83. “I grew up on food stamps. At 24, I’m about to get paid $215,000 per year”

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.

I feel like he's a little stingy. Oh, he's not stingy towards me if I ask, but his attitude generally makes me feel that if I shouldn't ask, I don't feel like the money that I have for myself, even the money that I earn, I don't feel like it's mine. I feel like it's Niles to give to me. If Niles just agrees to something that I propose, I don't feel like he wanted it. I feel like he's just giving in to me, which makes me feel like even more of an asker.

And after talking now, what do you recognize about that pattern? What are you doing when you go down that path?

I'm avoiding the money, getting rid of it as fast as I can. There you go, not learning any valuable skills. I want to learn how to advocate for myself better and not resent Niles, who I feel like is just losing with any choice that he makes.

Megan, you need to be able to ask for what you want when it comes to your money. He's not going to read your mind. How does that strike you?

That strikes me as true and uncomfortable to think about.

Megan is 24, Niles is 28, and their lives are about to completely change. Until now, Megan has been a student earning almost no money. Anything she earned, she gave to Niles, who would save it for her. In part because she admits she used to be irresponsible with money, and also in part because she doesn't even trust her own financial judgment. But now she's about to start earning more, a lot more, even more than Niles makes. She's finding it hard to even believe it, and it's starting to cause issues in their relationship now. This is an answer Niles provided during their application process. I want to read it to you really quickly. He wrote. The women in Megan's family are either not financially healthy or do not work. And Megan is worried about becoming powerless despite earning a high income. I'd like to encourage you to listen to this and also to watch it on YouTube where you can see their body language and facial expressions. Just go to YouTube, search for Ramit Sethi and follow my channel there to get all podcasts in full episodes on video. This is I will teach you to be rich. And I'm Ramit Sethi.

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

Considerable means. What?

It was like $10,000 or something? Megan?

I don't know. Yeah, I think it was like $8,000.

Okay.

Yeah, yeah. So with no way to pay it off. So it constantly was accruing and it was in collections and all this stuff. And so I didn't really trust her with her money. And as part of that, the rent, to me, it wasn't going to be like one of those things like, oh, I'm going to pay it back like that. You're going to have like, I'm saving this money so you can get it back in the future. But it did feel like it was more secure in my hands. Typically that wouldn't go directly to the principal. Like I was mentioning, it would go into my savings. So, like, if she needed the money, I always felt like she could take it out, though I don't think we had a conversation about that at the time. And that was, like I said, I felt more secretive about the money. I suppose. Um, this is earlier on in our relationship because I. I don't know.

Hold on, hold on. Let me make sure I Understand? So Megan was an undergrad, taken out loans, ran up $10,000 or so of credit card debt, couldn't pay it off. It started growing, going to collections, things like that. You two had met at that time. You were together. Niles, you said, okay, I don't really trust you with your money. Therefore, what was your conclusion?

Give it to me and I'll keep it in savings.

But it was, give it to me under the pretext as rent. And like Niall said, we didn't have a conversation about that. And I think the first time that I heard that that was why he decided to make me pay rent, so that he could, like, hold the money for me and it would be safer than if I had had access to it, was this past week.

Whoa.

Yeah.

Why? Why was it getting ready for this call?

Yeah, yeah.

It was secrets coming out of the vault. And what was that like when you heard that?

I was like, you know, that's fair, because I definitely have come a long way with, with my money and my approach, but I was still like, that makes so much sense because of the dynamic that we have now, which is like, I don't feel like the money that I have for myself, even the money that I earn, I don't feel like it's mine.

Whose is it?

I feel like it's Niles to give to me.

So you make the money, he holds on to it, and you need to ask for it back.

Exactly. And I hate asking for it.

What does it make you feel like?

It makes me feel powerless. And it goes back to, I grew up with a single mom who was. We were really poor. She still makes $10 an hour, and she did throughout my childhood. And we had to ask for a lot of help. Like we had food stamps, we had the Salvation Army Christmas gifts. I had discounts at all of the after school activities. Everything was subsidized somehow. And I feel like it made me feel lesser than my peers for sure, because I didn't see them having to ask for the help. It makes me feel like all of the work that I've put in to graduate and get this high earning job, which I felt like was so honorable, is for nothing because I don't think I'll feel like the money's mine.

So if we stop talking right now and you both went back to the way you were doing it, you're about to start making a lot more money. You would presumably hand that check over to him and then would you have to ask for it back? If you needed to spend money the.

Other day we were talking about this, and I said, even if I get fund money, I don't know that I'll be able to spend it truly guilt free because I feel like I back owe him for the years, the six plus years that he's been supporting us. So if anything comes up that we would pay for together, like buying a new couch, I feel like I would probably use my money for that. I don't know that Niles would consider doing that too.

Have, have you asked him if he thinks you back owe him?

No. Okay.

Want to ask him?

Do you think I'll back o you?

No, definitely not.

Do you believe him?

I don't believe him because this all stems from me. Like the rent, the rent issue, you know, I, I said I can't pay you rent anymore because I don't have enough money and I'm just gonna have to borrow money from you after I pay you rent for a few months. You know, a few years ago when I was living off financial aid, and I feel like, I still feel that his change hasn't been genuine because I had to bring it up. And I felt like he was kind of oblivious to the whole issue the whole time. I think there's some skepticism. Yeah, I want to know that he was thinking about it, too.

It's really challenging because then it feels like we can't have a conversation about really anything without there being skepticism around, like, hey, you know, I feel this way. How do you feel about it? What, what do we come into agreement with, you know, based on our two perspectives? So it can definitely be challenging because it doesn't really feel like there's a path forward if we can't have some trust around that.

You're engaged. Right. You live together. There's got to be some trust. But if you can't trust what each other is saying, especially if, you know, if you, Megan, can't trust what he's saying, that's going to make it challenging. So what do you think that's about? That lack of trust?

Maybe it's my pride that I don't want to accept the change, that I just want to be upset about it enough to mention it, and then I would be grateful. Nothing.

No, it would get you.

So maybe that's your hand.

Maybe. Do you find yourself ruminating on money conversations in your relationship?

I definitely do. When we're having them. I'll dredge up some old stuff that I'm sure Niles doesn't want to listen to anymore and be like, you know, remember when you Made me pay you rent and I had no money. And, yeah, all of our other history, that's since changed.

Yeah. Okay, so he. He, quote, made you pay rent. Made you means what? Did he say? Pay me or you have to get evicted?

I don't know if you would have evicted me, but you certainly asked me to pay you.

Okay.

Yeah, because it went from us renting two separate apartments in the same town to us living together and me paying for the same apartment or the same price. And so I felt like, hey, you have 600 extra dollars. Might as well send it to me so I can save it for you or for us in the future.

I didn't have extra dollars. That was my only dollars. I literally have no income right now. I have negative income.

Okay, what's the situation right now?

Right now I'm in school and I'm graduating, and my job doesn't start until October, but I've accepted a job, and Niles pays for all of our stuff. And it's been like this for four years. I've been in school for seven years. Okay.

This is law school. Okay. Oh, congratulations. Just out of curiosity, if you had not moved in with him, Megan, how much would you be paying in rent?

Yeah, I would be paying at least that much. And I would have certainly had to take out loans.

Yeah. Niles, in a way, you were suggesting that out of the goodness of your heart, you really wanted to help Megan. It seems like. Am I reading that correctly?

Yeah, I mean, you know, definitely that was my goal. I think at the time, I didn't feel like she was ready to take the feedback about her spending habits. I think so, yeah. I definitely should have been more open about it.

How old were you at that time, Megan?

I think I was, like, 20.

I'm not sure what's going on yet, but I am getting potential red flags. Let me start with the innocent explanation. Maybe Niles saw that his girlfriend wasn't great with money. He offered to have her live with him at a steeply reduced rent, and he took that rent money and put it into savings.

Okay.

If that's the case, it's pretty generous. On the other hand, it's not like she was a kid. 20 years old is enough to make binding decisions. Sure, maybe she wasn't good with money. Megan even admits that. But if you start off a relationship with one person holding money for the other because they're bad with money, it's very easy to continue that pattern. It's almost a parent child relationship, which you definitely do not want in a partnership.

All right.

Now don't let anyone tell you that money is simply a tool. Money, like any technology, is never neutral. It has built in bias. It influences and is influenced by society. Money represents power. It's all of those things Megan tells me.

More 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 or 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 a hundred thousand 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 Zoc talk 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-o c.com. There's this myth that if you rent, it means you haven't made it. I don't really believe that I rent and I want you to know that you are not a failure if you choose to rent. In fact, I want more freedom right now than buying a 30 year mortgage. But if I'm spending thousands of dollars a month, I want to get some of the perks that homeowners get. And that is where BILT comes in. BILT is a loyalty program for renters. You pay your rent through BILT and you can earn points for it. Think about it. You're earning points for your biggest expense every single month and you can redeem those built points towards flights, hotels, Lyft rides or even future rent payments. BILT has evolved into a complete rewards ecosystem where you get rewarded for the first time as a renter. And it's easy. Almost any payment method is compatible so you can start earning right now. I wish I had had this when I first started living in New York. Plus BILT recently Announced that homeowners will be able to get rewarded the same way on their mortgage in 2026. So stay tuned. Join the loyalty program for renters@joinbuilt.com Ramit that's J O I N B I L T.com Ramit and make sure you use our URL so they know that we sent you.

I feel like Niles has the power of. Of money over me, even if it's my money. Like, every time I get a windfall of money, like a tax return, I don't know, I feel like I need to put it towards our wedding and down payment savings. And I just feel like Niles doesn't have that same consideration where his money's already accounted for.

Have you asked him if he does?

Oh, yeah. We've talked about what he's going to do with his bonus coming up.

And how much is the bonus?

Maybe 15,000, I think.

So what are you gonna do with it?

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

Okay, Megan, so there you go. He told you what he's going to do with that $15,000 bonus. What's your reaction?

My reaction is that that came after I had the conversation of your money not being tied up in the same way mine was. And I gave the example when we had this discussion ourselves of his bonus last year. He bought an espresso machine, a camera. It was like $10,000 for, like, just fun things.

Whoa.

Which one? Wait, which was more expensive?

The espresso machine.

How much?

It was $3,500.

Wow. You use it every day for both of us.

That's cool. All right. Yeah, we love it.

Okay, so what's the problem? Just so I understand, I mean, it's his money, right? You guys are not married yet?

Yeah.

So he made a bunch of money, he spent it on an espresso machine, which benefits you and some other stuff. What's the problem?

I guess the problem is now if I need or want to buy something for myself, I don't feel like that money is mine. Like, it's in his savings account.

Niles, it's yours. Like, the two of you but no.

If Niles just agrees to something that I propose, I don't feel like he wanted it. I feel like he's just giving in to me, which makes me feel like even more of an asker.

Wait, what's the problem? If you, if you.

I feel like he's a little stingy. Oh, he's not stingy towards me if I ask, but his attitude generally makes me feel that if I shouldn't ask, he's not comfortable with it.

Okay, Niles, would you agree with that?

I think historically, yes. I think historically because of that, I guess I'll say lack of trust related to. Because, you know, some of the dynamics that we had in the past in conversations, I felt like I had to manage her money for her in those conversations. The dynamic is obviously very different now. She's much better at managing her money, but I think we still have some history around that.

I would say so. So you two have co created this dynamic of Niles, you're the responsible one with the money, and Megan, you're the irresponsible one running up the credit card bills and etc. Fair.

Yeah.

And I'm the instigator. Niles can ignore what we need or want, but I mentioned it.

Okay, so who calls you the instigator?

Me. The problem is I feel like his money is his and my money is his. Like, this summer I earned the same salary that I'll be paid when I start my job. So I made like $30,000 after taxes in 10 weeks, which was great. And I sent Nile $17,000 for our savings.

Okay.

Like, without him asking. I just feel so guilty about our situation that, that.

Did you make Catholic?

No.

Where.

Where does all this guilt come from?

Maybe the fact that I was bad with money.

If I could wave a magic wand, my dream is we would stop describing ourselves as bad with something. I'm bad with money. I'm bad with my fitness goals. I'm bad, bad, bad. We give ourselves these labels and then they often become self fulfilling prophecies. I'm bad with money. Then I overspend one month. See, I tell myself I am bad with money. No, let's reframe it. I haven't yet learned the skills of money or investing, but I'm making a plan to do just that. And you have lots of options. You can DIY it, use my book and use my journal, or you can get help with my money coaching program directly from me@iwt.com moneycoaching but please do not settle for calling Yourself bad at something. You haven't built the skills yet. But if it's a priority for you, you can.

I want to make sure I understand where you grew up with money, because some of the numbers I saw, you know, obviously you're very good at what you do. You're about to make a lot of money, and you're about to enter a level of socioeconomic status that you have not been at. Fair?

Definitely.

Okay. So I want to equip you to know how to think about money at that level, how to talk about money at that level, and how to behave with money at that level. All right, Megan, you mentioned you grew up poor. Salvation army, food stamps, single mom. What do you remember about growing up as it relates to money?

A lot of stress. Living essentially day to day or week to week. My mom making some of the poor choices that I made when I accrued the credit card debt.

Like what?

Like, she. I think she was gonna file for bankruptcy when I was, like, young child, like, less than 10. And I remember she, like, ran up her credit cards before that and was like, oh, I'm going to file for bankruptcy.

You know, might as well just charge it up.

Bad choices. Yeah.

Okay. And what else do you remember about money? When she talked about it, what do you remember her saying?

A lot of scared emotions. I would say. Uncertainty, not knowing if she could pay the mortgage. And. And I remember her asking for family members a lot. And she even tried to make me ask. She would try to make me ask my other family members to give us money. And I didn't like that. No.

Why not?

I was embarrassed and ashamed, probably.

How old were you?

I was probably around 10.

Wow, that's young. Young to be asking a little girl to do that. Amazingly mature of you to realize, like, there's something not right about this. Okay, what happened as you became an adolescent, as you went to high school? What happened?

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

Yeah.

Because of how she grew up. So I feel like I own her problems. And a lot of our conversations now, you know, I'm trying to figure out, like, how she could get this work that her house needs done and how she can afford it and whether she should, you know, buy this car with this payment. And I feel like I'm in charge of all that stress for her.

So on your conversations with her, how often would you say you're trying to help her or, sorry, find solutions for her?

A lot, even if she doesn't explicitly ask me. When she tells me anything about money, it's always negative and I always makes me feel like she just put the burden on me.

It is kind of interesting that she's taken on the parent role with her mom, but in her financial relationship with Niles. By saying that she's bad with money and letting him manage her money, Megan has willingly taken on the role of a child.

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Myself, I applied. Yeah.

Did your mom support you?

She was indifferent. I feel like, you know, she was proud that I did that, but she didn't really know what it meant. I found a lease for myself and I figured out how much I could pay with my financial aid and I moved myself. I just said, like, you know, next Friday I'm moving, and I left with all my stuff.

And this was like, age 17. 18.

Yeah.

Wow. Have you taken a second to reflect on that?

No.

I mean, as you say it out loud, how does it strike you, a 17 year old, 18 year old packing themselves and deciding how much they can afford? How does that strike you?

I feel like if it was anyone else, I would be like, wow, what an incredible achievement. Or, yeah, I guess it took some strength, but since it's me, I just. I don't think about it like that.

How do you think about it?

I guess I still feel ashamed that I had to do that.

Ashamed because of the family that you came from?

Yeah.

Okay.

How do you feel about money?

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

So you went on to college, you started. What'd you charge the credit card for? First of all, was it a Wells Fargo card or a Bank of America card?

It was a lot of store cards.

Old Navy or Gap?

No, neither. Like, well, there were multiple. One of them was furniture.

Yep.

What?

That's what I'm thinking of.

Yeah, like what? Just tell me. That one.

It was West Elm.

Jesus Christ. Yeah. I certainly had 10% off your first purchase. So cool. I just saved $12. Okay, what else?

It should have been Walmart, not West Elm.

Okay.

My taste was a little higher than what I could afford.

Is that true? So in other words, you were shopping at West Elm when really you could not afford it?

Yeah, when I couldn't afford Walmart for sure. Wow. Okay. All right.

Okay. What else?

Nordstrom.

Wow. Fine tastes.

I know.

Fine taste for an 18 year old with no money.

Yep.

Where'd you learn this stuff, by the way? West Elm. Nordstrom. I. I bet you did not grow up going to those stores.

Well, I just told you that before my mom filed for bankruptcy, she decided to charge up the cards. I think she had taste that was, you know, a little better than maybe she should have.

Champagne tastes on a beer budget, basically.

Exactly. Yeah.

Okay.

And I think I needed to fit in with the people around me or at least feel like I could. And that kind of buying stuff from places even though I couldn't afford it gave me some kind of worth that I think I was missing.

Did you understand how credit cards worked?

No. And I, looking back, I'm shocked that I got one because I had no income.

Yeah.

So you would charge it, and then you'd get these things in the mail and it would say some number, the minimum. And how would you even pay that? You weren't making that much from your loans.

Yeah, I would pay the minimums for a while and then I wouldn't pay at all from my financially.

Hence collections.

Right.

Okay, got it. Okay, so you ended up charging about $10,000. It went to collections. What's the status of those now?

They're settled.

They're settled.

Wow.

By the way.

Yeah. Okay, so, Megan, you're like a living example of the person who basically gets hooked on credit cards.

Yeah, but I'm not anymore.

Okay, good. When did you start to realize that the way you handled money was not working?

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

And is there a sense in your family that it's totally normal at some point, you're going to run out of money and you're going to need to ask other family members for sure.

Yeah.

Yeah. So we give when we can because one day we're probably going to be. Need to be the ones asking.

Yeah. And I feel like it disincentivizes you from being the successful person who keeps any money because you're just going to get asked.

Yeah. Well. Well, are you the most successful person in your family?

I think I'm going to be the most high earning person.

Okay. And does everybody know that.

I don't exactly share how much I'll be making?

Well, do they say, like, oh, Megan's like a lawyer.

Yeah. They're very proud.

Yeah. Yeah. Oh, that's cool. And. And is the implication positive for you, or is it like, Megan's a lawyer, she thinks she's better than us. Like, which one is it?

I feel like it separates me more than I would like. So the latter.

A lot of patterns repeating. I caught something you mentioned about your mom, too, the way she grew up. Do you think she grew up poor as well?

I know she did.

Yeah. So her lessons from her family were probably quite similar to the ones she taught you, for sure.

My grandma worked in a gas station and lived in, like, a trailer. And they're all from the deep south, so really this is just a common experience. Yeah. I feel like there's a lot of poverty.

Yeah.

Where we live. And she met my grandpa because he used to come into the gas station and buy lottery tickets. And he. She told him that, oh, no, my trailer's flooding. And she lived with them ever since she moved in. They weren't even dating. And then they spent the rest of their lives together.

I mean, I seriously feel like you need to write a book. This is insane. And you're. And you're only 24. Your life is just beginning. This is unbelievable. Okay. Definitely keep notes. All right. Who knows if you got a book in you? Wow. All right. So do you see the patterns repeating themselves through the generations?

Yes. And I feel like it makes me feel that I haven't really escaped that.

Yeah.

Reality where I came from.

That's insightful. Even though geographically you live in a different place, even though you're surrounded by, you know, all these academics and et cetera, you're about to go to these fancy law firms. Even still, you feel this inescapable pull back to how you grew up.

Yeah. I feel like I might be discovered.

Isn't it fascinating that someone can be so successful in certain Areas of life so driven, so confident, but they can totally shrink in other parts of life. I do it, you do it. Megan's doing it right now. In fact, I think we all do it. I want to point this out because it's so easy for you listening to this or watching this on YouTube to scream @ Megan, how could you do that? Well, it's actually pretty easy to charge up tens of thousands of dollars on credit.

Cards. Nobody stops.

You. In fact, they encourage you to. And one of my goals with this podcast is to give you a little more compassion for how people behave with their.

Money. You know, you went to law school, which is impressive as well. So did you do that on your own? Took the lsat, all that stuff on your.

Own? Yeah, I did. Yeah. And I got a full ride, so the.

Only. Wait, wait, wait. Hold on. How'd you do that? That's.

Awesome. I had good grades. I work.

Hard. How good? What's your GPA?

Undergrad? Uh, I had, like, a 3.9, but I have a science background. Fuck, yeah. Like.

That. That's awesome. High five. That's amazing. You're, like, blazing past this. I'm like, yo, this is so cool. And sometimes I think you minimize your own accomplishments. So you had a 3. 9. Amazing. Full ride to law school. Holy. Did you enjoy law.

School? Somewhat. Yeah, I think it was. My undergrad was harder for.

Me.

What?

Yeah. That's.

Weird.

Yeah. It's even weird for you to say you enjoyed law school. I mean, look, you and I both know all these law students, they all hate their lives for every minute they're in.

There.

Yeah. Were you the gunner? Were you the gunner in your.

School?

Maybe the gunner of.

Gunners. Holy shit. I'm talking to a real life. Okay. Wow. This is a. This is a. Suddenly this starts to make sense. All right, that was fun, but.

I also just got a lot of information. Megan is a serious player with a lot of intellectual horsepower. 3.9Gpa, full ride to law school. She thought it was easy. And she was a gunner, which is the kid in law school class who always raises their hand and knows everything. All of this is incredibly impressive, but I think it's even ten times more impressive when you put some context around where she came from. Her grandmother worked at a gas station. Her mom went bankrupt. Now Megan is about to graduate and become a lawyer. This is a big moment. Megan is literally changing her socioeconomic trajectory for the rest of her life and likely for future.

Generations. Niles, what's your take? I mean, sometimes the partner knows more than the person themselves. Have you heard all of this before about Megan's upbringing?

Yeah. Yeah. And I think, you know, one thing that you just mentioned, too, that's really key to this is that Megan doesn't really like sharing intimate details like that with other.

People. That's what confuses me because, you know, all these influencers online, you know, they're always starting off with the same old story. I grew up in a shack. I was poor. And then you find out they grew up in suburbia in like a 500, 000 house. I'm like, I'm gonna kill you right now. But you actually had an amazing transformational story in your life. And. And it's like the absolute opposites, you know, Salvation army, full ride. I. I like. It's mind blowing.

Yeah. I think part of that, honestly, is what makes you not want to share it. Everyone likes to talk about themselves so much and, like, what they've accomplished and, like, their sense of pride. That there's a sense of pride, I think, for both of us, of, like, kind of keeping that to ourselves and being like, we know where we came from, we know how challenging it was for us, but we don't share it because we don't have to. You know, we are the people that we are, and that's.

Okay. Do you grow up poor.

Also? Yes. Very similar to Megan.

Actually. So what did you learn about money growing.

Up? That it can disappear really.

Quickly. Did that.

Happen? Oh, yeah. My. My dad, he was the. The sole earner in our family. And during the recession in, like, 0809, he lost his job and had to liquidate his 401k.

And. Yeah, I'm sorry to hear that. That must have been very disruptive to your family.

Right? Yeah.

Extremely.

Yeah. Did it produce, like, long lasting effects in your.

Family? I would say yes, because my dad is now kind of. I hate to use the word, but, like, estranged from our family. And he. And that kind of all stemmed from that disruption, I would say. You know, I mean, it was. It was to the point where, you know, again, same kind of story as Megan. We were living off food stamps in a house that, like, was foreclosed on, but the bank lost the paperwork, so somehow we weren't paying for it. And, you know, the AC would get turned off in 95 degree weather and the water would shut off and. Yeah, so definitely instability is.

There. Just out of curiosity, how much is your salary going to be when you start getting paid in a few.

Months?

$215,000. Can you say that? In a full sentence, please. I want to make sure I heard that.

Right. I will be making.

$215,000. Round of applause. That is absolutely incredible. Does your mom know how much you're going to.

Make? No, and I'm really embarrassed about.

It. She's about to know. All right. What do you think's going to happen when she finds out how much you are.

Making? Gonna ask me for.

Money.

Really?

Yeah. What are you gonna.

Do? I kind of want to pay off her mortgage one day, but I'll probably say she's already asked me for money. She asked me for money over the summer. I did give her some money. I'll probably give her money.

Okay. If you need help with that, I can talk to you about that as well. You know, some strategies for that. Okay, so, wow, you're about to make 215,000 after making essentially nothing your whole.

Life. It feels insane. It doesn't feel like I deserve it. I don't think I ever will feel like.

That. Yeah. I'm surprised. And do you know in what way I'm.

Surprised?

No. What do you think? Why do you think I'm.

Surprised? Maybe, like, jumping class status.

Yeah. It's incredibly difficult. It's incredibly inspirational. Everything you've mentioned, from the fact that you grew up with a single mom, the fact that your mom taught you these money lessons, which were very maladaptive, the fact that you had to pack yourself and move. I didn't do that. And then you got a full ride and a three, nine.

And.

Yeah. Did that ever occur to.

You? Somewhat in small parts, yeah. I think I had a difficult.

Childhood. You're right. You are inescapably tied to where you grew up. But to me, that's also the good news. The good news is you know exactly where you came from. You don't have to tell everybody if you don't want. That's okay. But that is your past. Personally, when I hear your story, I'm incredibly inspired. I go, holy. I thought I accomplished something. You know, my parents, immigrants, all that stuff as, like, nothing compared to what you accomplished. Nothing. It's amazing. It is the definition of the American dream, in my opinion. You don't have to escape your past. It's never going anywhere. But you can learn how to turn the page and to embrace this new chapter of your.

Life. I'd like to do that, for.

Sure. The past does follow us, and it exerts peculiar influences on us.

Now. Think about.

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

Yourself. All right, all this comes and it affects the way that you think about money, the way that you talk about money, and the way that you behave with money. In light of all the things we just talked about about where you grew up, what do you think you have brought from your past into your current relationship with.

Money? A lot of negative emotions like we've discussed. Shame.

Guilt.

Yeah. Unconfidence makes me avoid it.

Definitely. What.

Else? Guilty. Whenever I buy something that I. I can't afford, I think I'm scared of money. And so maybe I commit to spending more or sending more to Niles than I have to or he.

Expects. Yeah. And then you tell him I have no money, I have no money. And I don't actually believe you telling me that I can take some of that money back. Yeah, Fast forward this, do that, do that, but do that for the next 25 years. How do you think that affects your.

Relationship? I think it makes me feel like I have to take care of both of us and maybe stay in a job that I wouldn't want to. That's mainly what I'm scared.

Of. You are a corporate lawyer. That's how you already.

Feel. Yeah, I'm.

Worried. All right, so let's put that aside. I don't think it feels good to have your partner not believe you. Yeah, like that lack of trust. It's one thing when the two of you are engaged and living together. Okay. And then you get married, and then maybe you grow a family. And then, and then, and then. I mean, how does it feel after 20 years of your partner? Just saying, like, I don't believe you. Doing the same fights over and over again. So let's not do that. Yeah, especially because the two of your going to have a great amount of money. This is not a numbers problem. Would you agree? Wait, what was that look on your face? You don't agree. That's okay if you don't agree, tell.

Me. I'm worried.

Still. Okay, you're worried you're not going to have enough.

Money. Yeah, because I don't know if I'll ever feel like I have, you know, money That I can spend how I want. I feel like maybe we'll have enough.

Money. What do you want to.

Feel empowered. I want to feel like I have a plan that will actually work for my money and that I can trust myself to make one. I also want to feel like I can purchase the things that I want to go on vacations and contribute my part of it and not feel the need to pay for all of.

It. Niles, any objections from you on any of.

That? I'd love all.

That. Do you believe him? Yeah, good answer. Okay. All right, let's look at the numbers, shall.

We? All right, let's recap on the numbers here. They have $290,000 in assets. That's a house and two cars, by the way. On their cars, they spend just $75 a month on gas. Total. Fantastic. And Megan is being added to.

The title on the.

House. Great. Megan has zero in investments. Niles has $165,000 invested. Their savings is at just under $40,000. Their debt is $229,000, 95% of which is their mortgage. Meaning Megan only has $10,000 in student.

Loans. Just, just to be clear, you have only $10,000 of loans graduating from law.

School? Yes. And I think they're going to be canceled if things go my.

Way. Do you realize how ridiculous and amazing that.

Is? Yeah, it's.

Incredible. Like you could graduate with $100,000 of loans. It would not make a difference because you're going to be making a really high.

Income. I wouldn't have.

Gone. Okay, just as a hypothetical, because I think this is important. You would not have gone to law school if you had to take out 100k of.

Loans? Probably.

Not. Okay, and let's say that I was interested in law. Do you think I would go to law school if I had to take out 100k of.

Loans? Yeah, maybe depending on your comfort level with the.

Debt. Yeah, I don't give a fuck. 100k, whatever. I know how much I'm going to make as a corporate attorney. 200, then 300 and blah, blah, blah. And you know, you're gonna, you're gonna be a partner, whatever. That's a lot of money. That number is inconsequential. What's the difference between.

Us? You see the return and I see now.

Close. I see the roi, you see the cost. Only cost is important. Absolutely. If you were going to some like 50th tier law school and you were only going to make 60k out of then. No. But you're Obviously going to a good school, you're going to be working at a great firm. Why not? Different way of thinking about.

It. The most common money lens in America is cost. How much did that cost? Oh my God. You could get that so much cheaper. Ugh. Why would you need to spend that much? One of my students recently sent me this Instagram post of a two star Michelin restaurant in San Francisco. She told me that she's eaten there twice. And the comments on one of the reels was a bunch of people saying, ew, who would spend $275 on this? I'd just be hungry. I'd rather go to McDonald's. This is what I mean by the money lens of cost. Most people only see the world as if they are wearing a set of eyeglasses that can only see cost. Yes, cost matters, absolutely. But it's also limiting if the only thing you're looking at is cost. It's kind of like only caring about height when you're dating. It's just a tiny sliver of what actually matters. I think a much more savvy way is to look at value as well. Now, there are some areas of life where value is very intangible. Like an expensive piece of clothing. This is where a lot of us lie to ourselves. We go, it's an investment. No, it's not. It's a luxury. That's the same with personal training. I used to say it was an investment, but now I've realized it's a luxury. An investment has the potential to pay back a specific material reward. Otherwise people start to call everything an investment, which is exactly what people are doing now. My lipstick is an investment. My sweater's investment. My office chair is an.

Investment. Get.

Real. But in other cases, there is a very clear, measurable roi. Going to law school would make Megan money. Once you're comfortable with money and you understand that there are different money lenses besides cost, like roi, even delight, these decisions become much more nuanced. And to learn more about this concept of money lenses, just Google Ramit. Money.

Lenses. 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 that 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. GT 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 pretty proactive 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 joingelt.com ramit to book a consultation and as a member of my community, you get to skip the waitlist. Again, that's join gelt.com ramit join g e l t.com ramit taxes don't have to be a task with Gilt. They can be a tool to build wealth. Every single day I get a question about what's the best bank account? What's the best credit card? And I have to tell you my philosophy is to find the best account and then stick with it. I really don't want to be changing stuff all the time just for the sake of changing it. And I found the same is true for my email software. Now believe it or not, this email software I use is incredibly good and it actually keeps getting better. It's called Superhuman. They are the sponsors of this week's episode and I personally pay for this software. Let me tell you why they just gave me access to a new feature. It's their AI feature right now it can automatically detect if somebody's trying to pitch me. It can move those pitches into a separate folder. If it's a marketing email it can automatically tell. It moves that into a separate folder. It can even tell when I write somebody saying hey, let me know when that meeting is set up. If I don't hear back from them, it will automatically detect it. It will create a follow up message hey, just wanted to check on this. And it will pre write the message for me using my own voice. I look at my inbox every day. I have less than 30 or 40 messages. Everything else is automatically filtered and some of the messages are already pre written for me to look at. Edit and click Send. This is incredible software. Imagine being able to buy back your time and to be able to become even more efficient with your email saves me at least 10 hours a week using Superhuman. Now I happily spend my own money because it has helped me buy back hours of my own time. And my team and I actually love it right now. All money for couples listeners. Get a free month of Superhuman and you can get started@superhuman.com Ramit My suggestion, get it right now. Superhuman.com Ramit Try it for the next 48 hours. You're going to be blown away with the features that is superhuman.com Ramit R A M I T. You were not raised thinking about roi making those trade offs and calculations. But at the level that you are now playing, that's something you're. That's a skill you're gonna have to.

Learn. Yeah.

Okay. All right, so 229,000. Only 10,000 being student loans. Wow. All right, what's your total net.

Worth?

$264,300. Let's talk about income. What is your current gross household income?

Niles? $8,600 a.

Month. Okay. And how's that split between you and.

Megan? I make all of that.

And.

Yeah. And she makes zero. Okay, you're a student. Fine. No big deal. Megan, how do you feel about making zero in this relationship right.

Now? Feel like it's normal. My feelings won't change when I start making money is what I'm worried.

About. No, like you could earn 10,000, 20,000, 50,000amonth and that wouldn't necessarily change your feelings.

Right?

Yeah. Right on. I agree with you. All right, so we got to find something else that we're going to do because it's not just the money. Take home pay is 6,600amonth. Fine. Your fixed costs are 54%. That's really good. That's really good. All right, fine. 20% on investments, which is good, especially at the current income you're making. That's fantastic. If you were to keep that up for just a few more years, you'd be in absolutely phenomenal position. That's really good. Savings goals at 23%. You got a wedding coming up, is that.

Right?

Yes. All right, when's.

That? September.

13Th. Oh, wow. It's coming up soon. Okay, great.

Congratulations. Thank.

You. So you're saving aggressively towards that. And then once that wedding is over and honeymoon or whatever, you'll probably take that money and redirect it somewhere.

Else. Yep, that's the.

Plan. Good. And your killed free spending is at 3%. Is that.

True? Yeah. Sometimes we go and get a pastry split.

It. You know.

It. Sadly, I actually believe.

You. All.

Right. I mean, I like you guys. I like the discipline. I'll say that. I like it. Are you doing it for a.

Reason? So all these other numbers can be what they.

Are. I mean, what if you were to take your investments to 19% and take 1% and redirect it so you guys could buy two croissants a month? Like, do you want to do.

That? Because they've been living a life of scarcity for so long, Megan and Niles literally lack the ability to know how to adjust their spending. It would be like me going to ask a random person on the street, how would you handle $20 million from the lottery? Where do you even.

Start? I think the two of you have the lowest amount I've ever seen of a couple for guilt free.

Spending. You know that that's sad, but I feel like it's.

Expected. When do you get to feel good about.

Money? I think when I know that my retirement is secure and that I have enough money in savings that we could do whatever we wanted to. And I don't mean like me. I mean we, both of us. Because that's kind of how I view our.

Money. Is there a.

Number? No, I wouldn't say there's a.

Number. So it's a.

Feeling. Yeah, it's definitely more of a.

Feeling. Okay, and where do I find the definition of that feeling on this conscious spending plan? I don't see it here.

Somehow. Oh, yeah, Yeah. I mean, this is Megan's favorite little anecdote about that is I use this little gas app that'll save you like 10 cents. On the gas. On the gas. I'll do it for one cent.

Though. He makes us drive all over to get go to a.

Specific. It's really happening right.

Now. It'll save us 12 cents. And I'm like, we're doing.

It. I mean, you didn't have to tell me any of the rest of your history. I already knew how you grew up once you told me that gas story. Yeah, and. And, like, it's not about the money, is it? What is the feeling you get when you roll up to that gas station, you go, these oil companies. I found 3 cents a gallon cheaper. What does it feel.

Like? It feels like a.

Win. I'm all for finding the win, but this is just an example of playing small, shopping for gas, playing the frequent flyer mile game, posting funny memes about how you went to Target to only spend $20, but you actually walked out with.

200. Ha, ha.

Ha. And what is dear husband gonna.

Think? Ha ha.

Ha. Fucking hate those. It's playing small. What a tragedy to get wins from something as small as. As shopping at a store full of commodities. Or in Niles's case, to drive around actually losing money to save $10 on gas. Excuse me, not $10.10. The people I speak to who do this kind of stuff, they actually don't need to. They choose to, not realizing that their decisions to drive an extra two miles to save $0.10 are actually keeping them obsessed with $3 questions. That, in my opinion, is a.

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

Them? No, honestly. I mean, we've talked about the amount of money after, you know, putting it into the new conscious spending plan and we're like, this is honestly ridiculous and insane to think that we're going to have like a thousand dollars a month that we could spend on something. I'm like, I don't buy a thousand dollars things a.

Year. So your current strategies work for the rules of your current game, but they stop working when the rules.

Change. I would agree.

Yeah. Should we look at the new rules? All right, so Megan, you're about to get paid, right? First time in a long time, basically.

Ever.

Right. So how much are you going to make per month.

Gross? Well, let's see. I'll make $17,916 a.

Month. So you're gonna make 18k a month. How does that feel to.

Say I think that's the amount of money I've made in the past, like seven.

Years?

Yeah.

Crazy. That's like amazing. It's ridiculous. It's all, it's bewildering. It's all of those things, but it's going to.

Happen. Yeah, it's.

Scary. If we didn't talk beyond right now, what would you end up doing with.

It? I'd probably be a lot less involved with how it's spent than I'd like to. And I'd probably have to ask Niles for.

It. Okay, so you would just get the paycheck, send it to his account, and then probably feel like, I can't do anything. I have no money, all that stuff.

Right? Yeah. Cause I don't want to ask.

Him. Yeah. Even though you yourself sent it to him. Yeah. And after talking now, what do you recognize about that pattern? What are you doing when you go down that.

Path? I'm avoiding the money, getting rid of it as fast as I.

Can. There you.

Go. Not learning any valuable.

Skills. There you go. It's like the money came to you, and instead of you touching it and engaging with it, you just. You literally just go hot potato onto the next person. Out of my hands. In fact, I'm still poor. Not a healthy relationship with.

Money. No. I want to learn how to advocate for myself better and not resent Niles, who I feel like is just losing with any choice that he.

Makes. Megan, you need to be able to ask for what you want when it comes to your money. He's not going to read your.

Mind.

Yeah. How does that strike.

You? That strikes me as true and uncomfortable to think.

About. Yeah.

Yeah.

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

That? Yeah.

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

Him. Yeah. I can sense this desire and need for both of you to have some sort of joint account where you are not where. Where it's structurally set up, that it's working for both of.

You. All.

Right. I also can sense the need for some individual money for each of you to do whatever you want with no questions asked. Right. So we'll set that up, too. I like this chameleon comment you made. It's Very perceptive of you to recognize that. You know, in psychology, there's this concept of high social monitors and low social monitors. High social monitors. They're always observing what's going on. And if they're in a certain situation, they will act that way. So you had your mom as. As one model, Right. You have Niles as another. Who's the model that you want to choose to model after.

Now? Honestly, neither of them is what I see for.

Myself. Is there somebody in your life that you can think of that you admire the way they treat.

Money? Honestly.

No.

Okay. I really haven't. I'm not informed about any financial situation that I want to.

Emulate. Can you think of a TV character, movie.

Character? Honestly, the way you talk about your money sounds pretty nice. You seem like you're not feeling a lot of the negative.

Emotions. No. When you said you were like, I feel. You said, I feel. I was like, what word is that I feel? And then I was like, oh, she's saying guilt. I don't even know what that word means. What the fuck is guilt? What does that mean? Okay, so. So you can use me, right? And. And I can be your metaphor some. You know, like, I used Captain Picard sometimes when I'm like, shit, what would Captain Picard do? You can use me. And you just go, what would Ramit do? Right. And then adapt it for your own situation. So sometimes we know that our history misleads us, so we need to create a new model for ourself. If it's me.

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

Order. Shall we look at the conscious spending plan with the new income? Because I'm really curious what you're going to do.

Differently.

Sure. Cool. Can you guys just tell me what your gross household income will be after this income.

Change? $27,516 every.

Month. Are you guys still going to be driving around for cheaper.

Gas?

Miles. It'll be hard not to. I'll be.

Honest. Miles. I'm going to kill you. Groceries. Looks like you're going to spend a little bit more. Wow, you guys are splurging yes. What are you going to.

Get? Well, I like to shop at the farmer's market. That also includes eating.

Out. This is hilarious. Your groceries at the farmer's market and eating out is a total of $2,000 a.

Month. I feel like that's an insane amount of money. We have 900 right.

Now. What are you guys going to get at the farmer's market? Some almonds. What are you going to.

Get?

Mushrooms.

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

Awesome. Sounds.

Great.

Okay. Some of these numbers do really sound high. Just saying them out loud. And this is one of the things that those people on Instagram were reacting to. $275 for dinner. Outrageous. This is why I always want you to calculate your conscious spending plan in percentages, because it's True. Dinner for $275 is outrageous if you are making $25,000 a year, but if you make $300,000 a year, it's not. And if you have a 20% savings rate, whether at a high income or middle class income, you can save for things that might seem unimaginably ridiculous. Context matters. It's like asking someone how much they bench. Oh.

225. Wow. All.

Right. Let's add some nuance, though. Is that your first set or your last? Are you training for the first time or are you 10 years in? Do you weigh 250 pounds or 150? As I say this example, I'm just getting mad because I actually can't bench 225. Maybe I'm just.

Bitter. All.

Right. Niles is about to talk about throwing money away on rent, which is perfect because I can just channel my existing rage right now into this next part of our conversation. Let's do.

It. Niles, you feel good?

Yeah. I mean, I think the only thing, it does feel like an insane amount of money. Even $2,000 a month for groceries and eating out. I'm like, that's. That's a lot. But I think, you know, the challenge that I have with renting, and I know Megan has said that you talk about this, is it feels hard for me to be like, okay with spending $5,000 a month on rent. It feels like I'm throwing it in the.

Drain. Okay. Let's just do.

This. I told him not to say.

It. Yeah, he said it. He said it. Now. Now we can't. Look, you pulled the plug. The water's rushing down the drain. We gotta address it. All right. If you were to spend 5,000, you feel like you'd be throwing money away on rent, right? I'll give you a couple of examples where the math is surprising. Living in high cost of living areas, Niles. Like New York, San Francisco, Louisiana. Every time you run the numbers, the vast majority of the time you find that it's actually cheaper to rent than to own. And I'll give you a personal example. When I lived in Manhattan, my apartment, let's just pretend it was $3,000 a month. The place next door, same view, same square footage, all that would have cost over $6,000 per month. When you factor in taxes, interest, maintenance, all kinds of stuff, it would be actually have been over 6,600amonth. So what I did was I took that $3,600 a month and instead of buying, I rented, which was a great place. And I took that 3600, I just invested it, which actually ended up making me more in the long term. But there are also some other reasons. I didn't know how long I was going to be in New York, so I wanted optionality. I didn't want to buy because it would have been incurring huge costs. And if I.

Leave.

Fuck. Do I really want to be a landlord? No. Do I. Do I want this to be that big of a part of my portfolio? Maybe, maybe not. So there are a lot of different concerns I had, but ultimately mine was a lifestyle choice first, financial.

Second. Okay.

Okay. So for you, I can't tell you what the financial part's going to roll up to be, but just so you know, like I'll tell you my back of the napkin little calculation, I do whatever the mortgage is, I add 50% on that to account for all phantom costs. Okay. All right. That's how I think about it. So the math is in my book, chapter nine, and I have a bunch of stuff online about this. But please don't feel you're throwing money away, because just the same way you go to a restaurant and you happily spend money there, you are paying for value. It's the same thing whether you rent or.

Buy. Okay, that makes.

Sense. If you want to learn more about everything I just said regarding renting versus buying and how to actually calculate your own numbers, go to iwt.com houseguide There's a free guide I put together where it shows you how to think about buying versus renting, including the actual calculations you need to make. That link again, iwt.com houseguide.

Okay. All.

Right. Your investments would be 25%. Fantastic. So in this case, you took a bunch of money and you redirected it to investments. Basically $5,000 a month. That's outstanding. I'm sure your work is going to have some 401k match. You're doing over 60k a year of investments. That's great. At this young age. Oh, my God. Ten years of this. You guys will be in an absolutely phenomenal, unstoppable financial position. You guys want to do the math right.

Now? Sure.

Sure. All right, so what's your Current amount.

Invested?

$165,000. Okay, $165,000. How much are you going to put in per.

Year to this calculator?

$60,000. Okay. That's this year when you're 28 and she's 24. But we're talking about the average over the course of your life. I know it's hard, but is it more or less than 60,000 a.

Year? I would say more. I don't.

Know. Way more. How much.

More? 80,000.

Maybe. Okay.

80,000. I'd say like 3% more a year or something like that, depending on how much, like, inflation and raises.

Are. I don't think corporate attorneys get 3% raises. How much do you make after, like, two years.

Megan? Like, over.

300. And then what? Just give me the key numbers on that curve. 300. Then what happens the next year? And the next.

Year? Like, 350, probably 400. And then there's, like, some bonuses in.

There. Anybody hearing a 3% rate in this? No fucking way. They don't pay those lawyers that much. They pay them to sit there and bill 2 million hours a year. All right, so what's the answer? The answer is it's definitely more than 60. It's definitely more than 80. What's the.

Number? I'd say higher. I mean, I want to say 100 just because it sounds nice.

Okay. Megan, how do you feel about.

That? Yeah, that's.

Crazy.

Yeah. A hundred thousand dollars a year invested. You never even made that in your entire life combined. That's the curve you're about to enter on. So again, you don't have to master every nuance of this right now, but I just want to show you what these numbers look like. All right, I want to point.

Out a couple of fascinating wrinkles there. What they just did is really funny and really common. I have found that people find it impossible to estimate what their lifetime is average earnings will be like. I constantly talk to someone in their early 30s making $80,000, and I ask them how much you think you're going to make over the course of your lifetime to go $80,000? I'm like, you fucking earned that at 31 years old. You think your salary is going to freeze in time like a stegosaurus? Have you ever looked at the median salaries of people like you? What it really comes down to is people are afraid to make an assumption because they believe if they get it wrong, they will have.

Failed. I'm like, what if we have.

A chance to dream big or small? Why not just choose big? The funniest part of this whole conversation, by the way, is how Megan was just sitting there quietly letting Niles talk about his 3% raises. And then when I ask her, hey, Megan, what do lawyers make? She's like, oh, yeah, 350, then 400, then 500. It's like, Megan, speak up. Okay. Anyway, you guys constantly minimize your dreams. It drives me insane. But in the grand scheme, it's fine. You'll just end up with millions of dollars more than you ever imagined and no real idea or skills what to do with it at age 65. Whatever. Let's get back to the.

Numbers. So I put 37 years for this to compound because that's how long until you're 65. What do you guys want to do here? How many years do you want to calculate this for? You want just do 20 to.

See. Yeah, 20.

25. All right, 20 years. And your interest rate, what should we put there? You don't know? Have you read my.

Book? 5%.

7%. Who's read my book out of the two of you? Oh, of course. The gunner did. All right, 7%. You are correct. And now again, why? It's all in there. You can choose seven, you can choose eight. Historical blah, blah, blah. But I always use seven for my calculations. All right, so what do you think the number's going to be here in 20 years? Investing $100,000 a year, starting with 165. What do you think it's going to.

Be? 4.

Million. All right, 5 million. Want to do something.

Fun? Yeah.

Why? Just let it sit there and do 25 years? Just five more years. It took 20 years to get to 5 million. What do you think's going to happen in five.

Years? Should almost double.

Right? My man knows the rule of 72. $7.6 million. And if we left it in there for 30 years instead of 20 and 25, we're at $11 million. Now, if I ever find out that you drove 10 miles to get gas when you have $11.3 million, I'm gonna find you and I'm gonna hurt you. What do you.

Think? Yeah, it's. It feels fake. It doesn't feel like, oh, that's what's going to happen. Like something is going to happen between now and then that's going to make that all messed up. I don't know. That's what it feels like to me. Probably because that's what happened to my.

Family. Exactly. You made the connection beautifully. It doesn't have to happen that way. You never have to spend so much that you put yourself at risk. We can manage your risks, but there is no virtue in living a smaller life than you have to. Conservatively, you have five to $12 million. Like, it's gonna happen. Seems to me that it's time to start building those skills right.

Now. I mean, I think that would be raised a fair point when he said that your investments are generous right now. And looking at the calculation that we just saw and knowing that our income will increase and we have 30 years to do it, I think that maybe we could divert a little bit of that money and pay for a vacation or for us to have more experiences together. Because staying at home is getting old. And cooking when I have, you know, been working for 10 hours, I think is it's not gonna work for.

Us. Yeah, no, I 100% agree with you. Especially, you know, right now. We're saving $600 a month as a down payment. Like, if we're not gonna buy a house, we don't need to do that. So I think that makes a lot of sense to improve our quality of life now rather than, oh, yeah, it's going to be good in.

October. Megan, I see you nodding a lot. Is that connecting with.

You? Yeah. I love to think about what I could buy someday. Like, I often. We visited Maine this year, and I really liked a certain town, and I thought, like, wow, maybe we could spend summers here and, you know, buy a house or rent a house for the summer. So I look at the houses for sale there, even though this is, like, a far off.

Goal.

Yeah. And the same thing with all these things I want to buy for our wedding. I have a list including the prices of everything, but then when it comes down to it, I just can't buy.

It.

Because. Because I feel like. I feel Like I'd have to ask for for it. I feel like there might be some judgment about it from Niles. The same way I feel about telling other people something personal about me. Maybe this is a personal desire that I just want to keep to.

Myself. Nothing you've mentioned seems outrageous to me. Can I just tell you that wanting to one day get a house. Okay, some something nice for your wedding. Why not? It seems to me Niles is fairly reasonable. But it also seems to me that you expect him to magically be able to read your.

Mind. Yeah, I do. And I also assume that he doesn't find these things as valuable as I will and that there will be some judgment about.

Them. And. And worst case, maybe there will. What I'm not going to do is pretend that both of you are going to agree on everything for the rest of your lives. It's not going to happen. Instead, what I will do is teach you how to handle these natural disagreements. First, we have to be able to just articulate what we want. I know you articulate what you want at school because you couldn't achieve what you did without going for it. Like that was not an accident. Would you agree that the levels you.

Achieved. Yeah, I had planned for.

It. Exactly. Getting that job you got, not an accident. You went for it, didn't.

You? I.

Did. You guys are awesome. Now get specific. You have the intention talk numbers because I know you're both numerically.

Driven. So we have 620, I think per month that we're saving for the down payment. It would make sense to me to take $500 out of that per.

Month. For.

What? To put it into guilt free spending. So we'd each have.

250. I think that for guilt free spending we should each have 150amonth, which is three times more than we both have now. And we could go to the tennis tournament that we want to go to in March and not just look at the tickets and never buy it like we've been doing. It's only $90, but we could go.

There. Yeah, let's do it. That makes a lot of sense to.

Me. That's awesome. How do you both feel about that.

Conversation? Much better. I think if we didn't have $30,000 in savings already, I might feel different. But we do. So like we don't need to keep saving that money and having literally no money to spend on anything.

Fun. That would be.

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

It. You could do it.

Today. You don't even have to wait for this new income to come in. So to me, this is such an awesome example of training wheels. 90 bucks. We redirected it from here. Ah, feels good. You're building the skills and you're probably going to encounter some stuff. You're going to go, oh, my God, I didn't realize. We should. The coffee, I didn't budget for it. This is $8. It's so expensive. Okay, you'll deal with that. And you're. Each time you go through one of these uncomfortable situations, what you're really doing is building the skills so that when you are making $18,000 a month, $20,000 a month, you've started already building those skills with smaller.

Amounts. Sounds.

Great. Yeah, makes a lot of sense to me. Yeah, I think especially in the future dynamic, we'll feel, I mean, I don't want to all pawn this off like, oh, yeah, we'll do it in the future. But I feel like our future budget does feel more flexible in that way versus our current one would be like taking from retirement or taking from savings. Which now that we've had this conversation, feels a little bit better. But I think before it was a hard dynamic to.

Change. Well, you do buy some flexibility when you add an extra $215,000 a.

Year. Before I share the follow ups from Niles and Megan, I want to remind you to go to YouTube, search for Ramit Sethi and follow my account there. You can watch this podcast with Megan and Niles and see the fascinating body language in this episode. Now, I did something a little unusual to wrap this episode up with them. I was more directive than I usually am. I suggested that Niall say, megan, I really appreciate you contributing so much for our wedding, but I want to Send you back $1,000 of your own money for you to use. And she resisted. She said, I don't know why, but it wouldn't feel meaningful to me. And this is what I said. I said something that I rarely do. I said, you know what, Niles? I would just ignore her and send it anyway. And here's why. Megan, you made $30,000 in your internship and you have no money in your account. That's not okay with me. I want you to have money in case there's an emergency and I want you to have money so you can begin trusting yourself. It's rare that I am that directive, but in this case sometimes you need to just brute force it in order to to begin building the foundation and in order for Megan to begin trusting herself with money. One way or another, they're going.

To start having a lot more.

Money. Might as well build the skills when the stakes are low. Here's the follow ups. Megan said, I learned that I caused myself internal anguish for no reason when I don't communicate my needs clearly to Niles. When I do communicate them, Niles is more receptive than I assumed he would be. I realized that I am avoidant with money and that part of me not communicating my needs is avoidance. After speaking with Ramit, we discussed our current CSP together. I was pleasantly surprised to hear that Niles had considered my expenses when we talked about the csp. More Great. Let's hear from Niles. Niles said, I learned how to trust Megan more with some of the financial decisions that I had been making on my own. I also learned how to take a more risk relaxed approach, especially as it relates to our savings. I was surprised by how much of our current habits and feelings towards money are influenced by events in our childhood and familial experiences. And they both said we rebalanced our CSP together to move money from saving for a down payment into fun money. Now we each have $200 of fun money per month. We calculated the money we still need for our wedding and honeymoon and we decided where it's coming from. We are also going to put some money into savings and keep some for our own purchases too. Finally, we also booked the tennis tournament. Four exclamation points. Megan and Niles, it was such a pleasure to talk to you. Thank you for coming on the podcast and being so candid and for everyone listening. As always, find me on YouTube, find me on Twitter, Instagram, TikTok and my newsletter and I will see you next week. Thanks for listening to I Will Teach youh to Be Rich. I'm Ramit Sethi. Please follow the show on Apple, Spotify or wherever you listen to podcasts. If you haven't read I Will Teach you to be Rich my book. Pick up a copy. You can get it at any bookstore or any library and it will show you the specific tactics for how to build the I will teach you to be rich system into your personal.