169. “We flew to Lisbon for Taylor Swift, but my $5 beer is the problem?”
01:14:08 Share

In today's conversation, there's a distance between us and our communication. We have very different relationship with money. I like security. He's more entrepreneurial. Meet Annie and Emery. Annie is 39. She's an optimizer. How many cards you have? Too many. I don't even know. It did pay for our plane tickets, which is

Nice. Emery is 43 and he's a dreamer. I just wanted to get out there and build something. Every time I tried to get something going, I just felt like I had the rug pulled out from underneath me. Their imbalance in earning is not letting them dream about a shared rich life. It's definitely been challenging knowing that I'm the sole person providing for the family. I don't feel like I'm contributing the way I don't want to be a stay at home dad. There's this feeling of unfairness. He's been in media five years and it hasn't really panned out. What if I don't want to be the breadwinner?

They have never seriously talked about what they want their money to do. And you have rental properties as well. How many properties? An Airbnb and a regular rental. It's a lot of maintenance. How much income do they produce every month? We break even. I didn't know it broke even. I thought we were earning $40,000 a year.

They've been fighting about these properties for five years. For me, that's our biggest point of tension. I want it gone so bad. The more assets you have, the better it's going to grow. Can they untangle their complicated financial lives and build a rich life together? I can't control how much he makes. I just have to let him do his thing. We're not on the same page at all. Let's find out. We went on vacation. We have a budget of $1,000.

say $2,000. But when we get there, it just felt like we're not really saving a lot of money and we would go out to eat and I'm not a big drinker. So he would go out and have beers and cocktails, which is fine, but it does, it did add up and we came home and it's

I mean, we spent double what we were hoping for because we did go from city to city. We also eat out pretty often. That's one of our big things is we do splurge on food. Okay. Where'd you go on vacation? Went to Paris and went all the way down to Lisbon by train. Nice. Okay. Yes. So you both went to Paris, Lisbon. How long was the trip?

in order for this budget to be 2,000 bucks? - It was 10 days, 11 days. - Okay, is this a common recurrence? Like you pick a number and then you end up spending more than you had planned? - We actually generally don't even pick a number. We don't really save for our vacation. That's part of the problem. We usually spend as we go.

We're pretty frugal. I usually book hotels last minute, so it's way discounted. And we take trains. We don't really spend a lot of money in hotels, so...

I thought that it was a reasonable budget, but it would probably be hard to stay within those confines. But I figured, let's give it a shot. If nothing else, it was a challenge. And let's see if we can do it. Once we get there, our commitment to the challenge tended to fade at times on both ends.

We were there for a Taylor Swift concert. That's the reason why we went to Lisbon to begin with. And so the trip wasn't really in the budget anyway. But we had Taylor Swift tickets, so we're like, well, I guess we're going to Europe. But I think she brought up the point of the beer, right?

So we'd order a meal, which you get a table full of fresh seafood for like $60 in Lisbon. It's amazing. And then I'd order a $5 beer, and the $5 beer was the thing that would later be mentioned. For me, that's one of the themes of why we...

reached out to you on the show from my end was there's like an inconsistency in terms of when we choose to feel tension and express tension to each other. And sometimes I just don't know when it's going to happen. And it kind of comes out of nowhere. And it's like, okay, I didn't know that that beer, but, or it was that bottle of tequila we're buying for this party going to be a problem. Or is this, I don't, I just, sometimes I don't know. All right. What's the problem? Well, now we're over budget. I don't know where you were in Paris and stuff, but.

Okay. I mean, I will say if you have a $2,000 budget for 10 days, it's not college backpacking prices, but it's not two working adults who are going out quote all day. Right? So generally on a monthly basis, Emory's income have been pretty low. And when we do go on vacation or if we do go to these things, we don't have a lot of flexibility to,

when it comes to those things, just because he's still trying to get his business going. But I, I still have to kind of see that and see where that goes. It's been a few years. How many years? At least four years. That's four years of Emory earning a relatively low income. Is that what you're saying? Yes. Yes. Is that a source of tension? Yes. Okay.

I mean, I feel like that's probably the highest source of tension when we do talk about finances. I guess it's not the first time he tried building his business. So I do have some hesitancy when it comes to that. What do you think is the main challenge when it comes to money in your relationship, Annie? If you had to boil it down to a sentence.

I think we have a different approach when it comes to money. I am more financially motivated and don't get me wrong. Emery works really hard. We do have rental properties as well. So he does work on that and he does take on more of the household chores and everything. And the kids, we do have two smaller kids. So he does take on a lot more of that responsibility and,

But definitely the difference in income has been a challenge. I do have friends where both parents are working or in a professional environment and they seem to still be doing well and still being able to take care of the household. It's definitely been challenging for me knowing that I'm the sole parent

the sole person providing for the family. And I really wish that Emory could as well. I know he does it in other ways, but not financially. So you want him to be more of a financial contributor? Correct. Okay. And how long have you wanted this? Forever. Since we met. You've been together 18 years? Yes.

What do you think are the issues so far? Here's what I notice. An unrealistic amount of money set aside for an international trip. The tail wagging the dog, meaning they set an unrealistic amount and then they say we went over budget.

One person who earns a quote, low income and maybe some gender dynamics, although I can't know for sure yet. Let me find out more by asking about Emery's job. I started getting into the video production, which is what I, the business that I'm in now. Before that I sold insurance. I sold real estate. I did okay at both of those. My income was closer to hers, not as consistent. So it was always this kind of roller coaster where I didn't feel that I

Because mine wasn't as consistent, I didn't feel like mine was valued as much. It was only really brought up when it was lower. So after the ups and downs, I said, you know, can I go back to school? Went back to school, got my master's in multimedia journalism and had a job going and, you know, picking up contracted jobs and then COVID hit.

shut down all the contracts. Nobody was hiring for anything in my field and our kids were out of school. So I had to

be the one to stay home. Her job was consistent. She could work remote. Of course, it hit my ego a bit. I like spending valuable time with the kids, but I was just always really frustrated. I just wanted to get out there and build something. And over the next few years, she sometimes thinks of it as an excuse. I've been making the same excuse for years, but there would be incidences where I would get something going and then my son's school would call.

Somebody's got COVID, we're shutting down for two weeks. Okay, all my appointments had to cancel. I just, over the few years, it's just every time I try to get something going, something that looked like momentum, it just, I just felt like I had the rug pulled out from underneath me left and right. We'll be right back after this short break.

If you've been listening, you know that I recommend your fixed costs should be between 50 to 60% of your take-home pay. And often when I talk to couples who are stressed about money, it's because their fixed costs are too high. 70%, 84%, one couple even had 125% of their take-home pay going to monthly fixed costs.

Now, if you feel like you make good money, but you're not sure where it all goes, you probably need to bring your fixed costs down. And one of the biggest no-brainers is with your wireless bill. With Mint Mobile, it's easy to get wireless for $15 a month with the purchase of a three-month plan. And my team even tested it out. It's

It's super easy. Go on their website, pick your plan, activate it in minutes, including using your existing number and phone. To get started, go to mintmobile.com slash Ramit. There you'll see that right now, all three-month plans are only $15 a month, including the unlimited plan. All plans come with high-speed data and unlimited talk and text delivered on the nation's largest 5G network. Find out how easy it is to switch to Mint Mobile and get $3.

Thank you.

$45 upfront payment required, equivalent to $15 per month. New customers on first three-month plan only. Speed slower above 40 gigabytes on unlimited plan. Additional taxes, fees, and restrictions apply. See Mint Mobile for details. ♪

I know a lot of people in the months leading up to most people's wedding, what are they spending their time on? Seating charts, planning their bachelor, bachelorette party, deciding what type of floral arrangement you're going to have or pot stickers at your dinner. You know what I was doing? Scouring the web for cooling vests that I could wear under my heavy wedding outfit. I sweat a lot. My wedding was in July. I knew it was going to be hot and I knew I was not trying to drown in my own sweat while being photographed.

If you're like me and you sweat a lot, check out this episode's sponsor, Element. Element is a zero sugar electrolyte drink mix.

Every stick pack delivers a meaningful dose of electrolytes free of sugar, artificial colors, or other weird ingredients. They're the exclusive hydration partners to Team USA Weightlifting and many Olympic athletes. Plus, you can now enjoy their new element sparkling, the same zero sugar electrolyte formulation, now in a 16 ounce can of sparkling water in four tasty flavors.

Get your free Element sample pack with any drink mix or Element sparkling purchase at drinkelement.com slash Ramit. And try it risk-free. If you don't like it, they will give you your money back, no questions asked. This deal is only available through my link at drinkelement.com slash Ramit, R-A-M-I-T. Again, drinkelement.com slash Ramit. Now, back to the show. Annie...

Any reactions to hearing Emery's description of his career path? I've heard it before. So it's not new to me. I agree with what he was saying. Our biggest tensions when we do have tension is, okay, if you have all of these reasons why you're not able to make more income, then

like do something else or get a w-2 job like we don't need you don't need to go out there and do it on your own to me from where we're at right now things are so complicated that i just want to not be so complicated for a little bit so that i could just focus in on like a few things including the time with the children and quality of life with the kids and not so many things

So far, it seems like Emery is a dreamer. A dreamer is someone who believes success is right around the corner with their next gig or their next deal. Dreamers tend to jump from one thing to another, rarely sticking with the hard part of developing excellence. And dreamers are extremely hard to be in relationships with. But interestingly, there's another clue I don't quite yet understand. It turns out that Annie and Emery both, not just Emery,

tried to create a documentary, which has not yet made any money. And they tell me that they have plans for a deep dive travel blog equipped with high end production, which is going to take a major time investment. Again, very unclear ROI. And this is coming from both of them, not just Emory. Emory then shares something with me that adds a lot more nuance to this discussion. And you have rental properties as well. How many properties?

two other properties. Are they co-owned by both of you or by one of you? Both of us. How much income do they produce every month? Honestly, we break even. That can't be. Real estate is only about profit. If you're breaking even, you just raise your rent 25%. No problem, right?

Well, so one's an Airbnb and the other one is a regular rental. We have old houses, so it does. It's a lot of maintenance, so it doesn't feel like we're making a lot of money. And then, Emery, you. I didn't know it broke even. No. What did you think? I thought we were earning $40,000 a year. That's a big difference.

I've had a friend of mine who's an investor as well as asked me the same question. And I said, I think it's thinking about 40,000 a year. Are you the primary property manager for these two properties? Yes. Okay. So another thing, you get a job going and then all of a sudden you've got to take two weeks off from that potential job, whether it's documentary editing or whatever, to go deal with broken pipes that froze over during the winter or to deal with contractors and to go, you know, why do you guys have these properties? Yeah.

We lived in them and then we moved. Yeah, we lived in both of them. We moved out of it. Why not sell them? Out of curiosity. I'm not saying right or wrong, just why not sell them? For investment purposes, like it's increased in value since we've bought them and we're able to rent them out. You're able to rent them out for a break even. Yeah.

I mean, long term, it's not breakeven. But short term, it feels like we're just we're bringing you in every month. But breakeven is one thing. But also Emery's point is valid, right? If Emery is the property manager and then he can't go to work or he can't do other things because the demands of the property, that itself has its own cost, right? Yes. Okay. Yeah.

So is it worth it? I want the, I want, especially the one I want it gone so bad. All right. You want to sell it. And Annie, what is your perspective on that? I feel like we'll have tax burdens if we sell it. Aren't you an accountant?

Yes. Haven't you heard the phrase, don't let the tax tail wag the dog? Come on. I know you have that hung up on your computer screen, right? Okay, so you have a different perspective. You want to keep them. Emery wants to sell them. That's a pretty big source of tension in the relationship, I would imagine. For me, that's our biggest point of tension. Hmm.

The one is three Airbnb units. Okay. So it's a constant management of that. So that's kind of part of the thing, right? Is you have to have it up to a certain standard, have certain things, um,

purchased all the time and she's managing managers and then turnover of Airbnb and are the guests happy and those kinds of things as well. So, you know, we'll be on vacation sitting at a in Cancun at a resort on having a cocktail and we will get

endless Airbnb messages. She'll spend hours going back and forth from Airbnb to the guest solving problems because this guest wasn't happy about this and that. It's a huge time sucks too. I do know that it takes away from his work or him trying to work. But to me, it does. It's not like he goes out there all the time. I feel like it does. It's a few hours of

month, but sometimes we don't go out there at all. I think on average, it's not a lot of time to take care of the houses. But they're neglected. So if you go over to the house at any given moment, there's weeds growing up everywhere. There's branches falling off of trees. There's things, moss growing on the roof. There's things where I should be over there more.

and if I'm able to be over there more and treat it like, let's say, a part-time job, 20 hours a week over there, then I think we could get it to a point where we're maybe charging more per unit, but it just doesn't seem worth it at the end of the day. And she says a couple hours a week, but it could be

you know like this winter we had some pipes break that was unexpected that caused a lot of damage we had to be over there for a for a long time it's like when my son's school would close closed down for covid that i do we didn't expect that coming and it's not just like a day it's two weeks you know until everybody's tested negative for covid for this it's when all the water stops leaking out of the house and all the sheet rocks put back up and

So it's, I realized we need a job that needs to be done. It's not just if we don't want to hire that out to somebody else and I have to take care of it or I, we choose for me to take care of it. There's usually like maybe a few hundred dollars for the new tools that need to be purchased for that. Another couple hundred dollars for the supplies and a couple other things. So we just, we kind of out of nowhere, we just spent like $700, $800 on supplies and tools for this new project.

average it out, I'm probably over there five to six hours a week. But that could be 50 hours one week and one hour the next week. So you're spending more on your properties than you probably think. Okay, congratulations. You're like every single American. All right, fine. I'm with you. You're spending more than you think. Your return is probably lower than you think. Yes, that's real estate. Annie, any disagreement with Emery? I agree. How long have you two been disagreeing about these properties?

Five years. Did you notice how Emory thought they were making $40,000 a year with their properties? And it turns out they're breaking even. Was anyone else shocked by that? To tell you the truth, I wasn't.

And that's because people think that humans are like robots. Like we go to the grocery store, we pull out a calculator, carefully compare prices, then we make an informed purchase decision. That's the way we talk about money. We need to give you the information so you can make an informed decision. Guess what? That's not how people work. People are much more like amoebas who respond to light stimulus. We see something, it

It's shiny. We go towards it. Except that unlike Amoebas, our shiny light tends to be a seven seat SUV that Americans buy because they think they need it. What I'm saying is that very few people actually understand how their money works. Emery was off by $40,000 per year and that's on houses he hates.

Most of us operate far more on vibes than on numbers when it comes to our finances. Now, there's another issue I want to point out. They've been fighting about these properties for five years. Five years of fights, resentment, and worst of all, driving to the most godforsaken place on this planet. It's called Home Depot.

Listen, I don't mind things taking a while to change, but five years of major disagreement is way too long. When you are in a situation like this, get help. Hire a therapist, hire a coach, apply to talk to me, whatever. I want you to get impatient with your lives because five years is way too long to be stuck. All right. Now back to the conversation where I wanted to understand more about how they use money day to day. How many cards you have? Too many. How many?

I don't even know. What? Probably at least 10. But yeah. I mean, I don't use them all. I don't use them all. Wow. A lot of defensiveness here. I hadn't even finished my sentence. I don't use them all. I'm just saying. It's not like I use them all.

I use them for points. You use them. If you have 10 cards, I'm pretty sure you're using them, right? I use the credit cards. Usually we have like one or two that are our main cards. Okay. I try to optimize and I try to travel hack. I love optimizing. I need to squeeze every mile.

mile and sent from these credit card companies i mean it did pay for our trip it paid for our our plane tickets which is which is nice so you know what else could pay i don't mind first of all i don't mind credit card points i don't mind it okay um you know what else could pay for your uh flight your 225 000 joint income

I don't know where it goes. I want to simplify, but it's hard for me when I try to optimize things. Because you're an optimizer. I'm an optimizer too, but I'm a reformed optimizer. Okay. Like I love, I can sit in spreadsheets and I could calculate this stuff and run all these analyses. And when I'm 65, I'll have this much money and blah, blah, blah, 4%. But at a certain point, it actually becomes dysfunctional.

Because you spend more time talking about the future, planning about the future, worrying about what can go wrong than actually saying, hey, I built this amazing thing. It's working. It's good. I'm going to turn the page and actually enjoy my life. Have you encountered that feeling? No, I have not felt that feeling. Okay. Do you want to? Most optimizers do not. I definitely want the feeling for sure. Hold that thought. We'll be right back.

Watching someone use Microsoft Outlook is like watching a boomer give career advice. It's just so out of touch. No, I'm not going to walk around the mall and hand over my resume, and I'm not going to drag email into different folders. Why would I waste my time doing that? This is why I don't use Outlook. This is why I use Superhuman, because my fingers never leave the keyboard. I can process emails incredibly fast. This software saves me

hours a week. And it works with any email provider you use, including Outlook and Gmail. Now, recently I got access to their new Ask AI feature, and I have to tell you, it's actually pretty cool. I asked it, what were my flight details to New York?

What were my flight details for that Tokyo flight I took earlier this year? What's the name of that Asian restaurant I ate at in New York? It goes through your inbox and it will pull out the relevant information. Honestly, it's pretty good. Now, once in a while, it doesn't get things quite right, so you need to double check it. But I have to say, it's pretty impressive. If you want to buy back your time, Superhuman is a no-brainer. I spend my own money on Superhuman. I highly recommend it.

All podcast listeners get a free month of Superhuman right now. You can get started at superhuman.com slash Ramit. That's superhuman.com slash Ramit, R-A-M-I-T. I've been getting served these TikTok videos where two friends are sitting there and a song comes on and one of the friends starts singing and the other friend looks over and their jaw just completely drops. They didn't realize their friend could sing that well.

There's something magical about discovering a whole new layer of one of your friends or your partner, something that you didn't know about them. Now imagine you could do that by speaking Spanish or Italian.

That's where Babbel comes in. Babbel's 10-minute lessons are quick, handcrafted by over 200 language experts, ready to get you speaking your new language in three weeks. And they're designed by real people for having real conversations. Babbel focuses on conversation, so you're going to be able to talk wherever you want to go, including restaurants.

If I were to go to another country and I wanted to be able to ask for directions or order a drink in the native language, I would use Babbel to get me up to speed. Here's a special limited time deal for our listeners. Right now, get up to 60% off your Babbel subscription, but only for our listeners at babbel.com slash Ramit. Get up to 60% off babbel.com slash Ramit. Spelled B-A-B-B-E-L dot com slash Ramit. R-A-M-I-T. Rules and restrictions may apply.

Let's get back to the conversation. Would you be willing to not get as many points as you're currently getting? Look at that smile. She's like, what is he talking about? Would you be willing to sacrifice? I don't know, 200,000 points a year. I don't know how many points in order for a much simpler infrastructure. Yes, I do want to do that.

And even with our like guilt-free spending, like it would be nice. I know he mentions it would be nice if my guilt-free spending is on a debit card because I'm less likely to spend it if it's on a debit card versus a credit card. Your actual behavior with money is actually causing you negative ramifications. I just don't think you're making the connection. And the reason you're not making the connection is that you are so driven to

by optimizing everything. You're going to optimize yourself into total unhappiness. I agree.

it just feels like the points just appear. And, and I don't see her like spending a lot, like tons of her time managing it or anything. It almost feels like it's like a, like a natural little side hobby that she's doing. And it doesn't seem to, that part doesn't seem to bring her a lot of stress. Look at the biggest smile I've ever seen on Annie's face. Annie, let me ask you a question. Would you rather be complimented as being a great mother or a great points optimizer? Tell the truth. I mean, a great mother. Yeah.

Of course. Thank you, Emery. I appreciate that. I know, Annie, I can tell you appreciate that. Look, we got to have some fun with money anyway, okay? Sure, there are things to fix. It's not life or death, at least in your situation, right? You have money. I do think it's over-engineered if you want to fix it.

I think we have a good shot at being able to make some big changes here. But what I think is missing so far is actual individual guilt-free spending money. Am I reading that correctly? Yes.

Okay, I think I was wrong. I started off by saying I suspected that Emery was a dreamer and I got that clue from him jumping job to job, never really following through. Now I think it's a lot more complicated than that. He might be a dreamer, but I don't know that yet and I don't want to put a label and jump to conclusions. What I do know is that he has a house that's taking up an unpredictable and demanding amount of time for him, which makes it hard for him to focus on other things.

And then there's Annie who makes the bulk of the household income and she loves optimizing, but the optimizing has gone too far. Let's take a quick look at their numbers in the Conscious Spending Plan. You can follow along by downloading your own CSP for free at iwt.com slash CSP. Assets, $2,035,000. Investments, $236,507. Savings, $2,500.

Debt, $1,060,000 for a total net worth of $1,214,007. Emery, can you read me the combined monthly income? $18,600. All right. Partner one, I'm assuming that's you, Annie, earns $15,600 per month. And partner two, I assume that's you, Emery, earns $3,000 per month, right? Yes. Let's just look at the rest of your numbers. Fixed costs at 58%.

Um, what if I have no comments? If you're at 58%, you're within parameters. Let's just quickly look through this. Savings are at 4%, a long-term emergency fund at 500 bucks. How come you only have, uh, $2,500 in your savings? What's up with that? Don't tell me you don't know where the money's going. You have the money. To me, stocks, the stock amount is savings for me. Cause I could just cash it out whenever I need it.

Exactly. Do you see, Annie, that your desire to own assets, to constantly have your money working for you, do you see that it's causing you unexpected ramifications? I mean, if I use it as a savings account, yes. Yes, I do. I'm not putting it towards vacation. It's just random. Explain it to me.

So to me, stocks is short term and I can use that towards other things that I need savings for. Let me give you a technical example. You're currently saving 940, excuse me, you're currently investing $940 a month. Yeah, that I won't touch. In post-tax. Yeah. Okay. You're doing $300 a month for stocks. That's the savings part that I was thinking. Why don't you just put that and start saving for an upcoming vacation? By the end of the year, you could have almost $4,000 saved. Okay.

I mean, I am semi-treating it as such, but I am getting more money back if I put it. No, that's sloppy. That's sloppy and you know it. Stocks are not savings accounts. They're also subject to a lot of volatility and all kinds of tax implications when you sell. Okay. And your guilt-free spending is at 26%. That's over $3,500. And I think you did some calculations down here. It looks like you actually probably spend more

Okay, the way you described it to me, you're a paragon of frugality. You spend $2,000 over 10 days in Paris. At least that's the budget. So, oh, you are? Where are you? We doubled. We spent $2,000, but we ended up spending $4,000. I think you guys are missing the point. I think you're missing the point. According to this, you're spending 35%...

of take-home pay from a $223,000 income, which is a lot of money, on guilt-free spending. So I'm like, cool. Like, if you can afford it, great. But I'm trying to find out, that's like $4,800 a month on guilt-free spending. Where's it going? Because having $50 of beers and getting last-minute hotels, that's not almost $5,000 a month on guilt-free spending. Where's it going?

I guess I'm struck, Annie, by you worrying about price of a drink on vacation or something like that when there's just literally thousands of dollars missing on a monthly basis. You see my surprise? Again, if you made 50K, this would be a different conversation. You make $225,000 a year and then you spent the money and now you feel guilty about it. Why go that route?

Something isn't adding up here. We started off talking about $5 beers in Europe, but from looking at their CSP, it's clear that they can buy any amount of drinks they want. This is when I really started honing in on Annie's relationship with money. Annie, I'm confused. You have a lot of money in the household, most of which you earn. Do you feel worried about money? Yes. What do you worry about? That we can't afford things, I guess. Is there a number where you would...

be okay to not worry about the price of a beer? I wish Emery would contribute more towards that type of expense. I guess that is the difference for me. He's going out and he's going on vacation or if he's going out to eat or he's doing all these things, it would be nice that...

He has to think about affording it. Like a lot of times I'm the one who has to think about, hey, can we afford this? Can you go out to Vegas with your friends? Can you go out to these bachelor parties? Could you do this? So it would be nice if he contributes that way financially where he has to figure that out and I don't have to.

I think there's something deeper, Annie. I don't think it's $1,000 that Emery needed four years ago. That's meaningless. What's really going on here? He does. He consistently need new equipment. A lot of times he had a drone and we need to get a drone. The drone flew away into the river. We now have to replace the drone.

How much? I mean, that's like a couple hundred, but it's just those little things, I guess, bigger things that add up. Annie, you're making my point for me. What's your point? Number one, why doesn't he have his own individual guilt-free spending money? And number two, why are we talking about $200 expenses when you make $223,000 a year? I mean, our guilt-free spending is only, what, $3,000? I don't even remember. Per month. Per month. Per month.

Yes. If he takes 20% of that or $600 a month, he could do whatever he wants with that, right? He should be getting his own drone. I agree. Okay. What's stopping the two of you from setting that up? We just never got around to it. Can I just ask a question? If the roles were reversed and Emery was earning $180,000 a year and Annie, you were earning...

Far less you were starting up a business. What kind of conversation would we be having right now? I don't know. I can't imagine myself in that scenario. Try for a second. Let's say you were taking care of the kids. You were kind of moonlighting and helping out with the properties. Emery was working, making $180,000 plus. And he said, like, whenever we go out, she wants to buy...

a couple of drinks and it really aggravates me because why isn't she making enough to pay for it? What kind of conversation would this be? I think the difference is it's not like he's a stay at home dad. Like we still pay for daycare. That still comes out of the accounts. I guess if the rules were reversed, I don't know. It'll be more common because I'm a woman. How would you feel if he was like,

Yeah, you fix those pipes, but really you only work like five hours a week on average. And like, you really need to be making more. Meanwhile, he's making $180,000 a year. How would you feel?

I need to get a different job that would make me that much money. I mean, I know what you're saying. Like, oh, I, I would not act that way. But it's such an interesting response that your response, even like, I don't think you were joking was I would need to find a job that would make at least as much as him. Is that what you were just kind of intimated right there? Yes. Okay. Because what? I mean, I take that back. If I were to,

If he was making that much money, I wouldn't... It'll be nice and I don't have to worry about it. And I could do whatever the heck I want. And that would be nice. Wow. Okay. I believe that. And then I love the honesty there. And by the way, isn't that kind of what Emery's doing? Yes. Now we're getting real. We'll be right back. I have a friend of mine who was taking care of his granddaughter the other day. And he was looking for a movie to watch with her. He found something on Amazon Prime and then...

He refused to pay for it because it was $3.99 to rent the movie. Now, keep in mind, this is the same person who pays a lot of money to a financial advisor paying a percentage of his considerable portfolio. Think about it. He's paying hundreds of thousands of dollars, probably more, but he won't pay $4 for his granddaughter to watch this movie.

Anybody else find that crazy? Yet so many people are working with a financial advisor paying tens of thousands of dollars or more without even realizing it. That's because the industry set it up this way to be intentionally confusing. You never get a bill saying, thank you for choosing us. Here's your invoice for this quarter, $5,000. Nope.

They just take that fee right out of your account, listing it in your activity statement along with everything else. Oh, and since it's a percentage of your investments, as your investments grow, so does your fee every single year. So when I ask most people, how much do you think you pay to your financial advisor?

They just shrug. Most people have no idea. This episode's sponsor, Facet, is changing that. With Facet, you get flexible access to a team of financial planners who are CFP professionals and a team of others providing guidance across retirement planning, tax strategy, estate planning, and more.

Instead of taking a percentage of your portfolio, there's an affordable flat membership fee and Facet does not charge you to invest with them. Look, not everybody needs financial planning. Many of you can manage your own investments and that's totally fine. Use my book, get it from the library. But if you have a complicated situation or you want someone to help make sense of all of your options, then I recommend a flat fee financial planner like Facet.

Facet will waive the $250 enrollment fee for new annual members, and they'll add $500 into your brokerage account when you invest and maintain $5,000 in the first 90 days of membership. Check out their new membership options at facet.com slash Ramit. Again, facet.com slash Ramit.

Now back to Annie and Emery. You said if the roles were reversed, it would be nice for me to earn money, but really I could relax a little bit and do whatever I wanted. That's what he's doing.

Yet it's a problem to you as the higher earner. I'm not asking you to change the way you feel. I'm simply trying to understand your feelings themselves. Why do you feel that way in your position? But if the roles were reversed, you would not feel that way at all. I think it's just me feeling like I'm contributing, right? So if I'm the contributor, a big, big contributor, um,

then it doesn't feel like we're equal or we're... Is money the primary way that you contribute in a relationship? No. I mean, it's tension, but the reason why I haven't been like...

No, you have to get it like you have to get a hundred thousand dollar job or anything is because he does contribute different in different ways, like the properties, et cetera. Part time job is fine. I don't mind him having a part time job, but it's just not consistent or it's not. I don't know. It's just, I guess, not enough for me.

I don't think this is Annie's fault, and I don't think this is Emery's fault, even though I previously described him as a dreamer. I think the two of them simply do not have a shared vision of a rich life. They see money differently, and it's very obvious that they have never seriously talked about what they want their money to do. You can tell because Emery didn't even know how much the houses make, and Annie was complaining about $5 beers.

This is how so many relationships get into trouble around money. There's this feeling of unfairness, which slowly calcifies into resentment. The couple never really talks about the real issues. One of them will bring something up, but the other doesn't receive it well, and they don't have the skills to get curious and to talk to each other about the true issues around money.

And then when we finally talk about it, we are not talking about the real issues. We're saying, why did you spend $76 at Target? Or why did you spend $5 on a beer? And soon you blink your eyes and 30 years have gone by.

This couple makes a ton of money. They own multiple properties. This conversation is not about a lack of money. But here's why I featured them and here's why I want you to listen. Because it shows how easily you can fight about money. Even when you have more than enough. The way that we feel about money is highly uncorrelated to the amount you have in your bank account.

So it's not necessarily about the dollar amount, if I'm reading you right, but it is about what? It's about seeing that he wants to contribute more than what he's contributing. Is there a number? What does that look like? I mean, I don't have a number in mind, just more numbers.

I think when I filled out the conscious spending plan, it would be nice if he makes a hundred thousand a year. Didn't you just say like two minutes ago, I'm not saying he has to make a hundred thousand a year. Is that what he said? I don't even know. Okay. So, you know, you don't know the number, but you know, it's more. Yes. Can I just throw out some numbers? What if, what if he made 50,000 a year?

That's great. And that's what he was making full time at his other when he was employed. You're good with that? It's fine. Okay. What if he made that? Oh, sorry. What was that last thing? That's a starting point. However, if our...

situation changes what if i lose my job what if i want to do something else then it i would want him to make more uh what if he makes 50k and he has a full-time w2 job and he can't go and fix the pipes then we'll have actually have money to fix the pipes because he's making at least 50k

Nice. Okay. That's a good answer. So I would be going to a job for 40 to 50 hours a week, making 50,000 a year so that we can give a lot of that money over to contractors, which are going to charge four times, five times more than it's going to cost me to go repair the thing. Well, listen, Emery, you can't have it all. All right. Right. That's number one. And number two is like, what's the purpose of all of this? Right. If we're being candid, you don't need to earn a cent. Right.

technically your household can run on one income. Annie, do you recognize that? Yes. And I've, it's felt like it has. So would you like to take a fresh approach to this? I'm giving you the chance. Yes. Okay. What would you like to say to Annie? I would like for us to declutter our lives so I can focus on my business. And I would also like to see you having more space in your life for things that you enjoy without feeling guilty for them. And I want to know what you, if that's possible.

Yes. I mean, we've talked about this before, the extra amount to pay for property manager and now contractors. It would be good to see you having more of that income to pay for that. What are you asking for, Annie, specifically? Be specific. I would like him to thrive in his business and or get a full-time job in order for us to

not have to manage other things and simplify our life. But the thing is, is that property is falling apart and it is going to start, it's going to be continuously cost us more. It's just taking up so much of our bandwidth and

I don't see the value. I feel like we've gotten the value out of this property. And I don't know what, I don't, it's hard for me to feel motivated to want to do anything to save this place when it just feels like it's not worth it. I mean, to me, it's worth it. I think even if you put in 50 to a hundred grand into that property, it will work much better. But the fact I don't like, I don't want to take out a loan when I can't,

pay the payments for it. It's kind of like a waiting game. It's like, okay, we want to update this, but I can't take out a loan because we don't have enough money to pay off that loan monthly. If I could see that you are earning a lot more money and you're on a more consistent basis, it would be easier for me to be like, yes, we'll update it. We'll be able to hire a property manager. We'll be able to hire contractors. Can I point something out? Yeah.

You two are playing so small right now. You're obsessed with this one property. You're centering your entire lives around this one property. Look at it. The amount of time you each spend, time away from your kids, daycare costs, one partner having to go get a full-time job and potentially give up their income. Another taking time on vacations in Mexico to respond to Airbnb inquiries. All of this

And you never stop to ask why. Why are we even doing this? Is it important? Do we need it? Do we enjoy it? First of all, who enjoys that property in this house? Raise your hand. I enjoy the gains. I enjoy the investment, having an investment. Annie, I think you might be an optimizer who has taken it a little too far. Do you realize that? Let me give you an example. Are you aware of how much money you're going to have when you retire? No.

No. Instead, you worry about the price of beers. You worry, you want gains. You want your husband to go get a job, which I don't mind wanting your husband to get a job. All right. I don't mind that at all. But also that you can pay for a property manager. Do you see how it seems like the tail's wagging the dog? Like you have this property and now you're recentering your entire lives around it when the proper way to do this is

You should decide the kind of life you want and then your investments serve you. Can I show you what's happening with your numbers right now? Yes, please. Here's a simple compound interest calculator. The two of you have $236,000 invested. And just for conservative numbers, you're investing, let's say $40,000 a year. How much are you going to have by the time you retire? Annie, any idea? I have no idea. $3.99 million. Okay.

And that's just if you currently keep up the way you are. We did not include if you were to sell one or both of these properties and put that number in here. You want to do the math real quick? How much, if you sold both properties just right now today, how much would you take home? Probably a million. Okay. Are you serious? A million bucks. That's like after taxes and everything? I think so. Holy. All right. I watched this. I'm just going to literally add $1,000.

a one in front of your number. So instead of 236,000, it's now $1.2 million in principle. You want to see what happens to this number? 25 years. What do you think? Annie, you want to guess? 10. $9.4 million. What the hell are you guys doing? Fighting over who's going to rake the leaves? You are playing so small. Why are you doing this? This is our day-to-day. That's...

I wish we weren't. But why are you? I think it served us for a while and then it stopped serving us. I've always thought that the more assets you have, the better. And keeping assets, like if you have assets, keep them and let it grow. And I've always thought if you have rental income and I have low interest rates right now, that it's going to grow.

I do think that the other one is fine. It's not about one versus the other. It has nothing to do with this. You can keep one. You can keep one. What I'm saying is it's not relevant. This is you going back into the weeds again. Listen, I'm not telling you to sell the properties. You can. You can sell one. You can keep them all. That's your choice. It's your money, your investments. Assets are good in general. But what these assets are doing to you is bad. It's actually terrible.

In all the time I had to prompt you to have the conversation together, I didn't notice either of you ask the other, hey, what do you want? It was just one person going to their corner of the ring and saying, here's what I don't want to do. Here's what I want. Here's why you're wrong. Not once did either of you say, hey, what would you really like? Let's zoom out for a second. What excites you? What's your rich life? What could we do together?

You guys are obsessed with this freaking house. And the funniest thing is that you don't even need it. You could literally tear the house down today, make zero money, and you would still be multimillionaires. Annie, the longer you go thinking that Emory needs to make more money so that it can go to cover the property, you are still playing small.

It's like someone saying, the more money I make, the more loads of laundry I can do. It's like, okay, but why are you measuring your life in terms of loads of laundry? This is one reason that I always insist you have a crystal clear vision of your rich life.

You can adjust it over time. Your vision will definitely change, but you need to know what you're working towards. Because like so many couples on this podcast, if you don't have a vivid vision, probably you're just going to go through life worrying and agonizing and playing small with money and never even realize when you've won.

I'm talking to a $10 million couple. They just need a little bit of time to get to that number. But I haven't heard gratitude. I haven't heard partnership. I don't even think they fully realize how much they've accomplished because they are so focused on playing small. What does your rich life look like for you? I would love for us both to be working jobs that we enjoy. We're both competent enough to make the amount of money that I think we need. And...

have the flexibility to do what we always wanted to do, which is to live where we want to live, make moves when we want to make them and raise our family in a way that's stress free, that's rich in culture and diversity and all these things that we want to do, or we're not held down by unnecessary stressors. Emery, are you going to ask her the same question? Yeah. What, I mean, what does your rich life look like?

I mean, I do have a similar vision. It would be nice to go off the grid or move somewhere, work remotely, just do our own thing, experience different cultures. My hesitation would be, yes, it looks like we can make almost $10 million, but that's based on me continuing to work and putting in the same amount of money every single year.

into that fund. So I can't just quit my job. I can't just... Annie, notice what's going on right now. If you can't even dream for 30 seconds, that's a real problem. Yeah. I want it to be tangible. I want it to be a tangible dream. Because if you don't offer a tangible dream, then that means you are what? You're just dreaming. It's not going to happen. Isn't it okay to just dream? I mean...

Emery's the dreamer. He has the ideas and he's the one who does these things. I tend to be the one that helps make it happen. And in order for it to make it happen, I need a plan. But yes, I would like to also just dream myself. Like, how are you going to get there? How is that going to happen? We can't just dream it and have it happen. Like he's been dreaming about having a great life.

thriving job and it hasn't happened. So I'm, it is hard for me to just dream, I guess. The how is a very valuable discussion. You can't just talk about dreams all day long, but that doesn't have to happen at the same time. In fact, it totally detracts from a dream.

One of the things for my rich life at this stage in my life when I envision it is dropping everything, putting whatever we have into an investment, moving to a small house in the Philippines with almost no belongings and making very little money and just living together. You don't need a lot there. You ever ask Annie what she thinks about that? She doesn't like the heat.

We're not sure what the best thing to do here is. We have different ideas. You know, notice that they found it really difficult to dream even for a minute. So I decided to shift to the earning part. Now, recently, I've had a few guests where the higher earning partner wanted the other to earn more. And my approach is if they want it and it sounds reasonable for

For example, the lower earning partner is not watching the children full time. I'm all for it. I think you get to ask for what you want in your relationship and then your partner can hear you out and say yes or no or you can both talk about it. I've seen a lot of comments saying, oh my God, if I earn $300,000, I wouldn't dream of asking my partner to work at all. I would retire them.

No, you wouldn't. Now, I am not saying that if you make a high income, it is reasonable to expect your partner to earn exactly the same amount. That's not the case. I've never said that. In fact, I don't recall any partner ever saying that on this show. However, if you earn a lot and there's a disproportionate gap between you and there's a reasonable ability for your partner to earn more, in my mind, that's okay to ask. And then you two can have a discussion about it.

But here's the twist with this couple. They haven't really decided why they are working this hard. What's the purpose? Where's the money going to go? What's it all for? Watch as I take their feedback that Annie wants Emery to earn more and I help them start to talk about it in a different way. We know the number that Annie has proposed for you to make, which would be $50,000 a year. Okay. Do you feel that that number is comfortable, Emery, that you could achieve that in this business? No.

Absolutely. Great. What's the time period? I think before winter. This year? Yeah. I think by the end of the year. Okay. I like that. I like that. Annie, what do you think about that? I think with having a business partner, I think it's possible that he can do that. Let's talk about what would happen if this is achieved and what would happen if it's not. Okay. Okay.

So let's say that you are at December 31st, you're making 7.5 K per month. You're hitting your numbers, 50 K net. Emery, what are you doing with that money? Buying a car that we don't have to worry about. I'm putting money away to where I can feel like I bought our next couple of vacations or something with the kids. You know, some upgrades to the house that we'd like to do investing in

Okay, fine. I mean, this sounds like a grab bag. It just sounds like a bunch of random stuff. What's like the one thing you're doing with your money? Have you thought about it? Just feeling a little bit better about myself for one. Not a very satisfying answer, Emery, if I can be honest with you, but I don't mind. We're coming back. That's why I'm here. Okay, don't worry. Annie, what if Emery delivers exactly what he said? He's making 7.5K or 50K net by the end of the year.

That would make me feel a lot better about investing in additional things with the property. So we're not having to deal with it so much. And our 20% guilt-free spending would be higher. So I'm able to do more things and get a new car. I would love a new car. We never get new cars. I feel like our relationship would be

a lot better because when he is confident and when he knows he's making the income, he, it does make a difference in our communication. All right. Hey, tell the world it's sexy when everyone's hitting their numbers. All right. That's spoken like a true optimizer. Okay, fine.

I feel like I would be helping relieve some stress that Annie feels when she feels the need to continuously to work and to spend so much of her time and mental energy on this subject. And we could spend more time shutting off our emails after six o'clock and spending time with our children and going for a walk without thinking, without having to talk about budgets and,

All this work, all these changes, which I think should happen anyway. And like, what do you get? It doesn't actually sound like you've really deeply thought about what an extra few tens of thousands of dollars will do for you. You're starting from the position of, I need to optimize everything. I need to optimize our properties. I need to optimize our credit cards. I need to even optimize the yield on a savings account by putting it in stocks.

It sounds logical, like, oh, I'm optimizing, I'm making more, but it's causing all kinds of downstream problems. When you go to Paris, you pick an artificially low number, then you exceed it. You're worried and always having to like check on this and that just because a couple that makes $223,000 at your age, you should easily have like 15 or $20,000 in your checking account. Just like put it there. What if you put 30 grand in there?

then I would feel better about it and I won't feel like I'm depleted. You want to do that? Where do I take it out of? Aren't you the one who told me that your stocks are actually just a modified savings account? You want me to not put in money towards stocks? Just decrease it? It's in an index fund. And sacrifice the yield? It's a lie. Yes.

My question is, what are you going to do with this money? How are you going to use it to improve your quality of life? Honestly, one of the things that changed my perspective when it comes to spending money now is Die With Zero. I don't know if you've read that book. I've also had a lot of, I guess my dad got sick. Sorry.

It's okay. Take your time. Sorry to hear it. My dad got sick before he could retire. So he's not even able to use any of the money that he put into investments. And I guess that's part of the reason, like, well, if we have this money, we can use it now. But obviously still keep some for later because...

I could live until I'm 90. But it did. My sister-in-law just got diagnosed with cancer and she's 34. So these health things that's going on around me made me think I need to do things now. I need to travel now rather than wait till I'm old and can't move as much.

I'm sorry, your dad and sister-in-law and maybe others have gone through that. I think when people around us get sick, we start to realize mortality is real. And sometimes it comes out in different ways for different people. The traveling makes perfect sense to me. You have the money. You want to enjoy life now. I get that. I have no problem with it. You can afford it. How else do you think that seeing family illness has affected your view of money?

Honestly, I don't find, I guess, future retirement as important. It actually hurt. My dad has Alzheimer's, so he's in a home for I don't know how long. He made enough that he can't get on Medicaid anymore.

but not enough for my mom to just retire early or retire because she can live till 90 years old. So, so it kind of hurt the situation where you're just kind of like in the middle of, of financially. Like I know it's important, but it's not as important to me, I guess. Yeah. That makes sense. Do you think there's any relationship between what you've experienced growing up and more recently and your

Things like the credit cards. Do you think there's any connection there? I'm not sure. To me, it's like, oh, it's free money. I'm going to spend it anyway. Might as well use it. What about the idea that you want to try to control things when it comes to money? Could be credit cards, could be another part of your financial life. But the idea that you really want to try to control things because so much is uncontrollable. Do you see that show up anywhere in your treatment of money?

I mean, yes, I definitely, that's one of the things I feel like I can control is how I treat money. And I think that's what makes it hard with Emery. It's like, I can't control how much he makes. I can't, like, I just have to let him do his thing. Keep going. Keep going. I don't know. You can't control how much he makes. And how does that feel to you?

I don't like it. Yeah. What else? How would you describe that feeling? You can control your savings rate. You can control your 401k match or max. You can control even your expenses and your credit cards and points and all that stuff, but you can't control how much your husband is making. And how does that feel to you? I hate it. You said you hate it. Yes. I hate the fact that I can't do anything about it. Like we live in the same house. We,

have the same expenses, but I can't do anything about it. You can sure try though, right?

How do you try? By pushing. By nagging him. How do you push? Uh-huh. How do you do that? Give me an example. By asking him to get a job doing like, you're good at contractor work. Why don't you just be a contractor? They make a ton of money right now. Or you like beer. Why don't you work at a brewery? I don't know.

So it's these jabs. It's these little elbow nudges. It's not even about the brewery. It's not about him being a general contractor. Do you see that it's in many ways? Yes, it is partially about Emery. I agree. And we've talked about how for a grown adult, he needs to be making more than $1,500 a month. He's already agreed. He's talked about that. We've talked about that. But Annie, do you see that your behavior also comes from something that's probably much deeper? I can see that.

Do you also see that when Emory makes 25K or 35K or 50K or even 75K, you will not automatically change the way you treat him? I don't know. I know. Maybe. It's one thing to maybe wish your partner made, you know, an extra five grand or 20 grand or something like that. Okay, fine. But when you use the word hate,

It's quite revealing actually, because it tells me that there's something much deeper here. The reason that I want to point that out to you is that many people, especially smart people and especially optimizers believe that if they just get a certain number, then suddenly they will feel differently. You know, all the things you're talking about, you already have it. You have $223,000 a year in income in your area. Uh,

With your expenses, that is more than enough money. Like you have a lot of money. You're on track to be multi, multi, multi millionaires. Did you know that? Yes, you knew that. What's that look on your face? I just doesn't feel like I have a lot of money. But yes, you're right. What do I always say on this show? You remember? What we feel and what is actually on paper are two different things.

The way we feel about money is highly uncorrelated with how much we've got in the bank. Just a few of the next steps we discussed. They each get their own guilt-free spending account. No more using stocks as savings. Create a dedicated high-yield savings account instead.

Emory has committed to making 50K net by the end of this year. They're going to pull way back on optimizing, including closing credit cards and simplifying their financial infrastructure. They're going to consider the lifestyle and financial impacts of selling one or both rental properties, and they're going to create actual boundaries and expectations around money. Let's hear what Annie said in her follow-up video. I learned that I overcomplicate things.

And the rental property has been a burden on us. It's actually surprising to me that he agreed with Emery that we need to sell the properties. And that's something that we are hoping to change. We've already been in contact with a realtor to see what updates that we can do before we sell, hoping to...

Sell it soon, probably the next year. And just making sure that Emery has a chance to actually focus on his job and give him the best path for success. Another thing that we are changing is we will be simplifying and having our own individual accounts created.

And not having so many credit cards that it's overcomplicated. So thank you, Ramit. Really appreciate you helping us. And now, Emery's follow-up video.

Hi, Ramit. Thank you again for the conversation. And thank you for helping Annie and I realize that the way that her and I communicate with each other about money is not as constructive as it could be. For example, we are both asking more questions, being more curious, and trying to understand what each other's rich life looks like so we can come up with something where we can live our rich life together.

We've made a few decisions. We are looking at how we can sell the rental property and maximize profits. I think we're both realizing that it's more of a stressor than it is something that's bringing value to our life.

We are looking at it. Annie is open to it, especially because she's realizing more and more that if we don't have that on our plate, that I can grow the business and that will be more profitable than the rental property will. And we are really trying to look at what things in our lives bring us joy and what things in our life we just have because we can have them.

We're also splitting up our spending funds as per your suggestion, which I think that's going to be like decluttering our financial situation, which I am all about. I really appreciate how you made it feel so simple. And I think for both of us, it just feels like a weight off our shoulders. Thank you.

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.