“Crypto, MLMs—I keep falling for get-rich-quick schemes”

If you keep doing this, you'll just be stuck here forever. We're not hoping for the next big thing to come around the corner. There's no secret money coming in. This is it.

We see the fire.

What happens if you change? Nothing.

I will be working till I die. And what's worse is she'll be working till she dies as well.

You said, looking at the numbers, I feel rich. How do you reconcile that?

I don't know. Wanted to create a life where I can, you know, provide for my wife and kids, give them a better life than what I've had. We shouldn't be in this type of position. I'm failing. I feel like I've gotten us into.

This, and I do want to live bigger. You know, it's hard to put into words, but, you know, like, at the end of every week, I'm just kind of like, is this it?

Welcome to part two with David and Halima. They initially approached me wondering if. If he could retire early. And Halima felt disconnected about money. At the end of our conversation last week, we discovered they're in $500,000 of debt. They're in the middle of a renovation that has no end in sight. They have credit card debt. They have a timeshare. And they finally started to realize what a situation they are in. Today. We are dropping right back into the heat of that conversation, and I want to urge you to stick with us because this conversation takes a lot of turns. You know what? You don't need some dude coming on a video and telling you that you're spending too much on Topo Chico, Get a life. Okay? What I'm going to give you instead this Saturday is actual numbers from three real people, their actual spending, how much they make, their debt, and where their money is going. And then I'm going to tell you what I would do if I were them. You and I don't need more tips. What we need is to see real numbers. And you can get it. This Saturday, January 6th, at iwt.com podcastnewsletter let's get to David and Halima, Part 2. You two spend a lot of money on fun stuff. Like the way that you talk about spending is a couple that makes $350,000, three vacations a year, multiple weekend trips, a new car, et cetera, renovations. I know you make a lot of money, but you don't make that much money. So I'm confused, because you could see these numbers. These are very large numbers. And yet the conversation for most of our conversation today was oh, you know, how do, how do I retire early and, you know, I compete against my partner because I want to make $2,000 more. Do we not ignore the fire happening in the relationship? Halima, what did you think when you put these numbers out here?

Honestly, it seemed like a lot of debt, but when I saw that percentage in the 70s, I honestly thought it was going to be higher for the fixed costs. We're not where we need to be, but we're not at like a hundred percent.

You're probably at 85 to 90%. If you were to see another couple in exactly this situation, how would you describe the characteristic that you see? How would you assess what's going on? This is a helpful little trick. Sometimes the reality of a couple situation is too close. So I ask, what would you do for someone else in a similar situation? And I've found that couples are extremely savvy. Their responses are usually 100% correct.

They're spending too much money on fixed costs.

Yeah.

They need to get serious about the debt. Tackle that as fast as possible.

I agree.

Why did this couple get into this situation in the first place?

Being compulsive.

Are you compulsive?

Yes. Yes. She said in the beginning of the call.

Yeah. Are you getting help for that?

I mean, we both see a therapist, so probably need to give her a call.

I think so. I think that would be a really good idea. And I think that some of the clues that you might be able to speak to your therapist about would be the timeshare and the renovations. Halima, how would you assess a couple if you were speaking to them? They were in the same situation. What would you say is going on?

That they're not managing their finances well. They're not realizing what they're doing. That they're spending more than they're making.

Right. They did not even know that they need help. Are they communicating well?

Probably not.

Well, what's the dynamic between the couples?

He is the one that's handling most of it and she is kind of going with the flow.

Yeah. She delegates it and she shuts down and she just figures it'll be okay. But the irony is that you were in that situation before.

Yeah.

So you worked on yourself. You told me you went through a lot of changes in self development. This one has proven really difficult for you, Right. Why?

Because it doesn't make sense to me.

Okay, that's fair enough. Why? What would it take for it to make sense? Like when you started driving, it probably didn't make sense to you.

Take More control. Not be so passive.

You know, usually when I speak to somebody in this situation, I have to spend a lot more time on helping them understand the stakes of what's happening here. But the thing is, Halima, I don't think I need to do that with you. Because you went through something that was worse, financially speaking, than almost anyone who I've spoken to on this show. Secret foreclosed house, ex husband who left abruptly. You've been through it. What I want to know is what is stopping you from taking control now?

I have David to rely on.

And David represents what the man of the house, which in your cultural background is supposed to do what?

Support the family.

Right. Provide. Take care of the family. Even though your previous man of the house did not do that, in fact, did the opposite. That cultural belief is so deep that you're just back on that train. And, David, you play a part in this as well. David, what do you tell Halima when it comes to money?

Tell her we're fine. Things are looking good. One thing that I need to start, like, working on, so I need to get on top of the disability rating from the VA because I've sustained injuries like when I was in Iraq, but I know in state of New Jersey, if you have a 100% disability rating, you don't pay property taxes.

So I hope you take care of that, and I hope that you're able to get that. But, David, that is just one more example of you looking for some secret around the corner. Do you see that you naturally are drawn towards some secret that's going to solve all the problems? Catalog it for me. What were they starting from when you were a teenager?

Boxing. Being a thief.

Mm.

I would steal bikes as well and resell them the mlms timeshare. Timeshare.

It goes on and on. We could spend another half an hour digging into all of them. Credit cards, one upon the other. You told my colleague that you had an idea. You said, I want to take our car back loan balance and transfer it to the balance transfer on our credit card. That will give us 0%, and then we can do that every year and not have to pay interest on our car loan. You remember that?

Yes.

I mean, you're talking about this stuff as of a week ago. How is it that you've listened to so much of my material, which is focused on long term, low cost, no gimmicks, and then everything you do with your money is centered around get rich quick and schemes and gimmicks? I don't know.

I mean, doing, you know, step by step. I'm doing stuff that I'm reading in the book. But I guess that's something that's kind of been ingrained in me.

I had to get honest here. So David and Halima understood the stakes of what was going on until now. They had a vague feeling that things weren't right. But please remember that he came on this podcast to ask if he could retire early. At this point, they are losing money every single month. The primary reason that that they don't feel the pain is that their credit card payments are temporarily giving them zero percent interest. But the minute that that finishes, they will be financially decimated. And I think now their eyes are open. This is where the real work begins. We'll be right back. Now back to David and Halima. Right now, you have $11,000 in investments. That's not a lot. Especially at your age and especially with your income of $200,000 a year. Your savings are $62,000. What's really interesting to me is that you have a kid's savings account of $22,600. Why?

So I'll chime in with that. And I went through that part of my life. I did have a savings account for both my children, and that was also taken from us. So when I pretty much, you know, because I had to, I had to file bankruptcy and move back in with my mom and start my life all over again, I vowed to create the savings account for the kids. And ever since then, I've just been kind of saving, you know, the two savings accounts for the kids.

Two, meaning they each have 11,000?

Yes.

Okay. Isn't it fascinating that you were able to create such a specific mission and execute on it at a very high level when it came to your kids?

Yes.

How come you didn't delegate that to somebody else?

Because I only trusted myself with that.

Well, then trust yourself. For this money, I would take that $22,000, and I would use it immediately for the credit card debt. If you're able to get control of your finances and potentially grow your income, you can easily save that much down the road. But right now, this is, in my opinion, a 91 1. These credit cards have got to go immediately. So right now you're paying $2,000 a month on your debt. Is that credit cards?

Yes, it's. That's just for the credit cards, and it's not the minimum balance.

Okay, so you're significantly overpaying.

Yes.

Yeah, I mean, we were using that to pay our, you know, our Outings, our bills and everything. We were using that because we were getting points on it.

Please tell me this is a joke. Why? Why do you care about points? How many people come here with $50,000 of credit card debt and they're talking about points? Why are you talking about points?

We're using the points for. For stuff.

But for the outings and bull para.

For the outings.

And do you realize what's actually going on here? Like your house is on fire and you're talking about accumulating points. Remember on the last episode when I said that you have a very small chance of winning when you go up against multi billion dollar companies? This is the perfect example. Humans are drawn towards free points like moths to a flame. Here we have a couple that is drowning financially and they're sitting here talking about accumulating points that are worth like $0.01 each. Here's what I really want you to hear. This is not the first couple that has said the same thing. Which means there are millions of couples out there in credit card debt thinking that it is still a good idea to use credit cards even though with interest it will cost them two times more, three times more, even 10 times more for their purchases. All because they earn a few points. If you have credit card debt, please stop chasing points. They are not worth tens of thousands of dollars in debt just so you can get a $235 free flight on JetBlue. All right, how do you decide which card you're paying towards whichever one is.

Due for the zero percent to be over. Like for example, that Quicksilver one. We paid it down because next month it's gonna hit all that interest is gonna hit. All right, so it's a 0% interest card. And yeah, the other ones are also 0% interest.

All right, here's the deal. Pay them off aggressively. But I just have to tell you something. Sometimes it's helpful to hear someone from the outside say something like this. All right, I'm gonna tell you this. At $192,000 of income, you should not be playing games like this. No way. Leaving a balance of $64 and 23 cents because you don't have the money for it. And then rolling over to another credit card and always having to stay one step ahead. This is not a way to live. It's not normal.

That one we are paying off.

I don't think you're hearing my message. What did I just say?

To not play those games, to just pay it off.

I'm saying the entire Game you're playing is the wrong game to be playing. Right.

Understood.

I think it's probably time to write a new chapter for yourself. And you probably need to be really strict because when you deviate, you end up in a really bad place. If you keep doing this, you'll just be stuck here forever. That's the bottom line. Especially because you have two kids. That's it. Second marriage. Both of you have gone through financial stress. Huge financial stress. And you're making huge, huge, life altering decisions. Again, we're not hoping for the next big thing to come around the corner. There's no secret money coming in. This is it.

Yes.

All right. David, how do you feel before I move on? You look a little down.

I am.

What's going through your head?

Feel like I'm not, not going to be providing as much as I'd like for my wife and kids.

What are you not providing now?

I'd like to provide more trips, more weekend getaways and stuff, but it's not realistic.

And when you provided those things, what did you actually provide for them?

Memories.

Yeah, true. Those. You, you were providing that. What else were you providing? What else were you giving them?

Something I didn't have.

This is poignant. I've seen this with many dads. They want to provide for their family. They want to give their kids everything they didn't have. But they don't realize that by giving them everything, they are not teaching their family how to say no. They're not teaching their kids how to say no. They are creating a huge problem that will only show up later. Also, by the way, people who say I want to give my kids everything I didn't have are also acting a bit selfish. The idea is that they get to be the hero by saying yes to everything. Yeah, we can go on vacation. Yeah, I'll figure out how to deal with the credit cards. Yeah. Halima, it's going to be fine. David becomes the hero. But that's not a real hero. A real hero sets boundaries. A real hero talks about money, makes it a regular part of a family's discussion. A real hero teaches their family how to make decisions and incorporates them into the decision making process. Because they can't know everything and they certainly cannot say yes to everything. Now at this point in the process, it is really easy to get down, to feel depressed. David and Halima are facing the realization of what their actions have done and also realizing how hard it's going to be to get out of this. So I wanted to nip that in the bud and I wanted to ask them what would they get if they made all these changes? What's the purpose of it all?

Yeah, it's for the security of the family and that we're on the same page. And that when I feel like the numbers don't add up and I, you know, I feel like we're spending more than we're making, I need you to stop telling me that we're okay, that everything's going to be fine, and for us to be realistic with the numbers.

Yeah.

Be more conscious about being compulsive.

Not.

Becomes pulsive, and call me out when I'm being compulsive. We see the fire.

What is it? Describe it for me. What happens if you change? Nothing.

That's just gonna keep accumulating and I will be working till I die. And what's worse is she'll be working till she dies as well.

Definitely true. What else?

Kids are gonna be going in the same path as us, and I definitely want them to be better off than we are.

What lessons did you learn from your mom about money?

We didn't really talk much about money.

So who taught you about money?

I kind of learned it myself. Right.

And as you told me at the beginning of our conversation, money makes you feel, what?

Comfortable. But it also, I mean, like, I want to be comfortable with money, but it makes me nervous and I don't understand it.

Yeah, you feel scared. You feel overwhelmed. Do you talk to your daughter about money?

Not really. No.

Do you see any connection between the generations? What is it?

We don't talk about money. It's just there.

It's just there. You're going to be taken care of. And then we'll leave you to fend for yourself and figure it out. You want that for your daughter?

No.

All right.

What changes do you want to make.

To create a better plan that we stick to, that we're realistic with and we have to. Like you said, we have to be disciplined with it.

You ever say no to them? Like with their behavior?

Yeah.

All right. We've gotten better at that.

Oh, that's code for no. All right. What happens to kids who are raised never being told no? Any experience with that? Yep.

We've already had a conversation with our seven year old today.

Oh, okay. Today. And so what happens when kids are never told no?

They're very bratty.

Correct. And what happens when adults are never told no? Yeah. Holes.

Entitled.

Entitled. Maybe ignorant of how the real world works. You can provide in so many different ways beyond having to give Them an entitled blank check. What do you say? Yeah, different way to think about it.

Okay.

It's really easy to say, yes, you're the hero. Everyone goes, oh, he's got it. You need to be a different type of hero. And you too, Halima. The one where your kids look at you and say, wow, they really made a turnaround with their finances. I remember they used to be stressed, and then they sat down with us and they talked about what we were going to do, and they always had us excited. They didn't let us do everything, but they showed us how money works. Wouldn't that be an amazing story?

And I do want to live bigger, you know, I. It's. It's hard to put into words, but, you know, like, at the end of every week, I'm just kind of like, is this it?

You know, tell me about that.

Like, is. Is. Is. Is this it in terms of, you know, the house and getting ready for the work week and making sure there's groceries in the fridge and making sure that we have our meals planned for the day and, you know, like, I want more.

Is this it? This is such a common phrase that I hear from people. It's something that is so real. It's like, we go to work, we save our money, we go to the grocery store, we do all these things, and then we go, is this it? I'm going to be doing this for the rest of my life. That's why I get so angry when people tell me that Target is their rich life. Because often they're not even asking that question. Is this it? Can my rich life really be limited to four walls in a retail store where I buy random commodity products that I throw away a week from now? No. There has to be more. But you have to be the one to make the change. Because nobody accidentally lives a rich life. It's intentional, always. And what that means is you have to get honest about how you treat money. And you have to learn about money so that you can understand cause and effect. For example, how buying a $10,000 sofa affects your dreams of an early retirement. We'll be right back after this. Let's get back to the show. So what I really want for the two of you is a vision, not a series of transactions. So I'm going to put the numbers up on screen. I'd like for you to tell me what you would like to change. Here's your fixed cost at 85%. Where do you want to begin?

Spend less on the miscellaneous. Amazon.

How can't you Say we're going to spend less. How are you going to change your habits? Why'd it get so quiet in here?

Honestly, I don't know.

What do you get on Amazon, Halima?

Toys for the kids, Gifts. I feel like when I'm down, I usually just go on Amazon and buy a bunch of stuff because it makes me feel better.

And do you know why you're down? Have you been able to kind of note that?

It's kind of like what I said before. Like, is this it?

Yeah, it's like a Friday night or a Sunday evening. I bet if you were to track it, you could see some patterns. Well, Halima, I totally understand that. Is this it? Okay, let me go get my dopamine Rush. At least I'll order this. I know it will be here tomorrow. It's going to feel good. Give it to the kids. They're going to smile. Everybody hugs. And it buys you a couple of days of feeling good. Have you ever known that?

No.

How long has it been going on for?

Since we bought the house.

Because of the renovation. Think it traces back to that.

I mean, the renovation? Yeah. Everything with the house.

Okay, so first off, thank you for being so honest. It's a great topic to bring up with your therapist. A great topic because life is always going to have some element of difficulty to it. We can't wish that it's always going to be easy. It's not. What instead we want to do is try to build the skills to handle it. So if you're feeling a certain way on a Sunday evening, therapist will work with you on some skills on how to deal with that. Okay. As for the renovation, well, shall we talk about that?

No.

I already told her that once we're done with the basement, no more renovations until we actually save up for the next project.

I agree with that.

Okay. Because frankly, you can't afford renovations. Had you come to me before you started, I would have said, no way. There's no, you have no money.

So.

Wrap it up, Tom. And I would not spend any more money on it. The fact that you're even saying it's going to the end of the year still makes me nervous because that's several thousand more dollars that needs to be going towards credit cards. So what if I challenge you to just stop right now? Could you?

I mean, yes, but I know I'm going to get backlash from my family.

Halima, this is actually a really interesting moment. Is that the primary reason that you both plan to continue the renovation?

Yeah.

This really shows the power of culture. Your house is on fire. You're losing money every single month. You have 30. You have tens of thousands of dollars of credit card debt, car loans, and then hundreds of thousands in mortgage debt. And you're planning to still continue spending thousands of dollars more that you do not have because you're afraid of a conversation with your family. Alima, when I say it like that, what.

What do you think I mean?

It's true.

Okay, so what do you want to do about it?

I need to put my foot down.

It's amazing to me that we all fancy ourselves rational and logical with money. But when you get to the root of it, we almost always use simple emotions to make huge decisions. Here we have a renovation that's costed them literally tens of thousands of dollars more than they planned. But because they're afraid to have a single difficult conversation, they are planning to just sail on with it, keep going with the renovation. And here's the truth. If it's not the renovation, it's going to be something else. That is why this is a skill that they have to learn. The skill of setting boundaries and having a difficult conversation. You want to practice right now?

Sure.

All right. I can be her family or, David, you can be her family. Who wants to play the role?

I know exactly how her family responds.

Let's do it. All right, Halima, go ahead. And is this conversation going to be with your dad? Yeah, go ahead.

So, Dad, I know you're. You're here and you want to help out, but we're going to put a pause on fixing the basement.

Why?

Because we don't have the money right now, and we need to put that money into paying off our debt.

I'll pay for it, and you pay me back.

No. Why not? I'm a grown adult. And it's enough that I'm getting help from mommy and daddy all the time. I need to do this, and you need to trust me to let me do this. When I need your help, I will ask you. But right now, we're putting applause on renovations.

Okay, now with your mom.

Hold on, hold on. That was awesome.

Thank you.

Damn. Round of applause. That was very impressive.

Her dad is not the issue.

Okay, well, we'll get to the mom in a second. But, Halima, several things you did that were so cool. Okay, I just want to call them. I don't want to take them for granted. I was impressed you came out of the gate, dad. This is what we're doing. And then you were very clear. No beating around the bush. Very Blunt, we don't have money. We need to put it towards our debt. And then when dad came back with an alternative, which was basically code for just take on more debt, the last thing you need is more debt. And you nailed it. And so I love Halima that you said, no, we have decided we are going to do this. Nobody can argue with we as a married couple. You are stronger together than you are as individuals. That's the beauty of marriage.

So, damn.

I just have to say, that was so good. Keep that energy up, okay? And, you know, you can throw in the little like, I love you, dad. That's okay. But fantastic work. All right, now, mom, go ahead.

So the next time you come over and you see that we haven't fixed anything in the house, I don't want to hear about why things haven't gotten done in the house. David and I have agreed that we're putting a pause with fixing the house because right now we want to put our energy and our finances to debt. And I need you to respect that.

You're still going to hear what I have to say. I don't like the way my grandchildren are living or the way you're living. You need to improve that.

And when the time is right, we will improve that. But the condition of the house is fine. We have a roof over ahead. We have running water. There's food on the table. We're fine.

I don't think this is acceptable. You need to find a way to get this done.

Why?

No, no, no, no, no, no. Stop. I'm stepping in.

That was first of all, would not stop.

I know. Okay, I got to give another round of applause to David. David, who knew you were such an actor?

It's just stressing me out just thinking about her Mom.

Maybe it's time to create a concrete vision and slowly start to quiet all the other noise outside. Okay? Because unless your parents are going to.