“We flew to Lisbon for Taylor Swift, but my $5 beer is the problem?”

In today's conversation, there's a distance between.

Us and our communication. We have very different relationship with money.

I like security. He's more entrepreneurial.

Meet Annie and emory. Annie is 39. She's an optimized. How many cards you have?

Too many. I don't even know. It did pay for our plane tickets, which is nice.

Emery is 43 and he's a dreamer.

I just wanted to get out there and build something. Every time I tried to get something going, I just felt like I had the rug pulled out from underneath me.

Their imbalance in earning is not letting them dream about a shared rich life.

It's different. Definitely been challenging knowing that I'm the sole person providing for the family.

I don't feel like I'm contributing the way I don't want to be a stay at home dad.

There's this feeling of unfairness.

He's been in media five years and it hasn't really panned out. What if I don't want to be the breadwinner?

They have never seriously talked about what they want their money to do.

And you have rental properties as well. How many properties?

An Airbnb and a regular rental. It's a lot of maintenance.

How much income do they produce every month?

We break even.

I didn't know it broke even. I thought we were earning 40,000 a year.

They've been fighting about these properties for five years.

For me, that's our biggest point of tension. I want it gone so bad, the.

More assets you have, the better it's going to grow.

Can they untangle their complicated financial lives.

And build a rich life together?

I can't control how much he makes. I just have to let him do his thing.

We're not on the same page at all.

Let's find out.

We went on vacation. We have a budget of, say, $2,000. But when we get there, it just felt like we're not really saving a lot of money. And we would go out to eat, and I'm not a big drinker, so he would go out and have beers and cocktails, which is fine, but it does. It did add up. And we came home and it's. I mean, we spent double what we were hoping for because we do. We did go from city to city. We also eat out pretty often. That's one of our big things, is we do splurge on food.

Okay. Where'd you go on vacation?

Went to Paris and went all the way down to Lisbon by train.

Okay, so you both went to Paris. Lisbon. How long was the trip, in order for this budget to be 2000 bucks.

It was 10 days, 11 days.

Okay. Is this a common recurrence, like you pick a number and then you end up spending more than you had planned?

We actually generally don't even pick a number. We don't really save for our vacation. That's part of the problem. We usually spend as we, as we go. We're pretty frugal. I usually book hotels last minute, so it's way discounted and we take trains. We don't really spend a lot of money in hotels.

So I thought that it was a reasonable budget, but it would probably be hard to stay within those confines. But I figured, let's give it a shot. If nothing else, it was a challenge and let's see if we can do it once we get there. Our commitment to the challenge tended to fade at times, but on both ends. We were there for a Taylor Swift concert. That's the reason why we went to Lisbon to begin with. And so the trip wasn't really in the budget anyway, but we had Taylor Swift tickets. So we're like, well, I guess we're going to Europe. But I think she, she brought up the point of the beer, right? So we'd order a meal, which, you know, you get a plate, a table full of fresh seafood for like 60 dol dollars in, in Lisbon. It's amazing. And then I'd order a five dollar beer. And the five dollar beer was the thing that was. Would later be mentioned. For me, that's one of the themes of why we reached out to you on the show from my end was there's like an inconsistency in terms of when we choose to feel tension and, and express tension to each other. And sometimes I just don't know when it's going to happen. And it kind of comes out of nowhere. And it's like, okay, I didn't know that that beer but. Or was that bottle of tequila we're buying for this party gonna be a problem? Or is this. I don't. I just. Sometimes I don't know.

All right, what's the problem?

Well, now we're over budget.

I mean, I will say if you have a $2,000 budget for 10 days, it's not college backpacking prices, but it's not two working adults who are going out, quote, all day, right?

So generally on a monthly basis, Emory's income have been pretty low. And when we do go on vacation or if we do go to these things, we don't have a lot of flexibility. When it comes to those things, just because he's still trying to get his business going. But I. I still have to kind of see that and see where that goes. It's been a few years.

How many years?

At least four years.

That's four years of Emory earning a relatively low income. Is that what you're saying?

Yes.

Yes.

Is that a source of tension?

Yes. I mean, I feel like that's probably the highest source of tension when we do talk about finances. I guess it's not the first time he tried building his business. So I. I do have some hesitancy when it comes to that.

Mm. What do you think's the main challenge when it comes to money in your relationship? Annie, if you had to boil it down to a sentence, I think we.

Have a different approach when it comes to money. I am more financially motivated. And don't get me wrong, Emory works really hard. We do have rental properties as well, so he does work on that, and he does take on more of the household chores and everything. And the kids. We do have two smaller kids, so he does take on a lot more of that responsibility. But definitely the. The difference in income has been a challenge. I do have friends where both parents are working or in a professional environment, and they seem to still be doing well and still being able to take care of the household. It's definitely been challenging for me knowing that I'm the sole person providing for the family. And I really wish that Emory could as well. I know he. He does it in other ways, but not financially.

So you want him to be more of a financial contributor? Correct.

Tagging the dog, meaning they set an unrealistic amount, and then they say we went over budget. One person who earns a quote, low income, and maybe some gender dynamics, although I can't know for sure yet. Let me find out more by asking about Emry's job.

When I started getting into the video production, which is what I. The business that I'm in now, before that, I sold insurance. I sold real estate. I did okay at both of those. My income was closer to hers, not as consistent. So it was always this kind of roller coaster where I didn't feel that because mine wasn't as consistent. I didn't feel like mine was valued as much as. And was only really brought up when it was lower. So after the ups and downs, I said, can I go back to school? Went back to school, got my master's in multimedia journalism and had a job going and was picking up contracted jobs. And then Covid hit shut down all the contracts. Nobody was hiring for anything in my field, and our kids were out of school, so I had to be the one to stay home. Her job was consistent. She could work remote. Of course, it hit my ego a bit. I like spending time, valuable time with the kids, but I was just always really frustrated. I just wanted to get out there and build something. And over the next few years, she sometimes thinks of it as an excuse. Like, I've been making the same excuse for years, but there would be incidences where I would get something going and then my son's school would call. Somebody's got Covid. We're shutting down for two weeks. Okay. All my appointments had to cancel. I just. Over the few years, it's just every time I tried to get something going, some. Something that looked like momentum, it just. I just felt like I had the rug pulled out from underneath me left and right.

We'll be right back after this short break. Now back to the show.

Annie, any reactions to hearing Emery's description of his career path?

I've heard it before, so it's not new to me. I agree with what he was saying. Our biggest tensions when we do have tension is, okay, if you have all of these reasons why you're not able to make more income, like do something else or get a W2 job, like, we don't need. You don't need to go out there and do it on your own.

To me, from where we're at right now, things are so complicated that I just want to not be so complicated for a little bit so that I could just focus in on, like, a few things, including the time with the children and quality of life with the kids and not so many things so far.

It seems like Emory is a dreamer.

A dreamer is someone who believes success is right around the corner with their next gig or their next deal. Dreamers tend to jump from one thing to another, rarely sticking with the hard part of developing excellence. And dreamers are extremely hard to be in relationships with. But interestingly, there's another clue I don't quite yet understand. It turns out that Annie and Emory, both, not just Emory, tried to create a documentary which has not yet made any money. And they tell me that they have plans for a deep dive travel blog equipped with high end production which is going to take a major time investment. Again, very unclear roi. And this is coming from both of.

Them, not just Emory.

Emory then shares something with me that adds a lot more nuance to this discussion.

And you have rental properties as well. How many properties Two other properties. Are they co owned by both of you or by one of you?

Both of us.

How much income do they produce every month?

Honestly, we break even.

That can't be. Real estate is only about profit. If you're breaking even, you just raise your rent 25%, no problem.

Right.

Well, so one's an Airbnb, and the other one is a regular rental. We have old houses, so it does. It's a lot of maintenance, so it doesn't feel like we're making a lot of money.

And then, Emery, you.

I didn't know it broke even. No.

What did you think?

I thought we were earning 40,000 a year.

That's a big difference.

I've had a friend of mine who's an investor as well, has asked me the same question, and I said, I think it's making about 40,000 a year.

Are you the primary property manager for these two properties?

Yes. Okay, so another thing. You get a job going, and then all of a sudden, you've got to take two weeks off from that potential job, whether it's documentary editing or whatever, to go deal with broken pipes that froze over during the winter, or to deal with contractors and to go, you.

Know, why do you guys have these properties?

We lived in them, and we moved. We moved out of it.

Mm. Why not sell them? Out of curiosity? I'm not saying right or wrong.

Just why not sell them for investment purposes? Like, it's increased in value since we've bought them and we're able to rent them out.

You're able to rent them out for break even?

I mean, long term, it's not break even, but short term, it feels like we're just. We're breaking even every month.

But breakeven is one thing, but also Emery's point. Point is valid, Right? If Emory is the property manager and then he can't go to work or he can't do other things because the demands of the property, that itself has its own cost, right?

Yes.

Okay, so is it worth it?

I want the. I want. Especially the one. I want it gone so bad.

All right, you want to sell it. And Annie, what is your perspective on that?

Before we hear her answer, I need a quick favor from you. If you are enjoying this show, please hit that subscribe button. It really helps me and my team.

I feel like we'll have tax burdens if we sell it.

Aren't you an accountant?

Yes.

Haven't you heard the phrase, don't let the tax tail wag the dog? Come on, I know you have that Hung up on your computer screen. Right. Okay. So you have a different perspective. You want to keep them, Emery wants to sell them.

That's.

That's a pretty big source of tension in the relationship, I would imagine.

For me, that's our biggest point of tension. One is three Airbnb units.

Okay.

So it's a constant management of that. So that's kind of part of the thing, right. Is you have to have it up to a certain standard, have certain things purchased all the time. And she's managing managers and then turnover of Airbnb and are the guests happy and those kinds of things. Things as well. So, you know, we'll be on vacation, sitting at a. In Cancun, at a resort on having a. A cocktail. And we will get endless Airbnb messages. She'll spend hours going back and forth from Airbnb to the guest solving problems. Because this guest wasn't happy about this. And that it's. It's a huge time. Sucks, too.

I do know that it takes away from his work or him trying to work, but to me it does. It's not like he goes out there all the time. I feel like it does. It's a few hours a month, but sometimes we don't go out there at all. I think on average, it's not a lot of time to take care of.

The houses, but they're neglected. So if you go over to the house at any given moment, there's weeds growing up everywhere. There's branches falling off of trees, there's things. Moss growing on the roof. There's things where I should be over there more. And if I'm able to be over there more and treat it like, let's say a part time job, 20 hours a week over there, then we could get. I think we could get it to a point where we're maybe charging more per unit, but it just doesn't seem worth it at the end of the day. And she says a couple hours a week. But it could be like this winter. We had some pipes break that was unexpected. That caused a lot of damage. We had to be over there for a long time. It's like when my son's school would close down. For Covid, we didn't expect that coming. And it's not just like a day. It's two weeks, you know, until everybody's tested negative for Covid for this. It's when all the water stops leaking out of the house and all the Sheetrocks put back up. I realized we need a job that needs to be Done. It's not just. If we don't want to hire that out to somebody else and I have to take care of it, or I. We choose for me to take care of it, there's usually, like, maybe a few hundred dollars for the new tools that need to be purchased for that, another couple hundred dollars for the supplies, and a couple other things. So we just. Out of nowhere, we just spent, like, $700, $800 on supplies and tools for this new project. Average it out. I'm probably over there five to six hours a week, but that's. That could be 50 hours one week and one hour the next week.

So you're spending more on your properties than you probably think. Okay, congratulations. You're like every single American. All right, fine. I'm with you. You're spending more than you think. Your return is probably lower than you think. Yes, that's real estate. Annie, any disagreement with Emry?

I agree.

How long have you two been disagreeing about these properties?

Five years.

Did you notice how Emry thought they.

Were making $40,000 a year with their.

Properties, and it turns out they're breaking even? Was anyone else shocked by that? To tell you the truth, I wasn't. And that's because people think that humans are like robots. Like, we go to the grocery store, we pull out a calculator, carefully compare prices, then we make an informed purchase decision. That's the way we talk about money. We need to give you the information so you can make an informed decision.

Guess what?

That's not how people work. People are much more like amoebas who respond to light stimulus. We see something, it's shiny, we go towards it. Except that, unlike amoebas, our shiny light tends to be a seven seat SUV that Americans buy because they think they need it. What I'm saying is that very few people actually understand how their money works. Emery was off by $40,000 per year, and that's on houses he hates. Most of us operate far more on vibes than on numbers when it comes to our finances. Now, there's another issue I want to point out. They've been fighting about these properties for five years. Five years of fights, resentment, and worst of all, driving to the most godforsaken place on this planet. It's called Home Depot. Listen, I don't mind things taking a while to change, but five years of major disagreement is way too long when you are in a situation like this. Get help, hire a therapist, hire a coach, apply to talk to me, whatever. I want you to get impatient with Your lives. Because five years is way too long to be stuck. All right, now back to the conversation where I wanted to understand more about how they use money day to day.

How many cards you have?

Too many.

How many?

I don't even know what.

Probably at least 10.

But yet, I mean, I don't use them all. I don't use them all. So.

Wow, a lot of defensiveness here. I hadn't even finished my sentence. I don't use them all. I'm just saying I don't sound like I use them all.

I use them for points.

You use them. If you have 10 cards, I'm pretty sure you're using them, right?

I use the credit cards. Usually we have, like one or two that are our main. Our main cards. I try to optimize and I try to travel hack.

I love optimizing.

I need to squeeze every aisle and.

Sent from these credit card companies.

I mean, it did pay for our trip. It paid for our plane tickets, which is. Which is nice.

So you know what else could pay? I don't mind. First of all, I don't mind credit card points. I don't mind it. Okay, you know what else could pay for your flight? Your $225,000 joint income.

I don't know where it goes. I want to simplify, but I. It's hard for me when I try to optimize things.

Because you're an optimizer. I'm an optimizer, too, but I'm a reformed optimizer. Okay? Like, I love. I could sit in spreadsheets and I could calculate this stuff and run all these analyses, and when I'm 65, I'll have this much money and blah, blah, blah, 4%. But at a certain point, it actually becomes dysfunctional because you spend more time talking about the future, planning about the future, worrying about what can go wrong, than actually saying, hey, I built this amazing thing. It's working. It's good. I'm going to turn the page and actually enjoy my life. Have you encountered that feeling?

No, I have not felt that feeling.

Okay. Do you want to? Most optimizers do not.

I definitely want the feeling, for sure.

Hold that thought. We'll be right back.

Let's get back to the conversation. Would you be willing to not get as many points as you're currently getting? Look at that smile. She's like this. What is he talking about? Would you be willing to sacrifice, I don't know, 200,000 points a year, I don't know how many points in order for a Much simpler infrastructure.

Yes, I do want to do that. And even with our, like, guilt free spending, like, it would be nice. I know he mentions it would be nice if my guilt free spending is on a debit card, because I'm less likely to spend it if it's on a debit card versus a credit card.

Your actual behavior with money is actually causing you negative ramifications. I just don't think you're making the connection. And the reason you're not making the connection is that you are so driven by optimizing everything, you're going to optimize yourself into total unhappiness.

I agree.

It just feels like the points just appear. And I don't see her like spending a lot, like tons of her time managing it or anything. It almost feels like it's like a natural little side hobby that she's doing. And it doesn't seem to. That part doesn't seem to bring her a lot of stress.

Look at the biggest smile.

Just throw Annie's face.

Annie, let me ask you a question. Would you rather be complimented as being a great mother or a great points optimizer? Tell the truth.

I mean, a great mother, of course.

Thank you, Emery. I appreciate that. I know Annie. I could tell you. Appreciate that. Look, we gotta have some fun with money anyway. Okay, sure. There are things to fix. It's not life or death, at least in your situation. Right. You have money. I do think it's over engineered if you want to fix it. I think we have a good shot at being able to make some big changes here. But what I think is missing so far is actual individual guilt free spending money. Am I reading that correctly? Yes.

Okay. I think I was wrong. I started off by saying I suspected that Emery was a dreamer. And I got that clue from him. Jumping job to job, never really following through. Now I think it's a lot more complicated than that. He might be a dreamer, but I don't know that yet. And I don't want to put a label and jump to conclusions. What I do know is that he has a house that's taking up an unpredictable and demanding amount of time for him, which makes it hard for him to focus on other things. And then there's Annie, who makes the bulk of the household income. And she loves optimizing, but the optimizing has gone too far. Let's take a quick look at their numbers in the conscious spending plan. You can follow along by downloading your own CSP for free@iwt.com CSP assets $2,035,000 investments, $236,507. Savings, $2,500 debt, $1,060,000 for a total net worth of $1,214,007.

Emory, can you read me the combined monthly income?

$18,600.

Partner one, I'm assuming that's you, Annie earns 15,600 per month. And partner two, I assume that's you, Emory, earns 3,000 per month. Let's just look at the rest of your numbers. Fixed costs at 58%. What? I have no comments. If you're at 58%, you're within parameters. Let's just quickly look through this. Savings are at 4%. Long term emergency fund at 500 bucks. How come you only have $2,500 in your savings? What's up with that? Don't tell me you don't know where the money's going.

You have the money to me, stocks. The stock amount is savings for me because I could just cash it out whenever I need it.

Exactly. Do you see any that your desire to own assets, to constantly have your money working for you, do you see that it's causing you unexpected ramifications?

I mean, if I use it as a savings account. Yes, yes, I do. I'm not putting it towards vacation. It's just random.

Explain it to me.

So to me, stocks is short term and I can use that towards other things that I need savings for.

Let me give you a technical example. You're currently investing $940 a month.

Yeah, that I won't touch tax.

Yeah.

Okay. You're doing $300 a month for stocks.

That's the savings part that I was thinking.

Why don't you just put that and start saving for an upcoming vacation? By the end of the year, you could have almost $4,000 saved.

I mean, I am semi treating it as such, but I am getting more money back if I put it.

No, that's sloppy. That's sloppy and you know it. Stocks are not savings accounts. They're also subject to a lot of volatility and all kinds of tax implications. When you sell and your guilt free spending is at 26%, that's over $3,500. And I think you did some calculations down here. It looks like you actually probably spend more the way you described it to me. You're a paragon of frugality. You spend $2,000 over 10 days in Paris. At least that's the budget.

But we doubled. We spent 2000, but we ended up.

Spending 4 I think you guys are missing the point. According to this, you're spending 35% of take home pay from a $223,000 income, which is a lot of money on guilt free spending. So I'm like, cool, like if you can afford it, great. But I'm trying to find out. That's like $4,800 a month on guilt free spending. Where's it going? Because having a dollar fifty of beers or. And getting last minute hotels, that's not almost $5,000 a month on guilt free spending. Again, if you made 50k, this would be a different conversation. You make $225,000 a year and then you spent the money and now you feel guilty about it. Why go that route?

Something isn't adding up here. We started off talking about $5 beers in Europe, but from looking at their CSP, it's clear that they can buy any amount of drinks they want. This is when I really started honing in on Annie's relationship with money.

Annie, I'm confused. You have a lot of money in the household, most of which you earn. Do you feel worried about money?

Yes.

What do you worry about?

That we can't afford things, I guess.

Is there a number where you would be okay to not worry about the price of a beer?

I wish Emery would contribute more towards that type of expense. I guess that is the difference for me. He's going out and he's going on vacation, or if he's going out to eat or he's doing all these things. It would be nice that he has to think about affording it. Like a lot of times I'm the one who has to think about, hey, can we afford this? Can you go out to Vegas with your friends? Can you go out to these bachelor parties? Could you do this? So it would be nice if he contributes that way financially, where he has to figure that out and I don't have to.

I think there's something deeper. Annie, I don't think it's a thousand dollars that Emory needed four years ago. That's meaningless. What's really going on here?

He consistently need new equipment. A lot of times he had a drone and we need to get a drone. The drone flew away into the river. We now have to replace the drone.

How much?

I mean, that's like a couple hundred. But it's. It's just those little things, I guess, bigger things that add up.

Annie, you're making my point for me.

What's your point?

Number one, why doesn't he have his.

Own Individual guilt free spending money. And number two, why are we talking about $200 expenses when. When you make $223,000 a year?

I mean, our guilt free spending is only, what, 3,000? I don't even. I don't even remember.

Per month.

Per month? Yes.

If he takes 20% of that or.

$600 a month, he could do whatever.

He wants with that, right?

He could.

He should be getting his own drone.

I agree.

Okay, what's stopping the two of you from setting that up?

We just never got around to it. That's.

Can I just ask a question? Like, if. If the roles were reversed and emery was earning $180,000 a year, and Annie, you were earning far less, you were starting up a business, what kind of conversation would we be having right now?

I don't know.

I can't imagine myself in that scenario.

Try for a second. Let's say you were taking care of the kids, you were kind of moonlighting and helping out with the properties. Emory was working, making 180,000 plus. And he said, like, whenever we go out, she wants to buy a couple of drinks. And it really aggravates me because why isn't she making enough to pay for it? What kind of conversation would this be?

I think the difference is it's not like he's a stay at home dad. Like, we still pay for daycare. That still comes out of the accounts. I guess if the rules were reversed, I don't know, it'll be more common because I'm a woman.

How would you feel if he was like, yeah, you fix those pipes, but really, you only work like five hours a week on average, and, like, you really need to be making more. Meanwhile, he's making $180,000 a year. How would you feel?

I need to get a different job that would make me that much money?

I mean, is that right?

I know what you're saying, like, oh, I. I would not act that way.

But it's such an interesting response that your response, even, like, I don't think you were joking, was, I would need to find a job that would make at least as much as him. Is that what you just kind of intimated right there?

Yes.

Okay. Because what I mean, I take that back.

If I were to. If he was making that much money, I wouldn't. It'll be nice and I don't have to worry about it, and I could do whatever the heck I want, and that would be nice.

Wow.

Okay.

I believe that.

And.

And then I love. I love the honesty. There. And by the way, isn't that kind of what Emory's doing?

Yes.

Now we're getting real.

We'll be right back.

Now back to Annie and Emery. You said if the roles were reversed, it would be nice for me to earn money. But really I could relax a little bit and do whatever I wanted. That's what he's doing. Yet it's a problem to you as the higher earner. I'm not asking you to change the way you feel. I'm simply trying to understand your feelings themselves. Why do you feel that way in your position? But if the roles were reversed, you would not feel that way at all.

I think it's just me feeling like I'm contributing. Right. So if I'm the contributor, a big, big contributor, then it doesn't feel like we're equal or we're.

Is money the primary way that you contribute in a relationship?

No. I mean, it's tension. But the reason why I haven't been like, no, you have to get it. Like you have to get a hundred thousand dollar job or anything is because he does contribute different in a. In different ways, like the properties, etc. Part time job is fine. I don't mind him having a part time job, but it's just not consistent or it's not, I don't know, it's just, I guess, not enough for me.

I don't think this is Annie's fault.

And I don't think this is Emery's fault. Even though I previously described him as a dreamer. I think the two of them simply.

Do not have a shared vision of a rich life.

They have.