Episode 72. Answering questions about recessions, marrying the right person, and firing a financial advisor

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Ramit Sethi: [00:00:06] You probably haven’t heard something like this, but privately I run a money coaching program. And once a month I do these calls where we all get online live, and I answer questions about money and psychology and how to use a conscious spending plan and even how to stop feeling guilty about money. And I realized the general public never gets to hear these questions.

[00:00:29] So I have a bunch of questions that our group has been putting in our Slack community. And sometimes I can’t answer them all. And I figured it would be fun if I just get on here and answer a bunch of questions, I haven’t seen these before. My team put them together, and so I’m just going to riff.

[00:00:46] I’ve got questions today about, let’s see, $3 questions versus $30,000 questions, starting late, the psychology of debt, how to fire a financial advisor. Well, maybe we can do that live. So I’m going to go through a bunch of these. And of course, if you want to be able to ask questions to me, you can go to iwt.com/moneycoaching. Again, we get on live every month and there’s a Slack community where people are asking questions and answering them 24/7.

[00:01:16] All right. First question is from Brian. Brian says, what advice do you have about combining finances with a partner? We’re getting married in two weeks. Well, two weeks is not that long. My advice is to have started like a year ago. But if you can’t do that, let’s talk about what you can do now.

[00:01:40] Getting married is an amazing opportunity, symbolically and in all other ways to turn the page and begin a new chapter of your life. And I love doing this with money because it gives you an excuse to sit down and talk about things that you normally would not talk about. Like it’s perfectly normal to just go, “Hey, babe, now that we got married, I’d love to sit down and talk about how we should set up our accounts.”

[00:02:06] Whereas if you had done that before, or if you do that three years from now, it’s going to be kind of weird. So a good thing to do would be to start using some of the questions in my journal where I sit down and I encourage you to say, what is our Rich Life? What do we want to spend our money on? Where do we want to spend our time?

[00:02:25] And there are some specific questions like, if you could live anywhere, where would it be? Except the problem is like, what if your partner is like, “I want to live on a farm” and I’m like, “Fuck a farm. I don’t want to live on a farm. I want to live in Manhattan.” Then you got a problem. Maybe you should have this conversation in the next two weeks before you get married. Nobody knew that this isn’t going to be about finances. It’s about encouraging Brian to break up with his partner.

[00:02:51] No, no, no, no, no. Don’t do that, Brian. I’m just kidding. All right. You can sit down and you can actually dream. It’s a lot of fun. So you go, “What kind of house do you want to live in? How often do you want to go on vacation.” And one partner is usually more scarcity oriented and they might go, well, we could save maybe we’re 55, we could go. Here you go. Okay, cool. We should do that.

[00:03:12] But what if we could do it sooner? Where would you want to go? Forget about when. Where? You’re encouraging them. You’re dreaming. And because this is hard for people, that’s why you use the prompts in the journal. And suddenly you start thinking, “Oh my gosh, I never thought of that. Oh, we can alternate holidays when it comes to families. Oh, we could hire a babysitter and go on date night once a week. Awesome.”

[00:03:37] So you start to think about this and you get excited. That doesn’t mean you have to do all of it at once, but I love that exercise and series of conversations that are just pure blue sky, pure brainstorming. I love that when I’m writing a book, I love that when I’m creating a new program with my team, it’s just pure candy, pure blue sky brainstorming, no constraints. And the question I always ask my team is, what if it were magic? What if it were magic?

[00:04:06] So think about it. Amazon, for example, they started with that question. They go,”If it were magic, you’d snap your fingers and you would have the detergent transported to your hand.” Well, we can’t do that. What’s the second best magic thing we can do? Oh, we could have a drone drop it on your front yard. Okay. We don’t have the technology for that yet. What’s the next thing we could do? We could have it delivered to you within 2 hours. And you just work your way backwards. I love this idea of starting from a place of magic and possibility.

[00:04:38] In terms of combining your bank accounts, this comes later. So after you start with, like, what do we want? What would it look like? What would it feel like? You’re both getting on the same page. This is a series of conversations. Doesn’t happen at once. It happens over a period of time. And you go, “Hey, let’s look at our numbers. What do we have here?” I’ve got this old 401K in this old account. I have my savings account here. And you might discover that your partner is like, what if you find out that they use a Bank of America debit card? I would be so disappointed. I would be like, You do what? Your parents raised you like that?

[00:05:14] Put that aside. Maybe you don’t have that conversation. You just go, “Hey, what do you think our finances should look like?” And because this is an opportunity where you’re basically blue sky and it’s a new chapter, you can redesign the whole thing. I often find that it’s easier to design from scratch than to take pieces apart. And I remember this at one point a few years ago, I just was overloaded with meetings and I started trying to get out of one meeting after another. And it was very difficult. Every time I tried to cancel meetings, there were some reason for me to go back.

[00:05:49] And so finally, after like three or six months of this, I just told my assistant, “Clear the entire thing, and I’m going to start from completely fresh.” And so I was like, “What’s important? Marketing? I want one hour a week. Writing, I want two hours a week, etc., etc.” And I rebuilt from scratch.

[00:06:08] So that’s really helpful. In terms of specific tactical advice, I typically like to see one joint account. Both of you contribute proportionally to that joint account. That joint account should cover all of your fixed expenses, any savings, joint savings, investments that you may want to make and, of course, your joint guilt-free spending. Then I like to see some of the money from your paychecks automatically going to each of your individual checking accounts. And this would be for your no questions asked money.

[00:06:41] Now, if one of you is making 10 times more than the other, you’re probably going to have more no questions asked money. That’s okay. But you can decide on the proportion. And I discussed this on my podcast episodes. Here’s the key principles that we are trying to address here. Number one, you want to create a joint future together, and you want to do that structurally. That’s really important. That’s like saying, I want my kids to love each other, but they each live like 10 blocks away. Yeah, they could love each other. I’m sure they will.

[00:07:14] But wouldn’t it be easier if they lived under the same roof? That’s the same thing with your money. You want to set up the structures to encourage the right behaviors. So if both of you are trying to take a vacation every year, that’s a joint expense. So you plan for that in your joint account.

[00:07:32] Now, you also want to have your no questions asked money. Somebody wants to eat at a certain place. Somebody wants to have a hobby. Cool. No questions asked about that. You spend that on your own. You probably want to have a series of discussions about what falls under what category.

[00:07:49] So think of particularly thorny questions like, if we take our parents out to dinner, what account does that come out of? What if it’s your parents? My parents? What if you’re gone and I order delivery, is that coming out of my personal account or joint account? These are issues you can discuss. They’re not that big of a deal, but you do want to come up with a playbook so over time, you both understand.

[00:08:13] And then on the super tactical level, you have a joint card which you use when you’re out together or if you’re buying joint things like detergent for the house. And then if you’re doing your own hobby, you have your individual credit card. So that is the way that I would set it up for your upcoming wedding. Brian, I’m so excited for you and your partner, and I’m really glad you asked this question. Congratulations.

[00:08:36] Next question comes from Tim. How does your money strategy change for a recession? I know you’re not supposed to time the market– notice, there’s always a but after this– but if a recession comes, I want some money set aside to buy at the more discounted rate.

[00:08:52] How does your money strategy change for a recession? What changes do you make to your allocation numbers such as saving, investing, fixed costs and guilt-free spending? All right. Let me give you the headline answer and then let me give you the but answer. The headline answer is, overall, you really should not change much during a recession, if you have a plan and you’ve been executing on that plan specifically if you have an emergency fund, if you’ve been investing every single month and you have a bunch of the ratios and accounts that I talk about in chapter five of my book. 

[00:09:29] But there are a lot of people listening who go, “Yeah, I do all that stuff and I want to see if there’s opportunities during a recession.”
All right, let’s talk about it. I remember in 2008, 2009, when there was a huge recession, it was traumatic. A lot of people were laid off. I was laid off from my own company. And you kind of go, oh, my gosh, is this the end of the world?

[00:09:55] And if you remember, there were tons and tons of articles saying it’s over, investing is never going to come back, etc. I remember looking around and saying a couple of things. Number one, I’m thankful that I have a healthy savings account because I never have to make a bad decision because of money. So I was very grateful to myself that I had saved a lot of money and kept it aside.

[00:10:16] Second, I remember saying, “Wow, I wish I had a bigger war chest to invest, because when everyone was terrified and the news articles were rampant, 10% unemployment, it’s never coming back, the world is over, I was thinking this is one of the most amazing investing opportunities in my lifetime. Now, I had cash. I put it in consistently, but I wish I had had a little extra war chest. And so from that day I vowed to myself that I would always have a larger amount of cash sitting waiting for extraordinary opportunities.

[00:10:52] Now, does this break my rule? Kind of, but also kind of not. Let me explain. First of all, let me admit that technically I’m a little overweight on cash according to my own basic asset allocation. But I also know that the amount that I save and invest already has achieved the financial goals I want to achieve. So this is basically play money.

[00:11:16] If you already have a six-month emergency fund, or Tim, if you’re in the situation where you’re really trying to get aggressive, maybe you even want to have a nine, 12-month emergency fund, fine, if you already have your investments, they’re going every month, the asset allocation is correct and you are investing enough so that you’re going to have more than you will ever need, and you’ve calculated out your compound interest returns over time, then you might be in an advanced position where you can take advantage of some opportunities. You may want to keep some money on the side.

[00:11:49] Now, let’s acknowledge that the downside of keeping cash on the side is you are essentially trying to time the market and that cash is going to be like a 20 pound weight vest on you while you’re running. It’s going to slow you down. But, but, but, but if you decide, you know what, I’m willing to accept that I’m going to lose money in the short term, but does it matter because the rest of my investments are already sailing, then that’s what you do.

[00:12:11] You keep money aside. Your timing is probably never going to be perfect. You’re never going to know when the bottom or the top is, that’s just the way timing goes. But if you want to keep a little extra aside and when the market goes down, you want to be what they call opportunistic, you want to invest in certain indexes or even individual stocks, sure. Just remember, manage your risk. Do not keep too much cash because that’s going to be a drag on your returns and you’re bordering very closely on trying to outsmart the market, which is not a good idea.

[00:12:42] But in general, if you’ve accomplished and checked off all the boxes of saving, investing, etc., you’ve earned yourself the right to play a little bit. So that’s how I would do it. Other questions about planning for guilt-free spending, Tim, I made the assumption that you have a bunch of extra money, but I also want to speak to the people who do not have a bunch of extra money and they are looking at an upcoming recession and saying, what should I do?

[00:13:07] Here’s the typical dynamic of what happens. Most Americans, their savings rate is essentially zero. When a recession comes, they’re caught totally off guard and times are usually good and they go, “Oh, it’s going to go forever. And if I get laid off, I’ll just go find another job.”

[00:13:23] But the problem is, when there’s a recession, you’re not the only one laid off. Everybody around you is laid off. So the best thing you can do is, of course, beyond having a plan and doing all the stuff that I talk about in my book, if you start to sniff the winds and say, oh my gosh, something is changing, you have two choices.

[00:13:41] One, you can wait until everything hits all at once and your back is against the wall. And that’s a terrible position. That often is when you have to sell cars, sell houses at a loss. It’s really bad and people die in recessions. So you don’t want to make light of it. It’s not good.

[00:14:00] The other thing you could do is start to make proactively aggressive moves now. I remember speaking on my podcast to a couple just a few months ago, and he was in the real estate brokerage industry. And I was like, “Dude, your job is going away soon, You know that, right?” He’s like, “No, no, no. The company is going to take care of me.” They have a Porsche, they have a Volvo. They have all this expensive marble in their backyard. I don’t know.

[00:14:26] And I was like, “You guys have a choice. You can either start streamlining right now and accumulate cash or your back will be against the wall, and it’s not going to be good. And you can listen to the episode to find out what happened. I would recommend building up your cash reserves, and you can do that in a couple of ways. The best way to do it is to cut back on your fixed and guilt-free expenses, cut those and redirect those to your savings.

[00:14:51] If you really need to, you can slow down your investments, but I would really encourage you not to because people who do that tend to have subpar lifetime returns. So lots of different ways to plan for a recession. You heard me start off by talking about how to be opportunistic with it, how to go on the offense, but there’s also ways to play it defensively as well. Thanks for the question, Tim.

[00:15:13] Jenny says, what would Ramit say to a single person who wants to marry the right person? Okay, great question. So this is one of my 10 money rules. And if you haven’t seen these bef10-moneyore, you can Google Ramit 10 money rules. Let me give you a quick background on why these are my rules, not yours, and how you can create your own rules and then I’ll talk to you about marrying the right person.

[00:15:38] So I believe that everybody should have their own money rules. And a money rule basically takes all your opinions and knowledge and it rolls it up into a single, beautiful, elegant rule. For example, one of mine is save and invest 20% of income. Okay, cool. That kind of makes sense if you understand compounding whatever. Yours might be, 10% or five– it shouldn’t be 5%, might be 10% or 12%.

[00:16:04] But here’s another rule I have, which is unlimited spending on health, on books and education, and on a friend’s charity fundraiser. Those are all meaningful to me. They are all things that I want to spend money on and I don’t want to restrict myself whatsoever. So if I see a book that looks good even remotely, I follow Ramit’s book buying rule, I just buy it. Done. I never even question it. Because if I can learn one thing from that book, it was worth it. And sometimes I don’t. And that’s okay.

[00:16:36] I have a couple of other rules. I really like this one, fly business class on flights over 4 hours. So this may not be affordable or relatable to a lot of people, but for me, I don’t want to have to make a decision about which flight and should I do this leg or that. It’s just boom, here’s a rule. I can hand it off to an assistant and they know exactly what to book for me. 

[00:16:58] Yours could be all different, right? My money rules are mine. And in fact, the more you turn those money rules and click them like a lock, it just fits exactly with the key you’ve got in your life, the more it becomes almost confusing and bewildering to the rest of the world. So if you Google my rules, look at them. But remember, they’re my rules, not yours. They’re just meant to inspire. And you can create your own 10-money rules. In fact, if you Google Ramit’s money rules, you’ll find a post that we wrote about how to create your own rules.

[00:17:28] Now, one of the rules I have is marry the right person. And this is somewhat provocative because a lot of people write me, they go, “Ramit, what does that have to do with money?” I go, “Wait a second, the person you marry, that may be the most influential financial decision you ever make in your life.” It affects everything– how much household income you have, how much you spend, where you live. Are you going to have kids? If so, how are you going to raise them? Are they going to go to college? Which college? And on and on and on.

[00:18:02] So I think it really pays to think about what the right partner is for you. And I’ve talked about this on different podcasts. I think I went on the Tim Ferriss podcast where we talked about prenup. And one of the things I emphasize is that especially in the Western world recently, we have this concept that marriage is simply about love. But what’s that old song? Sometimes love ain’t enough.

[00:18:27] The concept of a love marriage is a relatively recent historical one. We should remember that marriage for millennia has had lots of different economic reasons, political reasons, etc. So I believe it’s important to acknowledge that marriage is more than just love. And even love itself changes over time. It is an arrangement. In fact, in many ways it’s a business arrangement as well as an intimate and romantic arrangement.

[00:18:54] It’s every kind of arrangement. I remember seeing my sister with her husband and their kids at Thanksgiving one year, one kid’s running around. The other one’s got to go upstairs to get something and you look at it, you go, okay, this is really a partnership. And in any partnership, you would sit down and you would decide what’s important to me. What are the rules of the game? Let’s talk about this. In business partnerships, you sign an extensive contract. So the same, I think, is something that should inspire us for getting married.

[00:19:27] For me, when I got married, I did not have a checklist, but there were a few things that I knew would be important to me. I knew that I wanted somebody who had similar values in the sense that I was raised pretty middle class in California. My mom was a schoolteacher. She stayed home with us for most of the time. And then she was a schoolteacher later in life. My dad worked and my parents were immigrants. That was important to me. I could relate to that.

[00:20:00] Another thing that was important was education. Education is a huge deal for my family, for my culture. And I spent tons of time and money educating myself, and now as a teacher, educating others. Wanting to live in certain places, like there are certain places I want to live. There are other places I don’t want to live. That was important.

[00:20:19] And I think this concept of self-improvement or self-development, it’s core to who I am. If I met somebody who was just not into it, they didn’t read or they didn’t take classes or they thought it was weird to go to a book talk at 92Y when I was living in New York, it might be fun in the short term, but I couldn’t see the bonds being built long term.

[00:20:45] Financially speaking, what’s interesting is when I was dating, I wasn’t really thinking about money that much. I wasn’t certainly talking to people about their 401K balance and stuff like that, but over time and now being married for years, gosh, looking back, if I started to get more serious, it would have been way better to have conversations earlier than even I did. I made the mistake of assuming like, “Oh yeah, I’ll just do the money stuff in our relationship.”

[00:21:10] And when I really got serious with my now wife, we talked about it and I made it really clear that I wanted both of us to be involved. And I’ve shared some of the reasons why. I told her, number one, I’m going to die one day. I want you to be fluent in the world of finance because I don’t want anyone to take advantage of you. I want you to feel super comfortable. Two, I want a partner in this, right? Someone who can provide me a second set of eyes and push me and give me different ways to think.

[00:21:36] And three, I think it’s just more fun. It’s just more fun to have a partner and you’re discussing and planning and making trade offs and sometimes you disagree, but you’re doing it together. So it would have been really easy for me to just be the money guy, but I insisted, even though it was tough and it still is tough, it would be way easier for me to just do it, for us to do it together. And it has been a source of amazing growth.

[00:21:59] So in terms of marrying the right person, this is just my own opinion. Some people, they have their checklist. I never really had that. It was more organic for me. Do they have a sense of humor? I was never going to question if they thought I was funny. Either you laugh or you’re out.

[00:22:18] I didn’t have that checklist, but looking back, I did have this organic sort of set of things I was looking for self-development, family values, education, those kind of things turned out to be really important.

[00:22:33] The rest of them, for example, do you want to put up one of those things in your house that says live, laugh, love? Obviously the answer is no. Holy shit. Can you imagine if you married someone who wants to put that up and then above the fireplace they put something that says fire? I go, “Do we forget that this is a fireplace? I don’t need someone to remind me in the bathroom, pee here. No, thank you. Okay, you know what? I changed my mind about my entire answer. Forget it. I said don’t have a checklist. That’s the only question you should have on your checklist. Would you put a live, laugh, love sign in your house? If so, we can’t be together. Goodbye.

[00:23:12] Next question. Oh, this one came from the Slack community of our money coaching program. Again, you can join this program at iwt.com/moneycoaching and you can ask tons of questions and get amazing answers. This one, oh my God, it’s so good. This is from Brian. And Brian said, $3 versus $30,000 questions.

[00:23:34] I had to mail a few important documents this morning. When I pulled up to the USPS print at home shipping options print-at-homeI saw that it was going to be $18 to mail the two large envelopes. However, after a quick Google search, it looked like I could send them for less than $4 if I first brought them to the post office in person.

[00:23:52] Now, I have to admit, part of me still hated the idea of overpaying an extra $14 or 3.5 times more to ship it from home. But I took a deep breath and realized that the hassle and wasted time of a trip to the post office would cost me way more than $14. And I went ahead and printed the shipping labels for the two documents, which brings me to the $30,000 part of this update, because the documents I had to mail were two copies of the pre-nup my fiance and I had just signed, one copy going to each of our lawyers.

[00:24:24] The process of making the prenups not only helped us decide what to do in the event we separate in the future, but more importantly, it helped us figure out a lot of the critical details for how we wanted to manage our finances and assets while we’re married, hopefully forever. And those are the types of decisions I want to keep taking up the majority of my attention and money, not $14 of postage. Oh, my God. Amazing. So, Brian, congratulations. First of all, I’m so happy for you two getting married.

[00:24:57] This, to me, was just an awesome comment because, I mean, 14 bucks for postage is a lot. All of us kind of like, mhh. And then we start convincing ourselves, like, yeah, I could go to the post office. Like, it’s not that big of a deal. But when you have a bigger vision and you really internalize this idea of $3 questions versus $30,000 questions, suddenly things become crystal clear to you. And that’s why I love elevating our conversations above merely the tactical.

[00:25:32] If you’re stuck in the tactical, then every single day you are looking at a million different decisions and you’re just going, “Oh, no, no, no, no, I can’t spend that much. Oh, my gosh. Beets cost an extra $2. I can’t do that. Oh, my gosh. Peanuts really got expensive. Oh, my gosh. Gas. Oh, my gosh. Postage.” It’s overwhelming. And that forces us to retreat, to shrink ourselves, to worry about everything. What kind of life is that?

[00:25:59] Here, Brian, very successful. Brian’s been in IWT community. He’s been at a bunch of different programs for a long time. He’s focused on the $30,000 questions. He knows he’s destined for bigger than worrying about the price of celery. And so to him and his partner, I’m just thrilled to hear it. And I’m glad you shared your lesson with all of us. Thanks, Brian. Congratulations.

[00:26:20] Jenny says I’m a late starter. How do I calculate my contributions after age 50? For late starters, is there a calculator that can include the age 50 increase option for Roth IRA and HSA, the max goes up, blah, blah, blah, blah, blah. So Jenny’s asking a question because as you get a little older, you get the opportunity to invest more in different accounts. That max contribution you can make in accounts like an HSA goes up.

[00:26:51] So where can I calculate that? And I appreciate the question, Jenny, but I want to zoom out and look at the big picture. In very simple terms, if you want more money, you’re going to need to save and invest more. So let’s just assume that Jenny is 40. She calls herself a late starter, but I’ve heard people at 28 call themselves a late starter, so I’m going to just assume Jenny’s 40 years old.

[00:27:18] If Jenny sits down and says, “Oh, wow, I get to contribute an extra $1,000 after the age of 50.” Does that really make that big of a difference in the overall scheme of things? Not really. Not really. And so I want to emphasize here, should you max out your contributions if you’re able to? Of course. Do you need to worry about the precision of every single additional dollar you can contribute after the age of 50, but you have to stop by 65? No. In fact, if anything, I would just say save as much as you possibly can right now.

[00:28:01] It’s kind of like being late making Thanksgiving dinner. It’s like, oh, should I? I didn’t buy it. As you can tell, it’s like Ramit doesn’t even cook Thanksgiving dinner ever. Let’s just play along and pretend that I’m a turkey master. All right. You didn’t buy the turkey. You’re worried. You finally start the oven three hours late. And meanwhile, you’re asking the question, “Should I use the paisley tablecloth?” Forget that. Just put the turkey in the oven and get it going. That’s how I want you to think.

[00:28:31] Sometimes we overvalue precision and we forget the major thrust. The major thrust, if you want more money, save and invest more. Do you need to calculate every last detail? Probably not. Should you max it out when you turn over 50? Of course. But it’s not that important to get ultra-precise. That’s my opinion.

[00:28:52] May has a question. How do I balance funding an emergency fund and contribute to retirement every month? So she further says, if you don’t have a fully funded 3 to 6 month emergency fund and you also started contributing towards retiremen and you have less than $10,000 how would you recommend prioritizing funding those two areas? Put another way, if you had $2,000 to allocate between an emergency fund and investments, what percentages would you recommend for the split?

[00:29:29] Okay. All of these questions, first of all, are straight from my money coaching students. And if you have specific questions about your finances that you want me to answer, you can join me and the rest of the students in the money coaching program iwt.com/moneycoaching.

[00:29:45] So let’s talk about this question about allocating your money between emergency fund and investments. So this depends on a lot. This depends on things like how old are you? Because if you’re younger, that’s one option. Another one would be, do you sense that there’s a recession coming in your industry? If so, you might want to double down on an emergency fund.

[00:30:09] Debt might play.  If you have a lot of debt, this may not even be the right question. You may want to pay that debt off if it’s at 22%. But speaking generally, I’ll tell you how I think about it. I’ve always thought to myself, I want to be more aggressive with investing because I know how much it can turn into. I understand the power of compounding and time, and therefore I really want to do that. With that said, I never, ever, ever want to have my back against the wall when it comes to money.

[00:30:45] Some of you have been in this situation. Think about it, or your parents have been. They get laid off, they’ve got a mortgage, they’ve got debt. It is a terrible, terrible place to be in. And in my opinion, you never want to be in that position. So I do everything possible in my life to live with a very healthy margin of safety. What does that mean? It means my housing costs are below what I can technically afford. My car, I haven’t had a car payment in decades. Yeah, I spend a lot on the stuff that I love, but on the big, big, big things like housing, cars, debt, those things I am ruthless about.

[00:31:30] Now, in terms of the emergency fund, I want to emphasize something for you, May. It often takes years for people to build up an emergency fund. So I wouldn’t mind, again, speaking generally and without knowing your exact situation, if you said okay, out of $2,000. I’m going to take $1,800 and invest it and put $200 a month towards my emergency fund. Notice the key there, a month. This is less about one-time decisions. Financial success is about doing the right thing consistently every single month. It doesn’t mean you have to be perfect every single month, but because you’re doing it every single month, you will get massive compounding rewards over time.

[00:32:18] So this is a lot of different ways to think about the answer. In general, I do want you to have an emergency fund. I don’t like people to basically take all their money and pay off all their debt and end up with nothing, because if they get laid off the day after they’re debt free, they’re still in trouble. I want you to have savings. I want you to have investments.

[00:32:40] As for your allocation, like I said, it depends on a lot. But if I were in your situation without knowing anything more, and I had, let’s just say, $2,000 per month, again without knowing anything else, my guess is I would probably take $1,500 and put it towards investments and $500 and put it towards my emergency fund every single month.

[00:33:02] All right. Audrey says, what is your recommended asset allocation? All right. Well, the answer is read chapter seven of my book. Let’s see here. We have a question from Julien. He says, I’m curious. This is in the Slack group. I love this. I’m curious how others think about different kinds of debt. I have lots of different types of debt right now– significant credit card debt, significant student loan debt, a mortgage, a car payment, a loan to pay for a new furnace. Yikes. It sounds scary when I list them all like that.

[00:33:38] Most of the time I’m only stressed or embarrassed by my credit card debt. The rest of them seem like debt you’re supposed to have or you’re allowed to have as an adult. Does anyone else have that script? I’m sure it’s something I would re-evaluate once my credit card debt is gone. I’m making progress. Okay. This is really interesting. In the I Will Teach You to Be Rich book, there’s a page where I identify invisible scripts that we all have about credit card debt, and it is really fascinating.

[00:34:07] So I researched thousands of people and I distilled down their key beliefs and key phrases, and one of them is everybody’s got credit card debt. Or the credit card debt companies are evil. They’re out to get you or it’s not so bad. At least I don’t have $20,000 of credit card debt. I don’t love these invisible scripts, but I do think they are important to acknowledge, and I think Julien does a great service by sharing their invisible script that these types of debt are okay except for the credit card debt. So again, let me read off these types of debt– significant credit card debt, significant student loan debt, a mortgage, a car payment, a loan to pay for a new furnace.

[00:34:50] All right. How do I think about it? Years and years ago, when I was an intern I had a mentor of mine who took me out to lunch and we’ve become close friends. And we’re just talking about stuff. And he was telling me about money. And he said, “Ramit, in my family, we have a no-debt policy.” And he was very wealthy and was very successful in Silicon Valley. And I thought to myself, that phrase that I now hate it must be nice. It must be nice to not have a no-debt policy in your family. Now, we’re normal people.

[00:35:27] And now I actually respect his policy even more because he’s very wealthy. He could easily take on debt for a variety of reasons. If you are on TikTok, you hear all these cuckoos saying, “What’s the way that the wealthy stay wealthy? They use debt. Poor people don’t know anything about debt, but wealthy people use debt. So strategically shut the fuck up. You don’t know what you’re talking about. Why am I taking advice about wealthy people from some guy on TikTok who doesn’t know shit? Your shoes aren’t even clean.

[00:35:58] Okay. I think that, in general I don’t like debt. I don’t like it for the majority of people, because the majority of people have a zero savings rate. So why would it make sense to say the majority of people should use optionality in debt and they should exercise debt and exploit debt like the wealthy? They’re not wealthy. They don’t have the sophistication that someone who’s wealthy and has advisers and accountants and all kinds of stuff and float to be able to handle debt.

[00:36:34] So I understand there are some times that the average person needs to use debt. Most people don’t have 20, 30, $50,000 to buy a car. Probably need to finance that. Most people cannot afford a house cash. Virtually everyone is financing that. Fine. But there are certain things that I would just never, ever, ever take debt out for. That would be vacation, wedding. These are things that you pay for what you can. And if you can’t afford it, that’s that. You don’t go into debt for it.

[00:37:09] Now, Julien, from looking at your notes, the real question for me would be the significant credit card debt. I can understand why you probably buy a house. I can understand why you bought a car. I can understand that you probably didn’t predict you’d have to buy a new furnace, but those phantom costs come up.

[00:37:26] But the significant credit card debt really speaks to a behavioral issue. And what that suggests to me, without knowing anything more, is that once this debt is paid off, you’re probably going to go back into it again. Unless you tackle what actually caused you to spend and exceed what you could afford on that credit card.

[00:37:48] Well, that’s one of the reasons you’re in the money coaching program. So we’re going to work with you on that for the next several months and hopefully years to come, so every month when you come on to these calls, you know, wow, this is my time, my gift to myself to stay focused on improving my money psychology.

[00:38:04] Overall, if I were you, I would rewrite some of these scripts. Like, I would much rather you say “I have a zero debt policy except for a house and a car.” That might be more amenable to the average person versus my extremely wealthy mentor.

[00:38:26] And if you did that in general, then you would be in a real big hurry to pay off that credit card debt. Now, one of the things you mentioned is that you feel stressed out and embarrassed by your credit card debt. I get that. But the last thing I want you to do is feel bad about your money. If anything, what I would hope and what I want to help coach you on in the coaching program is to say, okay, I made a mistake. Here’s what led me to make those mistakes. I’ve spent a lot of time working on myself. I’ve acknowledged it. Here’s what I’m doing to pay it off aggressively. And once I pay it off, I’m never going to go back into credit card debt.

[00:39:02] Notice the difference in tonality. It’s accepting responsibility. It’s saying, “Yeah, I made a mistake, but I learned from it and here’s what I’m doing differently.” And that is different than feeling stressed or embarrassed. Stressed or embarrassed does not lead you to good decisions. It leads you to bad decisions.

[00:39:21] And so what I want to do, Julien, and make sure you speak up on the next coaching call we have I love to work with you live is to reframe the way you think about your debt. Sure, we’ve all made mistakes in different ways in life. That’s okay. Let’s acknowledge them. Let’s do what we can to fix them and let’s move on with our life.

[00:39:40] All right, Graham says, how do I fire a financial adviser? Oh, is it Christmas for Ramit Sethi gets to fire a financial advisor? The question is, I have a relationship with a financial planner that I’ve become convinced is no longer in my best financial interest. Probably never was. One consideration is that I also have life and disability insurance through him. What a surprise! And I’m relatively happy with this part of the relationship. Do you have any advice for how to cut ties?

[00:40:12] Oh, do I have advice? Yes. But you’re probably not going to like to hear it. First, a little background. Years ago, somebody in my network told me I need to talk to these wealth managers. You see rich people, they don’t call them financial advisors because rich people want to feel different, so they call them wealth managers. First of all, fuck off. Okay, I don’t need to be pandered to by you serving me fancy coffee in a silver tray and calling yourself a wealth manager and taking 1.75%. That’s ridiculous.

[00:40:47] But okay, I told the person no. I was like, I wrote a book on this man. I know how to do this. They’re like, “No, no, no. It’s really important our wealthy clients speak to them, blah, blah.” So I got the little gleam in my eye. Here’s the problem. I’m very vindictive when I find out someone’s taking advantage of someone else. And I love it. Some people are like, “Oh, it’s something I’m working on.” I go, “No, I love it.” So I emailed the person back. I go, “Yes, actually, you’re right. I would like to talk to them.” And I just have this gigantic smile on my face. So get on the call.

[00:41:22] It’s these two wealth managers from Wells Fargo Wealth Management. First of all, are you fucking kidding me? Okay, that’s like going into Target and asking for financial advice. Why would I get a Wells Fargo wealth manager? Okay. And these two have these beautiful British accents. You know, Americans, we can’t tell the difference between the different British accents, but it was like a good one.

[00:41:46] So this is what they do is amazing. I remember because I was in the back of a car and I was on the call with them and they introduced themselves. We’re wealth managers. Let us tell you a little bit about what we do. I’m sure that you’re really busy, so you want to focus on what you do and we focus on what we do. It’s like having a pro in your corner and if you could see my hand, it was just curling up into a fist. That’s what was happening to me. But at the same time, I had this little smile on my face. I was like, “What is happening to my body right now?”

[00:42:19] So they keep talking, and I played really dumb. I was like, “Oh, I just own this business. I don’t know too much about money. So, like, how would you guys help?” Which was just catnip. They go, “Oh, well, first of all, I’m sure that you don’t want to pay that much in taxes. So we specialize. We have a special consortium of tax advisers.” I was like, okay, wow, that sounds so good. I’d really love to minimize my taxes.

[00:42:45] And then I said, but what about investing? It seems like gambling. So of course they love that because that’s exactly what unsophisticated people say. And they were like, “Well, what we do is we take care of all of it. Their eyes light up because that’s where all the fees are– in wealth management, in investing, they typically take about 1 to 2%, which in my case would be millions and millions and millions of dollars in fees for them over the course of their lifetime.

[00:43:20] I said, “I hear about these things. There’s these robo, something and there’s like these mutual funds. Is this any different than that?” God, I fucking love playing dumb. It’s so good. And they were like, “Oh, well, here’s our approach. We don’t try to match the market, but we do focus on keeping your money safe.” And they had some exact phrase they used, which I was just dying. I put this in chapter six of my book, the entire conversation, because if you caught what they said., you realize what they really meant. And it was very quick, very fast, very off the tongue, but it told you everything you need to know.

[00:44:05] What they said in plain English was we don’t try to match an index fund, which costs approximately 0.05% in fees, 0.05. Write that down so you can compare it to one. Instead, we keep your money safe. Now let me explain what that means in plain English. If you want to keep my money safe, you can invest it in bonds. You can essentially return me basically nothing. And you will eat up essentially all of my returns in fees. But you can go back to the dumb celebrity client and go, “Your money’s safe. You haven’t lost anything because their clients– I asked them, “Who are your clients?”

[00:44:50] They’re primarily two people. They’re business owners and celebrities. And what do we know about business owners and celebrities? They’re pretty stupid when it comes to money if the truth must be told. They like to focus on either their business or if your celebrities, like ruining hotel rooms or whatever it is you do and partying, they do not want to get into the intricacies of asset allocation. Well, this wealth management team did not realize that they’re talking to the only guy who stays up Saturday nights reading asset allocation journals. Of course, I didn’t let them know this.

[00:45:24] So they can tell me we’re going to keep your money safe because most people, they simply worry about losing money. They don’t actually worry about how much money they are leaving on the table through fees and opportunity costs. So I laughed. And the funniest part of all was I asked him for some more specific recommendations and they told me all about the stupid Bond stuff. And I’m like, “These guys are so dumb. At that time I was 30 years old. I’m like, “Why on earth would a 30-year-old be in that heavy of a bond mix?”

[00:45:59] And did they even ask me one question about what’s my business? Do I plan to run it forever? What is the business about? Oh, if I told them I wrote a bestselling book on personal finance where I cover asset allocation, taxes, automation, they might have had a slightly different tune, but they didn’t ask a single thing. They just launched into their pitch.

[00:46:19] So first of all, what are the lessons we can take away from this? Number one, don’t ever work with Wells Fargo wealth managers. You fucking suck. Second of all, don’t ever work with Wells Fargo. They’re a predatory bank. In fact, there’s a discussion right now about how they’re about to be fined in their billion dollars. They are awful.

[00:46:37] Three, if you have to fire a financial advisor, do it mercilessly. You can be polite, but they are taking money and giving you nothing in return. So I’m going to tell you how to do this. Graham, I’m also going to tell you one of my other buddies I wrote about this in my book, too. He called me and was like, “Hey, I think I’m getting ripped off by my financial advisors. What should I do?” I was like, “Send me all the paperwork. I’ll look at it.”

[00:47:02] I did. He was definitely getting ripped off. He made a lot of money and over the course of his life he’ll have tens of millions of dollars. So he had some nice lady who was managing his money and I was like, okay, look, do you want me to tell you what you should do? Or do you want me to tell you 20 different things that are going to be nice to you? He’s like, just tell me what to do.

[00:47:20] I was like, okay, fire them. They’re not looking out for you. They’re taking fees. You could do way better at low-cost Vanguard Index Fund. And it’s going to be hard because when you fire them, they’re going to use all different emotions to try to keep you there. He goes, “Okay, fine. Great. I’ll do it.”

[00:47:34] I said, Do it by email. So it’s on record so that I can see the emails and laugh while eating popcorn and then put them in my book. He goes, “No problem.” And I did. The emails are in the book. If you’re wondering why I Will Teach You to Be Rich has sold over 1 million copies, it’s because I basically took all my vindictive fantasies and put them right into the book. And they’re all true. All of these things happen to me and my friends and you, my readers. And I just said, send me the documentation I put in my book.

[00:48:02] Here’s how you fire the financial advisor, Graham. Do it in writing, because if you do it on the phone, you’re going to watch like a basically a manipulative narcissist come to life. You don’t want that. Get it documented. You say, “I John, Jane, Doe, I wanted to let you know that I’ve appreciated our financial arrangement, but I’ve decided to move on and direct my own money. I’d like to get any details on transferring funds away as well as any other details that I need to know.

[00:48:31] When you send this, it’s going to be like a bomb dropped in their office. You’re going to get texts, you’re going to get voicemails, you’re going to get phone calls, multiple replied emails, the ones where they don’t even wait for you to reply and they just reply again. They start getting increasingly frantic with more and more caps. I love it. As always, remember to forward me all these details. I’ll anonymize them and share them. 

[00:48:52] So they’re going to try, how could you? I thought that we were friends. I took you to the pumpkin patch 10 years ago. There’s that. Then they’re going to say, what are you planning to do? Well, why would you do that? This return’s better if you look at the risk adjusted returns, all this nonsense. These financial advisors typically never even tell you how much they charge until the very last minute where they will if you press them, they’ll admit that it doesn’t actually make any sense for you to stick around. But that almost never happens. They just usually rage quit.

[00:49:22] All you have to do is remember this, Graham. Your job is not to answer their questions. Your job is to simply stay calm and redirect back to your questions. Your questions are, “Please send me instructions for transferring my funds to another account.” And what you’re going to want to do is in kind transfer. That’s I-N-K-I-N-D, in-kind transfer so that they don’t sell anything, but they just transfer it over.

[00:49:46] I have one piece of bad news for you, Graham. If you’re a financial advisor and I use that term loosely, they’re not an advisor, they’re a salesperson. If they were selling you life and disability insurance, they’re not financial advisor. You’re definitely getting ripped off there as well. They make money on their investments from you. They made money on their insurance from you. They make a ton of money.

[00:50:11] I have very little regard for insurance salespeople. The only person that I might regard lower than them would be realtors. Oh, my God. There’s going to be so many people mad at me. Whatever. Go on TikTok and complain to me there. I’ll roast you there myself. So you probably you’re getting ripped off on your insurance. You’re going to need to look into that as well. Get the fee structure on that and you will need to calculate if you should continue paying or not.

[00:50:40] I can almost certainly guarantee that you have been sold universal life insurance or whole life insurance. You would almost certainly be better off with something like term life insurance. So as usual, when we talk about financial advisors, we end on a depressing and hopeless note. Thanks for your question.

[00:50:58] Rebecca. Should I continue contributing to my Roth IRA even when the market is doing so poorly? Yes. Rebecca, should you keep buying strawberries when the price keeps going down every single week? Yes, it’s great. We need to rethink the way that we approach our investments. 

[00:51:16] In almost everything else in life, when the price goes down, we’re thrilled. But when the price in the market goes down, we get scared. And I can almost guarantee, Rebecca, you are reading news sources that are using words like market slammed, market crashes, risk of market crash increases.

[00:51:34] I want you to stop reading these sites that rage farm clicks for engagement. I want you to stop and I want you to come up with a simple plan. You can come up with it on your own, or you can just use the one in chapter three, four, and five of my book. You invest every month. When the market is up, you invest. When the market is down, you invest. You invest rain or shine.

[00:52:01] And you simply decide not to play the game that tens of millions of Americans do, which is I’m going to try to figure out what’s going on in the economic markets. Most of the people trying to do this can’t even figure out how to put together a decent order at Cheesecake Factory. And they’re over here trying to figure out macroeconomics and then relate that to their personal finances. No, no, no. Sidestep the entire thing.

[00:52:25] Every month, you’re going to automatically invest a certain amount into your Roth IRA, ideally, the maximum you can contribute divided by 12. So it’s every month you’re maxing it out, and that’s what you do. I want to encourage you to go back to chapter three and six, especially six, to look at why you cannot time the market, in fact, why even experts on Wall Street cannot time the market. And then I want you to decide not to play the game of timing the market one way or another. Every month your money goes in, you only have to think about it.

[00:53:02] Jenny asks, what is something about psychology Ramit wishes more people knew and took action on? Well, that’s a good question. What is something about psychology? Okay, this is a good one. So I remember when I was in college, you remember those cup of noodles that we all used to eat? Well, I did as a college student. So they came in like a six-by-six box. You get it from Costco. And I really love these cup of noodles. So I hung it up on my wall directly above my desk. And it was just like I could literally pull out one and it would automatically come down like a Pez dispenser. And I thought that I was a genius back then.

[00:53:50] And now, looking back, I think I was even more of a genius. This is the greatest show on Earth. I just come in here and glorify my past self and then my current self. What a great show. I love it. Thank you, Ramit Sethi. Round of applause for Ramit Sethi. Well done by Ramit Sethi.

[00:54:07] Okay. The key principle there was I didn’t even want to have to get up and go in another room to get my cup of noodles because that small barrier would have been enough to dissuade me from doing it, ironically, even if I were hungry. And this is true for so much in our lives, so many of us believe that if we want it enough, that we will do it.

[00:54:31] And psychology shows us that even the smallest barrier can cause us to not do something that we genuinely want to do. There have been people reading my material for 10-plus years who haven’t opened the right checking or savings account because they can’t find the password to their old savings account. And you laugh and you roll your eyes. How stupid? You’re so lazy.

[00:54:59] But it’s deeper than that. It’s the fact that small barriers can really hold us back. I was reading an article today about voter restriction and how even the smallest barriers can quantitatively affect how many people vote. So if they close voting one hour early, you think, “Oh, well, why don’t they just go a little earlier?” Well, maybe. Or maybe they didn’t realize it. Maybe they didn’t have transportation to go there and on and on and on. And that is exploited by a certain party that starts with, R, I’m talking about Republicans who restrict voters, particularly minority voters, using that same principle.

[00:55:36] So what I wish we could learn about the psychology of ourselves is to be brutally honest about what we need to succeed. If you don’t go to the gym in the morning because you feel cold orlike I used to be, I don’t want to have to get up and go to the other room to get my clothes out of the closet. I wish that we could be honest enough to just put our clothes on the floor before we go to sleep. If we want to drink more water, I wish we could simply fill up a bottle of water the night before and put it right next to our bed.

[00:56:10] And with money, I wish that we could acknowledge we are not going to do it someday. We need to do it now. And the best thing of all is we’re just going to automate it because we are intellectual, we are cognitive misers. We don’t want to pay attention. We’re going to give up on keeping a budget after two months. And that’s okay. That’s human nature. Therefore, let’s use technology and whatever else is at our disposal to make the right decisions, even if we don’t make them all the time for ourselves.

[00:56:41] Veronica. She asks, how do I protect my kids and think about where I want my money to go when I die? She said, I’m about to have a second kid want to start the estate planning process. It’s such a black box I’ve never learned about. My dad died without a will and a ton of debt. My husband’s dad lives off a trust that’s been really well managed.

[00:57:03] I don’t know where to start. I want to protect my kids, but I also don’t want to leave them much. Thoughts on getting started with the process and how to be creative with leaving money for social causes. Okay, this a great question.

[00:57:14] So first off, Veronica, I would say that I want to know about your finances. Whenever I get questions like this, it’s almost always from parents within two years of being 40, they’re like 38 to 42. And they go, “Oh my gosh, I just had a son or a daughter and I want to start saving for them. What should I open up?” I go, “What is your investments look like?” And you go, “Oh, I don’t have a lot, but I want to put something aside for my son.”

[00:57:42] I go, “Listen, your kids have time. You do not.” And so if I were to walk you through how much time you have left and how compounding gets increasingly difficult as you get older, you might go, “Oh, my gosh. I need to start saving money now. And an extra two, three, 400 bucks a month would be better served going into your investment account rather than saving for your kids.”

[00:58:12] That’s my first comment. I would say literally 90-plus percent of the time when people ask me about saving for their kids, they don’t have enough for themselves, 90% of the time. But let’s just assume that you do have enough, you’ve used all my material, you’re in the money coaching program, so you’ve put aside money for yourself, I would say, okay, how do you think about putting money aside for your kids?” Well, you have lots of options.

[00:58:38] If it’s a relatively modest amount, so we’re talking about maybe a few thousand dollars or even if you let’s say, 10, 20,000, options would include things like a 529 for education. That would be a really good way that a lot of parents do it. That’s pretty straightforward. If I had some extra money, that’s what I would do.

[00:59:00] If you want to get even more sophisticated and we’re talking about larger amounts, certainly you can set up a trust and a will and or trust. You should do a trust. You want to talk to a lawyer. They can walk you through it. I will share a few things that I have read when it comes to leaving money, because I’ve thought about estate planning as well quite a bit.

[00:59:29] Basically, I made all the mistakes that people make in growing up, thinking how I would leave money to my kids. I thought to myself, let’s just say I have two kids and one is doing really well and the other is struggling. I should probably leave more money to the kid that’s struggling because they need it more.

[00:59:45] Wrong. That’s a great way to make your kids hate each other and make your other kid resentful of you because that kid might say, “I went to medical school, I worked hard every single day and now I get punished and he or she gets it because they didn’t even go to school?” So that’s cause for resentment. A better solution, split it equally.

[01:00:10] Next, what if you pass along a house? That’s a huge opportunity for fighting, leaving your kids to hate each other. Because how do you split an illiquid asset? One person wants to keep it, the other person doesn’t. One person wants to use it on Christmas, the other doesn’t or does. Better to just clarify these things up front. Either liquidate the house and give them the cash or agree on who gets the house and make it relatively equal value.

[01:00:38] Three. Another thing. What if you pay for one person’s wedding at age 22 and another person’s at age 37? What if the amounts are different? You want to account for this. So there are lots of these little wrinkles that have been well discussed by advisors. So this is an example where if you have a very large portfolio, you definitely want to engage with a lawyer and specifically in estate planning attorney who can walk you through how to do this right.

[01:01:12] Another common mistake people make, they’ll say, I will give money to my kids, but they have to marry this type of religion. Or they have to go get this type of degrees. This used to be much more common than it is now. Now it’s taboo. Lawyers don’t like it. They call it don’t control from the grave.

[01:01:35] And finally and this is the most important one. This really blew my mind. A lot of parents don’t pass along money to their kids until they die. But imagine you die at 90 and your kids are 70, 70 fucking years old and they haven’t gotten whatever million dollars you’re going to give them. There’s a lady at my gym. I overheard her talking one day and I was like, “Oh my God, this is crazy.” And she looks to be in her 60s or 70s, and she mentioned that she– basically her parents are still alive and she will get something when they pass away, but she doesn’t know how much.

[01:02:11] I thought to myself that money would have been so much more valuable when she was 30, 40, even 50. And now at 70, it takes on a different meaning. It’s not nearly as meaningful. So again, what used to happen in the past was parents would simply say, “When I die, this will go to you.” But that has become way less popular and now it’s much more popular to give partially throughout the decade. So at 30, here’s a little bit. Learn how to manage it, etc. At 40 here’s another chunk of it.

[01:02:47] That money is more meaningful at those ages than 60 or 70 years old. So those are some basic thoughts. All this should be discussed with an attorney if you have a large enough portfolio. But I would say that, again, 90% of the time most people need to focus on themselves before they worry about their children because your kids have time, you do not.

[01:03:10] All right. Let’s see here. We have a comment from one of our students in the Slack community. Oh, okay. We have a bunch of different channels in the Slack community, and this one is called Money wins and humble brags. So I love people to brag about something great that’s going on with their money because it’s so rare. Usually we only talk about bad stuff that happens.

[01:03:39] Graham says this is definitely in the humble brag category, but I’m giving myself a pass because I think it could help some of the folks having trouble seeing themselves make more money as time goes on.

[01:03:52] I recently went to ssa.gov and downloaded my earnings history with the intent of showing my son how my money journey looked because he doesn’t understand the grind it took to get here. When I saw this, it even surprised me a little bit, but it made me proud of putting in the work every year. And he shows his actual Social Security earnings and he says 1994 was a job making pizza at Little Caesars.

[01:04:21] I think that’s amazing. I think that’s awesome. So, Graham, thank you for sharing that. Congratulations. And for everyone else, you can go to ssa.gov and look at your earnings history. It’s quite amazing.

[01:04:33] Let’s see here. This is another comment from the community. Oh, I love this one. This one is from Michael. Oh, this is about invisible scripts on spending money. Michael is a member of our money coaching program iwt.com/moneycoaching, where you can share these amazing stories. You can see how people are talking. Some of the categories we have in our Slack community, our Money psychology, podcast discussions. People talk about the podcast. The comments are amazing, rich life moments, saving, earning more, credit cards, community asks, and on and on.

[01:05:12] So Michael says, I have taken my family, my wife and two boys to a nice restaurant this evening, and for the first time ever, I wasn’t checking prices. Me and my wife ordered a set menu. Good stuff. My younger son, kid’s meal for starters and one more for his main. My older son went, “Oh, can I have a steak?” And in that split second, I faced my old money scripts. Is it worth it for him, etc.? Is it too expensive? His one course is more than the set menu, and after this large amount of thoughts which lasted a split second, I said sure, if you want to try it.

[01:05:51] He also got a nice starter on top of it. By the way, he is 13. The evening was great, food was great. We spent time together and had a really good time. When I asked for the bill, I was not surprised. I was ready for it without anxiety. Everything was planned. Reflecting now, I think I am evolving in the right direction.

[01:06:16] I love, love, love hearing that. This is a great example. Just that one moment of being seated at a table with your family you’ve done all the work to be able to get to this point, worry free and to use money to live your rich life, to see the joy in the people’s faces around you, your loved ones, and to say, yes, we can afford this and have the confidence to be able to do that. I love it.

[01:06:48] I hope you’ve enjoyed today’s call. I love being able to answer some of these questions from my money coaching students. And if you are interested in connecting with more students like this, you can join at iwt.com/moneycoaching.

[01:07:07] Thanks for listening to I Will Teach You to Be Rich. I’m Ramit Sethi. Please follow the show on Apple, Spotify, or wherever you listen to podcasts. If you haven’t read, I Will Teach You to Be Rich, my book, pick up a copy. You can get it at any bookstore or any library, and it will show you the specific tactics for how to build the I Will Teach You to Be Rich system into your personal finances.