88. “We own 7 properties. Why can't we pay for groceries?”

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The same 10 things I put in my cart a year ago are not the same price and they're so much higher. So we're not going to go out to eat this week or we're not going to get your new shoes till next month. Ah.

So are you spending down your savings every month?

Yes.

Okay, and how does that feel to both of you?

Awful.

Natalie, I'd like you for you to start with the net worth section. Just say okay, assets and then read me the number next to it.

Assets. $890,000. Includes property income, property investments that we have.

How many properties?

Seven.

Seven properties and you guys are arguing about $20 on Amazon. What world am I in right now? Is that enough? It could be enough, but does it feel like enough? No.

There is no guilt free. There's always guilt to this fending every single time. Where does the grind stop and where does the enjoyment begin?

I'd like to introduce you to Natalie, who's 42 years old and her husband Travis. He's 48. Travis is in the military. Natalie stays at home with their four children and runs the household and they live in Southern California, which is very expensive. Now, they reached out to me initially because they disagree about the way to spend money. And you're going to hear about very specific examples like their son's birthday party. But as we dig, not surprisingly, you're going to discover that there's something much deeper beneath the surface. As you listen today, I'd like to remind you of a couple of things. First, it helps me if you rate and review this podcast on Apple Podcasts. Leave a little written comment. I read them all. I appreciate it. Second, watch this episode on YouTube. You can see the full episode. And you can see Natalie and Travis and their body language, which is quite revealing. Just go to YouTube and search for Ramit Sethi and follow me there. Now let's get to the episode.

Our son's birthday party that happened last month, turn 11.

Okay, congrats.

And he's our youngest of four, and we initially set out to have a budget of 250 bucks. And I'm sure that we doubled, triple, quadrupled that. And with no thought, no conversation, or like, nothing afterwards about the amount spent.

Who came up with the number? 250.

Usually for our children's birthdays, it's around 200, 250. When we were good at our budget, we would put money away for that, but we have not looked at budget in months. And so when it came time to plan his party, I wanted to plan it at the skate park. Found out that was 500, so canceled. That postponed it to the next weekend where we could do it outside for free. So Travis actually doesn't know what we spent on the budget, but we were under 250 for that birthday party. But to him, he thinks that we went over.

Wait, what? Wait, Travis said you may have quadrupled the budget, and you're telling me it was under the budget?

Absolutely.

Okay, this is a good example. How much did you end up spending on this birthday, exactly?

So far, I've spent about $180 for his birthday. I just grabbed a couple Costco pizzas and some of his favorite sparkling waters and a couple cookies and went to the skate park with 12 of his buddies. So it was a pretty cheap birthday.

Sounds like a great birthday. This is already fascinating. So many of the stories we tell ourselves with money are just that, stories. We'll say, I'm not good at money or I'm afraid of losing money, or in this case, Travis literally tells himself that they quadrupled the budget for their son's birthday party. Now, it's tempting to think that presenting the facts will change people's feelings. But it won't because. Because these are feelings, and facts rarely change feelings. This is why so many people feel like investing is gambling, even though it's not. I can show them a compound interest chart and point to a hundred years of history, and it will not change a thing. That's the point of this podcast. Emotions matter. Psychology matters. Compound interest charts and spreadsheets matter a lot less than people think. All right, Travis, what do you think about hearing that the birthday may have been under budget?

I think it's fantastic. Super stoked.

That's a big smile. I see that. All right.

Yeah, it's great. Then I'm gonna add the set the 70 to $90 for the fishing trip, and then we're back where we're over. Not quadruple, but we're over.

You're over by 20, 30, 40 bucks or so. Okay, Right. And does that trouble you, Travis?

It's just the. I have no problem. Like, I know that you remit, like, hate budgets. I have no problem spending every single piece of every penny every month, but as long as we know where each penny goes, I don't care. Yeah, right. And when we. When we can't have money for the frivolous. What's the term that you call it?

Guilt free spending. It's not frivolous. It's guilt free.

Guilt free. There is no guilt free. There's always guilt to the spending every single time. Because it doesn't. We didn't allocate its work prior to it being spent.

Okay, who feels the guilt?

I do.

You do. Okay. Natalie, do you feel it?

I feel guilt from Travis because I guess we're not on the same page and we don't communicate monthly as to, hey, this is what's coming up this month. Do we have the money to pay for that, or do we need to borrow from our savings to pay. Pay for this? You know, we're really good at certain things, like budgeting, the car registration, those things. But it's the random things that come up that we don't communicate completely about where the money's coming from. So I feel. I do feel a little bit of guilt when I do spend it because he's not on board with me communicating and planning that part of it.

Okay.

All right.

And when you say it's the little things that you may be over on, you're talking about birthday parties, groceries. What are we talking about?

So we are definitely over on our groceries. The other small things that I feel like Nickel and Dimas. What I say to Travis is, the kids have birthday parties that they're invited to, or, you know, the girls high school sports need an extra hundred dollars for this or that. And we don't talk about where that's coming from. We don't plan for that large of the nickel and diming to come out. And I think that's what's eating our budget.

So let's talk about that. She comes to you and she says, what, I need a hundred bucks for uniforms or something.

Right.

All right, what do you do?

I would take it out of the budget and then in my mind, try to spend less the next time I go to the grocery store.

Does that work?

No, it hasn't. That's why I'm here.

Travis, you're shaking your head. What's your take on this?

It's just after the fact, right? Like, I have alerts on my phone for Amazon, Amazon, Amazon, Amazon. And I'm like, we don't even have a budget for Amazon. And it keeps getting lumped into the food budget and household things and food and household. And like, that. We can't. That's not. That's not a. Like, we're violating the very principle of money that. That we should be enforcing and, like, employing on ourselves.

Is it possible for the two of you to be financially compatible?

Absolutely.

I think we can. I think we definitely have to mesh on some common goals.

Okay. Do you know anyone else, Any other couples who see money differently, but they are meshed?

Yes.

Tell me about them, Natalie. What comes to mind when you think about them?

So from the outside, one of our couples wants to, you know, save nickel and dime savings and not spend it on those things, like, oh, well, you know, let's make him a card or let's do something like that. And the other person in this couple is wanting to use their money to invest it for it to grow.

All right. By the way, you said nickel and dime in a really interesting way. When you say nickel and dime, is that a positive thing or a negative thing for you?

For me, it's negative.

Like, we're nickel and diming our way to death.

Yeah.

How you use it to death or.

Yes.

Yeah.

I picked up that you also had a positive view of it. Like, nickel and dime is interchangeable with saving.

I think that we can be. It can be a form. I've seen other people do it, and I feel like, you know, living in Southern California, where things are so expensive and everybody has the best of everything. I feel like, in my mind, Because I am the biggest spender in the family. I mean, Travis doesn't go to the market. He doesn't buy the kids socks or shoes. So a lot of this, I feel, is heavy on my shoulders because I want to get better at making him feel that I'm confident and competent in leading this family financially and not spending money that it's not needed to be done. So I would like to get better at not nickel and diming. And I think if I. I feel like I do do these things. But to Travis, all he sees is spending like the Amazon. This is a perfect example. The Amazon packages that come to me, I would rather push a button and order those new socks on Amazon that are the same price at Walmart instead of driving my car 5, 10 miles to go pick it up. So I'd rather do that. And that's why a couple Amazon packages come each week rather than driving to go do it. Whereas Travis is the type, if he needs a tool for the lawnmower or something, he'll stake out three different stores, find the best price, and bring it home. Well, I feel like he just wasted a ton of gas and time, which time is very valuable to me doing that.

Just to clarify, time is valuable to you. Why?

If I can save time going shopping, physically going out there to get it, when I don't need to even drive down that street or that area, I can use it more wisely as doing household chores or preparing a meal for my family, or.

Or what about just enjoying the time?

That would be a fantastic way to do it. Yeah.

Okay. All right. When was the last time you just enjoyed the time?

It's been a while.

In college, I majored in something called sts. Science, Technology, and Society. And one of the things we studied was the emergence of technology in the home, like irons and dishwashers and vacuum cleaners. The promise was always that suddenly, magically, once you buy this technology, you will be free to enjoy your leisure time. In reality, expectations simply went up, and now you spent approximately the same amount of time on housework. From the perspective of designing a rich life, if you let these things consume your time, they will. Just as if you let all your random expenses consume your money, they also will. But if you are in charge of your rich life, it's your job to fight back by designing what your rich life is and then prioritizing those things first. As an example, when you hear the phrase pay yourself first, this is exactly what they mean. You set a target savings goal, let's say 10% of gross income and you pay yourself first. That money goes into a savings account. Then you take the remainder of the money and use it to cover your spending. In other words, you put the important things first or they will never get done. You can apply this to travel. You can apply this if you really want a nice car and it's part of your rich life to be able to afford it. Fantastic. That's how you do it. Now let's explore how they both think about money. 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.

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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 Zocdoc.com Ramit 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 got to pull all this paperwork and we're panicked because the deadline is approaching. That's why I recommend guilt. 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 G, you get a 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 Gilt'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 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. When you think about money, what are the first two or three words that come to mind for you? Let's start with Travis, then Natalie.

Money is a tool. Money is a method to pursue greater things. Selfish and selfishly and selflessly. You know, for example, I've got about three or four years left in the military and when I retire I don't want to W2 job. And so I want to be able to spend my time supporting communities locally and abroad, doing whatever, teaching English in Indonesia to clearing a trail and you know, up in Tahoe for three or four months. Like that's, that's what I want to do. Selfish selflessly.

The first words that came to my mind when you asked that question were safety and save.

Tell me.

Yeah, I want to feel like I have enough money to do the things that we need to do for now and for our future.

Okay. This is very helpful for me to understand where you're coming from. I am curious about Amazon. So you make a really good point, Natalie, that your time is valuable and you've got four kids in this household that you are in charge of. So makes sense to me. You'd prefer to order something from Amazon and have it delivered rather than drive. Travis, I heard you say that. First of all, you get a notification when there's an Amazon order. Is that true?

Yes.

Why do you have notifications turned on for Amazon purchases?

I don't know.

Can we just like turn that off.

For anything else on?

So are you serious?

There it is.

So, Travis, can you turn off these Amazon notifications, please?

I. I will. I will note that.

Okay.

All right.

I feel like Family Harmony has already increased 15 just from turning off Amazon notifications. Okay. Job. The job is done. Travis, I'm curious though, knowing that you will turn off those notifications when you see those things come across your phone, what's that feeling you get?

Just absolute, like, gut punching dread. Like you're going over and we're going over and we're going over. That's what I see, Phil, every time.

And do you even see the amount or is it just the icon?

I see the amount.

Okay, so, like, what's a typical amount.

That you might see anywhere? 20 to 40 bucks. 50 bucks. Okay, 10 to 50 bucks on a given day.

You're feeling existential dread from seeing 20 bucks on your phone. Okay, that's a problem.

Stupid. I know I'm feeling dread because it's. It wasn't. It all goes back to allocating money to. So the money has a job. If the money is this, if we have a budget that said, or a allocation of money that says, hey, this much money is going to go to Amazon, I don't care.

Okay, fantastic. All right. And Travis, you said something in your application. You said, we're loose. We're not tight right now. We're loose with our money. When you said that, it deeply resonated with me because there are parts of my life where I want things just completely tight. I want them dialed in, you know, whether it's workouts or my calendar or whatever. And then when. When it's important to you and you can feel it's getting a little sloppy, you go, oh, God, I just feel out of control. Is that how you feel about it?

100% true.

Travis is a born optimizer. When things aren't in their place, it drives him nuts. And he's also in the military, which tracks perfectly. I'm an optimizer, too, so I understand how he feels. But I also know that if I let my optimizer feelings take a front seat with my finances, my life can become extremely numbers oriented, and it can be really hard for a partner to deal with. So that's what you're hearing when he talks about gut punching dread. It might sound like hyperbole to you, but to him, he genuinely feels it. Okay. Doesn't mean it's right. Doesn't mean I agree with it, even though I totally get it. Travis doesn't mean it's helping his relationship, but that is how he genuinely feels. Okay, so tightening it up or dialing it in for you would be. Every dollar has a job. It's assigned to something. We agree on that. And. And then I don't care about the execution of it. Is that correct?

That's correct.

I don't have a problem doing that because I know that he wants every dollar to have a place to go. I think the problem is, is that A, we don't plan it each month and B, we haven't changed our allowed budget in over a year. You know, with inflation, the way it's gone and everything else. So I think that's a big part of why he feels the way he does. I feel it as well. But I also am the one shopping and seeing that the same 10 things I put in my cart a year ago are not the same price and they're so much higher. So I make. I try to make the adjustments with our shopping and. And I see that, and then I try to make up for it in other ways. Is not spending dolls. We're not going to go out to eat this week or we're not going to get your new shoes till next month, or, you know, little things like that. Because I'm the one going out and actually spending it and seeing the difference.

I see. Okay, and can I go out on a limb and make a guess here? You haven't updated it in a year. Is that because something changed and you started to feel worse about money and now it's just this sort of thing in the closet nobody wants to really tackle?

Yeah.

We're kicking the can down the road because we haven't figured out the principles yet that we're violating the prince.

And you believe the principle is the.

Day to day spending of just allocating our money? Correct.

Okay, but why haven't you allocated it in a year?

I guess tired.

Okay, that's an honest answer. The thing is, we're not robots. I'm not surprised you haven't done this in a year, but I'm also not surprised that now you want to talk to somebody like me. Because sometimes we need a little nudge to get. Get it tight again. Travis and Natalie are stressed out by money enough that they've come on this show in front of millions of people to share their story and their actual numbers. But notice that they haven't updated their numbers in over a year. I gotta tell you, I got a lot of compassion for people who aren't on top of their money every single day of their lives. We have family obligations, we get busy with work, or we're confused about a certain investment term and we need to find somebody to ask for help. But then life gets in the way. One of my goals for this podcast is to introduce you to couples who really want to improve their relationships with money. But for whatever reason, they're stuck. The reasons might seem silly or trivial to you, but they are nonetheless real to them. And the truth is that each of us has something in our life where we know we should be doing better, but we're not. That is real life. And out of curiosity, have you had budgets before?

Yes.

And how long did those last? Look at Travis's face right now. Look at that. Sometimes that's all that needs to be said. Go ahead, Natalie. How long did those last?

I don't know if I can put a word on it after that. Look, they didn't last very long.

That's shocking. I'm. I'm utterly shocked. All right, let's. Let's look at the numbers. The net worth. Okay, you know what, Natalie, I'd like you. For you to start with the net worth section. Just say, okay, assets, and then read me the number next to it.

Okay. Assets. $890,000. 341,000.

Okay, great. $890,000 in assets. And what do those assets Includes property income.

Property investments that we have.

How many properties?

Seven.

Seven properties. And you guys are arguing about $20 on Amazon? What world am I in right now? All right, we're going to get to that. Seven properties. Are you actually cash flow positive on these, everyone?

Yes.

What am I doing here right now? Investments. What's the next number?

323.

Okay. All right. And of course, that does not include your properties. You count those as assets. Fine. Savings?

119,000.

Okay. And debt?

401.

Okay. What is that Mortgage?

The mortgage is on some of the properties.

Okay.

That's our only debt. We don't have any debt on anything else.

All right. You guys are pretty financially conservative in that way. That's good. So what's that total net worth you see there?

931,000.

All right. What do you think about that number, Natalie?

I like it. I think that it's a good number to have, but I feel like we're crippling ourselves in our personal versus our investing or a business that we're not as well disciplined.

I see. So your business. I can hear a lot of pride. You've got multiple properties. They're all cash flow positive. I can hear that. It seems pretty dialed in. The personal side seems to be different. Is that a fair assessment?

Yes.

Accurate.

All right, fine. Great. At least we're honest. That's the step number one. Travis, talk to me about the income.

So the income is what I make. We're a one income military family earner. That includes the housing allowance that we get because we live on base.

Okay.

And it also includes a. It's called bas, which basic allowance for sustenance. So it's like an extra 280 bucks that the government just throws you. Because I have dependents. Right. And so when you. The 10,000, you subtract 3,400 for the housing that they put in and then take out. And so like technically we have like 5,800 that they. And then. And then we have the tsp that comes out of that, which is how much? Right. At 20%. So right around 1350amonth.

Okay, so just to summarize, you make a gross amount every month of $10,523. That's great. And do you have a pension at.

After 20 years of 50% of the base pay, which. My base pay right now is like 7200, 7200amonth.

And so 20 years will be when?

Next year.

December.

December or sorry, this December.

This December.

Great. So you're close to getting 50% of pay if you retire.

Correct.

And when do you plan to retire? Ballpark.

If someone's asked me, right now, probably I've got another three years. Ish. So probably three or four years from now.

Great.

I've already ran those numbers. So it'll just at that point, with my. If I get 100% disability, which four tours, that'll definitely happen, but that'll be basically $8,000 net just for waking up.

$8,000 net. That's double what you make right now. Correct. Okay. And that's in three years? Yes. You guys are making my job too easy for me. They have seven cash flow properties and he makes good money and is likely to make even more soon. It seems like they should have plenty to be able to spend. All right, let's work down the rest of it. Fixed costs. Just out of curiosity, what's that big old number in blue on fixed cost? Natalie, what do you see there?

86%.

Now, out of curiosity, what, what is the recommended guideline for that?

It's I believe it's 50 to 60%.

50 to 60%. You guys are at 86%. You're actually way over that because you should add your mortgage or your rent in there. So it's like, I don't know, 100. Basically you're spending. It's 100%. Yeah. What does that tell you? That your fixed costs are essentially 100% of your take home.

Spending.

Tells me That I have no. No guilt free spending.

That is correct. And what was that, Natalie?

Just that we were spending too much money.

Maybe. I'm not sure I would take that conclusion.

You.

You may be spending too much money. Yes, but really the problem is a structural problem, which is your fixed costs are just too high. So let's. Let's just take a breath on that. Hearing that, what does that feel like to you, Natalie?

It's sad.

Why?

It's sad because how can we succeed if our plan is a failure? So no wonder that we, you know, mumble under our breaths or the sigh happens when he gets a text from Amazon. Or it's like, why would we not be surprised? Because it's exactly what we planned for that.

Now that is very accurate. Travis, what about you?

It's.

It's frustrating.

The final section of the conscious spending plan is your guilt free spending at negative 29%. I don't know if I've ever seen a number like that on a conscious spending plan.

You're welcome.

You're in the hall of fame. So what does that mean, negative 29%. What does that mean to you?

That means our kids are getting shoes and jerseys and birthday parties and everything else out of our savings.

Ah.

So are you spending down your savings every month?

Yes.

Okay, and how does that feel to both of you?

Awful.

And I am now having income of, like, my paycheck is 55, $6,000 a month. Well, then I should be employing the extra money either through securities, paying down debt, buying another investment property, something like making that money, make more money.

Okay, what about spending some of it?

Sure. Yeah.

I mean, I don't know if you really believe that spending some of that.

Money would be like celebrating a win, Right? I don't. I am very. As a Marine, like, I'm driven, right? Like, that's the mission. I accomplished it. It's crushed, it's devastated. Onto the next mission. Right. Like, like the joy that I get is not celebrated because I'm focusing on the next target, the next mission and the next property or the next, like, you know, moving my TSP percentages around between the different funds to make sure that we're maximizing. And it's just like always moving forward. So I don't celebrate that. You know, I just got promoted to Chief Officer 4 and we got our paycheck and it was backdated a month, and I'm like, all right, that's an extra fifteen hundred dollars. Put it over here instead of, let's go and get ice cream. For the day. Like, yeah, I need to be better about that.

Okay, Natalie, you want to chime in here?

I 100 agree.

Yeah, I agree. But I also agree that celebrating is a really important skill. And it's not just a skill with money, it's a skill with family. You know, when you, when you really look back on your family, you know, you don't remember the type of salt your mom or dad used. You remember the rituals. You remember the random celebrations, the dinner, eating dinner together or going out for ice cream. You know, there's an art and a science to living a rich life. The science is what most people focus on. They think money is strictly about the numbers. And it's true. The basic nuts and bolts of money are a key part of a rich life. But that's where most people stop. And you can hear Travis admitting that. He even says he wants to use money to what? To buy more investments? There's a lack of understanding the psychology of money, which is the second key skill in a rich life. That means understanding how you behave with money, how you talk about money, and how you feel about money. Travis won't celebrate their financial wins. That's his story. And now that you understand this lens that he uses, you can understand why he thought that Natalie overspent on their son's birthday party. You can even understand why when he learned that she didn't, he quickly pivoted to another worry about money. I dig into their CSP and I notice that they invest 29% of their take home pay and they only spend $50 a month for vacation. That's for a family of six. It's a little unusual that you only put $50 a month aside considering you have 7 cash flow positive properties. Anyone else here think that's a little weird? 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. 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 well, there's history.

Behind why we, we. We lost six properties in the recession 20 years ago.

Okay.

And I was deployed. Natalie was a young mother doing the, you know, doing all the property management stuff on her own. And we, you know, we end up having to short sell them. And regardless of how much money we had saved, it didn't matter. And so we were doing the classic Dave Ramsey beans and rice because we had nothing else.

Yep.

And you know what? We short sold the last house in 2011 after my fourth deployment. And it was like that was, it was a big wound for us. There's still that lingering thing of like, we don't have enough money saved. We gotta save more money because we, we don't know what the future is going to Hold. And even though we have all of our stuff for capex we've got, if we're a year plus, that money just comes in the account and sits there because.

You know, something might happen, we need to have it. Yeah, I don't feel scared about it. Travis was deployed every other year and I was the one having kids and dealing with what happened in 08. So I'm not scared. I just want to have a plan for it. And I think that's why, you know, Travis is a lot more aggressive in his investing to where I want to make sure that we do have six months reserve free to the properties if the renters move out or if something were to happen or we need a new roof. Like, there's that number that I'd like to see in the bank to feel comfortable about what we have, because that's why things crumbled in 08. But it taught me a lot about. I always want to make sure that there's enough in case something happens.

And how much is enough for you now?

We have to have at least 40 to 50,000 in the bank just for our family.

Okay, you have triple minimum.

Minimum.

Okay, you have that. Is it enough?

It is unless I start taking from it every month.

Well, you said you need 40 to 50,000, minimum. You have 119,000 in savings. Assuming you take $1,000 a month, you could go many, many, many, many years, basically the rest of your life before you got down to 50,000. Is that enough? Why'd it get so quiet in here?

Yeah.

Weird.

Yeah.

What do you think?

I think it, it could be enough.

But does it feel like enough?

No. I'd like to take 30,000 and put it under my mattress. So then that takes us down to about 60,000, you know, or 70,000. And I'd like to go and buy another 30,000 in gold coins and have that in case the economy blows up. Like, I've got all these things in my head to really make me feel comfor completely safe and to travel.

Hold on. Take me out of your head. Because putting money under your mattress and buying $30,000 of gold, I can tell you right now is not going to change the way you feel. Do you believe me?

I can see that. I feel like, yes, I guess so. I guess because it's, it's, it's. I feel like to me, it's more diversified. And then I feel like, okay, if.

One area falls, this diver that's up here, diversify. You are diversified. You have cash, you have investments, you have real estate. You're diversified.

Yeah.

Take me out of here and take me here. What would safe feel like.

If we had money left in the account before the next paycheck came?

Oh, why would that feel safe?

Because if that was the case, then I'd feel like we were telling our money where to go instead of our.

Money telling us, you know, it's up here. But when we get to here, it's actually quite simple. It's, I want my husband to trust me, and maybe I want to have the freedom to be able to breathe, to go for a walk, to get my nails done, to not deplete our savings account and take from it every month. Anything else?

I think that's right on.

Isn't this interesting? Natalie could have gone the rest of her life believing that she needed another $50,000 to feel safe. But the way you feel about money is highly uncorrelated with the amount you have in the bank. You heard it yourself. First she said she needed $50,000 to feel safe. I said, you have that. Then she said, minimum. I said, you have three times that. Then she pivoted to, well, I don't want to draw from it. I said, you can actually draw from it for decades. Then she said, I'd like to buy gold and stick cash under a mattress. And then she wanted to talk about diversification. I'm going to say something respectfully here. Natalie didn't even really know what she was saying. This is nothing against Natalie personally, but we as humans are natural storytellers. We really think we know what is going to make us feel a certain way. Of course, in our culture, especially in the west, we are individualistic. We believe we are in control of ourselves, but we are also storytellers. Our minds are what's called adaptive. If something doesn't make sense, we will naturally create a story that to make it make sense. That's what children do when you hear them talking to their toys, trying to make sense of the world. But guess what? Adults do it, too. Natalie genuinely believes that she needs all kinds of financial instruments in order to feel safe. She was sitting there talking about diversification, but none of that is actually true. It's like me saying, excuse me, my car is on fire. I think I need to create a spreadsheet comparing alternative options for a new car that I might buy. But I definitely want to factor in depreciation. No, I need a fire extinguisher. And sometimes you need somebody to help you understand what you really need. What Natalie needs is to know that her husband trusts her and she needs to be able to go and buy something nice every once in a while without worry.

Point of life is to enjoy. Right? The point of I want to create a legacy of something for my posterity. Something that allows my kids and their kids and their kids, you know, the opportunity to enjoy life. And, and, and money allows the life to be achievable because it's a tool. It's not. I don't need. My goal is to make $10 million. That's not my goal. My goal is to live a selfish and selfish life by impacting communities local and abroad. That's my burning why. Right. That's what I want to do. I want to go with my kids on summer break when they're out of college and go somewhere and like build a house in Mexico. Like these are like events and episodes. Like we've kind of backed off of Christmas gifts under the tree because we want to go and have an experience. We took the kids to Maui, dear. Was that last year or 2020 we went to Maui, a part of our vacation there. We went and did service for an hour, two hours at this woman's house. Because I called a local church, I'm like, hey, who in your congregation needs help? And so we went to some random woman's house, motor grass, picked her yard, she ordered pizza, we hung out. Never met the woman in our life, but we left. It was a great experience. That's what I want to, I, that's what we want to teach our kids. That's what we want them to have it. And you know, and we, we learned that lesson because we went to Thailand and we saw a family of 12 living in a 10 by 10 corrugated metal building. You know, there's, there's so many things that our kids have been exposed to, like money's not the end all. And we live in Orange county where it's very easy for high school kids to drive their parents Tesla or their, their kid, their dad's Raptor to high school. We get it. Yeah, but that's not what we're trying to do.

So many things I love about what you just said. You know, you have a personal vision. You've clearly thought about it. That's powerful. That's leadership. I mean, what you did on vacation is amazing. Just that alone, I hope inspires every single person who's listening and watching this to realize that their vacations can have even more of layers to it than just eating and seeing things. I think that's incredible. I also recognize when you said that We've backed off of Christmas gifts because we want to spend more on other things. Totally aligns with my philosophy. Spend extravagantly on the things you love. Cut cost mercilessly on the things you don't. What if I were to talk to your kids right now and I were to ask them, what lessons have you learned about money from your parents? What would they say?

To invest it.

To invest it.

Okay, what else?

That's a really good question. I hope not to fear it.

I know that the kids have heard Travis and I talk about different ways of spending or investing, and they know that we have difference of opinions on some of it.

How do they know that we involve.

Them in some of it?

Okay, good.

You know, ask them how they feel about it or what they.

Wow.

Very advanced. That's very impressive. Most people don't even talk about money and to involve their kids. Whoa, that's great.

I know that they've said on occasion, like, hey, are we poor?

Oh, wow.

Why can't we, why can't we go do that? Why don't we have. Right. And, and, and that might be reinforced by me because, you know, we, we have. We are surrounded by seven and eight digit earners, and the. When they find out that their friends are going here and they're like, hey, can we go do that? I'm like, no, we can't afford to do that. And, and as a father, as a provider of the family, like, that is like, that's, that's far worse than ever. Getting an Amazon text message, like, touches me to the very, like, core of a man. Right. And provider and a patriarch of, like, you should never have to say that. And so that is like, that is one of my daily drivers. So that you don't have to say that to your kids.

Well, your, Your youngest is 11 years old. Right. I mean, they're leaving soon enough.

Yeah.

And would you say that you've taught them good values?

Yes.

Would you say that you've taught them how to make their way in the world? Yes. Okay. So I don't think they need seven figures because they will become financially independent. I have no doubt about that. You're going to start them off young. You're already teaching them about cash flow. Great. I just think it would be a tragedy if they end up pursuing the very thing that you both do not want to teach them, which is the blind pursuit of money, without realizing that your rich life is actually lived along the journey, not at the destination itself.

There's so much truth to that. You know, we teach Them about enjoying the journey and so many other things, but we're really not living it right now.

You know, I think that my struggle with, with that is where does, where does the grind stop and where does the enjoyment begin, right? And I'm not talking about enjoying the little things, the ice cream or the dinner after something, right? I'm not talking about that. But I'm saying like we know, like we have our cash flow amount we want to have each month, preferably from real estate, because it's now it's me don't have to wait till I'm 59 and a half day to in, to withdraw. And while that has a monetary amount, once we get to the monetary amount, like we're good. Like in my opinion, I don't need to keep, it's not, it's not a number of doors, it's not a seven digit number that I need to get to. It's just like, hey, my finances are this much. If I can make that much with the real estate cash flow, then, then the paper assets, the pension, the retirement, all that stuff is just all gravy, right? All gravy. And then the gravy becomes the, the rich life.

Let me ask it a different way. You asked a really great question. When does the grind stop? What a fantastic question. If you have been grinding your whole life and it has gotten you to this, where you're very successful, it's not just a intellectual question, it is part of you. So let me ask you, if I were in the military and I were to say to you, when does the training stop and the competence start? What would your answer be?

Those are training never stops, ever.

So nobody's going to stop the grind from you. It's imp. I can't take it out of you. I cannot extract it. What I can do is to help you add on another layer to your identity. And that would be enjoyment, the rich life, using it now while continuing to grind. And it may turn out over time that one layer becomes a little bit larger than the other. I actually hope that, that you can, you know, add that layer on at this point in your life. But the fact is you're never gonna turn that grind off. It's you. And that's okay. You're picking up clues, your financial friend, these numbers, your pension. And it's starting to dawn on you that, oh my God, I did it. But like, what now? One does not come after the other. They, they are beautifully intertwined. If I can share one message with you, it's that I want you to live your rich life today and tomorrow. You and I already intuitively understand that some things must be done at the same time. Like if you're cooking, you have to add in peppers and onions and garlic. Ah, God, I don't even know what this analogy is, where it's going. Let's take kids. Let's take kids. As spoken by a non parent. Listen, you don't first teach your kids how to read and then later teach them how to be a good person. You do it all at the same time. Yes, it's hard. That's how it's supposed to be. We intuitively understand this, but when it comes to money, we stop listening to our intuition and we develop magical thinking. The kind that says first I'll invest, later I'll enjoy it. Wrong. You might get sick. Your partner or your family might get sick. You'll definitely never develop the muscle of living a rich life until you're in your 60s or 70s. And by then, for most people, it's too late. I'm not telling you anything revolutionary here. What I am asking you to do is to connect your money habits with the other parts of life where you intuitively understand that you have to do them today, live your rich life today, and live an even richer life tomorrow. This is important. 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 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, and 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/ramit w, I s, p r flow AI ramit or click the link in the description below. Have you ever met somebody who tries to fix everything with duct tape? We know these people. They try to fix the bumper on their car. They use it to hold their wallet together. They patch a hole in their winter jacket and I actually don't mind. It's very creative for a while, but it is a temporary solution. It's like a band aid that doesn't really fix the underlying problem. And we see the same thing happening with your business. You can try to patch together a bunch of apps, but it's only going to be a temporary fix. To take your business to the next level, you need to address the problem at the source, often using an all in one platform like NetSuite. NetSuite is the number one AI cloud ERP trusted by over 43,000 businesses. It simplifies your business into a single platform. Your financials, inventory, commerce, HR and CRM, all of it. Plus it uses an AI built system to automate your routines, deliver actionable insights and help you cut costs. We with confidence. Whether your company earns millions or even hundreds of millions, NetSuite helps you stay ahead of the pack. If I'd had a system like this back when I was building iwt, it would have been amazing. Right now get their free business guide demystifying AI at netsuite.com that guide is free to you at netsuite.com Ramit netsuite.com Ramit Talk about the next few years because you've got this big income jump that'll be coming from the pension. You've got these cash flow properties, kids going out of the household whether or not you help them with college, the kids are going to be leaving the household at some point. Three years from now, that income jumps up. You could wait. It would be very typical to grind and then wait and you go, ah, okay, we really made it. Now we got the properties, maybe we acquired another one, we got the pension and this and that. And I think if I left you alone and we stopped this call right now, you would do that and you would do it very successfully. Fair? Fair. Okay, here's my question for you. Can we change that trajectory? You're gonna get that pension three years from now. One way or another, it's gonna happen. What would it look like if you were to actually love the journey from here until then? I'm talking about both of you. Natalie, let's start with you. What would it look like, financially speaking, if you were to love the next three years instead of merely Be okay.

Yeah. I think it would look like making money available to create the memories before the people we want to make the memories with are gone.

Those are your kids.

Yeah.

Okay. I love that.

I think. Learning to communicate better with Travis about our common goal as to what. What. What are we doing? What is the purpose?

Why?

What are we spending? What do we want us. You know, I just think that there's a lack of detailed communication that we're missing.

Okay. Those two would be good. What about for you, personally? Just.

You probably have my nails done.

Thank you.

I. I would schedule time to. To do the things that I love and fill the rest in with all the things that I need to do.

How much time per week for myself?

I think I should have at least a couple hours a day.

A couple hours a day. Okay.

All right.

10 hours a week. Okay. And a couple hours a day. Let's just take. Let's say a Monday. A Monday. What would those couple hours be?

I would love to make time for myself to do something enjoyable, whether it is a beach walk or discovering a new hike or sitting in silence in the backyard. I love silence. I love just listening to the world. And. And I don't do that.

It's a beautiful vision. You two are clearly very aligned in so many parts of life. It's just this money thing that's gotten a little loose. I totally get it, but it is so clear that you're actually both generally pointing the same direction. Love having this conversation because we can tweak a few things, change the way you look at the world and money, and it just brings you like a magnet. Two magnets coming together as they should. It's really a beautiful illustration of what money can do. Part of the inability for the two of you to talk about money. And, Natalie, for you to not feel like you're failing every single week and to have to preemptively call your husband and say, hey, I just bought something for Amazon. Don't freak out that that's a structural issue. It doesn't mean you're bad people. It just means that the structure you've set up is not serving you. It's actually reducing you down to a series of tactical maneuvers. One person orders something. Natalie, you order something with the best intentions in mind. But then you have to call him. He's already got this existential dread in his chest, and both of you are just like, ah. And by the way, the funniest part is this is all over $20. I'm like, huh? That's what the system is accomplishing. It's actually making you dream smaller. So let's change that. What do you think the problem is here?

I think, I think it's kind of what Natalie brought up is that we, we need to reduce our amount we invest. Maybe that's, that's, that is a, a course of action. I may not be the only one, but it is, it is worth mentioning.

Very good. I love, I love that, Travis. Let's put them all out on the table, no matter how crazy, and then we can decide. Yes, you can reduce your investments, which are currently 29% of take home. Very impressive. Absolutely. Okay. That's one thing you could do. Your savings are 14% of take home. Again, let's. For everybody listening, they're going, how is this guy telling them to consider reducing their investments? Let's not forget you have a pension in three years that's going to pay you 50% of your income. And you've got seven income producing properties. So your financial situation is a little different than other people's. We got to take that into account. You know, it sometimes blows people's minds to hear that you can over save or you can over invest. And it's true, it's relatively rare in our culture, but it's a real problem for some people. And the truth is there is virtually nothing that caters to people in this scenario. What I'm really trying to teach you through this podcast is that most of society teaches you a one dimensional view of money. Save, save, save, invest, invest, invest. But once you understand money, it has nuance. There's an art and a science to it. There's a rhythm to it. There are rules, and sometimes you can even break those rules. Let me give you a few examples. There are times where you should invest aggressively, but there are other times where you can ease off the gas, like the first year of having kids. Or in Travis and Natalie's case, when you have more than enough and $20 purchases are causing relationship problems. You know, the advanced level of personal finance is not investing in private equity and venture capital. It's knowing how and when to, to vary the basic fundamentals of money to suit your needs today. All right, what are the other potential strategies? Reduce the investments, reduce the savings goals. What else?

We could take some of the net income from our income properties and offset our income. We could, sorry, increase our income from the rental properties.

Hold on, let me get this straight. You can take this very profitable business you've created, buying seven properties, being very disciplined, and you can actually use the Money to make your household run more smoothly. What do you think?

Say it ain't so.

Sounds like a pretty good idea to me. I actually think that, that those three things right there, those levers are your key levers. When I looked at your conscious spending plan, the first thing that jumped out to me was that your gross monthly income was 10k and your net monthly income was 4700. I now understand that you, you really should probably deduct your real estate costs and move them to fixed costs and all that stuff. But the point is when I look at, you know, having a family of six, it's tough on $7,000. It's tough. It's just very tough. Especially then I find out you live in Southern California. All that stuff is tough. So if you didn't have the pension, the real estate, we'd be having a very different type of conversation. Right? We'd be seriously looking at the grocery bill. But the fact that you've got basically this secret treasure over here, to me the obvious answer is to start using it.

There is a method to why we are investing the way or at least while we have been and doesn't say that we're too rigid and not expanding those options.

We want to actually make today magical and enjoyable. That's the purpose of money.

Yeah, I think it sounds wonderful.

It would feel good to just leave the house every day to go to work and knowing that we're our not only is our bank account growing, but we're growing closer together with I would.

Love to plan our future in a positive way together and I'm more excited about it now than I ever have been.

Ditto.

Here's what Natalie and Travis sent me in a follow up quote. Our biggest takeaway from the call was that Ramit actually asked us to invest less. Build the skill of spending money meaningfully together and family give trust by not asking about spending. What surprised us most was that we did not recognize there was a structure problem. We can grind and enjoy symbiotically. We also updated our csp. The biggest changes we made were number one did not add any new income to investing. Number two, we moved our insurance to only renters insurance. The business pays all our other insurance payments. Number three added 15% to miscellaneous on our fixed costs. Number four added savings goals for vacation and gifts. Natalie went and got her nails done the day after the call. Here's the calendar block she created for herself. Every night meditate and gratitude journal before bed Monday 8:30 to 10 workout lunch with friends at noon family trip to tide pools Tuesday 8:30 to 10 workout date night with Travis Wednesday beach walk 8:30 to 10 Thursday 8:30 to 10 workout Friday 8:30 to 10 workout nail appointment at 11 well Travis and Natalie, fantastic work. Thank you so much for appearing on this podcast and sharing your story with us. For everybody listening, I have three ways that you can help me and also get help for yourself. The first one this is strictly for me. Go on Apple Podcasts and rate and review this podcast. It helps a lot and I appreciate every time you leave a review. Second, you can watch this episode in full on YouTube. Just go there, search for my name and you will see the body language and the facial expressions of Natalie and Travis and all of our guests. And number three, you can design your rich life on your own. You can get help with my book or you can get the most help directly from me in my money coaching program. Go to iwt.com money coaching join a community of hundreds of other people as well as me. I do a live call every single month where I will answer your questions. That's iwt.com moneycoaching 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 finances.