103. It’s time to cut off your son: Ramit’s 3 Lessons from Ep 102

If you've recently discovered this podcast and you've wondered, how can I get Ramit to answer my specific money question, There are two ways to do it. Number one, you can apply to be on this podcast, although we are already.

Full for the rest of the year.

Number two, you can join my Money Coaching membership in this program. We do a ton of cool stuff I want to make sure you know about it. We do a monthly live call with me where I cover some of my favorite money topics that I can't go into publicly in as much detail as and I break down our members conscious spending plans. Plus I answer your questions live. We also have tons of virtual events coming up that cover every aspect of living a rich life. For example, our new event Money for aging Parents is coming up at the end of October that is included for all Money Coaching members.

You get access to our library of.

All past calls like how to find an extra thousand dollars a month and how to do a Rich Life annual review. Plus, we have a Money Coaching community group where you can see inspiration how other people are spending their money and get your own questions answered if you want to get help. If you want to meet amazing other people in money coaching and you want to build your rich life faster and bigger, you should check out Money Coaching today. Go to iwt.commoneycoaching to join right now. That's iwt.com moneycoaching how are you both feeling about our conversation today?

Excited and scared, I guess.

I feel like I'm gonna look really stupid.

Oh, why do you, why do you worry about that?

Just because I don't like Mike does most of the finances. You know, I'm just like, tell me how much I should spend.

Okay. And Mike, you mentioned excited, great. And scared. Why scared?

Well, I guess I know that I'm not a good conscious spender and I have a history of I guess enabling where I want my family to have what they want. Wow.

We really need somebody to kind of put these things in front of our face and help US finally, after 38, almost 39 years of marriage, be able to, you know, dream and make it happen instead of one day. One day. One day.

This week in episode 102, you heard from Mike and Janice. They're a couple in their early 60s and they told me we've been together for 39 years and we've been broke for 39 years. This was an unforgettable episode with lots of twists and turns out we heard about their 31 year old son that they can't seem to cut off financially. We heard about Mike feeling like a commodity when he was growing up. And we heard about the ducks and the cats and the dogs and all kinds of farm animals. So today I want to do something a little different. Starting today and every Thursday from now on, I want to take you behind the scenes of this week's episode. I want to share the can't miss moments and and even some cut moments that you didn't hear the first time so you can go deeper when it comes to your money psychology. So let's kick it off with three can't miss moments from my conversation with Mike and Janice. Now, first up, you got to listen to this background of Mike and Janice. You've heard me talk about how our upbringing affects the way that we look at the world of money. Listen to Janice as she describes what what Mike's parents gave him at his college graduation.

Real question for you, do you know.

How often you're supposed to see your primary care physician?

How about the dentist? How about a dermatologist? A lot of us just wait to get a text from the dental hygienist to know it's time to make an appointment.

But your health is important and we talk about going from defense to offense with your money. What about with your health?

Why not make your life easier and.

Book this year's appointments today with zocdoc.

Zocdoc is a free app and website.

Where you can search and compare high quality in network doctors and click to instantly book an appointment.

They have over 100,000 doctors across every specialty from mental health, dental, primary care and more.

Just filter for the doctors based on.

Your insurance, your location, even ratings and.

Find a doctor who's a good fit for your needs.

Plus, Zocdoc appointments happen fast, usually within.

24 to 72 hours instantly.

Click through your options, book the appointment.

And you are good to go. If I needed to find a new doctor today, this is what I would use.

Stop putting off these doctor's appointments and.

Go to Zocdoc.com ramit to find and instantly book a top rated doctor today.

That's z o c d o c.com Zocdoc.com Ramit what comes to mind when I share these specific moments? Renewing your passport, scheduling a dentist appointment, Replacing that light bulb that's been out for six months and you're not sure.

What'S the right bulb.

We all procrastinate on weird stuff and.

Taxes are usually right at the top of that list.

We wait until the last second Then we get overwhelmed, we gotta pull all this paperwork and we're panicked cause the deadline is approaching. That's why I recommend gilt. Now that tax season's over, this is actually the best time to get ahead. If you run a business or you filed for a tax extension, one small move right now could save you thousands later. G is not just another CPA firm. They helped one of my colleagues rethink his entire tax setup. Now he's saving more than he spends on tax prep. With Gelt, you get a proactive. Yes. Year round strategy, not just a one time filing. Credits, deductions, business structure. It's handled. And their tech platform makes it easy to stay organized. You'll also get access to G's full tax library with guides on retirement plans, QBI and more. So if you've got a business or you filed for an extension, this is the window to take control of your tax plan. Head to Joing to book a consultation.

And as a member of my community, you get to skip the wait list again.

That's joingelt.com ramit join G-E-L-T.com ramit taxes.

Don'T have to be a task with Gelt. They can be a tool to build wealth.

At the graduation, my parents were there, or my mom and her husband were there and Mike's parents were there and they handed him a graduation card. And he looked at it and then he handed it to me and I opened it up and it had every single cent that he had borrowed. Like Christmas present for dad. $20. And she had listed every debt that he had to them and then put minus 100. We're proud of you. And he had a master's in architecture from University of Illinois.

Wait a minute.

Yep.

Mike's mom listed every expense he incurred as a kid.

Beanbag chair, college. Yeah.

And. And what was the minus 100? What is that?

That was her gift. Her graduation, Graduating with a master's.

Yeah.

And Mike was your reaction. Here we go again, right?

Yeah.

Yeah.

He didn't do anything. I ripped it up and threw it on the ground.

Imagine getting a card like that from your parents on your graduation day. How would that affect the way you look at the world? And how do you think it would affect the way you think about money and time going forward? We spend a lot of time talking to couples about how they grew up. And one of the reasons I do this is I want to disabuse you of this idea that we are all rational robots, that we go to the grocery store and we compare the price of bread by number of slices per dollar, and then we buy. Rationally, that's just not how it works. We are a product of our experience. It actually is shocking to me that people will listen to a hundred episodes of this show and they'll be like, wow, childhood really matters. And then they'll go right back out in the world and post on Twitter, oh, pull yourself up by your bootstraps. It's just a matter of showing up to work. That's not how it works. We are a product of our experiences. What I didn't get to tell you on the episode with Mike and Janice is a little bit more about their background. If you listen to them, you go, why don't they just get their CSP in order, have a conversation about money, stop paying for their deadbeat son, and live a rich life? Mike actually sent me an email after our conversation sharing some of his upbringing that I didn't know about. Let me read you some of what he told me. He said I had an alcoholic father. My grandfather would often send my mother his paycheck because my father had spent it on weekend drinking binges and, and not coming home. Janice also had an alcoholic father. Her parents divorced when she was 13. Her mom remarried when she was 17 to a guy who turned out to be horrible. So at 17, Janice and her older sister moved out of their house. When Janice was 19, her sister was killed by a drunk driver. Janice's father was a homicide victim when our daughter was three and a half and our son was only 10 months old. These experiences are deeply interwoven with who they are. I share this because if you see someone acting in a peculiar way with money or a way that doesn't match up with how you would act, there's often a reason. Sometimes they don't even know what the reason is, but there's often a reason way, way, way back in their history. And as part of this podcast, my dream, my wish is for us to all become a little bit more compassionate about the people as it comes to their spending and financial behaviors. Next up, financially supporting their 31 year old son.

Your son is 31, you're 63 and you're helping him with his finances.

Yeah.

Does he have a job?

Yes.

How much does he make? Ballpark.

Right now he's at like 3, 500amonth. Okay.

All right. And for his area is that he's.

Up in Seattle, so it's pretty expensive.

Yeah, that's expensive. Okay. All right. So you help him with some stuff and you said to your own detriment.

Hold on.

Janice just let out a huge sigh, and she looked down at the floor. Don't worry, Janice. I'm coming to you soon. I know you got a lot of stories. She's probably going to pull out this scroll, 35 pages. She goes, ramit, run the tape. I got a few things I want to talk about.

Yeah, I wasn't the only one who kept the list. Yeah.

Okay. So, Mike, to your own detriment. Give me an example where you have helped your son, financially speaking, to your own detriment.

I think it's really in the past few years because when he was younger, we helped him financially as far as he was in a few bands. He. He traveled the country. So we helped him with that, and it was great experience for him. But then when he moved out, he got himself into situations with a variety of girlfriends that were not helpful as far as economically.

What is that?

That's a very nice way of putting it. What does that mean?

That they were. They were freeloaders, basically.

Okay.

Now, it's been a few times, but there were two big incidents. One where his girlfriend wrecked his car, and to get it fixed, you know, they. He couldn't pick it up till he paid for it.

His insurance laps.

Yeah.

How much? What? Oh, his insurance slapped.

Okay, that's not good.

And how much did he have to pay?

It was about 3, 600.

And so what do you do?

He picked up the phone to you?

Yeah.

How'd that call go? Hey, dad.

The car, you know, he's. And the. The bad thing was that he actually worked at the car dealership that was repairing it, and they. They wouldn't give him a break.

This is crazy. Yeah.

Yeah. Okay. So they wouldn't. It's like, well, all right, take it on my paycheck. But they wouldn't do it. They wouldn't release a car till he paid for it.

And what kind of car, by the way?

Well, that was actually a Land Rover because he.

Fucking Land Rover? Are you kidding me?

He makes 3,500amonth and he drives a Land Rover?

Well, now this.

What world is this?

Well, previously. Previously had. He had worked for Land Rover, he.

Was making a lot more.

You don't get that much of a discount.

No, no. Again, instead of saying, no, I don't have the money either, I put it on a credit card to, you know, bail him out because he needed a car to get around, but with the.

Intention that he was going to pay us back.

Right, Right. Yeah.

Who's Whose intention? Who said that?

Well, it was. It was an agreement that they're going to pay it back. And they started to.

When he stopped paying you, were. Were there any consequences?

No.

Well, because they laid him off because of co. Of COVID They laid him off from his job and they still made him keep the lease on the land Rover for 400amonth.

That's horrible. That's why we don't take those kind of obligations from our employer. It's handcuffs. And people think they're getting a great deal, but they're actually being encumbered. Did he learn any lessons from this?

I don't know.

No.

Mike?

No, because I like Mike's honesty. No, because now he drives a Jaguar.

I have to admit that when I heard about their 31 year old son calling them up and basically extorting them to send money, otherwise they're never going to see their son again, I got pissed.

I'm still pissed.

How can you do that to your elderly parents, especially knowing how they were raised? I just can't stop thinking about this. I want to point out what happens when you enable someone else financially. And we've seen it. We've seen it in many examples of couples on this show, on the Netflix show and many other places. If you do not actually feel the effects of your behavior, like if you don't have to have a job because someone's just sending you money, it's probably likely that you're going to lose touch with reality. It's no surprise that Mike and Janice's son lies to them, evades them, doesn't take responsibility, because in many ways the way that they treated him with money was to enable him. Mike and Janice know this. Janice rolling her eyes the entire time. She knows it. But I want to emphasize for you to really be critical about any areas where you might be enabling someone else or even allowing yourself to be enabled. Think about it.

A lot of people go, how would.

I turn down money from my parents if they want to give it to me? And sure, if your parents have the ability and willingness to give you some money for down payment or a car, whatever, fantastic. That's awesome. But you have to remember that there are strings that come along. It may be explicit, like you need to have your wedding the way we want. Or maybe implicit, like because somebody gave me this money, I don't take it as seriously, or I don't understand how hard it was to earn it. Now I want to add one last thing to confound this entire example. I used to Think growing up, going to public school, that if you had wealthy parents and you went to private school, that you were spoiled. I just thought that. I don't know where I got that idea from, but I think a lot of people believe that I certainly did. And then I went to college, and within my first week, I met a lot of people who had wealthy parents and who had gone to private school. And I. It was like my world shattered in front of me because I realized this thing I had believed fervently for so long was totally wrong. Doesn't mean you're spoiled just because your parents have a lot of money and even sent you to private school. My college friends, some of them worked really hard, some of them less so, but there was basically no correlation at all. And in fact, I really admire a lot of the friends that I met who grew up really wealthy and work insanely hard. So being enabled or enabling someone with money is not as simple as it's good or it's bad. It is complex. But I just want you to understand that if you are considering paying for somebody, enabling them in a certain way, it might have effects. And if you are the recipient of that, it also might have effects. Finally, we have to talk about the phantom costs of these pets. You know, a lot of people in America don't like to talk about costs when it comes to their pets. It's, like, very unromantic. It's like talking about the cost of how much it costs to date or, you know, be in love and build a relationship. It's like, hey, money is real. Just because it's romantic doesn't mean that the money part of it phase out of the equation. Let's be honest. It costs money to have pets. It costs money to date, costs money to get married and on and have kids, and on and on and on. Whenever someone dares to bring up the idea of the cost of pets, people get really defensive. Mike and Janice were actually great. They acknowledged, particularly Janice, that she hadn't really thought that if once a year she has to take her duck to the vet and it costs 1200 bucks, that she actually needs to spread that cost out or amortize it over the course of a year, that'll be a hundred bucks a month for the ducks. In fact, in America, we're simply taught to look at the sticker price. That's it. And companies incentivize us. They have no reason to tell us about all the secret phantom costs. They're just like, oh, look at the price. The house, the car, the dinner. But of course, phantom costs are prevalent. For example, whenever I plan a vacation, I know whatever the hotel nightly rate is. I add 50%. That accounts for 38% taxes if I get a drink, tip, et cetera. It was really important for Mike and Janice to grasp the importance of these phantom costs. One Whenever you buy something, in fact, the more expensive you buy, the more phantom costs you're gonna have. Second, there are one time costs that still need to be accounted for in your conscious spending plan. And if you don't do this, you end up like millions of Americans who earn decent money, but they are always confused. Where's it all going? That's because you didn't honestly calculate the insidious phantom costs that are present in many purchases.

When I talk to new business owners, I hear a lot of the same motivations. I want to make extra money. I want more freedom. I want flexibility. But I will tell you something that I've never heard. I want to start a business so I can fill out a bunch of tax forms. That sounds like my hell. The good news is you don't need to be a tax expert to start your own business. Instead, you can use Gusto, this episode's sponsor. Gusto is online payroll and benefits software built for small businesses. It's all in one. It's remote, friendly and it's incredibly easy to use so you can pay, hire onboard and support your team from anywhere. They offer automatic payroll tax filing, simple direct deposits, health benefits, workers, comp 401k, matches, you name it, they can help. Plus, it's quick and easy to switch to Gusto. Just transfer your existing data and get up and running fast with no hidden fees and no surprises. Try gusto today@gusto.com ramit and get three months free when you run your first payroll. That's three months of free payroll@gusto.com ramIt Once more gusto.com ramit I know that some of us think better when we write our thoughts out. But for a lot of us, including me, I'm better when I can see. Think out loud. If that's you, I recommend you check out Whisper Flow to save you tons of time to bring your ideas to the page. Whisper Flow turns your voice into clean final draft, writing inside whatever app you're already using, email, Slack docs, even text messages. And it works on Mac, Windows, and iPhone. So instead of spending all of your time responding to messages, especially while sitting at a computer, you can hit a hotkey, speak and the text appears.

It's accurate it's fast. It's all formatted so you can get back to work.

Here's what my friend said about it. Whisper is amazing because it learns the way you speak. So you can send this rambling note as a text message, and it kills all the filler words, and it perfectly.

Formats it for you.

They said it's much better than using the Apple voice to text feature. The spelling is way better. If you want to buy your time back and get back to what matters, check out Whisper Flow. Try it for free at whisperflow AI ramit. That's whisperflow AI slash ramit wisprflow AI ramit. Or click the link in the description below. So we talked about your pets costing 600 bucks a month or $500,000 a month, because we factor in, right? We gotta amortize or spread all those costs out. I think that you need to be thinking very carefully about how much you can actually afford to spend on pets. Like, I know you have a good cause, but if. If I were in your position, the first thing I would say is, like, absolutely no more animals.

Oh, yeah, no worries.

Okay, and next is how long and like, what's the plan for these animals? Do you plan to provide for them forever, et cetera? Just because a thousand dollars a month is a lot of money right now. It's a lot.

500.

I thought everybody a lot. So let me give you an example why this is so important. So when I. You love ducks. I love hotels. Okay, let's just.

Perfect example.

So a duck, you go, oh, this duck costs like 50 bucks a month. But then you forget that once a year you need to pay some expensive vet fee. For me, I go, oh, this hotel is 300 bucks a night. But I gotta factor in taxes, tipping, eating at the restaurant, whatever. It actually adds 50% to the price. So 300 actually becomes $450 a night. It's a lot of hidden costs in all these things that we choose. And a hotel is just a hotel. Animals are a whole different story.

We don't make a thousand dollars in eggs.

Yeah. All right, I want to make sure you that this is clear, Janice, because it's really important. So let's say you spend a hundred dollars a month for your pets. Just easy math. 100 bucks a month, that's 1200 bucks a year.

Okay, let's say that you have to.

Take one of the dogs to the vet, and that costs 1200 bucks. Okay, so if I were to ask you, how much do you spend on your pets every year? What would you say.

So. You said I already lost.

It's okay. We'll go slow.

Okay, so $100 a month?

Yep.

Over for 12 months?

Yep.

Yeah.

That would be how much?

1200?

Yep.

And then your dog has an accident, and it costs 1200 bucks, so that.

Doubles it right there.

So how much would that be per year?

2400.

2400.

Which is 200 bucks a month, not 100.

Right, right. We got the food and stuff.

Exactly. So what I'm doing is I'm helping you to kind of think at a higher level.

So now you have a bird's eye.

View over all of your expenses.

Fun fact. In their screening interview, one of Janice's primary questions was to ask my producer, should we put the costs of our pets in this category or that category? It's like, who cares? There's so much chaos going on in their financial life, and she was worried about cell B32 versus B46. Again, we find comfort in $3 questions because it allows us to control something. How it's categorized is totally irrelevant. We simply need to start from ground zero and calculate what's really going on here. You'll notice this in episode 80, where I point out to Sarah and Kevin that the amount of their vacation is probably double what she thinks it is. And she's visibly startled. Same thing here, but this time with pets. All right, I want to thank you for listening to this Thursday episode. I have a podcast newsletter where you can come and ask me questions about these episodes or Money psychology. Go to iwt.com podcastnewsletter Ask me your questions there, and I will answer them every Saturday. See you next week. Thanks for listening to I will teach you to be rich. I'm Ramit Sethi. Please follow the show on Apple, Spotify, or wherever you listen to podcasts. If you haven't read I will teach you to be rich. My book. Pick up a copy. You can get it at any bookstore or any library, and it will show you this specific text tactics for how to build the I will teach you to be rich system into your personal finances.