“He put $1M into a risky investment…Will we lose it all?”

We've invested the majority of the money from the house into an oil operation.

You invested one million into one fracking operation?

Several different fracking operations. I feel like the system is rigged. Right, yeah.

Against you.

With all the IRAs and 401ks and mutual funds and advisors.

No, no, not that.

Taxes.

The oil game is rigged against you.

No, see, I don't see it, though. I see it like the deck is stacked against you. And every now and again you get like, a perfect hand and you go big with it. And that's where I'm at, actually. She has told me I should get a job probably 10 times. And she reminds me about every other week that I'm underemployed. You're a smart guy. You should be out there making more money.

It can't wrap my brain around why he doesn't get a job. Like, it's really hard for me to understand that. I just want money saved. I want enough to cover everything every month and a little bit of extras. He wants the moon and the stars and all the things in between.

Welcome to part two of my conversation with Sandra and Brad. Sandra's 46. Brad is 48, and they've been fighting about money for almost 25 years. Brad has even contemplated divorce. She agonizes over spending their money every month. She keeps spreadsheet after spreadsheet. He used to earn $800,000 a year, but then their income dropped. Unfortunately, their spending did not. And they recently realized that the investments they'd been making for about 25 years were only getting them about 3%, and they were being charged crazy fees. As a result, Brad has taken their life savings, about a million bucks and invested it into an oil operation. I just discovered that at the end of our conversation last week. And so far, that investment has been paying out. But Sandra is extremely worried about their finances. You're going to have a chance for me to analyze your conscious spending plan, and I can keep you anonymous if you like. So here's what you do. Download the conscious spending plan for free@iwt.com CSP fill it out and email it to cspwt.com you may be anonymously selected to have your income and spending analyzed by me in an upcoming newsletter. I'll tell you what I see, and I'll give you some personal recommendations on what I would do if I were in your situation. Of course, you can read my thoughts if you're signed up for my newsletter@iwt.com podcastnewsletter so again, here are the steps Download the CSP for free@iwt.com CSP fill it out and email it to cspwt.com and make sure you're signed up for the newsletter@iwt.com podcastnewsletter because I'm going to be breaking down the most interesting examples that I get. What you're going to hear right now is Sandra discussing a deep need for safety and Brad feeling like he's been forced to make decision after decision to placate her.

I never wanted to sell our house and that was a really hard decision to make because this is something I don't think was on the application when we first got married. Within four years we bought 23 rental units.

What?

Because we read rich dad, poor dad and we wanted to be real estate investors and we.

Oh hold on, hold on. Well what, how many? You must own six or seven thousand units by now because all you have to do is buy a few units and, and then cash flow em and then you just buy more and then they just print money. It's free, right?

Yeah. So free. We only had enough money to buy really old beat up ones and we're not fix it people. And so it didn't go well. Brad had some health challenges and so when we got to having 23 we had some issues come up and we sold them all within about six months. We intended to keep them like long term and Brad got Bell's palsy and it was a really, really hard time for us and we had two little kids and it just was too much and so we sold them and bought a just a regular single family home and moved into it and it was really peaceful and it was a nice change but I think I've always looked back and kind of wish we'd kept at least a couple of the properties and so when we had just our one home left, he's wanting to sell the one that we still have that has appreciated so much. I just really didn't want to. I, I felt very attached to keeping it and keeping this house.

Do you know why you felt attached to it?

It felt safe to me. Felt like we'd have a place to go back to. We didn't own oh very much on it. It just felt like would secure, felt very secure to have this house.

And would you say it's fair to characterize your desire with money primarily as safety?

100% yes. Safety, security. I just want money saved. I want enough to cover everything every month and a little bit of extras.

And then what do you think?

Brad's is he wants the moon and the stars and all the things in between.

Yeah. Okay.

So I've kind of had a couple of thoughts through the last 25 years rumbling around my head, but it's starting to like clarify for me. Maybe a pattern that's happening here. Sandra's desire for safety and security are 10 out of 10. The only way to really satisfy that safety and security is with a lot of money. And that's been proven out over a relationship together. The only time where there hasn't been like this constant dread or fear or horribleizing our financial situation is when there's a ton of money which may lead to some intense desperate acts. I. E. 23 rental units, oil commission based jobs, event businesses, etc in what might be a foolish attempt, but an attempt nonetheless to satisfy safety and security.

Brad, that was as deep as it gets. Is that the first time that you've made that realization?

It's the first down. I wrote it down in that much clarity.

One thing I really applaud you for, beyond making the connection, is that you also identified some of your own behavior as risk seeking. I love that you made those connections. 23 rental properties, commission based jobs, and then oil rigs. All three have a very common thread through them. I love that you did that and that's impressive self awareness. Sandra, zooming out and reflecting. What do you hear from Brad?

I hear that he believes that he's doing these things for me and not for him. I hear that he's up against something that is really challenging. That it's how can he ever make enough money to make everything peaceful and happy for me? And that it's kind of this losing battle that he takes on things that are probably the word you use was risky because he's trying to seek that, you know, magic bullet that's going to just make it all work.

Okay, you two want to say anything to each other? I definitely want to ask you more questions, Sandra, but I don't want to get in the way of the two of you. This seems like a very important moment for the two of you.

And I agree it's important, but it feels like a powder keg. If we start peeling back layers, it's going to get. It's going to go dark pretty quick.

Would you agree with that, Sandra?

I think it could, but I also think that it is, it is just pretty awesome that you've spent the majority of your life now trying to do something that makes me happy. I think that's really sweet. I think it shows that you really Love me and you love our family, and you just really do want to just take care of us, and that's awesome. I like that. Because sometimes I think that there's a different motivation, but I like that motivation.

I like when you two are connective like this. You work with a therapist.

We have. Off and on. We don't have one right now.

Would you be open to seeing one?

I think we should always.

Yeah.

Is there room in the budget.

Trust me. That I can find room for that. Trust me. So, Sandra, I wanted to hear what you think about the oil investment.

I didn't want to do it for a really long time. I think I just was tired. I was tired of not having enough. And I was working two jobs, and he was working two jobs, and it was just really, really hard. And his friend's been doing the investment for a while, so, you know, when he wanted to do it, honestly, I kind of felt like I was more. I won't stop you. But I don't support it, if that makes sense. But in a way, because I didn't say no, I feel like I did agree. Right.

Is that the kind of thing where it's like, I'm not gonna say no, but when it ends up disastrously, then I'm gonna tell you, I told you so.

Yeah, kinda. Which isn't very nice to hear. But I also decided that mentally, if we lost all of the money, that it would be okay. It was the only way that I could be, like, okay putting the money in was to get to a place where I knew that basically we could be kissing a million dollars away.

How would you be okay? Just so I know.

Just stoically just figure it out the same way like my mom always figured it out when all the money was gone all the time. Because I didn't know how else to make that decision and, like, be supportive of it, because I felt very nervous and still do feel nervous about it.

I'm nervous.

I know.

Putting 100% of a family's investments into one private deal. Yeah, that's terrifying.

My feelings about it were, any dividends that come back are not to be touched or spent until everything is returned.

Why?

I didn't want it to turn around and put it back into something else because it was like, I wanted to make sure we got our money back if we could.

Well, hold on. Explain that to me. So, like, you put $1 million in there, you're getting paid, let's just say 20k a month.

Yeah.

So you're going. I don't want to use any of this money, I'm going to just let it sit in this account because I want to get all of my money back. What does that mean?

Until the initial investment was returned, it didn't feel like I wanted to spend it. It felt like, I don't know, retaking your gambling and then you're taking all your winnings and you keep on gambling with them. I'm like, let's just get what we can out of it in case the whole thing implodes.

That doesn't make sense to me because you're telling me that every month you're stressed, for the last several months you've been in the red, but meanwhile you have 20k a month coming in from this oil investment. And because of the way you feel about it, you're not allowing yourself to use it.

We have to use it. We don't have any money to pay the bills if we don't use it.

So isn't that the worst of all worlds? You are, in your own mind, betraying yourself, using the money, and then you feel horrible about it. And meanwhile, Brad's like, what are you talking about? I got 20k a month coming in from this oil thing. And he's like, what's the problem?

Yeah, it's exactly what's going on. The oil is so different to me because it's everything that we accumulated and worked for our whole lives. And I feel like we blew so much when we did have a lot of money. And now everything that we have, that we've worked for, for our whole lives is all resting in one basket.

And I agree with that.

Freaks me out.

I agree. I'm freaked out by it. I want to talk about that. I agree. However, when we're Talking about the 20k per month, okay, you're going like, all of that makes me feel bad. So I don't want to engage with it at all. Like, leave it alone. Put it over there. I hope it all turns into a hundred percent. And then like, oops, I gotta take from that to pay our bills. That's what you're feeling, right?

Yeah. And every month we have to take from it. And so it. It leaves me feeling very. Just freaked out about it all. I don't see a logical reason why we don't earn enough money from earned income as opposed to investment income, to just pay our monthly expenses.

Should we talk about that? Should we look at the numbers?

I don't know. Brad, do you have anything else you want to say? I get scared to look at the numbers.

How was it going through this CSP together?

It was fine until we actually started.

Okay, tell me more.

Well, we had it open. We had it planned on the calendar. We had a limited window because I was going to be gone and he was going to be gone. So we had to get it done in that window. And that we could not agree on our income. And so it kind of just went downhill from there.

That's like one of the top numbers.

I know.

Couldn't agree on your income. Okay. Because you have a variable income.

We have variable income. We didn't know what we should include, what we shouldn't include. We went through several of the things. Like we kept going through the list and I had my little spreadsheet open, but like he was getting madder and madder. And then. I can't remember, Brad, you got up and left, but I don't remember what the final nail was that precipitated him leaving. But it.

Hold on. I want to know, Brad, what happened?

Okay, so we were going through the line items. We started with the income number.

And this is the first number you started with? Yeah.

Well, this is an important one. And it goes back to our. I forget the name that. The word that Sandra used. Like, like the fair. The word fair. What was the adjective that you had for fair?

I don't know. Equitable. Equal? Yeah.

Equitable equals. So I am not contributing at a high level at this point. Point. Okay. And when. When she says that she feels like we should be able to have our income, meet our expenses, I interpret that as saying that. Brad, you need to get your crap together and get a full time job. You need to stop playing around. It's. It's time for you to go and get some middle management software sales position so that we can meet that delta and have a little bit of extra. So. So that'll happen.

Did she ever say any of that?

Actually, she has told me I should get a job probably 10 times. And she reminds me about every other week that I'm underemployed.

Underemployed? What does that mean?

I'm not making enough money. You're a smart guy. You should be out there making more money.

Sandra, how often you say that?

Probably every time we talk about money, it can't wrap my brain around why he doesn't get a job. Like, it's really hard for me to understand that. And so I think it just is a frustration.

And, and so what do you get.

Out of that being right?

Yeah.

Cause I don't want to work A full time job either. And I haven't enjoyed it. And it's not always awesome, but I do it every day. So it just is kind of. I just don't understand it. I. I can't seem to see it from his point of view with that. But why he's. He won't do that.

Do you need to understand it?

No, but it feels unfair.

Okay, well, that's different. But the understanding part, there's a lot of things you don't understand and probably never going to. What do you need from Brad.

From a emotional point of view or a financial point of view?

Let's say financial.

I need him to bring home $5,500 a month.

Okay. All right. That is something that we could have a discussion about. And I think it could probably go a lot healthier than ever. Using the word underemployed, would you agree?

Yes. But he is a very smart man and he is very talented and he could do something more than what he's doing. So I think that's why underemployed comes in.

What if he had said, you're under parenting the four kids, how do you think you would have responded?

I know I'm a boss mom. I'd probably just give him a little swat, so. But I probably would be offended by it. It would definitely hurt my feelings.

Probably when. Especially when times are tough.

Yeah.

It's not always easy when everything's going wrong. And he said, why don't you just take control of this? You're a smart woman. You're under parenting them. You're not living up to what I need from you. How do you think you would have taken that?

Yeah. I don't know how long we would have stayed together if he talked like that.

Honestly, this is awful to hear. I hear sarcasm, disdain, and insult after insult. I've been married for five years. There are a lot of couples that have been married for a lot longer. But it is hard for me to hear or even imagine a married couple that would talk to each other like this. The conscious spending plan that I give to couples is in many ways a testing ground to see how they come together to talk about money and literally get on the same page. I'm not even particularly concerned if their numbers are right or wrong. Honestly, the first time people do the csp, most of their numbers are wrong, and that's okay. What I'm looking for is how they collaborated to write down a few basic numbers from their life. And to hear Sandra and Brad describe their experience is ominous. I'M going to share their numbers with you. If you'd like to download the CSP template to plug in your numbers, you can get it for free@iwt.com CSP Brad and Sandra's numbers, their assets are 80,000. Their investments are 1 $1,027,000,000, savings $50,000 and debt is $85,000 for a total net worth of $1.31,000,000. Brad, talk to me about your income. What is your gross household monthly income?

So we started going through the line items and the way that she had defined income was we could only include a fixed income on a monthly basis. Okay. So I am, I am grateful in my heart that she has been working for the last year and a half and it is saved us, it has kept the ship afloat. And I agree to some degree I'm underemployed.

Right.

And I start making moves for investments to try to bridge that gap. So that, but that's, that's another conversation that there's, there's another side gig that I do. I'm a professional announcer for running event company all over the country and I love it. And I make about $14,000 a year. Now. Our conversation was, well, what did we do? Or she, she left it off of the initial document and I suggested that that should be something that we should account for. But she said you didn't actually get paid in this particular month because it's usually a race season, cyclical contractor type payment scenario. So she decided that that was not income that we could use, so that, that was difficult.

I don't think I was intending to start a fight with it. And we were writing notes on the side to ask questions and so of you. And so one of them was the income question. I didn't really know how to manage that, so I just wanted it to be accurate.

All right, so just so we know that's $113,000 per year. Did either of you know that that's how much you make as a household?

I don't think I knew that exact number because I knew how much I made. But with Brad being so fluctuating, I wasn't sure what he made. So that's actually like, not horrible.

I basically am in the middle of a complete career change. So at some point after mortgages dried up, Sandra came to me and suggested that perhaps you should look at becoming a school teacher. And this was in like July or August of 2023. So just several months ago, I thought becoming a teacher would be fantastic. I. I could, I could Enjoy entrepreneurial opportunities and mountains in the summertime. And then I could provide a steady income. It's the exact opposite. Sandra said that it would be something that she appreciated and, and they've got a good retirement. I've got 15 years from four or 17 years, from however many years between 48 and 65, to continue to build like a real solid retirement type of a scenario. I moved heaven and earth to become a schoolteacher from July until September. And the turns out you have to have licenses to become a schoolteacher. And it's a complicated process. I found a nice scenario teaching community college finance classes. I'll be teaching accounting down the road, but it was only part time. But I thought this would be. And it was, it wasn't my first move and I probably wouldn't have been pursuing this unless Sandra had been like, listen, this is something that I think you should pursue. And I thought if, if this is like her wish for me, then perhaps I won't be as underemployed as per se. The part time scenario, just not making a lot of money at this point. So it did with, with our $113,000 per year. We're still on the low side. We're still not making as much fixed income as we do monthly expense, but we are heading in the right direction. It is something that's just really difficult to, like, wrap my arms around, how upset Sandra is with the whole scenarios like, this is something that you asked me to do. You actually whispered in my ear one night, I'm the, the Brad whisperer. Because she suggested. And so it's, it's.

So what do you want, Brad? Do you want her to understand? Do you want to make more money? What is it that you want?

I, I think my first goal is just to have her satisfied so that she can have peace and so she can be happy and so that she will not be on my back.

All right, well, let's see if we can get there. But I think there's probably bigger things at play here. I think that you have narrowed your vision down to what do I need to do to not get those text messages once a month? Because that will mean she's satisfied. And trust me, that's not the issue here. This is a common pattern where one partner, usually the husband, will do something to, quote, get my wife off my back. We've heard it. I hate it. And when it comes to money, this often involves reassuring her, we're going to be fine, we're going to be fine. Although, as we've Heard in multiple conversations on this podcast, partners are often looking for certainty, not reassurance. Those are two separate things. Second, they will finally engage with money, only to stop after a few weeks. And this is common with avoiders, especially ones in debt. Or in this case, Brad will take on a job so she will, quote, not be on his back. When he has previously repeatedly described working a 9 to 5 like losing at life. I also noticed that they get hung up on how to handle variable income. This is something that paralyzes a huge amount of couples, and to me, this is very confusing. It's like someone who wants to be a good parent, but they're totally paralyzed with whether they should buy original or Honey Nut Cheerios. They're obsessed with the decision. They agonize over it, but it honestly takes five minutes to figure out and move on. Choosing your cereal or how to handle variable income is honestly nothing in the grand scheme of creating a rich life. I've literally discussed how to handle variable income on this podcast multiple times in my book, which nobody on this podcast ever reads, and in my money coaching program. The point is, they use that as an excuse not to move forward, when in reality, it's the tiniest of speed bumps. And by using that as an excuse, they get to avoid doing the real, substantial, often hard work. Let's go ahead and look at your fixed costs. All right, what's this number here, Sandra?

99%.

All right, so you're spending 99% of your household income on your fixed costs.

Yeah.

Okay, so that's why you're stressed out about money every single week now. Okay, I understand that, Brad. You understand that?

Yes.

All right, we'll come to the line items in a minute. Let's just keep going. Your investments are at 238%. That's definitely not true. This number, which is $20,500, that's your monthly average distribution from the oil rig. That needs to count as income.

Sandra, Brad's really happy right now.

What about you? I don't. It's income.

Yes, I know. It is incoming money. I get that.

So what's. Is what's. Stop. What's holding you back here?

It's just the money coming in, and it should be no different than the other money coming in, but it. It's like. It's like eating and taking a little bit of struggles and trials and work and all the things we did for 25 years and spending it on toilet paper. That's how it feels to me.

What's the alternative?

Not having toilet Paper. It's not a very good alternative.

So it is literally income. That's dividend income. Now, do I think that that oil investment is a good idea?

No.

Hell no. But do you need to do something with $20,000 a month for the time period that it's coming in? Yeah. You need to use that money properly. So let's separate the two things. First of all, the money's coming in. All right? Secondly, what are you spending your money on? That's a separate issue. We'll tackle that as well.

Okay.

But we've got to admit and acknowledge that you've got roughly $20,000 a month or more coming in every month. Let's do something with that while. While the going is good. Okay. Okay. All right, so where do we put this? It's got to go up to income.

Mm.

Brad, is this you making $2966 a month?

Yes.

All right, so let's just say 3000 for easy math. Your oil number is 20,500. Where does that go? That's gross.

Yes.

Okay, look, this is not a competition of who makes what. You two are married. Just because I put it under Brad is irrelevant. We could just as well put it under Sandra. I just want to clarify that because I don't want this to become any type of dynamic. Everybody okay with that? Sure. All right. And if you needed to, you could add another category if that makes you feel comfortable. It's not the point. At 23,000. What. What do you net off of that? I'm gonna just put it at 16,000. Why? Who the hell knows? Is it wrong? It's definitely wrong. This number is a hundred percent wrong. However. Are you gonna get into trouble when you discover the actual number? Probably not. Probably not. Got it?

Yeah.

All right. 16,000. Okay, that significantly changes. What the. This changes everything. At least we can breathe. Look what just happened? Sandra, What. What did the number change from 99%. What is your fixed cost now?

40%.

What are we. What am I even doing here? The source of your stress on a weekly basis has been this number. What's this number now? 40% instead of 99%. That problem is fixed, at least for the time being. Yeah, I don't think this number is going to last forever. Okay. But at least for now, we've put that fire out. Okay? Are you with me, Sandra?

Yes. I totally can see that. Yeah.

Brad, are you with me? Yes. All right, now. Oh, back to the good old days. What's that song by Steve Winwood? Back in the high life again. Here we are. Oh, boy. We got Brad and Sandra netting $12,000 a month back in the high life again. What are you guys going to buy with $12,000 a month?

Nothing. You're not buying stuff.

Nothing. Not at all. Not for a family of six.

Oh, well, things that we need, but.

No $25,000 bedroom sets. Now, I'll tell you what. At least now we've got something to work with in the short term. Agreed?

Agreed.

Let's talk about that. And then we'll talk about what to do about this oil thing and, and all the money coming in. How about that?

Okay.

I've seen this phenomenon happen where one partner simply denies the reality of their financial situation. We previously had on guests who didn't like how they had made money and they simply refused to acknowledge it. That's happening here. Sandra hates the oil investment. It worries her. Which, by the way, remember, she agreed to. And her not being able to separate the investment itself from the dividends it's paying. The reality is they're making $20,000 a month in dividends. You have to acknowledge that. You have to account for that. And when we did on the conscious spending plan, it changed everything. The real issue is not the 20k a month. The real issue is that they have so many layers of distrust and contempt that they can't really communicate about this one thing. Let's keep going. So Your rent is $3,000 a month. Your insurance is $774. Fine. Life insurance, 100. Okay, all right. You have term life insurance for four kids, is that it?

No, that's just my term and Brad's term. Mine's a lot more. Mine's like 90amonth and his is like 38.

All right, good. Well, at least you don't have some larded up whole life insurance policy. Good.

No, we decided to not go down that road years ago when it was sold to us. So.

How nice. Just for everyone watching. I love that. Here we have parents of four children.

Four.

And their term life insurance policy is only $132 per month. What does that tell you? Freaks out there paying $800 a month for some cash value. Stop it. All right, Your car payment is a total of $1,600 a month. What the hell's going on here?

Well, there's car and gas. So car is 30.

Oh, I know how to add. Why are you paying that much?

Because when we were making a lot with loans, I bought a Telluride.

How nice.

Yeah, it's very nice. My Honda Odyssey that we'd driven for 12 years. Literally went up in smoke. And that was the car that we bought to replace it.

How much did this thing cost?

It was $54,000.

Hold on, I'm having a flashback. Just a moment. Deja vu. Somebody recently saying, it's not like we spend a lot of money on anything. Who is that person?

But if you just spend money on a few big things over 25 years, I don't think that counts as spending money on a lot of things. Like I am wearing clothes that I have had since my daughter was born and she's 15. So like, I just am not into those things.

So here's my point. My point is not that you couldn't afford the Telluride. Clearly you could if you're making 80,000amonth. Okay, fine. Right. I have no problem with it at all. What I'm challenging you is that the identity you have created for yourself around money might not be fully accurate with reality. And on this call, both of you have shared your identities around money a lot. What you will do and what you won't do. Have you noticed it?

Not until you've pointed it out.

Why don't you tell me what your identity is, Sandra?

First, mine is that I am frugal and careful and not extravagant.

Wow. All very charitable descriptions of yourself. Like all frugalistas. I'm selective and I don't need anything really fancy. Okay, it might be true. In the course of 25 years, it might be true. Might there be another way to describe it?

A little bit on the cheap side with stuff I don't care about.

Okay, what else is it? Is it.

It's a little martyrish.

Huh? You're a martyr. If we can't do this, I'm not going to do. I wear my 15 year old sweater. Look at me. And also, what about the thing about like 50 categories and then sending angry comments to your husband? What's that?

Control. Massive wanting to just control it all and have it all. Just manage just so.

Right.

And you thrive off of worrying. Because if you're not worrying, then what are you doing?

I don't know. I'm not very effective or contributing. That's my contribution, is worrying about it.

Is there a way to be good at money and not worry?

I believe there is. I just have not figured it all the way out yet.

Okay, so do you see what I'm saying about your identity?

Yeah.

It's totally constructed. You don't have to worry about all these things if you don't want you get something out of it, it's now become automatic and habitual. But you're making $29,000 a month currently, even though the number is temporary. Don't you think when you were young, you thought, oh, when I make $30,000 a month, that I'll stop worrying about money?

I don't think I ever thought I could make that much in month. So, yeah, I mean, I. It. It was much less. We celebrated my first raise when I went from $19,000 to $23,000 a year. We were so excited.

Do you think it's time to get rid of your old identity?

Yeah, it would be nice.

I'm trying to take this step by step. There's an obvious elephant in the room, which is investing their entire life savings in a private oil investment. But I can't jump right to that. It's too big. So here was my approach. First, I wanted to hear how they handled the csp, which was not great, but we talked about it. Then it was to help Sandra understand that $20,000 a month of dividends is indeed income. Then it was to help Sandra recognize that she tells herself a lot of stories which are clouding her view of their finances. But we definitely have more work to do. We'll be back after this. Back to Sandra and Brett. Watch as their responses take us in wildly different directions. Let's keep looking at these numbers here. So assuming we're working with the money that's coming in every month, I want.

To max everything out, meaning if we do an hsa, put as much in as we possibly can. Put as much as we can into the 401k. But there's a limit to how much Brad wants me to invest every month. So I don't want to take all of the money and put it in that.

Why?

Because I feel like we need to agree on it.

Okay. Talk about it.

Yeah.

This is the crux of the conversation. In terms of your CSP, you have 90% of your money in one incredibly risky investment. Now it's paying money out. Right. Now. What is your approach in like, one sentence each. Brad, what's yours?

Reinvest the returns.

Okay. And Sandra, what's yours?

Reinvest it in long term investments.

Okay. I understand both of your perspectives. How are you going to come to a resolution?

Something that I proposed that when we were watching.

Talk to each other.

Okay. So, Brad, what I proposed about splitting the return money that was coming from the dividends, and then we each get to decide how we invest those portions. That's what I proposed to solve some of this angst that we were having. So once the money is taken care of for the difference between, you know, so that we paid our expenses for the month, then what's left?

We're dividing that, the 401k and the IRA and the, the long term scenarios, I think there's definitely a place for it. There's another investment that I'm still in the middle of researching, which is purchasing another business. I am more likely to look at business opportunities. But I do very much appreciate index funds because Warren Buffett said so.

But if Warren Buffett said so, do you really respect or is that sarcastic?

No, that was respect. So that's what sent me down this rat hole of figuring out the whole financial advisor mess and just feeling quite depressed about where our funds have been.

Sorry to cut in just a question on that because I think it affects everything else. You had a bad experience with your investments over the last 20 years or so. I think probably to be fair, you weren't paying attention to it. You delegated it to a financial advisor. You never really learned how this stuff works. And I totally respect that. You have a bad taste in your mouth about it. Do you think that your past is negatively affecting your future?

Yes. So index funds, based on the new information that we've been learning and studying and researching, I think there's definitely a good place. Is 401k maxing out a 400, 100, 401k. Isn't it like 23,000 per year? Yeah, and I'm on board to max them out. Does that mean with an index fund? I would say probably yes. So do I have an answer at this point? No, because I'm super confused. And literally, like my financial advice to myself is do what Warren Buffett told his wife to do when he dies. And he said he hopes it in the s and P500.

Wait, do you want to do that? Because that's not what you're doing right now. You're doing the opposite of that. Just talk to me about this. What do you want to do with $12,796 per month? How much of that do you want to invest.

In long term savings or long term investments? I would say half of that.

Half. All right, 6,000. Watch. All right, so that's 29%. Okay.

Makes me feel really good. And I think it's a good step to take.

Okay, why? Do you have any quantitative like, or is it just a feeling?

Well, it's just a feeling, but I think it's a Good compromise between the two of us and what we have as our goals. Because if he wants to invest in a business, then that leaves him with half of it to do something with a business. And then half of it is long term.

You're saying 50. 50. And what about the guilt free spending and savings? What about that?

I don't know. You didn't account for. Yeah, I didn't account for that.

So what do you think, Brad? $6,000 putting aside each month invested and that's 29% for your investments. What do you think about that?

That sounds like a good starting point.

Okay, so just so I'm hearing you clearly, you're saying whatever's left after you're covering your fixed costs, you're happy to put that towards investments.

Yeah, Right now I'm hedging it back because we have a little bit of fun. I mean, we got to talk about our rich life at this point.

But all right, let's say, look, let me give you a thousand bucks for you need some money. I'll leave it to you to how much your guilt free spending is. Okay. I actually have very little concern that your way overspending on guilt free spending. Sandra, do you have that number under control?

Yes, we do not really have much guilt free spending going on. Yeah.

Okay. So like I wouldn't mind if you were to say, hey, let's give ourselves just a little bit. I'm talking like two 50, 500amonth. But just as a number. If I had to ballpark it, it would be like 7, 7%, maybe 10. Like maybe. Why? Let me tell you why. I'm going to be very direct in a way that I'm ordinarily not on this when I have conversations, because what you have demonstrated to me, what you've told me in your conversations, 25 years of disagreeing about money is really, really a long time and it's hard to get out of that, especially with the boom and bust habit that you've both gone through. For you to actually meet in a place that, Sandra, you feel safe and you feel like there is some consistency in planning, that's what you need. And Brad, for you to feel respected, that you can be given a goal and then be given free reign to achieve that goal, that's also challenging. The fact that you've invested all this money in one oil thing terrifies me. I would never do it ever. Ever. There's no single investment in my portfolio that represents more than a few percentage points. And even all my individual stocks represent less than 10%. This is the opposite of diversification. I'm happy that you're making money right now, but I strongly suspect that in a matter of months the money's gonna stop or it's gonna dry up and you're gonna hear all kinds of excuses. But these private investments are, they love what they call dumb money. And it's a, it is a bit of a derogatory term. It's the mom and pop investors, typically doctors and dentists. That's how they describe them. And so these Wall street guys come and just take them for everything they're worth. Now, right now, you're getting the money. I hope it continues. I genuinely do. For right now, while the money's coming in, I would aggressively invest that money and in diversified index funds. I'm like, I gotta get it out of this oil thing and into simple low cost funds as quickly as possible. That is me being as direct as possible. I can't tell you what to do with your money, but I can tell you that if I'm looking at it, I'm going, oh my God, I'm taking this money while the going's good. I'm going to invest it aggressively, put it away and secure our future. How does that strike you?

It is very direct. The dumb money struck a chord and my initial reaction is to defend myself and defend the group that we're into. The average investment into this project per individual is closer to 40 and 50 million dollars, for what it's worth. That said, investing it into index funds and repositioning it, I think that was always part of the plan. But we've had a big question mark as to what that next investment looks like. And I hear you loud and clear that diversified index funds, to a degree, we're leaning in that direction.

The point is, if you want to have additional money for alternative investments, I say start a business, get a job, you figure that out. But you can put the Money in your 401k, you're going to max that out. You can max that out like in a month. You're going to eventually end up putting money in a taxable account which you can reach into, but don't. Couple of observations on that lengthy exchange. First of all, kudos to Brad. He was coachable on hearing some of what I had to say. And I appreciate that some of this is not easy to hear. I also want to talk about that phrase I used, dumb money. I hardly ever say anything like that. But this is such an egregious mismanagement of risk that I had to be utterly direct. Nobody wants to be called dumb money. Okay? The phrase itself is pretty crass. But the concept that Ma and PA investor, they are there as marks and to take their money. And for private investments, which far more often than not end up underperforming the s and P500, Wall street is masterful at marketing them as unbeatable. You're going to make tons of money, and people buy into this. This happens in private equity. Even happens for really rich, wealthy, sophisticated investors. But I'm worried about Brad. I'm worried about Brad and Sandra's life savings being put into a single private oil investment. We'll be back after this. Now back to the show. Sandra, what do you think about my comments? Fairly direct comments regarding your financial situation?

I think it's perfect. I want the money somewhere that I know it's going to be there when we need it, when we're older. I think it's a safe gap against ending up in a situation that my parents are in where they don't have that money. And so I feel like it's kind of the best of both worlds as far as, hey, you know, Brad, you got to do this awesome, scary investment. And now we can take the first proceeds from that and put it somewhere safe so that we know we're going to be taken care of and we're not going to be burdening our kids and making them worry that we don't have enough to take care of ourselves. So I feel like it's the best of the options.

Yeah, I'm in total alignment that it needs to be repositioned as quickly as. As possible. And if, if, if. I can't even say it. Locking it, Locking up the whole million. Maybe that's what. Maybe that's what needs to happen.

That's how you build the serious wealth. You got to let it compound. Yeah. Let's take a look at some numbers here. I just want to show you because I think the two of you have pretty ambitious goals. You've tasted what it's like to make a lot of money, and once you taste that, you kind of want to go back. In your case, that was a very difficult lesson to learn because if you taste it and you don't stay at that level, it's quite devastating to come back down. Would you agree?

Definitely. Yeah.

But this is your opportunity right now. You're basically in the same situation and you're getting very lucky, so take advantage of it. Let's take a look at some numbers here for compound interest. How much do you have currently invested in just like index funds and other low, you know, retirement type accounts.

250.

$250 or thousand?

Thousand.

You know, you're talking to a couple with a lot of money when they just throw numbers around. I'm like, are we talking like on your couch or 250. What are we talking about here? All right, $250,000 is currently invested in, like, index funds.

Yes.

All right, Mutual funds.

And you're planning to invest how much per year?

If we did, 29% of the income, Right? Isn't that what we were looking at?

Yep.

Oh, gosh, I'm not good on the spreadsheet.

It was about $5,000 per month, right?

Yeah.

Times 12. $60,000.

About 60 grand.

All right, let's say you, you two, what are you, like, how old? 40? 48.

48, let's say.

All right, let's say 10 years. 58. Just to see. Okay, I just want to show you. And then what interest rate should we assume here? It's definitely not 3.8% per month. What should we assume per year?

Like seven?

Yeah, let's do seven. All right. What do you think this number is going to be?

What? I don't even know. I hope it's really high. I have no idea.

1.3 million. Not bad. All right, let's play it out. Let's just keep going a little bit, huh? This assumes no increase. All right, this is a bit aggressive. 5,000amonth. I hope you can keep that up for 10 years, but that is a really high income. All right, let's do the good and let's do the bad. Let's play it out in all different forms. Let's say that you're able to keep maintaining $5,000 a month investments, right? Which is 60,000 a year. And instead of 10 years, we keep it at 15 years. Same thing. 2.3 million starts to really grow as you go a little bit. 3.5 million after 20 years. Okay, impressive. So first off, right now we are assuming that $20,500 is coming in every single month as an oil dividend. Okay. If that comes in, you've already created a plan where approximately 6,000 of those dollars go into investments. All right? For guilt free spending, it definitely should not be $6,000 a month. You want to just fix this right now? Just do this. I hate homework. Let's just do it right. Right now you have $5,796 left over per month. That's too much to be spending on guilt free spending. Okay, let's get aggressive. Let's. Let's play around. Let's put 4,000 more. Holy. Oh, my God. This is amazing. I just put $4,000 additional in investments. That's 10,000amonth. Now, that's aggressive. What do y' all think?

Aggressive.

Definitely aggressive.

Yeah, I like that. But keep in mind, keep in mind, it's paying $20,000 a month. Doesn't it make sense that half of that should be going to investment hell? If it was me, and if I didn't have all these other expenses and stuff, I would take $20,500, take every last cent, and diversify it into the market. That's what I would do. So the fact that half of this money is being eaten up by other expenses, what does that tell you?

That's the part that I don't like. Yeah. Just tells me that we have not enough regular income. And. Yeah.

Yeah. Just so you know, the two of you look at money totally differently. Brad looks at money as net worth. That is what Brad is concerned with. Brad goes, what are you talking about? We don't have enough money. We have $1.3 million, and we're drawing from that, and it's paying us our. We are millionaires. Okay. Net worth. And there's validity in. I personally look at my financial situation by net worth first. Okay. Sandra is saying, what do I care how much money's locked up in some oil thing? We are losing money every single month. It's in the red, and I'm sitting over here trying to move things around like Tetris, and there's just not enough money. Yeah, both of you can be right, but that doesn't solve anything just because you feel right. That got you 25 years, but that didn't solve your financial problems. In my opinion. I. When you get to a certain level of your finances, net worth starts to become more relevant, more interesting. It's where you focus more of your time on cash flow. You want to keep an eye on it. Right now, it appears like to Brad, he's like, well, that's what we're doing. We got a million bucks. It's paying out a huge amount. What do I care about some tiny amount here or there? It's fine. Sandra says, I don't even count the $20,000 a month. We can't do that. It's real money. We got to count it as income. Okay, but let's also play what happens if this doesn't work out? So let's say you're able to do this for one more year, $300,000 in your principal, and then this oil thing vanishes and you lose it all. It's gone. It's very real possibility. How much money can you contribute now to your investments?

With our current income, none.

Yeah. Zero. All right. And 10 years to grow. 7%. You have $590,000 by the time you're 58 years old. What's the percentage of this actually happening here?

I hope it's low, but I really, I don't even know.

Make it up.

Ballpark like 50%. 50, 50. It could go either way.

Okay, Brad, what do you think?

The worst case scenario?

Yeah.

20%.

That's pretty high. Brad, you can't control what's happening with the oil thing. That ship has sailed. Whatever's going to happen with is going to happen. But now what if the money goes to zero? We need to grapple with that. All right, are you all ready to do this? Yep. Yep. All right, so here we are. I am going to take this number. This is in your gross income and I'm simply going to delete it because I'm going to assume that that money just stopped. All right, so we're back to 2966. I'm not even getting into the fact that net and gross are the same. Whatever. And you're back to 99% fixed cost. These numbers look familiar, right?

Yes. This is what I look at all the time.

There are two things you can control. Number one, you can control what you do with the money when it comes in, which I think we've agreed. You're going to aggressively invest it in diversified funds, whether through a 401k HSA, taxable account, whatever. Speak to your accountant. What's the second thing you can do, Brad and Sandra, for that matter, to mitigate against ending up almost 60 years old with $600,000 in the bank.

Earn more income.

Yeah.

So it looks like creating a part time job into a full time position. Teaching, fully employed. What? 10, 12,000 per month.

Okay, fair enough. Put a pin in that. I'm coming back to you. But I love what you just said. Sandra, what about for you.

Right now? I do work full time. I could probably make more. I like what I'm doing, but I mean, I could probably do something different. I work remote from home and it's a really flexible job. So it's nice with the kids that we do have here at home to be able to take care of them and such. But I mean, I could do something different there. I was working full time at the same position. And then I was doing massage at night and it was very lucrative. And so that's why I was doing it. Because a lot of tourists and city making about a hundred dollars an hour doing massage. It was a pretty good gig, actually make, you know, an extra thousand dollars a week working a couple nights. That's an option. And I have a hide business that I would love to grow, doing ayurvedic health coaching and. But it's something I've kind of dabbled with for years and I've not ever really seen that grow much. So I don't have a lot of confidence in that becoming something that's stable.

So how do you decide out of the two of you what you're going to do about your income? Because right now it's easy to just ignore it. You're like, what do we care? We're making 29,000amonth. Let's just hope that everything goes well. But hope is not a strategy.

That's, I think, the most uncomfortable thing about this whole conversation. When I get stressed about this, I try and figure out all different ways that I can earn more money. And I just don't want it to become my problem to solve the whole thing by myself. And so I don't want to keep on trying to find new ways.

So can. Can you. What would you say in a way that would be connective to Brad and not a jab?

Brad, I think we need to have a. We need to decide together. Here's how much our family needs, how do we want to provide that income. And maybe it's doing a business together, maybe it is something like that, But I think it has to be something we're both comfortable and happy doing and happy with.

So yeah, I think that the full time teaching scenario is still the right path to take. I mean, we don't have a huge delta or a huge difference that we're trying to solve. And I know it makes you very uncomfortable, but it still feels like that's a good way to make this work the best. So the total gross teacher would be 63,000 on year one, which would be 5,250.

Okay.

And then plus we would have another $14,000 for the year for the contractor scenario that I've got. All right, fine.

I added it in. Okay. All right. So here's what I just changed. For everyone listening, instead of Brad's gross income being $3,000, it's now 6,450. They both make the same gross income. They both make the same Net and they're combined gross monthly income is $12,950. All right. Your fixed costs are now 75%. That's high.

Yeah.

And by the way. Oh, we're definitely not. We gotta change all this. Investments needs to go to 000 savings. And then you got a little bit of money left over. So you know, you could put a.

Little bit of savings maybe.

Yeah. You could put like a thousand bucks a month into savings.

I agree.

Yeah. 15. Yeah. And you could put like 500amonth into investments. You'd be doing 7%. Which let me tell you what I see at 7%. Because I typically say, you know, investments 5 to 10%. But of course more is better. Now if you two were 25 years old, I would say like, yeah, 7%. Good. Enjoy taco Tuesday and put 7% in. And as your income increases, you know you're going to compound and all that stuff. But you're 48 years old so the consideration changes. What do you all think about where I'm going with this?

Not enough income.

Yeah, not enough income. And time is getting short to start compounding.

Yep. Totally agree.

I mean, you know what happens if you put $500 a month into at your age? I mean, let's just take a look.

We've got 17 years until we're 65.

All right, let's play that out. I mean, you'd have $987,000. That's not bad. It's not bad. You know, your withdrawal on that. Let's say, let's just even say 4%, $40,000 a year. It's not a lot to live on.

No, that's bad. Definitely not enough. Needs to be like $4 million to be able to comfortably have a nice life at that point.

Yeah. And every year starting right now that you're not contributing a substantial amount to investments becomes harder and harder. You see what I'm saying? I do. Might there be a way that you could look at other options while, you know, still working part time?

Sure. Yeah.

Are you interested in that? You don't sound that interested.

I, I, I, I'm not. I'm not. We, we. Yeah. I'm just not.

What are you gonna do if, if, if, if we're in the worst case scenario, which we are. The oil thing we're talking about.

If the oil thing. If the oil thing died, then I would be, I would be bailing on the teaching scenario and I would be looking for the 10 to $12,000 per year position.

What is that?

It's whatever I could find for 10 to 12,000, I haven't explored yet. I don't know what that would be. But I would say if I'm fully employed, if I'm like making the money I should be making, it would be in that space.

Okay.

It's like a full time middle manager cubicle scenario. So yeah. So yeah, if it goes belly up, then I'm absolutely willing to suck it up and head that direction.

Do you want to teach?

I would love to teach. I've been doing it for the last three months. It's spectacular.

What do you think, Sandra?

I think that he's a great teacher. I think it's a good stable thing for him. I don't think that the income is as high as what he could do. But if the oil continues, I think it's the perfect place for him to be. I think him saying he's willing to do a full time job is really a good step. You know, if he needed to do.

That, I'm happy to get a full time job. I can make that commitment. Sandra. If the oil goes belly up, I will get a full time job.

Hey, I like that. That's good reassurance there.

Just to reiterate once more, let me tell you why we're talking about potentially making more income. Even though their oil investment is currently paying off, it's giving huge returns based on pure math, that's unlikely to continue. Okay. If it were to continue, it'd be one of the best investments in the history of the world. But Sandra is also recognizing that this is a severe risk. This is one individual investment. It could dry up. It could stop paying for whatever reason, regulatory risk and like if this thing goes away, we are sunk. Can we agree that that's how everyone in this conversation feels? Is that fair?

Yeah.

I'm not as dire on that conversation and I appreciate you painting the picture of it. It's doomed to fail at this point. It has been performing fantastic. It's not dumb money. These are 60 million dollar investors that are putting money into this project. We're fortunate enough to be tied into these big investors.

I hope it works.

And so we're paying a doomsday scenario. And I can appreciate that and it's kept me up at night. But I don't believe that that's the likely case scenario. There's some place. And then what if it's best case scenario?

We'll talk about that as well. But Brad, I don't hope that this thing fails. I hope it crushes it. But if it doesn't right now, there's no plan forward and you're out of money in a matter of months. I couldn't run a two person relationship like this, much less a six person household.

Yeah, that's fair.

All right.

Yeah.

So we gotta plan for the best and the worst case scenarios. We talked about worst. We said, look, right now the money's coming in. Invest that aggressively. Okay, what if you make instead of 20,000, what if you make 40,000 next month in dividends? Because that's happened, right? Yeah. We have 40,000 in a month from this oil thing, right, Brad?

Yep.

Here's my suggestion. If you make 40k instead of 20k in a month, literally take all your numbers and double it. Don't mess with it, don't tweak anything. It's all percentage based. That's it. So instead of this thing being 10,000amonth, it's 20,000 in a month for your investments. That's literally it. What is that huge smile on Sandra's face?

Look at that smile. Because I'm like. Because that would be awesome. It'd be really great.

Okay, Brad, do you understand the principle? Just doubling the percentage.

Totally get it. Yep.

All right. Now, Sandra, I want to raise something that Brad brought up which is like, will it be enough?

Yeah.

Are you going to feel good about money if you're executing on this plan?

I'd like to say yes. I don't know if I would feel good, but I think having a plan is very much feels secure to me. Knowing that we're making strides, that we're working towards it, that it's not just counting the Costco membership in that line, but it's count. This money's being set aside every month and we know that it's going to be there for us when we need it. So that I think is very helpful. I don't know if I'll feel like amazing all the time. I don't know. I think that would be silly to think that I would. But I think it would give that layer of we're doing something really good with the dividends from the oil, so I can not worry about them so much now.

And how could you continue to work on the way you feel about money?

Oh, gosh, I don't know. Read your book again and get more coaching on money and spend time really working on my mindset around it.

Of course you can join my coaching program. Yes. All that. Yes. But also your therapist.

Yeah.

Like, where's the money for that?

Oh, that's true. You should probably put that as a language.

Discretionary spending.

Discretionary spending.

Is that instead of the Caribbean, Honestly.

It'S one of the most important things the two of you can spend your money on. And if you want to do it individually, do that too.

Yeah, you're right. That should be spent.

If it doesn't show up on our calendar and in our csp, it's probably not as true as we think. I'll give you an example from my own life, one you might not expect. As I'm talking about generosity, I'm like, no, I'm a hotel guy. I love hotels. Guess what? That shows up big in my spending, and it shows up on my calendar, and it shows up in my csp, and so should anything that's important to you. So if in your relationship with four kids and 25 years of marriage, this relationship is important to you, then it should show up in your spending.

Well said.

I think when you talk about safety, Sandra, that's a word. But had you been able to both have the skills of going deeper on that which you can learn those skills, you can become equipped to do that, then I think Brad would have said, hey, I hear you saying safety. I want you to feel safe. I want to feel safe. Sometimes I'm scared. I want us to both feel safe. Hey, Sandra, what would safety mean to you? And then Sandra would probably say, oh, I don't know. You know, I'd want to have, like, enough that we could comfortably get by. And then Brad would say, like, tell me more. Is there a number? Because sometimes I feel like, gosh, even when they're was a big number, sometimes I worried that that wasn't enough. But then I think maybe we just didn't get specific about what we need from each other. So I'd love to know from you, what does safety look like? Tell me. Let's write it down and I'll try to get there. Have you ever had that conversation?

No. No, we've not.

What do you notice about how different that is than some of the conversations you have had?

A lot more positive and it's a lot more unified, connected. It's like supporting each other instead of being adversarial.

Yeah. What do you notice, Brad?

Yep. Same.

This stuff is hard. If Brad is willing to say. And what I would recommend is you all get a piece of paper and write it down. What are our fears? What are our agreements? And Brad is point blank saying, look, if the oil money stops, I will get a job and I will make X dollars. What a relief. That feels good. And then Sandra is probably going to talk about, here's what I will do more of and here's what I will do less of. And Sandra, I think probably some of that is words like underemployed. It's gotta be off the table.

Yeah.

It's just devastating. There's gotta be some things that are just off limits. And, you know, the texts, the frantic texts. There's probably no reason for that. I mean, I understand the fear. I understand that being frantic is not gonna get you what you want. It's actually gonna be more important for you to connect with Brad. And I would propose you take that big old budget and throw it in the garbage. I would do it theatrically. I would actually print that thing out and be like, look, we're going to have a ceremony and it's going to be called Bye, Bye, Budget. Toss that thing in, light it on fire, have some fun with it. Give each other a high five and start all over. And you're both involved. Skin in the game is going to change the dynamic between the two of you. What do you think?

I love that.

I'd like to give it a shot. Maybe we should do it, like very close to our marital counseling meeting, either right before or right after.

Fantastic. Gosh, it feels like we have some certainty around these things. What do you think?

Yeah, that feels good. Feels really good.

I think we made some progress in this conversation, and I'm thankful to Brad and Sandra for having such a candid, difficult conversation with me and with each other. I also think it was pretty hard. There's so many layers here of resentment and misunderstanding and identities and stories that's difficult to disentangle them. What I appreciated was the honesty about how they both felt and some agreements about what they're going to do with their money. Now. Please listen to their follow ups. First, let's hear from Sandra.

So I would say the biggest surprise is in my call was probably the emphasis that was put on our investments in the oil. I would say my biggest takeaways were that my husband and I are actually more on the same page than we thought. And we've made some really good strides as far as setting up some investments and also creating a really clear vision of what we want together. I think from that call I was able to see that it's important that we both get involved in the money, that we both spend time discussing it and going through it, and that we're more of an active participant and that managing the money does not mean just paying the bills that it's having a bigger vision for what we want for our future. So thanks for your time. It was great to visit with you and thanks so much.

As for Brad, I received an email from Sandra. She wrote Brad will not be sending a follow up video. He felt very attacked on the podcast and does not want to engage further. I'm hoping for the best for Brad and Sandra and again I thank them for coming on and sharing their story.