00:00:00
how can you talk about renting you're just throwing money away BS should I just dismantle these arguments once and
00:00:05
for all because there's some shocking math behind a mortgage and most people don't know this let's get into it the
00:00:11
meet safy the financial expert and entrepreneur is back to teach you how to take control of your money and confront
00:00:17
the financial problems that hold us back most people fall into four money types that I've identified number one is
00:00:23
avoiders and they'd hate talking about money but if your partner simply will not talk about money that's a huge red
00:00:28
flag because % of the people I talk to do not know their household income 90% who are in debt do not know how much
00:00:35
debt they're in and 100% of the people I talk to in credit card debt also have trouble with that is shocking next up
00:00:43
Optimizer they can get you to a very good place they'll be investing we love to live in a spreadsheet but it can be
00:00:48
taken too far and then the dreamer who believes that success is one deal away and they tend to fall into crypto coin
00:00:56
scams like all this BS finally worriors they love to worry are we going to have enough what if we run out of money
00:01:02
typically they picked up worrying from their parents who said stuff like money doesn't grow on trees and the problem is you can take it a little too far and
00:01:08
they become cheap and become so obsessed with $3 questions like agonizing over buying a coffee but everybody listen
00:01:14
closely cuz I want to break down how you can change any of these types so Remy the only investment most couples make is
00:01:20
buying a house what is the alternative this is where real wealth is created let's simplify the whole thing and I
00:01:26
have four numbers that everyone should be talking about the first off is your this has always blown my mind a little bit 53% of you that listen to the show regularly haven't yet subscribe to the
00:01:38
show so could I ask you for a favor before we start if you like the show and you like what we do here and you want to support us the free simple way that you
00:01:44
can do just that is by hitting the Subscribe button and my commitment to you is if you do that then I'll do everything in my power me and my team to
00:01:51
make sure that this show is better for you every single week we'll listen to your feedback we'll find the guest that
00:01:56
you want me to speak to and we'll continue to do what we do thank you so much [Music] much REM if someone's just clicked on this
00:02:09
conversation please explain to me exactly why they should stay and listen to what we're about to discuss on the
00:02:15
basis that we're about to talk about the things you've written in this book if you are single and dating if you
00:02:23
are engaged or if you have been married for 25 years money is one of the central
00:02:30
parts of our lives and most of us think about money as something to be avoided it's something we only talk about when things have gone wrong what a terrible way to live and
00:02:43
there is a different way which is we can use money as a source of connection possibility and joy and that is what
00:02:51
we're going to talk about today I had a conversation a couple of days ago actually with um James ston who's the
00:02:57
divorce expert he's a divorce lawyer by trade but he knows more about divorce than anybody else and he said to me
00:03:02
there's two things which cause people to end up in his office going through a divorce number one is cheating in infidelity and the second thing is money problems in the relationship so I find
00:03:14
it especially sort of pertinent to have this conversation with you about couple's relationship with money um
00:03:20
because clearly one of the things that is most likely to end my relationship or or I guess prevent me getting into one
00:03:26
is this financial avoidance that most of us engage in you've interviewed hundreds and hundreds of couples about money on
00:03:31
your podcast what have you learned about our relationship with money in relationships from that I've learned
00:03:38
that 50% of the people I talk to do not know their household income 90% of the people I talk to who are in debt do not know how much debt they're in and 100%
00:03:51
of the people I talk to in credit card debt also have trouble saying no to their children isn't that shocking of those things 50% do not know how much
00:04:02
income they make because most of us are simply living by looking at our checking account and that's it the debt part kind
00:04:10
of makes sense why would you want to know how much debt you owe you don't really want to think about it so you ignore those emails and envelopes and
00:04:18
the credit card debt part that is really interesting the idea that if you can't say no to spending so you've racked up a bunch of credit card debt the same princip principle applies to saying no
00:04:31
to kids for me when I discover these I find them absolutely fascinating but the good news is you can also change these things
00:04:38
and what's the difference between men and women in terms of spending habits in a relationship secrecy avoidance
00:04:45
arguments well let's start with the roles men always describe themselves as providers always that's what we are taught it's exists in culture the
00:04:57
problem is of course what happens when are not the top earner which is happen happening increasingly more now so when I often ask them who are you financially
00:05:08
speaking if you're not a provider and they're just stumped but there's got to be something more than simply being a
00:05:14
provider you can be a provider and you can be a nurturer you can be a provider you can be a helper a leader there's so many different ways um often what you'll see with women is discussions about a
00:05:27
secret bank account keep a little money aside just in case we have to remember that in the US many grandmothers were not allowed to open up their own bank accounts that
00:05:40
happened in two generations ago and so there has been a rightful message that has been passed down Orly keep a little bit of money aside just in case whether
00:05:53
it be physical abuse Financial abuse divorce Etc and I totally respect that message I don't think you should have a secret account I do think you should have an account that is yours only but
00:06:06
no secrets in a relationship what about arguments as it relates to money and relationships what are the the cause of
00:06:13
the arguments is it someone spending too much is it hiding money is it something else it's usually not hiding money
00:06:19
that's very small extreme the biggest phrase that I get from couples is he or she's a spender and I'm a saver so it's creating this identity that they're a spender I'm a saver or they don't want
00:06:34
to talk about money ever why can't I get them to finally sit down with me and get on the same page that's a phrase that's
00:06:41
tossed around everywhere when I ask them what is getting on the same page the answer is I don't know I just
00:06:48
want to talk about it so when it comes to money yes there are the numbers that we need to understand of course but what
00:06:55
I often tell people the way you feel about money is highly un correlated to the amount in your bank account that is
00:07:02
why I speak to so many multi-millionaires who still worry about money they think if I just have 50,000
00:07:08
more 500,000 more $5 million do more well guess what I've had all those folks on my podcasts and they still worry
00:07:15
about money that means there's two things you need to do to master your relationship with money one you got to
00:07:21
know your numbers this is a language you have to learn the basics of personal finance two you have to master your
00:07:27
money psychology that means you need to change the way that you talk about money
00:07:33
and behave with money so that you can ultimately change the way you feel about money you do those two things you're
00:07:39
going to have a very healthy relationship with money we'll go into all of those things and how you do them
00:07:44
um on this point of gender roles obviously Society has changed in the last couple of decades in terms of
00:07:51
equality and more women are in work at higher level positions in corporations in the SE Suite earning much more money
00:07:58
this has caused a shift I should say in the sort of typical gender roles and assumptions of what what each gender is supposed to be doing in couples and I'm wondering now
00:08:11
with more women earning more money in many cases they're going to be earning more than their husband in heterosexual
00:08:17
relationships have you seen new Dynamics and new issues created because of this in terms of like I don't know insecure
00:08:24
men feeling emasculated or the woman not being happy that she's contributing more and I asked this because I had someone
00:08:30
on my podcast a couple of uh months back who said to me that I think it's 70 or 80% of women expect that their romantic
00:08:38
partner will earn more than them but that Gap is closing now because women are earning more and more money I'm just
00:08:45
wondering if you've seen in those couples scenarios where the woman ears more and it's causing problems I've seen it all the time I've seen it all the
00:08:51
time I think that we see different gender Dynamics um I recall one episode where I spoke to uh a young woman woman and her boyfriend she was around 40 years old she made way more than her
00:09:05
boyfriend care to guess how much she makes per month $20,000 $200,000 per month she has a
00:09:14
business it's doing very well she's around the age of 40 now her boyfriend was never taught about money when he was growing up most people are not he never learned about investing certainly no one
00:09:25
was telling him about a Roth IRA when he was 12 years old and he had started his own business and
00:09:32
he was on the upswing he's making a few thousand dollar a month good for him she's making 200 Grand a month her
00:09:39
parents started talking to her about investing when she was 5 years old so here we already see a difference not
00:09:44
just in gender but in socioeconomic status okay and over time that progressed so they come to me and she says I want him to pay for dinner
00:09:56
occasionally fine super reasonable he even said no problem I want to so he would take his credit card out and he would offer to pay and she would say no I want you to contribute more to your
00:10:09
IRA so in many ways she wanted him to pay she wanted to feel taken care of which is totally reasonable but when he
00:10:17
offered she said no so this is the kind of thing that I often see which is I think I want one thing but when I get that thing I don't actually want it it doesn't make me feel the way I thought
00:10:29
it would I want to earn 50k more I think that'll make me feel safe oh my God I am
00:10:35
earning 50k more it doesn't actually change the way I feel so I worked with this couple and I helped them understand why they both felt this way about money
00:10:46
and you know from the outside it's like this is so irrational if you make more just pay more if I were in that
00:10:52
situation etc etc none of that stuff matters when you are in the couple in that relationship you will feel a certain way and we got to work with you individually not what everybody else
00:11:02
says in the end the conclusion that they came to was she wanted him to occasionally pay for dinner but she also wanted him to fill up his Ira so this is what they did every so often before they
00:11:14
went out to dinner she would give him her credit card and she would say here I want you to pay for tonight and he said
00:11:21
cool he understood it they went out and that's what they did now to us sitting here we're like this dance makes no
00:11:29
sense why don't they just do it this way or that way guess what every single one of us has some irrational thing we do
00:11:36
with money every single one of us and I think that we are ready to actually have conversations about how we are
00:11:43
irrational money is not just dollars and cents on a page that's why you don't feel good about money even when you have
00:11:50
more than you ever thought you would that's why you worry about money but you have never read a single book on Personal Finance we are all irrational
00:11:57
including me and when you get into a a relationship you got to acknowledge that and then you got to say hey what is our
00:12:03
vision of a rich life together let's build that if it means we do a little dance about the credit card once every
00:12:09
two months fine do we both feel good is it fair then I'm good with it what's going on there with her because it it sounds like there's this battle between her mind and maybe her heart or it's
00:12:22
almost like the social expectation is coming in but then her her brain is saying no invest in the IRA and in Ira
00:12:27
for anyone that doesn't know in other it's a retirement account a retirement account so she's saying invest in the future but also buy my dinner well it's
00:12:33
the same it's the same we all have these things that Society has told us but then
00:12:39
we don't quite agree and we're not sure what to do last time I was here we talked about how you don't necessarily
00:12:46
need to buy a house in order to live a rich life and in my case I have rented for the last 20 years by choice and I
00:12:53
made more money renting and investing the difference than I would have by buying a house and this is shocking to
00:12:59
people like we saw the comments last time people went berserk how can you talk about renting you're just throwing
00:13:05
money away on rent and this is something we have been fed constantly for Generations that in order to be
00:13:12
successful you must buy a house so when somebody like me comes around and says actually you should run the numbers because sometimes renting can be better people are shocked same thing
00:13:23
with um if you want to be taken care of or you want someone to treat you or you want someone to pay for the first first
00:13:29
date same thing when men come and they talk about being a provider but in certain relationships where they actually earn less I'll say to them if we look at the numbers you're not the
00:13:40
provider so who are you and they're stumped and that is when we need to start grappling with the idea that maybe
00:13:47
what we were told is not exactly true for us in our situation today and that's okay do you think it causes more problems when the in terms of the relationship Dynamics and that sort of
00:14:00
masculation and you know that the man not feeling like a provider when the woman earns more money than the man from
00:14:05
what you've seen not necessarily I think that it is a different framework than we're used to yeah when we think about my parents for example my mom stayed home with us my dad went to work single
00:14:16
earner simple everybody knew where they stood what the roles were it was very simple it's very difficult to do that today housing is historically expensive
00:14:27
healthc care is expensive especially in the US and so you have two people earning in in urban cities you have
00:14:35
young women earning more than men in their 20s a lot of us are trying to figure out
00:14:41
what does this role mean for me and for my partner and for our relationship that makes it tricky I wonder if a lot of men
00:14:47
are just choosing to remain single until they've kind of worked on themselves because I think actually that's probably
00:14:53
the path I would have taken if I'm being completely honest well I kind of did take is I didn't have a relationship
00:14:59
until I was able to really provide oh the p word yeah and where did that word come from provide like watching my father watching movies everything exactly yeah no one ever says like you
00:15:12
are a provider but we learn it from a million different uh perspectives and yeah I hear a lot of guys I mean when I uh was living in New York and I had a lot of single friends topic of
00:15:23
conversation was I'm not ready to get married I need to get to a certain point in my career first you have all these
00:15:29
words for it and deep down there's a feeling that we're often expressing you know maybe I'm not ready maybe I'm not enough maybe I need to do XYZ before I
00:15:42
do the thing that I want and so part of what we talk about when it comes to relationships and money is like let's
00:15:48
actually shine a light on that let's not be shy about it if you want someone to pay for your dinner fine that's totally
00:15:54
fine let's have that conversation if you want to be the sole earner in your household okay let's see what it would
00:16:01
take and too often we don't have those conversations we just dance around them for 50 years who should pay for the
00:16:07
first date then my answer is doesn't matter it would be nice if the person who suggested the date pays but I think we spend way too much time focusing on
00:16:18
the first date and way too little time thinking about the next 14,622 days it's like a couple who's obsessed with the wedding fine you want
00:16:29
a nice wedding great what about the marriage same thing with money first aid okay we can have that conversation but
00:16:36
aren't you more interested in how your partner thinks about money and talks about money are they a cheap skate are they generous are they abundant did they grow up the same or different than you
00:16:47
that is something we don't talk about meanwhile we have five million YouTube videos on who's going to pay on the first date we are missing the real point
00:16:55
the point of money in a relationship is not just about the first date that's fun for clicks but it's about do we see
00:17:02
money the same way do we connect are we going to be rowing in the same direction or are you going to be doing that and
00:17:08
I'm doing this and we can never get aligned you can only make a first impression once right and if you are a
00:17:16
guy this is just how I feel anyway if I go on a date a first date with a woman and we have a wonderful date you know
00:17:23
it's a nice restaurant and then it gets to the end of the day and then I turn to her and say should we split the bill I
00:17:29
couldn't even say it with a straight face frankly I couldn't I definitely couldn't ask her to play yeah I just I
00:17:35
just could never and if I think if you anonymously pulled 10 of my female friends and said how would you feel if on the first day the guy asked you to pay I think privately they would say
00:17:47
that's a bit of a turnoff that's a red flag that's an ick I think probably that's true and again goes to the power
00:17:52
of socialization right like culture is very difficult to change we got to admit that we got to acknowledge that and when I was dating I paid for dates so I don't
00:18:04
have a problem with it I like to be generous I think that when you are in a relationship you like to know that your
00:18:11
partner is generous too now generous comes in lots of ways it could be paying for dates it could be planning a trip it
00:18:18
could be being thoughtful and you know buying extra toothpaste because we're running low there's so many different ways to be generous but generosity for
00:18:25
me would be a value paying for a date sure I paid for dates I'm happy to I like to do it but generosity to me is way more important to talk about that in a relationship versus the date itself
00:18:37
because chivalry you know this this idea that the man is to lead um in that regard and to you know open the door
00:18:46
yeah and open the car door and pull out the chair yeah but think about it I agree with all that stuff I I'm I
00:18:51
support it but think about what message that sends when you tell Men You're supposed to be chalous but there's no
00:18:57
real context no real around it and let's say you have a 26-year-old guy now who's
00:19:03
earning less than his girlfriend so he wants to be chivalrous but for him he's like well look at our bank accounts and so what I want to emphasize to people is you can be chivalrous you could be
00:19:15
generous money is just a small part of that let's not over fixate on who's paying for top us okay and let's actually think about the important things when it comes to money we are so
00:19:26
obsessed with $3 questions people are obsessing over should I buy this coffee can I afford this appetizer on and on
00:19:33
and on about $3 questions we totally neglect the $30,000 questions or the $300,000 questions is this person financially aligned with me how do I even find out am I investing 5 to 10% of
00:19:49
take-home pay every month are we doing it together um do we talk about money regularly and proactively and positively those things matter and they're actually worth hundreds of thousands of dollars
00:20:01
these $3 questions including who's paying for appetizers or should I buy a latte irrelevant fact get get the big
00:20:09
answers in life right and you can buy all the appetizers you ever want what are the financial red flags in a
00:20:15
relationship then number one is they don't want to talk about money if you don't want to talk about money red flag
00:20:22
the biggest red flag of all because we could differ on how we see money we can even have different values for a few
00:20:29
things but if your partner simply will not talk about money you have a huge problem why if you can't talk about money then you can't even understand where they're coming from and they are
00:20:40
not curious about what you want so how are you ever going to get on the same page think about this a lot of people think we need to have the conversation
00:20:50
about money the con as if it's one conversation would you have the conversation about raising kids no
00:20:58
you'll will have thousands in your life that's the way it should be money is very much like parenting not like uh should we play pickle ball or tennis
00:21:08
today irrelevant so we want to have lots of conversations about money and that means we need to first of all be willing to talk about it and then we need to find a way to have fun doing it why
00:21:19
don't we and who doesn't is it men is it women that don't do it more more or who's not talking about money and why
00:21:25
aren't they talking about it it's not about gender couple it has nothing to do with gender terms of who does or doesn't talk about money there are avoiders
00:21:32
that's one of four categories uh money types that I've identified avoiders hate talking about money and they will use a series of conscious and unconscious techniques to avoid talking about money
00:21:45
they'll say things like um uh why why do you always have to talk about money can't we just have a nice night out or
00:21:53
you're so much better at this you just handle it you're just so much savier at this stuff that's an avoider do they
00:22:00
know their own financial situation no so they don't know their own financial situation and they don't want to talk about it correct we and by the way we
00:22:07
all have something like this it could be our fitness it could be our relationship with our parents there's something in
00:22:13
our life that we know we should deep down but we avoid it yeah and there's no there's no immediate consequence like if I don't call my college friend it's fine
00:22:25
I could probably call him tomorrow and you can go on and on and on like that until one day you can same thing with our fitness it's very easy to
00:22:31
procrastinate on Fitness or money because it's not like your house is being taken away or even your cables
00:22:37
being shut off it'll probably be fine until one day you hit this brick wall and it's not so that's the avoider that's the first money type yep next up Optimizer I
00:22:51
have a soft spot because I am an Optimizer optimizers we love to live in the spreadsheet it's like let me sit and
00:22:58
calculate this and what if I run a compound interest calculation a Monte Carlo calculation and what if we do this
00:23:04
but not that I love calculating everything and left alone I would sit there and do that for the rest of my life okay the problem is you can take it a little too far now I don't think I've
00:23:15
taken it too far perf I think I'm perfect on my spreadsheets but my wife has taught me enough's enough we we've
00:23:23
won that part of life let's focus on another part connection and fun and experience are these people often
00:23:29
thought of as boring yes they are they are deep down they are boring I was boring when I was sitting there thinking money is only about numbers it's not
00:23:40
money is about Adventure and possibility and generosity and you will often find optimizers I'll give them a challenge
00:23:46
I'll give him a $100 challenge Al you have to take $100 in the next week and spend it on yourself they cannot do it
00:23:52
they will spend it on their dog they'll spend it on their kid they'll spend it on their partner but they will not do it
00:23:57
for themselves and I go go why didn't you do it they go R do you know that if you put $100 in the S&P 500 and you
00:24:04
compound that for the next 45 years it'll turn into this much I go I don't give a spend the money because
00:24:10
money is not simply meant to be hoarded right it's meant to create a rich life and when you have optimizers the thing is they can get you to a very good place they will probably
00:24:22
have your account set up dialed in they'll be investing great they're going to be very proud look at the compound
00:24:28
interest returns all that is fantastic but it can be taken too far these are the people that die and then you figure out that they had like $9 million some saving account what a waste they never
00:24:39
tasted the caviar but they've got yeah like people send these newspaper articles around like oh local librarian
00:24:46
discovered to have $9 million and I go what a tragedy what a tragedy to live a smaller life than you have to I want you
00:24:53
to save I want you to invest but I also want you to try a nice meal or if you don't like nice food or you don't want a
00:25:00
nice t-shirt also fine get super generous give that money surprise the people around you tip 50% so those are optimizers the third category is
00:25:12
worriors they love to worry typically they picked up worrying from their parents almost always and their entire
00:25:20
relationship with money is worry are we going to have enough what if we run out of money what if we don't have enough to pay at the gas station and often times it's very surprising
00:25:31
because I told you that 50% of couples don't know how much they make right so they'll say like we need more we don't
00:25:38
have enough right now and I'll ask them how much do you think you make this just happened a couple of weeks ago on a podcast episode they thought they made
00:25:45
around $70,000 a year okay we add up all their stuff they make $120,000 a year so
00:25:53
I go well here you go you you wanted to make an extra 40K you actually make 50K more than you thought do you feel any better and she goes no because the way you feel about
00:26:06
money is highly uncorrelated to the amount in your bank account so worriers worry that's how they relate they can't imagine any other relationship to money
00:26:17
and my job is to help them realize first of all let's actually look at your numbers let me help you understand what
00:26:23
it means do you have enough what does it take to have enough and then can you start to develop a new relationship with
00:26:30
money it's almost like a new taste bud I'm never going to tell you to eat tomatoes if you hate Tomatoes but I am
00:26:37
going to teach you maybe you like okra and we can develop a new taste for that finally the
00:26:44
dreamer the dreamer believes that success is one deal away if we just close this deal if I just get this thing and they tend to fall into get-rich quick schemes lots of scams ml m a lot
00:26:59
of crypto shitcoin scams like all this BS but they are extremely resistant to calm lowcost long-term investing in other words the way that most people build real wealth they think it's boring
00:27:13
they even have little phrases like uh I don't want to be stuck in a ninetto five like those suckers I'm like that sucker
00:27:19
makes 10 times what you make what are you talking about but they have simply been surrounded with the idea one more
00:27:25
deal and I'll finally make it they must be hard to be married to it's impossible it's really really difficult they don't
00:27:33
not only do they not want to talk about money when they finally do talk about money they're almost living in a
00:27:38
different world often you will find that dreamers can only dream because they are being subsidized by someone in their
00:27:45
life usually their partner and if their partner were to leave for example the House of Cards would collapse and actually that's usually the only thing that gets them to truly change so if
00:27:57
we've got these four money types um the avoider the optimizer the worrior the dreamer in your view who lives a happier
00:28:06
life you can live a happy life with any of these also you can change any of these types but on average one person's
00:28:12
going to probably I mean I I'm the optimizer and I'm pretty happy so is that is that the answer yeah optimizers
00:28:19
are great they love their spreadsheet um I think that uh the warrior clearly is not going to live the happiest life the dreamer is actually quite happy yeah the dreamer is quite happy they live in
00:28:29
optimism yeah they're living in a world that's not real it's subsidized by somebody else they're always optimistic
00:28:35
about what's going to happen next week next month next year never realizing the catastrophe that they are leaving behind
00:28:42
them that's that's the whole issue this the reason I wrote the book is it's one thing to treat money in a certain way on
00:28:49
your own when you're single you can be irresponsible you can be an Optimizer but when you're in a relationship it's not about you anymore it's about the two of you as a unit and so you have to
00:29:01
deeply understand yourself and then you have to be willing to communicate with your partner and really create a rich
00:29:08
life vision for the two of you most couples I talk to have no vision for their money that's why they fight over
00:29:14
who spent $50 at Target I go who gives a about Target financial problems are almost never about overspending at
00:29:21
Target the biggest problem with couples and money is they have no Rich Life vision what is money to us what do we
00:29:29
want to use money for how do we want to feel about it so they're confronted with
00:29:34
a thousand different decisions with their money every week and they have no vision to guide them this is for us this
00:29:40
is not for us one of the things I've always wondered in relationships is how many couples know how much money
00:29:49
the other couple has in their savings account and their total sort of Investment Portfolio because I've never
00:29:54
been in a relationship where I mean I've only really been in two relationships you could say but I've been with you
00:29:59
know dated people over the years and been with my current partner for many many many years but even my current
00:30:05
partner has no idea how much money I have zero IDE when will you have that conversation probably never should we
00:30:10
bring them out right now let's bring them out I've just never had the conversation
00:30:16
if we if you need something we can get it yeah and it's just always been like that in my life okay so I I made a
00:30:22
mistake in my own relationship I was uh dating my now wife for many years and at
00:30:28
one point she had asked some question about her 401k or something and I said well there is a book called I will teach
00:30:35
you to be rich here's a copy of it and I was joking around with her and so it I ended up learning all about her finances
00:30:41
so I knew about her entire Financial picture it didn't occur to me to talk about my own and a little while later she she very assertively said this
00:30:54
doesn't feel fair you know everything about my finances but I don't know about yours and I realized I violated my own rule in
00:31:02
chapter n of my first book which is talk about money early on talk about it regularly so we talked about it we talked about is actually one of the most
00:31:13
memorable conversations we had because talked about the numbers talked about my pride in how hard I had worked to build my business and invest for 20 years 25
00:31:25
years and um and then we talked about what it meant for us like what kind of Life do we want to have do we want to live here do we want to live there do we want to have kids do we want to eat this
00:31:37
type of food travel like that conversation about possibility is the conversation I want every couple to have because it's about possibility and you can start to dream
00:31:49
and that dream is important you can get to the logistics of course we'll get to that but so few of us still
00:31:58
dream with our money but you know that I think for someone like you who is the optimizer and who's probably quite proud of the system you've created love systems but there's going to be so many
00:32:09
people listening now that are in a relationship and they are maybe early in the dating process and maybe they've been with a person six months they've taken them out on lots of nice dates and
00:32:21
they have $1,000 in their savings account and their partner has no idea and they're thinking
00:32:28
if I tell my partner what's in this bank account she is going to be shocked or he is going to be shocked and they are
00:32:34
going to leave me so I'm keeping this a secret because they are living under ill an
00:32:40
illusion that I have more than I actually have yeah but remember this just because you don't have as much
00:32:46
money as you want doesn't mean that you are less of a person what could be more completely agree I completely agree what
00:32:53
could be more appealing than saying you know what would you be open to talk about our finances we're getting a little bit serious you know I know we're kind of
00:33:04
talking about taking the next step I think money is going to be an important part of it I know it is for me and I
00:33:10
wonder if we could sit down and talk about it first just being proactive how many people watching and listening are
00:33:17
like I wish my partner whether they're dating or my partner of 20 years would come to me and say can we sit down and talk about money but the part of that is is shameful about financial situation
00:33:29
yes if I run it back 10 years just over 10 years ago I was living in an area called um Rush Holm I was in a
00:33:38
shared house with living with some um a few people who had come to the UK legally okay um I didn't have a carpet in my room I was in a single bed didn't
00:33:49
have duvet or bed sheets or anything and every day I woke up and thought to myself how am I going to eat today so
00:33:56
I'd find different ways to find food at the same time I was dating this girl called Ruby this girl called Ruby had no
00:34:01
idea she'd never seen where I lived she wasn't aware that I was looking behind uh Sofas in takeaways for pound coins
00:34:09
there is no possibility in the world that I would have ever told Ruby the financial situation I was in yeah I like
00:34:16
so I don't know what to do in that situation and I'm sure I'm sure I would assert that maybe 30% of people
00:34:22
listening right now don't want to tell their partner their financial situation because they're deeply embarrassed still
00:34:27
shameful to the point that they think their partner might leave like them less be less attracted to them if they really knew the truth I totally agree I totally agree it's crazy how much shame we have
00:34:40
around money and it's uh a young guy not having enough it's um a young woman who
00:34:47
has $188,000 of credit card debt it's all over the Spectrum that's the second point which is if you want to talk about money talk about money don't wait for your partner
00:34:59
to do it bring it up yourself even if you feel embarrassed or ashamed okay if you're planning to make a life with this
00:35:06
partner you got to be able to talk about this because you're going to be talking about a lot of other personal sensitive
00:35:11
things over the course of your life the second thing is what could be more attractive than somebody saying you know
00:35:17
when I was in my 20s I moved to the city I spent a lot of money going out and I wasn't super
00:35:24
responsible I racked up a lot of credit card debt I've paid it down from 18,000 to 6,000 it's going to be paid off next year and I just know that I'm never going back there
00:35:35
again oh my God someone who acknowledges what they did has a good reason for it and then most importantly has a plan huge turn on so what I'm begging all of
00:35:47
us to do is to realize just because you have more or less money does not make you a better or worse person I want to
00:35:53
take shame away because we all have something that we are ashamed of but not talking about it and putting it in the corner in the darkness that doesn't solve it that's why I love talking about
00:36:03
the most taboo of taboo subjects money gender prenups dating these are things that nobody's talking about so when you hear couples on the podcast and they're talking about being married for 15 years
00:36:16
and they've never actually had one conversation about money I want you and everyone watching to be inspired because
00:36:24
stuff doesn't have to be shameful and doesn't have to be kept in the dark and what do you think about prenups then do you think they are a good thing for
00:36:31
all couples do you think all couples should initiate a prenup no no not all couples there are some couples who should have one my wife and I have one
00:36:37
so we went through this process and um who should get a prup is if one or both partners are bringing substantial premarital assets to the marriage
00:36:48
meaning before they get married they have a large Investment Portfolio a business rental property or a house like
00:36:56
you should have AE up but most people should not because when most people get married they don't have substantial
00:37:02
assets what if your partner turns around if I turn to my partner say babe ra told me to go get a prenup yeah and she goes
00:37:09
absolutely not well that's not a good introduction I wouldn't say that although I don't mind if you throw me under the bus oh this guy raid he said
00:37:15
this thing fine how to bring it up is an art so when I was um deciding on a prenup I asked for lots of advice from lots of friends and um some of the
00:37:27
advice out there especially online is not great um one of the most common pieces of advice is blame it on your
00:37:35
lawyer I'm like get real you're about to build a life with your partner and you can't be honest about this thing this in
00:37:42
the grand scheme is a minor topic so I'll tell you exactly what I said to my wife we sat down and um we I said uh I
00:37:53
want to talk to you about something um you know that because of how long I've been in business I've been very lucky I've been fortunate I worked hard I've built this business up and I'm really
00:38:05
proud of what I've accomplished and saved and you also know my lifestyle I don't drive around in a Lamborghini uh I
00:38:12
like to travel I like to wear nice clothes and I like to save money and it's important to me that as we are getting closer in our relationship to getting married that we talk about a
00:38:25
prenup and my heart was p pounding I had planned it I had thought about it I had
00:38:30
talked to so many people what I knew is I wanted to take responsibility it's not
00:38:36
some lawyer that wants it it's me it's important to me I wanted to bring up the topic and I wanted to reassure my wife
00:38:45
that I'm not going to change overnight when we get married into someone who's blowing all of our money it's just
00:38:52
important because of the business that I built in her response I was like like how is she going to respond because bringing up a prenup is very fraught she's the best she said okay I
00:39:05
wasn't expecting that but I'm willing to learn more about it that's as good of a
00:39:11
response as I could have hoped so we started the series of conversations we both had lawyers it was going well at
00:39:17
first until it wasn't and we were talking about numbers that to me seemed astronomical I started to feel resentful she didn't feel listened to she didn't
00:39:29
feel heard she started to feel resentful and these conversations were were like so difficult I would say they were some of the most difficult conversations of our relationship at one point she said
00:39:40
we should go see a therapist because these conversations are not good and I was like you're right so we went to see
00:39:46
a therapist we sat in that therapist office I still remember therapist asked us a bunch of questions including how do
00:39:53
you see money and she turned to me I was like how do I see money growth I could literally see numbers
00:40:00
floating in front of my eyes the optimizer in me was talking about the rule of 72 it was like so obvious what
00:40:06
an obvious question then she turns to my wife how do you see money and she said safety so what sa safety to me that was like saying charcoal like the two words
00:40:19
don't relate at all but it started us on A New Path of realizing that we were seeing money completely differently me and that was exactly when I realized I wish there
00:40:30
were other couples talking about money from behind closed doors that exactly was the Genesis of me doing my podcast
00:40:37
and my Netflix show to show people not just tell them but to show them how real couples deal with money what was the resistance between you two in sort of
00:40:48
more specific terms she she wanted a different arrangement to the one that you wanted yeah the terms are are super
00:40:54
technical in prenups it's um so with a prenup you have a variety of different rules or technicalities which would be like what if you separate in 6 months
00:41:05
what if you separate in 25 years but there are children involved who gets the house what if you have a house what if you have two houses what if you have this much in your joint investment but
00:41:16
each of you has this much in individual investment and so what happens is it's not even just the numbers themselves
00:41:22
it's the fact that the process is set up to be adversarial mhm so they have a lawyer we have a lawyer we're communicating through lawyers when it comes to this topic when normally you're
00:41:34
just talking to your fiance or your girlfriend and there's an art to also managing the lawyers see the lawyers want there's nothing bad we had great lawyers I'm happy with them but lawyers
00:41:47
job is to look over every freaking contingency and make sure that nothing is left a chance and I think a good
00:41:53
reminder for anyone considering a prenup is to remember you manage your lawyers and your job is to come to an agreement
00:41:59
with your partner for the rest of your life so sometimes you can be generous you can be willing to let up on a few things here and there as long as you are
00:42:06
looking at the Northstar we're going to be together we want these premarital assets to be protected and in case
00:42:11
something goes wrong we both want to feel good about what the arrangement is and there is a 60 odd percent chance
00:42:16
that you will break up if you look at the marriage statistics so well those statistics are a little skewed that includes second marriages that also
00:42:23
includes all different socioeconomic all everybody else if you break it down for example just by having a bachelor's
00:42:29
degree or certainly an advanced degree that goes way down first marriage goes down and in fact the divorce rate has
00:42:35
been decreasing for decades so this 50 60% thing that's kind of tossed around not quite accurate but whatever the
00:42:44
statistic is what's more important is if you should always think about how can things go right and also how can they go wrong and I think with money A lot of times uh we only think about one or the
00:42:55
other we buy a house never asking ourselves like what if one of us loses our job and we get married without ever
00:43:02
asking like what if we separate so you want to be able to play both what happens if things go right incredibly
00:43:09
right and what happens if things go wrong let's make a plan what are the other red flags then we mentioned the
00:43:14
first being they don't want to talk about money ah um they have a money guy a money guy is so common everybody talks about I have this money guy your money guy is probably uh whole life in
00:43:27
insurance salesman charging you 1.25% AUM let me explain what that means so many people in America do not want to learn the basics of money and so they
00:43:38
hire a financial adviser now I don't have anything against financial advisors in general but a money guy that they're
00:43:44
typically referring to is someone who charges them a percentage of their assets so if I have a $100,000 portfolio
00:43:52
they'll charge or let's say a million dollar portfolio I might be paying 1% 1% doesn't sound like a lot but if you
00:43:59
actually run the math you will pay about 28% of your lifetime investment returns
00:44:06
in fees that's not $10 or $100 that's tens of thousands or sometimes hundreds of thousands of dollars so it's a red flag if someone has an advisor that they're paying a percentage based fee to
00:44:19
I would much rather you pay an hourly or project or that type of fee too okay um they're cheap I can help a lot of people but I
00:44:30
can't help cheap cheap is cost is the first and last thing they always consider so you might come home you're so happy oh my gosh look at this beautiful thing I got for the kids how
00:44:44
much was that and it just sucks the life out of every room cheap people are obsessed with cost cheap people rarely recognize the effect they are having on their loved ones and cheap people
00:44:57
find it very very difficult to change they don't want to change they actually reinterpret their behavior and call it a virtue oh I'm not that I don't need that
00:45:09
fancy wine I'm perfectly happy with this well what if your partner wants one glass of wine they seem like a miserable
00:45:15
group yeah I don't like cheap people I don't like cheap people I don't like cheap tippers and their Partners don't
00:45:21
like them so it's it's one I'm not saying everybody has to go out and spend a million dollars but you got to use
00:45:26
money to live your rich life the point of money is not to just hoard it and save it that's why when you create a
00:45:31
rich life Vision you ask yourself what do we want to spend extravagantly on not just a little bit but extravagantly and what do we want to cut cost mercilessly on you have to be able to play different
00:45:44
notes like you're in a symphony if your only note is spend less that's a miserable existence are there any more red flags I want to go into why people and where they develop these
00:45:57
relationships with money but are there any other sort of standout red flags that we should be looking for well if they if they follow Robert kosaki that's
00:46:03
a huge red flag I mean the guy once Robert kosaki wrote this uh well-known personal finance book and the
00:46:10
guy has really lost it in the last few years he literally I'm not joking he literally told people the best investment you can have is a can of
00:46:17
tuna I'm not joking and I replied to him Robert I sold everything in my portfolio
00:46:23
and bought 3 million cans of tuna um is this a good investment but sadly I never heard back so beware of Beware of
00:46:31
charlatans let me put it that way personal finance and money is filled with people who will promise you get
00:46:37
rich quick who will tell you that the sky is falling and when it comes to money we want to be balanced we want to have fun we want to be have a healthy relationship with money it's very
00:46:49
similar to Fitness lots of people making promises you want to find the people who are giving you long-term advice you know
00:46:56
these cheap people that you mentioned mhm and you know any of them I a couple come to mind tell tell the camera who
00:47:02
they are right now so we know who are these cheap people they also fit into the category of the Warriors in my experience so someone who's a bit of a
00:47:08
warrior can also be quite quite cheap and I was just wondering in the hundreds of couples that you've sat down with an
00:47:13
interviewed does there tend to be a origin story which links to their Friv their FR frugalness with money and they're penny pinching yes okay always
00:47:25
when I talk to people um I asked them what do you remember your parents saying about money when you grew up always and they'll tell me they are very conversant
00:47:38
they remember and usually the parents said stuff like we can't afford it and uh money doesn't grow on trees we don't talk about money in this family these are the type of things that people said
00:47:49
but you will often find um usually when kids are teenagers when there's something really
00:47:55
tragic that happens and it's of often that um Dad lost his job and that meant that they completely changed socioeconomically often they had a big house they had to really like shift into
00:48:06
Grandma's apartment that kind of thing that affects people in a huge way now it affects people in one of two ways and
00:48:13
you cannot predict how some people go I'm never going to let that happen to me therefore I'm going to have a high
00:48:19
savings rate I'm going to invest I'm going to start a business and they develop a really healthy relationship with money others go the Direction
00:48:27
you're suggesting which is they become incredibly cheap incredibly worried about money anxiety is common and they
00:48:37
often do not see the connection at all until I point it out to them and when you talk about making this Rich Life
00:48:44
vision together what exactly does that mean we start off in the book just talking about let's have our first
00:48:50
positive conversation about money okay you have to remember most people have never had a positive conversation about money money is the the only way it comes
00:48:57
up is why did you spend that much at the gas station last week that's it so we start off by just saying I give him an
00:49:03
agenda literally an agenda you can read off these words and start it off it's like why this is going to be awesome
00:49:08
here's how I feel about money today how do you feel here's how I want to feel about money how about you high five I
00:49:14
love you we're good that's it part of having conversations about money is this philosophy of declare Victory
00:49:23
and go home you don't need to talk about it all at once make it short make it fun and at the end always say I love you
00:49:31
that's it over time you're going to associate talking about money with positivity and that's what we want when it comes to a rich life Vision this is
00:49:41
where it's really fun so I have some fill in the blanks um where you fill it in like I wish we spent more money on
00:49:48
and then you fill it in I think we could probably cut back on and then you fill it in then you compare your notes my
00:49:55
wife and I did this really fun exercise which I would encourage everyone to do and it is the 10-year bucket list so
00:50:02
imagine you sit down with your partner and you go let's each take a piece of paper write down what would make the
00:50:08
next 10 years incredibly Rich meaningful to to me and to us so you write it down
00:50:14
and then you compare notes this is exactly what we did and you get excited you oh you want to learn Spanish amazing
00:50:20
do you want to do it online or do you want to go to Mexico City oh you want to go skydiving ah that one's not for me
00:50:27
but I'll meet you at the ground right have fun and you just get excited you encourage the other person and then you
00:50:34
find one that you both want to do that's meaningful for both of you so maybe it is we want to um create an art studio in the garage love it maybe it is we want
00:50:47
to take a round the world trip at some point in the next 10 years okay great the difference with this exercise is
00:50:53
you're actually going to make it happen so right there on the spot you estimate how much it would cost take five minutes
00:51:00
don't take more than that you can estimate it within 80% like that decide when you want to do it maybe if there's
00:51:06
kids involved you're going to want to go in summer winter Etc and then all you do is take the rough amount divide it by
00:51:13
the number of months and that's how you know how much you have to save for it we did this and for us what was really
00:51:20
meaningful is to have a 10year wedding anniversary so we know where we want to do it we know the exact place we know
00:51:25
all the friends and family want to have with us and we knew when it was going to happen so we we had a funny experience
00:51:30
because we each sat down and estimated the cost and I think the number I picked was something like three times bigger
00:51:36
than hers and in those cases I say go with the bigger number okay it helps you dream a little bigger if you can't save
00:51:43
that much money per month that's okay shrink the dream a little bit right narrow the scope or maybe extend it a
00:51:50
little longer until you have to do it but suddenly every single month when you sit down and talk about money it's like a video game you're like oh we're 3%
00:51:58
closer to that goal that is how you start to build a vision for money and have fun along the way and do you subscribe to this idea that you should have like a joint bank account and then
00:52:09
separate bank accounts or because right now I just have my bank account and how does it work how does it work for you so
00:52:15
do you just you just pay for most things I have to give context on what my partner's like she really doesn't care
00:52:23
about material things so she's avoider she just doesn't she doesn't care about whether we fly first class or economy she doesn't care about if we stay in that hotel or this hotel right she doesn't care if we stay in the 70th
00:52:37
floor Penthouse we live there or or if she stays in a studio she doesn't care what does she care about she cares about quality time with me she likes having
00:52:44
nice experiences she likes going to places doesn't care how she gets there or where she stays she likes traveling and exploring and she likes her simple
00:52:51
thing she's a very simple person if I didn't get her birthday present or Valentine's Day present or Christmas present or if I just made her a
00:52:56
scrapbook every year she'll be thrilled okay so I am the one that wants the nicer you want the okay I'm the same I'm the same to to a large extent but we have a like we you know life it costs money so
00:53:09
um I pay for most things okay and you're cool with that it's fine right yeah I've always been cool with it okay cool so
00:53:15
I'm particularly cool with it because she doesn't care right right does that make sense yes it makes there's no resentment because she doesn't care I'm
00:53:22
the one that's making sure she travels this way yeah I have to intervene and I have to fight to make sure that her
00:53:29
plane ticket is booked here or that the hotel she's staying in isn't going to be dangerous I've got so many stories of
00:53:36
her booking it herself and then me having to rescue her because it's super dangerous yeah so so you and I have a
00:53:43
similar um Dynamic at least in this way um I think my wife does have her money dials money dials are the things you love to spend money on and you can turn that dial up but when we met she was not
00:53:56
into hotels at all I'm a hotel guy I love hotels and so we had to have some conversations at first I'm just like oh yeah like of course I'm paying and then when we merged our finances which I
00:54:08
recommend couples do well suddenly it's not my money it's our money yeah and so now we are forced to talk about that stuff and come up with a way like she's like I don't need to stay there and like
00:54:21
personally I don't really think it's worth it for our money and I'm like well like have you seen have you seen the
00:54:27
suite at this place and do you know what type of wood they use and that she doesn't care so so how does that work
00:54:34
you said you merge your finances when you say you merge your finances do you mean you're paying into the same bank account correct so and this is what I
00:54:41
recommend for most for for almost all couples um you take your paychecks or if you're we're both business owners you take whatever money comes in put it in the joint checking account that joint
00:54:52
checking account then pays a variety of different accounts it pays our joint expenses like our rent and if we eat out
00:54:59
it pays for our joint credit card bill the money also is paid out from the joint checking to her individual
00:55:05
checking and individual savings which she has her money no questions asked if she wants to spend it on something like she loves self-care what am I going to ask it's her money it also sends some money over
00:55:17
to me that's no questions asked money that I same money yeah the money that came in from us two together is
00:55:24
processed in the joint checking account account and an amount goes to each of us the same amount goes to both of you good
00:55:31
question it could be the same 50/50 I think is actually great but once in a while if you have somebody who's earning
00:55:37
like let's say 10 times more okay you may decide to make it proportional right so like one the higher earning partner might get more because imagine just for argument sake imagine you're earning a
00:55:48
million dollars a month easy math and um suddenly you're getting like $22,000 a month for guilt fre spending you're like um what the hell this this doesn't make sense usually partners are
00:56:01
totally cool with that but I will tell you this I used to be on the proportionality train meaning
00:56:07
everything's proportional Etc my wife and I did this for many years it's really complicated it gets
00:56:14
really really complicated and what's more important is you want to set your accounts up so that they drive the right
00:56:21
Behavior just like when you hire people you set the right incentives to drive the right Behavior when our moneyy was
00:56:27
separate and we were doing all this proportionality calculation all these different accounts we didn't see the
00:56:33
money as ours now all the money goes into that pot it's ours so we sit down every month we look at our numbers and we go what's worth it do we care about this hotel do we care about that etc etc
00:56:47
we really love that let's keep spending on that and find a way to do that it's about us and of course we have our own
00:56:53
individual money so why didn't you just the money coming in Why didn't it just go to you individually and then you pay
00:57:00
into the joint account why did you make that's what we did at first and it became really complicated so the money came into each of us and then we because
00:57:07
we each run businesses that are each variable we wanted it to be proportional well guess what if it changes every
00:57:12
single month we had to recalculate the proportionality every single quarter what a mess so we're we're literally
00:57:19
calculating every 3 months and then it changes and then at the end of the year we have to reconcile all this stuff
00:57:24
we're like what is this marriage or a freaking multi-national conglomerate so part of a philosophy around a rich life vision is one of our values is fight for
00:57:37
Simplicity fight for it because I talk to couples who have more complicated Financial setups than we do shouldn't be
00:57:45
the case most people's setups should be very simple all your money comes into a joint checking account from there it is it pays out to individual accounts
00:57:56
and it pays all your joint expenses your life is together your rich life is together that's it we're married we're going to be married forever our future is together so let's set our accounts up
00:58:11
accordingly so then if you end up getting a divorce that joint checking account do you just split it in half or
00:58:16
yeah so this is a this is a good question when you are married the money that is earned is community property so
00:58:24
let's just say we put $100,000 in that checking account and we were to get separated tomorrow
00:58:31
5050 yeah that and that's reasonable right it's community property the prenup is only concerned with what happened before the marriage so you're in the camp of not
00:58:44
caring too much about the small expenses the coffee it's a waste of time why is it a waste of time because the they are
00:58:51
$3 questions if you actually add it up how much they actually cost you it's actually not that much it's the simple
00:58:58
joy that you enjoy in the morning and you could spend your entire life agonizing over buying a coffee but when
00:59:04
I ask people okay so you stopped buying coffee for a month how'd you feel they go oh I felt okay I go what' you do with
00:59:11
the money you saved they go I don't know it's in my checking account not only do
00:59:16
you have to make the decision every single day to save on these tiny little things you then have to properly invest
00:59:22
that money and you have to do this every single day for the rest of your life what if we just got five critical decisions correct for the rest of our
00:59:28
life and didn't have to worry about coffee why are we playing so small oh let's decide do we have enough money to
00:59:34
buy this Saran Wrap who cares let's talk about are we investing properly do we have a a Target rate that we are doing watch this I bet you so many couples watching this right now have had
00:59:47
arguments about why did you spend so much at the grocery store why can't you stop spending so much on the kids and on
00:59:52
and on but have they ever had conversations like this what is our savings rate is it 4% 6% 7% what is our
01:00:00
investment rate is it 6% 8% whatever the number is Let's Make a rule that every December we increase it by 1% if you just did that if you increase
01:00:11
your investment rate meaning the percentage of your net income that you invest every single month I always
01:00:18
recommend people start off at 5 to 10% let's say you're at six if you make a rule every December we're going to
01:00:23
increase that by 1% it will be worth hundreds of thousands of dollars to you more than all the
01:00:30
coffee you ever buy in your entire life so why the hell would you focus on coffee when you can make one decision
01:00:37
per year and make way more than all those coffees combined most couples when they think about investing or their
01:00:43
investment rate the only investment most couples make together is buying a house
01:00:48
yeah well and that that's questionably not even an investment most people think renting is wasting money yeah and the
01:00:55
the logic goes well if my rent is $2,000 a month or £2,000 a month my mortgage is
01:01:00
only going to be £2,000 a month and we so we might as well buy a house because then we get to keep the asset are you
01:01:07
trying to get me mad right now I'm starting to Swit just hearing this because you're right that's what they say should I just dismantle these
01:01:13
arguments once and for all right now sure okay renting is not throwing away money just like going to a sushi
01:01:21
restaurant is not throwing money away on Sushi you're paying for something you're getting value you it's fantastic the
01:01:27
next argument they use is um you're paying your landlord's mortgage I go okay aren't you paying the sushi owner's mortgage when you go there and get sushi funny we never think about it like that
01:01:38
we only think about paying the landlord's mortgage finally we have to understand that buying a house can be a good financial decision it can be but
01:01:49
renting and investing the difference can also be a good decision and right now in the US in the top 50 US Metro cities it
01:01:57
is cheaper to rent than to buy so let me give you some math let's say because I lived in New York close by if the rent was let's say 3,000 bucks
01:02:07
a month to own the equivalent property right next door would have been 6,600 a month that's $3,600 per month more just to own so
01:02:19
most people don't know this they don't factor in Phantom costs like maintenance taxes transaction opportunity cost they
01:02:25
simply look at a number that says uh 3,600 or whatever the number may be and they go great investment we have got to
01:02:32
get more sophisticated with the biggest purchase of Our Lives I'm just looking at some of the uh
01:02:39
comments on our last conversation oh yeah what did they say it's a balancing act there's there's two groups of people
01:02:45
here there's a group of people who attest to the fact that they bought a house and it's the single best thing they did yep um this person said I
01:02:52
bought a house it's the best thing I ever did it's launched my mindset and New Direction remember that having your own space has
01:02:58
profound psychological impacts and can change your life that's a good comment okay let's talk about that first I love
01:03:05
that comment we have to remember that life is not just about a spreadsheet it's not so when it comes to a major
01:03:11
purchase like a house or a car we got to start with the numbers okay we have to start by running a buy versus rent
01:03:18
calculation by running an amortization chart I have a whole bunch of stuff on buy versus rent and then we we need to
01:03:23
know can we afford it is this part of our Rich Life vision what if one of us loses our job and on on on but then
01:03:30
second we need to say what kind of Lifestyle do we want if we love to decorate that's probably worth something
01:03:37
we should maybe we need to buy a house if we want our kids to be in a particular area maybe we need to buy
01:03:43
there's so many non-financial reasons to buy or to rent and so we can't just do one or the other but my main argument is this most of us never run the numbers we
01:03:53
will spend a million dollars in toal cost of ownership for a house and we won't run one calculation so we got to
01:04:00
play multiple notes doing the financial and non-financial parts I think that's what a lot of people are actually saying
01:04:06
a lot of people are saying you know I bought a house and this person is saying I used to be I used to live in a caravan
01:04:12
I finally bought a house and I don't care about being rich necessarily but having my own house means the world to
01:04:18
me great great non-financial reason they want stability I totally value that I would all also ask did you run the numbers I think the key thing is most
01:04:29
people when they buy the house they see it as an investment and they see it as a good investment I think in part because they don't really know any other way to
01:04:35
invest totally right so we we grow up we think okay the minute you get enough money the first thing you have to do is
01:04:41
buy a house I mean there's a real sequence of of events in our lives that are given to us which is go to school go
01:04:47
to college or university or something like that there get the degree get the job buy the house get married have the
01:04:53
kids and then move to Florida get skin cancer die oh retire okay have your pension die we don't have pensions anymore that was in the 60s but yes and
01:05:05
actually that's a pretty good life if you think about it it's actually a very good life especially the way that our
01:05:10
parents generation grew up where you know they could buy a house on a reasonable salary one salary but that
01:05:17
doesn't exist right now housing is historically expensive um and not through any fault of young people by the
01:05:24
way I there's a lot of this um stuff thrown around the media young people are buying too much avocado toast they're
01:05:30
always buying the new iPhone that's not why housing is expensive housing is expensive because people who bought
01:05:37
their houses in the 60s 70s and 80s bought a house and then systematically prevented everyone else from building
01:05:44
more housing so it is it's called nimbyism not in my backyard they have allowed almost no housing to be built particularly in the US that's why if you only have a limit Li mited Supply guess
01:05:56
what happens to the price it goes way up that's changing slowly housing prices will in certain cities like Austin even
01:06:04
Santa Monica have come down in certain areas it's really important to be able to build more housing so that young
01:06:09
people middleclass people poor people can afford housing we should not have people unable to afford rent or buying
01:06:18
housing it's a big problem so are you saying that the average couple if they're looking to make a financial
01:06:23
return yeah on their joint savings count account they shouldn't invest that money in a house I personally would not
01:06:31
consider my primary residents to be a great investment because it has massive costs right massive um maintenance opportunity cost of that down payment
01:06:43
let's say you put down 50k or 100K that could have been invested it has all kinds of uh Phantom costs and then you
01:06:51
have to stay there for until you pay it off presumably 30 years most people don't stay for 30 years there's some
01:06:57
shocking math behind a mortgage like most people don't realize that they will be paying more towards their uh interest
01:07:05
than towards principal for 21 years let me say that again most people when they take a 30-year mortgage right now with interest rates the way they are they will be paying more towards interest
01:07:18
than they are towards the mortgage in year 1 2 5 10 year 20 until till finally year 21 when they are finally paying more towards their mortgage their
01:07:31
principal rather than interest so you know that phrase I don't want to throw money away on rent we might more aptly
01:07:38
say I don't want to throw money away on interest so if I'm in a couple I'm in a relationship and me and my partner have managed to save I don't know 50k what is a better use of that 50k to drive a
01:07:50
financial return okay so let's simplify the whole thing I have a conscious spending plan I
01:07:56
have four numbers that couple should be talking about okay the first off is your fixed costs those should be roughly 50
01:08:02
to 60% of your take-home pay and what's the fixed cost fixed cost includes your housing or uh that could be rent
01:08:09
mortgage your utilities your car payment any debt payment anything that is consistent even groceries that you need to live every single month so 50% of my
01:08:21
monthly income go straight to those fixed costs monthly take-home post tax post tax okay 50 to 60% is the number
01:08:27
you want to be targeting right there is um is the Crux of why couples are stressed out about money it's because they are spending too much on fixed costs and within that there's two areas
01:08:39
they spend too much on you know what they are housing is number one because it's so expensive and they don't calculate number two is cars usually
01:08:47
trucks we love trucks trucks and SUVs in America the cultural script is oh we're
01:08:54
having a kid we need to get a big house and a big SUV uh because we do so that right there is where people get stressed out about money next number is your savings this
01:09:09
should be 5 to 10% minimum this includes your emergency fund this includes saving
01:09:14
for a down payment anything you're saving for money you don't need for between 1 to five years basically okay
01:09:21
next up is Investments this would be 5 to 10% minimum this is where real wealth is created and this is where couples neglect they they talk about saving and they'll say oh we try to save I don't
01:09:34
try to brush my teeth I don't try to save I make it automatic that's what I want couples to do that's what I cover
01:09:40
in the book and then finally my favorite category of all guilt-free spending this is going out for drinks concerts travel
01:09:50
20 to 35% of take-home pay that's a lot that's a lot if you look at it people go
01:09:56
wow yes and when you get down to that number and you're out and you're having drinks with your friends or you're out
01:10:01
to a beautiful experience you don't have to worry about anything else you don't have to feel guilty or anxious because
01:10:08
you're already handling all these other three numbers you know you're set and you have this money set aside and you
01:10:14
can enjoy it guilt free so this 10 this sort of 10% that is automatically invested would you set up some kind of system that automatically invests it always always you should not be doing
01:10:27
any of this manually so your investment should be happening automatically and for a couple you actually get to
01:10:34
celebrate it every month you have a monthly money meeting where you talk about money every month most couples
01:10:39
don't do this you will now after watching this and you talk about it you look at how your Investments are doing
01:10:45
you give each other a high five a big hug congratulations and once you do this for six months a year you really start
01:10:52
to see how it adds up fast what if your partner wants to buy a house and you don't o that's tricky how would you
01:10:59
handle it um it depends on my level of conviction about the decision I think you got to pick your battles and relationships but um I am probably more
01:11:09
financially aware than my partner because my brother is he's been an investment banker for 13
01:11:15
years he works for me full-time he's my money guy yeah okay he's my older brother where does he charge you 1.5% uh
01:11:20
he doesn't charge me a percentage on my P so happy no he works full-time in the business so he
01:11:26
he manages much of my money but he would make the case to me of pretty much the case you've made yeah so based on an
01:11:32
opportunity cost basis I a lot of people don't even know what opportunity cost is I'm going to Hazard a guess I'm going try and explain it which is essentially
01:11:39
all the things you could have done with this money instead yes so based on all the opportunities you have available to
01:11:44
you Steve is buying this house a good use of that money and the answer was actually no when I bought my first house it was no unless this is a emotional
01:11:54
decision because you and your partner want a psychological feeling of safety to bring
01:12:01
up the kids whatever it might be just a then if it is Steve if that's why you want to buy it and you think you're
01:12:06
going to stay there for a considerable amount of years then go ahead we're going to kind of section this as a different rationale than the rest of
01:12:13
your Investments what you do I did exactly what he said you bought it knowing it was an emotional decision yeah I bought it knowing it was a bad
01:12:19
decision I love this yeah okay this is amazing everybody listen closely cuz I want to break down what you just said in
01:12:25
in a different term first off you got to run the numbers yeah always for the biggest purchases in your life you need
01:12:32
to calculate carefully what's my buy versus rent what's my opportunity cost what's it going to amortise at all these
01:12:37
things that most people are not familiar with learn it it's not that complicated second you need to factor in the non-financial hey why am I doing this do
01:12:44
I just feel this certain way there's nothing wrong with feeling irrational about money nothing you want to buy this
01:12:50
thing and it's a bad financial decision okay first can I afford it if so we can continue the conversation and then you
01:12:56
buy it Eyes Wide Open saying I know it's not an investment I know it's not even a
01:13:03
good Financial DEC fact it's a terrible financial and I'm still going to do it when I when my wife and I go to buy a
01:13:09
house one day it will be the worst financial decision of Our Lives we already know
01:13:15
that but we will probably still do it anyway same as you because there's more to life than just what's in a spreadsheet but you have to know know all the pieces on the board before you
01:13:28
make these big decisions and you have to be able to do it with your partner you know it'd be very easy for you to do
01:13:33
things unilaterally it'd be very easy for me to do it as well what I've learned and what I emphasize on my
01:13:39
podcast every episode is just because you may be the higher earner or have more money it's actually your obligation
01:13:47
to bring your partner in and to get them involved and they may not be as Savvy or
01:13:53
even as interested but you have to find a way to bring them into this world and get them connected with you with my wife
01:14:00
and me of course I know more about Investments so I'm doing our investments but we're still talking about them we're saying like hey here's the numbers we chose are we still good with that let's take a look at it high five you know
01:14:13
here's what we're thinking for next year that's the level we're talking about these are these are exactly the kind of
01:14:19
conversations you want to have and I I'm actually really thrilled you shared that example because I celebrate that you
01:14:25
made a bad financial investment because it wasn't an investment it was just something you wanted and you could
01:14:31
afford it yeah and we're both aware me and my partner we had the conversation we're
01:14:36
both aware that um this is one of the worst things we could have spent the money on if our objective if our kpi our
01:14:44
key performance indicator was to make more money this was a terrible decision to make yes but we're also aware we just
01:14:50
didn't care we thought you know it's there's a lot of non-monetary things that are going to be beneficial about
01:14:56
this decision and I think that's what most people don't realize actually and I just think about my friends I think most of my friends believe that when they buy
01:15:02
their house they're doing so because they don't know they don't know any other way to invest Society hasn't given
01:15:07
us an alternative so what is the alternative simple lowcost long-term index funds are fantastic ways to invest I'll explain what they are the myth
01:15:19
about investing is that you have to sit there and look at PE ratios and things like that no you pick often one One Fund
01:15:25
there's a simple example called a Target date fund you pick the year you're going to retire in like if I'm going to retire
01:15:30
in 2050 I pick a Vanguard 2050 fund or Fidelity or Schwab 2050 fund all I do is literally send money every single month I set it up so it happens automatically it could be $50 a month 500 500,000 per
01:15:46
month and that's all I do I just send it there it automatically buys the stock market it automatically diversifies and gets more conservative over time and that's it so you know the Fitness World
01:15:59
you've I've seen you training you you've learned about Fitness when you first start off so much information and so
01:16:07
many different people giving you different pieces of advice right it's like oh my God how am I supposed to know
01:16:12
what about my genetics and this and that and then over time you realize oh it's actually pretty simple once you cut
01:16:18
through the noise that's the same thing with money that's the same thing with investing you have to cut through the
01:16:23
noise and it actually becomes shockingly simple oh my God this is the way that real wealth is created it's
01:16:30
about consistent investing it's about time it's about low fees that's it and you start to wonder what's all this stuff that they publish all the time in these magazines and newspapers and on
01:16:41
Tik Tok it's just noise do you know when you sat down with those 180 odd couples
01:16:47
you've spoken to about money in their in their relationship have you not had moments where one of the partners was
01:16:52
shocked always for better in F us yeah yeah actually yes um sometimes they are shocked before they meet me because I have them prepare their document with their financials and one of them has
01:17:08
never actually looked at their financials sometimes both and they realize it's much worse than they thought or it's much better sometimes
01:17:15
we're talking and a one of the partners will actually talk about how they feel for the first time ever and the other partner will be crying give me some examples of the moments that you remember that shocked you the
01:17:29
most I think about one of the most shocking examples was a woman who was around the age of mid-40s maybe 50 and she had had a
01:17:43
double lung transplant and um she had successfully had the transplant and she was alive um
01:17:50
she was healthy but she knew that she would live five or 10 more years that's what the doctors told her and she said I want to share this time with my daughters they were around 11 and 12 her
01:18:05
husband and um I want to do that I said okay what's stopping you and she said um
01:18:12
well I still have a job and I looked at her financials they were multi-millionaires they had saved
01:18:18
consistently doing index funds over time nothing fancy just consistent investing
01:18:24
they she could stop working tomorrow and they would have enough money forever she couldn't stop she said I like to work I like knowing that I have a job I like the consistent income so
01:18:39
most people are used to getting an income and that's why they find it so difficult to retire among other reasons because the income will stop even though I can point out to them the Investment
01:18:50
Portfolio you've built and Social Security and all these things will actually pay you people are terrified of
01:18:55
not seeing that money come into their checking account in this case she had a ticking clock we all have a clock but
01:19:02
she knew how long hers would go for she found it incredibly difficult to quit her job and spend time with her daughters now if we're listening to this it's like just quit it's so obvious to
01:19:15
all of us but we're not the ones making the decision that was quite shocking to hear
01:19:21
how difficult it can be even in cases of life or death wanting to have a stable income can
01:19:28
affect us and what about earning like what role does earning play like just earning more money playing all of this stuff because I think I did I'm gonna be honest I had a bias when I was 18 19
01:19:39
years old um I was fairly Reckless with money and I had these four credit cards I maxed out the credit cards I blew the money I got two ccjs which is a county court judgment in the UK okay had huge
01:19:52
debts of thousands of thousands of pounds and and in my head I thought it will be fine if I just earn more no because I'm G to earn so much money that
01:20:03
I'll just outpace this problem and that was like my bias my bias was like I'll just earn loads of money and when I
01:20:10
figured out what a credit score was and that mine was destroyed I thought that won't matter because I'll always pay in cash yeah classic um every couple I
01:20:17
speak to who has a spending problem they always say the same thing they go we just need to earn more and these are the
01:20:23
very same couples when we crunch their numbers they'll often realize they were earning way more than they thought and you can see their faces cuz I have the
01:20:30
whole thing on YouTube and it's this realization that oh my God the story I've been telling myself if we just earn $25,000 more and then they realize we actually are earning 25k more and they
01:20:43
don't know what to do with it what I tell them is you could be making $300,000 more right now and it would not
01:20:49
make one bit of difference because you're you have a hole in your bucket and all the money is going out
01:20:55
the next thing I ask over Spenders is um do you want to make no change small change or big changes 100% of them say
01:21:02
big changes I go all right I take them at their word and then we start going down the list and they find it
01:21:09
incredibly difficult to strip out even the most minor of spending so we have a couple here that will be in literally hundreds of thousands of dollars of debt okay it's like I'm having a heart attack
01:21:20
watching them and they're very calm it's because I understand interest rates and I know what situation they're in and so
01:21:27
they go big changes suddenly 10 minutes later we're debating whether they can keep their Netflix subscription or not
01:21:34
and I go guys I'm not here to berate you I'm not the teacher who's telling the kid you've been a bad kid which deep
01:21:40
down a lot of them want a lot of us want an authority figure to tell you you've been bad now we got to be good and that's just not what I do I help them
01:21:50
realize it themselves and it goes slower it takes a long time but if they realize
01:21:56
it themselves they're able to make the change every couple says they want to make big changes when it gets down to
01:22:02
the spending is really difficult that's why you have to be incredibly careful which lifestyle purchases you make that
01:22:10
are tied to your identity so if you are a car person and you're driving a Rolls-Royce really fancy car it will be incredibly difficult for you to
01:22:21
downgrade that car because it's part of your identity right meanwhile like if you have to get cheaper paper towels
01:22:26
whatever nobody cares but you have to be very careful about what you allow to become part of your identity I'm not
01:22:33
saying don't buy nice things and couples you should buy nice things but do it when you know that you can afford to do it forever don't just do it because oh we want to buy private school this year
01:22:44
but we don't know how to pay for it next year so do you think that couple should make a
01:22:50
budget uh I don't like budgets I don't think they work I think they look backwards whereas a conscious spending
01:22:57
plan looks forward but most couples think deep down we just need to create a budget isn't a budget the thing you gave me like the 50% 60% different a budget
01:23:09
is couples tracking every last line item they're tracking how much they spent on
01:23:15
corn they're tracking how much they spent on diapers someone has to create and track this laborious spreadsheet and
01:23:22
then at the end of the month they look at it and they go uh I guess we spent that much what are
01:23:28
you supposed to do with that most couples have no idea does this budget tell you when you're going to be a
01:23:33
millionaire does it tell you what your net worth is does it tell you if you have
01:23:38
enough no it doesn't stack up to anything it's just a bunch of numbers tracking budgets Look Backwards a
01:23:45
conscious spending plan looks forward so a conscious spending plan allows you to zoom out and say what is the vision for
01:23:53
our RIS rich life how do we pick the things we want to spend extravagantly on and cut cost mercilessly on the things we don't so I give you these numbers 50 to 60% for fixed costs it's up to you
01:24:06
how you want to hit the number if you love your house you want to spend more on your house do it maybe it means you
01:24:11
spend less on your car payment if you want to um go to concerts but you don't care about eating out fantastic take the trip go see Taylor Swift so it's up to you to make the tetris pieces fit but
01:24:24
you decide and all your money flows for those four numbers how do we go about teaching our
01:24:31
kids about money my my older brother and the one that works in our company he has three kids under the age of six and I'm
01:24:37
wondering because he's such an Optimizer are they going to end up being optimizers is there a relationship between our parents and our kids and if
01:24:43
I want to when I do have my kids how do I make sure that they aren't worriors or avoid is the number one thing that the
01:24:51
couples in financial trouble say is when they were growing up their parents never
01:24:56
talked about money never there was an episode on our podcast with this uh couple living in Kansas in a low cost of living area and um they were making
01:25:08
$130,000 a year that's a very good income especially for their area they should have had tons of money tons of
01:25:15
savings but their daughter came home one day with um food from the school because
01:25:22
she had told her school we don't have have enough money to eat now they had plenty of money why because her mom and dad were always saying we don't have enough we can't afford it daughter took
01:25:35
that message to school and was given free food this was horrifying to the dad horrifying and what he realized at that moment was the way that I'm communicating about money is not
01:25:47
working see most parents deep down believe that money is something to protect kids from they think it's bad
01:25:55
deep down most Americans we we have a LoveHate relationship with money but parents think their kids let them be
01:26:03
kids but you would never teach a kid how to ride a bike by saying we don't talk about bikes in this
01:26:09
family you would get them a bike you would get them on you would show them how to do it you would let them fall and
01:26:15
then you would help them get up again so imagine this with your kids imagine that they are three years old young you pull
01:26:23
them up sit them you say look can you help me push this button we're gonna pay for the rent this is for our beautiful
01:26:28
house help me push that button yay give them five okay getting them involved right from the get-go and this is if they're living with two parents this is Mom and Dad you want them to see both
01:26:40
because too often people only see um Mom worrying about the bills and so they come to associate mom with worrying and therefore if it's their daughter they think they are supposed to worry as well
01:26:53
now imagine the kid is uh 8 10 years old you say hey we have to go to the grocery store here's $100 we need to get all
01:26:59
these things how should we do it let them let them make mistakes they're going to forget about taxes let them
01:27:05
learn right they get a little older they're planning uh pizza or a restaurant for the family here's $100
01:27:13
for dinner problem is they're going to pick some place like Chili's it's horrible but you got to go let them learn their lesson by the time they are
01:27:20
16 years old they have planned a family vacation they are aware of tradeoffs taxes tips all kinds of stuff they have helped the family buy its new car this
01:27:32
is how you prepare kids you don't simply say we don't talk about money in this family you let them learn about money and you tell them what you've learned about money that's how you teach them
01:27:44
I'm somewhat scared of my kids being sport brats and I say to my partner sometimes I'm like if when we have kids
01:27:50
should we be putting the kids in like the back of the l oh yeah you know what I mean or should we should they be upfront with us like what's the deal well I'll tell you what I I um I went to
01:28:01
Public School uh my entire childhood and then I got a bunch of scholarships and went to a private school and for college and at that college I remember in the
01:28:13
first week so many of the beliefs I had about money and kids were shattered I had always assumed that if you went to a private school you were spoiled and you didn't really like to to work within 3
01:28:26
days I realized that was totally untrue like some kids are spoiled some are not the correlation with private school not
01:28:33
really there it's about parents it's about how they were taught and it's also about some element of luck as well but
01:28:40
can you teach kids not to be spoiled yes there are so many wealthy kids who grew
01:28:46
up not entitled appreciating what they have and the parents were still like hey I want to go to a nice hotel how how do
01:28:52
you raise kids that AR spoil what you think so what start at the very beginning when you're teaching them
01:28:57
about let's do this together money is something that we all do together now imagine that when you're talking to your
01:29:03
family just the same way we talk about creating a healthy relationship with food right how do you teach your kids to
01:29:08
have a healthy relationship with food you talk about it all the time you go to the grocery store together you cut
01:29:14
carrots together and potatoes and you say this is why we're putting potatoes in this thing but we never do that with
01:29:19
money so you have a healthy relationship with money by shining a light on it by talking and asking them questions do you
01:29:26
know how we afford this house um what's a good thing to do with credit cards and
01:29:31
what's a bad thing to do with credit cards hey what do you think that we have 200 bucks and we want to give it to a
01:29:38
worthy cause how should we do it how should we pick these are the kind of conversations that families should be
01:29:44
having and when kids start to engage with money and they see parents doing it and they realize it's not something to be ashamed of or hidden from they go oh my gosh like I have some agency over
01:29:57
this some control that's how you prevent them from being spoiled have you got kids yet no when you have kids if your
01:30:03
kids come to you and they say Dad um I want to be rich mother love it I would say what does rich mean to you it means being able to have Financial Freedom so not having to look at Price tags when I go into restaurants or shops or when I'm
01:30:15
browsing Amazon I can just take care of myself I can live somewhere nice drive a nice car go on a holiday when I want it's freedom and what is the most
01:30:23
important thing that I should be thinking about to create that wealth and preserve it so that I can be
01:30:30
rich well you'll first noticed that when this hypothetical kid said I want to be
01:30:35
rich what was my response what you mean by Rich yeah amazing what do you mean by
01:30:41
Rich so excitement and curiosity the opposite would be why do you want to be rich you don't need to be rich that's not for People Like Us squashing those dreams so when um like my nephew um a
01:30:55
few thanksgivings ago he was young and he said um I want to buy a Rolex amazing where'd you get that tell
01:31:02
me what kind of Rolex how you going to do it how much is it going to cost how much do you have to save to put that
01:31:07
aside that's encouraging kids now they can figure out these trade-offs later but just encouraging them first off is
01:31:14
the first thing we do with kids when they talk about money kids are smart they notice by age three four or five
01:31:22
how their parents feel about money I talk to parents all the time and I speak to my own family and their parents of
01:31:28
younger kids they will tell me my four-year-old is already worried about money every time she gets a little bit of money she
01:31:34
puts it in an envelope and saves it because she's always worried about having enough I go wow that's tough um
01:31:41
where do you think she got that from and then Mom starts crying always I can have
01:31:48
a very um difficult financial situation uh two parents they'll be in $150,000 of
01:31:55
credit card debt they're stoic about it they ignore it we talk about it they engage but the minute I bring up the
01:32:03
kids tears and the reason for that is that you can take on a lot of Burden yourself but when you realize that your behavior is being passed on to your kids
01:32:14
that is really difficult and that's why couples can get on the same page and build a healthy relationship for their
01:32:21
kids as well so what would you say then to your kid says Dad I want to be rich you said amazing great love it y tell me
01:32:26
what it means and they say what are the principles for wealth creation dad in keeping that money so that I can be financially free it would be number one
01:32:34
you have to find something you love to do work hard you have to love to work okay in your own way whatever it is
01:32:41
two automatically invest every single month right that's great and number three you have to enjoy money enjoy it
01:32:51
not just making it not just managing it but also spending it and if they said Dad should I get credit cards I said
01:32:57
sure of course when the time is right you should get a credit card you should always pay it off every month but you
01:33:04
should get a credit card and when you start to spend enough probably get a rewards card you can get some free trips
01:33:09
or cash back out of it notice that I'm not being restrictive if they say I want to buy coffee every day I would say fantastic let's talk about how you can earn enough so you never have to worry
01:33:20
about coffee if they even said to me I want to buy a Lamborghini I'm not a Lamborghini guy I couldn't care less I
01:33:26
would say amazing how do you think you could do that and what if they said oh um you know I want to be a school
01:33:32
teacher I would say okay you know have you talked to any school teachers and asked them how much they make then
01:33:37
calculate how long it would take you to buy a Lamborghini kids are smart they can do these things we just have to
01:33:45
challenge them they say Dad I've only got my pocket money so how am I going to become an investor I don't have enough M
01:33:50
money yet how much do you need to invest I assume you need like, of pounds what if I told you you only need to start
01:33:56
with $100 I don't have $100 I have S pound pocket money have you asked anyone else how you could make an extra $93 no okay what could you do to ask
01:34:08
them to make $93 what could you do clean the cars in the street keep going I paper around and on and on and on so
01:34:15
here I'm not giving them the answer I'm challenging them to learn how to think for themselves and to make $93 for a kid
01:34:21
you could do it it won't happen in one day but you could do it very very quickly how much money do you think you need to start investing you should start
01:34:28
investing as soon as you can you could start investing with 50 bucks a month my my dad helped me open up a custodial
01:34:35
account when I was 14 years old so I started investing then and my dad immigrated from India so I was very
01:34:41
lucky that he pushed me um but if you're a parent you should definitely be getting your kids to invest early even 50 bucks a month makes a huge difference so you invested at 14 yeah and I've been
01:34:53
investing ever since and how did that do for you fantastic you know why because I sold I never sold almost anything it
01:35:01
just stayed every single investment every single month no magic no random like amazing stock picks except for a couple lucky ones it's just basically almost all index funds just every single month
01:35:15
what about crypto I mean if you want to have it as one to 5% of your portfolio as
01:35:21
speculation fantastic the problem is that crypto investors I talk to don't believe in diversification they will
01:35:28
often have all their money in it and they don't really they don't follow classic principles of investing and the worst part is it's hard to argue when
01:35:38
it's done so well so people go like what the do you know 7% that sucks Grandpa and I go all right fine it has
01:35:47
performed incredibly well at least in certain parts of crypto but you do not want to have the majority of your assets in one thing and it's the problem with crypto as well is you only hear when it's doing well exactly so whenever the
01:35:59
the bare Market comes in everybody goes quite quiet they get very quiet where'd you go guys sometimes I follow with them
01:36:05
on Twitter half the time their account is deleted that's called survivorship bias
01:36:10
you only hear about things when they're good the minute it's bad account deleted never heard from them again what about
01:36:17
gambling you must see some gambling in relationships I'm not sure how legal gambling is in every state over here in
01:36:22
the USA but in the UK gambling is legal so yeah it's often an issue in relationships a quiet issue yeah it is a quiet issue I think um I don't hear about it too often I suspect that um
01:36:35
gamblers simply don't want to talk about it yeah which is actually the worst of all maybe I need to find a way to reach
01:36:41
some gamblers I mean we do hear some really tragic stuff we hear about um folks who have lost money on bad
01:36:48
Investments late in life we hear about parents whose kids are bleeding them dry but we also hear about some really positive things you know couples who who have quietly accumulated money over time
01:37:01
and they just don't realize we made it and sometimes I get to do the very pleasant thing of saying like hey you
01:37:07
two clearly love each other you've done this together you made it have have you ever seen marriages fall apart because of these issues we've had couples break up directly after our podcast marriages
01:37:22
of course I get emails all the time the reason that we broke up was money but you know what's interesting research shows which I cite in the book that um when couples fight they don't fight
01:37:34
about money you know what they fight about kids chores and communication money is rarely talked about it's only talked about when
01:37:47
there's a fight but it's the least of what people are typically arguing about kids chores communication that's what gets fought about unromantic though isn't it seen as being you know there's
01:37:59
a stigma don't talk about money and yeah which is crazy I I encourage couples to have a monthly money meeting I even give
01:38:04
them an exact agenda here's the Google Doc work it out adapt it for your own needs start off with a compliment you
01:38:10
know I really appreciated that you planned that trip for us to the grandparents like the you did such a great job with flights start off like
01:38:17
that people look at me like I'm speaking cling on to them an agenda for my wife or my husband I go what they go that's weird I go I think it's weird for you to go 40 years fighting about money never
01:38:31
talking about it never creating a vision instead of using an agenda it's so interesting because you know much of the issues in my household growing up were money related so between my my
01:38:42
mother and father and there is no way that my mother had any idea how much money my dad had or how much money the household had wow and I really as you were saying it now I thought God if they
01:38:53
just sat down once and had that conversation like how much money do we actually have here God our childhood
01:39:00
would have been so drastically different let's pause for a minute to talk about today's sponsor which is whoop I often
01:39:09
think how lucky we are to live in a time where we can so easily access information on how our body is performing but it also makes me wonder
01:39:16
how many of us are really utilizing this technology a couple of years ago I started wearing whoop a device that
01:39:22
monitors how activities and behaviors affect my sleep my training my recovery and my stress I'm currently Midway
01:39:28
through whoop sober October Challenge and this month if I compare it to a time when I used to drink my stress levels
01:39:34
are significantly lower if you're like me and you're aiming to be the best version of yourself then you have to go
01:39:39
and check out whoop head to join. woop.com CEO to start your free trial today and if you're already a whoop
01:39:45
member taking part in this challenge do me a favor send me a DM a message and let me know how you're getting on do you
01:39:51
know you said you are at a point where you now think you have enough yeah but you're still striving for more and still
01:39:56
investing and still earning and still waking up every day and driving then why I like it I love what I do I love
01:40:03
working I um the more that I make the more that it is a sign I'm creating value that's it but I
01:40:13
systematically earn more like I have my rules so for example unexpected income that comes in 70 to 90% of that will be invested right meaning like I'll take
01:40:24
10% and have a good time but I'm primarily investing unexpected income question then if you got a$ 100 million
01:40:31
windfall yeah how would your life change it's hard to say I have a very good life i100 million comes in what you going to do with
01:40:45
it I mean it's going to change almost nothing I would I would it would accelerate some
01:40:52
of my plans for charity um for a house because I would have the house drawn up even though I don't even want to buy a house anytime soon I would probably have the house drawn up and then I would say call me
01:41:07
when it's ready to move in and don't call me before then I I want nothing to do with building it I don't want to see
01:41:12
a piece of wood go over there why would you buy a house purely because what else
01:41:18
are you going to do with the money of course giveaway you got to spend the money somehow but
01:41:23
a why house what else you going to do with it just save it I already saved it I already invested it see what happens is when you start to as you know you start to hit your numbers and exceed
01:41:35
them bigger than you ever thought possible you start to realize that so much of our life is spent playing
01:41:41
defense with money that's the relationship that most of us have with money will we have enough at the grocery store will we have enough to fix the
01:41:47
window will we have enough to get a car and most people live that way but if you
01:41:53
start to save automatically and you start to invest and you really make it a focus to earn and understand how money
01:41:58
works at a certain point you go oh my gosh objectively speaking looking at our numbers we don't ever have to worry
01:42:05
about the price of a chicken bowl again so then what then what is the point of it all give it away I guess this is where I think um this is the real Challenge and you know a lot of retirees
01:42:15
they get to the point where they have accumulated money and but they never really thought about the point of it all
01:42:21
what is the point of it all I tell sometimes people um surprise me by how uncreative they are with money I'll give
01:42:28
you an example I ask people what is your money dial what do you love to spend money on and um people they usually have
01:42:35
a pretty good answer the most common answer is um food the next common answer is uh travel then health and wellness and there's a bunch of other money dials so one guy once told me um I like
01:42:48
coffee that that's his money dial coffee I go what do you mean he goes I order different beans from whatever I go can I
01:42:56
be honest with you I'm bored I'm bored by your answer cuz he he was doing very well I like okay you buy a $20 bag of
01:43:02
coffee beans all right you have way more money and he's just like he was a little insulted that I said it but I was trying
01:43:08
to shake him because I was bored some person with that much money should not be telling me that the thing they love to spend money on only is coffee so I go
01:43:16
listen you like making your own coffee he goes yeah I have my Aro press and this and that I go what if if you
01:43:23
considered hiring the Barista from your local place to come to your house and show you how to fine-tune that coffee
01:43:30
what if you really learn how to spend money on that experience and deepen the experience it's not about buying 10 more
01:43:37
coffee bags it's about going deeper a year later or two years later we talked he had done that and he got really into coffee he was now traveling to go to
01:43:47
different locations Colombia Rwanda all these places where he had started to appreciate the coffee so sometimes we need to get more creative you don't have to spend thousands of dollars but if you
01:44:00
and your partner love this thing think about how you can spend money to appreciate it even more and your
01:44:07
strategy is to then stop spending money on the things that you don't appreciate yeah so this why your Rich Life vision
01:44:13
comes in what do we care about what do we want to spend extravagantly on and then what do we want to cut cost mercilessly on we always start with what
01:44:20
do we want to spend more on so when I people I have a variety of exercises I walk them through like what's your
01:44:26
perfect week I'll tell you that uh I've done this with many many people not one person has ever said my perfect week
01:44:31
involves doing laundry cool could we pay that out and if you can't afford to do that today that's okay put it on your vision and say when we get to this number we're
01:44:43
never going to do laundry again fantastic but it also gives you something to look forward to you know
01:44:48
it's thrown around that once household income equals x number then people are happy or at least that there diminishing
01:44:55
returns is it yeah that $75,000 number first of all that was already like 10 years ago so we have to factor
01:45:01
in inflation but second more recent research has show uh shown that actually happiness continues increasing there's
01:45:08
also self-satisfaction so there's a variety of different variables basically don't believe that $75,000 number that's
01:45:15
tossed around it doesn't make any sense what's more important is you create a vision together and you go what would
01:45:22
make this week this year this next 10 years amazing for us let's just put it all out there it doesn't even matter if we know how we can afford it or not then let's talk about it do we know our
01:45:33
numbers do we have enough can we pay for our kids college or not can we buy an extra iPhone charger so we don't have to run to the bedroom every day and you start to create and design your rich
01:45:45
life together that's the way you do it very interesting topic and it's particularly pertinent to me because you know as I said I spoke to a divorce ly the other week and he told me that it's
01:45:56
the one of the top two reasons couples get divorced is because of money problems and I really didn't know what he meant I thought maybe it's one of the
01:46:03
partners loses all of their money and it causes arguments or maybe it's just that
01:46:08
there's a lot of resentment and frustration built up because there's opaqueness surrounding the subject of
01:46:14
money and it's kind of like the elephant in the room that has never been addressed and this is exactly what you
01:46:19
try and do in this book and you do it so masterfully your first book is sold you know seven figures worth of copies and I
01:46:25
understand why and I have a sneaking suspicion that this book is going to be equally successful because it is the elephant in the room in most
01:46:31
relationships the fact that you know when I saw that you'd written a book about money for couples it immediately
01:46:37
made me realize I go Chris we've never talked about that in our relationship and why not and it's a whole complex
01:46:42
Myriad of reasons and Trauma and uh emotions and insecurities and shame but like all things in my relationship the more talking I did about it the better it became and the less of a an issue it
01:46:55
became and you know there's almost a correlation in relationships isn't there between the amount you talk about an
01:47:01
issue and how big the issue is um and that relates to all things whether it's sex or if it's the in-laws or it's
01:47:07
friendships or whatever it might be so it's a really well-timed book and I've really not discovered one quite like it
01:47:13
so I highly recommend everybody goes and checks it out it's out in December um the link is below so if you're listening
01:47:19
to this now you should be able to pre-order this book right now and hopefully this can form the Foundation of a conversation that you very much
01:47:24
need to have in your relationship one that might just save your relationship such a pleasure we have a
01:47:30
closing tradition on the podcast where the last guest leaves a question to the next in the diary of the CEO and the
01:47:35
question that's been left for you is what can you do to improve humanity and the life of
01:47:48
people I think in my world the best thing I can do is uh set an example of someone who publicly speaks about the things that
01:48:00
are important to them who wakes up every day and has a great time teaching loves
01:48:05
what I do and models having a loving relationship with the people around me yeah leading by example in every
01:48:17
sense of the word thank you so much such a pleasure to speak to you and you've open my eyes
01:48:23
to so many things and every time I have these conversations I hope that uh I walk away with some kind of actionable
01:48:28
insight into something that matters in my life and that's certainly the case in this conversation so thank thank you so much for coming coming back today thank
01:48:34
[Music] you every single time you eat you have an opportunity to improve your health and that's why I love Zoe because Zoe helps me to make the smartest food
01:48:47
choices for me and my body and as you guys will know by now Zoe is a sponsor of this podcast and I'm an investor in
01:48:54
the company and if you haven't tried Zoe I highly recommend you do because Zoe combines My Health Data with Zoe's World
01:49:00
Class science and using those two things Zoe guides me to Better Health every single time I make a food choice and eat which means that I have more energy better sleep better mood and I'm less
01:49:11
hungry and the most important thing is Zoe actually works it's backed by their recent clinical trial something called
01:49:17
the method study which is the gold standard of scientific research I started Zoe just over a year ago now and
01:49:23
I've been able to track my progress week after week so I can learn how to be even smarter the following week and if you
01:49:29
haven't joined Zoe yet I'm giving you 10% off when you join Zoe now just use the code ce10 at checkout
01:49:39
[Music] oh [Music]