Episode 49. “Our housing expense unexpectedly went up $2K when we bought our first home” (Part 1)

Eric and Elena (Part 1)

Date: June 28, 2022

Elena and Eric are both 25. They live in Toronto, and they make $160k as a household. They love going to EDM festivals and spend thousands of dollars every year traveling to them—it’s their Rich Life! The problem is that they also own a condo that’s draining their savings at a rate of $2k every month. They’ll be broke in two years.

Before this call, Elena and Eric made a pact that they would NOT consider selling their condo, no matter what I said. But we learn that they’re committed to keeping the condo for all the wrong reasons.

What will it take for both of them to see the truth in their error? To admit a mistake and commit to moving on as a team? First, we need to see if either of them are even willing to budge on the subject. Listen in to find out.

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Episode Transcript

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Elena:  [00:00:03] Eric is making $20,000 more than what he was making last year and we’re still not saving at all. We are just living paycheck to paycheck. We really thought at the beginning that worst case, we’re going to have a lifestyle change. And I think we’ve come to realize we are in the worst case right now.

Eric:  [00:00:27] I’m wondering if we have to sell the condo. I think I’d rather take the hit.

Elena:  [00:00:33] We’d have everybody breathing down our neck. It’s embarrassing to think about that we just made a $770,000 mistake. You really think we should try to sell this condo?

Ramit Sethi:  [00:00:45] I’m not telling you, you have to sell, but I’m telling you you’re going to go broke in two years. Meet Eric and Elena. They’re both 25 years old. They live in Canada. And together, they bring in $160,000 each year. They called me because they can’t seem to figure out what’s going on with their money. 

In today’s conversation, they’ll spend a lot of time talking about how they love music festivals, and they don’t want to stop going to music festivals. But they think I’m going to tell them to stop going to music festivals. It turns out the real problem is something they are not even thinking of. 

I want to share their story because so many of you have been told that you are throwing money away on rent, and that you need to buy a house because it’s the best investment you can make, and you’re an adult if and only if you own a house. But what happens when you do everything that other people told you to do and suddenly you realize homeownership isn’t everything you thought it would be? Today’s episode is full of fascinating insights on money psychology. So listen closely to hear Eric and Elena story. I’m Ramit Sethi, and this is the I Will Teach You To Be Rich podcast. 

 [Interview]

You came on the call, Eric, saying, I want advice for someone doing well and wants to do better. But the fact is you’re spending more than you make every single month. When did you realize that you had a financial problem?

Eric:  [00:02:25] The second time I had to pull out from my stocks to cover credit cards/day to day payments. 

Ramit Sethi:  [00:02:37] What happened? 

Eric:  [00:02:38] We basically paid all our bills and everything, but then I started falling slightly behind on my personal credit card. So I just took some money from the stocks to try and cover that. 

Ramit Sethi:  [00:02:53] And then what happened? 

Eric:  [00:02:55] Behavior wise, nothing else changed. Nothing changed in terms of our spending or our attitude towards money.

Ramit Sethi:  [00:03:04] What about you, Elena? When did you realize there was a financial problem?

Elena:  [00:03:08] I think I realized there was a financial problem after we said that we would stop booking music festival trips, and then we booked two more that same year. I think the worst part is anytime that Eric gets a raise or we get a raise, somehow we’re still living paycheck to paycheck. Eric is making $20,000 more than what he was making last year, and we’re still not making any changes. And I think that’s the most frustrating part. And we’re just out of luck. We don’t know what to do at this point.

Ramit Sethi:  [00:03:44] What are these festivals? 

Elena:  [00:03:46] Have you been to a music festival?

Ramit Sethi:  [00:03:48] Do I look like I’ve been to a music festival?

Elena:  [00:03:51] You’d be surprised. I think a lot of different types of people go.

Ramit Sethi:  [00:03:54] It’s very kind of you. What type? What type of festivals are we talking about?

Elena:  [00:03:59] Like electronic music festivals, techno music festivals, like that kind of thing.

Ramit Sethi:  [00:04:05] Do you travel for these? 

Elena:  [00:04:07] Yeah. So this year we’re going to Seattle, Chicago, Orlando. So we’re going to a few different places. And it adds up as you can imagine.

Ramit Sethi:  [00:04:16] What are the typical expenses for one of these trips? Do you have a sense? 

Elena:  [00:04:19] Yeah, so definitely a flight usually to the US, accommodations, the ticket itself, which is usually 300 to $500, any food that you need ,Uber rides, which end up spiking in cost. And our last trip we spent over $600 in three days on Ubers alone. So there’s a lot that is similar to regular travel except you also have the cost of the ticket and the festival food and everything.

Ramit Sethi:  [00:04:46] And how much would you spent this in a typical year?

Elena:  [00:04:49] We’ve only been dating for two years and traveling together for about a year. So I think in the past year we spent probably close to $12,000 in traveling, music festivals, that kind of thing.

Eric:  [00:05:06] There’s also the local events that add up. This year we have three different ones booked international to the US. But then on a monthly basis, we’ll probably go to two to four events per month locally. And that’s, I’d say, between the two of us between tickets costs, there and back, probably at least $200, 200 to $250 nights every single time.

Ramit Sethi:  [00:05:38] So when you came on this call, did you think that I was going to tell you to stop going to these festivals?

Elena:  [00:05:44] Yes, that is what I thought. 

 [Narration]

Ramit Sethi:  [00:05:48] People are so weird. They come talk to me expecting me to tell them to cut back on the very thing they love, which they already know they’re going to ignore. Why would you do that? I actually think a lot of people like the feeling of being chastised. On one hand, they hate it. But on the other hand, they love it because it feels so familiar. And these people are usually the ones who describe themselves as feeling guilty about money.

Notice that people who feel guilty about something love talking about how guilty they feel. Psychologically, you’ll see them spending years talking about how do you feel guilty. “Yeah, I could do that. I probably should. I just feel so bad.” They’ll use those phrases, “I’m bad with money. I’m just bad with money.” 

At a certain point I ask them, what do you get out of this? And they might actually realize with enough introspection, “Wow, by saying I’m bad with money, I actually give myself an out instead of learning how to manage it.” Elena expects me to berate her for going to festivals. But that would accomplish nothing.

 [Interview]

Okay, fair enough. I can already tell you both love it. So I’m not going to sit here and tell you stop it. That’ll be a quick call. We’ll be done here in five minutes. You’ll say, screw this guy. I’m out of here. There’s no point. Also, I don’t think you really want to stop going. I think you’d love it. It’s great. Let’s figure out a way to help you go to those things guilt free. Elena, I’m curious why you thought I was going to tell you to stop doing it. 

Elena:  [00:07:34] I feel like whenever people online, financial advisors online, they all have the same persona. And I’m not saying that you do. I honestly haven’t listened to you enough to get a real idea of the type of advice you would give.

Ramit Sethi:  [00:07:47] Problem number one. 

Elena:  [00:07:48] But I feel like– pardon.

Ramit Sethi:  [00:07:50] Nothing. Keep going.

Elena:  [00:07:51] I feel like that’s the obvious thing to do. It’s the most expensive thing. So if we’re talking about cutting out the thousands of dollars, then the festivals are the easiest thing and the quickest thing to do. So that’s what I thought. And I feel like that’s the type of advice that my parents would probably give too. They’d be like, “Well, you should just not go to a festival and you’d save like $3,000.”

Ramit Sethi:  [00:08:13] And then would you actually listen to them?

Elena:  [00:08:14] I think we have listened to them.

Ramit Sethi:  [00:08:19] So then why do we want to even think about that advice? If it doesn’t work, then why bother? That’s my philosophy. Let’s get real. Let’s do some stuff that works. Otherwise, there’s no point. You’re wasting my time and I’m wasting yours. We don’t want to both just bullshit each other. So you want to do the festivals? Fine. I don’t care you paying 600 bucks for Ubers, whatever. You want to do it? Fine. But you guys are here for a reason. So what’s the problem? Elena, what do you think the problem is financially?

Elena:  [00:08:48] I think the problem financially is that we’re not saving at all. We are just living paycheck to paycheck.

 [Narration]

Ramit Sethi:  [00:08:57]

Before coming on this call, I asked Eric and Elena to fill out a conscious spending plan using my template. Now, if you want to get your own free copy, go to iwt.com/episode49. The conscious spending plan breaks your spending down into four categories: fixed costs, savings, investing, and guilt-free spending. 

Now I’m going to go out on a limb and guess what you’re thinking right now, “Ramit, clearly this couple is just spending way too much on festivals. If they didn’t spend $12,000 a year on festivals, they’d be fine. It’s so simple.” Well, it’s actually not that simple. They love going to festivals, and they’re not going to give it up. Let’s start there. If you were going to help Eric and Elena, they’re living paycheck to paycheck, but they simply are not going to give up their spending on music festivals, what would you do? I wanted to understand more about their money psychology so I could start to come up with a plan that would actually help them. And what’s the problem with that? 

 [Interview]

Eric:  [00:10:04] Well, I would love to propose to Elena that’s one of the things that is coming out like, I’m just not saving any money. And in a way, I’m nervous to take out that money to take that next life step to start to move forward. I think a lot of it is the moving forward, right?

Elena:  [00:10:24] I mean, we obviously want to have kids at some point, and we want to purchase more properties. We would ideally like to purchase a property in Miami. We love going to Miami, two to three, and of course, prioritize their education. Our parents paid for our university. We want to make sure if we have kids we’re able to do the same, especially if our kids went through anything that required some kind of money, we would be able to support them through that as well. So I think that’s a long term goal for us.

 [Narration]

Ramit Sethi:  [00:10:55] This is what I call trying to be 40 before you’re 40. Eric and Elena are not saving anything. In fact, they’re losing money every month. But here they are talking about buying a property in Miami. Guys, you earn the right to do advanced things after you execute the basics flawlessly and consistently. When people come to me talking about accredited investing and private equity and crypto but they don’t even have a simple diversified portfolio, they’re trying to be 40 before they’re 40. And what that usually means is a lifetime of sub-par returns. 

 [Interview]

It doesn’t seem like it’s that concerning to both of you.

Elena:  [00:11:42] I think for me, I hate getting stressed and worried and I get l hives and everything. So I think I just try to keep as calm and as prospective as I can, especially on things like finance. I do stress about pretty frequently. But I just try to stay calm as much as I can. I don’t like getting anxious over money, which might come to a fault because then I feel like I don’t see it as seriously as I should.

Ramit Sethi:  [00:12:11] Yeah, it’s interesting that for you, the opposite of stress is what? You stress about money. So therefore you try to what?

Elena:  [00:12:23] Calm down about money. 

Ramit Sethi:  [00:12:25] How do you calm down?

Elena:  [00:12:27] I don’t think about it as much. 

Ramit Sethi:  [00:12:29] You ignore it?

Elena:  [00:12:31] Yeah. 

Eric:  [00:12:33] I’ve always been thought and I’ve been raised in like, don’t really talk about money. 

Ramit Sethi:  [00:12:39] What did your family say?

Eric:  [00:12:42] We just didn’t really talk about money. There wasn’t really a conversation.

Ramit Sethi:  [00:12:45] Did you grow up middle class, poor, wealthy? 

Eric:  [00:12:46] Yeah, middle class parents. My main conversation on money when I was being raised was– my parents were divorced, but with my mom who’s the one that mainly raised money, we just never really talked about money. I never knew how much she made or anything.

Ramit Sethi:  [00:13:04] What would it look like if you were not stressed about money, Elena?

Elena:  [00:13:07] I think it would look a lot more calm when I sign in to my banking apps and look at our bank accounts. I think I wouldn’t have that pit in my stomach of okay, what are we at in our checkings after the 5th of the month and everything has been removed, what’s left there. I think I would just stop thinking about stuff like that. I would open my app with no worries as to how much is in our checkings.

Ramit Sethi:  [00:13:11] How often do you open your app?

Elena:  [00:13:12] Very frequently. At least once a day on one of the banking apps.

Ramit Sethi:  [00:13:28] Why do you do that? 

Elena:  [00:13:28] I don’t even know. It’s as if I think the number in there is going to change, but it’s going to be the same. And I guess I just opened it to make sure we’re not losing any money or everything’s okay on it or the purchase came through correctly, we were charged the right amount. I think that’s probably one of the ways that I stress about it is that I check it so frequently.

Ramit Sethi:  [00:14:05] What do you think that’s costing you? 

Elena:  [00:14:09] A lot of my mental health, I guess. Not mental health, but just a little bit of anxiety every single day, I guess.

Ramit Sethi:  [00:14:17] Have you ever wondered why you do that? What you get out of it.

Elena:  [00:14:24]  I might imagine that I get a sense of control, that I know exactly what’s going on, but in reality it’s I’m tracking and thinking I have control over it, but I’m actually so on in control of the finances, which is why I’m checking it so frequently.

Ramit Sethi:  [00:14:39] Okay. You’re very perceptive.

Elena:  [00:14:42] I try to be self-aware.

Ramit Sethi:  [00:14:44] Yeah. It’s one thing to be perceptive. It’s an entirely another thing to know how to change. Logging into accounts every day is a major, major red flag. It tells me so much about someone. It tells me that someone is probably obsessed with $3 questions instead of $30,000 questions. It tells me they probably don’t feel in control their money. And it tells me they probably don’t have a financial system. And instead, they feel the need to micromanage every single thing all the time. People who log into their accounts every day are playing defense with their money, not offense. And to live a rich life, you have to play offense. Eric, are you stressed about money? 

Eric:  [00:15:35] A little bit. 

Ramit Sethi:  [00:15:37] How does it manifest for you?

Eric:  [00:15:40] Oftentimes more so through ignorance. I don’t like to think about it much to them. But whenever I do think about it, I’m like, all right, and then I just try and tell myself that it’ll be okay in a little bit.

Ramit Sethi:  [00:15:56] What do you guys want me here for? Do you want me to tell you that it’s not going to be okay? Are you looking for a wakeup call?

Elena:  [00:16:05] I don’t think we’re looking for a wakeup call.

Ramit Sethi:  [00:16:09] What are you looking for?

Elena:  [00:16:11] I think we’re looking for some guidance. We’ve tried the budgeting. We’ve tried setting a maximum for the credit cards, a maximum for our leisure spends, for groceries, we’ve tried doing all of that multiple times, and it doesn’t work for us. And it’s just not the way I guess our minds work. So I think we’re just looking for something from your perspective what you think would work for our specific situation.

Ramit Sethi:  [00:16:34] So when you say, “We’ve tried a lot of things,” when was the last time you read a book on money?

Eric:  [00:16:39] I never did. 

Elena:  [00:16:45] We didn’t read a book, but we did do two online financial courses, I guess, but it was very vague and again that influencer type of idea.

Ramit Sethi:  [00:16:57] What course did you take? Tell me.

Elena:  [00:17:01] I purchased this self-help bundle like a year ago, and it came with a bunch of different courses that you can access e courses. 

Ramit Sethi:  [00:17:09] How much did they cost? 

Elena:  [00:17:09] I know you’re looking at me and you’re like– I think it was like $70 or something. But it came with 20 or 30 courses. It was to support this influencer that I followed, anyways. So we got this course. And essentially the core of it was not a budget, it was identifying in your transactions what are regrettable, what are mandatory, and what are happiness, true happiness.

And I guess that’s what we looked at for that period in our time was we looked through our transactions, which ones gave us happiness, which ones we could go about without, and the next month we would try to avoid the regrettable transaction. So avoid that one take out trip that we probably don’t need and focus more on spending money on things that really made us happy, which is these events. So we tried that. Again, not that’s sustainable because there wasn’t really a monetary percentage or numbers to justify anything behind it.

Ramit Sethi:  [00:18:05] It sounds like a life coach lost their job and they decided to in one weekend write a course and then charge you $7 for this advice.

Elena:  [00:18:15] Correct, yeah. 

[Narration]

Ramit Sethi:  [00:18:19] Oh, my God. Some of you really love telling me how little you paid for something. Did you catch that when I asked Elena if she’d read a single book about money? That’s the very reason they came on this podcast. And she said, “No, but I bought a discount course created by an influencer.”  I want you to think about the psychology of that. Why don’t we take the important things in our lives seriously? I have this concept of things called money lenses. Imagine you put on some eyeglasses. Well, the lens that most people view the world through is the money lens of cost. They agonize over how much something costs, they brag about getting it on sale. 

But most people don’t realize there are also other money lenses. There’s the money lens of experience, like sitting at the sushi counter and watching the chef work. There’s the money lens of results, like hiring a personal trainer. There’s a money lens of speed and delight and so many more. Just Google money lens Ramit. Most people only have a single money lens– cost. That’s like being able to play one note. It’s incomplete. And yes, there are times to use cost. Sometimes costs can actually be the best money lens to use like with your investments. You want a low-cost investment. But there are certain times where you should use different money lenses. 

Elena clearly did not use this financial guide. Not despite it being cheap, but because it was cheap. It was a bundle for God’s sake. When something is important to me, I don’t want to bundle. I want the very best thing that’s going to get me results. With rare exceptions for the important things in life, I want to urge you to consider a different money lens besides cost, as Dan Kennedy says, “Why pay less when I can pay more?” I’m glad you supported that influencer. I think for something as important as money, I probably wouldn’t just buy a bundle that throws in a bunch of stuff, and says, hey, here’s the money thing. Good luck. I take this seriously. You guys take festival seriously. I take money seriously. Do you guys both care about your money? 

Eric:  [00:20:52] Yeah.

Elena:  [00:20:53] Yeah, we’re making more money year on year, but it seems like we’re not saving any of it.

Ramit Sethi:  [00:21:00] What do you think is going on? 

Eric:  [00:21:02] I think we’re just not executing anything. Even this one was like, I fill out the form and attend. I’m was like throw this Hail Mary and hope that maybe this session will help us. Maybe this will be the one that will change our attitude. But I think there’s deeper things there.

Ramit Sethi:  [00:21:31] That’s pretty perceptive too, the idea that, I’m just going to check out this YouTube video while I’m brushing my teeth. It doesn’t take too much work. I’ll throw this Hail Mary to this podcast thing. Maybe one of these things will pan out and fix it for us. 

Well, I guess I’ll be the first to tell you, I’m not here to fix your problem. Nobody’s going to fix your problem. It’s your problem. I don’t think that the two of you actually take money that seriously. I don’t think you think there’s a problem actually. You’re living check to check. You came on the call, Eric, saying, I want advice for doing well and wants to do better. But the fact is, you’re spending more than you make every single month. That’s actually not doing well. 

Part of living a rich life is being honest, honest with ourselves, honest with the people around us. You’re losing money every month. So maybe we need to recenter. You’re losing over $1,000 per month in the red. I don’t think that’s doing well. How long until you run out of money, Eric?

Elena:  [00:22:42] A year, two year. 

Ramit Sethi:  [00:22:43] Which one is it?

Eric:  [00:22:46] I think two years. 

Ramit Sethi:  [00:22:47] Two years. And I ask because you’re dipping into your savings, correct? 

Eric: [00:22:48] Yeah.

Ramit Sethi:  [00:22:47] So you guys are two years away from running out of money. How much are you losing each month from your savings, Eric?

Eric:  [00:22:53] Probably 1,000 a month.

Ramit Sethi:  [00:22:57]

It’s got to have been tough for you to be watching your savings deplete every single month.

Eric:  [00:23:08] Yes. I felt like a failure, a repeated failure. It’s like I bang my head against the wall multiple times and I haven’t learned.

Ramit Sethi:  [00:23:27] Elena, are you curious what’s going through his mind? 

Elena:  [00:23:31] Yeah. 

Ramit Sethi:  [00:23:32] I mean, he’s drawing out of his savings every month, and he’s going in the red with his savings. Are you curious what’s on his mind, what his fears are, how he’s feeling?

Elena:  [00:23:47] Very curious.

Ramit Sethi:  [00:23:48] Ask him. 

Elena:  [00:23:49] How are you feeling about the fact that you’re consistently contributing more than I am?

Eric:  [00:23:55] I don’t mind contributing more. It doesn’t bother me to contribute more. It wouldn’t bother me to put more towards our investment. It wouldn’t bother me to pay more of the festival. But I don’t want to contribute to getting us out of the hole. It’s almost like I’m contributing to a bad addiction. I don’t want to contribute to that. I want to contribute to cool stuff and stuff that would make us grow and make us happy and all that kind of stuff.

Ramit Sethi:  [00:24:13] Did you know that, Elena? 

Elena:  [00:24:38] I feel like we talk about finances very loosely. And we talk about it frequently, but very loosely. And I can just assume or imagine that that’s what he feels like because I take out a line of credit $100 every month and I’m just like, why am I doing that? So I can imagine, but it’s good to actually hear him say that that’s what he feels like.

[Narration]

Ramit Sethi:  [00:25:06] I bet in your relationship there’s one person who talks about money more than the other, one person who takes the lead, who drives things. I want to give you a challenge today. Try to flip that dynamic for one day. If you’re the leader, ask the other person to take the lead. If your partner is the leader, you go and start a conversation about money. 

As you change your roles for a single day and have conversations about money, you’re going to learn all the subtle ways that both of you reinforce your roles. One of you asks more questions. One of you waits for the other person to bring money up. This will be eye opening for you. By the way, once you do this, send me a note. You can message me on Instagram. Or if you’re on my newsletter, you have my direct email. Send me a note and tell me what surprised you about this exercise.

[Interview]

So you have roughly 25,000 bucks in your savings account? 

Eric:  [00:26:12] Yeah. 

Ramit Sethi:  [00:26:13] All right. So two years away from being out of business, running out of money completely, and what’s going to happen then?

Eric:  [00:26:22] Then the festivals are going to go, the events are going to go, the gym membership is going to be changed to the cheaper one, start taking them one after the other.

Ramit Sethi:  [00:26:34] That’s not going to save you. If you run out of money, cutting back on $6,000 of festivals is not going to change anything for you. You both look very uncomfortable.

Elena:  [00:26:50] But I think it’s good you’re making us uncomfortable, to be honest. I feel like we haven’t been this uncomfortable talking about finances in a long time. I think we’re both just very positive about it. And I think we needed somebody to make us uncomfortable to ask us that question of what happens when you’re going to run out because we never really thought about that.

Ramit Sethi:  [00:27:09] No, if anything, you came on this call thinking that you were doing great. 

Elena:  [00:27:14] Yeah, I really did. I’m like, wow, we’re not doing that bad. There’s people that are homeless, and we’re not that.

Ramit Sethi:  [00:27:21] You’re comparing yourself to homeless people. 

Elena:  [00:27:25] I mean, I was, yeah. 

Ramit Sethi:  [00:27:26] Do you see this self-deception? 

Elena:  [00:27:28] Yes, definitely.

Ramit Sethi:  [00:27:31] So you came on here going, “Ah, there’s too much stuff for all these beginners, but we’re already quite intermediate. We need to advance stuff.” Meanwhile, you’re losing over $1,000 a month and you’re two years away from being out of money. Sometimes you have to spell it out for people. You have to let them know what the stakes are. And now that Eric and Elena can see what’s really going on here, at least they know what reality is. So right now, the two of you make $160,000 per year, correct?

Elena:  [00:28:05] Yeah. 

Ramit Sethi:  [00:28:06] What’s the breakdown? Who makes what? 

Eric:  [00:28:10] I make 100. 

Elena:  [00:28:12] And I make 60. 

Ramit Sethi:  [00:28:13] Okay, cool. So what would it take in order for you to both be able to hit those savings and investment goals?

Eric:  [00:28:23] Reducing our expenses, some of them. From a knowing perspective, I think we even have a savings account, which was called emergency fund.

Ramit Sethi:  [00:28:36]  With $0 in it.

Elena:  [00:28:39] Well, there’s 354. So it’s not zero.

Ramit Sethi:  [00:28:43] That’s good. How much are your monthly expenses, by the way? You got real quiet in here.

Elena:  [00:28:50] Not including our fixed costs? 

Ramit Sethi:  [00:28:52] No, all of it.

Elena:  [00:28:53] All of them? Probably close to $8,000.

Ramit Sethi:  [00:28:59] Okay, well, you have 300 bucks. That’s good. That will get you one day. 

Elena:  [00:29:05] Yeah.

[Narration]

Ramit Sethi:  [00:29:08] There’s a subtle dance going on here. Eric and Elena are using a lot of techniques to avoid facing the real problem. Can you spot them? First, they ignore the problem. They’ve been in the red every single month for months. They are two years away from being totally out of money. Next, they focus on the wrong things that feel good, but don’t actually matter. For example, logging into accounts every day. 

Next, they self-handicap. When they finally decide to get help, they buy an influencer bundle on manifesting money happiness or whatever bullshit that thing was. Then they compare themselves to homeless people and say, well, we’re not as bad off as they are. They make $160,000 a year. They’re comparing themselves to homeless people. Not only is that offensive, it’s just a horrible barometer to use. Finally, they use tiny, incremental success to congratulate themselves, instead of taking an honest look at reality. Great, you have an emergency fund. Oh, it only has enough to last you for one single day.

And you want to know a secret? They haven’t even gotten to the actual problem. These are all subtle psychological techniques they use to avoid the reality of the problem. I suspect most of this is unconscious. They came on this podcast expecting me to tell them to cut back on festivals, maybe do some whiz bang Microsoft Excel calculations, and then they could go back to living their life. But the truth is that won’t work. I’m going to start moving us in the direction of the real problem. Remember, I’ve seen their conscious spending plan before they came on the call. 

[Interview] 

Ramit Sethi:  [00:31:10] So let’s talk about where your money is going. You were both renting.

Eric:  [00:31:19] We rented for a year.

Ramit Sethi:  [00:31:20] And what was life like that year that you rented?

Eric:  [00:31:23] There was COVID, so not much to do. But between us it was great. We were actually saving some money. 

Ramit Sethi:  [00:31:31] And then what happened? You decided to buy a condo. Walk me through that discussion. 

Eric:  [00:31:37] So my best friend’s parents are real estate agents. They’re very big proponents of purchasing a place.

Ramit Sethi:  [00:31:45] No, no, no, no. 

Eric:  [00:31:51] And I agreed with them. I think I still agree with them. And we basically were talking and I’m like, it seems like the time could be now and this would be a great opportunity. And– you’re going to love this one. We thought it’d be a forced way to save money because we thought, we’re going to take this and then we’re going to save because of this.

Elena:  [00:32:21] There were a few factors for us purchasing a condo. And I don’t know if you’re familiar with the Toronto real estate market, but it’s nearly impossible for young couples to purchase a place. And we essentially had 90 days from that pre approval to purchase a place. Otherwise, we would have to reapply under a higher rate, which means we would get 60,000 less in our mortgage. 

And we had the down payment. Our parents very happily helped us with it. So we just felt like it was now or never. Condo prices were going up. And we found this one condo we were absolutely in love with and for the right price. We didn’t want to keep paying somebody else’s mortgage. We figured if we had the downpayment, the mortgage itself wouldn’t be that much different from our rent. 

I think we just didn’t look in depth enough about all these additional costs, like the tax of $300 a month, the maintenance fee, that’s another $600 a month, all of these other fees that go along with it. So where our rent was 23 and our mortgage is 26, all these extra costs, make it that we’re paying close to like $3,500 a month on non-negotiable things. So that’s why we purchased a condo when we did. 

Ramit Sethi:  [00:33:37] And so you bought this place. And how much more expensive is it per month than you thought it would be? 

Elena:  [00:33:48] $1,500. 

Ramit Sethi:  [00:33:49] 1,500. And if we factor in some repairs and we amortize that out it’s probably more like 2,000 a month.

Elena:  [00:33:56] Yes. 

Ramit Sethi:  [00:33:58] That’s 24,000 a year out of 160,000 gross.

Elena:  [00:34:04] That’s like five music festivals we can go to comfortably.

Ramit Sethi:  [00:34:09] Let me see if I have this right. Hold on. I need to take a deep breath just to gather myself. So you two were renting. You were making good money. You had good money. You were living life. And then you decided, “I don’t want to pay somebody’s mortgage. And a house is good for savings. And realtors are telling me that it’s a good idea to buy.” Do I have this right so far? 

Elena:  [00:34:50] Yeah. 

Ramit Sethi:  [00:34:51] I’m not done yet. Just do I have it right so far? 

Eric:  [00:34:54] So far, yeah. 

Elena:  [00:34:55] Yeah. 

Ramit Sethi:  [00:34:56] So then you went out and you got the stress test and then they said, you have 90 days. So you again, went back to that old chestnut, I don’t want to pay somebody’s mortgage. And so you went out and bought it at quote, the “right price.” And you just neglected a couple of calculations, and now you’re paying over almost $1,500 more per month than you were renting. Did I get that right?

Eric:  [00:35:28] Yes. 

Elena:  [00:35:29] 100% correct.

Eric:  [00:35:30] I want to be clear and honest on the down payment parts. It was all our parents. We put like $1,000. 

Ramit Sethi:  [00:35:38] How much did they put down? 

Eric:  [00:35:41] 30,000 from Elena’s parents, 25,000 from my parents.

Ramit Sethi:  [00:35:46] So you guys could not afford any down payment?

Elena:  [00:35:50] No. 

Eric:  [00:35:51] Not for a condo, no. 

Ramit Sethi:  [00:35:53] Did that concern you? 

Eric:  [00:35:59] Not at the moment.

Ramit Sethi:  [00:36:03] You know what? I love honest answers like that, “No, actually it did not concern us at the moment. Okay, fair enough. That’s honest.

Eric:  [00:36:11] I’m not going to lie to. 

Ramit Sethi:  [00:36:14] I appreciate that. Listen closely because I’m about to walk you through some math here. When you buy a house, it takes years to start building any meaningful amount of equity. Now you can see this if you go to a mortgage calculator and open up the amortization table. Don’t bother asking your neighborhood Tik Tok financial expert what amortization means because they’ve never even heard that word. 

So let me walk you through an example. Let’s say you have a $500,000 mortgage. You have a 5.5% interest rate and a 30-year loan. Your mortgage payment would be roughly 2,800 bucks a month. Again, $500,000 mortgage, 30 years, 5.5% interest rate, your monthly payment is around $2,800 a month. Of that payment, $550 goes to the principal and $2,200 goes to interest. Do you know how long it takes until you start paying more towards your mortgage versus paying more interest? October 2039, 17 years from now.

Do you understand that? In the first year, you’re paying 75% of your money to interest. And some of you guys are so brainwashed. You’re worried about paying someone else’s mortgage, but you never stop to run a single calculation, which would tell you you’re paying the bank’s interest. You want to know how much? By the time you’re finished paying that loan, you will have paid $500,000 for the house and $522,000 in interest. 

Now you understand why I get so mad when people run around town saying all these dumb little phrases, “I don’t want to pay my landlord’s mortgage. I want to build equity.” Learn to run one simple calculation before you make the biggest purchase of your life. And has anything broken in your condo yet?

Eric:  [00:38:19] No. 

Elena:  [00:38:21] No. 

Ramit Sethi:  [00:38:22] When it does, how are you going to pay for that? 

Eric:  [00:38:25] I still got some savings. 

Ramit Sethi:  [00:38:27] Okay. All right. This is another thing, maintenance. A good guideline is to put aside 1% of your total purchase price for maintenance. You might not have maintenance the first year, you might not even have it the second year, but the third year, you might have something big break. Eventually you’re going to need to pay for a roof repair. Or if you’re in a condo, you might have your fees go up. This is money that should be set aside in advance. 

Now, let’s go back to this concept of paying someone’s mortgage. I just have a question for you. Elena, when was the last time you ate at a restaurant?

Elena:  [00:39:09] Yesterday.

Ramit Sethi:  [00:39:10] Don’t look guilty. I don’t mind that you ate at a restaurant. What restaurant was it? What type of food?

Elena:  [00:39:15] It was like an all-you-can-eat sushi. 

Ramit Sethi:  [00:39:20] And was it good? 

Elena:  [00:39:22] Actually I was telling Eric today some of the best I’ve ever had was that. 

Ramit Sethi:  [00:39:27] Oh, fantastic. Do you want to plug them? I don’t mind. 

Elena:  [00:39:30] No, I don’t know how to pronounce the names, to be honest. I don’t want to offend anyone.

Ramit Sethi:  [00:39:35] Okay, fair enough. Fair enough. So how much did this sushi meal cost you?

Elena:  [00:39:41] It cost me $60 after tip.

[Narration]

Ramit Sethi:  [00:39:44] I wish you could have seen Elena’s face right here. She correctly knew that I was setting a trap, but she thought I was going to judge her for eating out at a restaurant. I don’t care how much she paid for sushi. That’s just another example of how Eric and Elena are focused on the wrong thing. They’re so focused on thinking small that they are ignoring the humongous problem that’s right in front of them. Listen in as they talk about this. 

[Interview] 

You think that I’m going to come down on you for paying 60 bucks for sushi, don’t you, Elena? 

Elena:  [00:40:18] Yes.

Ramit Sethi:  [00:40:19] I’m not. I don’t care how much you spend on your sushi. But I just have one question for you. Didn’t you feel terrible that you were paying the sushi owners mortgage? 

Elena:  [00:40:33] Whoa. Wow. 

Ramit Sethi:  [00:40:38] I want to describe what’s happening right now. Elena is literally rotating looking left and right. She looks completely in disbelief. Eric has his hand over his mouth. And he’s looking up at the sky and now he’s rubbing his forehead like, holy shit. The two of you look completely bewildered right now. Elena, talk to me.

Elena:  [00:40:59] I never thought about it like that at all. But that’s crazy. It’s true. It’s true. How are they paying for the rent for the restaurant if it’s not me coming with my five girlfriends to pay $60 pays for the sushi? I never thought about it like that. 

Ramit Sethi:  [00:41:15] Don’t you feel guilty? Don’t you feel horrible that you paid their mortgage? No?

Elena:  [00:41:15] For them?

Ramit Sethi:  [00:41:15] No, why is that? 

Elena:  [00:41:16] So why would I feel guilty when renting and paying someone else’s mortgage if I’m more than willing to go to a sushi restaurant and pay for those?

Ramit Sethi:  [00:41:33] So interesting. Eric, what about you? 

Eric:  [00:41:36] I’m thinking about the gym owner where I go to. We’re helping him 200 bucks a month for his rent.

Ramit Sethi:  [00:41:48] You got to feel terrible about that, right? Why would you pay a gym owner’s mortgage? This phrase, “don’t pay your landlord’s mortgage” is one of the most common phrases when people talk about renting versus buying. But let’s break it down. I think it’s actually designed to make you feel resentful, angry, and indignant. Why should I pay someone else’s mortgage? She’s getting rich off of me. Why shouldn’t I get rich? I think I’ll just buy my own place. The problem is that logic is very stupid. Why don’t you feel guilty about paying your local restaurant owner’s mortgage or the carwash down the street? Why is this argument only applied to real estate?

The answer is that this phrase has been engineered so that you feel resentful about your rent and then you go buy a house with all its transaction fees. Guess who profits. The very people who spread that phrase, the mortgage industry, the banking industry, even your nimby parents who want you to buy houses so that demand goes up, their house value goes up, and then they can turn into nimbies and restrict supply. That’s for another conversation. When you go to a restaurant, you’re paying for food and service. When you pay rent, you’re paying for a roof over your head. It is a simple trade of money for services. Do not let the real estate industry fool you. 

The two of you have been bamboozled. You got taken advantage of. You got ripped off. You got propagandered. And you know who did it? Who did it? Think back now. Who told you that you were failing at life by renting? Who told you? 

Eric:  [00:43:46] Real estate agents. 

Elena:  [00:43:47] Honestly, a lot of people. My parents were not excited that we were renting and paying someone else’s mortgage.

Ramit Sethi:  [00:43:56] Who else? Feel free to name full names. We’ll find them. Well, double put their piles. No, don’t do that. Who else? There were other people in your life. 

Eric:  [00:44:05] My best friend. 

Ramit Sethi:  [00:44:06] What did they say?

Eric:  [00:44:10] It’s impossible to pay someone’s mortgage. It’s ridiculous.

Ramit Sethi:  [00:44:12] It’s ridiculous. It’s outrageous. Who else?

Elena:  [00:44:17] We had friends that recently purchased a pre-construction. They said if you had the money for a down payment, you might as well purchase something instead of paying rent.

Ramit Sethi:  [00:44:25] You might as well because you’re going to build equity. And how about walking around Toronto? Were there any signs perhaps that said something about property? Go ahead. Tell me what they said.

Elena:  [00:44:41] We live in downtown Toronto. We live in a place which is a bunch of young adults trying to pay rent and there’s always signs there of, “New builds coming in this area. Purchase now. Low 500, low 800.” It kind of gets to you. 

Ramit Sethi:  [00:45:00] What is the implication? When you see it what do you think? 

Elena:  [00:45:05] We think we can afford it. It’s so easy to look at the sign. If we’re the demographic that this sign is meant for, then why would we not look into the opportunity?

Ramit Sethi:  [00:45:15] The implication is, if you rent you are a loser. I recently posted a billboard that I saw at LAX, which said, bosses don’t rent. I posted it to Instagram. And I showed people the kind of propaganda that is so present in our culture. It’s actually become an invisible cultural script. By the way, I’m a multimillionaire boss who actually does rent. Now, I’m going to press Eric and Elena on their logic a little more, so they start to understand what’s really going on here. Their financial problems are not caused by her eating out at all-you-can-eat sushi. So perhaps this house may have turned out to be a great investment. So how do you get the money?

Elena:  [00:45:16] That’s a fantastic question.

Ramit Sethi:  [00:46:12] I don’t know if the realtors told you that. How come they only talked about what a great investment is? They never actually told you how to get the money.

Eric:  [00:46:19] Well, eventually, you’ll be able to take some equity out and then rent it out to someone and then you can buy another one.

Ramit Sethi:  [00:46:28] Oh, right. We’re already in debt. We’re losing money. And so let’s buy another one. Yeah, that’s good. That could work, but it’s a different mindset and philosophy than your primary reasonings. How much taxes will you have to pay when you sell and fees, transaction fees, all that?

Elena:  [00:46:46] So when we purchased we had like 18,000 in fees that we had to pay. And then we’re, of course, aware that when we sell we have to pay the realtors and the seller, and it’s about like 25% of I don’t know how much. Is it 25%? I don’t even know how much it is, which shows like we shouldn’t have really gone into this.

[Narration]

Ramit Sethi:  [00:47:07] This is why I constantly tell you to run the numbers. Buying a house can make financial sense. You can even buy a house for non-financial reasons. But you absolutely must understand the numbers behind the biggest purchase of your life. I hear so many people saying, my grandma bought a house in 1970 for $100,000. She just sold it for $900,000. She made $800,000. 

Listen closely, because I’m not going to tell granny because it would destroy her and she only has a few years left on this earth. But the fact of the matter is that house probably was not really a great investment. First of all, she did not actually make $800,000 because granny forgot to factor in all the expenses she incurred over those 30, 40, 50 years, including closing costs, interest, taxes, and maintenance. And as you heard earlier today, interest alone can more than double the price of the house. Next, even if you factor in leverage, and the cost of rent she would have paid elsewhere, it’s likely that she still made less than you could make with a simple index fund.

Oh, and how about this one? How is she supposed to get the money from it? You’re telling me granny wants to sell her house in the town she’s lived in for 50 years and suddenly move to a worse part of the country where she knows no one else and she’s going to downsize even though housing is now even more expensive? What kind of fucking investment is this? And finally, granny still think she made a great investment. She literally believe she made $800,000. I have seen more sophisticated math with a bunch of rats in New York City, dividing up a piece of pizza. Don’t ever come to me with this horrible example. 

[Interview]

Ramit Sethi:  [00:48:58] So now that we’ve just had this discussion, how are you both feeling about this condo?

Elena:  [00:49:08] A little embarrassed. 

Ramit Sethi:  [00:49:10] Tell me more.

Eric:  [00:49:17] It’s a little embarrassing for me because I’ve been following you for a while and I know your stance on homeownership. And I remember looking up, should you own a home? Does it make sense to own a home? Is it better if you just rent instead and invest your money and all those other things and rent forever, all those things? And I just look at those things and ignore them in the moment. I looked at them and I was like, well, I guess my situation is okay. And we can go ahead and purchase this home and we’ll just make our wealth and live our rich life by owning a condo first and then go from there.

Ramit Sethi:  [00:50:07] By the way, what is my advice about buying versus renting?

Elena:  [00:50:11] To rent. 

Ramit Sethi:  [00:50:12] That’s not my advice.

Eric:  [00:50:15] It’s buy if it is something you truly, truly want and are able to have less than 55% of your after-tax income. 

Ramit Sethi:  [00:50:28] That’s closer. My advice is to run the numbers. And that advice, had you followed it would be, let’s calculate how much our HOA and our taxes and transaction fees and realtor all that stuff will be and make sure that it fits within our conscious spending plan. What are you hearing as you hear this, Eric?

Eric:  [00:50:53] We ran the numbers wrongly. We did it wrong. 

Ramit Sethi:  [00:51:01] How did you run the numbers?

Eric:  [00:51:03] We sat down together on my laptop and we put some numbers in Excel and were like, well, yeah, at the current income level, we can basically make it paycheck to paycheck. We just won’t be saving money for a while. But that’s okay because we’ll build equity. Eventually I’ll get a promotion, and then we’ll have more money.  

Ramit Sethi:  [00:51:29] Can I ask you a question? When you sat down for that conversation to run the numbers, were you trying to prove that you could buy the house? Were you trying to convince each other? 

Eric:  [00:51:42] Yes. 

Ramit Sethi:  [00:51:43] Yeah, that’s not running the numbers. That’s just using Excel to tell you what you want it to tell you. When you run the numbers, here are some good guidelines. Your total housing costs ideally should not exceed 28% of your gross monthly income. Total means you include taxes, interest, insurance, furniture, maintenance, even for the roof that might break 12 years from now. A simple guideline for that maintenance is 1% of your purchase price every year. Again, that total housing costs should be less than 28% of your gross. 

And total housing costs plus total debt load should be lower than 36%. That’s the 28/36 rule. When you factor those in, you should also be able to save 5 to 10% of your take home pay, and invest roughly 10% of your take home pay. All of this can sound overwhelming. So I have a template to make this easy for you. Go to iwt.com/episode49 to get the conscious spending plan. 

And remember, you can tweak these numbers if you want, especially if you live in a high cost of living area. But these are guidelines, they’re conservative, and they will prevent you from getting in situations like Eric and Elena were losing money every single month. And one more thing, I have a program called the rich life system, which helps you take all the stuff you’re spending money on and put it into a system. This will help you make sure that you are saving enough every month, that you are investing enough every month. It will help you focus on spending money guilt free. So if you’ve always wondered, why can’t I seem to take a vacation, how come I can’t seem to get ahead, rich life system will help you do that. Go to iwt.com/rich so you can start using this system with your money today. 

Can I tell you something? Elena, it’s interesting that in our conversation today and in the pre interview that you did with my colleague, you spent a lot of time talking about festivals a lot. “Oh my gosh, I love our festivals and I don’t want to stop my festivals.” And even when we started talking about sushi, you had this embarrassed look like you were so nervous about me talking about sushi. But do you know what? Those are not actually the real problem here.

Elena:  [00:54:15] I’m starting to learn that.

Ramit Sethi:  [00:54:18] It’s not sushi and it’s not even the festivals. You’ve been playing small and you’ve been focusing on the wrong thing. You can stop going to sushi for the rest of the year. It’s not going to change your finances. And you can even cut back on 50% of your festivals which I doubt either of you are going to actually do, and it would not change your financial life. Let me just give you some context. In my conscious spending plan, you both filled it out. And for fixed costs, I recommend 50 to 60% of take home pay. Do you know how much you’re spending on your fixed costs right now? 

Elena:  [00:54:55] Over 80. 

Ramit Sethi:  [00:54:56] 88%. It is way too high. It is crystal clear why you can’t afford to save, to invest or even to go on some of the stuff that you want to go on.

[Narration]

This is the actual problem, their housing costs, not the sushi, not the festivals, not even the $722 a month that they’re paying for their transportation cost, it is their housing cost. What’s worse, they’re not putting anything aside for what happens when something in their condo inevitably breaks. That is a disastrous scenario. There’s something I want to highlight for you. Eric and Elena have an especially interesting situation. Remember how I gave you that guideline of spending less than 28% of your gross income on total housing costs? They actually hit that number exactly. They’re at 28.6%. 

The problem is they also have other high expenses, including eating out festivals and a car payment. But here’s the reality, they are not going to change those things. No matter what I tell them, they are not going to cut back on festivals. It doesn’t matter that I showed them they’re going to run out of money in two years. It doesn’t matter that they’re saving nothing. They are not going to stop going to those festivals because they love them. That’s reality. And that’s fine with me. I’ll deal with reality. Reality says it’s easier to make one big change, like rethinking their condo ownership than lots of medium sized changes such as cutting back on lattes and eating out and getting a cheaper car. Realistically, do you think they would actually do that? No. They even told me that. So my only chance at helping them is to focus on the condo.

[Interview]

So you mentioned that you bought this condo because you believed it would be forced savings for you. In reality, what’s happened? 

Elena:  [00:57:12] We’re getting fucked.

Ramit Sethi:  [00:57:18] You know what? I started a while ago. I was like, we got to be honest in our rich life, honest with ourselves. Now we’re being honest. All right, look, we can laugh. All right, it doesn’t all have to be dreary. Yeah, there’s some shit. We got to figure this out. But at least we’re being honest about what’s going on here. So where do you both want to go from here?

Elena:  [00:57:41] I think we really thought at the beginning that worst case, we’re going to have a lifestyle change. And I think we’ve come to realize we are in the worst case right now. So we need some kind of change to happen, either, where we can, remove the personal training, remove the gym memberships. We need to do something. And I think we both thought we weren’t in a spot where we had to action something urgently, but I think you’re making at least me realize that we have to get our shit together and be adults.

[Narration]

Ramit Sethi:  [00:58:18] Notice that Elena is still thinking small. She thinks making incremental changes will fix this. But the fact is, if that would have helped, they would have done it already. Deep down, Elena is still hiding from the reality of what actually needs to be done. Try to think about her psychology. What do you think is causing her to focus on tiny things like gym memberships? And while you think about that, let’s hear from Eric.

[Interview]

Eric:  [00:58:50] I’m wondering if we have to sell the condo. I’m wondering if we need to take this as a lesson learned as we got taken by the wave and take it as like it happened and get out of it and then restart, but restart at least from a decent position, not restart in the red position.

Ramit Sethi:  [00:59:14] Why don’t you two talk to each other? I’ll just listen.

Elena:  [00:59:19] I don’t think we’re going to sell the condo. As much as you don’t want to hear, we honestly we both went into this call being like, we support our condo decision. This was the right thing for us. And I think we’ve definitely realized some things, but I don’t think the solution is necessarily to sell the condo. You really think we should try to sell this condo?

Eric:  [00:59:40] I mean, you’ve heard what he said before, right? So you can stop going to sushi, you can cut out 50% of your music festivals, which I doubt that we will, I just don’t know if us cutting out all of these expenses and I hate– I think I’d rather take the hits and take the embarrassment of running with this and being taken by the way that we can buy this condo, maybe it’s worth it to us to have the shorter term, harsh pain of like, we’ll have to face the parents and our friend’s parents and admit that we’ve made the mistake. There’ll be consequences and whatnot for this, but I almost feel like that would be a much quicker, even not less painful, but quicker solution to get to a restart. 

Elena:  [01:00:43] I mean, I’m a little speechless. I feel like this was something we were so confident about. And it was a huge step we took together for our future. It’s all hard to hear. I love this place. We just did so much for it. I see where you’re coming from, I completely see it. It’s logical. My heart just doesn’t want to let go of it. No. And then I also think like, eventually, we will need to buy something. 

We’re going to have kids or whatever it is. And I fear that the prices are just going to keep going up. And that’s honestly my worry is are we even going to be able to afford something later. If our two-bedroom condo has already gone up to 100,000 when we purchased that, I don’t even want to imagine what it would be like to purchase in three years, or four years, or five years, whatever it is. 

Ramit Sethi:  [01:01:42] Elena. 

Elena:  [00:1:01:43] It worries me a little bit.

Ramit Sethi:  [01:01:45] Elena, you can’t afford this condo right now. I understand everything you said. And I think beyond the math and the logic, the thing is the two of you did it together. You built this together. You went through the process. You had that meeting and you talked to your parents. It’s almost like tearing something down that the two of you build together. That’s hard. I’m not going to tell you, you have to do it. It’s your money. You have to make a decision for yourself. Again, I’m not telling you, you have to sell. But I’m telling you, you’re going to go broke in two years. 

[Narration]

Isn’t this fascinating? First, Eric and Elena came to me confident. We can’t find advice for people like us, people who are doing well and want to do better. Then we quickly discovered that they’re making $160,000 a year, and they’re living paycheck to paycheck. And what’s worse, they’re actually losing money every single month. They’re two years away from being broke. Then we spent a lot of time talking about sushi and all these tiny expenses that are not really the main problem. They spend a lot on festivals, but they are not going to change it. Fine. 

And finally, we started talking about their condo. And you can almost hear the floodgates open. The condo represents more than just a roof. The condo represents almost a religious belief on what success should be for the two of them. The problem is they can’t afford it. So what are they going to do? In part 2 of this episode, you will hear them confront the reality of what they are actually facing. And Eric and Elena will finally get real. 

If you want to download your own copy of the conscious spending plan that they use, go to iwt.com/episode49. And I look forward to seeing you next week for part 2 of my conversation with Eric and Elena. 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.