Reacting to My Subscribers’ Finances

Today I'm going to review the finances of real people. I'm talking about their income, their debt, their spending and I'll tell them exactly what I would do in their situation. Stick around too, because you're actually going to hear follow ups from each of them. Now one thing I want to mention is that a lot of you have left comments saying you want to see people with lower incomes. Listen, I want every diverse financial situation possible so I can highlight it for you. It's really important for me to hear from all people in all different scenarios. So if you would like your finances reviewed, please go to iwt.com submitcsp and submit your finances for a chance for me to look at them in a future video. For now, let's get into it. Starting with conscious spending plan number one. Here's what I know about this person. Claire is 27 years old, lives in Palo Alto, is single and works in education. She asks I live in a Silicon Valley world but do not make a Silicon Valley salary. So I always feel strapped for cash when I buy things. Despite doing well for my age in my early career. Number one, what habits can I change to give me some more breathing room? Number two, I live with a roommate to make housing semi affordable. How much housing can I afford on my own? I've paid off almost all the student loans I'm legally responsible for. But I've agreed to chip in for the loans my parents took out on my behalf for my undergrad. The total is around $55,000. Number three, how do I navigate the student loans in my parents name? Okay, Claire, very interesting scenario here. I can tell you that I have lived in Palo Alto. I know how expensive it is and back then I had roommates. But since I lived there, it's become way more expensive. So I can empathize but. But I can't even imagine how difficult it is for you right now. Let's take a look at your numbers. Assets $5,000, investments $45,000. Okay. Savings $30,000 and debt is $3,200. Wow. Total net worth at age 27, working in education and living in Palo Alto, $76,800. Very impressive. Overall gross monthly income is 6,600 bucks which is $79,200. Okay. Wow. I have to say that's very impressive so far. Net monthly income is 5,100. Fixed costs at 58%. I have to say before I even go on, I'm very impressed at these numbers. We have somebody here making $79,200 which is a good salary. But we have to put it in context. This person lives in Palo Alto, one of the most expensive cities in the country. And this person is not working as, for example, an engineer at Google coming out making $350,000 by the time they're 27 or more. This is very impressive that Claire has a net worth of $76,800 and fixed costs of 58%. Really good. Let's take a look. Housing costs are at 26%. This is a great decision to rent and have a roommate. Fantastic. Transportation is at 176. Debt payments at $136. Okay. Groceries at 300. Does this person get free lunch? Claire, do you get free lunch? Do you work at a tech company and they give you free lunch? Because otherwise, how the hell are you doing 300 bucks a month? That's incredibly impressive. Phone is at 35 bucks. Subscriptions at 18. And interestingly, miscellaneous is at $386. I actually don't believe that. $386. Let me tell you why. In my CSP, the template that I built for you, which you can get for free@iwt.com CSP we automatically add 15% to your fixed costs because most people forget about tons of stuff. And in my experience of working with lots of people's finances, 15% is that magic number of what they tend to forget. Candidly, I bet you could take that number down safely to 100 bucks. Honestly, it could probably go down to 50 of unknown expenses. And it would be quite accurate for Claire. I think Claire's basically sandbagging here. And good for her. That's the way you should do it. You should always be conservative. But her number is actually way lower. In fact, let me show you what it is. Instead of 386, I'm going to make it 100. Watch what happens to her fixed costs. Look at that. It drops to 52%. Very impressive. I'm going to leave it at 100 because that still has a little bit of margin for something she forgot, etc. But there's no way she's spending 386 bucks a month. All right, investments are at 11%. Oh, my God, this is great. So post tax, I don't know if she's doing any pre tax investing, but post tax already she's doing 583 bucks a month. That's fantastic. Savings are at 10%. She is doing extra for her debt. $200 a month. Okay, fine. And her emergency fund is $300 a month. Let's Take a look at her emergency fund. So if her fixed costs are 2,600 bucks, she has way more than she needs for an emergency fund. So that's another 300 bucks a month that she could put towards investing or paying off debt, et cetera. We can talk about that. Her guilt free spending's at 26%. Okay, how do I feel about this? Typically, I recommend that your guilt free spending number be between 20 to 35%. The nuance is that sometimes I'll talk to somebody who has like $45,000 of credit card debt and they have 30% in guilt free spending. I'm like, in what universe do you think you should be having the same percentage of guilt free spending as somebody who has zero debt? In their cases, I typically recommend they take their number actually below 20%. Basically, they have to acknowledge, hey, we racked up a bunch of credit card debt. We can't afford to have as much guilt free spending. Sure, we can have a little bit. We should have one dinner per month or something like that, but we need to be overwhelmingly focused on paying off our credit card debt. Well, for Claire, she's not in credit card debt, okay? She's quite responsible with her money. She has student loan debt, but she already has a plan. She's paying extra off for that debt, and she's actually taken on some of the debt that her parents took out on her behalf and she's paying towards that. Overall, I think she's in a great financial situation, but I do think she has some margin to play with. For example, maybe she might take that guilt free spending number down instead of an extra $200 a month towards her debt. Maybe she makes it 400. But that extra $200 per month or $2,400 per year can make a profound impact on debt, especially if it's high interest debt, which I would define as anything above roughly 6 or 7%. So I'm not saying, Claire, you have to do it, but I'm saying you have options, which is absolutely fantastic. And for everybody wondering, how does somebody making $79,000 in Palo Alto, California, have all these options? Well, there's a couple things that we notice here. Number one, her housing costs are not especially low. They're 26%. For Palo Alto, they're really low. But in general, that's not the key. The key is she does not have massive transportation costs. Right. She doesn't have a huge car payment. Notice that she does have debt, but it's manageable. It's $136 she's paying a little bit extra. Her groceries are crazy low. That one is a mystery to me. I am assuming she gets free lunch and or dinner at work, but maybe there's something else going on. And aside from that, she has very, very minimal fixed costs. Her phone is 35 bucks, her subscriptions are $18. Okay, what she is doing instead with her money, she's investing aggressively, which is great. She actually could invest more if she wanted to, but that's sort of beside the point. She's saving a lot, maybe too much because she doesn't need to put that money in her emergency fund right now. She's full with that and she's spending some of it. So what would I do? Well, let me go back and look at what she said she wants to do. She said, what habits can I change to give me some more breathing room? And I live with a roommate to make housing semi affordable. How much housing can I afford on my own? Damn, Claire, these are good questions. Let's talk about it. So what habits can I change to give me some more breathing room? I'm going to talk about that. But you might find that those are actually the opposite of how much you can afford for your own housing. Okay, Those two are kind of a push and pull. Because if you want more breathing room, that is the opposite of spending more on housing. Unless you consider your own housing to be your breathing room. Let's talk about it. So first of all, let's start with the habits. Claire, your habits are great. You're saving, you're investing, you have your guilt free spending, you're accounting for fixed costs. In fact, over accounting for fixed costs you didn't even think about. I don't have any feedback on your habits. I think you're doing a great job. I propose that you're probably logging into your accounts too much. I just get the feeling from looking at this. I, I propose that you have not really celebrated how far you've come. I think you've been doing an amazing job, Claire. And I would take a second and pat yourself on the back and really celebrate and say, oh my gosh, look at how far I've come. Yes, I still have work to do and yes, I feel like I'm never getting ahead because I'm surrounded by people who earn 3, 4, 5, 10 times more than me. But for me in my situation, I'm doing exceedingly well. That's what I would love to hear from you. In terms of spending. I have no feedback at all on how you're spending Your fixed costs. I think you're doing a phenomenal job. If anything, you would be able to spend a little bit more if it gave you some breathing room. For example, if you want to get an extra subscription to Netflix or HBO or whatever, you can afford that. That's not going to make a material change. If you want to go out to an extra dinner per month, that's not going to make a material change. You feel free to do that. Next up, I would take your emergency fund money, that's $300 a month, and I would reallocate that. That's a lot of money. The question is, what is your priority? If you want to put it towards housing, the way you do this is you create a separate savings or sub savings account. You can even name it and you call it my own apartment. Okay. Every month you're going to transfer 300 bucks into there. And now you start to know exactly when you can afford to make your move. Another option for you would be to simply pay off the debt way faster. If the interest rate on the debt you're paying off to help your parents out is like 2%, I would just stretch that out forever. It's low interest, meaning you could make more investing the difference in the market. On the other hand, some people just hate debt. They don't care how much it's costing them in interest. They just want to pay it off. And so those people, I say, look, as long as you understand the ramifications and the consequences of paying debt off early, if you really want to, it's your money, go ahead. Certainly you could take $300 a month that you're currently putting towards your emergency fund, and you could pay that debt off way faster, probably years faster. I want to run a quick calculation of how much your investments are going to turn into. So you currently have $45,000 in your investments. You're contributing $583 a month post tax. I don't know about your pre tax, so I'm just going to ignore it. Going to let that money grow for 38 years until you're 65 and compound at 7%. Damn. You're on track to have $1.8 million, which is great. It's great at this age, at this income. Great job. But let's just play around a little bit. What do you say? So let's take that 300 bucks that you're currently putting towards an emergency fund and let's instead invest it. So instead of you investing $6,996, which is what you're currently doing. You. You're going to put $300 a month additional towards it, which totals up to every year you're investing. 10,596. If I recalculate, instead of you ending up with $1.8 million, you end up with $2.5 million, all from a single flip of a switch in your conscious spending plan, redirecting the money from savings to investments. And it won't even affect your lifestyle at all. You already have your emergency fund. I don't know. I'm getting excited by this right now. I love it. So many people are writing in asking, hey, can I see people with different incomes? Absolutely. First of all, $79,000 is not a low income. But when we put the context of living in Palo Alto and having all these additional loans that she's taken off of, she certainly has a more challenging situation than somebody I talked to who makes $280,000. So what I love to see is that Claire is so clever in how she's managing her expenses. And even in these expenses, we find margin to play with. Okay, Claire, so here's what I did so far. I took the $300 a month that you were currently putting towards an emergency fund and I instead invested it. Okay, so you're now investing 17% of take home pay or $883 a month. That's a lot. Your savings are at 8%, which is represented by $400 a month extra towards your debt. Now, I don't know if you need to be spending $400 a month. Maybe you run the calculations, depending on the interest rate, you go, hey, I'm going to put an extra 250, but I'm going to take that remaining 150 and spend it on myself. I wouldn't mind. It depends on how aggressive you want to be with your debt. But the key thing I want to mention for you, Claire, this isn't just a sprint to pay off debt. So many people live their lives simply sprinting from one panic to the next when it comes to their money. I think of it so much as a marathon and a marathon along which I want to enjoy the ride. So if it means that by taking an extra hundred and fifty dollars that you would normally put towards your debt, extra, and you instead spend it on a couple of nice dinners every month, something that you allow yourself to celebrate how far you've come and it allows sustainability for the next 25 years, I'm all for it. Claire, your second question was, how much can I Afford on housing. Okay, Claire, you have lots of options. If you decide you don't want to pay anything extra towards your debt, that's $400 a month extra you could put towards housing. If you decide that you don't need $2.5 million right now because your income is going to go up predictably in the next two, three, four years and, and you'll take 80% of what you make in your raise and you'll redirect it towards investments. Then maybe you take 2, 3, 400 bucks from the investments and put it towards housing as well. In other words, I can't give you an exact answer because it depends on so many different variables, but I can tell you you have hundreds and hundreds of dollars extra every single month of margin to play with. So overall, if I were you, I would think, number one, how aggressive do I want to pay off my debt? If you want to pay it off really fast, you can. But my suggestion would be, don't move. Honestly, if you can bear it. And if you feel comfortable in your housing today, you have a great situation, particularly in Palo Alto right now. You are allowing yourself the gift of saving and investing a tremendous amount of money when you move. If you move to a place where you are the only person living there, you're going to incur lots and lots of costs. I don't mind if you do that. But right now you are in a situation where you have the ability to save and invest a lot. And in those rare moments in life, I highly recommend you embrace them. Save and invest aggressively, because someday you will have to move out of having a roommate and you will incur those costs. Better to have gotten all the savings, all the investment and the debt paid off as aggressively as possible. Claire, I'm so impressed with your work. Please keep me updated. I can't wait to see your follow up.

Hi, Ramit, it's Claire from Palo Alto. I want to say thank you so, so much for taking a look at my csp. I think my biggest surprise was just the sense of relief that I felt of having an expert taking a look at my finances. I think particularly as a single person, you don't get the opportunity to bounce your numbers and your habits off of somebody else just, just because of how taboo it is. And so I'm so appreciative of this opportunity. And I think my biggest takeaway was that I do need to trust myself more. I make good habits, I'm conscientious, and I think I can take a step away from the spreadsheets and I can already feel myself stressing less when I make either like a large or unexpected purchase. So I am just so appreciative of your feedback. And to answer your questions, I am investing pre tax. I'm investing about 10% from both my contribution and my employer match. And that total is already reflected in the investment portion of the csp. The interest rate on the student loan in my parents name is about 7% and they're not pressuring me to pay it down quickly, but I would like to pay it off as aggressively as I can without sacrificing my current lifestyle. And in terms of what I'm spending for guilt free spending, it's about like another $300 on dining out each month, which does explain my lower grocery store costs and like another couple hundred on clothing and shopping and another couple hundred on local events and travel. So I really am spending the amount that I listed in my CSP for guilt free spending. And to answer the question, do I feel behind compared to my peers? You know, I don't. I think I have a pretty good awareness of both the habits that I have and the privilege that have brought me in my current financial situation. I do think that my hyper focus on personal finance comes from one just thinking that it's fun. But also I do have bigger goals and I do feel like sometimes that I need to check in and have that sense of control to be able to get to my final destination. You know, I don't want to feel restricted by money.

All right, before we move on to the next conscious spending plan, I'd love it if you could do me a favor, hit that subscribe button and turn on notifications. My team and I put a lot of work into making these videos that you want to see, and I don't want you to miss out on any of them going forward. Conscious spending plan number two. Here's what I know about this person. Pat is 28 years old, lives in New York, is single, and works as a data scientist. Pat's question is, can I retire by age 50? Let's take a look at the CSP. Assets are zero investments, $410,000 savings, $30,000 and zero debt. Wow. Okay, very simple. Total net worth of $440,000. Okay. No assets, no debt. This is common for people who are renters and people who live in high cost of living cities who tend to rent. And also somebody, of course, who doesn't have any debt, like no credit card debt, no student loans. All right, let's take a look Green Gross monthly income is $11,923, which is $143,000 per year. Net income 98k. Fixed costs are at 49%. This person lives in New York, right? Very impressive. Let's take a look at what's going on. Total housing costs are at 23%. What's interesting is their rent is $2,551. It's possible they have roommates or it's possible they live in a, you know, somewhat of a distant location. But overall, they're keeping their housing costs low. They probably have no car. Transportation is $150 a month. One of the benefits of living in a city is you don't necessarily need to own a car. Imagine how much your costs come down if you don't have to own a car. Debt payments at zero, groceries at 320. How come everyone's only paying 300 bucks a month now for groceries? What happened? Pat, whenever we follow up with you, will you please tell us how you are affording $320 a month? Probably, since this person is a data scientist, they work for a tech company and that company provides their lunch and or dinner. Clothes are $75 a month. Phone is $60 a month, subscriptions at 150. And miscellaneous, which this person definitely does not spend, is 15% at $525 a month. There's no way this bull. I'm taking that out right now. 150, I could tell you. So their fixed costs are now 45%. All right. Investments are 33% of net. That's impressive. Post tax retirement, a Roth 401K is $1,958 a month plus an employee stock purchase program at 745amonth. They're currently investing $2,703 post tax and definitely they're doing some pre tax as well. Savings are at 10%. $600 a month for vacations, $50 a month for gifts, 50amonth for an emergency fund, 100amonth for a wedding, and 50amonth for a car. Hold on a second. Okay, this person's 28 years old and they're single. Do you all see what you do? If you read I will teach you to be rich. You save for your wedding before you're even in a relationship. Okay, I don't know if this person's single, single or single dating, AKA not married, but this is exactly what I did. And I know a lot of you think it's freaking weird. Oh, what kind of single person saves for their wedding before they even get engaged. The answer is when. Ramit Sethi and anyone who follows IWT Chapter nine. You know that there are predictable things that most people will go through. So if you're single, like a lot of people are in their 20s, you still know that the odds are you will likely get married at some point. I knew that. I also knew that one day I wanted to have an awesome wedding without having to worry about costs. So I started saving money every single month. I also saved for other predictable expenses that would come my way. Those would be things like an engagement ring, honeymoon, kids, down payment for a house, et cetera, et cetera. In other words, if you get really dialed in, you don't only think about your retirement 40 years from now. You think about the things in between and you start saving for them. And if you save like 10 years out, you don't have to save as much as if it's coming next month. And suddenly you got to find the money from somewhere. This is one of the key distinctions of people who live a rich life versus everybody else. The people who are living a rich life already have looked ahead and they are putting money aside just in case they need it. I want you to do the same. Adapt this advice for your own situation. I'm not saying you have to be able to save for everything that's going to come your way, but identify the main big things that you're very likely to encounter and put some money aside every single month. It will make you so happy when those things come up and you've already got money set aside. This is great work by Pat. I'm very, very much a fan of it. Guilt free spending is only 12%. What? And I. Hold on. And just to go back. Oh man. If I didn't even make the change to the miscellaneous cost, Pat's guilt free spending was 7%. Pat, what the hell? Hold on. Pat lives in New. Pat lives in New York and spending $588 a month on guilt free spending. There's no freaking way I'm gonna fix it this right now. Hell no. First of all, Pat, good job, but also not a good job. Let me, let me fix this stuff, all right? Financially speaking, it's great. You're saving a lot of money. And I'm going to answer your question about can you retire? And all that stuff, but please let me remind you, you're in your late 20s. You gotta think about more than just retiring at 50. I don't want you to be working for the next 22 years. And just looking at the finish line over there, I want you to actually be living a rich life today and a richer life tomorrow. So we're going to make that happen. Your fixed costs are low. I have no comments on that, except that I took your miscellaneous fixed cost spending from 525 down to 150 because you and I both know you're not spending a bunch of money, you're on top of it. Let me look at your emergency fund. You have $30,000. What the hell? You have. You don't need this emergency fund money. No, you don't need $50 a month going to an emergency fund. You already filled up your emergency fund for 10 months, so that's getting zeroed out saving for a wedding. I love it. Like I talked about, you know it's going to happen one day. Maybe not today or tomorrow, but when it happens, phenomenal. You're saving up for a car. Okay, fine. Your guilt free spending is currently at now at 12%. So just by reducing some of the numbers higher up in the CSP, that has flowed down, giving you $1,000 a month to be able to spend going out enjoying New York, et cetera. But let's get to your primary question. Can I afford to retire when I turn 50? Well, let's take a look. You currently have $410,000 in investments. All right, let's plug it in. So we got current principal, $410,000, annual addition $32,436. And it's probably more with pre tax investments. 22 years to grow at 7%, you're going to have $3.5 million. Let's just calculate. So you'll have about $140,000 in income per year. If you want to retire at 50, your income will match your income today. And that includes inflation, by the way. That is because I calculated at 7%, not 10%. Just to show everybody what I mean by that. A lot of times whenever I show these projections, I always get the comments saying like, well, a million dollars won't be worth anything 30 years from now. No, let me show you what I mean. If we just take what Pat is going to have 30 years from now, again, assuming what roughly the last 75 years of the stock market have returned, Pat would actually have $5.8 million. That is the number that Pat will see in Pat's account. However, if we reduce that by 3%. So instead of a 10% return, we take it to 7%. Because inflation, we typically assume will be 33% per year, that $5.8 million actually turns into $3.5 million. So basically, by using 7%, we are simulating inflation. Okay, and is it exact and precise? No. But you can see $3.5 million of purchasing power is what Pat will have, even though the number will be higher in Pat's account. Pat, overall, that's the answer to your question? Yes. However, I think there's a few variables you haven't accounted for. So you're young, your income is already quite good and it's going to go up. That's important to know, which based on your historicals here, you're probably going to take a large part of that and invest it. Therefore, you will have way more than we have currently projected. Because my projection was simply based on you being stagnant for the rest of your career. That's not going to happen. Next up, if you get married, you possibly likely will have dual incomes, which means you can invest even more, again increasing the amount that you're going to have, meaning you will likely be able to retire earlier. I haven't factored in other expenses such as buying a house, having children, being laid off or incapacitated for whatever reason. Those are all things you can take into account, but in general, just you. If it's you solo and you don't even increase your income $0.01 and you don't lose your job, you're on track to be able to retire at 50 if you want to be able to have the same income you have today for safe withdrawal rate. Now, here's another question for you to consider. Would I go that route? No. Hell no. Let me tell you why. You already save very well. I think that's fantastic. I have no comments about that, but I do think that your guilt free spending is low. I think you live in New York. I think you have an opportunity in your 20s and early 30s that you can never buy back. The opportunity to go out with friends, experience new things, and if it costs a few hundred dollars a month extra, you can certainly afford it. So I would think very carefully about not just rushing towards the finish line at age 50, but really what would it take to have a rich life today, a magical set of experiences, and know that I'm confident enough to trust the process that I will be able to retire down the road at 49, 52, etc. In other words, don't only look at the finish line, look at where you are and enjoy the process overall. Pat, great work. I'm very interested to see your follow.

Up I think overall reading Ramit's impressions is very healing for me. I grew up in a very money conscious family. We basically never ate out. My mom was a really impressive couponer and the one thing we did spend money on was travel, minus the food aspect of it. I remember vividly in my early career that my mother called me to question why I'd spent $40 on a meal and I felt such immense shame during that entire conversation. And afterwards, four years ago, I removed myself from the geographical, you know, space my parents were in and I moved to New York City and have since made a very active effort to allow myself to spend money on things that make me happ. And I think that's why hearing these words from Ramit like, really eases my internal fear. My spending habits are so incredibly different than my parents and it's really helpful to have a third party let me know that I'm fine and then I can keep investing in my current life to maximize experiences and my happiness to a greater extent than I currently feel okay with. Just this month I did buy myself a $600 dress and it took me a lot of convincing myself, don't get me wrong, I but it was a huge step for me with my money psychology in general to buy something that I've wanted for so long that makes me very excited to wear. Overall, I feel like I'm getting to live my rich life in terms of prioritizing travel and visiting my friends. And I look forward to getting to expand that rich mindset into other aspects of my life, which I finally feel a little more comfortable doing. As for the grocery question, I do have a Trader Joe's on my block and and I'm wondering if that's probably what allows for the discrepancy and cheaper grocery bill in general because I do purchase the majority of my groceries there and then we'll use H Mart to supplement whatever I may need.

Conscious spending plan number three. Here's what I know about this couple. Joy and Leon are 32 and 33 years old. They live in Richmond, Virginia. They're married with children and Joy is a senior manager and Leon is a stay at home dad. At their question is we are also maxing out our 401k with a 7% match and both our Roth IRAs with my year end bonus which is not included on the csp. I will also receive a pension from my work when I retire. Are we saving too much for retirement? All right, let's take a look. Joy and Leon, in their early 30s have $410,000 in assets, $230,000 invested, $40,000 in savings. Their debt is a mortgage with an interest rate of 2.87% of $135,000. Total net worth $545,000. Okay, very impressive. Monthly income is $15,000. From Joy, that's $180,000. Salary take home is 112. You can see that huge delta. That difference is what is going towards pre tax contributions or 401ks Etc. Nice work there. Fixed costs are at 43%. Wow. Their housing is 13. All right. Again we talk about housing typically being less than 28%. But when you make an income like this in a place like Richmond, Virginia, you often have opportunities to have way lower percentages spent on anything proportional. Which in a housing context is a huge amount of savings. Car payments 150amonth. Groceries and occasional weekend takeout, $1,000 a month. Okay. Phone is $100 a month. Subscriptions 223. And miscellaneous is 524. Again all of that adds up to 43%. Wow. This is just a reminder that when you have a high income you can only spend so much on bread. In other words, you can only spend so much on certain fixed costs. And that is why there's a limit to how much you can cut. Cut, but no limit to how much you can earn. It's why we always want to manage our expenses. Yes, but we also want to earn more money. That means that as your earnings go up, it's almost super linear. It means you can afford to take more of those extra earnings and spend it on guilt free spending. Invest it, save it, etc. It's one of the reasons that I have been talking about increasing your income for so long because it's almost a superpower when it comes to your money. All right, great work. Investments are 24%. This is post tax by the way. Take a look. They have $1500 a month going into brokerage accounts and $700 a month going into their kids 529 college fund. All right, savings at 11%. $1000 a month for vacations and guilt free spending is 23% or $2134. All right, what's the question again? What'd they ask? Are we saving too much for retirement? Well, without getting into all the intricate details, I'm going to make some assumptions here and I'm going to run a calculation for you. Let's calculate how much you are investing every single year and I'm going To use some broad approximations, you mentioned that you max out your 401k. So let's just call that 24,000. I know that you have a 7% match, but I don't know exactly how much the match is. Just to round up, we'll call it 28,000 for that. In addition, you, you are investing $1,500 a month for a brokerage account and $700 a month for a 529. That's 54,400. Again, I'm probably off by a few thousand, but for the most part it doesn't really matter. 54,400 per year is how much you are currently investing. You have 33 years to let that money grow. And if we calculate at 7% return, gee, you tell me you're going to have $9 million. What do you think? Is that too much for retirement? Well, let's just take it to the limit. What do you say? Let's find out how much income you will be able to safely withdraw off of $9 million. By the way, I will tell you that the safe withdrawal rate sort of falls apart when it comes to 9 million because who the hell needs to die with full principal amount? All right, let me just show you. So you, you will be able to safely withdraw $362,000 per year. Just remember that at that age you likely will not have a mortgage. So your biggest expense will be gone. The answer is, are you saving too much for retirement? Yeah. Yeah, you probably are from the amount you spend right now. I mean, you spend a healthy $2,000 a month on guilt free spending, which is great. I doubt that you would know what to do with $9 million right now. So what does it mean? It means you've accelerated so far, which is fantastic. You've set yourself up for an amazing life. You can afford to ease off the gas a little bit. And I find this incredibly relieving. This is also described as coast fire, which means you've invested so much early on that you can kind of ease off and coast a little bit. And that feels really good. So for example, if you are investing all of your year end bonus into these investment accounts, maybe you take $5,000 of that and use it on an extra vacation or maybe you hire a little bit of help around the house. That sure would be nice. There's so many other things, most of which I talk about in my money coaching program. We talk about how to use your money to actually live a rich life. And both of you can also use My journal. Get it from any bookstore and design your rich life. One other thing I notice is that you are heavily focused on investments, which is amazing. It's what has gotten you to this position of being able to know that you're going to have millions and millions of dollars down the road. But I don't see as much focus being paid to your savings area. There's $1,000 a month for vacations. But I wonder, for example, if I were to go through the journal and I would say, what is your rich life? What else do you want to be saving up for? Certainly it could be more vacations, it could be more luxurious vacations. But what else? Is there a car that would be part of your rich life? Is there something special that would be part of your rich life that you want to do? A concert, for example? Box seats? Who knows what it is? That's up to you. That would be something that I would highly encourage you to be thinking about because you focus so much on investing and you've done so well. But I'd like to see you also be focusing on that for your near term savings goals. I will point out that you're saving $700 a month for your kids. 529. You are a great example of a couple that can easily afford to do that and probably should. I think you're doing a great job with that. Many times when I see couples saving for their children's education, they're not even able to save enough for themselves. And that's a major problem. But in your case, you've been so aggressive with investments that you've put yourself in the position where you can give your children the gift of a 529. I think that's awesome work, Joy and Leon. Financially speaking, great work. I'm a big fan of what you've been able to accomplish. My hope for you is that you zoom out, you both connect over what your rich life is and you realize maybe we don't need to be pushing as hard on the gas as we have. We've accomplished a lot. Let's ease off a little bit. Let's improve our lifestyle right now and let's really think about how we can use money to live our rich life. Congratulations. I look forward to hearing back from you. Joy and Leon sent me a written follow up. Let's see what they had to say. As regular listeners, we have found the structure to be a really helpful and less stressful way to think about where we are allocating our money. Because both of us came from lower income families. We have found over the last several years that it's hard to spend our money on nice or non essential things. We spend so much energy thinking about retirement planning that we have wondered if we'd even be capable enjoying retirement if we can't learn to enjoy and relish our lives now as we are younger. Your response really drove that point home for us. We have also been considering your advice about where we could let up from the gas and spend more on experiences or things that we've been wanting. With two young kids, experiences can be hard to come by, at least the experiences we'd want. But there are several things we've been talking in circles about for years. For example, replacing a 14 year old hand me down dining table with something more our style, splurging on the brand of workout clothes we want, and maybe getting some periodic spa treatments like facials and massages. For now, our plan is to continue maxing out the 401k Roth IRAs and contributing to our kids 529 accounts, but pull back on saving to our brokerage account. In this scenario, we'll still be saving almost $60,000 a year for retirement and college, but with 1500 dollars a month to loosen things up and find meaningful ways to enjoy our lives.