MBA1988 Extended Interview: Ramit Sethi – Navigating Money & Relationships

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I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014 and and today we have a very special episode. We have an extended interview with the New York Times best selling author Ramit Sethi. This is a special kind of episode that we do once in a while. These episodes are longer, more in depth and a chance for me to get into some pretty incredible minds and share with you those conversations. Today's conversation with Ramit Sethi is all about money and relationships. How to navigate those conversations with your significant other or even a business partner or partners. Money is a very emotionally charged topic, so it's really important to understand how best to navigate those waters. Who else is better to do that with us today than Ramit Sethi, the author of I Will Teach youh to Be Rich the book that hit the New York Times bestsellers list more times than I can count. We're gonna be covering how to understand your partner's money language, their understanding of success, what they value when it comes to their rich life, and even how to even start talking about Money with your partner in life or partner in business. We get into that and more in today's extended interview.

So let's get into it.

Let's get down to business. Recently, Ramit Sethi has launched a new podcast, and I thought it was very interesting. It's called I'll Teach youh to Be Rich with Ramit Sethi, where he has conversations with with couples and works through some of the friction and issues these couples have when it comes to money. The first thing I got to say is that this podcast is actually quite engaging, but very informative, and you learn a ton about how you perceive money and what it could do for you. And you can see yourself in a lot of the examples and the conversations that are shared. I wanted to dig deeper on this topic with Ramit when we had our conversation, because I really believe that this is not talked about enough. In business. Money is a big deal, okay? It's the lifeline. It's the oxygen that fuels your business, but also applies to your life. How do we make sure that those conversations are healthy and not hurting our relationships, whether they're personal or professional? So we're gonna jump into the conversation right now, but I'll be back to wrap up today's episode and give my takeaways. But for now, jump into the conversation with Ramit Sethi.

All right, so happy to have Ramit Sadie back on the show. Ramit is no stranger to the podcast at this point. I think you're officially a co host now. But no, we really love having you because you really share some really interesting insights when it comes to money, when it comes to finances, also the psychology of money and our relationship with it. So I'm really happy that we're going to be digging into this really interesting but important topic when it comes to money, and it's money and relationships. So we're going to retouching on money relationships in terms of romantical or romantic couples or people that are in a relationship together. But also we'll also talk a little bit about if you have a business partnership with somebody and you need to make sure that you're on the same page when it comes to money. So before we get into all that, you recently launched a podcast on this topic, relationships and Money. Tell me a little bit about why you wanted to start this podcast. What inspired you to do so? What is your intention there?

My wife and I started talking about money and I figured I'm the I will teach you to be rich guy, so it should be pretty easy. I've Been thinking about money for a long time, and we started having these conversations, and it was a lot harder than. Than I thought. First it was, let's just kind of chat about how much we each have. What does it mean for us. That was a cool conversation. Then we started discussing a prenup before we got married. And that was actually not bad at the beginning. But then it started getting really hard, and my wife and I were fighting about money. We were talking about money in different ways. And finally my wife said, we got to go see somebody because this is. This thing that we're doing is not working. And so we went on to Yelp and we searched therapist near us, like literally the closest one. And we just walked over there and it was actually fascinating. I'm so glad that my wife suggested it because we talked in a way that we hadn't talked. And. And I walked out of there saying, I wish that I could hear other couples having these conversations. But there's nothing. When you go online and you search about prenups, there's nothing. It's all nonsense on Reddit from broke people who don't know what they're talking. They watched Richie Rich in 1996 and that's what they think a prenup is. They have no idea. And then once my wife and I got married, we're like, great, we don't have to talk about a prenup anymore. We solved that. We both got on the same page. But it was actually quite challenging to talk about. How do we use our money day to day? And if you're listening, you know exactly what I'm talking about. What if one of you wants to buy organic food? What if one of you wants to stay at a nicer hotel than the other? What if one of you wants to buy a certain type of car or you want to have a higher savings rate or buy a truck? Well, those are decisions that almost always end up in the same pattern. Everybody ignores it for a long time, then it blows up into a big fight, then you paper over it and go right back to ignoring it. It's this beautiful, horrible cycle. And I wanted to show people how to have a healthy relationship with money so that instead of fighting about it, you can actually be joyful about it. You can create a rich life vision together.

I love this because like you said, this is not something that's discussed openly. And in fact, I look back at my own parents relationship, I don't even recall one conversation of them talking about finances, when the reality is that that's all they're worried about is like, how do I make sure I pay all the bills, how to make sure that my kids have a better life than I do, all that kind of stuff. And I think that not talking about it causes more harm than obviously, the short term, maybe heated discussion that comes out of that whole situation. Having said that.

What would be the.

First step of getting on the same page with money? With a partner?

The first step is a lot smaller than people think. So here's what most people think the first step is. All right, let's get all of our IRAs out and let's dig up all of our debt and put it all out on the table. Hell, no, you're not ready for that. If you do that, you're definitely going to fight. I can guarantee that. In fact, I talk to people on the podcast and you can listen to them fighting. It's quite entertaining, but it's also educational as to see what you should and should not do. First step is so much simpler. You don't need any pieces of paper. You don't need any data. Just start off by saying, you know what, I'm curious. What do you remember about money growing up? What are your best memories? You remember your mom or dad saying something at the dinner table? Or any weird stories? How did you grow up with money? Here, let me tell you how I grew up. In fact, I'll give you a real example. When we used to eat out, my family would eat out once, maybe every six weeks, and we would only eat out at a pizza place where there was a coupon, okay? So we'd go. We'd have our coupons and, you know, back then, these little arcade games, and we were kids, and so we would kind of look at each other and we'd go, okay, like, ask dad for some quarters, but only ask for two. Don't ask for more than, that's too much. So we'd get two quarters, play the games, and that was that, right? That was joyful to us. Now, what if that was your experience growing up like me, the son of immigrant parents? And what if your partner said, oh, yeah, we used to eat at eleven Madison, or we were eating at the best restaurants twice a month because, you know, my mom or my dad loves fine dining. Whoa. You're going to have totally different perspectives and conceptions of money and food, and suddenly it you, you know, you just file that away. You go, that is really interesting. Wow. So how did you guys choose? And you get curious. You're not in that first conversation. Goes oh, so that's why you always buy organic quinoa. No, no, no, no, no. Save the judgment for never, okay? We don't need to do that. But you're just getting curious, and you go, you know what? Awesome. I'm so glad we had this conversation. I'd love to talk about money with you more. I feel like we have so much to learn about each other with money. Anyway, thanks so much. That was awesome. Let's grab some dinner. Now that's how you do the first conversation.

Yeah, I love that because it's not like, you know, what do you think is a good budget for the month? You know? Yeah.

Say, there are some words to never use in your first conversation or ever. Budget is one of those words. Nobody wants to hear the B word. Nobody. Nobody cares. Stop talking about budgets. Nobody wants to hear about the word taxes. Nobody wants to hear about the word compound interest and estate planning and all you financial nerds listening. I know you think you're so smart. Oh, what's your asset allocation?

Oh, my God.

84. That's so bad. Oh, what about a 9010? Stop it. Your partner does not want to hear that. That is way down the road. The first step is just to talk about how you think about money. And the great irony of all this is my favorite part is that the highly technical people, including me, we always want to jump to the spreadsheet. Okay? That was the mistake I made with my wife. I was like, look at this model I built. It's so amazing. Like, when you do this, it flows. Nobody cares. And in fact, what I really needed to do was to connect first on a level that the two of us could relate. So my wife. You know, it's funny, that therapist asked us this interesting question. When you think about money, what's the first word that comes to mind? I said growth. Obviously, growth. Have you ever heard of compound interest? Oh, my God.

Look at this.

Rule of 72. Blah, blah, blah. And then she asked the same question. My wife. My wife goes, safety. I looked at her like she was speaking another language. I said, what? What does safety have to do with money? I don't even understand it. And that was the beginning of a beautiful conversation because we saw it completely differently.

I love this because it could be just something as simple as how you celebrate how you enjoy your life. All that kind of stuff can mean something different from one person to the next. And it's nobody's fault or it's nobody's right or wrong. It' just your experience of life. You Know, I'm thinking of my own relationship with Nicole and my own life and our relationships with money. Understanding of money and it all depends on, you know, what you, what you were exposed to and what was normal. So maybe we all have to kind of just learn a little bit more about each other before we start, you know, like you said, judging or understanding that we all, like you say, have a different language or different love language or different money language when it comes to their understanding of how money incorporates in their life and their enjoyment of life.

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You have this concept of the rich life or your rich life, which I really love because this kind of really encapsulates what you're talking about right now in terms of, you know, how would you want to spend your money? What is the good life for you? Just yesterday I have this routine where I have breakfast in the morning in the balcony and we have a nice view of the harbor in Sydney. And I just, um, I love that. I'm sitting there and I'm just saying this, this to me is the ultimate right here. Like, I don't want anything else. Like, to me, this idea of having a peaceful morning, listening to some Jim Rohn book in my ears and having some raisin toast. And I realize, you know what? This is my rich life. You know, this is, this is what I feel like. I'm content. Some people might think that's way beyond and some people might think that is not enough. How do you get on the same page on terms of rich life with your partner?

This is the exercise that I work with a lot of couples on and it's quite fascinating. First, I ask them, what is your rich life? So if you're listening, try to answer that right now. Just pause this and jot down a few things that would be your rich life. Come back here in 30 seconds and watch what happens. So most of those folks who just paused it and came back, you're looking at your paper right now and it says something like this. I want to do what I want when I want, or travel, or I want to spend time with my kids. Okay, all those are good. But that's not enough. It's not even close. I ask people, okay, you want to do what you want when you want, what do you want? And they just look at me blankly. They have never thought beyond a catchphrase. And I go, what a tragedy. What are you working so hard for? You're saving this money you're investing. You're compounding. You don't even know what you want to use it for. And in a way, I don't blame people, because if you look at financial media, if you look at other podcasts, everybody talks about how to save, but nobody talks about how to spend. Spending is a skill. And for a lot of people, you suck at spending. You still buy the same things you bought when you were 20 years old. You still shop at the same places your parents shopped at, even though you're in a totally different socioeconomic class.

You are horrible. Yeah, that's okay.

That's okay. I'm here not just to judge, although I do love it. I'm here to help. Spending is a skill. And so when we talk about the rich life, I want to know exactly what you mean when you say travel. I get really interested. I go, okay, tell me where they go. Oh, you know, different countries. I go, what country? Don't make me drag it out of your mouth. They go, okay, I'd like to go to Bali. I said, beautiful, where do you want to go in Bali? What hotel do you want to stay at? What airline seat do you want to sit on? And what restaurant do you want to eat at? And finally, maybe the most important question of all, who do you want to take with you? Okay, that level of specificity is critical because a rich life is lived in the details. So if you're listening, a rich life could be being able to pick up your son every day at 3pm from school. That could be your rich life. Your rich life could be driving an RV around the US or living in a Manhattan high rise. Your rich life could be wearing a thousand dollar cashmere sweater, okay? Or it could be living Close by to your parents so that your children can have interaction with their grandparents. Your rich life is yours. It's not mine. It's not anybody else's. But in order to get it, you have to get deep into the details.

Do you believe that some people, if they do this exercise and they go through, okay, in detail, this is my rich life, that sometimes people can get scared of the answers, maybe even scared to go after it, maybe self sabotage, so they never kind of achieve that dream. Is that like something that plays out frequently?

People get scared because they've never thought about it. Let's imagine a typical scenario. This is a real couple on my podcast. So they come and they've done pretty well financially. They live near the Midwest. They earn six figures. They've saved and invested well. And when I. And they're coming to me fighting about some minor issue, you know, he spends too much and she spends too much at target $100 questions. I calculate how much their net worth will be, and in just a few years, they will be multi millionaires. Okay? And they don't know this yet. So I hold that in my back pocket just for fun. And so I said, you know, what is your rich life? And they gave me these generic answers. I want to be able to go to the grocery store and buy two types of lettuce. I said, okay, that sounds good. That was actually a breakthrough for me. We used to only eat iceberg lettuce. And then I grew up. I go, wait a minute, I can actually get the other type of lettuce. That's actually awesome. Okay, great. So then I said, what else? And they have these dim dreams. They never thought beyond these things. And meanwhile they're fighting over $50 spend at the grocery store. So I push them. I push them and they go, we would like to take a hiking trip to the western somewhere in the United States. I said, where? And they go, the western states. I go, what state? I specifics. Because if you're not specific, you're not going to do it. So they finally tell me some parks, and they want to take a drone and they want to go with their dog. I said, this is a beautiful vision. Like, I can feel it as they're talking. They're smiling. And I said, you know what? You could do all that. You could do all that this year. So they're now looking at me with their eyes wet. I said, what else? Now this is where it becomes fascinating. They had never even articulated that they want to go to these national parks. So when I tell Them, Yeah, okay, you can already do that. Do it. And then what else is your rich life? You're in your 30s. They go, I don't know. I go, you're going to be multi millionaires. And you know what the wife said? She goes like, she's just stuttering. I go, does that make you uncomfortable? She goes, yeah, I'm not a millionaire. I go, what is a millionaire to you? And in her mind, it was, you know what we grew up watching some with a top hat who opens up a silver platter to eat dinner every night in his mansion or her mansion. I'm like, that's a very outdated concept of a millionaire. You know, I mean, look, you know, millionaires are, like, traveling around, and they might travel two months a year. They might have a remote business also. They're not really defining themselves as a millionaire. They might be an entrepreneur. They might be a mom or dad. You don't walk around saying, oh, I'm a millionaire. But she and her husband were going to be multimillionaires. And so when confronted with this, she was uncomfortable. It wasn't a factor of her upbringing. She thought millionaire meant a certain negative connotation. But until she got comfortable with it, she would constantly be minimizing her rich life, minimizing her dreams. And I consider it a tragedy to live a smaller life then you have to.

Yeah, that's super powerful because you've helped this couple, you know, kind of see, especially, you know, the wife in this example, to see the damage she's doing to herself by just like you call invisible scripts, believing in these invisible scripts about themselves. And often, Nicole and I, when we talk about why we're making certain decisions in our business or in our life, we ask ourselves, like, what's the story I'm telling myself, you know, what is, you know, the thing I think I'm going to lose, or how is my ego playing a part in this decision? And those are the tough conversations where you start to realize, oh, man, this is all in my head. This is not. This is not the reality of the world. You know, So I think that you're really doing some good work here.

Thank you. That's a very advanced concept that you and Nicole are exploring, too. I mean, I think it's awesome you talk about that for your listeners, because what is the story I'm telling myself is quite advanced. You know that old story about the fish? You ask the fish in the water, like, how's the water? And they go, what's water? The fact that you're questioning what water is, what are the stories I'm telling myself is beyond advanced. So for everybody listening, you know, questions like, if you want to have a certain number in your bank account, if that will make you feel safe, try Omar's question, what's the story I'm telling myself? Then you'll discover that most people who say, I want to have a million dollars in my savings account, they don't know what a 4% rule is. They haven't read the Trinity study. They don't know any of that stuff. It makes them believe that they will feel safe. And I tell people, let me get this straight. You're telling me that right now you feel scarce about money Right now you worry about money right now you describe money in terms of guilt and shame and scarcity, and you're telling me that one day when you have $1 million in your savings account, that you're going to wake up and bound out of bed and with a big smile on your face and say, ramit, I feel safe. And you know what they say to me? They go, yeah. I go, it's. You actually believe that, but is completely untrue. And here's how I know. On the podcast I Will Teach youh Be Rich. I also speak to multimillionaires. So I want to tell you a story about a couple. They have a net worth of over $8 million. And this guy is a great couple. I love them. He tells me, he goes, ramit, I just hate overpaying for blueberries. I said, okay, okay, break it down for me. Tell me more. And he goes, whenever I order blueberries, I open up two different websites and I comparison shop. He's comparison shopping for blueberry. He goes, I will not get ripped off for $14 organic blueberries. And I said to him, you know, you have an $8 million net worth, and at a certain point, you've won the game and it's okay to, quote, waste a little bit of money. And as you listen to this episode, he and his wife, they plan their trips based around where they can optimize their points. And I don't mind using points. It's fine. I use them myself sometimes. But I said, when do you get to be able to choose your travel destinations based on what you want, not what United Airlines tells you? And he and his wife looked at each other and they were stuck, stumped. And as she put it, she said, we've been playing the game for so long that I'm not sure how to get out of it anymore. So for all those of you who think that when you have a million dollars or X million dollars or Y number of clients, that you're going to feel safe, let me say this. The way you feel about your money is highly uncorrelated with the actual amount you have in the bank. Again, for those of you who think you'll feel safe one day, the amount of money or the way you feel about your money is highly uncorrelated with how much you actually have. So you need to work on both. That's the message.

Yeah. And I'm a big believer that your wealth is not just money. Like, your time is part of your wealth. Your health is a part of your wealth. So one of the best exercises is to give yourself an hourly rate. Like, how much is your time worth? You know, how much. How much time are you spending? 30 minutes an hour just comparing blueberries. You know, like, is that worth your time versus the 50 cents or the hundred? The dollar you're going to save on the blueberry package.

Listen, I like that conceptually, but I have never found it to actually change anyone's mind.

Yeah.

Because. No, I think it's interesting. And, you know, like, I go to this millionaire couple, I go, listen, what's your hourly rate? And it's astronomical rate.

Okay.

And they go, this is what they would say if I presented them that argument. They go, yeah, I know. It's like, it's actually costing me $500 for this blueberry, but I just can't overpay for blueberries.

Wow.

And that is. So this is the key. These are not logical feelings.

Yeah.

Yeah.

And for everybody, remember what I said earlier? I. I love metrics. I love tracking my models and all that stuff. So I get the logical part of it. I'm not demeaning emotions, if anything, what I want to honor. Yeah, emotions are real. Usually when we say, oh, it's almost always focused on minimizing women. Because, quote, some. Some guy comes and says, she's being emotional with money. This is so common. Notice that when you say that emotional with money is denigrating. It's insulting. As if. Oh, you should just be a logical robot.

Wrong.

We're all emotional about money here. I have a guy driving. This is so common. Guy will come, he'll be like, louis Vuitton bags are a waste of money. Who needs to spend money on status? Meanwhile, that same guy climbed into a $75,000 finance truck, and he goes, nailed it. I really told her today. I'm like, dude, we're all emotional. About money. The important thing is not to minimize our emotions. It's to acknowledge them. I would rather somebody said, I bought this pen because it gives me a sense of accomplishment. And frankly, I like when people look at it and go, wow, that's a really nice pen. Or watch or phone or car. I would rather we just be honest. Instead, we shroud our decisions with logic. When many, many times over, 50% of the time, it's really just, you know, I shop at this place because it reminds me of how I grew up. It makes me feel good. Okay, let's be honest about that. Then we can decide if it fits into our rich life.

Love it.

Stop demonizing handbags, please. Yeah, that's another thing.

Exactly. It's all perceived value at the end of the day. I listened to an episode of your podcast. I really enjoyed this episode because it was so real. I felt I was listening in on a conversation. The conversation was about a couple where the wife wanted to quit her job to become a full time entrepreneur, but the husband was worried about them losing her income in the equation. Even though he was making a healthy living. He was making, I think close to half a million dollars a year or something like that. For our listeners who haven't listened to this episode yet, can you tell us a little bit more about this couple, the issue they had, why they were struggling or what they were struggling with, and really talk about how you got beneath the surface. I was really pretty impressed actually, how you really dug in deep to find out, okay, this is why there's so much friction.

Well, thank you for listening and I love this episode. Episode 11 with Nicole and John. Yet together they made $650,000. Okay. And the first thing I want everyone listening to understand is that it's easy to dismiss a high earning couple, but instead I would challenge you to treat this as a crystal ball. Because if a couple making over half a million dollars a year has financial disagreements, then you're going to have the same disagreements today and tomorrow as you start earning more. Okay. And whether it's a couple I speak to making 60k, 600k, or even millions of dollars a year, such as the $13 million net worth couple that I spent spoke to, the fact of the matter is you have never listened in on real conversations from behind closed doors like this. So with Nicole and John, there are a few factors that were super, super important. And you have to remember that most people don't know these factors. They're stuck in their own dynamic and they come in, they're angry you know, he said this or she said that, and I let him talk. But ultimately my job is to follow the clues and find out what the real issue is. Deep down they know it, but they've covered it and shrouded it with a lot of other mess. Okay, so the first issue here was a higher and lower earner dynamic. Okay? This is common. Interestingly, it's whether it's in heterosexual relationships, whether it's the man or woman earning more. You will see these dynamics play out. In this case, he would say things like, you know, we need, well, I already contribute more. Right, The C word, C contribute. And then the lower earner will often say, well, I want to contribute too, even though I can't contribute that much money. This is a very common thing. Imagine, for example, you have a stay at home parent. They will often be obsessed with the C word. How am I contributing to this relationship? You know, my partner's earning 50k or 500k. I can't earn that kind of money right now, so what am I doing? Does it count? Where does it show up in the spreadsheet? Okay, so we explored that concept. The other thing, what I told him in this case gently was if you are the higher earner, it is your responsibility to be aware of this dynamic. If you are the higher earner, it is your responsibility to be aware and have a high EQ to discuss these issues. Okay? Because if these roles were reversed and you were the lower earner, you would feel exactly the same way. And this is eye opening because typically the high earner has been the high earner their whole lives. And this is, they, they just can't put themselves in the place of their partner.

So when I help them in that relationship.

Yeah, exactly, yeah. There's a dynamic that's played from day one. Okay. The other thing is, I talked about what is their rich life. So again, this is an affluent couple, they saved a lot of money. I go, what's your rich life? And they, you know, they did the same thing everybody does. Oh, travel, blah. I go, you better tell me your rich life or we're going to spend the next three hours with me digging it out. And so they, they had this beautiful vision. They want to go to this other country and they want to build a house, etc. I said, okay, beautiful. I said, how much do you need for that? And it turns out they could do it soon. So they start to go, wait, what? Why are we fighting over this when we already can live our rich lives? And instead of, you know, living Life based on scarcity. We have to actually rethink the way that we treat money. We won the game. This is impossible for most people to conceptualize. They spend their whole lives saving and investing. And I go, hey, what was the goal? And they tell me, some goal. I go, you won, you're done. And they are lost because they never actually planned to win. They just planned to play. And when you've won, you get to do a lot of stuff. You want to keep working. Awesome. Keep working. But you don't need to feel bad about buying a name brand detergent or getting a few extra grapes.

Go ahead.

In fact, in fact, I advise people create a worry free number. Everybody listen. Do this with your partner. What is the number below which the two of you are not going to worry about it? In fact, you're not even going to talk about it. For example, when you go to the grocery store and there's a pack of gum for a dollar or two, you don't care. You just buy it if you want it. But what if your worry free number was $5 or $50 or $500? You will find that most couples are arguing over $20 questions when they really should be focused on the $200,000 questions. And that's what I help people do. On the podcast, you've made it on.

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I think sometimes this concept that you're talking about, about winning the game and not being addicted to the actual game itself, because I can see this almost in myself as well as other entrepreneurs, where you start to realize, okay, I am already where I wish I would have been 10 years ago. Like if I went back 10 years ago and spoke to, you know, 31 year old Omar and told him that this is what your life is going to be and this is the success you'd have in business. I'd be like, my God, I'd do anything for that, you know, and. And yet I'm still chasing things. I'm still Going after it, which is, you know, I'm not knocking ambition, but at the same time, you got to have some gratitude. You got to also give yourself a little bit of a break and realize that, you know, you did succeed, you did win the game in some regard. And I think not enough entrepreneurs do that.

Would you agree? I agree 100%. I mean, I see entrepreneurs, I have a lot of entrepreneur friends as well. And the type of people who get into entrepreneurship and then sustain it tend to be chasers. They're chasing something. I'm speaking of myself as well. What I have learned is that there's a very common path for a lot of people. Let's just take in America, for example, you know, very common path. Go to college, get married, have 2.5 kids, get a house, because that's what society tells you to do, and then move to Florida and die. Okay, common path. That's fine. Entrepreneurs, the path is, you know, find an idea, start it, grow your customer base, maybe raise money, if that's your route. And. But then what happens? And this is a question that I want entrepreneurs to ask. It's a very simple question. What do I get? You took all this risk. You built this massive customer base. Put your hand out and say, what do I get? Do I get to travel for six weeks every year and not check email? Do I get to provide a scholarship for my local community? Do I get to tip 30% minimum when I go out to eat? I don't care what it is. 30% minimum or $20, whichever is greater. Do I get to see my friends five times a year skiing? What do I get? And to all the entrepreneurs who are chasing, I know, I know exactly who you are because I am you. Oh, you know, I'm going to continue growing, and then one day when I have this much money, then I'll do it. You're going to die before then. You're not going to be able to climb Mount Everest when you're 80 years old. You're not going to be able to do certain things. You have a window, a limited window in which to truly live your rich life. And yes, hopefully you have a very long life and you're healthy. I hope that for the best. But if anything, if we've learned anything in the last few years, unexpected things happen, whether it's an illness, an ill parent or family member, somebody losing their job, or just you losing interest. The fact of the matter is, if you go 50, 60 years of your life without practicing the skill of designing and living your rich life, It'll be very difficult for you to actually do that.

I'm pausing here because I actually wrote that down, that sentence, that statement, that question that you brought up.

What do I get?

What do I get for all this hard work? What do I get for all the sacrifice? What do I get for all these long hours, for all the risk I took on my own personal wealth being invested in my businesses and my pursuit for this picture in my head? And sometimes entrepreneurs need to realize when to cash out.

Oh, man. Totally. I asked my buddy. He runs a very successful business, and they're on track to sell it in a few years. I said, hey, when you sell your business, what are you going to do? And he goes, start the next one. It's like, I'm going to kill you, dude. Like, I don't mind if you want to start another business, but what do you get? So let me give you a couple examples of what I get from my business. I'll talk about one thing that is kind of glamorous and one thing that is meaningful to me. The glamorous thing is that my wife and I decided that each year we're going to take a very long trip. Four to six weeks. We love to travel. We. I love really nice hotels. And we craft these trips, like, down to the painstaking, most beautiful.

I was taking notes. I was. I was following on Instagram. I was like, okay.

Oh, thank you.

That's a beautiful place in Japan. I gotta figure that out.

Thank you. Yeah. So I post all these pictures and videos behind the scenes. Take Japan, for example. You know, I love stationary, okay? I'm a writer. I love stationary. So in Kyoto, we go to this famous artisan's house and we create our own notebooks from hand, right?

Wow.

Now, if. If you don't care about stationery, you're like, this guy's a freak. But if you're a writer or you love this stuff, you're like, oh, my God. How do I find that? Right? We love design. So we arranged to go. It's very difficult to go to a Japanese local's house. Just not a cultural thing that's done. We arranged to go to somebody in Kyoto's house, and it turns out they were architects. So I pulled out all my favorite Japanese photos and I said, can you please explain this to me? Why is it designed this way? What does this mean? And through the. With the help of the translator, they explain, this is the historical context. This is why in this part of the world, this part of Japan, this is the weather. So they design things like this. I was like, this is one of the greatest conversations of my life.

Okay?

That's the kind of travel that we love. And we do it long so we don't have to rush anywhere. Some days we just say, you know what? We're going to do nothing today. Some days we do something awesome. That's the glamorous thing. That's what I get and my wife gets from being a business owner. A more meaningful thing is I created something called Ramit's 10 money rules. You can just Google it. These are my rules, not yours. It will probably make no sense if you're just reading it, but one of them is, I work only with people that I like and respect. Now just think about what that means to be able for the rest of my life to know that I'm going to work with people who are likable, who I personally like and I respect. And these are the members on my team. But they're also any vendor that I work with, any podcaster that I'm speaking to. Like, I don't have to say yes. I only work with people I like and respect. And I wake up every day and I look at my calendar and I smile as opposed to going, oh, God. And that feeling is priceless. Okay, it doesn't cost me anything, but it's priceless. And so for entrepreneurs or for anybody listening, the question is, what do I get? And you can craft it to be as glamorous or as simple and meaningful as you want, because it's your rich life.

I love it. A lot of our listeners on the show are in a similar situation to the woman that was in your podcast that wanted to leave her job and start a business. And one of the most common questions I get is, how much Runway should I have? How much money should I have in my savings account if I want to pursue my own business? I have a different answer. I had a different path. My personal path was a little bit, I would say, extreme because most people are not willing to totally downsize their life and move to a different city and all that kind of stuff. That helped me a bit. But what's your thoughts on that?

I think it's important to make a framework that your partner and you both agree with. I'll give you some rough guidelines of what to do. When I was thinking of leaving a job, I had a side business. And what I told myself was, I won't even think about leaving until my side business earns more than my full time job. 3 months in a row. That's a pretty high bar. Not just one month. If on the second month it goes down, gotta start all over again. So I valued at that stage in my life, security. Okay? I wanted to be safe. I wanted to be sure. Okay, you might say two months or, you know, you pick. But that was my role for me. Another rule would be, how much do you have in your emergency fund? So this is a good one, especially for couples, because if you're both depending on two incomes, if one person just leaves with nothing, it can be catastrophic. And you will notice the dynamic is very common. The partner who's not planning to leave is going to get really worried and start trying to sabotage and ask a million questions. So agree with your partner. You know, a good rule of thumb would be six months of an emergency fund. Notice that that's not six months of normal expenses. It's six months where, if you can't seem to get this business up, you and your partner are going to dramatically cut back on discretionary expenses. You're probably going to stop going out to eat. You're certainly not going to go on vacation. So that will help extend how far you can take your money. Six months of emergency fund is a good rule of thumb. Again, depending on your situation, you may tweak it a little bit up or down, but I think that's a good place to start.

And when it comes to the couple's finances, when it comes to the wealth of the couple, do you have a recommendation or do you have any kind of advice? When it comes to. Do people. Should people have separate accounts? Should everything just be pulled in expenses and income? What are your thoughts on that?

One simplest model that I recommend is joint expense. So that would be things like your mortgage or your rent, food, all that's joint and it's proportional. So if one person earns two times the other, that person contributes two times as much. Okay? And then each person has their individual account, and you can agree on what that ratio is. So just to give an example, let's take the most complicated situation of all. It would be like you and your wife, or actually my wife and me, have an even more complicated situation. We have two separate businesses, okay? She runs her business and I run mine. So we discuss our setup. We know our joint expenses. This is how much it costs to keep the lights on. We know that she's going to make approximately this much this year, and I'm going to make approximately that much. Again, within some variance. What we do is we agree on what percentage should come into our Joint account, keep the lights on, build some savings, that kind of thing. And then what percentage is going to be separate? And that separate can be for business or for our own personal things. That can seem a bit complicated. I would recommend that start with my book dial in your personal finances and then in chapter nine, you're going to know a better way to bring your finances together.

Good stuff. We're going to shift gears just a bit and we're going to talk about the relationship between co founders, whether they're a couple or not. And talk a little bit about how to have healthy discussions when it comes to finances in business, especially if you have a partner or partners, you're going to disagree when it comes to money. I have rarely found that business partners are always on the same page when it comes to funding, when it comes to, you know, allocation of funds, what do they spend on? Spend more money on marketing. No. Versus engineering versus, you know, you know, staff salaries, all that kind of stuff. Or even the idea of taking on risks or funding or investment. Do you have any advice in terms of like, how can you this be a healthy discussion while not making anybody in the discussion feel like, you know, their concerns, their worries are not being addressed?

So first let's acknowledge that most people don't even know about their own personal finances. So when you add in another variable, whether it's a romantic partner or a business partner, it's like multiplying complex times complex equals really complex. Okay? So the best thing you can do first is to understand yourself. Dial in your own personal finance. Basically. Take a look in the mirror, everybody. All right, put on that Michael Jackson song and take a look in the mirror and work on your own finances first. Understand your own invisible scripts. You better be able to tell me what your asset allocation is. If you have debt, you better be able to tell me the exact month and year of your debt payoff date. Okay? Know this stuff because it makes it way, way, way easier when you go have this partner discussion. Now, as for your partner, I'm talking business partner. Remember that your partner has probably never done this either. So they also are insecure about their money knowledge. They feel strongly, but they're probably not that competent with money. Fine, let's acknowledge it. It's going to be a process. That's, that's insight number two. Insight number one is work on yourself first. Insight number two is understand that this is going to be a process. It's not a one time conversation. You're going to be talking about this forever. Just get used to it, it's normal. And actually, money can be seen as joyful instead of negative. So it'll be tough in the beginning, but you can do it. Three is to have a series of conversations. You know, we talked about what to do with your romantic partner. Do the same with your business partner. How'd you grow up with money? What do you think about for business? But then get more and more tactical. I just, I've seen that almost no business partners talk about these things. Here's some questions. What is success to us? Is it 50 clients or 500? Is it x dollars or 10 x dollars? If we make a million dollars a year, what happens? Are we taking a distribution? Are we going to hire a marketing lead? Are we just reinvesting all that back into the business? Other questions, more lifestyle oriented. What if I want to take a honeymoon for three weeks? You know, what if I have a son or a daughter and I need to step back for a few months? These are questions that are really important. And what's most important is being able to have these discussions calmly. You might disagree. You go, hey, that's fine. Let's write it down. We'll come back and talk about this next week at our regularly scheduled time. Why? Because like I said, most people, they just fight and then they just cover it up. Not you, because you listen to this podcast, you're going to have a standing meeting in Romantic Partners. I recommend once a month. In business, it could be once every two weeks or once a month. And you want to dial in these conversations and you're going to have a running agenda of open ones. It's fine. It's going to take you a long time to work your way through them, but that's normal.

Yeah, I love this idea of the standing meeting because I know it works. I think that sometimes when you don't have that allocated time to make sure you're on the same page with your business partner, to know that. Because the thing is that in business, especially as you start growing, both of you are making so many decisions every day and you just don't have time to consult with each other every single minute. Every little and big decision, decision. So having that standing meeting to talk about money, but also just to talk about, hey, these are the decisions I've made or I am going to make that are going to move us in this direction. Are you with me here? Because every little thing counts in some regard. And I find that we used to not do that because, oh, we're too busy. You know, we got so many things to do, just go, go, go. And then we realize, wait a minute. That's kind of our job as leadership, is to make sure that we're navigating the ship the right way. And that's been one of the learning curves and challenges a lot of entrepreneurs have as their business grows, is that, oh, I got to do different things, I got to have different conversations as I level up in my business. Yeah.

Isn't that the same thing with personal finances, too? You know, when you start off, when I'm 20 years old, the thing that got me excited was being able to get in a taxi and not worry about spending 10, 15 bucks on a hot, sweaty August day. That felt great. But guess what? If I was still operating at that level now, 20 years later, that's a tragedy. I should not be worrying about a $20 expense at this point in my career. I shouldn't. And so I need to elevate myself, because if I'm sitting there arguing with my wife about, oh, my gosh, I can't believe you bought artichokes for this much money. We are living a smaller life than we have to. I would rather say, how much do we want to donate to charity this year? You know, can we bring our family on this trip with us? You know, what do we want to do this year that's going to be awe inspiring. You constantly are leveling up in personal life again. It doesn't mean you're unhappy. I'm happy, but I'm maybe not satisfied. My rich life is constantly developing, and I'm constantly redesigning it. The same in business. You can't be talking about the same thing you did 10 years ago. You have new clients. You have leadership in place that is better at handling that. And so you as an executive, need to be up, leveling yourself. And that means really questioning what your weekly time and agendas are spent on.

Love it. One of the things that I get asked a lot when they. When somebody finds out that Nicole and I are partners in life and partners in business is like, how do you do it? I can't even, you know, make toast with my wife, you know, like, whatever it is, you know, and they just. They're just dumbfounded about, like, how can you get into business or work with your significant other. Now, I'm not going to say that every day is a walk in the park. It takes work. It takes just like any other relationship, and it takes a real definition of what our responsibilities are and all that kind of stuff. But I want to hear your take what's what's your take on couples starting a business together, working together? I'm sure that you help Cass out and cast helps you in some ways in your business. What are your thoughts on that?

You know, before it actually happened, for me, I was naive, I was ignorant, and I said the same things that you hear from people. How do you guys work together? Oh, that seems like you guys must be spending way too much time in the business and outside of the business. You know, the same phrases. I had the same concerns. I'm always curious, where did we learn those concerns? Because everyone asked the same questions. You know, where did I get that? I still don't know. But then I saw people that I know, including you and Nicole, working together, and you were like, yeah, it's challenging, but we do it. Like, we figured out a way to do it. And that got me thinking, if they can do it, then it's possible. So I think the first thing was just seeing that it was actually realistic and going, wow, if they can do it, then, then somebody can do it as long as they put the work in. My wife and I actually have worked together in different ways, formally and informally. So she has helped me with some of my Instagram stuff back in the day. I've helped her informally with some of her business stuff. Here's what I learned. So I've been in business longer than she has, and I was very aware because of my business where I teach people, you know, about money. I even teach people in my earnable program how to start and grow your business. I said, I need to be very careful about my role here. I need to be careful because when people come and join my earnable program, they're paying for me to guide them and they are putting themselves in a student role. Okay? My wife is not that my wife is my wife. And so what I did with her was I first had to get straight with myself. I had to take a look in the mirror and say, what kind of relationship should this be on the business side? And in the beginning days, all I did was encourage her. You know, times get tough when you're starting off. She had a tough time in the business in the early days, too. And I didn't go in there and say, you know, you really should tweak your opt in because it'll improve your conversions by 13%. I have the test data. That would have been disastrous. You know what I said? I know you've been working really hard. I know this is tough. You're doing all the right things. Keep at It. It's not easy, but I know that there's a light at the end of the tunnel.

That's it.

And that's what somebody in the beginning needs to hear. They don't need your tactics. It doesn't matter how advanced you are. Then, as her business grew, I had to remind myself, okay, don't offer unsolicited opinions. If she asks, I love it. I mean, I'm, like, bursting at the seams to share what I know. But I also know that it's her business. It's not mine. And that dynamic, it's really important to get right from day one. I'm not the savior. It's her business. She's better at it than I am. Okay. And then as her business was, like in chapter three, which is now skyrocketing and just doing awesome as a personal stylist, I'm asking her questions. How'd you guys do that? Oh, my gosh, that Instagram thing you did was amazing. Who do you use? And so it's much more of a peer relationship, and I'm asking her questions about her industry because I don't know it as well as she does. Okay. And in fact, I asked her for some guidance and even helping me on some of my social stuff because she was just dominating. She was so good. So I learned that, yes, it would have been tempting for me to jump in with some answers early on, but there's a cost to that. People have to run their business themselves. I'm not her business partner. I'm her husband. And I just had to remind myself of that and keep it in mind. That's been our relationship. I'm actually curious, since you and Nicole work together, how's that dynamic for you?

So Nicole and I are fortunate in the regard that I actually knew Nicole as a professional before we were a romantic couple. So in a prior life, Nicole and I were educators at the high school, university level, and she worked in the department that I was managing. So I knew her as a teacher, I knew her as a professional. I saw her that way before we became a couple. So when we did become a couple, and then we had a few years where she was working on her thing, I was working on my thing. And then when we joined forces, I. It wasn't hard for me to see her as a professional, as somebody who can offer her skills and her knowledge, because that's kind of how I got to know her in the first place. So I have to say I'm fortunate in that regard that we both kind of saw each other as professionals before. We saw each other as. As romantic partners. But having said that, it's very important to kind of visit and revisit our responsibilities because they evolve as, you know, they change as a business grows. And we start to even say, well, I don't want to do this anymore. I don't want to do these tasks anymore that I'm responsible for. How can we find somebody to do it? How can we offload it? Is there somebody on our team already that can do it for us? And maybe you're better served or you're better at serving our business, at doing these things now that you have these new skills. So it's this constant conversation that we kind of have to have over and over, and sometimes we do get busy and those conversations don't happen as often as they should. But just being conscious of and having that standing meeting helps. I think the hardest part, the biggest challenge for us as a couple is the idea of shutting off, is the idea that, like, we know we went to Tasmania for a short break and this idea of, like, no notifications, no emails, no nothing, but then we still have each other. Like, we still talk about work and the business. And I actually am a big believer. It's important for you to shut off your brain from the business for a moment, for a few days, for a break, so that you can come back refreshed, so you can come back with new ideas, so your subconscious brain can start solving problems. But that's our biggest challenge, is how do we say, how are you doing? What's going on in your writing course? What's happening in, you know, in your free time time? And how is that conversation with your friend? Just couple stuff, you know?

Yeah, that's super. That makes a lot of sense. I mean, entrepreneurs frequently struggle to shut it off. And then when you've got two of them, it's amplified. It's also easier to talk about business because it's quantifiable, you know, and you'll notice this a lot. Like, humans are drawn to what's quantifiable and. But in reality, the most important things in life are often unquantifiable. Seeing your family, watching a sunset, going on vacation to a new place, can't quantify it in a spreadsheet, but it's often the most meaningful thing of all. So I share your challenge of turning it off. I will share what my wife and I have done. So she's been really good at saying, let's have regular date nights. And we alternate on planning it's awesome. Just quality time together. And, hey, maybe we talk about business during that, but we also just. We have something else to talk about. And the other thing is, of course, our trips, because they're so long, they give us time in a different setting to read books, decompress. We're not working during that time. Right. So our teams are taking care of everything for over a month. And that forces us to delegate appropriately, build amazing teams, and we can talk about us. What do we want to do next year? What's our rich life next year? What do we want to do less of? Who do we want to travel with or see? What kind of relationship class do we want to take next year? That would be really cool to do. And it's just by putting ourselves physically out of that normal space, it gets the juices flowing in a totally different way.

That's awesome. One of the things that Nicole and I do that we find helpful, especially as entrepreneurs, we always look forward. What's next, what we're going to do, what's the next goal? What's the next milestone? But Nicole's very good at recapping. She likes to recap. Let's look at this year. Let's look at last month. Sometimes you never look backwards and say, you know what? We did pretty good. You know, like. And just kind of pat ourselves on the back a little bit. Wow. You know, that's a tough one. Yeah, no, you're right.

That's. Wow. See, this is what I love about talking to you. People who are thinking about this kind of stuff, they always have interesting solutions to it. Right. Whether it's a thoughtful parent, whether it's a thoughtful entrepreneur, whatever. I'm like, tell me more. And I love that recapping. I don't think we do as good of a job as we could on that. So thank you for sharing that.

Yeah, I just thought of it because you're mentioning the trajectory that Cass has had in the last year or so with her business. I'm a big fan of what she's been doing.

She's.

She's really done an incredible job with her business. And it's tempting when she's in that mode to be like, go, go, go. And not stop for a moment, say, wow, I am who I wanted to be. You know, I. I would. I would crave, I would die. I would kill for the person I am today, 10 years ago or 5 years ago or whatever it is. And sometimes it's good to just, you know, just say, I'm proud of myself. I think a lot of us have a hard time saying, like, you know, you've done good, Omar. You've done good for me. You know?

Yeah, you're right. Well, a lot of us, you know, we grew up being taught, like, what's next? What's next? Did you get the A plus?

Why'd you only get an A?

Yeah, I get that. Okay, we both get that. And. And you're right. It's a hard lesson to shake. So hopefully with the two of us talking and are very capable wives, helping us see that there's more than just chasing what's next, hopefully we can pass that on to some people as we get better at it.

Love it. Ramit, thanks so much for sharing your wisdom today on the $100 VA Show. This is a format we experiment with from time to time. It's a bit longer than our normal episodes, but it's definitely worth it. Guys, please check out Ramit's new podcast that Will Teach youh to Be Rich. It's super amazing, and you've had an amazing success with this podcast. It's hit so many charts. I was just looking it up on Apple Podcasts and how you're sharing pixels of. Of the giants of podcasting. So, amazing job, and I hope you're enjoying the podcast journey.

I am. Thanks for having me. This was a lot of fun.

Take care. I absolutely loved this conversation with Ramit Sethi because we really discussed so many interesting topics, including what it's like to support your significant other if they're starting a business or if you're in business together. Like my situation, what I loved, really, and what I learned is that there really are no wrong answers in these conversations. What's really important is just to be honest about how you feel about money and what it means to you and what you want out of life and what do you want your money to do for you? This is the only way you're going to get on the same page as your partner in life or a partner in business. Otherwise, you're going to be going down a road or going down a path that leads to somewhere that. But maybe you're unhappy. And days, months, years can pass by and you ask yourself, how did we end up here? Like, why did we do this? So I highly recommend you apply some of the practices and tips that Ramit shared today. But of course, I also recommend you check out his new podcast, I'll Teach youh To Be Rich with Ramit Sethi. You can find it on all platforms that offer podcasts like Apple Podcasts, Stitcher Radio, Spotify, Himalaya, you name it. Thanks so much for listening to the $100 NBA show. Let us know what you think of these types of episodes. The extended interview episodes, they're longer than our normal episodes. They're a little bit different, the format's different, but we want to hear from you. What's your feedback? Leave us a rating and review on your favorite podcast app and let us know. Of course, our regular type of episodes that are short shorter will continue tomorrow, so you can count on that. Thanks so much for listening. But before I go, I want to leave you with this when you're having these discussions about money, it's important for you to ask yourself, how do you feel? What's your state right now? What's going on? What's your mood? Are you in a positive mood?

A negative mood?

Somewhere in between? Are you tired? Are you frustrated? Are you hungry? These things are important because you want to make sure you're in the best possible position to have these conversations. You don't want to be operating from a place of tiredness or frustration. Those conversations are not going to go very well, and you're not going to get the most out of them. So be mindful of when you schedule these conversations or have these conversations that you're in the right frame of mind. Thanks so much for listening and I'll check you in tomorrow's episode where we discuss how you your job can help grow your business. We discuss that tomorrow. So I'll see you then. Take care. Of Foreign.

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