Money + Relationships: Building and Living Your Rich Life Together

00:00:00.000 | So like, yeah, Chris, you know, you're living the life and you're well experienced with this, but

00:00:03.520 | honestly, the way people react, they shrink their dreams. We've been taught to shrink.

00:00:08.800 | So I'll literally ask them, "What's your rich life?" And they'll go, "You know, I always have

00:00:14.320 | dreamed of having a beach house. It's not like I need a big one. It could be a small one. It could

00:00:18.400 | be a shack. It could be half flooded, but you know, it would just be kind of nice." I go, "What the

00:00:23.760 | hell? Why are you shrinking your dreams in this hypothetical example? The point is a rich life,

00:00:29.280 | not a small life." So what you just did naturally is actually a great example of what I wish people

00:00:35.440 | would do, is that we are motivated by big dreams and by vivid examples, not by naturally shrinking

00:00:42.320 | our dreams to something that seems modest, but actually will not motivate us three days from now.

00:00:47.360 | Hello, and welcome to another episode of All The Hacks, a show about upgrading your life,

00:00:51.760 | money, and travel. I'm Chris Hutchins, and I'm so excited to have you here today for another

00:00:56.080 | return guest appearance from none other than my good friend Ramit Sethi. He's the author of I Will

00:01:01.280 | Teach You To Be Rich, a bestseller that is sold over a million copies worldwide. I'm a little

00:01:06.320 | partial to the second edition, which happens to feature me and my thoughts on credit cards on

00:01:10.000 | page 37. He's also the host of the I Will Teach You To Be Rich podcast, where he goes behind the

00:01:15.520 | scenes with couples who share all the intimate details of their finances to get his advice,

00:01:20.480 | and his Netflix show, How To Get Rich, just dropped yesterday, which I am excited to binge this week.

00:01:26.320 | Now, if you're not familiar with Ramit's work, you may think all those titles about getting rich

00:01:31.040 | feel a bit used car salesy, but that assumption is definitely not true. In all of his work,

00:01:36.560 | he focuses on helping others define a unique version of their own rich life and make the

00:01:41.600 | best financial decisions to start living it. Back when he was on episode nine, we talked a ton about

00:01:47.520 | how to start living your own rich life, so go back and check that out if you haven't. But since then,

00:01:52.560 | he's worked with over a hundred couples to talk about money, so I wanted to dive deeper on that

00:01:57.520 | topic. That means best practices for couples managing their money, building a shared rich

00:02:02.000 | life vision, moving from asking each other $3 questions to $30,000 questions, the red and green

00:02:08.640 | flags you might want to look out for in your own relationship, and a lot more. So let's jump in

00:02:14.240 | right after this. Ramit, thanks for being here.

00:02:22.160 | Thanks for having me.

00:02:23.280 | Congratulations. Netflix shows out. How do you feel?

00:02:25.600 | I feel... It feels surreal. I still cannot believe that I can turn on the TV and see myself.

00:02:34.880 | And I remember filming every one of those scenes. But when I watch the scenes, I know the setting,

00:02:41.760 | I know the street, I know what's going to happen. And then I see my dumb face walking across the

00:02:46.560 | screen in this beautiful cinematic part of How to Get Rich. And I go, "What's that guy doing there?"

00:02:52.240 | So it still feels surreal, but it is amazing that so many people now are watching the show.

00:02:58.400 | I'm excited to dig into it, but let's jump in first to some of what you've been learning

00:03:03.520 | talking to people, which I know you started writing and it's not a two-way medium as much

00:03:07.680 | as you've been experienced now. So with all the conversations you've had with people about money,

00:03:12.480 | and specifically with lots of couples, what do you think one of the biggest misconceptions people

00:03:16.560 | have when it comes to managing money with your partner?

00:03:19.440 | Well, I think the biggest mistake that I see with couples is a lack of a shared vision.

00:03:26.640 | And the way that it manifests is not two people coming to me and saying, "Hey,

00:03:31.520 | we have a lack of a shared vision." Nobody ever says that. You know what they say? They go,

00:03:35.120 | "Why does she spend so much at Target?" Or, "Why doesn't he ever want to talk about money?"

00:03:39.760 | That's how it comes up. So it's really transactional. It's almost focused on these

00:03:45.920 | little jabs about what the other person is doing wrong. And they come to me often and they'll be

00:03:51.360 | like, "I think I know the solution." I go, "What is it?" They go, "We need a budget." I go, "Oh,

00:03:56.400 | really? Have you ever kept a budget?" They go, "Yeah, in 2007, I kept a budget." I go,

00:04:01.680 | "How long did that last?" "Three weeks." I go, "You're crying. Your partner's looking away.

00:04:07.600 | None of you want to talk to each other. And you really think a tactical budget is the solution?"

00:04:12.080 | No. And that's where the conversation really starts. And where do you go from there, right?

00:04:17.040 | You're seeing these jabs. Is it about solving the jabs? Is it about digging deeper? How would

00:04:21.440 | someone listening to this apply this if they're like, "Well, we're not on the same page"?

00:04:25.680 | I always start by asking, "Tell me about a time in the last month or two where you were not on

00:04:33.040 | the same financial page." And I do that very intentionally because it's very easy for couples

00:04:38.240 | to start speaking in platitudes. "He always does this. She always says that." And actually,

00:04:43.120 | those are really just stories that we tell ourselves. We create stories about each other.

00:04:48.560 | He's considerate. She's busy. And that's maybe true. It may be situationally true. But what I

00:04:55.040 | really want to do is take a specific instance. We went out, we celebrated our son's birthday party,

00:05:00.240 | and then we got in a big fight on the car ride home. I go, "What happened?" And I really make

00:05:06.400 | them walk me through it like a movie. I want to know scene by scene what's happening. As they say

00:05:10.960 | it, you can hear people replay their version of reality. And there's a famous study that I remember

00:05:17.360 | studying in social psychology. I think it was a Harvard-Yale football game. Harvard-Princeton or

00:05:24.080 | something. Two schools that are not very good at football. Let me put it that way. And the crowds

00:05:30.560 | from each side were asked, "What happened in this football game?" And both of them had radically

00:05:36.480 | different opinions about the referees and the integrity of the players. And that's exactly

00:05:41.440 | what happens with these couples. So we start there, and then from there, we expand the conversation.

00:05:46.400 | And in over, I think almost 100 conversations you probably had, if not more, what's changed?

00:05:54.400 | Have you evolved your thinking of how to have these conversations or what people should do

00:05:58.960 | or how people should act? Yeah. I mean, you can hear it. Episode one,

00:06:02.400 | I actually lost my temper in episode one. And I regret it. There was a person on there who was

00:06:09.440 | saying some things that I really, really did not agree with. And I actually lost my temper. And I

00:06:14.560 | apologized in the episode because that's not cool. I've become a lot calmer because I've seen so

00:06:23.680 | much. So that's number one. Two, I can read things that are beneath the surface. You ever listen to

00:06:30.480 | Loveline back in the day with Adam Carolla and Dr. Drew? So they would get a caller and within

00:06:36.240 | five seconds, they could identify certain things about that caller just by the tone of the person's

00:06:41.040 | voice. And it seemed like magic, but now I can understand it. So for example, there are little

00:06:47.200 | verbal and behavioral tells that we all have that tell us a lot about money. If somebody's using a

00:06:51.840 | debit card, they probably have credit card debt. They may not even realize why, but they have

00:06:57.520 | credit card debt because intuitively, they don't want to put more money on the back of their

00:07:00.880 | balance. If somebody says something like, "I grew up poor. I'm not afraid to be poor." Again, that

00:07:07.440 | tells you a lot about the socioeconomic way they grew up and how they view money. So there's class,

00:07:13.120 | there's gender, there's a lot of different things that come to play. And you can hear the patterns

00:07:18.160 | after listening to a few episodes. And so once you start to realize people aren't on the same

00:07:24.160 | page about certain things and they've play by played, kind of walk through this, what's the

00:07:29.360 | process for healing, if you will? How should people get on the same page? What are your kind of

00:07:34.160 | protocol or recommendations for how couples should operate around money for a healthy relationship?

00:07:40.560 | I like the way you describe it, a healthy relationship with money. A lot of us think

00:07:44.880 | about a healthy relationship with food or a healthy relationship with our partner or our kids,

00:07:50.160 | but we don't usually think about a healthy relationship with money. We just think of

00:07:55.200 | money as this thing that's always been, for example, guilt-inducing or anxiety-inducing,

00:08:02.320 | and we don't realize that there's actually another way to live. So sometimes it's just asking people,

00:08:06.960 | what would it look like to feel good about money? And they're just stuck. They never thought of

00:08:12.160 | that. They never even realized that they were feeling bad consistently. And so for them to

00:08:17.680 | even think about feeling good is totally foreign, but they could do it. Intuitively, all of us know

00:08:22.000 | what it would feel like. They start by saying what they wouldn't do. "Well, I wouldn't worry.

00:08:26.240 | I wouldn't agonize over buying a pack of gum." I go, "Okay, okay, okay. Now tell me what you would

00:08:30.640 | do." Because people love to identify themselves by what they wouldn't do or what they don't like.

00:08:36.000 | I go, "What would you do if in your rich life?" They go, "Well, I wouldn't worry about shopping

00:08:40.320 | at this place." I go, "Okay, now tell me what you would do." And that is much harder.

00:08:45.280 | So part of the premise is to help people start to rewrite the next chapter of their life.

00:08:51.120 | Oftentimes, the same money beliefs we grew up with, I call them invisible scripts,

00:08:56.480 | are the ones we carry into our 20s, 30s, even 40s. Things like our parents saying,

00:09:02.240 | "We can't afford it." You hear that a thousand times growing up, you start to really believe

00:09:08.480 | it. It's axiomatic. And one day, let's say you have a good job, you're making $120K a year,

00:09:14.800 | and you have money in the bank. And then you realize, "Why am I agonizing over the price

00:09:18.880 | of broccoli?" And it's not "rational," but it's real to you. So I want to help them rewrite their

00:09:26.240 | narrative and rewrite the next chapter of their lives. And how do you rewrite that? Because I

00:09:29.760 | imagine people listening, I know I'm one of them, have had that same problem. And sometimes it's

00:09:35.680 | not "I can't afford this." It's like, "I know I could buy the..." I know from listening to your

00:09:42.080 | show, which I've done quite a bit of, blueberries seem to come up a lot.

00:09:45.520 | Rich people are obsessed with berries. By the way, I am obsessed with berries too,

00:09:50.160 | because when I was a kid, we rarely got them. They were super expensive. And so when I got them,

00:09:55.360 | it was like, "Oh my God, eat them fast." And if I dropped one in the sink while I was cleaning them,

00:10:00.560 | I would feel anguish. And now I have to tell you to be able to get blueberries or raspberries

00:10:08.080 | and put them in my hand and wash them and eat them without counting how many there are,

00:10:13.840 | it feels incredibly rich to me. That just shows you how emotional money is. I could buy all the

00:10:18.960 | raspberries I want. And I still am like, "Oh my..." It's like a jewel. "Oh my God, look at this

00:10:23.600 | beautiful raspberry. I get to eat this thing." It's a great example of how money emotions carry

00:10:29.040 | with us. Let's say you're at a place and you know that oftentimes you can get a nice pint of

00:10:34.640 | rad blueberries for $3.99 and they're $9.99. It might not be that I don't feel like I can afford

00:10:40.240 | blueberries. It might be that I just feel like this is not a good deal. Well, I think a lot of

00:10:45.920 | your listeners are like this, right? They love the deal. They love the hack. And I'm all for that.

00:10:52.480 | There's a time and a place where that makes a lot of sense. In your 20s, certainly you have

00:10:58.480 | more time than money for most people. And you're like, "Okay, I want to find the best airfare deal."

00:11:02.640 | Love it. Totally get it. I did the same thing. I get it. But at a certain point, there's a phrase

00:11:08.880 | from an old self-development book, which is, "As I got wealthier, I couldn't afford to do certain

00:11:15.280 | things." Now, think about what that means. This person was referring to mowing the lawn. For

00:11:20.240 | spending half of their Saturday mowing the lawn. As they became wealthier, they couldn't afford it

00:11:25.200 | because they wanted to prioritize time with their son. And so for me, I can't afford now or I choose

00:11:31.760 | not to spend my time booking flights and trying to get the best deal. For me, the best point system

00:11:39.200 | is to be able to afford the flight that I want to take. That's really hard. That's really hard

00:11:44.560 | because a lifetime of optimizing, it feels like a win, right? You're like, "I got one over the bank.

00:11:50.480 | I got one over the airline." But you may be winning the battle and losing the war. And that war

00:11:56.960 | really is, "What is my rich life?" If you were to articulate what's your perfect week look like,

00:12:02.240 | I bet you spending six hours saving $110 on a flight to New York probably is not part of it.

00:12:08.320 | Yeah, but it sounds like if you can identify, I know you kind of have phrased this in $3

00:12:12.720 | questions and $30,000 questions. It's not that I shouldn't spend the optimization energy

00:12:19.280 | on a Saturday afternoon. It's that there's probably a place in my life where I could

00:12:23.200 | spend it that isn't going to save me $3 in blueberries, but might add 20% to my business

00:12:29.680 | this year or might be spent evaluating other opportunities for a career that could double my

00:12:36.640 | income. So I would say it's not stop optimizing. It's just... Would you say it's more about figuring

00:12:43.680 | out where the optimization can have the most impact? I think it's about elevating yourself

00:12:48.240 | to the level that you are at. When you need to save 50 bucks at the age of 22, it makes perfect

00:12:58.560 | sense. The problem is that most of us get stuck there. And we don't realize that as your wealth

00:13:04.880 | increases, your psychology needs to correspondingly come along. So wealth, by the way, could increase

00:13:10.640 | by your income going up, your investments going up. Your time may simply shrink because you have

00:13:16.240 | a family or a busy career or a sick parent. And so you can't keep operating at the same level with

00:13:22.000 | everything. Now, if it's your hobby and you're like, "I actually love to do flight hacking."

00:13:28.160 | Great. But don't deceive yourself and say like, "I'm doing this to save money." What we need to

00:13:34.160 | do is really adjust our view on the world. That's the crux of these $3 questions versus $30,000

00:13:40.000 | questions. We agonize over $3 questions like, "Should I buy the extra large coffee? Should I

00:13:45.680 | get the cheesecake? Should I flight hack this thing?" Versus if you have a business,

00:13:51.840 | a $30,000 question or even $300,000 question is much better time spent.

00:13:57.840 | Yeah. And I think I'll push back on the flight thing because I think you could probably optimize

00:14:03.600 | away your family vacation for the year, which might be $5,000, $10,000, which for a lot of

00:14:09.440 | people might be a huge impact. I agree. But I think I just have to get over. It's not worth

00:14:16.400 | trying to find the cheaper berries or not get them, but it's so hard.

00:14:19.760 | Let's do this. So I never find success in telling people to get over it. It never works, right? Like,

00:14:25.200 | "Hey, get over this emotion you've felt for the last 35 years. It's stupid. That doesn't work."

00:14:30.240 | So instead, what I really do, especially in around the first half of my conversations with people,

00:14:34.880 | is I really go deep on, "Where'd that come from? What does it feel like to you when you get the

00:14:41.200 | $75 savings on a JetBlue flight? And how does it reflect on your partner? What does your partner

00:14:47.200 | say?" And they're over there rolling their eyes. You can see them on the YouTube video.

00:14:50.640 | And I go, "Okay, that's cool. I understand. I'm not judging them, right? I'm really trying to get

00:14:55.120 | them to express because most of them have never been asked about it and they've pretty much been

00:14:59.120 | mocked by their partner, et cetera. So I'm just like, "Tell me more. Where does it come from?"

00:15:03.520 | And then we start to examine what is their rich life? And if their rich life is, "I want to go to

00:15:10.720 | Bora Bora," or, "I want to be able to stay home with my kids for a few years while they're young."

00:15:16.880 | I go, "Cool. I love that vision. That's beautiful. Tell me more about that." And then we start to try

00:15:21.360 | to bring the things together. Is this thing you're doing serving your vision today or is it not?

00:15:27.840 | And a lot of times you find out that the vision and what they're doing on a day-to-day basis is

00:15:32.640 | totally misaligned. I had somebody who drives miles to save money on gas and it's just not

00:15:40.080 | serving them anymore. It's not even part of their vision. And again, this goes back to the lack of a

00:15:45.840 | shared vision. Most of us don't have an individual vision of what our rich life is. We're really

00:15:50.240 | vague about it. "I like to travel." And we certainly do not have a shared vision that is

00:15:54.960 | vivid and specific. How would you tell someone that's listening saying, "Okay, I want this. I

00:15:59.360 | want an individual and a shared vision." What are the steps to create that vision? What does it

00:16:03.920 | actually look like? Is it written down? Is it an idea? Yeah, it's written down. So it starts off

00:16:08.880 | with just people all intuitively know what they love. So I do a quick little exercise. We can do

00:16:13.440 | it right now. Money dials. Let's talk about it. So what, Chris, is the thing that you love to spend

00:16:19.520 | money on? Very few things, but I do like food. Food. Okay, great. And what do you love about it?

00:16:27.840 | I think especially right now in a world with young kids where travel isn't what it used to be,

00:16:35.280 | right? We used to... I mean, at one point, we quit our jobs and we just backpacked for eight months.

00:16:39.840 | This is just not an option with two small kids. So I think going out and getting to eat at lots

00:16:45.840 | of different restaurants... I get so excited when a new cuisine or a new place opens up. It's like,

00:16:51.200 | "I want to do that because we're getting a little bit of that cultural experience while we can't

00:16:55.920 | travel." So that's something right now I feel like I'm willing to spend money on. Okay, love it. So

00:17:00.080 | that's your money dial. Food. By the way, that's the number one most common money dial is eating

00:17:04.240 | out. So you're in great company. Number one is eating out. Number two is travel. Three is health

00:17:09.200 | and wellness. Four is convenience, which happens to be mine. And then there's many other money

00:17:13.600 | dials. Now, my second question, and the reason I call it a money dial, which you can turn up or

00:17:18.400 | turn down, is Chris, if you could quadruple the amount you spend on eating out, what would it

00:17:24.720 | look like and what would it feel like? Before you answer, everybody listening and watching,

00:17:29.360 | I want you to do this with us. So remember, what is the thing you love to spend money on?

00:17:35.600 | And get as specific as Chris did. He had a big smile when he was talking about,

00:17:38.880 | "I get excited about the restaurant opening." That's question one. And now question two,

00:17:43.120 | what if you could quadruple your spend and turn that dial? Go ahead.

00:17:46.800 | So I know the answer to this because I just seem so obvious.

00:17:52.400 | I think most people listening maybe at one point in their life have done a cooking class. If not,

00:17:56.560 | and you like food, I would encourage it. And when you do that, especially when you're

00:18:00.800 | not taking like a technical pastry making, but you're taking kind of more of a cultural experience

00:18:05.280 | maybe while you're traveling, you're sitting down with someone from a country teaching you their

00:18:10.480 | food because this is the experience I want out of cooking. It would look like if we were going to

00:18:15.680 | instead of go out and spend money on an Indian restaurant, I'd love to hire an Indian cook or

00:18:20.480 | chef to come in and do an Indian cooking class. Are you trying to hire my mom right now?

00:18:23.840 | Hold on. I'm about to negotiate a deal right now. How much are you willing to pay for this?

00:18:28.640 | Where is she based? She'll come to you. Depends on the price.

00:18:31.600 | Yeah, I know. She's got a son who represents her well.

00:18:34.960 | Quadruple though. She's got to do it for less than four times the local Indian restaurant.

00:18:40.160 | I think we might have a business idea here. But yeah, that's what that would look like is

00:18:45.040 | every time if we want to go have a Lebanese dinner, let's go have it with a family at a

00:18:50.160 | house, cook it at our house. I don't care where, but more than just order from a menu at a restaurant.

00:18:54.400 | I love that. What a beautiful answer. Okay. I'll tell you what I love about that answer.

00:18:58.160 | First of all, you've clearly thought about it. Okay. I love that. That's actually quite rare.

00:19:01.920 | When I ask people what would it look like to quadruple,

00:19:04.880 | usually they haven't thought about it. And then their first initial answer is very linear.

00:19:10.000 | They almost always with food say, "Well, I'd probably be eating out four times a week,"

00:19:15.200 | which is possible. But I love that you went multidimensional. It wasn't just quadruple

00:19:22.240 | the quantity. It was the changing the quality. And you went to the experience. I want to have

00:19:27.440 | the cultural experience. I want to have a chef come in or we'll go to them and teach us, create

00:19:31.600 | an experience. There's so many different ways to think about expanding your vision of what you love.

00:19:37.520 | And so if you're listening to this, food is a great example. Chris just gave us a phenomenal

00:19:41.920 | way to think about what would it look like to turn that dial up. If it's travel, you can imagine

00:19:47.520 | you might go to different destinations. You might stay at different hotels if you're a hotel person

00:19:52.960 | or fly on a different seat. You might bring loved ones with you and treat them. There's so many

00:19:59.600 | different ways to expand your vision. Now, the whole point of this, why are we even talking

00:20:04.480 | about money dials, is that how can you create a vision for what excites you about your money

00:20:10.320 | if you only think about money in terms of restriction and anxiety? And that's how most

00:20:16.160 | of us think about money. I ask you, "How do you feel about money?" They go, "I feel guilty. I

00:20:19.520 | feel overwhelmed. I feel stressed." I go, "Okay, well, what do you talk about on a day-to-day

00:20:22.640 | basis?" They go, "Can we afford Target? Why do we spend so much on asparagus? How come my partner

00:20:27.680 | never reconciles this and that?" I go, "Yeah, that sucks. All you talk about is negativity

00:20:32.960 | and reactivity." We got to be able to have a vision so that we can spend extravagantly on

00:20:38.720 | the things we love as long as we cut costs mercilessly on the things we don't. So that,

00:20:43.600 | Chris, is how I start off, really help people create their vision, is to find out what they're

00:20:49.120 | already excited about and then ask them themselves to articulate what turning that dial up would look

00:20:55.200 | like. And do you also ask them what you would turn the dial down on? Yeah, but not till way later.

00:21:00.880 | Because I want them to get super excited. So usually a common example, everybody loves Italy.

00:21:06.560 | It's like the safest destination. We just did an episode on Italy. So much good feedback. Go back

00:21:12.640 | and listen if you haven't. It's like a gimme. It's like a comedian making a fart joke. You're like,

00:21:17.600 | "Okay." You know you're going to get that response. By the way, I'm not equating Italy to a fart joke,

00:21:24.240 | but I am saying whenever you talk about Italy, everyone's got a big smile. Hell,

00:21:27.600 | we even took our parents as part of our honeymoon to Italy because we know everybody loves it.

00:21:32.960 | So people go, "I love to travel." I go, "Where would you like to travel?" And they just go like,

00:21:38.480 | "Oh, I just like to go anywhere." I go, "Uh-uh. You're going to tell me exactly where you want

00:21:42.800 | to go." I force them to get specific. And so we end up with them saying, "I want to drink Italian

00:21:48.240 | wine, watch the sunset in Rome and be staying where we can see the Colosseum." I go, "Now,

00:21:53.280 | that is a beautiful vision. That is really specific. And my final question, who would you

00:21:57.520 | take with you?" So suddenly, they've articulated, they can almost smell it, right? Now that they

00:22:04.800 | have that vision, I take a look at their numbers. And everyone is required to submit all of their

00:22:10.800 | numbers to me so I can see their net worth, income, debt, everything. And you can see it

00:22:15.200 | too. I pop it up on screen. Can you imagine being able to see a couple who overspends by $4,000 a

00:22:22.560 | month every month and they didn't even know it? That happens on the pod. Or a couple who's got a

00:22:27.520 | net worth of like $6 million and they agonize over an extra $100 a night for a hotel. That also

00:22:34.320 | happens. Once they know that they want to go to Italy and see the sunset, it's actually much easier

00:22:41.120 | for them to themselves make decisions about what to cut back on. And that's one of the cruxes of

00:22:46.800 | how to get people to change their behavior with money. What happens if my money dial,

00:22:52.000 | I'm fortunate because I know my wife would say something similar about food, but let's say she

00:22:54.960 | didn't care about food and her money dial is clothing. What happens then? We talked about

00:23:01.120 | building a vision and your money dials, but what if they don't align? Well, that's okay.

00:23:05.200 | They don't all have to align. That's actually a big relief that you and your partner do not

00:23:09.040 | have to see eye to eye on everything. But it does help to see eye to eye on a few big things.

00:23:15.680 | So let me give you a few examples, including from my own life. So I love really nice hotels.

00:23:21.600 | My wife likes them, but she doesn't love them like me. Okay. I love them. And so we actually

00:23:30.080 | have, we've discussed this a lot and we've come up with a solution that works well for us, which is,

00:23:34.800 | you know, when we travel, sometimes we are going to, we go, it's a special occasion,

00:23:40.640 | it's an anniversary, et cetera. So jointly, we're going to stay at this beautiful place.

00:23:44.720 | But sometimes we're going somewhere and she's like, you know what? I'm perfectly happy with

00:23:47.920 | the ordinary place. And I go, Oh, but that city has this awesome resort. I want to stay there.

00:23:53.120 | And so we've talked about how do we want to reconcile that? And in our case, we go,

00:23:57.600 | I will pay the difference personally, because it's valuable to me. And for her,

00:24:02.640 | she doesn't really mind it at all staying anywhere. Other times we go somewhere and we're like, Hey,

00:24:08.160 | we don't actually need to stay at a fancy place. We're perfectly fine. We're going to be in and

00:24:11.520 | out. Cool. We'll stay at a more modest place. That's fine. But the key is we're talking about

00:24:16.080 | it. And we're acknowledging that we've got differences in certain areas and coming up

00:24:19.840 | with a solution for it. More often than not, couples are not, they don't even know what their

00:24:26.560 | money dial is. They don't know what they love and what they don't love. And so everything becomes an

00:24:31.520 | existential question. Why do you want to stay at a on-property Disney hotel? I don't want to,

00:24:37.120 | it's $1,200 more. And it's purely transactional. And if you have to go through life fighting about

00:24:42.960 | transaction after transaction, you've made a wrong turn way back there by not identifying

00:24:48.800 | the key things that are important to each of you. You mentioned that you could just use your money

00:24:53.600 | for the nice hotel. Do you think it's helpful for couples to have some money that's their own

00:24:58.240 | and some money that's theirs together? What's your perspective there?

00:25:02.080 | 100%. So the simplest way to set up joint accounts is one joint account,

00:25:09.200 | which is used for all joint expenses, rent or mortgage, utilities, cell phone, all that stuff.

00:25:13.840 | It pays off your credit card. It goes into joint savings, all of that. But I also recommend having

00:25:21.520 | a little bit of individual money that each of you can do whatever you want with. And I think that's

00:25:26.800 | really healthy. And a lot of people, they prefer to have a little bit squirreled away in their own

00:25:30.880 | personal savings. Fine. Other people want to spend it on their hobby. Fine. In my case, it would be

00:25:35.680 | really nice hotels. Also fine. It's no questions asked money. You get to do whatever you want with

00:25:41.760 | it. That is, in my opinion, a really healthy way to approach a hybrid system of joint and

00:25:46.960 | individual money. And is there a target for how much you put of your earnings into that amount?

00:25:53.280 | And does what you make matter at all in this scenario?

00:25:56.480 | I think it does. Proportional is always a good way to think about how to set up your account.

00:26:01.680 | So if one person is making three times what the other person's making, it's fair to say

00:26:08.160 | that one approach, which I think is pretty healthy, is for them to pay more for joint.

00:26:12.480 | Now, how you negotiate, how much goes into your individual accounts is up to you. But if a person

00:26:18.480 | is making three X more, it's likely they take a little bit more in their individual accounts as

00:26:23.520 | well. Also keep in mind that the person who's earning less should not be totally burdened and

00:26:29.280 | be spending 90% of their money on rent because the higher earner wants to live in a nicer place.

00:26:34.640 | That's not fair either. So the model we use is we have one shared checking account.

00:26:39.360 | All the income from everything goes in there. And all the credit cards get paid. We have our

00:26:43.200 | own credit cards and we kind of spend on them how we will. But we're not really keeping track of

00:26:48.320 | who's spending what and it works. Is that okay? Are there problems we're overseeing or we're

00:26:54.720 | missing of giving people a little more freedom because it's all commingled?

00:26:58.800 | This is a great question. And you are one of the few people who says, "Hey, it's working for us,

00:27:04.320 | but what problems are we not seeing down the road?" That is an amazing question.

00:27:08.960 | So overall, if it's working, I say generally, that's fantastic. What we want to do with money

00:27:17.920 | and account setups is to make sure, as you pointed out, that we're not setting ourselves

00:27:22.720 | up for a big blow up down the road. So here's some things to think about. I know you had kids.

00:27:28.960 | Before, you may have said like, "Hey, we know how to spend. We're married. We don't have kids."

00:27:36.320 | And when you have kids, obviously things change a lot. One person might say, "I want to buy a

00:27:42.560 | really expensive stroller or this type of food, et cetera." And the other might not.

00:27:47.600 | You can do two things. One is you can change the way your accounts are set up.

00:27:51.840 | Two, you can just have open regular conversations. I call them rich life reviews. You do them once a

00:27:57.120 | month or in certain times, once every two weeks, and you just realign. And you don't have to agree

00:28:03.200 | on everything, again, but you can find solutions to make it work. I do think that some things to

00:28:09.120 | keep in mind going forward would be big changes in income. Let's just say you start making 4X what

00:28:16.640 | you're making. You might go, "Hey, I want to step it up. I want to stay at this place, or I want to

00:28:21.280 | fly this type of thing," or whatever. And your wife might not. That's worth a discussion. But

00:28:27.680 | aside from that, if it's working and you have regular conversations, I say thumbs up.

00:28:32.800 | It's funny. I haven't thought about this. There's a book called The 80-80 Marriage.

00:28:36.720 | I don't know if you've read this. Yeah, we've talked about it before. Yeah.

00:28:39.760 | And I interviewed Nate and Kaylee Klemp with my wife on episode, I think it was 43.

00:28:44.480 | I'll link to it in the show notes. But one of the things that I never processed until now

00:28:48.160 | was whether you apply this concept, which is basically that instead of everyone playing

00:28:53.920 | the tit-for-tat game of "We each get $100. We can spend $100." If you could elevate to,

00:29:00.000 | "We know no one's trying to overspend the amount of money that we have as a family.

00:29:04.800 | We're trying to make sure that we have good times and we can do our own things," but

00:29:09.200 | you assume best intent effectively, and you have healthy conversations,

00:29:13.840 | maybe that could be something that works. 100%. But remember, most couples don't have

00:29:20.080 | a vision together. So they go, "Yeah, of course, I trust my partner. We have kids together, etc.

00:29:26.720 | But I just can't get over how they always spend so much on this." And again, they attack the tactic.

00:29:34.080 | They attack the symptom. And what I want to encourage people to do, and what I do on the

00:29:39.440 | Netflix show and on the podcast is to zoom up and say, "What kind of life do we want to live

00:29:44.880 | together?" Some people, their rich life is to be able to pick up their kids from school every

00:29:49.280 | afternoon. Beautiful. I love it. Okay, so what do we want to do with our money to ensure that?

00:29:55.760 | Because if you're spending too much on a mortgage or a truck, then the other partner might not be

00:30:02.800 | able to do that. And so that is where we want to start. What's the vision? What does our rich life

00:30:07.600 | look like down to what does our perfect day look like? And then let's use our money to try to

00:30:11.680 | create that. So obviously, you need two people to create a shared vision. Do you need two people to

00:30:17.600 | be the money manager in the household or do you think it's okay for one person to be like, "I'm

00:30:24.480 | going to manage all the investments and track the expenses and do the budgeting," or is it helpful

00:30:28.000 | to have both people? No, you cannot do it alone. This is a really common thing. People will say,

00:30:33.600 | "Oh, well, she's the money person in our relationship." I go, "Red flag," because

00:30:38.240 | just like you will almost never these days hear someone saying, "Oh, he's the parent in this

00:30:45.520 | family. She's the parent." That's not how it works. Both people have to be involved. It is

00:30:51.120 | that foundational. So unlike emptying the dishwasher or gardening in the back, watering the

00:30:58.000 | plants, which typically one person will do, just natural in a couple, money is much more like

00:31:05.520 | parenting. We've both got to be involved. We've got to have a vision. We've got to talk about it.

00:31:12.320 | And we've both got to put some skin in the game. That doesn't mean that both of you have to be

00:31:17.680 | sitting there tweaking your asset allocation. First of all, you shouldn't even be doing that.

00:31:21.040 | But one of you is probably going to be a little more knowledgeable and comfortable with investments.

00:31:26.320 | Okay. In our relationship, that's me. But we still look at the numbers. We talk about what it means.

00:31:33.040 | And she knows. And when we got together, I told my wife, "Look, it would be really easy for me

00:31:39.920 | to be the money guy in our relationship. That's what I do for a living. I know how to do this.

00:31:43.920 | My systems are bulletproof." But I told her, "I want us to both do this." And I insisted on it

00:31:51.440 | because one day I'm going to get hit by a bus. And the worst thing I could do would be to leave

00:31:56.080 | her defenseless, especially against some 1.5% AUM bullshit charging advisory service. I would come

00:32:05.280 | back, okay, from heaven or hell. And I would be so pissed. I told my wife that. And she was like,

00:32:12.720 | "I would never do 1.5% AUM. Love you, babe." The other thing is you need two sets of eyes

00:32:20.160 | on your money because these things get complicated, right? How should we spend? Am I doing it right?

00:32:23.840 | I just need someone to check me. And third and most importantly, it's just more fun.

00:32:27.360 | Why would you want to go on this journey alone? This is a rich life. It's not about budgeting.

00:32:32.640 | It's not about paying your bills on time. That's a classic myth people have. They think managing

00:32:37.280 | money means paying bills on time. Wrong. This is about creating a rich life. And you want to do it

00:32:42.000 | with your life partner. It's just more fun. A lot of times I get emails from people saying,

00:32:47.280 | "Oh, I really want to get my spouse involved," but they're just not that interested.

00:32:50.800 | It sounds like one tactic is create this rich life together and excite people about

00:32:57.280 | money with what it can do. Are there other things you've seen work well to get people involved?

00:33:01.920 | But wait, hold on, hold on. Yes. But I don't want to skip this because

00:33:04.400 | we can't just skip over like it's not fun. Yeah. Your partner's probably not involved because

00:33:09.280 | every time you both talk about money, it's a fight and it's some meaningless tactical question.

00:33:14.240 | "Oh my God, I can't believe you got the expensive pickles." Who the hell wants to talk about pickles

00:33:18.880 | for the rest of their life? I wouldn't even want to have those conversations. So I would say to

00:33:23.520 | everybody listening, the last time you talked about money, the time before, the time before,

00:33:28.960 | was it a transactional question? Was it a negative question? Was it something accusatory or was it a

00:33:36.160 | dream? "Hey, you know what? I've been thinking, what do you think would make this rest of this

00:33:40.960 | year amazing for us? Oh, we're planning to see our family for the holidays. What if we took a

00:33:46.480 | day before and just did something for the two of us? Have you ever had that kind of conversation?"

00:33:51.520 | And so I talk about it all the time, but I've tried to model it. That's why on the podcast

00:33:56.800 | and the show, you can actually hear me showing couples. You could see me showing them how to

00:34:02.160 | do that. Look at the excitement right now. That's the kind of energy I want people to bring to it.

00:34:06.640 | So yes, that's number one. And recalibrating your relationship always is hard. Your partner

00:34:12.320 | might be like, "This is really weird. Why are you talking like that?" You go, "You know why?

00:34:15.520 | Because I've realized that when we talk about money, it's not really fun. And I want it to

00:34:21.440 | be fun. I love you. And I want us to create this amazing life together. Will you sit down and do

00:34:26.240 | it with me?" That's compelling. So that's number one. Two is, I like people to save for something

00:34:34.080 | that they can do that's really fun this year. It could be an overnight trip camping. It could be

00:34:40.560 | an amazing trip to Thailand. It could be a meal at a restaurant that you've both wanted to do.

00:34:44.800 | But that's a really fun way to make the connection that spending money can be something that is part

00:34:51.520 | of your rich life. Totally different than, "Oh God, we got to pay this bill." So I hope everybody's

00:34:56.880 | hearing over and over, start with the positive. Start with the vision. Start with using your money

00:35:02.480 | to live the rich life and all the restriction and cutting back and all that stuff. We could deal

00:35:06.320 | with that stuff later. But I do want to talk about it because I'm imagining a conversation

00:35:10.640 | between a couple being, "Okay, what do we want to do? You know what? It'd be really nice to

00:35:14.000 | go on a trip to Italy, let's say. Everyone wants to go to Italy. And it'd be great if we could

00:35:18.000 | bring our family there and with us and we could experience it with them. But it'd also be nice if

00:35:22.160 | we could be there for a few days on our own before. Maybe we even have someone who could

00:35:25.200 | take care of the kids so we can really enjoy it." It's like, "But when it comes down to it,

00:35:28.960 | we still have to pay for that trip. And we don't have the money to pay for that trip right now.

00:35:32.880 | So how do you get back to reality when you've designed a rich life that you want,

00:35:40.560 | but you just practically can't afford it right now?" Okay. I love your example. First of all,

00:35:44.800 | no one ever gets that specific in their example or that big. So like, "Yeah, Chris, you're living

00:35:49.760 | the life and you're well-experienced with this." But honestly, the way people react,

00:35:53.680 | they shrink their dreams. We've been taught to shrink. So I'll literally ask them, "What's your

00:35:58.720 | rich life?" And they'll go, "I always have dreamed of having a beach house. It's not like I need a

00:36:04.960 | big one. It can be a small one. It could be a shack. It could be half flooded, but it would

00:36:10.080 | just be kind of nice." I go, "What the hell? Why are you shrinking your dreams in this hypothetical

00:36:15.600 | example? The point is a rich life, not a small life." So what you just did naturally is actually

00:36:21.680 | a great example of what I wish people would do, is that we are motivated by big dreams and by vivid

00:36:28.000 | examples, not by naturally shrinking our dreams to something that seems modest, but actually will

00:36:34.000 | not motivate us three days from now. So that's number one. Number two, it's natural that you

00:36:39.680 | come up with some things you want to do that you can't afford now. That is a good sign you're on

00:36:44.160 | the right track. A rich life is lived today and tomorrow. So we did this exercise. My wife and

00:36:50.960 | I did it together. It's the 10-year bucket list exercise. Love to share it with everybody right

00:36:55.600 | now. We sat down and we pulled out two pieces of paper. And you can do this. It's really fun.

00:37:00.480 | There's basically very few numbers involved. And you go, "Hey, in the next 10 years,

00:37:06.960 | what can we do that would make it an amazing, rich life?" And so you each take a few minutes

00:37:14.560 | and you write it down. Some of them can be just for you. Some of them can be together.

00:37:19.440 | And then we compared notes. So we had some examples of learning a different language,

00:37:24.880 | et cetera. And each of us go back and forth. And this is where you get curious. "Oh, wow. You

00:37:30.080 | want to learn Spanish? Would we do it in Mexico City? Would you do it alone? Oh, you want to go

00:37:33.680 | skydiving? That's for you. No, thanks. I'll stay on the ground." And we've identified one of our

00:37:38.880 | things that was big. It was the equivalent of the Italy trip. And for us, it was a 10-year

00:37:44.720 | wedding anniversary abroad. Well, we want to save money for that. So what we did was we did a back

00:37:51.280 | of the napkin calculation. Let's just pretend it's going to cost $10,000, just for easy math.

00:37:56.800 | Okay. We know it's going to be roughly 10 years from now. That means we need to save $1,000 per

00:38:01.760 | year. Okay, great. We now put that money automatically into a sub-savings account.

00:38:07.840 | And we know for a fact exactly when we will have enough for that dream trip of ours.

00:38:13.040 | That's how you do it. I mean, that assumes you had the $1,000 a year to set aside, right? So

00:38:19.440 | you talk about cutting costs mercilessly. Is the other aspect of this trying to go in and see where

00:38:24.880 | you're maybe not getting that much value? This is a conversation my wife and I had the other day.

00:38:29.440 | We were walking in the neighborhood, and we were like, "Well, if we had $5,000 extra a year to

00:38:35.760 | spend on something, what would we be excited to spend it on?" Great question. And then we said,

00:38:39.920 | "If we look at the marginal $5,000, if we look at what we had to cut out of our budget,

00:38:46.000 | are we getting as much joy out of the first $5,000 to go as we would from the next $5,000 to spend?

00:38:53.440 | And if not, then we should absolutely just cut that $5,000 and swap it out."

00:38:57.440 | And then we threw savings as a third option. It's like, "We have $5,000. We could save it,

00:39:02.720 | we could spend it, or we could spend it more optimally." And did this get you anywhere?

00:39:07.200 | No. What a surprise. I mean, it's a good conversation.

00:39:10.480 | I'm shocked. I'm so shocked. The minute you said the word "marginal," I was like, "God damn it.

00:39:14.800 | This is going nowhere." So two people who are too smart for their own good,

00:39:20.000 | this is a great example where I love that you brought it up and talked about it,

00:39:24.400 | but I actually, for most people listening, they're not going to use the word "marginal,"

00:39:28.720 | and $5,000 would actually be very meaningful. So I totally agree with you that there are places

00:39:35.600 | we can look in our own spending and optimize it, 100%. That comes after identifying what you love.

00:39:42.720 | So I use the CEO strategy. You can cut costs, you can earn more, you can optimize your existing

00:39:47.680 | spending. Optimizing would be setting up a reminder once a year, check your insurance,

00:39:53.200 | negotiate your cable, check all the benefits on your credit cards and evaluate whether you

00:39:58.320 | really need them, evaluate your subscriptions, and many other tools that are available that

00:40:02.720 | can help people do that. That right there can often save you well over $1,000 a year,

00:40:08.320 | well over it. Now, here's the key. Everybody forgets. If you save $1,000 or $2,000 a year,

00:40:15.680 | make sure you redirect that money to the places you want, otherwise it will simply get sucked up

00:40:22.080 | by day-to-day life. And that's a lesson that I learned from someone who's very wise. He's

00:40:26.720 | a little older than me. He told me, "Rameeth, when you have kids, if you don't prioritize

00:40:32.640 | your relationship with your partner, your kids will suck up every minute of your time.

00:40:37.440 | And it's great to spend time with them. Of course you love them,

00:40:41.840 | but you've got to set pillars in the ground for you and your partner. And that's the same

00:40:46.240 | with money. If you don't prioritize where your money flows, and it's not flowing to something

00:40:50.640 | that's part of your rich life, it will simply get sucked up by random expenses and you will

00:40:54.400 | have no idea where it went." So you brought up budgeting a lot. Is that at least a practical

00:41:00.800 | way to get a sense of where you're spending if someone doesn't have a good sense of it?

00:41:04.240 | If you want to budget for the last 30 days of your spending, fine. That's fine. I'm not a

00:41:10.240 | fan of budgeting. It doesn't work. It's very difficult for people. It makes them feel bad.

00:41:14.320 | And worst of all, it's backwards looking. It doesn't really tell you anything. I much prefer

00:41:18.320 | to have four key numbers to track and then get on with my life. So the four key numbers are fixed

00:41:24.000 | costs, which should be 50 to 60% of your take-home pay. And that would include your mortgage or rent,

00:41:30.640 | utilities, insurance, any debt payments, auto, everything that's fixed, groceries that stay

00:41:36.640 | roughly the same every month. Next would be savings. That would be roughly 5 to 10%. Next

00:41:42.880 | would be investments, roughly 5 to 10%. Of course, the more the better because you can turn a dollar

00:41:47.520 | into many more. And finally, my favorite of all, guilt-free spending, 20 to 35% of take-home.

00:41:54.720 | Now I love that last one because suddenly, if you go out to a really nice restaurant or you want to

00:42:01.280 | get a babysitter one night so you can go out with your wife or whatever, you don't have to feel

00:42:05.920 | guilty. You don't have to feel anxious. You don't have to worry about getting the $9.99 blueberries

00:42:10.480 | because you go, "I already hit all my other numbers. My fixed costs are already being

00:42:14.720 | taken care of automatically. My savings, my investments, all that is automatic. I have

00:42:19.360 | allocated this money for us to spend on the things we love, whether it's food, a beautiful coat,

00:42:25.920 | an Uber so that you can go have a nice time, whatever." That is being intentional with your

00:42:33.280 | money. So four numbers, those are straight from my conscious spending plan. That's the numbers

00:42:38.480 | that I pay attention to. It's funny because when I say budgeting, I don't actually mean budgeting.

00:42:43.280 | It's like I mean kind of what you're describing there. It's like having a grasp of how much you

00:42:48.320 | spend each month on fixed things and how much you spend and how much is left in between.

00:42:54.640 | But you know the difference? The difference is that when people... First of all, when people

00:42:58.160 | think of budgeting, they already hate it. It feels horrible. It feels like a lot of work,

00:43:02.400 | which it is, and it's mostly minutia. I don't track the price of snap peas. It's not worth the

00:43:11.760 | time. People who budget, they spend more time recategorizing stuff and plugging numbers in and

00:43:18.800 | checking it all than they do actually living their rich life. That's backwards. The hard work of a

00:43:24.640 | rich life is creating the vision and becoming basically financially fluent, knowing what a

00:43:30.240 | savings rate is, understanding your asset allocation. There's like five to 10 big wins

00:43:34.240 | in life. Nail those. You never have to track the price of Reese's Pieces Peanut Butter Cups.

00:43:40.960 | You shouldn't. That's a $3 question. The $30,000 question is, "Hey, what's our savings rate,

00:43:47.200 | and can we increase it by 1% per year?" If you do that, that's worth actually over $300,000.

00:43:54.240 | It will make up for all the coffee you ever buy in your entire life.

00:43:59.040 | So a little bit ago, you mentioned there are a few things you hear that are red flags.

00:44:02.640 | I'm curious if there are any other things that people should be listening for as ways for them

00:44:09.520 | to say, "Oh, you know what? Maybe there's an opportunity to improve." But also the counter

00:44:13.520 | of that are, I don't know if it's a green flag or a checkered flag, but are there things that

00:44:17.440 | when you hear people doing, you're like, "Oh, they're doing it right in this area."

00:44:21.600 | Well, you mentioned what you and your wife just are talking about money. That's a huge red flag.

00:44:27.440 | The fact that you are just talking about it regularly while on a walk is awesome. Awesome.

00:44:33.600 | You're talking about it proactively. The two of you are having conversations.

00:44:37.760 | That right there, it normalizes talking about money. For everybody, that's why I encourage

00:44:45.440 | a monthly Rich Life Review. I have a structure for it. You always start off with a compliment.

00:44:50.960 | I really appreciate that you always book the best flights for our family. I know

00:44:56.560 | that I never have to worry about the flights we're going to take. You do an amazing job. I love you.

00:44:59.840 | It's such a beautiful way to start off talking about money and to really set the intention.

00:45:04.880 | It sounds a little formal, a lot of people going, "That's weird." I really don't care if it sounds

00:45:08.480 | weird. I want you to feel good. I want your partner to feel good and for you two to be connected.

00:45:12.000 | Other green flags I see are when couples look at each other and they often say, "What do you think?"

00:45:21.680 | Huge green flag. In many relationships I speak to, I'll hear one person talking and the other

00:45:28.800 | will share their piece. After an hour or so, I'll ask one of them, "Do you ever ask your

00:45:34.720 | partner questions about money?" They'll go, "No." I go, "Do you ever ask your partner questions at

00:45:42.240 | all?" They go, "No, not really." I go, "Did your mom or your dad ever ask their partner questions?"

00:45:52.000 | "No." These things are passed down. Can you imagine being in a relationship where your

00:45:58.160 | partner never actually asks you a question? That's a red flag, but a green flag is when

00:46:02.880 | they pause. They say, "What do you think? Gosh, I'm stuck. Can you help me out with this one?"

00:46:06.560 | That is when you know you've got a solid foundation.

00:46:09.840 | If there are things that you realize, and we talked about this earlier, where you're like,

00:46:13.440 | "I grew up and we always said I can't afford it." You said you can't just change. You can't just

00:46:18.560 | say, "Get over it." Is the practice just knowing where it comes from and understanding if that's

00:46:27.200 | why it is? Does that just make it better? What's the way to move forward?

00:46:32.080 | Let me give you an example from a couple that I spoke to. This is a couple where the husband was

00:46:37.520 | going on a trip to New York for work, and he invited his wife. He said, "Let's make a fun

00:46:42.960 | weekend of it." She said, "Okay, where do you think we should stay?" He had this hotel that

00:46:47.760 | he was going to stay. Her first question, "How much does it cost?" He said, "I don't know. It's

00:46:53.680 | like 300 bucks a night," which for Manhattan is quite reasonable. She said, "That is outrageous.

00:47:01.280 | I won't do it." They got a different hotel in Chelsea, went there for the first night,

00:47:06.320 | and then went back to the other Moxie the next night. Then they went throughout their stay in

00:47:14.720 | New York. You know what she said to me? She said, "We wanted to get Broadway tickets, so we stood

00:47:19.920 | in the last-minute ticket line." This is for people who typically come from out of town,

00:47:24.480 | they get the discount tickets. Fine. The only problem is they're multi, multi-millionaires.

00:47:31.920 | I had to find a way to show her that she was not living her rich life. Her rich life was not,

00:47:37.360 | she told me this, was not taking hours of her limited trip to New York City to stand in a line

00:47:43.360 | to save 100 bucks and get whatever tickets are left. Here's what I did. I'm a master of Indian

00:47:50.400 | mom guilt because I'm Indian. I said to her, "Okay, imagine the family behind you. They came

00:47:58.080 | here from Wisconsin. This is their one and only family trip to New York. They're hoping to get

00:48:04.960 | those Lion King tickets. Then the multi-millionaire couple in front of them snatches the last ticket.

00:48:11.120 | How do you think they're going to feel?" She was almost starting to cry.

00:48:15.120 | Now, we were having a good time with it, but what I wanted for her to see was the stakes of her

00:48:20.640 | decisions. By only looking at the cost, she never thought about how much she could have left for

00:48:24.960 | the doorman at that hotel, how much she could have tipped for a server at a restaurant, and what kind

00:48:31.280 | of experience she could have gotten with her husband. That's what I want people to see,

00:48:35.040 | which is the stakes are high and it's not just about saving 50 bucks. Nobody's going to look

00:48:39.920 | back and say, "Wow, I optimized for $50 on my trip to New York City." It's going to be what

00:48:46.000 | kind of magical experience did I create with the people I love. One thing I try to do, especially

00:48:51.040 | when it comes to travel, is remember how much the trip costs when you're making these small

00:48:56.400 | decisions. You're going to New York. You're going for, you said, $300 a night. They're there for,

00:49:01.280 | let's say, four or five nights. You're spending over $1,000. Flights, maybe another $1,000. All

00:49:05.200 | your meals, maybe you're spending another $1,000. You're spending $3,500. When you look at it in

00:49:09.680 | that perspective, you think, "We're spending $3,500 to go on this trip for four days.

00:49:15.760 | Do we want to make a decision about one little thing for saving $100

00:49:19.840 | when we lose part of our vacation?" If you're spending $3,500 for three days,

00:49:25.280 | $1,000 a day, do we want to spend our $1,000 a day to be in New York in line?

00:49:30.640 | I think that having a holistic vision is a beautiful way to do it. It totally changes

00:49:34.480 | the dynamic instead of, "Should we go to this restaurant?" It's like, "What's our vision for

00:49:39.040 | this trip?" I'll give you an example. When you're going on a trip, not everything has to be the

00:49:42.560 | best. In fact, in my experience, picking the one thing that is magical and then the rest can be

00:49:49.360 | totally normal, ordinary, is a great way to approach it. The approach I try to take is,

00:49:54.720 | "What would make this trip magical?" On a recent trip, we went to Japan. We didn't want to eat at

00:49:59.600 | any fancy restaurants. We'd done that a couple times. We just wanted to eat at ordinary places

00:50:05.040 | that we found and that we had tagged. That's it. Food was not an expensive part of our trip

00:50:10.560 | whatsoever. That actually is a huge relief to talk about that ahead of time. Be like,

00:50:14.640 | "Hey, what would make this magical? I'm actually not feeling the need to go to X, Y,

00:50:18.160 | Z, or we can't afford it." Cool. That's totally fine. But pick one thing that would make it

00:50:24.960 | magical. It could be a food tour. It could be a behind-the-scenes thing that you find on Airbnb

00:50:29.680 | experiences. Whatever it may be, that to me is something you will always remember.

00:50:34.000 | Yeah. I like that idea. I don't know if you know the peak end part of travel.

00:50:39.840 | Yeah. You want to have the peak experience,

00:50:41.920 | and then you want to have the end be great. I like that. Actually, what it really reminds me

00:50:47.840 | of is creating rules for the important things in your life. So I have my own 10 money rules.

00:50:54.000 | My wife and I are starting to create our joint rules. And so for example, when we travel somewhere,

00:50:59.600 | we talk about where we're going to stay. We talk about how long. So we have one rule,

00:51:05.600 | which is a minimum of four days because leisure is the ultimate luxury to be able to slow down

00:51:12.560 | and not have to rush around. We recently got a photographer when we were in Japan

00:51:17.760 | to take some photos of us, and we just loved it. We're like, "Wow, we're always going to remember

00:51:22.000 | this trip because of these awesome photos." And so we go, "Cool. Let's make that a rule.

00:51:25.760 | Every time we travel somewhere, we're going to get a photographer so we can remember

00:51:28.960 | that experience." Again, these can be really inexpensive things. One person I know,

00:51:33.600 | the day they land, they go out to eat. Love it. Simple example. Could be 15 bucks.

00:51:40.640 | But the idea is you're coming up with these rules together and really creating that vision.

00:51:45.760 | That is when you've built a beautiful connection with your partner.

00:51:48.880 | Do you have any money rules with your wife?

00:51:52.800 | So when we had our last conversation, I can't believe it was almost 2 years ago.

00:51:57.680 | It was an early episode of the podcast. You shared your personal money rules,

00:52:01.760 | and we talked about coming up with them. And I know we probably sat down and made up a few,

00:52:06.320 | but I wouldn't say I committed to any to the point that... You can list yours off, right?

00:52:11.360 | "I know this one. I know this one. I know this one." I think we kind of generally

00:52:14.880 | agreed on a lot of things, but I don't think I've written them down. So maybe that's some homework.

00:52:18.160 | Because I'd like to... The reason I like money rules...

00:52:23.280 | I say this as someone who hasn't put them in stone, is that it just makes the decision go away.

00:52:29.120 | Yes.

00:52:29.840 | You make the money rule of, "I am never going to

00:52:32.560 | care about how much berries cost," right? Let's say I make that rule.

00:52:36.880 | It's like, "If I want blueberries and the big box is $8, great. But if the tiny box is $9,

00:52:42.320 | doesn't matter. You got to buy it because you committed in advance."

00:52:46.080 | Yeah. And you choose those rules knowing that you can easily afford it. No one's going,

00:52:52.320 | "Oh, my rule is I'm going to fly private every day and you can't afford it."

00:52:57.040 | That would not make any sense. But for you, the price of blueberries is irrelevant.

00:53:02.640 | It's totally irrelevant. Now, I would not have made the blueberry rule when I was

00:53:07.040 | 17 years old. I couldn't have afforded it.

00:53:09.200 | And for a lot of people, they're like, "Who the hell cares about blueberries?"

00:53:13.120 | Cool. Not your rule. But I love the idea of coming up with these rules and writing them down.

00:53:18.640 | It also becomes a really fun exercise to do together because it's dreamy. It's aspirational.

00:53:25.760 | And you can agree on something small to start. And as time goes on and finances allow it,

00:53:31.680 | you can expand it. That's really part of a beautiful, rich life.

00:53:35.520 | I think the one rule we do have, and it's our version of not having personal savings buckets,

00:53:41.840 | is just that anything under $200, you don't ask permission.

00:53:46.480 | That's your worry-free number. Awesome.

00:53:48.560 | Now, I think we've had an offline conversation at one point about,

00:53:52.640 | "Is that number the right number?" So we won't go there.

00:53:54.800 | No, it's not. But...

00:53:56.720 | But it's great that you set it up. That's 99% of it. Who cares? The number itself can be tuned,

00:54:03.040 | whatever. It's like a savings rate. "Oh, should it be 5% or 7%?" Okay, we could figure that out.

00:54:08.000 | That's math. But the idea that you even know what a savings rate is or a worry-free number,

00:54:12.560 | and you've set it up automatically, that is amazing. That's a green flag right there.

00:54:18.960 | The funny thing, though, is because now my wife and I have both become a bit of an optimizer,

00:54:22.800 | a bit of a hacker of sorts. And so my version of it and her version is,

00:54:27.440 | "Well, I could spend $500 without any questions. As long as I have the intent of returning

00:54:32.880 | more than $300 of what I purchased, the net amount will probably end up being $200."

00:54:39.280 | And so I remember she definitely said, "Hey, if you notice that there was a $600 charge,

00:54:43.520 | don't worry. Most of it will get returned. It doesn't matter."

00:54:46.480 | Or you'd say, "Oh, I want to buy an iPhone." It's like, "Well, if I do the Apple Play plan,

00:54:51.520 | it's only $100 a month. So I'm not making $1,000 purchase. I'm making $1,000 purchase."

00:54:57.040 | I'll tell you what I like about this, even though I find that a little odd. But hey,

00:55:00.400 | it's your rich life. It's not mine. So what I really like about this is the two of you are

00:55:05.680 | talking about it regularly, and you have a good attitude about it. The fact that you're laughing,

00:55:10.400 | and I can tell that you and your wife laughed about this, and you joke about it. And you're

00:55:15.200 | even making jokes about the optimizer thing. That is cool. That's how it should be. And so,

00:55:21.840 | so many times when I talk to couples about money, or if you're listening right now,

00:55:25.200 | money does not feel like that. It feels tense and rigid, and like you're walking on eggshells,

00:55:31.760 | whether you're solo or with a partner. And in order to become confident with money,

00:55:36.880 | like you are, Chris, the way you're talking about it, you got to be competent. You got to know what

00:55:42.400 | a savings rate is. You have to have talked about, "Hey, what do we feel comfortable on?" And it's

00:55:48.000 | okay if your number is different than somebody else. Fine. It's your rich life. But I love you

00:55:52.800 | modeling what excitement and confidence and competence looks like.

00:55:57.600 | For someone listening, there's an arsenal of episodes in your podcast they could go listen to.

00:56:04.320 | Is there one or two you'd want to suggest someone who's heard this conversation,

00:56:08.080 | kind of comes from the attitude of, "I like to optimize. I like to organize my life,"

00:56:12.800 | should go and start off with as a good intro if they haven't heard your show before?

00:56:17.280 | I've got two episodes that I want to recommend to people. First off, episode 20, "My wife is

00:56:23.120 | going to divorce me unless I can stop being so cheap." It's absolutely fantastic. If you

00:56:30.400 | or your partner is a high net worth person, or one of you is cheap in the relationship,

00:56:35.120 | or sometimes both of you are cheap, listen to that one. Also, in episode 80, if I add any more

00:56:42.400 | to our $50,000 of credit card debt, he will ask for a divorce. This is a cerebral and deeply

00:56:51.360 | psychological episode where you're going to learn that money is rarely just about the numbers.

00:56:56.240 | It goes much, much deeper. Those are some that I would highly recommend to people to start with.

00:57:02.240 | But also, you should definitely, like I said in the intro, go check out

00:57:05.840 | at least the first three minutes of the show on Netflix.

00:57:08.560 | Yeah. I'd love it if you go to Netflix. The show is called How to Get Rich. Watch the first three

00:57:15.120 | minutes and send me a note about what you think. Send me a note. You can DM me, email me, tweet me,

00:57:21.120 | but watch the first three minutes of How to Get Rich on Netflix. It is a different way

00:57:25.920 | of looking at money. Yeah. I'm excited for the show. Ramit,

00:57:29.520 | any final parting advice or places people should stay in touch with what you're working on?

00:57:33.040 | You can follow me on Twitter, on Instagram. I am doing a behind-the-scenes pop-up newsletter

00:57:41.600 | of what it was like to shoot a Netflix show. A lot of people are like, "How did you get the show?

00:57:46.400 | What's it like shooting? Is it real?" I'm doing that at iwt.com/netflix for the next couple of

00:57:54.320 | weeks. Cool. Awesome. Ramit, thank you so much for being here again. Thanks for having me.

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