83. “I grew up on food stamps. At 24, I’m about to get paid $215,000 per year”
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Before we start today's show, I have a really exciting announcement that I've been wanting to share for a long time. On January 1st, 2025, I'm releasing a new book called Money for Couples. For the last three years, you've heard me on this podcast speaking to different couples every single Tuesday. I've spoken to over 170 couples on this show about their money psychology, the money messages they heard from their family, the peculiar dynamics that they have around money and where they get stuck.

and how they can get on the same page. Well, behind the scenes, I've been working on the definitive book to help couples get on the same page with money, and that's what I wrote for you. It's coming out January 1st, and in the book, I'm going to share how to talk about money, including the exact words to use, when to talk about it, how to teach your kids about money, even the exact agenda and account setup that my wife and I use in our finances.

I'm going to show the tactics to make instant improvements, like how to set up your accounts to automatically work together and how to assess your financial health.

And finally, you're going to get a deeper understanding of money psychology in your relationship. And you're going to discover why you and your partner see money differently and how to get on the same page. Now, it's one thing to listen to couples or watch couples every single week. I love doing that for you. But it's a whole different thing to be able to have the book and to be able to work through it with your partner. Okay?

I'm so excited to get this book in your hands. You can pre-order it using the link IWT.com slash money for couples and stay tuned for a lot more on this book this year. Again, go to IWT.com slash money for couples to pre-order my new book about getting on the same financial page as your partner.

Um, what the hell is going on on this podcast that like 80% of the people who come on here go through massive screening, fill out applications, they never actually read my book. Is anyone else puzzled by this? Look, a lot of the questions that you ask me about money are answered directly in I Will Teach You To Be Rich. How do you pay off your student loans? How do you automate your finances? Where do you start investing and how do you handle big purchases?

I wrote this book as a six-week program so you can follow along on your own or with a partner. If you want to improve your finances, I recommend you get the I Will Teach You To Be Rich book. It has over 18,000 reviews on Amazon. Get it at iwt.com slash book. I feel like he's a little stingy. Oh. He's not stingy towards me if I ask, but his attitude generally makes me feel that...

I shouldn't ask. I don't feel like the money that I have for myself, even the money that I earn, I don't feel like it's mine. I feel like it's Niles to give to me. If Niles just agrees to something that I propose, I don't feel like he wanted it. I feel like he's just giving in to me, which makes me feel like even more of an asker. And after talking now, what do you recognize about that pattern? What are you doing when you go down that path?

I'm avoiding the money, getting rid of it as fast as I can. Not learning any valuable skills. I want to learn how to advocate for myself better and not resent Niles, who I feel like is just losing with any choice that he makes. Megan, you need to be able to ask for what you want when it comes to your money. He's not going to read your mind. How does that strike you? That strikes me as true and uncomfortable.

to think about. Megan is 24, Niles is 28, and their lives are about to completely change. Until now, Megan has been a student earning almost no money. Anything she earned, she gave to Niles, who would save it for her, in part because she admits she used to be irresponsible with money.

And also in part because she doesn't even trust her own financial judgment. But now she's about to start earning more, a lot more, even more than Niles makes. She's finding it hard to even believe it and it's starting to cause issues in their relationship.

Now, this is an answer Niles provided during their application process. I want to read it to you really quickly. He wrote, the women in Megan's family are either not financially healthy or do not work. And Megan is worried about becoming powerless despite earning a high income.

I'd like to encourage you to listen to this and also to watch it on YouTube where you can see their body language and facial expressions. Just go to YouTube, search for Ramit Sethi and follow my channel there to get all podcasts in full episodes on video. This is I Will Teach You To Be Rich and I'm Ramit Sethi.

Early on in our relationship and early on in college, you know, Megan had financial aid and I had financial aid as well. And I was working a minimum wage job. So this is before, you know, I was supporting us. But Megan accrued, you know, a considerable amount of credit card debt. Considerable means what?

that was like ten thousand dollars or something megan i don't know yeah i think it was like eight thousand dollars okay yeah yeah so uh with you know no way to pay it off so it constantly was accruing and it was in collections and all this stuff um and so you know i i didn't really trust her with her money um and i you know as part of that the rent

To me, it wasn't going to be one of those things like, oh, I'm going to pay it back. I'm saving this money so you can get it back in the future. But it did feel like it was more secure in my hands. Typically, that wouldn't go directly to the principal like I was mentioning. It would go into my savings. So if she needed the money, I always felt like she could take it out, though I don't think we had a conversation about that at the time.

And that was, like I said, I felt more secretive about the money, I suppose. This is earlier on in our relationship because I don't feel like I trusted her. Let me make sure I understand. So Megan was an undergrad, taking out loans, ran up $10,000 or so of credit card debt, couldn't pay it off.

It started growing, going to collections, things like that. You two had met at that time you were together. Niles, you said, okay, I don't really trust you with your money. Therefore, what was your conclusion? Give it to me and I'll keep it in savings. But it was like, give it to me under the pretext as rent. And like Niles said, we didn't have a conversation about that. And I think the first time that I heard that

That was why he decided to make me pay rent so that he could hold the money for me and it would be safer than if I had access to it was this past week. Whoa. Yeah. Why? Was it getting ready for this call? Yeah, yeah, it was. Secrets coming out of the vault. And what was that like when you heard that? I was like, you know, that's fair because I definitely have come a long way with my money and my approach. But I was still like, that makes so much sense.

because of the dynamic that we have now, which is like, I don't feel like the money that I have for myself, even the money that I earn, I don't feel like it's mine. Whose is it? I feel like it's Niles to give to me. So you make the money, he holds on to it, and you need to ask for it back. Exactly. And I hate asking for it. What does it make you feel like?

it makes me feel powerless. And it goes back to, I grew up with a single mom who was, we were really poor. She still makes $10 an hour. And she did throughout my childhood. And we had to ask for a lot of help. Like we had food stamps. We had the Salvation Army Christmas gifts. I had discounts at all of the afterschool activities. Everything was subsidized somehow. And I feel like

It made me feel lesser than my peers for sure because I didn't see them having to ask for the help. It makes me feel like all of the work that I've put in to graduate and get this high earning job, which I felt like was so honorable, is for nothing because I don't think I'll feel like the money's mine. So if we stop talking right now and you both went back to the way you were doing it, you're about to start making a lot more money.

you would presumably hand that check over to him. And then would you have to ask for it back if you needed to spend money? The other day we were talking about this and I said, even if I get fund money, I don't know that I'll be able to spend it truly guilt-free because I feel like I back owe him for the years that

six plus years that he's been supporting us. So if anything comes up that we would pay for together, like buying a new couch, I feel like I would probably use my money for that. I don't know that Niles would consider doing that too. Have you asked him if he thinks you back owe him? No. Okay. Want to ask him? Do you think I'll back owe you? No, definitely not. Do you believe him? I don't believe him because...

This all stems from me, like the rent issue. You know, I said, I can't pay you rent anymore because I don't have enough money and I'm just going to have to borrow money from you after I pay you rent for a few months, you know, a few years ago when I was living off financial aid. And I feel like I still feel that his change hasn't been genuine because I had to bring it up and I felt like he was kind of

oblivious to the whole issue the whole time. I think there's some skepticism. Yeah, I want to know that he was thinking about it too. It's really challenging because then it feels like we can't have a conversation about really anything without there being skepticism around like, hey, you know, I feel this way. How do you feel about it? What do we come into agreement with, you know, based on our two perspectives?

So it can definitely be challenging because it doesn't really feel like there's a path forward if we can have some trust around that. You're engaged, right? You live together. There's got to be some trust. But if you can't trust what each other is saying, especially if you, Megan, can't trust what he's saying, that's going to make it challenging. So what do you think that's about, that lack of trust? Maybe it's my pride that I don't want to accept.

The change that I just want to be upset about it enough to mention it. And then I'm too prideful. Nothing. No, it would get you. Maybe the upper hand. Maybe. Do you find yourself ruminating on money conversations in your relationship?

I definitely do when we're having them. I'll dredge up some old stuff that I'm sure Niles doesn't want to listen to anymore and be like, you know, remember when you made me pay you rent and I had no money? And all of our other history that's since changed. Yeah. Okay, so he, quote, made you pay rent. Made you means what? Did he say pay me or you have to get evicted? I don't know if he would have evicted me, but he certainly asked me to pay you.

Okay. Yeah. Because it went from us renting two separate apartments in the same town to us living together and me paying for the same apartment or the same price. And so I felt like, hey, you have 600 extra dollars. Like, you might as well send it to me so I can save it for you or for us in the future. I didn't have extra dollars. That was my only dollars. I literally have no income right now. I have negative income. Okay. What's the situation right now?

Right now I'm in school and I'm graduating and my job doesn't start until October, but I've accepted a job and Niles pays for all of our stuff. And it's been like this for four years. I've been in school for seven years. Okay. This is law school? Okay. Oh, congratulations. Just out of curiosity, if you had not moved in with him, Megan, how much would you be paying in rent?

Yeah, I would be paying at least that much. And I would have certainly had to take out loans. Yeah. Niles, in a way, you were suggesting that out of the goodness of your heart, you really wanted to help Megan, it seems like. Am I reading that correctly? Yeah, I mean, definitely that was my goal. I think at the time, I didn't feel like she was ready to take the feedback about her spending habits. I think so...

Yeah, I definitely should have been more open about it. How old were you at that time, Megan? I think I was like 20.

I'm not sure what's going on yet, but I am getting potential red flags. Let me start with the innocent explanation. Maybe Niles saw that his girlfriend wasn't great with money. He offered to have her live with him at a steeply reduced rent, and he took that rent money and put it into savings. Okay, if that's the case, it's pretty generous. On the other hand, it's not like she was a kid. 20 years old is enough to make binding decisions. Sure,

Sure, maybe she wasn't good with money. Megan even admits that. But if you start off a relationship with one person holding money for the other because they're bad with money,

It's very easy to continue that pattern. It's almost a parent-child relationship, which you definitely do not want in a partnership. All right? Now, don't let anyone tell you that money is simply a tool. Money, like any technology, is never neutral. It has built-in bias. It influences and is influenced by society. Money represents power. It's all of those things. Megan tells me more.

You know how many people's conscious spending plans I see every week? What's fascinating is the categories of spending, especially the ones where people spend way more than they think they do. For example, subscriptions. Let's take a look at some recent numbers on how much people spend on subscriptions. $100 a month on subscriptions. $205 a month. That's from someone spending 76% of their take home each month on fixed costs.

costs, $211 a month, $147 a month, and $487 a month. This is literally thousands of dollars a year, and most of us have forgotten about all the subscriptions we are actually paying for.

Thankfully, this episode's sponsor, Rocket Money, can help you easily find and cancel those unwanted subscriptions. Rocket Money monitors your spending and helps you lower your bills so you can grow your savings. Rocket Money will even try to negotiate lower bills for you by up to 20%. Just submit a picture of your bill

and Rocket Money takes care of the rest. They'll even deal with customer service for you. Rocket Money has over 5 million users and has saved a total of $500 million in canceled subscriptions, saving members up to $740 a year when using all of the app's features. Stop wasting money on things you don't use. Cancel your unwanted subscriptions by going to rocketmoney.com slash Ramit. Give it a shot at rocketmoney.com slash Ramit. That's rocketmoney.com slash Ramit.

My team and I create tons of material every single day. Scripts, voiceovers, emails, all kinds of material that we need to be good and we need it to happen fast. And one of the things we use is Grammarly, especially their new AI tool. For example, every Saturday, we send out my podcast newsletter. I break down an anonymous person's conscious spending plan. And I like going really deep to break down the numbers and show you things you might have missed in your own finances.

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Save time with one click and go from editing drafts in hours to seconds. Get AI writing support that works where you work. Sign up and download for free at grammarly.com slash podcast. That's G-R-A-M-M-A-R-L-Y dot com slash podcast. Easier said done. I feel like Niles has the power of money over me, even if it's my money.

Um, like every time I get a windfall of money, like a tax return, I don't know. I feel like I need to put it towards our wedding and down payment savings. And I just feel like Niles doesn't have that same consideration where his money's already accounted for. Have you asked him if he does? Oh yeah. We've talked about what he's going to do with his bonus coming up. And how much is the bonus? Maybe 15,000, I think. Okay. So what are you gonna do with it?

My plan is, you know, whatever we've already accounted for with, we have a very tight budget. So if there's things outside of our budget, you know, typically when we're close to a windfall like this, I'll be like, okay, we'll put this towards that. And then, you know, whatever Megan needs for her surgery, $2,000. And then the rest straight into savings, not really any specific plans for it, probably for our down payment that we are saving for.

Okay. Megan, so there you go. He told you what he's going to do with that $15,000 bonus. What's your reaction? My reaction is that that came after I had the conversation of

your money not being tied up in the same way mine was. And I gave the example when we had this discussion ourselves of his bonus last year, like he bought an espresso machine, a camera, it was like $10,000 for like just fun things. Whoa. Which one? Wait, which was more expensive? The espresso machine. How much? It was $3,500. Wow. You use it every day?

For both of us. That's cool. All right. Yeah, we love it. Okay, so what's the problem? Just so I understand. I mean, it's his money, right? You guys are not married yet. Yeah. So he made a bunch of money. He spent it on an espresso machine, which benefits you and some other stuff. What's the problem?

I guess the problem is now if I need or want to buy something for myself, I don't feel like that money is mine. It's in his savings account. It's yours, the two of you. But no, if Niles just agrees to something that I propose, I don't feel like he wanted it. I feel like he's just giving in to me, which makes me feel like even more of an asker.

Wait, what's the problem if you... I feel like he's a little stingy. Oh. He's not stingy towards me if I ask, but his attitude generally makes me feel that I shouldn't ask. He's not comfortable with it. Okay, Niles, would you agree with that? I think historically, yes. I think historically, because of that...

I guess I'll say lack of trust related to... Because some of the dynamics that we had in the past in conversations, I felt like I had to manage her money for her in those conversations. The dynamic is obviously very different now. She's much better at managing her money, but I think we still have some history around that. I would say so. So you two have co-created this dynamic of Niles, you're the responsible one with the money.

And Megan, you're that irresponsible one running up the credit card bills and et cetera. Fair? Yeah. And I'm the instigator. Niles can ignore what we need or want, but I mentioned it. Okay. So who calls you the instigator? Me. The problem is I feel like his money is his and my money is his. Like this summer, I earned the same salary that I'll be paid.

when I started my job. So I made like $30,000 after taxes in 10 weeks, which was great. And I sent Niall $17,000 for our savings. Okay. Like without him asking, I just feel so guilty about our situation that that's what I did. Did you grow up Catholic? No. Where does all this guilt come from? Maybe the fact that I was bad with money.

If I could wave a magic wand, my dream is we would stop describing ourselves as bad with something. I'm bad with money. I'm bad with my fitness goals. I'm bad, bad, bad. We give ourselves these labels and then they often become self-fulfilling prophecies. I'm bad with money. Then I overspend one month. See, I tell myself I am bad with money.

No, let's reframe it. I haven't yet learned the skills of money or investing, but I'm making a plan to do just that. And you have lots of options. You can DIY it, use my book and use my journal, or you can get help with my money coaching program directly from me at iwt.com slash money coaching. But please do not settle for calling yourself bad at something. You haven't built the skills yet to

but if it's a priority for you you can i want to make sure i understand where you grew up with money because some of the numbers i saw you know obviously you're very good at what you do you're about to make a lot of money and you're about to enter a level of socioeconomic status that you have not been at fair definitely okay so i want to equip you to know how to think

about money at that level, how to talk about money at that level and how to behave with money at that level. All right. Um, Megan, you mentioned you grew up poor salvation army, food stamps, single mom. Uh, what do you remember about growing up as it relates to money? A lot of stress, uh, living essentially day to day or week to week.

my mom making some of the poor choices that I made when I accrued the credit card debt. Like what? Like she, I think she was going to file for bankruptcy when I was like a young child, like less than 10. And I remember she like ran up her credit cards before that and was like,

Oh, I'm going to file for bankruptcy. You know, might as well just charge it up. Bad choices. Yeah. Okay. And what else do you remember about money? When she talked about it, what do you remember her saying? A lot of scared emotions, I would say uncertainty, not knowing if she could pay the mortgage. And I remember her asking for family members a lot. And she even tried to make me ask. She would try to make me ask my other family members to give us money.

And I didn't like that. No. Why not? I was embarrassed and ashamed, probably. How old were you? I was probably around 10. Wow. That's young. Young to be asking a little girl to do that. Amazingly mature of you to realize there's something not right about this. Okay. What happened as you became an adolescent, as you went to high school? What happened?

I think I started to take on my mom's problems. I feel like my mom is, she's great and she was a great single mom, but she's not a sophisticated consumer of really anything. She didn't finish high school and I feel like I'm just at a very different level than her. And I've accomplished a lot of the things that I felt like she didn't get the chance to do because of how she grew up.

So I feel like I own her problems and a lot of our conversations now, you know, I'm trying to figure out like how she could get this work that her house needs done and how she can afford it and whether she should, you know, buy this car with this payment. And I feel like I'm in charge of all that stress for her. So on your conversations with her, how often would you say you're trying to help her or sorry, find solutions for her? Um,

a lot. Even if she doesn't explicitly ask me when she tells me anything about money, it's always negative. And it always makes me feel like she just put the burden on me. It is kind of interesting that she's taken on the parent role with her mom, but in her financial relationship with Niles, by saying that she's bad with money and letting him manage her money, Megan has willingly taken on the role of a child.

One of the worst feelings in life is feeling stuck.

You hear it sometimes with podcast couples here. They feel stuck around their money. I felt stuck in my business. I had made a bunch of decisions years ago and I woke up feeling trapped. So after thinking about it, feeling stuck, not sure what to do, I went to a CEO council that I'm a part of and I just laid it out. And after listening to me, they were like, oh, it's so obvious. You need to change this, move this person over here, change this resource allocation. Boom.

I wish I had done it years earlier. If you feel stuck in your career and you also wish you had a group of peers who could help you get unstuck,

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and join thousands of top senior leaders from companies like Microsoft, Amazon, and Meta who have taken the first step towards accelerating their careers. That's sidebar.com, S-I-D-E-B-A-R.com slash R-A-M-I-T. When I was in my early 20s, I was not into clothes. I wore free t-shirts from tech companies, and I really did not want to seem like I tried too hard.

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Elevate your style using Next Level Wardrobe at nextlevelwardrobe.com slash Ramit. That's nextlevelwardrobe.com slash Ramit. How did you get into college? Myself. I applied. Yeah. Did your mom support you? She was indifferent. I feel like, you know, she was proud that I did that, but she didn't really know what it meant. I...

found a lease for myself and I figured out how much I could pay with my financial aid and I moved myself. I just said like, you know, next Friday I'm moving. And I left with all my stuff. And this was like age 17, 18. Yeah. Wow. Have you taken a second to reflect on that? No. I mean, as you say it out loud, how does it strike you? A 17 year old, 18 year old packing themselves and deciding how much they can afford. How does that strike you?

I feel like if it was anyone else, I would be like, wow, what an incredible achievement. I guess it took some strength, but since it's me, I just don't think about it like that. How do you think about it? I guess I still feel ashamed that I had to do that. Ashamed because of the family that you came from? Yeah. Okay. How do you feel about money personally?

I'm scared. Not good. I feel good about it. Hypothetically, I can look at houses for rent in a place that we're moving and look at our conscious spending plan and say, yeah, we could afford that. And then whenever it gets down to it, I'm like, we should live outside of the city and pay a fourth of that price because it's scary to think about having to owe that much. So you went on to college.

you started, what'd you charge the credit card for? First of all, was it a Wells Fargo card or a Bank of America card?

it was a lot of store cards. Fuck. Old Navy or Gap? No, neither. Well, there were multiple. One of them was furniture. Yeah. What? That's what I'm thinking of. Yeah. Like what? Just tell me that one. It was West Elm. Jesus Christ. Yeah. I certainly had- 10% off your first purchase. So cool. I just saved $12. Okay. What else?

It should have been Walmart, not West Elm. Okay. My taste was a little higher than what I could afford. Is that true? So in other words, you were shopping at West Elm when really you could not afford it? Yeah, when I couldn't afford Walmart, for sure. Oh, wow. Yeah. Okay. All right. Okay. What else? Nordstrom. Nordstrom.

Wow. Fine tastes. I know. Fine taste for an 18-year-old with no money. Yep. Where'd you learn this stuff, by the way? West Elm, Nordstrom. I bet you did not grow up going to those stores. Well, I just told you that before my mom filed for bankruptcy, she decided to charge up the cards. And I think she had taste that was a little better than maybe she should have.

champagne tastes on a beer budget they say exactly yeah okay and i think i needed to fit in with the people around me or at least feel like i could and that kind of buying stuff from places even though i couldn't afford it gave me some kind of worth that i think i was missing did you understand how credit cards worked no and i looking back i'm shocked that i got one because i had no income yeah

So you would charge it and then you'd get these things in the mail and it would say some number, the minimum. And how would you even pay that? You weren't making that much from your loans. Yeah, I would pay the minimums for a while and then I wouldn't pay at all from my financial aid. Hence collections. Right. Okay, got it. Okay, so you ended up charging about $10,000 that went to collections. What's the status of those now?

They're settled. Wow. By the way. Yeah. Okay. So Megan, you're like a living example of the person who basically gets hooked on credit cards. Yeah, but I'm not anymore. Okay, good. When did you start to realize that the way you handled money was not working? Probably when I had to settle the credit cards. So I think I went from an approach that was

And now I think I'm overly careful and extremely shameful about buying anything. I think it just shows my mom felt the same way that I did, which is like scared about her abilities. And our whole family is just, they're in the same situation where like, there's a lot of people asking for money. You might need to send it to somebody. So if you don't have any, you could be the asker and not the payer. Right.

And is there a sense in your family that it's totally normal at some point you're going to run out of money and you're going to need to ask other family members? For sure, yeah. So we give when we can because one day we're probably going to need to be the ones asking. Yeah, and I feel like it disincentivizes you from being the successful person who keeps any money because you're just going to get asked. Yeah. Well, are you the most successful person in your family?

I think I'm going to be the most high earning person. Okay. And does everybody know that? I don't exactly share how much I'll be making. Well, do they say like, oh, Megan's like a lawyer? Yeah. They're very proud. Yeah. Yeah. Oh, that's cool. And is the implication positive for you? Or is it like, Megan's a lawyer. She thinks she's better than us. Like, which one is it? I feel like it separates me more than I would like. So the latter. A lot of patterns repeating.

I caught something you mentioned about your mom to the way she grew up. Do you think she grew up poor as well? I know she did. Yeah. So her lessons from her family were probably quite similar to the ones she taught you. For sure. My grandma worked in a gas station and lived in like a trailer and they're all from the deep South. So really, this is just a common experience. Yeah. I feel like there's a lot of poverty where we live. And yeah,

She met my grandpa because he used to come into the gas station and buy lottery tickets. And she told him that, oh no, my trailer's flooding. And she lived with them ever since she moved in. They weren't even dating. And then they spent the rest of their lives together. I mean, I seriously feel like you need to write a book. This is insane. And you're only 24. Your life is just beginning. This is unbelievable. Okay.

Definitely keep notes. All right. Who knows if you got a book in you? Wow. All right. So do you see the patterns repeating themselves through the generations? Yes. And I feel like it makes me feel that I haven't really escaped that reality where I came from. That's insightful. Even though geographically you live in a different place, even though you're surrounded by all these academics and et cetera, you're about to go to these fancy law firms.

Even still, you feel this inescapable pull back to how you grew up. Yeah, I feel like I might be discovered. Isn't it fascinating that someone can be so successful in certain areas of life, so driven, so confident, but they can totally shrink in other parts of life? I do it. You do it. Megan's doing it right now. In fact, I think we all do it.

I want to point this out because it's so easy for you listening to this or watching this on YouTube to scream at Megan, how could you do that? Well, it's actually pretty easy to charge up tens of thousands of dollars on credit cards. Nobody stops you. In fact, they encourage you to. And one of my goals with this podcast is to give you a little more compassion

for how people behave with their money. You know, you went to law school, which is impressive as well. So did you do that on your own? Took the LSAT, all that stuff on your own? Yeah, I did. Yeah.

Yeah, and I got a full ride. Wow. So the only... Wait, wait, wait. Hold on. How'd you do that? That's awesome. I had good grades. I work hard. How good? What's your GPA, undergrad? I had like a 3.9, but I have a science background. Fuck yeah. I like that. That's awesome. High five. That's amazing. You're like blazing past this. I'm like, yo, this is so cool. Sometimes I think you minimize your own accomplishments. So you had a 3.9, amazing.

Full ride to law school. Holy shit. Did you enjoy law school? Somewhat, yeah. I think it was, my undergrad was harder for me. What? Yeah. That's weird. Yeah. It's even weird for you to say you enjoyed law school. I mean, look, you and I both know all these law students, they all hate their lives for

every minute they're in there. Yeah. Were you the gunner? Were you the gunner in your school? Maybe. The gunner of gunners. Holy shit. I'm talking to a real life. Okay. Wow. This is a, this is a moment. Suddenly this starts to make sense. All right. That was fun. But I also just got a lot of information. Me?

Megan is a serious player with a lot of intellectual horsepower. 3.9 GPA, full ride to law school. She thought it was easy and she was a gunner, which is the kid in law school class who always raises their hand and knows everything. All of this is incredibly impressive. But I think it's even 10 times more impressive when you put some context around where she came from.

Her grandmother worked at a gas station. Her mom went bankrupt. Now Megan is about to graduate and become a lawyer. This is a big moment. Megan is literally changing her socioeconomic trajectory for the rest of her life and likely for future generations. Niles, what's your take? I mean, sometimes the partner knows more than the person themselves. Have you heard all of this before about Megan's upbringing?

- Yeah, yeah, and I think one thing that you just mentioned too,

That's really key to this is that Megan doesn't really like sharing intimate details like that with other people. That's what confuses me because you know, all these influencers online, you know, they're always starting off with the same old story. I grew up in a shack. I was poor. And then you find out they grew up in fucking suburbia in like a $500,000 house. I'm like, I'm going to fucking kill you right now. But you actually had

an amazing transformational story in your life. And it's like the absolute opposites, you know, Salvation Army, full ride.

Like it's mind blowing. Yeah. I think part of that honestly is what makes you not want to share it. Everyone likes to talk about themselves so much and like what they've accomplished and like their sense of pride that there's a sense of pride, I think for both of us of like kind of keeping that to ourselves and being like, we know where we came from. We know how challenging it was for us, but we don't share it because we don't have to, you know, we are the people that we are and that's okay. Do you grow up poor also? Yes. Very similar to Megan actually. Mm-hmm.

So what did you learn about money growing up? That it can disappear really quickly. Did that happen? Oh, yeah. My dad, he was the sole earner in our family. And during the recession in like 08, 09, he lost his job and had to liquidate his 401k. And yeah. I'm sorry to hear that. That must have been very disruptive to your family, right? Yeah, extremely. Yeah. Did it produce like long lasting effects in your family?

Um, I would say yes, because my dad is now kind of, I hate to use the word, but like estranged from our family. And he, and that kind of all stemmed from that disruption, I would say, you know, I mean, it was, it was to the point where

Again, same kind of story as Megan. We were living off food stamps in a house that was foreclosed on, but the bank lost the paperwork. So somehow we weren't paying for it. And the AC would get turned off in 95 degree weather and the water would shut off. And yeah, so definitely instability is there. Just out of curiosity, how much is your salary going to be when you start getting paid in a few months? I don't know.

$215,000. Can you say that in a full sentence, please? I want to make sure I heard that right. I will be making $215,000. Round of applause. That is absolutely incredible. Does your mom know how much you're going to make? No, I'm really embarrassed about it. She's about to know. All right. What do you think is going to happen when she finds out how much you are making? She's going to ask me for money. Really? Yeah.

What are you going to do? I kind of want to pay off her mortgage one day, but I'll probably say she's already asked me for money. She asked me for money over the summer. I did give her some money. I'll probably give her money. Okay. If you need help with that, I can talk to you about that as well. You know, some strategies for that. Okay. So, wow, you're about to make 215,000 after making essentially nothing.

Your whole life. It feels insane. It doesn't feel like I deserve it. I don't think I ever will feel like that. Yeah. I'm surprised. Yeah. And do you know in what way I'm surprised? No. What do you think? Why do you think I'm surprised? Maybe like jumping class status. Fuck yeah. It's incredibly difficult. It's incredibly inspirational. Yeah.

Everything you've mentioned from the fact that you grew up with a single mom, the fact that your mom taught you these money lessons, which were very maladaptive, the fact that you had to pack yourself and move. I didn't do that. And then you got a full ride and the three nine. And did that ever occur to you? Somewhat and in small parts. Yeah, I think I had a difficult childhood. You're right. You are inescapably young.

tied to where you grew up. But to me, that's also the good news. The good news is you know exactly where you came from. You don't have to tell everybody if you don't want. That's okay. But that is your past. Personally, when I hear your story, I'm incredibly inspired. I go, holy shit, I thought I accomplished something. My parents, immigrants, all that stuff, it's like nothing compared to what you accomplish. Nothing. It's amazing.

It is the definition of the American dream, in my opinion. You don't have to escape your past. It's never going anywhere. But you can learn how to turn the page and to embrace this new chapter of your life. I'd like to do that, for sure. The past does follow us and it exerts peculiar influences on us. Think about it.

I grew up in this place. Now we're making more. We're living in a much nicer place. So why do I feel so guilty? Why do I feel so anxious when it comes to talking about money with someone I love? This is normal. You cannot take away the past. It exists. It will never leave. But what I hope to teach is that you can add on extra layers and extra skills to

so that you can retain that past and never forget it. You can also create a new future for yourself. All right. All this comes and it affects the way that you think about money, the way that you talk about money, and the way that you behave with money. In light of all the things we just talked about, about where you grew up, what do you think you have brought from your past into your current relationship with money?

A lot of negative emotions. Like we've discussed, shame, guilt, and unconfidence. It makes me avoidant. Definitely. What else? Guilty. Whenever I buy something that I can't afford, I think I'm scared of money. And so maybe I commit to spending more or sending more to Niles than I have to or he expects. Yeah. And then you tell him...

I have no money. I have no money. And I don't actually believe you telling me that I can take some of that money back. Yeah. Fast forward this, do that, but do that for the next 25 years. How do you think that affects your relationship? I think it makes me feel like I have to...

Take care of both of us. Okay. And maybe stay in a job that I wouldn't want to. That's mainly what I'm scared of. Well, you are a corporate lawyer. That's how you already feel. Yeah, I'm worried. All right. So let's put that aside. I don't think it feels good to have your partner not believe you. Yeah. Like that lack of trust...

It's one thing when the two of you are engaged and living together, okay, and then you get married and then maybe you grow a family and then, and then, and then. I mean, how does it feel after 20 years of your partner just saying like, I don't believe you, doing the same fucking fights over and over again. So let's not do that. Yeah. Especially because the two of you are going to have a great amount of money. This is not a numbers problem. Would you agree? Wait, what was that look on your face? You don't agree. That's okay if you don't agree. Tell me.

I'm worried still. Okay. You're worried you're not going to have enough money. Yeah. Because I don't know if I'll ever feel like I have money that I can spend how I want. I feel like maybe we'll have enough money. What do you want to feel? Empowered. I want to feel like I have a plan that will actually work for my money and that I can trust myself to make one. I also want to feel like

I can purchase the things that I want to go on vacations and contribute my part of it and not feel the need to pay for all of it. Niles, any objections from you on any of that? I'd love all that. Okay. Do you believe him? Yeah. Good answer. Okay. All right. Let's look at the numbers, shall we?

All right, let's recap on the numbers here. They have $290,000 in assets. That's a house and two cars. By the way, on their cars, they spend just $75 a month on gas total. Fantastic. And Megan is being added to the title on the house. Great. Megan has zero in investments. Niles has $165,000 invested. Their savings is just under $40,000. Their debt is $229,000, 95% of which is...

their mortgage, meaning Megan only has $10,000 in student loans. Just to be clear, you have only $10,000 of loans graduating from law school? Yes. And I think they're going to be canceled if things go my way. Do you realize how ridiculous and amazing that is? Yeah, it's incredible. You could graduate with $100,000 of loans. It would not make a difference because you're going to be making a really high income. I wouldn't have gone.

Okay. Just as a hypothetical, because I think this is important. You would not have gone to law school if you had to take out 100K of loans? Probably not. Okay. And let's say that I was interested in law. Do you think I would go to law school if I had to take out 100K of loans? Yeah, maybe depending on your comfort level with the debt. Yeah, I don't give a fuck. 100K, whatever. I know how much I'm going to make as a corporate attorney. $200,000.

then 300 and blah, blah, blah. And you know, you're gonna, you're going to be a partner or whatever. That's a lot of money. That number is inconsequential. What's the difference between us? You see the return and I see now. Close. I see the ROI. You see the cost only.

Cost is important. Absolutely. If you were going to some like 50th tier law school and you're only going to make 60K out of, then no. But you're obviously going to a good school. You're going to be working at a great firm. Why not? Different way of thinking about it.

The most common money lens in America is cost. How much did that cost? My God, you could get that so much cheaper. Why would you need to spend that much? One of my students recently sent me this Instagram post of a two star Michelin restaurant in San Francisco. She told me that she's eaten there twice. And the comments on one of the reels was a bunch of people saying, ew, who would spend $275 on this? I'd just be hungry. I'd rather go to McDonald's. This is what I mean by the money lens of cost.

Most people only see the world as if they are wearing a set of eyeglasses that can only see cost. Yes, cost matters. Absolutely. But it's also limiting. If the only thing you're looking at is cost, it's kind of like only caring about height when you're dating. It's just a tiny sliver of what actually matters.

I think a much more savvy way is to look at value as well. Now, there are some areas of life where value is very intangible, like an expensive piece of clothing. This is where a lot of us lie to ourselves. We go, it's an investment. No, it's not. It's a luxury. That's the same with personal training. I used to say it was an investment, but now I've realized

It's a luxury. An investment has the potential to pay back a specific material reward. Otherwise, people start to call everything an investment, which is exactly what people are doing now. My lipstick is an investment. My sweater is investment. My office chair is an investment. Get real. But in other cases, there is a very clear measurable ROI. Going to law school would make Megan money.

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You were not raised thinking about ROI, making those trade-offs and calculations. But at the level that you are now playing, that's a skill you're going to have to learn. Yeah. Okay. All right. So $229,000, only $10,000 being student loans. Wow. All right. What's your total net worth?

$264,300. Let's talk about income. What is your current gross household income, Niles? $8,600 a month. Okay. And how's that split between you and Megan? I make all of that. And she makes zero. Okay. You're a student. Fine. No big deal. Megan, how do you feel about making zero in this relationship right now?

I feel like it's normal. My feelings won't change when I start making money is what I'm worried about. No, like you could earn 10,000, 20,000, 50,000 a month and that wouldn't necessarily change your feelings, right? Yeah. Right on. I agree with you. All right. So we got to find something else that we're going to do because it's not just the money. Take-home pay is 6,600 a month. Fine. Your fixed costs are 54%. That's really good. That's really good. All right, fine.

20% on investments, which is good, especially at the current income you're making. That's fantastic. If you were to keep that up for just a few more years, you'd be in an absolutely phenomenal position. That's really good. Savings goals at 23%. You got a wedding coming up. Is that right? Yes. All right. When's that? September 13th. Oh, wow. It's coming up soon. Okay, great. Congratulations. Thank you. So you're saving aggressively towards that.

And then once that wedding is over and honeymoon or whatever, you'll probably take that money and redirect it somewhere else. Yep. That's the plan. Good. And your guilt-free spending is at 3%. Is that true? Yeah. Sometimes we go and get a pastry. Split it? You know it. Sadly, I actually believe you. All right. I mean, I like you guys. I like the discipline. I'll say that. I like it.

Are you doing it for a reason? So all these other numbers can be what they are. I mean, what if you were to take your investments to 19% and take 1% and redirect it so you guys could buy two croissants a month? Like, do you want to do that?

Because they've been living a life of scarcity for so long, Megan and Niles literally lack the ability to know how to adjust their spending. It would be like me going to ask a random person on the street, how would you handle $20 million from the lottery? Where do you even start? I think the two of you have the lowest amount I've ever seen of a couple for guilt-free spending. You know that? That's sad, but I feel like it's expected. When do you get to feel good about money?

I think when I know that my retirement is secure and that I have enough money and savings that we could do whatever we wanted to. And I don't mean like me, I mean like we both of us, because that's kind of how I view our money. Is there a number? No, I wouldn't say there's a number. So it's a feeling. Yeah, it's definitely more of a feeling. Okay. And where do I find the definition of that feeling on this conscious spending plan? I don't see it here somehow.

Oh, yeah. Yeah. I mean, this is Megan's favorite little anecdote about that is I use this little gas app that'll save you like 10 cents on the gas. I'll do it for one cent, though. It makes us drive all over to go to a specific. Is this really happening right now? It'll save us 12 cents. And I'm like, we're doing it. I mean, you didn't have to tell me any of the rest of your history. I already knew how you grew up once you told me that fucking gas story. Yeah. And like, it's not about the money, is it?

What is the feeling you get when you roll up to that gas station? You go, mother, fuck these oil companies. I found three cents a gallon cheaper. What does it feel like? It feels like a win. I'm all for finding the win, but this is just an example of playing small. Shopping for gas, playing the frequent flyer mile game, posting funny memes about how you went to Target to only spend $20, but you actually walked out with 200. And what is dear husband going to think? Fucking hate those.

It's playing small. What a tragedy to get wins from something as small as shopping at a store full of commodities. Or in Niles' case, to drive around actually losing money to save $10 on gas. Excuse me, not $10, 10 cents!

The people I speak to who do this kind of stuff, they actually don't need to. They choose to, not realizing that their decisions to drive an extra two miles to save 10 cents are actually keeping them obsessed with $3 questions. That, in my opinion, is a tragedy. I don't like playing those games. But I think what stands out to me most...

is that with the current rules of your game of life, you're doing pretty well. Your fixed costs are low. Your investment is solid. Your savings goals are great. Your guilt-free spending is fucking horrible, but you've turned it into a virtue. We only buy one croissant per month. We're so cool. Fine. I'm not going to argue it, but fine. The problem is the rules are about to change in a big way. Do you know how you're going to change with them?

No, honestly. I mean, we've talked about the amount of money after putting it into the new conscious spending plan. And we're like, this is honestly ridiculous and insane to think that we're going to have like $1,000 a month that we could spend on something. I'm like, I don't buy $1,000 of things a year. Your current strategies work for the rules of your current game, but they stop working when the rules change. I would agree. Yeah. Should we look at the new rules?

All right. So Megan, you're about to get paid, right? First time in a long time, basically ever. Right. So how much are you going to make per month gross? Well, let's see. I'll make $17,916 a month. You're going to make $18,000 a month. How does that feel to say?

I think that's the amount of money I've made in the past like seven years. Yeah. Crazy. That's like amazing. It's ridiculous. It's all, it's bewildering. It's all of those things, but it's going to happen. Yeah. It's scary. If we didn't talk beyond right now, what would you end up doing with it? I'd probably be a lot less involved with how it's spent than I'd like to. And I'd probably have to ask Niles for it.

Okay. So you would just get the paycheck, send it to his account, and then probably feel like, I can't do anything, I have no money, all that stuff, right? Yeah, because I don't want to ask him. Yeah, even though you yourself sent it to him. Yeah. And after talking now, what do you recognize about that pattern? What are you doing when you go down that path?

I'm avoiding the money, getting rid of it as fast as I can. There you go. Not learning any valuable skills. There you go. It's like the money came to you and instead of you touching it and engaging with it, you just, you literally just go hot potato onto the next person out of my hands. In fact, I'm still poor, not a healthy relationship with money. No, I want to learn how to advocate for myself better. Um,

and not resent Niles, who I feel like is just losing with any choice that he makes. Megan, you need to be able to ask for what you want when it comes to your money. He's not going to read your mind. Yeah. How does that strike you? That strikes me as true and uncomfortable to think about. Yeah. Yeah. Good. It should be. That's the level. You're jumping from here to here.

It is an uncomfortable jump. But the fact is, one way or another, you're going to be in this situation, the situation where you're making 18K a month. One way or another, you're going to have to figure out how to deal with it. Either you're going to continue on the path that you've continued on, which is to hand over the money to him, let it go hot potato in one hand and out the other, and then feel resentful and like you don't have anything, which doesn't do him any favors. Niles, are you on board with that?

Yeah, 100%. I think I'm like a money chameleon. And with my mom, I inherited her reckless approach. And with Niles, maybe he's slightly too conservative in his approach. And it leaves me feeling like I can't spend the money that I get when I occasionally get some and I need to give it to him. Yeah.

Yeah, I can sense this desire and need for both of you to have some sort of joint account where it's structurally set up that it's working for both of you. I also can sense the need for some individual money for each of you to do whatever you want with. No questions asked. So we'll set that up too. I like this chameleon comment you made.

It's very perceptive of you to recognize that. In psychology, there's this concept of high social monitors and low social monitors. High social monitors, they're always observing what's going on. And if they're in a certain situation, they will act that way. So you had your mom as one model, right? You have Niles as another. Who's the model that you want to choose to model after now?

Honestly, neither of them is what I see for myself. Is there somebody in your life that you can think of that you admire the way they treat money? Honestly, no. I really haven't. I'm not informed about any financial situation that I want to emulate. Do you think of a TV character, movie character? No.

Honestly, the way you talk about your money sounds pretty nice. You seem like you're not feeling a lot of the negative emotions. No, when you said, you were like, I feel, you said, I feel raw. I was like, what word is that? I feel raw. And then I was like, oh, she's saying guilt. I don't even know what that word means. What the fuck is guilt? What does that mean? Okay, so you can use me, right? And I can be your metaphor. You know, like I used Captain Picard.

Sometimes when I'm like, shit, what would Captain Picard do? You can use me. And you just go, what would Ramit do? Right? And then adapt it for your own situation. So sometimes we know that our history misleads us. So we need to create a new model for ourself. If it's me, fantastic.

All right, what would Ramit do? Here's what I would do. I would start by assessing the state of money in this relationship, including the numbers and how we talk about money. That's what they're doing right now. Then I would decide on my rich life, starting with something vivid and specific. I would have my rich life, your rich life, our rich life. Perfect. And then I would set up the systems to make it happen. That is exactly what I would do in that order. Shall we look at the conscious spending plan with the new income?

Because I'm really curious what you're going to do differently. Sure. Cool. Can you guys just tell me what your gross household income will be after this income change? $27,516. Every month. Are you guys still going to be driving around for cheaper gas? Niles? It'll be hard not to, I'll be honest. Niles, I'm going to kill you.

Groceries. Looks like you're going to spend a little bit more. Wow. You guys are splurging. Yes. What are you going to get? Well, I like to shop at the farmer's market. That also includes eating out. This is hilarious. Your groceries at the farmer's market and eating out is a total of $2,000 a month. I feel like that's an insane amount of money. We have 900 right now. What are you guys going to get at the farmer's market? Some almonds. What are you going to get?

Mushrooms. Peaches. Wow. This is a big day. All right. She goes, I went to law school for like 30 years so I could afford some farmer's market peaches. God bless you. So great. I have nothing to add. You're under the recommended 60%. You're at 49% even with a $5,000 a month rent and your peaches. Awesome.

Sounds great. Okay, some of these numbers do really sound high, just saying them out loud. And this is one of the things that those people on Instagram were reacting to. $275 for dinner? Outrageous. This is why I always want you to calculate your conscious spending plan in percentages.

Because it's true, dinner for $275 is outrageous if you are making $25,000 a year. But if you make $300,000 a year, it's not. And if you have a 20% savings rate, whether at a high income or middle class income, you can save for things that might seem unimaginably ridiculous.

Context matters. It's like asking someone how much they bench. Oh, 225. Wow. All right. Let's add some nuance though. Is that your first set or your last? Are you training for the first time or are you 10 years in? Do you weigh 250 pounds or 150? Fuck, as I say this example, I'm just getting mad because I actually can't bench 225. Maybe I'm just bitter. All right.

Niles is about to talk about throwing money away on rent, which is perfect because I can just channel my existing rage right now into this next part of our conversation. Let's do it. Niles, you feel good? Yeah. I mean, I think the only thing... It does feel like an insane amount of money, even $2,000 a month for groceries and eating out. I'm like, that's a lot. But I think the challenge that I have with renting, and I know Megan has said that you talk about this, is...

It feels hard for me to be like, okay, with spending $5,000 a month on rent. It feels like I'm throwing it in the drain. Okay. Let's just do this. I told him not to say it. Yeah. He said it. He fucking said it. Now we can't. Look, you pulled the plug. The water's rushing down the drain. We got to address it. All right. If you were to spend $5,000, you feel like you'd be throwing money away on rent, right? I'll give you a couple of examples where the math is surprising.

Living in high cost of living areas, styles like New York, San Francisco, LA, every time you run the numbers, the vast majority of the time you find that it's actually cheaper to rent than to own. And I'll give you a personal example. When I lived in Manhattan, my apartment, let's just pretend it was $3,000 a month.

The place next door, same view, same square footage, all that would have cost over $6,000 per month when you factor in taxes, interest, maintenance, all kinds of stuff. So it would actually have been over $6,600 a month. So what I did was I took that $3,600 a month. And instead of buying, I rented, which was a great place. And I took that $3,600, I just invested it, which actually ended up making me more in the long term.

But there are also some other reasons. I didn't know how long I was going to be in New York. So I wanted optionality. I didn't want to buy because it would have been incurring huge costs. And if I leave, fuck, do I really want to be a landlord? No. Do I want this to be that big of a part of my portfolio? Maybe, maybe not. So there are a lot of different concerns I had. But ultimately, mine was a lifestyle choice. First. Financial. Second.

Okay. Okay. So for you, I can't tell you what the financial part's going to roll up to be, but just so you know, like I'll tell you my back of the napkin little calculation I do, whatever the mortgage is, I add 50% on that to account for all phantom costs. Okay. All right. That's how I think about it. So the math is in my book, chapter nine, and I have a bunch of stuff online about this.

But please don't feel you're throwing money away because just the same way you go to a restaurant and you happily spend money there, you are paying for value. It's the same thing whether you rent or buy. Okay, that makes sense.

If you want to learn more about everything I just said regarding renting versus buying and how to actually calculate your own numbers, go to iwt.com slash house guide. There's a free guide I put together where it shows you how to think about buying versus renting, including the actual calculations you need to make. That link again, iwt.com slash house guide. Okay. All right. Your investments would be 25%.

fantastic. So in this case, you took a bunch of money and you redirected it to investments, basically $5,000 a month. That's outstanding. I'm sure your work is going to have some 401k match. You're doing over 60k a year of investments. That's great. At this young age, oh my God, 10 years of this, you guys will be in an absolutely phenomenal, unstoppable financial position. You guys want to do the math right now? Sure. Sure. All right. So

What's your current amount invested? 165. Okay. 165,000. How much are you going to put in per year? To this calculator, 60,000. Okay. That's this year when you're 28 and she's 24. But we're talking about the average over the course of your life. I know it's hard, but is it more or less than 60,000 a year? I would say more. I don't know. Way more. How much more? 80,000 maybe. Okay. Okay.

$80,000? I'd say like 3% more a year or something like that, depending on how much inflation and raises are. I don't think corporate attorneys get 3% raises. How much do you make after like two years, Megan? Like over $300,000. And then just give me the key numbers on that curve. $300,000, then what happens the next year and the next year? Like $350,000.

Probably 400. And then there's like some bonuses in there. Anybody hearing a 3% rate in this? No fucking way. They don't pay those lawyers that much. They pay them to sit there and bill 2 million hours a year. All right. So what's the answer? The answer is it's definitely more than 60. It's definitely more than 80. What's the number? I'd say higher. I mean, I want to say 100 just because it sounds nice. Okay. Megan, how do you feel about that?

Yeah, that's crazy. Yeah, $100,000 a year invested. You never even made that in your entire life combined. That's the curve you're about to enter on. So again, you don't have to master every nuance of this right now, but I just want to show you what these numbers look like. All right, I want to point out a couple of fascinating wrinkles there. What they just did is really funny and really common. I have found that people find it impossible to estimate what their lifetime average earnings will be.

Like I constantly talk to someone in their early 30s making $80,000. And I ask them, how much do you think you're going to make over the course of your lifetime? They go, $80,000. I'm like, you fucking earned that at 31 years old. You think your salary is going to freeze in time like a stegosaurus? Have you ever looked at the median salaries of people like you? What it really comes down to is people are afraid to make an assumption because they believe if they get it wrong, they will have failed.

I'm like, what? If we have a chance to dream big or small, why not just choose big? The funniest part of this whole conversation, by the way, is how Megan was just sitting there quietly letting Niles talk about his 3% raises. And then when I asked her, hey, Megan, what do lawyers make? She's like, oh yeah, 350, then 400, then 500. It's like, Megan, speak up.

Okay. Anyway, you guys constantly minimize your dreams. It drives me insane. But in the grand scheme, it's fine. You'll just end up with millions of dollars more than you ever imagined and no real idea or skills what to do with it at age 65. Whatever. Let's get back to the numbers. So I put 37 years for this to compound because that's how long until you're 65. What do you guys want to do here? How many years do you want to calculate this for?

You want to just do 20 to see? Yeah, 20, 25. All right, 20 years. And your interest rate, what should we put there? You don't know. Have you read my book? 5%. 7%. Who's read my book out of the two of you? Oh, of course the gunner did. All right, 7%. You are correct. And now again, why it's all in there. You can choose seven, you can choose eight, historical, blah, blah, blah. But I always use seven for my calculations. All right, so what do you think the number is going to be here? In 20 years, investing $100,000 a year

Starting with 165, what do you think it's going to be? 4 million. All right. 5 million. Want to do something fun? Yeah. Why don't you just let it sit there and do 25 years? Just five more years. It took 20 years to get to 5 million. What do you think is going to happen in five years? Should almost double, right? My man knows the rule of 72. $7.6 million. And if we left it in there for 30 years instead of

20 and 25, we're at $11 million. Now, if I ever fucking find out that you drove 10 miles to get gas when you have $11.3 million, I'm going to find you and I'm going to hurt you. What do you think? Yeah, it feels fake. It doesn't feel like, oh, that's what's going to happen. Something is going to happen between now and then that's going to make that all messed up. I don't know. That's what it feels like to me. Probably because that's what happened to my family. Exactly. You made the connection beautifully.

It doesn't have to happen that way. You never have to spend so much that you put yourself at risk. We can manage your risks, but there is no virtue in living a smaller life than you have to. Conservatively, you have $5 to $12 million. It's going to happen. It seems to me that it's time to start building those skills right now. I think that Ramit raised a fair point when he said that

your investments are generous right now and looking at the calculation that we just saw and knowing that our income will increase and we have 30 years to do it. I think that maybe we could divert a little bit of that money and pay for a vacation or for us to have more experiences together because staying at home is really,

Getting old and cooking when I have been working for 10 hours, I think it's not going to work for us. Yeah. No, I 100% agree with you. Especially, right now we're saving $600 a month as a down payment. We're not going to buy a house. We don't need to do that. So I think that makes a lot of sense to improve our quality of life now rather than, oh yeah, it's going to be good in October. Megan, I see you nodding a lot. Is that connecting with you?

Yeah. I love to think about what I could buy someday. Like I often, we visited Maine this year and I really liked a certain town and I thought like, wow, maybe we could spend summers here and, you know, buy a house or rent a house for the summer. So I look at

um the house is for sale there even though this is like a far-off goal yeah and the same thing with all these things i want to buy for our wedding i have a list including the prices of everything but then when it comes down to it i just can't buy it because because i feel like i feel like i'd have to ask for it i feel like there might be some judgment

about it from Niles, the same way I feel about telling other people something personal about me. Maybe this is a personal desire that I just want to keep to myself. - Nothing you've mentioned seems outrageous to me. Can I just tell you that? Wanting to one day get a house? Okay, something nice for your wedding? Why not? It seems to me Niles is fairly reasonable, but it also seems to me that you expect him to magically be able to read your mind. - Yeah, I do.

And I also assume that he doesn't find these things as valuable as I will and that there will be some judgment about them. And worst case, maybe there will. What I'm not going to do is pretend that both of you are going to agree on everything for the rest of your lives. It's not going to happen. Instead, what I will do is teach you how to handle these natural disagreements. First, we have to be able to just articulate what we want.

I know you articulate what you want at school because you couldn't achieve what you did without going for it. Like that was not an accident. Would you agree that the levels you achieved? Yeah, I plan for it. Exactly. Getting that job you got, not an accident. You went for it, didn't you? I did. You guys are awesome. Now get specific. You have the intention. Talk numbers because I know you're both numerically driven.

So we have 620, I think, per month that we're saving for the down payment. It would make sense to me to take $500 out of that per month. For what? To put it into guilt-free spending. So we'd each have 250. I think that for guilt-free spending, we should each have 150 a month, which is three times more than we both have now. And we could go to the tennis tournament that we want to go to in March, which

And not just look at the tickets and never buy it like we've been doing. It's only $90. We could go there. Yeah, let's do it. That makes a lot of sense to me. That's awesome. How do you feel about that conversation? Much better. I think if we didn't have $30,000 in savings already, I might feel different. But we do. So we don't need to keep saving that money and having literally no money to spend on anything fun. That would be nice.

I love that. I really enjoyed watching you both joke around and even make fun of yourselves. The tennis tournament, it's only 90 bucks. You're right. It is only 90 bucks. And your quality of life to give you something to remember and create these memories, absolutely amazing. It's not like you're asking for a $90,000 vacation. 90 bucks, it's meaningful. You both love tennis.

You could do it. You could do it today. You don't even have to wait for this new income to come in. So to me, this is such an awesome example of training wheels.

90 bucks. We redirected it from here. Oh, it feels good. You're building the skills and you're probably going to encounter some stuff. You're going to go, oh my God, I didn't realize we should, oh, the coffee, I didn't budget for it. This is $8. It's so expensive. Okay. You'll deal with that. And you're each time you go through one of these uncomfortable situations, what you're really doing is building the skills so that when you are making $18,000 a month, $20,000 a month,

you've started already building those skills with smaller amounts. Sounds great. Yeah, makes a lot of sense to me. Yeah, I think especially in the future dynamic, we'll feel, I mean, I don't want to like, I'll pawn this off like, oh yeah, we'll do it in the future. But I feel like our future budget does feel more flexible in that way versus our current one would be like taking from retirement or taking from savings, which now that we've had this conversation feels a little bit better. But I think before it was a hard dynamic to change.

Well, you do buy some flexibility when you add an extra $215,000 a year. Before I share the follow-ups from Niles and Megan, I want to remind you to go to YouTube, search for Ramit Sethi, and follow my account there. You can watch this podcast with Megan and Niles and see the fascinating body language in this episode. Now, I did something a little unusual to wrap this episode up with them. I was more directive than I usually am.

I suggested that Niles say, Megan, I really appreciate you contributing so much for our wedding, but I want to send you back $1,000 of your own money for you to use. And she resisted. She said, I don't know why, but it wouldn't feel meaningful to me. And this is what I said. I said something that I rarely do. I said, you know what, Niles? I would just ignore her and send it anyway. And here's why.

Megan, you made $30,000 in your internship and you have no money in your account. That's not okay with me. I want you to have money in case there's an emergency. And I want you to have money so you can begin trusting yourself. It's rare that I'm that directive. But in this case, sometimes you need to just brute force it in order to begin building the foundation and in order for Megan to begin trusting herself with money.

One way or another, they're going to start having a lot more money. Might as well build the skills when the stakes are low. Here's the follow ups. Megan said, I learned that I caused myself internal anguish for no reason when I don't communicate my needs clearly to Niles. When I do communicate them, Niles is more receptive than I assumed he would be. I realized that I am avoidant with money and that part of me not communicating my needs is avoidance.

After speaking with Ramit, we discussed our current CSP together. I was pleasantly surprised to hear that Niles had considered my expenses when we talked about the CSP more. Great. Let's hear from Niles. Niles said...

I learned how to trust Megan more with some of the financial decisions that I had been making on my own. I also learned how to take a more relaxed approach, especially as it relates to our savings. I was surprised by how much of our current habits and feelings towards money are influenced by events in our childhood and familial experiences.

And they both said, we rebalanced our CSP together to move money from saving for a down payment into fun money. Now we each have $200 of fun money per month. We calculated the money we still need for our wedding and honeymoon, and we decided where it's coming from. We are also going to put some money into savings and keep some for our own purchases too. Finally, we also booked the tennis tournament for exclamation points.

Megan and Niles, it was such a pleasure to talk to you. Thank you for coming on the podcast and being so candid. And for everyone listening, as always, find me on YouTube, find me on Twitter, Instagram, TikTok, and my newsletter. And I will see you next week. 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.