense with money.

• 1:41:14Ramit Sethi?

  That's the relationship that most of us have with money. Will we have enough at the grocery store? Will we have enough to fix the window? Will we have enough to get a car? And most people live that way. But if you start to save automatically and you start to invest and you really make it a focus to earn and understand how money works. At a certain point, you go, oh, my gosh, objectively speaking, looking at our numbers. We don't ever have to worry about the price of a chicken bowl again. So then what? Then what is the point of it all? Give it away, I guess? This is where I think, um, this is a real challenge. And you know, a lot of retirees, they get to the point where they have accumulated money. And, but they never really thought about the point of it all. What is the point of it all?

• 1:41:55Ramit Sethi?

  I'll tell you, sometimes people, um, surprise me by how uncreative they are with money. I'll give you an example. I ask people, what is your money dial? What do you love to spend money on? And, um, people, they usually have a pretty good answer. The most common answer is, um, food. The next common answer is, uh, travel, then health and wellness, and then there's a bunch of other money dials. So one guy once told me, um, I like coffee. That's his money dial, coffee. I go, what do you mean? He goes, I order different beans from whatever. I go, can I be honest with you? I'm bored. I'm bored by your answer. Because he was doing very well. I'm like, okay, you buy a $20 bag of coffee beans? All right, you have way more money. And he's just like, he was a little insulted that I said it,

• 1:42:40Ramit Sethi?

  but I was trying to shake him because I was bored. Some person with that much money should not be telling me that the thing they love to spend money on only is coffee. So I go, listen, you like making your own coffee? He goes, yeah, I have my Aeropress and this and that. I go, what if you considered hiring the barista from your local place to come to your house and show you how to fine tune that coffee? What if you really learn how to spend money on that experience and deepen the experience? It's not about buying 10 more coffee bags. It's about going deeper. A year later, two years later, we talked. He had done that and he got really into coffee. He was now traveling to go to different locations, Colombia, Rwanda, all these places

• 1:43:24Ramit Sethi?

  where he had started to appreciate the coffee. So sometimes we need to get more creative. You don't have to spend thousands of dollars, but if you and your partner love this thing, think about how you can spend money to appreciate it even more.

• 1:43:39Steven Bartlett?

  And your strategy is to then stop spending money on the things that you don't appreciate?

• 1:43:44Ramit Sethi?

  Yeah, so this is why your rich life vision comes in. What do we care about? What do we want to spend extravagantly on? And then what do we want to cut costs mercilessly on? We always start with what do we want to spend more on? So when I ask people, I have a variety of exercises. I walk them through like, what's your perfect week? I'll tell you that I've done this with many, many people. Not one person has ever said my perfect week involves doing laundry. Cool, could we pay that out? And if you can't afford to do that today, that's okay. Put it on your vision and say, when we get to this number, we're never going to do laundry again. Fantastic, but it also gives you something to look forward to.

• 1:44:20Steven Bartlett?

  You know, it's thrown around that once household income equals X number, then people are happy or at least there's diminishing returns.

• 1:44:27Ramit Sethi?

  That's bullshit.

• 1:44:28Steven Bartlett?

  Is it?

• 1:44:28Ramit Sethi?

  Yeah, that $75,000 number. First of all, that was already like 10 years ago. So we have to factor in inflation. But second, More recent research has shown that actually happiness continues increasing. There's also self satisfaction, so there's a variety of different variables. Basically, don't believe that seventy five thousand dollar number that's tossed around. It doesn't make any sense. What's more important is you create a vision together and you go, what would make this week, this year, this next ten years amazing for us? Let's just put it all out there. It doesn't even matter if we know how we can afford it or not. Then let's talk about it. Do we know our numbers? Do we have enough? Can we pay for our kids' college or not?

• 1:45:10Ramit Sethi?

  Can we buy an extra iPhone charger so we don't have to run to the bedroom every day? And you start to create and design your rich life together. That's the way you do it.

• 1:45:22Steven Bartlett?

  Very interesting topic, and it's particularly pertinent to me because, you know, as I said, I spoke to a divorce lawyer the other week and he told me that it's the, one of the top two reasons couples get divorced is because of money problems. And I really didn't know what he meant. I thought maybe it's one of the partners loses all of their money and it causes arguments, or maybe it's just that there's a lot of resentment and frustration built up because there's opaqueness surrounding the subject of money. And it's kind of like the elephant in the room that has never been addressed. And this is exactly what you try and do in this book, and you do it so masterfully. Your first book has sold, you know, seven figures worth of copies, and I understand why. And I have a sneaking suspicion that this book is going to be equally successful because it is the elephant in the room in most relationships.

• 1:46:04Steven Bartlett?

  The fact that, you know, when I saw that you'd written a book about money for couples, it immediately made me realize, I go, Chris, we've never talked about that in our relationship. And why not? And it's a whole complex myriad of reasons and trauma and emotions and insecurities and shame. But like all things in my relationship, the more talking I did about it, the better it became and the less of an issue it became. And, you know, there's almost a correlation in relationships, isn't there, between the amount you talk about an issue and how big the issue is. And that relates to all things, whether it's sex, or if it's the in-laws, or it's friendships, or whatever it might be. So it's a really well timed book, and I've really not discovered one quite like it. So I highly recommend everybody goes and checks it out. It's out in December.

• 1:46:49Steven Bartlett?

  The link is below. So if you're listening to this now, you should be able to preorder this book right now. And hopefully this can form the foundation of a conversation that you very much need to have in your relationship, one that might just save your relationship.

• 1:47:00Ramit Sethi?

  Such a pleasure.

• 1:47:02Steven Bartlett?

  We have a closing tradition on the podcast where the last guest leaves a question for the next in the diary of a CEO. And the question that's been left for you is, what can you do to improve humanity and the life of people?

• 1:47:21Ramit Sethi?

  I think in my world, the best thing I can do is

• 1:47:27Ramit Sethi?

  set an example of someone who publicly speaks about the things that are important to them, who wakes up every day and has a great time teaching, loves what I do, and

• 1:47:41Ramit Sethi?

  models having a loving relationship with the people around me.

• 1:47:49Steven Bartlett?

  Leading by example in every sense of the word.

• 1:47:52Steven Bartlett?

  Thank you so much. Such a pleasure to speak to you. And you've opened my eyes to so many things. And every time I have these conversations, I hope that I walk away with some kind of actionable insight into something that matters in my life. And that's certainly the case in this conversation. So thank you so much for coming back today.

• 1:48:06Ramit Sethi?

  Thank you.

• 1:48:12Steven Bartlett?

  As you guys know, I am an investor in a company called Zoe. They're also a sponsor of this podcast. I always think that without our health, we have nothing. You've probably heard me on this podcast say that health is our first foundation. And I know because I previously struggled with low energy, it was partly the result of my body not getting enough nutrition. But in 2023, when I had one of the co-founders of Zoe on this podcast, Tim Spector, I discovered that my nutrition contributes more to my health than anything else. And I think that was a lightbulb moment for me. I've been a Zoe member ever since. They've released something called Daily 30, which is 30 different plants in one supplement. And what really sets that product and Zoe apart is it's science backed. Daily 30 is no exception. It contains a natural source of copper, which contributes to normal energy yielding metabolism. So it's no surprise that this product continues to sell out.

• 1:48:57Steven Bartlett?

  So if you can get your hands on it, don't hesitate. And I'm going to give you a code to help you. Use code PODCAST10 at zoe.com/daily30 for an exclusive 10% off your first order. And once you try it, tag me in a photo and let me know how you get on.

• 1:49:36Steven Bartlett?

  You.