Episode #138: “My wife doesn’t want me to take a $720k job offer”

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[00:00:00] Babu: I, being a medical trainee for the last eight years, have been living almost paycheck to paycheck. And thankfully, Mel has been really supporting me for the last three years. And now I’m at a point where I’m about to be complete with my training, and I will be a significantly higher earner.

[00:00:18] Mel: I don’t think there’s anything that can take away the anxiety of what we’ve been through over the last few years.

[00:00:26] Babu: I think once I make full partner, it would probably be somewhere around 55 to 60k a month.

[00:00:34] Ramit: Mel, do you accept that this financial change is happening, that the household income you are about to get, regardless of what job Babu chooses is real?

[00:00:45] Mel: What makes it difficult to accept is that I can never make that amount of money ever. Even if I decided to open up my own private practice, I could never, ever again be the one that supports the house financially.

[Narration]

[00:01:06] Narration: Meet Mel and Babu. They’re both 33-year-old doctors worrying about how to make an important career decision that’s going to change their financial lives forever. Babu’s about to finish his training, and he wants to work in one area, but Mel is not on board. What you’re going to see in today’s conversation is that Mel and Babu who have a very specific way of thinking, and that way of thinking has helped them excel in their careers, but when it comes to these unstructured decisions, like where to work, they are paralyzed. I specifically wanted to talk to them because a lot of us think about life in a certain way, and it’s actually helped us become successful. But when we face other situations where we have to think in a totally different way, we also get stuck.

[00:01:54] It is the beginning of the year, a perfect time to think about what you want your rich life to be this year. Where do you want to spend more money? Where do you want to cut or redirect your spending? Now, a few weeks ago, in my newsletter, I shared how to do an end of the year Rich Life Review, and my wife and I of course, did this. I want to share what came out of it, what we loved, how we are thinking about our categories of spending, and what our rich life is going to look like in 2024. I loved our conversation. It was fun. It was dreamy. It’s exactly what money is supposed to be. So this Saturday, January 13th, I’ll be sharing what we discovered in our Rich Life Review. You can only get this material at iwt.com/podcastnewsletter.

[00:02:42]  Listen into today’s conversation with Mel and Babu.

[Interview]

[00:02:45] Mel: We talk about money constantly, to be honest.

[00:02:48] Ramit: Like how much?

[00:02:49] Mel: From the time that we wake up until the time that we get home. And we text each other throughout the day about how our brokerage accounts are doing.

[00:02:59] Ramit: What? Wait. How much time per day do you spend talking about consuming media, about reading, analyzing money?

[00:03:13] Mel: At least three to four hours per day. Babu, how many episodes of Ramit’s podcast have you had just playing in the background? Yeah.

[00:03:25] Ramit: Seems to be causing some stress in their relationship. Would you agree?

[00:03:30] Mel: The spreadsheet comes out weekly.

[00:03:32] Ramit: Okay, okay.

[00:03:33] Babu: Because it changes.

[00:03:35] Ramit: You guys are hilarious, and you don’t even know it. Seriously, the people I talk to, they don’t even know how much money they earn. And what about in your relationship? If I were there with a clipboard for a month, what would I write down about the way that the two of you together feel about money?

[00:03:56] Mel: We try to make big decisions about our finances together. I think there are times certainly that we disagree about certain things, such as how quickly to pay off our student loans, how to invest our money, and how much to invest.

[00:04:11] Babu: I, being a medical trainee for the last eight years, have been living almost paycheck to paycheck. And thankfully, Mel has been really supporting me for the last three years. But we’ve had these times in our lives where we’re changing roles as the higher earner, and now I’m at a point where I’m about to be complete with my training, and I will be a significantly higher earner. These last few months maybe have been particularly stressful when it comes to big decisions.

[00:04:40] Mel: I just wanted to maybe try to entertain the idea of maybe taking a lesser paying job, that Babu would take a lesser paying job, and we’d be in a place where I have better career satisfaction, and things got pretty heated and tense, and we just had to take a break from the argument.

[00:05:04] Ramit: And when you say lesser paying, that’s way more than he’s earning now, but potentially less than the top offer, right?

[00:05:12] Babu: Yeah.

[00:05:12] Mel: It would be probably four times my income.

[00:05:15] Ramit: Okay. And how much times the current income you’re making Babu would the lesser pay be?

[00:05:21] Babu: Minimum of five times.

[00:05:23] Ramit: Okay, got it.

[00:05:24] Babu: For the last three years we lived, for my training, in a different place. That was, to be frank, just not our environment. And my wife took a job that supported us because she was done with her medical training, but it wasn’t the best environment for her.

[00:05:39] She was stressed all the time. She was unhappy with her workplace and life balance so much so that she actually ended up quitting early, and we just made it work for a couple of months without her income and just mine alone. And now we’re in a place for my last year of training where she loves it.

[00:05:56] We came in with the plan being like, okay, we’re going home, back to where we’re originally from, after this. I started looking for jobs immediately, and the offers I got, frankly, are more money than I could have ever expected in my life.

[00:06:09] We have the potential to reach every single financial goal we had quickly. It felt to Mel as if I was ignoring her views about her job and how much she likes it, and now we’re moving again. It led to a downward spiral and argument about, why are we so focused on money at this point? We both clearly are going to be high earners since we’re both physicians. What does it matter?

[00:06:37] Ramit: Got it. All right. So you took a break from this heated conversation. And then what happened?

[00:06:44] Babu: Inquired to be on your podcast.

[00:06:46] Ramit: Really? That night?

[00:06:47] Mel: I feel like, from watching your podcast, you have unique experiences that we felt like you could understand because you have family who are physicians, and you understand how rigorous the training is, how much you sacrifice and give up a lot of years of your life.

[00:07:08] And so I feel like I’ve just been sacrificing and sacrificing. I guess part of the reason I got so upset during this argument is because I am tired of delaying gratification. I finally found something that works for me. And I know that money is important to us, but we’re going to be making so much of it. The difference between the lower paying job and higher paying job, is that really going to keep us from making our financial goals in the timeline that we’ve set up?

[00:07:41] Ramit: Got it. Okay. I’m going to ask you a question that might seem a little weird, but since we’re talking about all your numbers today, do you remember your high school GPAs?

[00:07:54] Mel: Yes.

[00:07:54] Ramit: Of course, you do. What were they?

[00:07:57] Mel: I think I was 3.9 was it five, six, or something like that.

[00:08:03] Ramit: I love how you take it to the fifth decimal place. Okay, great. Babu, what about you?

[00:08:07] Babu: I think I was like 3.95. She was like a few stops ahead of me–

[00:08:10] Mel: No, you were–

[00:08:11] Babu: When we graduated.

[00:08:13] Mel: You were 3.9238, I think, or something like that.

[00:08:17] Ramit: Of course, you’ve talked about it too. This is amazing.

[00:08:20] Babu: It’s exactly what we said we wouldn’t do on the pod.

[00:08:22] Ramit: No, I love it. And then college GPAs, what was that?

[00:08:28] Mel: Mine was, I think, 3.85.

[00:08:31] Ramit: Mm-hmm.

[00:08:31] Mel: And Babu, you were 3.6 or seven or something.

[00:08:36] Ramit: It’s very clear to me that the two of you excel in structured ways of thinking. And so now that you’re coming up to this unstructured question of life, which is like, I like my job, but then you could make more money. This is becoming difficult because unlike the structured questions where you’re just like, maximize my GPA, this is the first time that maybe maximization purely based on numbers may not be the only way to look at the solution.

[00:09:07] Babu: We had a structured plan going forward, just like you mentioned. We knew this is what we were thinking about before we moved here. Because this was an unexpected move for my last year. And frankly, we love where we live, but we had certain goals, and we had a laid out plan to hopefully get to those goals. I was just excited because I was like, man, we can do this quickly, I think.

[00:09:30] Ramit: We could beat the plan.

[00:09:31] Babu: And successfully if we do it right. And so I think now it’s like, oh my gosh, what are we doing?

[00:09:37] Mel: I do like a plan. I do, yes. I also recognize that the plans can change. They can be flexible. Do we always really have to stick to the plan, Babu? Oh, we can adjust it, right? Maybe instead of retiring at 45, we retire at 47.

[00:09:55] Babu: How do we do this so that we enjoy the time we have now while still being able to reach certain goals?

[00:10:02] Ramit: Okay. I totally get this. I’m the less spontaneous one in my relationship. I love a good plan. I love it. But I also think that left to my own devices, I would sit at home on the computer building models and planning for something 35 years from now. And that’s, I guess, probably not that healthy for me.

[00:10:27] So I can see both. I completely understand a good plan. I love it. I want to live in it. And I also understand that maybe spontaneity can be additive to it as well. All right, let’s talk about it. How do you feel about money today?

[00:10:44] Mel: I feel excited about some of the upcoming changes in our income. I like talking about personal finance, but at the same time, I just also feel like I don’t really know what I’m doing. We got to a point where I think I just got so frustrated. I told Babu just to make a decision, and I’ll just go with it.

[00:11:06] Ramit: Okay. And then what’d you do, Babu?

[00:11:09] Babu: So naturally, I felt somewhat guilty about it because I think as much as my wife loves her job now, and I hate to say this this way, so I apologize, but I don’t know if it’s that she loves her job now because it’s not the job it was previously because it was very hard. And in my opinion, I think we can try to replicate everything you have wherever we go next.

[00:11:36] Now, I can’t guarantee it no matter what, but I think there are certain benefits that outweigh it. And so out of respect to my wife, I did everything that was asked in terms of applying for jobs within the area that we’re currently in. One of the offers I’ve gotten has been pretty great so far.

[00:11:55] Ramit: And when do you have to make a decision?

[00:11:58] Mel: Next week.

[00:12:00] Babu: Yeah. Ideally, next week, maybe after–

[00:12:01] Ramit: What? Are you serious? The stakes are high.

[00:12:05] Babu: In this particular case, I think there are so may extenuating factors that would add to the decision that ultimately I think I would have a really, really long discussion with Mel, but probably choose the one that we both know is likely the longest term best move.

[00:12:26] Ramit: Is that the one that you want?

[00:12:30] Babu: Maybe.

[00:12:31] Ramit: Okay.

[00:12:32] Mel: Yes. I personally would have to take all of my own feelings and emotion out of it and look at everything from a very logical and, I guess, objective perspective.

[00:12:45] Ramit: Hmm. Is that common when you make decisions?

[00:12:49] Mel: Yes, absolutely. It’s the nature of our jobs to be as objective as possible, and so it’s pretty easy for us to flip the emotional switch on and off.

[00:13:03] Ramit: Hmm. What about for things that you do together that are maybe not as inherently objective such as which restaurant should we eat at? So would you have a conversation where one of you is like, I want to go to this Thai restaurant, and the other one’s like, hmm, if you’re feeling that, I’ll go, but I’m really feeling more like pizza? Would you have that type of conversation?

[00:13:25] Mel: That is how the conversations always go. Yes.

[00:13:27] Babu: It’s absolutely emotional. Whatever we’re feeling for today is like, whatever. We both agree on what we want to spend our money on. We spend exorbitantly on food, for example. We love eating out. We’ve gone to a bunch of very nice restaurants in our time together because for us, those are the things that make us so happy, so we don’t try to take emotion out of that, like what restaurant we’re going to.

[00:13:51] Ramit: So connect the dots for me. When you’re talking about your career choice, is that different? Is that not a source of joy for you?

[00:13:59] Babu: I’m going to try not to get in trouble here. I love what I do. I enjoy it. What’s the best way to put this? I enjoy my time outside of work with my wife more. And so I know the two things I can never buy are my time and my health. And so for me, having a job that allows me to have maximized the amount of time I have with my wife while still giving me a chance to take care of us and ourselves is what I really look for.

[00:14:31] Ramit: I got it. So as it currently stands, if we ended the call right now, you two would go back to the “objective spreadsheet”, and you would have some discussions, model it out again. It sounds like ultimately Babu would make the decision on this one. And Babu, you’ve said that based on your analysis, you would take the job back in your hometown. It would pay huge amounts of money, which would allow you to reach your financial goals. And I believe you would be close to your family as well. Is that right?

[00:15:09] Babu: Probably. It’d be five minutes from my parents, and 10 minutes from Mel’s.

[00:15:14] Ramit: Okay. And Mel, would you like to be closer to your parents? Hold on. You have to look at Mel’s face right now. She took a second to be like, how do I say this correctly? I’m asking because it sounds like Babu really wants to be near his parents. I’m not trying to put you in a box. You can love your parents and not want to live five minutes from them. Just trying to understand.

[00:15:40] Mel: I love my family. I love my parents. I love everybody. I enjoy having physical distance from everyone because it just simplifies our lives.

[00:15:54] Ramit: I got you. Okay.

[Narration]

[00:15:55] Ramit: Okay. How would you make this decision? One of you is about to 5X what you currently earn and become the higher earner in the family. You have the chance to live closer to your family, but your spouse loves their job and is not super excited about living close to theirs. How would you decide? This is a really common scenario for couples.

[00:16:17] The decision might be about careers, in which case, a lot of times we often make the decision based on the higher earner. But what if you both earn enough? What if money is not the primary driver? What if you want to make a decision through a different lens besides what’s on the spreadsheet?

[00:16:35] That might be involving having children or one partner staying at home, or how to take care of elderly parents. There’s so many scenarios in life where we have to think about things in a different way, and I want you to think about how you make big decisions in your relationship as well.

[00:16:51] We’ll be right back.

[00:16:53] Let’s get back to the show.

[Interview]

[00:16:56] Ramit: All right. I think I understand what’s going on here. What I don’t understand are the numbers. And so we’ve alluded to these salaries with all these multiples and your financial goals. Can we first just say, how much are you two making right now?

[00:17:09] Babu: That number, and you can tell me if I’m wrong, is somewhere around $270,000.

[00:17:16] Ramit: All right, 270. And that’s Mel is a full-time physician and Babu still in training.

[00:17:23] Babu: Correct.

[00:17:24] Ramit: Okay, got it. That’s helpful. I want to understand these financial goals that you’ve talked about.

[00:17:32] Babu: I don’t know if this was in our application, but we’ve known each other since we were 14 years old. We started dating when we were in high school. And so throughout different periods of our lives, we’ve had goals about what we want to achieve. And I think when we got real serious about a number was when we first started thinking about our wedding.

[00:17:53] Mel: And Babu had to work a lot in order to save up for our wedding.

[00:17:59] Ramit: How much was the wedding going to cost?

[00:18:02] Mel: it was definitely going to be well north of a 100,000, which I guess is small based off of Indian wedding standards. But we were both in training. So a 100,000 when you’re in training and making 50 to 60,000 a year was–

[00:18:19] Ramit: And no family help on this, right?

[00:18:21] Mel: Very little.

[00:18:22] Ramit: Okay. Very little. All right.

[00:18:23] Babu: Over the last three years, with Mel’s recent sort of diagnosis and stuff, we are somebody, like myself, who projects and plans every single thing. And I think that led to us being like, no, we have to sit on this firm number by this certain time, especially because we also want to help our parents out as they get older. But we’d always had things in the back of our minds, probably for the last 10 years in terms of exactly where we want to be.

[00:18:55] Ramit: What’s the number? What’s the financial goal?

[00:19:00] Mel: You want say it, Babu? It sounds crazy.

[00:19:03] Ramit: All the better.

[00:19:05] Mel: We feel like we would feel comfortable if we could retire with 10 million.

[00:19:13] Ramit: 10 million what? Can y’all say it in a full sentence?

[00:19:21] Babu: I don’t even know how to say this, but yes, $10 million is our financial goal.

[00:19:27] Ramit: Thank you.

[00:19:28] Babu: For retirement.

[00:19:30] Ramit: Why so uncomfortable?

[00:19:33] Babu: It feels very odd to say this I guess maybe because of how we grew up, to talk about money at all. And to some degree, I was so nervous about being completely unrelatable because we’re putting out such big numbers.

[00:19:48] Ramit: You’re unrelatable because you have a 3.96 GPA, not the number you have a goal for at the age of 33. I love a big goal. I love it. I love a big goal even more if there’s a realistic chance of achieving it. That’s fantastic.

[00:20:07] So I’m not so worried about unrelatability. Two of you are physicians. You’ve worked very hard since literally junior high. Why shouldn’t you be able to reach for a huge goal and achieve it? I got no problem with it. What I’m more interested is why you so uncomfortable to say the number?

[00:20:26] Mel: Because it’s way more money than anyone in either of our families have ever made, have ever saved for, and our parents have worked their whole lives and have not even gotten anywhere near that number or even like a fraction of it.

[00:20:44] Babu: I get it. Maybe it’s because of how we grew up with money. We definitely both come from parents who worked– my parents worked two jobs. Mel’s parents also worked a lot to give us a chance. And now as they’re getting older, we’re obviously very concerned about if they run into any health issues.

[00:21:05] Ramit: By the way, 10 million to you means what? How’d you pick that number?

[00:21:12] Babu: Yeah. If you do a safe withdrawal rate of 4%, that’s $400,000 basically per year, for 25 years. And it would be enough to take care of– and when I say enough, I mean way more than enough to take care of all of our living costs, our parents, to be able to retire them, and to be able to also go on all the travel and do things that we would need or we would want to.

[Narration]

[00:21:38] Ramit:  I take a special delight in asking twisted questions and letting people sit there in silence. I truly love my job, but I also think this is fascinating, don’t you? Here we have a couple that spends four hours a day talking about money, but when I ask them their financial goal, which you and I both know, they’ve written down in 300 spreadsheets, they find it difficult.

[00:22:03] Here’s what you need to know about picking your number. It’s a valuable exercise to think about a number. The point is actually not to be right. No one’s ever going to be right. Some people pick too low. These are usually the people who are not particularly savvy with money.

[00:22:18] They’re often scared of money. They don’t prioritize anymore. They’re afraid to factor in raises. In fact, they’re not actually just afraid to factor in raises. They’re also afraid to ask for them. On the other hand, some people pick wildly huge numbers. We had a doorman on the podcast who said something like, I won’t be satisfied until I’m a billionaire. That’s just setting yourself up for failure. 

[00:22:38] So you’re going to get the number wrong, but it’s still important to go through the process. As you get older and savvier with money, you learn that the number itself is largely irrelevant. Yes, have a goal, but also remember that you have to live a rich life today and a richer life tomorrow.

[00:22:56] Let me put it another way. Once people hit their number, they rarely change their life. If they were worried way back then, they’re still worried. Beware of picking a number and building your entire life around it. This is what I mean when I talk about the tail wagging the dog. Mel and Babu picked an arbitrary number, and now they are making life decisions to hit that number.

[00:23:17] But when I zoom out and say, why’d you pick that number? It’s like they basically picked it out of thin air. Overall, I like people who think in terms of big goals. That’s awesome. But beware of letting a number, 30 years from now, guide every decision in your life.

[Interview]

[00:23:35] Babu: Our wedding actually got canceled because of COVID, so we had money that we had both worked for, say, the wedding leftover. We ended up just getting married on our porch, which was great. And we finally went on vacation, which of course I planned out, but my wife got appendicitis in Mexico.

[00:23:53] Ramit: Oh, okay. That sucks.

[00:23:56] Babu: Yeah, so she had to have surgery in Mexico. We had to pay for it out pocket initially, but after that period, we just went on like a, all right, that seems like the worst thing that could happen. We just need to go enjoy our life.

[00:24:14] Ramit: What’d you do?

[00:24:15] Babu: Oh man, what did we do? What didn’t–

[00:24:18] Mel: We went to New York City with my younger brother, and we ate at every Michelin star restaurant where we could make a reservation.

[00:24:27] Ramit: Like where? Where’d you go?

[00:24:29] Mel: Well, our favorite was a place called Kajitsu. I can’t remember some of the other places we went to. Then we also took a trip to Chicago and we spent a ton of money on Alinea as well. And we actually ended up going back to back weekends. It was an accident.

[00:24:50] Ramit: Whoa. Double Alinea. Love it. All right. So you really like fine dining?

[00:24:56] Babu: And traveling in general. We have the opposite of what you recommend, where it’s like we have a number in our head. We know we’re going to spend over it. So then we have a second number that we’re like, okay, that’s fine.

[00:25:10] Ramit: What’s the number that comes to mind, the dollar amount that you’re like, this is probably how much this trip is going to cost?

[00:25:17] Mel: 20,000.

[00:25:20] Ramit: All right. That’s pretty good. And then what does it end up costing?

[00:25:24] Mel: Probably 25.

[00:25:26] Babu: There have been bad decisions that I have made with investments in the past, thinking that maybe there’s a way I could make a lot more money quickly. Probably because this number’s been in my head. Yeah, I know. It sounds stupid.

[00:25:37] Ramit: Who the fuck needs to make money quickly, when you’re going to make hundreds of thousands of dollars as your starting salary?

[00:25:43] Babu: By the way, this happened when we were in Cancun and my wife had had surgery. She was in–

[00:25:50] Mel: He made these investments right before I went to surgery.

[00:25:53] Babu: It was more like I had a discussion with a friend, and they were saying this is essentially a market abnormality. And so I decided to buy a bunch of GameStop, about $15,000 worth. And I think the stupidest decision of all was I did most of it with my Roth IRA initially, which I know should be the safest funds, which I have now sold all of, even though I held onto it for a long time, hoping that one day something would change. I guess I still have some crypto.

[Narration]

[00:26:27] Ramit:  It’s so interesting to me that when Mel and Babu have a structured process, like grades or medical school, they excel. But when they’re given a blank slate, they pick things like meme stocks.

[00:26:38] Let’s pause for a quick message from our sponsors.

[00:26:41] Next in our conversation, I wanted to understand more about their families growing up.

[Interview]

[00:26:46] Ramit: Did both your parents immigrate from other countries?

[00:26:49] Mel: Yes.

[00:26:50] Babu: Mm-hmm.

[00:26:51] Ramit: All right, so they immigrated here to give you opportunities. And if they knew the incomes that you both make– I’m assuming they don’t know the incomes you make. Right?

[00:27:04] Babu: No. They– well, my wife told my mom about one of them, and now, ever since then, it’s been like a, so how much did they offer you at this job, kind of deal?

[00:27:14] Ramit: Why did you tell that number, Mel?

[00:27:17] Mel: There’s a long plan behind it. I wanted her to know what he’s capable of. I wanted his parents to be able to understand if we ended up staying far away from home, it would be because the money was good.

[00:27:32] Ramit: And then within five minutes, every single auntie in town knew.

[00:27:35] Babu: My dad has told every person he sees at the grocery store where I trained and what I do.

[00:27:40] Ramit: This is too good. Okay. All right. Your decision seems to pretty closely mirror how other doctors make their decision, right?

[00:27:51] Babu: Yeah. And I think for me, what the hard thing has been is we had a– I’m so sorry. I’m going to come off as like the most neurotic person, but we had a checklist of things we wanted prior to us moving and my wife starting out at her new job. I thought, with the opportunity I was presenting, I hit every single checkbox and then some.

[00:28:16] Ramit: And it just didn’t work, right?

[00:28:18] Babu: Exactly. So I get conflicted, to be honest, because part of me is like, well, I have an opportunity to do something fantastic and get us to where we want to be very quickly. And also, I understand the idea of job satisfaction a lot. If we both agree that we get more satisfaction outside of work, there’s a real opportunity for that to where even if Mel didn’t want to work, she doesn’t have to, because we’d be more than comfortable.

[00:28:48] Ramit: I get it. I totally get it. Mel, what do you want to say about that? I mean he hit all the checks.

[00:28:57] Mel: He did. And we’ve had this conversation over and over again. What I really wanted was just acknowledgement that I have followed him all over the country for his career, and I have made sacrifices personally and career wise in order for him to have what he wants. I think I just wanted him to be more understanding of what I was going through and battling with in my own head.

[00:29:31] Ramit: You wanted him or you want him?

[00:29:38] Mel: He’s gotten better about acknowledging my feelings, but yes, I do want that acknowledgement from my husband.

[Narration]

[00:29:45] Ramit: That was a big moment. Even though they try to make decisions using an objective spreadsheet, most of us actually make big decisions using what we feel, and then we find a way to logically justify it. We do it with decisions as small as the brand of chips we buy at the grocery store, and decisions as large as where to live.

[00:30:07] Now, as I’ve always said, if you want to live a rich life, you have to be honest with yourself and honest with the people around you. And that means acknowledging that you are emotional about decisions. That’s okay. Emotions are okay. Now, yes, when it comes to big life and financial decisions, you should pair them with numbers. But it’s totally okay to say, hey, I want you to acknowledge that I’ve followed you all over the country, and I feel like maybe it’s my turn. Or maybe it’s my turn to prioritize what I’m looking for in this chapter of our lives. 

[00:30:40] Speaking of numbers, I’m going to share their finances using the conscious spending plan, and if you want to download this free template for yourself, you can get it at iwt.com/csp. Their assets is $13,000. Their investment’s $200,500. Their savings, $142,000,  And their debt, which is all student loans, is $315,000.

[Interview]

[00:31:07] Ramit: Total net worth?

[00:31:09] Mel: $40,089.

[00:31:12] Ramit: How’d you feel about that number?

[00:31:14] Mel: Kind of sad.

[00:31:16] Ramit: And I understand that you’re four years away from at least your student loans, Mel, being forgiven. Is that correct?

[00:31:25] Mel: Correct.

[00:31:26] Ramit: All right, so some amount of that is going to go away. And then Babu, how much is going to be left?

[00:31:33] Babu: If I take this other job–

[00:31:35] Ramit: Mm-hmm.

[00:31:37] Babu: Their sign-on bonus will take care of all of my student loans.

[00:31:41] Ramit: Oh, that’s nice. Hold on. Hold on. I have to stop here because I don’t think people understand what happens at really high-income jobs. Let me just explain this for a second because this is really cool. People need to see what’s going on behind the closed doors. So when you have a very highly paid job, there are lots of perks.

[00:32:02] They will help you get a mortgage. They will pay all your moving or relocation costs. They’ll put your kids in private school, $50,000 a year, no problem. Nowadays it’s more, 65,000 a year. They will help secure a job for your spouse, including a recruiter. All those things happen at really executive level jobs, etc. Babu, tell us what happens at this specialty for your position.

[00:32:30] Babu: In my position, they basically would give me a sign-on bonus that would take care of all of my loans. They also helped Mel find a job. They had multiple recruiters reach out to her. They also were happy to hook me up with any kind of realtor, anybody in the area that could help us get established very quickly.

[00:32:51] And that was just at this job that’s back home where we are. Some of the other perks in this current job, the one where we’re living, where they’ll help you like lease a car through their business office. They’ll help you set up a business or a business entity to help you optimize your tax structure.

[00:33:12] Ramit: I’d be like, can you guys cook spaghetti for me? I’d literally walk in there with a piece of meat and be like, write down every single perk that you have. Tell me everything you can do for me. And then after they finished, you’d be like, yeah, but what about my haircuts? You expect me to find my own haircut? That’s not going to happen.

[00:33:29] Babu: And as ridiculous as it sounds, my interview was a private dinner at one of their homes, cooked by a private chef who owns a restaurant for 30 people, just for me and Mel to meet everyone. That was fantastic.

[00:33:47] Ramit: I think it’s cool for everyone to know this is how the world works at very high-end positions. It’s nothing to be ashamed of. If anything, I’m proud of you, and I’m proud of both of you for being able to enjoy the perks of this. Took a lot of hard work. Nobody just slips and trips, and falls into offers like that. You got to be good. So congratulations. Very impressive. That’s awesome. All right. Your loans, if you go to that place, are going to be paid off. If you stay in this place, what happens?

[00:34:20] Babu: Hers will be paid off, and I’ll pay mine off over the course of the first year or six months.

[00:34:26] Ramit: Oh, that’s it. God damn. I got to figure out how much you’re about to make. Hold on, hold onto that number. That’s great. I love it. Okay, so the loans are basically a done deal. They’re sort of irrelevant. All right. We’re looking at 300,000 in loans. Both of you are just like, yeah, yeah, whatever. It’s going to disappear soon. Let’s not even count that. Fine. 

[00:34:45] So if we look at your current income, where, again, Mel, you are a full-fledged physician, and Babu, you’re in training. You currently make, like you said, about $270,000 a year. Great. Your rent is $2,350. I love it. I love young doctors usually before they become doctors, let me tell you why. Because the minute they become doctors, they do everything wrong with money.

[Narration]

[00:35:08] Ramit: You’ve heard me say it before. Doctors are one of the professions who are the absolute worst with money. They lease BMWs right out of the gate. They sign up for the worst financial advisors on the planet. And there’s some very good reasons for this, which I cover on Episode 127.

[00:35:25] Of course, if we compare doctors to some of the people I see on my social media feed, I’m talking about influencers in sales, the type of people who love to write me and tell me that I’m wrong, doctors are angels. At least they have solid jobs with high income.

[00:35:40] I literally have guys in my YouTube comments making $27,000 a year telling me I’m stupid for investing in index funds because the real way to make money is by concentrating all your assets in alternative investments. That’s what Charlie Munger said. Where do I even start? Forget it. Let’s just get back to the episode.

[Interview]

[00:35:59] Ramit: Now for the big moment I have been waiting for, which is, first give me the big number. So right now, Babu, this is your income, $6,000 a month.

[00:36:11] Babu: Yeah.

[00:36:11] Ramit: All right. Give me the biggest number at the place with the highest offer. How much gross income would you make per month?

[00:36:20] Babu: At the biggest offer so far, it’s about 42,000 a month.

[00:36:25] Ramit: What the fuck? Ah, my spreadsheet went so crazy. Hold on, hold on. Everybody, watch these numbers because I don’t even know how the hell this spreadsheet’s going to handle it. Hold on. Watch this. 42,000 turns their gross monthly income into 59,000 per month. By the way, obviously the net is not calculated here, so I’m just going to make it up. If you’re making 60k a month, you’re taking home, I don’t know, what do you say?

[00:36:52] Babu: After you’ve out your like 401k, and the health savings, and all that stuff, that would probably be taking home somewhere 35.

[00:37:02] Ramit: Let’s say 35,000.

[00:37:02] Babu: And move to a place with no state tax, which that’s not why we’d move there. That just happens to be a perk of some one of these places.

[00:37:08] Ramit: Yeah, yeah, it could be. All right, let’s just say 35,000. Okay. Your fixed cost, if you were to keep it the same, go down to 14%. This is hilarious because most people can’t even keep their entire housing expense below 14%. Your entire fixed cost if you stayed exactly the way you’re living, which you should not, you should spend more, would be 14%. Mel, why’d you just have that reaction?

[00:37:30] Mel: Part of the plan that we’ve come up with is that when Babu takes on this higher paying job, we are going to continue living how we currently are for at least two or three years until all the loans are done, and then we can think about a mortgage, new cars.

[00:37:49] Ramit: You guys are too good. All right, so let me explain what’s going on here because 99% of America just heard you, and they think you’re speaking Martian. I would say probably about 90% of people I talk to, the minute they get more money, they’re like, let’s get a new car. Let’s get a new house. And what Mel just said, Mel and Babu have talked about this. They’re going to continue living in a $2,300 apartment for two years. There’s something beautiful about saying, we have made a bunch of money. Let’s maintain at least the similar universe of our lifestyle. That’s awesome. You do that and you’re set.

[Narration]

[00:38:35] Ramit: What? No ATVs? No 125,000-dollar renovation, which you claim is actually an investment because renovations simply and positively increase the value of the house always? No? Are you hearing what Mel and Babu are saying? It’s so important. One of the reasons I occasionally bring high earners on the show is I want you to have access to hear how they think and how they talk about money.

[00:39:01] Most of us have never heard a couple who’s about to earn $700,000 a year talk about money openly and candidly. And when they do, what are they saying? They are saying, when we get more money, we’re going to wait to make huge purchases. Amazing. Why is it that the couples making $73,000 a year are out there renovating their houses and buying two cars, freaking boats, while the couple who’s been in school for 30 years and is on track to have millions of dollars is like, let’s just sit tight for a couple of years and pay everything off then we can spend a little bit more? This reminds me of one of my favorite movie scenes of all time. The Intro To The Firm. You remember that movie from the ’90s with Tom Cruise? Mitch McDear and his wife are living in this tiny apartment while he goes to law school eating takeout food because they have no money, and suddenly he gets a life changing offer.

[00:39:57] I love that scene. I love that concept. To me, there’s something formative about living in modest circumstances and doing the best you can. Now, of course, it helps to be able to eventually move into something nicer, just like Mel and Babu are going to do. What I can say is that they are both very disciplined with their money, and if a couple who’s about to make $700,000 a year can live beneath their means, I hope that inspires you too as well.

[00:40:29] We’ll be right back after this.

[00:40:32] Okay, now back to Mel and Babu.

[Interview]

[00:40:35] Ramit: Your investments are at 49%. What is that? You’re just like investing super aggressively.

[00:40:42] Mel: Yes. So we invested the minimum that we could when we were in residency. And of course in medical school, when we were in our 20s, we weren’t earning an income, so we feel like now we have to catch up. And so we’re trying to be as aggressive as possible.

[00:40:57] Ramit: Do you feel anxious about it, or do you feel calm about catching up?

[00:41:02] Mel: A little bit of both. I think I feel anxious about trying to get to where we want to be, but I feel some calmness and peace knowing that our shovel to get there is a bit bigger than other people, and I realize that’s a privilege. Not everyone is in our position to do so.

[00:41:26] Ramit: Okay. That’s a healthy answer. I love that. I rarely encounter someone who feels calmness and peace about catching up, and I wish more people had the answer that you did. Fantastic. I have one minor, minor tweak. You know what I’m going to say, right? You don’t know? Okay. Mel literally doesn’t know. Babu, you know what I’m going to say? What is it?

[00:41:49] Babu: Well, I think this is another point of maybe a mild contention between me and my wife is that I think there should be some lifestyle creep. I don’t think we should live exactly the way we’re living. These vacation budgets, for example, maybe it would be nice to travel first class once in a while, especially if we can afford it, which it seems like we can.

[00:42:09] Mel: I have a lot of anxiety about seeing our savings and investment numbers go down.

[00:42:17] Ramit: Right. Why?

[00:42:18] Mel: I think I won’t feel a 100% comfortable with that until we actually have the income coming in. Because right now this is all just hypothetical. I think it’s because we’ve had a lot of– I know exactly why. It’s because we’ve had a lot of unexpected life events happen in the last three years, and I feel secure knowing that we have enough money to take care of whatever may happen.

[00:42:50] Ramit: I got it. It’s like your fortress. You’re strong enough to weather whatever may come your way. Okay. Is there a number that you need to feel secure?

[00:43:02] Mel: Yes. So we’ve actually talked about this. The number initially, so when I ended up having appendicitis and we had to shell out money out of pocket to pay for the surgery upfront, the number used to be 30,000. Now the number now that we’ve had more things happen and we’re taking into account there are other people who will depend on us, the number minimum in our savings is a 100,000.

[00:43:30] Ramit: Okay. That’s fair. What’s this number right here?

[00:43:35] Mel: 141,000.

[00:43:37] Ramit: That’s how much you currently have in your savings without any additional job that Babu gets?

[00:43:43] Mel: Yes. Did you subtract the 18,000 that we spent on our credit cards this past month for vacation?

[00:43:50] Ramit: I’ll take it down 120 just to be–

[00:43:51] Mel: Okay, okay. That 120 makes me nervous. The 140, I felt a little better about.

[00:43:56] Ramit: All right. You felt a little better or– you said 100 is what you need, but you’re telling me that 120 actually makes you feel nervous, and 140, you still feel– is it possible that maybe the number is not really going to change your feeling?

[00:44:18] Mel: I don’t know, but I’d like to find out.

[00:44:22] Ramit: You’d like to find out by stuffing it full of like $600,000 more, and then I’ll figure it out. Right?

[00:44:28] Mel: Yes.

[00:44:30] Ramit: All right. Listen, if you want to do that experiment, then I can tell you two things. Number one, Babu should take the highest paying job that he can possibly get, because that’s the fastest way you can stuff that account up to hundreds of thousands of dollars. And number two is you’re not going to feel any differently when that’s double, triple, quadruple, or 10 times more. I’ll tell you right now. How’s that strike you?

[00:45:02] Mel: I don’t believe you.

[00:45:04] Ramit: But it is interesting that your number used to be 30 and now it’s a 100, and do you feel any differently?

[00:45:15] Mel: No, I don’t.

[00:45:16] Babu: I’d say she feels worse. So now I think there’s this mindset of like, okay, we really need to have a very large backup plan.

[00:45:28] Ramit: How large is large?

[00:45:31] Babu: I thought we were there, but that’s me looking at just the numbers of what I projected.

[00:45:36] Ramit: Mel, how large is large?

[00:45:44] Mel: I don’t know.

[00:45:46] Ramit: Babu, as you’re hearing Mel share her discomfort spending money, what do you notice?

[00:45:57] Babu: Yeah. Maybe it’s that we just don’t feel like we earned it yet. I love my wife, and I think she has a lot of stress and anxiety around taking care of other people at the expense of taking care of herself. Just the usual things that you should do. I know a lot of the things that she does for herself is me pushing forward or encouraging it, because I want her to know that you are just as important as all the other people around you, and it’s got to be exhausting to take care of everyone around.

[00:46:44] Ramit: Mel, what are you thinking as you hear that? It’s okay. Take your time. If you need to take a break, we can take a break.

[00:47:04] Mel: Can we?

[00:47:05] Ramit: Sure. Let’s take a break, come back in a couple of minutes. It’s no problem.

[00:47:09] Mel: Thanks.

[Narration]

[00:47:09] Ramit: I am always happy to take a break when I speak to couples on the podcast. My guests are extremely courageous to come here and share some of the most intimate details of their lives. That can be scary and nerve wracking. So I want to thank all of my guests, especially Mel and Babu today for being so open.

[00:47:27] I will also say it’s striking that we’ve talked about some really heavy stuff so far, huge career decisions, living near family, completely changing their socioeconomic status, but it was only when I brought up how Mel feels about money that she became overwhelmed. Both Mel and Babu excel at logic and structure.

[00:47:52] All of us are human. We feel certain things about money, and our feelings are like a muscle. If you don’t use them when you’re confronted with them, it can feel overwhelming. Now, if you are a logical spreadsheet lover, you might ignore your feelings and double down on your calculations. It’s safe. It’s calm. Cell C36 never made me cry.

[00:48:19] But that’s just camouflage. The real solution is, yes, know your numbers, of course, but also master your money psychology and the way you feel about money. Build those skills. You know what? I’m glad Mel wanted a break because that break made what happens next possible.

[Interview]

[00:48:40] Ramit: What was going through your head?

[00:48:43] Mel: I get very emotional when Babu reminds me of how hard, I guess things have– I don’t know. I get very emotional when he says things like he just did because it just shows me how much he cares and loves me, and I know ultimately we are going to be fine financially.

[00:49:11] Ramit: That makes you emotional, why?

[00:49:18] Mel: It makes me emotional because I really love my husband, and I am very grateful for everything that he’s done for us. And I know how hard he’s worked over these last several years in training to get where he is.

[00:49:34] Ramit: Your own history would suggest that whatever number you set, collectively, you two are such a powerful team that you’re going to blow through that goal. No doubt. You’ve done it every time you set a goal. Correct? Back since junior high, if you think about it, when you met in high school, you two set goals.

[00:49:53] You talked about it. You beat your goals, and here you are on top of the career pyramid. You did it. Now you’ve shifted that focus to money, and you’ve taken that same quantitative structured approach. You said, okay, we need a goal. We need to save. We need to invest. And you did it. And all this debt and stuff aside, you won.

[00:50:17] Give it another one year, and the numbers are going to be insanely positive. And yet, feeling anxious about money, shifting the goalposts, and now more than ever, planning for what can go wrong instead of giving yourself regular pats on the back and saying, oh my God, we did it right, what do you make of that?

[00:50:50] Mel: I know that that’s a product of our jobs. We see the worst of the worst. We know all of the rare complications, the rare diseases that can happen. And in fact, both of us have been diagnosed with very rare issues. So yes, we’re always planning for the worst case scenario.

[00:51:17] Ramit: And I want you to have a plan. Plans are so deeply embedded in both of you that nobody could come here and tell you you should stop planning. I’m not going to tell you that. I like that you have plans. I think something is missing. It’s missing from the way that you talk about money. It’s missing from the way that you talk about careers. It’s missing from the way that you talk about your future together. What is missing?

[00:52:08] What I see that’s missing is a true rich life vision. You’re really adept at the numbers and projecting, no doubts about that. But what is it all for? What is $120,000 in savings or $250,000 get you? What does $10 million get you? You might think it’ll make you feel safe, but that’s not really compelling.

[00:52:41] Babu: We’ve talked about this. We’ve talked about, okay, if we get there, what do we want out of all of this?

[00:52:48] Ramit: When we get there.

[00:52:50] Babu: When we get there, what do we want out of all of this? And I would say those things have really changed over the last five year with our own– yeah, wedding getting canceled, wife getting appendicitis, our own sort of health issues that have come up.

[00:53:09] And it feels like we’re trying very hard to get there, even faster than we did before, because our hope is that the things we want to do, which we’ve planned out, which is being able to travel without worrying or our take care of our parents. And I think to get extremely specific, we have thought about the exact place we’d like to retire and the type of house we’d want that point.

[00:53:37] Ramit: Where? Can you tell me?

[00:53:38] Babu: Yeah, it’s one of two places. It’s either going to be in Hawaii, specifically the North Shore of Oahu, or this last year, we were in Madrid, and we liked Spain. We both thankfully can speak a little Spanish, and we loved the culture there. We liked how everything was set up, and we felt like there were very few places in the world we just could retire happily. And that was one of them. And so that’s the goal, is to ultimately be able to do that without worrying. And I feel like we’re getting there.

[00:54:18] Ramit: I agree. Mel, what do you think? What’s the rich life vision?

[00:54:23] Mel: It’s about being able to, like Babu said– I agree with everything he said, is being able to travel, go where we want without having to worry about money. It’s about having options, including just when we work. I want us to be able to work because we enjoy it, not because we feel like we have to earn an income. I want the option to live wherever we want to in the world and just be able to go anywhere we want without anyone telling us where to be.

[00:54:59] Ramit: When do you get to live it?

[00:55:05] Mel: I’d like to start living it at 45. So 10 years from now.

[00:55:13] Babu: But I guess there’s always some worry in the back of our mind about what’s going to happen next. I feel like as a byproduct of the way we were brought up and the careers we decided to choose, that’s a natural defense mechanism for us to be able to deal with some of the issues we deal with day to day.

[00:55:35] Ramit: It’s worked so far because it’s gotten you both where you are, which is successful. So let’s keep using the same strategies that got us here. That’s how most people go through life. Especially if you are academically inclined and you’re a high achiever, like I said, you know how to win. You get the A’s, or preferably A pluses. You get into great schools. You do your training, and you win. But sometimes the thing that got us here as the famous book title goes, will not get us there. You can’t spreadsheet your way to a rich life.

[00:56:22] Mel: I agree with. You have change what you’re doing as your circumstances change. That’s pretty much what we do every single day in our jobs.

[00:56:35] Ramit: Totally agree. Similarly, maybe the ways that you made decisions about money early on, maybe there’s a different way to look at it now, because according to the numbers here, Babu, you told me about the highest income that you would expect. By the way, I suspect from the way you two are talking, that that number goes up substantially over time, correct?

[00:57:01] Mel: Yes.

[00:57:02] Babu: Yes.

[00:57:02] Ramit: What’s the number that it eventually would become per month? Or just tell us the– I don’t know, some number.

[00:57:11] Babu: Conservatively, I think once I make full partner, it would probably be somewhere around like 55 to 60k a month.

[00:57:27] Ramit: So we’re talking 700, $800,000 a year. Fantastic. All right. Now, instead of this current 42,000 “entry level” salary that you would get at the high place, tell us about what you might get if you stayed in your current location.

[00:57:47] Babu: So if we stayed at the lower paying with– I can’t believe I’m saying that, but it would be approximately 20, about 30k a month.

[00:58:00] Mel: That feels comfortable.

[00:58:02] Ramit: Yeah. Again, let me just read off the numbers for everybody listening. We’re talking about a gross monthly income of 47,000. This is the job that is in the current city, not moving. So it’s not the highest paying one, but it’s quite well paying. You’re netting– we’re just estimating here– 28,000 a month.

[00:58:21] Again, real rough, rough numbers. Fixed costs are 18%. Investments are 66% of net. All right. Savings are 7%, and your guilt-free spending is 9%. Now, this is a seriously wacky CSP, but I’ll tell you something. I don’t mind it. My CSP makes no sense because I spend a ton of money on travel. And your goal is we want to invest super heavily. Okay. Now, what do you think of the numbers? They look okay. What do you feel?

[00:58:59] Mel: Yeah, they look okay. I would feel very comfortable with that. And actually, the investments come out to a lot more than what Babu and I have discussed.

[00:59:10] Ramit: Why is that?

[00:59:13] Mel: I think because we’ve thought about how much we want to invest total over the next couple of years. And then once he makes full partner, then that number will increase probably by double.

[00:59:29] Ramit: So you can invest even more. Can we just take a look at the– let’s just do a compound interest calculator because I know you have this goal of 10 million. By the way, how much do you currently have invested?

[00:59:41] Mel: How much did we say? 200,000, was it? 250, was it?

[00:59:45] Babu: Yeah.

[00:59:46] Ramit: Is that about right? 250?

[00:59:47] Babu: I think so.

[00:59:48] Ramit: All right. Annual edition. What was the number? We just said 18,000.

[00:59:53] Babu: A month.

[00:59:54] Ramit: Yeah. So let’s 18 times 12 is 216,000. Huh. That’s a lot. That’s great. That’s crazy to see that, right?

[01:00:03] Babu: It’s insane to see that because that’s more than my whole salary right now.

[01:00:07] Ramit: Yeah. All right. Again, these are just numbers, and you have choices. You could choose where you go to work and all that. There’s lots to choose from. Years to grow, you’re 33. You want to just do 65 just to see?

[01:00:21] Babu: Sure.

[01:00:22] Ramit: And of course, what interest rate should we choose?

[01:00:25] Babu: 7% is probably safe.

[01:00:28] Ramit: Let’s do seven. I hope you get eight. Let’s just do seven to be conservative. What numbers this going to be?

[01:00:34] Babu: I would guess somewhere around 10 million.

[01:00:37] Ramit: Okay. What do you think, Mel?

[01:00:41] Mel: I don’t know. I’m not very good at math.

[01:00:43] Ramit: All right, read that number out loud please.

[01:00:46] Mel: Holy. $27,652,437.51.

[01:00:58] Ramit: $27 million. What’s your takeaway from that?

[01:01:09] Mel: That’s a lot of money. That’s a lot of money.

[01:01:11] Ramit: Okay, that’s a good. Now give me your second takeaway.

[01:01:15] Babu: Probably we don’t need that.

[01:01:17] Mel: We don’t need that much money. Also, I don’t want to work until we’re 65.

[01:01:24] Ramit: Okay. Want to play it out a little bit shorter?

[01:01:28] Mel: Sure.

[01:01:29] Ramit: How many years.

[01:01:31] Mel: We ideally would like to retire at 45 or cut back hours at 45. So 12 years from now.

[01:01:42] Ramit: 12 years. Read the numbers.

[01:01:46] Mel: Yeah.

[01:01:46] Babu: $4.6million.

[01:01:48] Ramit: 4.6. That does not include what? Any raises.

[01:01:59] Babu: Yeah, that’s a good point.

[01:02:02] Ramit: And the raises will come. They’re quite predictable. It’s just a number of years, etc., etc. And I know that when you get a raise, it’s going to be a large number, and you would increase the amount you contribute by tens of thousands per year. So actually the number we just selected, which is $216,000 a year in investments would actually be quite a bit higher over the course of 12 years. What does that tell you? What’s your takeaway?

[01:02:29] Babu: I think we can relax. I think it’s going to be okay.

[01:02:35] Mel: We’re going to be fine regardless of which job he chooses.

[Narration]

[01:02:39] Ramit: It is very, very common that people want to speak to me with some minute technical question, but as I get to know them, they work through the question they thought they had, then another until finally they realize that what they’re feeling actually has nothing to do with some technical question about money. That is exactly what’s happening here.

[01:02:59] Mel has been worried about not having enough for some very real reasons. But now that we’ve systematically dispensed with each of her objections, we’re about to get an even deeper truth with what she’s actually worried about.

[Interview]

[01:03:13] Ramit: Mel, do you accept that this financial change is happening, that the household income you are about to get, regardless of what job Babu chooses, is real?

[01:03:31] Mel: Yes, I acknowledge it’s real. What makes it difficult to accept is that I can never make that amount of money ever. No matter what position I take, even if I decided to open up my own private practice, I could never, ever again be the one that supports the house financially. That’s what it all ultimately boils down to. It means that I would be depending on Babu for all of our finances, for basic living. That’s what it feels like.

[01:04:14] Ramit: Hold on. I love this–

[01:04:14] Mel: I know that’s not true.

[01:04:16] Ramit: Mel, I love it. Mel, don’t stop me now. I love it. I just want to show how right I am. Because when I say the way you feel about money is highly uncorrelated to the money in the bank, and here we have a very successful position, Mel, who’s currently earning $17,000 per month. That’s a very good salary. And Mel, you are concerned that suddenly you are not going to be able to provide for the family. Isn’t that fascinating? What do you think about that?

[01:04:58] Mel: I know where that comes from. It comes from everything that my mom taught me growing up about money.

[01:05:11] Ramit: What’d she say?

[01:05:14] Mel: She basically saw her mother, my grandmother, having to ask my grandpa for money because he controlled the finances. He made more money, and she never wanted that for herself. And she, my mom, made sure to instill that same independence in me.

[01:05:34] Again, I know logically that is not the case. Babu is amazing. He’s supportive. He constantly gives me reassurance that yes, we are a team, we are doing this together. But yeah, it’s hard to shake the feeling of I will never be able to, I guess, win again.

[01:05:58] Ramit: Then Mel, don’t try to shake the feeling. A feeling is a feeling. You can’t tell someone to stop feeling.

[01:06:08] Mel: I don’t think there’s anything that can take away the anxiety of what we’ve been through over the last few years. I think that’s really what underlines a lot of our conversations. I like seeing the numbers. I know we’re going to be fine, but that is assuming that both of us remain healthy for the next 12 plus years that we’re working.

[01:06:34] Like Babu said, tomorrow’s not guaranteed. And so I feel like even though the numbers look great on paper, life happens. I think that’s why we feel so much pressure to get to our goal as quickly as possible.

[01:06:53] Ramit: Life is not guaranteed. You don’t know what’s going to happen over the next 12 or 35 years. You don’t know. If anything, we saw that during COVID. But the last sentence is where you and I diverge. So you said, “Therefore we want to get to our goal as quickly as possible.”

[01:07:14] And the way I look at it is I see this number, and I think I can’t wait 12 years to begin finally feeling good. I can’t wait 12 years to live my rich life. You got to GPA, you got into medical school, finish your training, you got all these jobs. What other credentials? What other things do you need before you give yourself permission to finally accept that your rich life starts now?

[01:07:59] Babu: You can take this one.

[01:08:00] Mel: I don’t know what to say to that.

[01:08:03] Babu: I think it’s just how we’re wired, I guess, and how we were brought up in that. It was always like we had a goal in mind. We got to the goal. Now there’s the next thing. I’ve been in school since I was– I don’t think I’ve not been in training since I moved to kindergarten, right?

[01:08:25] Ramit: Yeah. What would it feel like if you were to take off the lenses you were wearing just temporarily? The lenses you’re wearing that currently you see the world through. And those lenses are about mitigating risk, they’re about achieving a quantifiable goal, and they’re about putting it on a spreadsheet and making sure that we achieve it. Would you say that that’s the lenses that you currently look at the world through?

[01:08:59] Babu: Probably. Yeah.

[01:09:00] Ramit: And they’ve been great. Not taking anything away, they’ve been great. They have served you very well. You might hear your grandmother’s lessons echoing across the generations in your ear. I’m not even asking you to throw them away. I’m just saying take them off for just 60 seconds. Just change your life for 60 seconds with me and then you can put your old lenses back on.

[01:09:19] So you take them off, and then I hand you a pair of new lenses. Hold on. I happen to have them here. Here’s a new pair of lenses. What do you see when you look through these lenses?

[01:09:28] Babu: My wife’s and I’s probably favorite restaurant is this place called Kasama in Chicago. It’s a Filipino restaurant. It’s small inside somebody’s house. We went there before they got really popular, and we go back every time we can.

[01:09:43] Ramit: I love that. Tell me more. What else do you see besides amazing restaurants through these lenses?

[01:09:51] Mel: Being able to fly first class across the globe. So to India, to the Philippines, and also being able to pay for our parents to fly first class with us.

[01:10:06] Ramit: Wow. What does that feel like when you’re going through the airport and they check their bags and you’re holding the tickets for everybody? Say, just come with me. And when they call first class and your parents are just sitting there, because of course, that’s not them. They’re waiting till their seat gets called, and you say, come on, let’s go. And they say, what do you mean? And you tell them. What does that feel like?

[01:10:35] Babu: I think that’s been like a personal goal for both of us, is to be able to take care of our parents since they gave us so much with limited resources. And so I think that would feel, I don’t want to say [Inaudible], but a sense of like, okay, we did it. I feel happy and fulfilled to some degree and not really worried about anything at all at.

[01:11:06] Ramit: Mel, how about for you?

[01:11:08] Mel: I think it would feel like we’ve really accomplished what we have set out to do in our life. Our parents sacrificed so much for us and got us to where we are today. It’s just one small way that we can pay them back. And I think it would feel great. We would feel accomplished.

[01:11:32] Ramit: I want you to be able to play that note with your career, with your family, with where you live, everything. I want you to add a level of richness that currently does not exist on a spreadsheet.

[01:11:49] Mel: I agree with you. Yeah, you’re right. We should focus maybe a little less on the numbers. The numbers are there regardless of which position is taken. The earning potential is there. As far as the way we talk about what to decide on moving forward, yeah, our happiness should be our priority, thinking about who we want to come home to, who we want to see on the weekends.

[01:12:26] Right now it’s just you and me that’s here in the city. And we talk a lot about how we miss our friends, we miss our family. And so being able to add them into our perfect week, I think would be great. And to be able to actually have them physically close so that we can take them out to eat with us, and they can enjoy some of the experiences that we have together. Yeah, I’ll take that into consideration. I think that’ll make us happy.

[01:13:06] Ramit: I like this.

[01:13:08] Mel: The experiences we have together and the people that we’re with. I recognize we are in a very good position, a very privileged position to be able to, one day, or at least even now, be comfortable to do what we want to without really worrying too much about money. It’s just hard to let that worry go at times.

[Narration]

[01:13:34] Ramit: That last conversation where they talk about their hopes and dreams, including their favorite restaurants and treating their parents to luxurious travel, that made me so happy. It’s the first time that I really heard Mel and Babu truly dream. They put away the spreadsheet and the worries, and they simply talked about what kind of rich life they want.

[01:13:56] Mel and Babu are in an enviable position. They are academic rock stars. They have awesome careers, and they have really good financial discipline. What they needed was a little help looking into themselves and connecting with their own desires.

[01:14:11] Yes, you can save enough to build a financial fortress, but a fortress or a savings account cannot be the end goal. You’ve got to enjoy the journey because as Mel said, tomorrow’s not guaranteed. So now let’s check in with their follow-ups. First, we’ll hear from Babu.

[01:14:31] Babu: Hi, Ramit. One of the things we learned on the podcast is that we spent a lot of time talking about our finances, and that ate up a lot of our day and impeded our ability to actually just hang out and spend time with each other at times.

[01:14:48] One thing that surprised us is that looking at how we were structured, our finances were structured, we both, Mel and I thought we were very behind, but it’s nice to know that there is a path forward and that there are things we can do to get to our goals that we had in mind without always looking at the numbers and always looking at the spreadsheet and trying to plot our next move.

[01:15:10] Now, one thing we’re definitely going to change in the future, and we have already, is we’ve identified things that make us happy. And even if we don’t necessarily need it, we’re buying, or we’re spending, knowing that it’s important to enjoy our time in the present, and we’ve worked on cutting out the things that aren’t really important to us, but spending very aggressively on the things that do matter to us. We really learned a lot from our time together, and we appreciate you taking the time to chat.

[01:15:39] Ramit: And now here’s Mel’s follow-up video, which, just as a reminder, you can watch on YouTube.

[01:15:44] Mel: So one thing I learned after talking to Ramit is that I spend a lot of time worrying about other people, and oftentimes it’s at the detriment of my own health and well-being. I was really surprised when Ramit pointed out my number that I need to feel financially secure has actually risen over the last few years. And unless I address the underlying reason for why that happened, the number will continue to rise.

[01:16:13] I’ve realized that I project a lot of my own insecurities onto Babu and those close to me, and that’s likely the reason why I need this large emergency savings in order to feel okay. I think one thing that Babu and I are going to do moving forward is try to allocate more of our money towards things that’ll buy us more time together that will free up a lot more of our, I guess, brain space so that we can really just focus on enjoying life together.

[01:16:54] So for example, hiring a cleaner, hiring somebody to cook part of our meals for the week, someone to do our laundry. And we’re also looking into getting a fee-only financial advisor to offload some of the worries that we have about our finances.

[01:17:19] Ramit:  I want to thank Mel and Babu for being so open with a huge decision that they’re facing. I want to thank all of you for watching and listening. And if you enjoy this podcast, please go on Apple Podcasts and leave a written review. It really helps.