"We have $11M in assets. Why are we still living month to month?"

We're considered a top percent wealthy people. However, there's a struggle to pay the bills.

We do spend. We go out for dinner a couple nights a week. We like to go away.

You spend $30K a year on vacation?

At the least. Kids get allowances.

How much is their allowance?

$300 a week.

$300 a week?

Yeah.

The food is going up, tuition bill goes up, and we have 5 kids to pay tuition for.

You have 5 kids in private school?

We live in a community where everybody Sends to one of 3 schools.

What's the phrase? Keeping up with the—

Joneses.

These numbers are very wrong.

I don't know what I'm spending, probably.

He doesn't include me in the finances. He just gives me the brunt of his upset about it and his stress. We're definitely not on the same page.

Not on the same page, not making progress. That's what I'm hearing.

Yeah.

You are spending far more than you make every single month.

Now it makes sense.

Your understanding of reality is so out of alignment with The numbers. You have 5 kids, you have very high expenses. You are in serious trouble. Deep down, a lot of us truly believe that if we just earned more money, our financial problems would disappear. I've talked to so many people who think if I just made $10,000 more, $20,000 more, $100,000 more, everything would be fine and I would stop worrying about money. Are you starting to get it by listening to this podcast? We find out over and over that this is simply not true. And today I'm talking to Margo and Kevin, 42 and 52 years old. They live in Brooklyn with their 5 children, and on paper they have an incredible financial life. But beneath the surface, they describe themselves as rich poor people. They spend virtually everything they make. They have very little set aside for their future. And despite years of earning more, they still feel like they're on a hamster wheel. The problem is when we start looking at what they could actually change, they tell me that everything feels almost non-negotiable. Their kids' private school, their homes, plural, their vacations, even the community and lifestyle they've built their lives around. So today we're going to find out whether they can finally get together on the same page and make some extremely difficult financial choices Or whether they don't want to change at all. And I want you to stay to the end because after our conversation, I asked Margot and Kevin to update me on what changes they actually made. Now let's meet Margot and Kevin. Who was the one who filled out the application to speak to me?

Oh, me.

You did.

Okay.

Let me read you something from your application that caught my attention. You wrote, at the moment, we are rich. Poor people, high income with no savings and living month to month. Tell me about that.

It's exactly what I wrote. Thank God we're very fortunate to have a beautiful life. And my husband makes a very nice living. He works really, really hard, and he built everything himself. So it's not anything that was given to us. It was something that was worked for. And in the grand scheme of things, If you look at his income, we're considered top whatever percent wealthy people. However, there's a struggle to pay the bills month to month.

So every month he's trying to figure out how to pay the bills because he does the money?

I don't know if it's month to month. It's more like at the end of the year when we're getting down to the bottom of things, like, How is it that we're short?

You're short at the end of the year.

Well, there's not much left when there should be.

Well, which is it? Are you short or there's not much left?

I wouldn't say losing, but spending every single penny.

Okay. And then what is a rich poor person?

Somebody that lives a wealthy life, very comfortable lifestyle, owns homes, is able to go on vacations and at the same time has such a high cost of living. So there's no savings, there's no cushion.

Margo, when you wrote that application, what was going through your head?

So for a long time, I've seen my husband just working really hard, making things work, keeping up a very I would say high lifestyle, paying the tuition bill, private school, and just trying to keep everything intact and keep everybody happy. And I think he consistently would say, I don't understand. I don't understand. I don't understand. What? How is it possible? And so I started to listen to some podcasts on finance and just trying to, you know, figure out how I could help us as a couple, as a family, financially, and try to shift the energy and shift it the way things are going so that we're—

This application, though, sounds like there was some tough stuff going on. Like, at the moment, we are rich poor people. What was going on then?

We have a very high tuition bill, and we spoke about it, that that's a very big part of our income. My dad helps with some of it, and we decided that we're going to take on the whole thing next year. So if that being the case, that's going to be an even more difficult pill to swallow next year with everything going up. The food is consistently going up. The tuition bill goes up a little bit every year, and we have 5 kids to pay tuition for next year.

You have 5 kids in private school?

Yeah. Oh, wow.

Okay, so let me make sure I understand. Margot, your dad was helping with some of the tuition bill. You both decided we're going to do this on our own. And when faced with the costs of 5 kids in private school, knowing that even with the help from your dad, you were already not putting aside a lot of money, and now it's going to be even a bigger expense, you're like, what are we supposed to do?

Exactly.

Is that what brought you to applying to speak to me?

Yes.

Good to know. Kevin, what's your take on this whole situation as Margot described it?

You know, as the kids get older, they get— it's more expensive to take care of them. So just maybe that pressure she felt of kids starting to go to college, getting older, having more needs.

Who feels more pressure about money?

Kevin.

Ah, is that because you manage the day-to-day or what?

It's been a part of my history, worrying about money.

You worried for a long time?

Yeah, it's always there somehow. But, you know, as I get older and I'm dependent on a business to keep performing, it becomes a question where, you know, when am I putting away savings and when is that going to benefit me?

Gotcha. When you think about the word money and money in your relationship right now, what's the first word that comes to mind?

We have fun with it.

Money is fun. Okay.

Stress.

Fun, stress. Okay. How long has money been a source of stress for you?

I think it was maybe a few years into the marriage where it started to become stressful for Kevin because I don't really deal so much with the finances. He's the one that makes the money and pays the bills.

So is he the one who's stressed out about it?

Yeah, but it causes stress in the relationship because when he's stressed about it, I'm the one who's running the home. So it becomes a questioning of what's—

Yeah, she gets the brunt of my—

So you get stressed, Kevin, and then you start asking questions. Why are we doing this? Can't you save money on that? Is that how it works?

Sort of.

So you get stressed about money, and then how does it rub off on her?

I could get upset about it. be in a bad mood about it, things like that, where she'll get the brunt of that.

Margo, you want to add anything?

Yeah. It affects the dynamic of the relationship because once he's stressed about money, things just feel like they're constantly revolved around that. And it's, why is the bill this high? I don't know, hon. Let's look at it together. I brought it home. Why don't you look at it? Supermarket, supermarket, supermarket, meat bill, kosher meat in New York. We're feeding like an army in the house, and it's a lot. I don't know. I don't know what to say. I never ever was like an irrational spender.

Yeah.

I was never one to irresponsibly go shopping and buy myself things that I shouldn't. So it's kind of like we both don't know why we're in this position constantly.

You feel confused?

He's confused. I'm trying to—

Wait, how come? Hold on. I have a question for you because this is twice now. So I asked, how do you feel about money? He goes, fun. You go, stress. But it's actually him feeling stressed. And then I go, are you—

It's fun to make it.

It's fun to make it. Okay. And then I ask, do you feel confused about money? You go, he feels confused. What do you feel?

I feel that we live a very high lifestyle, and in order to be able to keep our kids in private school and keep this lifestyle, we have to find a way to make more income, because it doesn't seem that there, to me, that there's anywhere very significant where we can cut.

Do you agree?

Yeah. Okay.

But maybe you feel otherwise.

Are we about to have the shortest conversation in the history of this podcast. Y'all just need to make another, what, million bucks?

Another half a million.

Call it a day.

We're good until we're not.

And there's another something that we didn't mention was that we have plans to build a summer home. Okay. So we— and it's been in the making for a couple of years now. We're living in this house the way it is. We would love to be able to fix it. That's a big thing for us. But it's like, how?

Okay. What's a time where the two of you recently did not see eye to eye on something about money?

Kevin thought that maybe it would be a possibility to move to New Jersey. It would bring our expenses way down because the schools there are a lot less than what we're paying in New York, and I don't want to move there.

You don't want to move to Jersey?

No. Okay.

Why?

It's just not for me. It's, like, really quiet and desolate in the winter. Slower pace, quiet life. It's just I'm not ready to make that move. It's a big move. Yeah, the pressure would really decrease by a lot. I think that the cost of living would go down, but it's a very different lifestyle.

How long did you talk about this and disagree about this?

I brought it up a few times, but I knew it was off the table. She wasn't doing it. So I just gave up after a little bit.

Is that a typical trend? You bring something up?

No, this is a big move, you know, to do that. There's a lot of liquid sitting in the home. Figured if we sold it, invested some, and had a strategy of how to earn on that, it might bring the pressure down that we're under and just live a better lifestyle.

A little lower key, a little less And Margo, you said no because you don't want to move there.

I'm not selling my home. That's our safety net. And it's an asset that hopefully will keep going up and we'll have it for our children down the road if we decide to move or to change our lifestyle and go somewhere else. We have an asset. I don't feel like—

Isn't that what he was proposing? You have an asset.

Yeah, but I'm not going to sell that now Because we have a great home. We live in a really great block in a great neighborhood. The kids are happy. We're very comfortable. We have a lot of kids.

Okay, so you want to keep it the way it is for now?

Yeah, for now.

And then I have a question. You mentioned we have this asset so that one day we may give it over to the kids. You have 5 kids in one house, the one we're talking about, right? I know you have other houses, but this one, how do you envision distributing a house to 5 kids?

Well, they'll sell it and they'll Distribute the funds.

Split the money.

They'll split the money.

Okay, cool. Have you talked about this?

That's the plan, but not really.

That's like the norm for where we come from.

What does that mean, where we come from?

Like, we live in a community in Brooklyn where we all live in kind of like the same area. And my grandparents left their homes to my Parents, and my parents will probably leave, you know, their homes. And, you know, generally speaking, everything has just consistently gone up in value.

So this is what you've seen happen for generations.

Exactly.

That's the plan here. Okay, Margo, what feels most frustrating to you about your financial situation?

The hamster wheel of constantly just trying to keep up, make, you know, pay the bills, and at the end of the day, There's no savings, and it's the same thing year after year. And we need to, like, educate ourselves, figure this out on our own, because obviously nobody's going to teach it to us. And we have to have a plan. And it's enough is enough.

Enough is enough.

Enough is enough.

Hey, I love that phrase. Enough is enough. Let's fucking do it.

You got to do it.

Enough is enough. How long have you felt this way? Like, God, this sucks when it comes to money.

You know, from where we come from, almost everybody sends to to private school, and everybody seems to be struggling to keep up, not just us. And if you think about it logically, it makes absolutely no sense, like how we're just going and going and spending all this money every year. We don't have savings. Our kids are not set up. What is this doing for us? We want a certain future, and if we're not going to make the changes now, we're not going to get there. I mean, it's just logical.

Mm-hmm.

If you, if you see where we are now and where we want to go, we're We're not kind of like on that path.

I'm not sure what the dynamic is between the two of them because there's so much information coming at me. But a few things are clear to me already. They both have a story about money, and I can tell that they have repeated this story a lot, and it is entertaining. I'm kind of enjoying it, but I'm wondering, when are we going to get to the real stuff? I mean, after all, the application speaks for itself. I think the way they set it up is this traditional sense of he makes it. She spends it. But I think there's something deeper beneath here. I just don't know what it is yet.

We do spend. We go out for dinner a couple of nights a week. Kids go, they come, they get allowances.

How much is their allowance?

They get— my one in college, I'm probably giving $300 a week to.

$300 a week?

Yeah.

I was once 18 years old. Weren't you both?

Yeah.

Did you need $1,200 a month for food? It's not my place.

I was working at 16 because I grew up without money. So I know how hard it was to get $0.10 out of my dad, may he rest in peace. Because at 15, I was working for myself. I was all on my own.

What do you think is stopping you from changing this financial situation?

I like the fun. We like to go away. We go to Italy in the summers. We just got back from a fantastic ski trip in Europe. Those things are tempting to me. I spend on them. You know, there are certain things we could cut out, but then I feel like we're just not enjoying what we like to enjoy.

Is that the crux of it, though? I mean, you're just saying—

No, when we spend, we went to Europe because it was a quarter of the price as to go to Vail. Yeah, but I still had to take 7, 9 children.

That doesn't work on me.

It was 100%.

Margo, listen, listen. I'm going to repeat what you just said out loud so that you can hear yourself.

It was literally, I'm telling you.

Hello, America. Instead of going to Vail, we decided to take our family of 7 to Europe. Aren't we economically conservative? It was cheaper. Care to respond?

It was cheaper. Significantly cheaper.

You're sticking with it.

It was literally significant— was it not significantly cheaper?

All right.

We all make our own decisions in life.

It is so expensive.

Right. God bless.

You know?

All right.

Shall we take a look at your numbers?

If you'd like to.

Oh, the mood shifted. That's interesting. How was it to do the conscious spending plan together?

We did not do it together.

Okay. Now, I just want to point out, this is quite an interesting scenario because, Margo, you're the one who applied. Part of the instructions are that you should do the CSP together. Did you see that?

Yes. So I was like, let's do this together. I don't— what do we have to do?

Okay.

And Kevin said, I'll do it. I'll take care of it.

Why'd you say, I'll take care of it?

Because if I went to her with a question about something, she doesn't have the answer. So on what I'm spending a month on, whatever the cars, the subscriptions, it's not really aware.

So it's like, don't ask her because she doesn't know.

He wants to change, but I feel like he's not committed to just figuring it out with me somehow.

How do other couples do this?

I don't know. Couples that we know are dependent on, of course, themselves, what they earn. But there's a lot of extra help in our community.

Family.

Family help. Parents.

Well, you guys, at least right now, for the moment, do have a limited amount of that. So you don't know how other couples do it.

Margo, this is a conversation that we have consistently. How is everybody else doing it? Like, you're making X amount. How is everybody else doing it?

Is there possibly a podcast that shows in depth what other couples talk about behind closed doors.

No, like, we were home for Passover this year, and I could have laid down in the middle of the street.

And yeah, there's no one. There's no one in Brooklyn.

There's not a soul around.

We were maybe one of, like, 10 families home. Everybody's away.

Point is that everyone's paying their tuition bill, paying their summer house and vacation.

I'm sorry, is this like a— okay, I understand the curiosity. That is interesting. But is this like a woe is me? Like everyone else has to go on vacation?

No, no, no, we do.

We do. No, no, we're very— we live— we're very appreciative of the lifestyle.

We do.

Absolutely not. Okay.

We're very, very—

you're wondering, like, how do they do it?

But how does— like, you're making a nice salary. Like, what's going— how is this possible?

We're spending it.

You're spending whatever you make.

There's a part of my brain that doesn't know how to put aside. And when I do, when it's there, it's just in the bank. So that doesn't do anything for us.

I will show you different ways of changing it. But problem number one is that you did not Actually do this together. That is the problem. When I met my wife, not surprisingly, I knew a lot more about money. It would have been really easy for me to be the money guy. Hey, I'll do this. Give it to me. Blah blah blah. I have the thing that works already. And what do you think would have happened had I done that?

That would just would have continued. Yeah, pattern.

It would have been me being the money person for our entire relationship. We she would had no visibility. Once in a while, she would probably gotten anxious. Maybe disagreed with me. Maybe I would have said, ah, it's fine, blah, blah, blah, because I know all this stuff in my head. Maybe one day I get hit by a bus. Maybe she doesn't know what to do anymore. Maybe Morgan Stanley or, God forbid, Wells Fargo calls her up, tries to charge her 1.5% AUM. She's defenseless, crying. Now we don't know what to do. Plus, she's paying AUM to a worthless financial advisor. And what happens? I'm looking up from hell. I'm there because I didn't help my wife become equipped about money the way that I was.

Right.

Not a good situation, especially if you yourself are not particularly equipped.

Right.

Shall we change this?

Yes.

Thank you. I don't know about you, but I'm finding the communication style pretty difficult. I'm not used to having couples who talk over each other and talk at me at the same time. It's a little overwhelming. And I think what's going on here is this need to share their story. Everyone feels like, I just need to make sure you know what's going on. And I also think there's a bit of, this is what the people around us do. And so this is what we've learned. And this is just natural. This is how our parents probably talk. This is how we talk. But I'm an outside third party. I'm here to gather information. I'm here to help. And part of what I suspect is going to happen in today's conversation is the stories they tell themselves, everything from the way they think about money to the way they communicate with me, with each other. Those will probably need to come under question. They may need to change those things. At least that's my suspicion. We're going to take a look at the numbers right after this. One of the best things that my wife and I have spent money on is personal training. It has allowed us to stay on track, to be healthier, to build muscle. It's something that's just important. It's now part of our lives. Now, I know that not everyone is in the position to hire a personal trainer. It can get expensive. So when the Ladder app asked me to try it, I was curious about what it actually did. The Ladder app is an expert strength training plan, not a random collection of workouts. It's real progressive programming designed by certified coaches with a new plan every week that builds on the last. It's like having a personal trainer in your headphones. Now, I actually tried it myself, and having done many different workouts in my life, I approached it a little skeptically. Is this thing gonna be good or is it gonna have a bunch of BS in it? And I have to say, I was impressed. I chose bodybuilding. I chose to use machines, dumbbells, et cetera. I focused on specific areas that I wanted to work on that I'm currently working on. And then I evaluated the workouts and did it myself. I thought it was great. If I did not know how to program my own workouts, I would use this app. It tells you exactly what to do. It shows you the form. It helps you enter your weight and your reps, and then you can track it all. And I like that it included bodybuilding, but also Pilates, at-home dumbbells, kettlebells, and a whole bunch more. The app costs less than a dollar a day. Compare that to over $100 for a single session with a trainer. Remove the guesswork with Ladder and get a real coach in your ear telling you exactly what to do for every workout. No thinking, everything planned for you. If you have an iPhone, head to ladder.fit/ramit and take a quick quiz to find your perfect ladder plan. Use my link and get a free 7-day trial with no credit card and $10 off your first month if you join. That's ladder.fit/ramit. Are you still using the same passwords you had in high school? The one that includes your dog and numbers in your address? Stop it. The easier your password is for hackers to figure out, the more vulnerable you are, especially because I know all of you are using the same password across different sites. It's time to protect yourself online. If you are ready to take this more seriously, like I do, check out this episode's sponsor, NordVPN. NordVPN is an all-in-one digital security app combining the world's leading virtual private network with a next-generation antivirus. To help protect you from scams and everyday digital threats. Their privacy-first next-gen antivirus doesn't just wait around until a malicious file is on your device. Instead, it intercepts threats at the source, identifying fake shops, blocking scam websites and malware, and neutralizing phishing links. Plus, one subscription can give you access to multiple security features and protect up to 10 devices. We're talking about your laptop, smartphone, tablet, smart TV, all covered. Get an exclusive NordVPN deal plus 4 months extra at nordvpn.com/ramit. It's risk-free to try with NordVPN's 30-day money-back guarantee. The best deal for NordVPN is through my link. That's an exclusive NordVPN deal plus 4 months extra at nordvpn.com/ramit. That's nordvpn.com/ramit. What's the exact date where you will be debt-free? What's the exact date when you'll be rich? Most people don't think this is something you can plan for. It's just something one day in the future.

Wrong.

This is something you can plan for. In fact, I created Rich Life Road to $100K to show you step by step how to figure it out. In the program, we cover exactly what you need to focus on. How to accelerate your timeline so you can get there faster, and how to live your rich life along the way. Plus, we have tons of added bonuses in this program, like live weekly calls, access to a great community, and a library of vast content all at your fingertips. You can join this program today at iwt.com/100k. Let's take a look at the numbers. Kevin, I would like you to read off the word in bold. and the number next to it for this entire box, please.

Go ahead. Assets, $11 million. Investments, half a million. Savings, it's about accurate.

Wait, are you going to read the numbers?

$50,000. Yeah. Debt, $2.3 million.

Uh-huh.

Total net worth? Total net worth, $9.25 million.

$9.25 million. Okay. What do you think about those numbers?

I think they're beautiful, but they're on paper. They're They're in our homes.

Paper wealth in your homes?

In my investments.

Okay.

Yes.

Okay. My assets, we'll call them.

Margot, what do you think about those numbers?

Just the savings is ridiculous.

Okay.

I guess in comparison to the assets.

Yeah.

And—

What about the good stuff?

Yeah, there's good stuff.

Yeah, thank God.

We have wealth at the end of the day.

Thank God.

I don't know. We're fortunate.

This is the most depressing— how many digits in this fucking thing? Number one, two.

A lot.

A lot of digits. I never heard a more depressing answer. Thank God.

Ah, fuck.

That's the response?

No, it's good. We're very, very appreciative of what we have.

We really are very fortunate.

And we did pump a lot of money into those assets.

All right. What are the assets, by the way?

There's homes and my business. We have two.

Just the two homes.

Two homes. How much are those worth total?

Between, I would say about nine, eight and nine.

Nine million for the two homes.

Yeah. Great.

And then the business you valued at $2 million?

Yeah.

Okay. How did you value that? Just out of curiosity.

I was offered a buyout at that number.

Oh.

But I didn't take it.

We have a real business value on this show. Amazing.

Yes.

Too many times people come on the show, they go, I make $150K. That's probably worth $22 million. I go, what the fuck? Yeah, whatever.

No, I had an offer like that. I declined.

Amazing. All right, well done. Your investments at $500K, what are those investments in?

Stocks.

Okay. Like a 401 type of thing?

It's not 401s. It's in—

That's my— it's my personal—

It's between both.

Individual stocks?

Yeah, individuals.

Got it. Savings at $50K. Low compared to assets. I think you recognize that, Margo. And then what's the debt? $2.3 million. What is that?

That was just the mortgages.

Okay. 2 mortgages.

Yeah.

$9 million value. $2.3 million left to pay.

Yeah.

What's your interest rate on both of those?

They're fantastic. So that's why—

Tell me.

You know, it was during COVID so the rates were cheap.

2.75%.

Yeah. Great.

Well done. All right, let's take a look at— Margo, can you read off the combined gross monthly income, please?

Zero.

Yeah, that's interesting. Y'all make $0 gross?

Um, I put the net.

The net is $50K a month.

Yeah.

Where's the gross?

It's probably 70, 60s.

You make $60K gross and $50K net? I don't think so. What's your gross income per year? Ballpark?

Let's call it $700,000.

Do you pay yourself a salary?

Yeah, of course. That is the salary that I pay myself.

$50K net is the salary you pay yourself? And are you an S corp?

Yeah. Yes.

Okay. You take distributions as well?

Yes.

How often?

I like to get it in once a year.

How do you decide how much you can take?

Depends what's there at the end of the day. At the end of the—

That must be tough for planning.

Yes, because the business fluctuates. There's years we'll have an incredible year, be able to pull a lot more. And then there's challenging years with You know, all that's gone on in the business that I'm in. Tariffs plays a big role. Shipping, the consumer.

What kind of business are you in?

I do wholesale.

Wholesale. Okay. So you have stuff you're bringing, importing certain types of goods. Tariffs have affected those goods, making it more expensive.

Yes.

Is your net income down over the last, say, year or 2?

Yeah.

Okay. Got it. We're going to find out the approximate gross monthly income that you would make In order for you to net $50K.

Okay.

And we're going to put it in. We might be right or wrong. It depends. But considering I don't see any pretax deductions like a 401, it will be relatively straightforward given that you live in New York, et cetera. So we'll be able to extrapolate that. That will clarify a lot of stuff. So y'all are making about $96,500 per month gross. How does that number strike you?

It's a nice number. Beautiful number.

Margot, $96,000.

It's a very high number.

It's a lot of money, right?

More confusion. More confusion.

Right.

So did you know that approximately you all make about $1.15 million per year?

Do you, though? No.

If you run the numbers like that.

I just took what you made and I added on taxes, et cetera. Reverse engineered it. It might be off by a few tens of thousands here or there, but in the grand scheme, Now, by a show of hands, who knew that you make approximately $1.05 to $1.15 million per year? Put your hand up if you knew it. Okay. Margo says no. You put a half hand up. What is that?

I know what I make. I just— it's not always that number.

Yeah, it goes up and down. Like I said, it's, you know, some years up, some years down, some months up. Fine. But just in general, we have to average it, right? Pick something. Did you know that?

Yeah. All right.

Can we go down the rest of these?

Sure.

All right. Margo, what's this number here under fixed costs?

67%.

67%. So typically I like to see that number below 60%. And for very high earners, which I would call you at netting $600,000 a year, that number should probably be way under 60% in general. Now, you all have 5 kids. And you live in a very expensive area. So, all right, I don't mind if it's 60, but too high. Okay, let's keep moving. What's the investment number, Kevin? What's this percentage right here?

I was gonna say 1,000.

Yeah. Now, I don't know about you, but I don't really believe 1,000%. And I don't believe you're putting $500,000 a month Into investments.

Oh no, is that— was that a monthly thing?

Yes, this is monthly CSP.

Sorry.

No, this should be zero, correct? That's more like it. So nothing is going to investments.

Nothing.

I kind of liked it better at 1,000%, but yeah, reality is reality. Uh, savings are at 80%. That's wrong. I don't think you spend $30,000 a month on vacations, but no, that's—

no, absolutely not.

Okay, I thought this was yearly. Sorry, my bad.

So you spent $30K a year on vacation?

At the least.

What's the actual? Don't be shy.

Just don't spend more than that.

The trip alone was that.

It was 20.

One trip. No, it wasn't.

And then it's 30. It's— I, I would say 30. I would not spend more than—

wait, who's the one who charges it?

Yeah, me.

So I do the research, like, yeah, but, uh, he's the one who charges it, right? So let me ask him. Okay.

Yeah, I would put another 10 on that.

That's it? 40?

40 for a— Let's call it that.

No, let's not. Let's call it the real number. I feel like it's way higher than 40. You all have 5 kids. You obviously like to travel nicely.

I'm telling you, we do. We use points. All right, fine.

Okay, fine.

Is it more than 40?

Let's call it 40.

Uh, gifts says $10,000. That's wrong because that's $10,000 a year you give in gifts. Is that right? Or not? What's the gifts?

Gifts like big family. So baby gifts, wedding gifts. I don't know.

How much you give for a wedding gift these days?

We just gave his friend $360. Okay.

Sounds reasonable to me. What about for birthdays?

Birthdays, we buy our kids. We celebrate like 4 days of birthdays in our house per kid.

Pretty much.

I only care about things like— My daughter just got a ring. It was $500.

$500 for a ring. What about the birthday parties and dinners and stuff like that?

Dinners get costly.

It's more like I'll do a Friday night dinner and invite my family over.

Does anybody know any numbers? Like, do you kind of notice what's happening?

I just—

every time— No, hold on. Let me, let me tell you something. I am asking simple questions. Income. How much do you spend on vacation per year? I'm not asking complicated questions. I don't even mind if you're off by $10,000. What I'm looking for are straight answers from you, and neither of you can give it. In fact, what I notice is that you live in your story. So what you're doing, you don't realize it though, is you're giving me just the scratching of the surface. I don't care if it's $100 or $10,000. I truly do not care. It's your money and your life. I want you to both start dealing with reality. Give me a ballpark number and estimate high, but don't give me we spend $500 on a ring because it's bullshit.

Okay, it was $1,000 on Marie's birthday. We took her out for dinner. We had Friday night and then the ring. So figure $1,000.

Okay. Could it be higher?

Marie's birthday was the last one. We spent $1,000.

Total, everything. Ring, cake, food, decorations, taxis, Ubers, et cetera.

All of it. No, we don't do that stuff.

Okay, great. $1,000. Good. You have 5 kids. I know the youngest is maybe not as costly. Maybe. Uh, all right, so $5,000 there plus $5,000 for friends and family, $10,000 a year. Sounds reasonable to me. I'm gonna change it to $1,000 a month, which is $12,000. I don't mind. I'd rather have you have a little bit of extra.

That's—

there probably is a little emergency fund.

Nothing. Nothing.

Okay. And then guilt-free spending. Well, if the numbers we just put are true, y'all have $12,000 extra per month.

But what about groceries? Do you have any clue how much we spend on food? Every Friday night is Shabbat, which means there is a large meal and the meat is kosher.

Well, let's look. Let's look. So I want to look at your fixed costs because they're very interesting. 67% fixed costs. Let's drill into it. Okay. Your rent— sorry, your mortgage is $11,000. Frankly, incredible.

For the 2 homes.

Yeah. $11,000 is very reasonable, especially for a couple making $96,500 a month gross. So well done on that. Utilities, $2,000. All right. Insurance, $5,000. What's that?

I mean, my health insurance for the family is $4,500 a month.

But I don't, I don't see how it's $5,000 if just our health insurance is $4,500. And then we have auto, dental, and homeowners. How, how did you get to $5,000?

Well, the medical insurance comes through the company, so, yeah, it is a little higher than—

How much?

Let's call it $700. Okay.

You all seeing the pattern?

Yeah.

What is it?

That we don't really know our set expenses.

Exactly.

Yeah.

Let's continue on. Car, $2,500 a month. Does that include gas?

No, no, it's not $2,500 a month. It is. It's got to be.

It's 3,000.

Do you think it would be more efficient for me to just take every number, just double it? I mean, why are we doing this?

What the hell is going on?

But also, that's like, put the number. What's the— calculate the number properly. I don't know.

I want to just zoom out for a second and ignore the numbers. So can we all take a second and, like, almost as if there's a game of chess being played, I would like you to zoom up and look at what's happening on the chessboard. You asked Margot to come and meet because obviously something does not feel right. There's a high income. Yes, you live a very nice life, but like, where's the money going? So you fill out all this stuff. You want to be a little bit more harmonious, a little bit more united, a little bit less like annoyed and annoying about all this stuff. Like, why is money such a problem when we make Presumably a lot of it. What are we doing wrong? So you get the CSP. The instructions explicitly say do it together. You don't. And here we are now.

Right.

Fast forward again. I'm not here to beat anybody up. I want to help you understand your own behavior.

Yes.

What are we noticing from looking at these numbers, Kevin?

That we don't really know our own.

Yes. The numbers are wrong. I don't mind that the numbers are wrong. Almost everybody I talk to, the first time they do their CSP, the numbers are wrong. Some of this stuff is a little complicated the first time around. But importantly, I noticed that, Kevin, you said, I'll take care of the CSP. But looking at the numbers, they're all wrong. So what are we to make of this? Kevin?

I don't know what I'm spending, probably.

Yes, I agree. Margo?

He doesn't include me in the finances. He just gives me the brunt of his upset about it and his stress.

He doesn't include you in the Financial conversations. I agree with that. Anything else?

We're not making any segue. We're not getting anywhere.

We're not on the same page with it.

We're definitely not on the same page.

Not on the same page. Not making progress. That's what I'm hearing.

Yeah.

How does it feel to you? How would you put it?

I get it that he feels like this is his territory, and I am in charge of a lot in our lives. I'm in charge of the kids and the household, and I make a lot of decisions. However, I think that It would be a lot better for our family, our marriage, our finances, and everything in our life if we start to be a team and we start to work on this together. Because, you know, obviously it needs work. It's not going to work itself out. This is important.

Love it. Great. Kevin, when you are thinking about money and like the CSP or managing expenses, etc., What are you feeling when you think about sharing more information with her?

Well, when I originally said it was— it became an argument or stress for her. So I just decided to not do that to her anymore.

Because?

Because if we're going to end up arguing about it or not being on the understanding that I have and she has and not being met, yeah, then it just becomes frustrating. So I guess I just took it to myself to manage.

Can I paraphrase? Tell me if I'm getting this right.

Sure.

Whenever we talk about money, it doesn't really go anywhere. We get in a fight, it gets stressful. We don't see eye to eye. She doesn't understand money the way I do. So if we're going to have those conversations and fight, I might as well just do it myself. And that way, She doesn't need to be bothered, and I can deal with whatever problems there are.

Well said.

Is that accurate?

Yeah, it works.

And now that you're hearing Margot's reaction to some of this, what do you think about that idea?

Yeah, I'm more open to sitting and coming up with a plan that we can both focus on, share thoughts, and be on the same page with Everything that's going on.

Good.

You're open to it. I appreciate that, Margo. You've been asking for that, so I appreciate that coming together a little bit. I also think if I can be candid, these numbers are like very wrong. So I actually think not only might you be open to it, you might actually need Margo's help. Yeah. When I brought my wife in, and it took us a long time, it was hard, man. I could have done it myself much easier, but I was like, nope, we need to both be partners in this, et cetera. But Guess what I discovered after several years of working for us to come together? I was like, oh, she's actually better at some of this than I am. I was like, I'm the I will teach you to be rich guy. How's my wife better at this? But actually, I needed that. Not just that I'm open to it or I want her, but it's like, oh, she's actually fucking good at this. I just didn't put her in the position and us in the position, which you now can. Okay, let me just summarize what we know about these numbers. I see a very high income, almost $100,000 a month gross. That's a huge amount. That's what more than most people make in a year. Okay, I see a high net income, $50K a month take-home. That's $600,000, a huge amount of money. Now, I understand that you have high living costs. I understand where you live.

Cool.

Your mortgage is low. Like, wow, unbelievable. And, um, I see some expenses that are really high. And as I dig in, I go, uh-oh, like, I don't think you really know your numbers enough for us to, like, go line by line. But I can essentially see what you are telling me, which is at the end of the year, you don't have much to show for it. Oh, you have a beautiful house, your kids go to private school, and you take some nice vacations. Yes. Hey, listen, I need to cut in here because I know I'm about to get 5,000 comments from people saying, boohoo, another high-earning couple. Let me let you in on a little secret that they don't even know yet. They are spending more than they make every single month.

Camps, sleepaway camps. We left that.

You didn't put in— you didn't put tuition in there. Where's the tuition bill? That's a huge, huge, huge bill.

Shall we put it? How much?

$150,000.

$150,000. And then what about the camp?

Camps came down a little bit this year. Call it $10,000.

So $150,000 plus $10K, $160,000.

Yes.

I like how, like, you know, once in a while you have somebody, like, feeling between the couch cushions. And remember, like, when we were kids, we used to find a quarter. We're like, oh my God. Like, I'm going to the arcade. But in your case, we just found $160,000 of hidden expenses in your couch cushion. So if I'm doing the math right, we're at around $13,000 a month. I like how that was just left off, by the way. Yeah, beautiful. Um, hey, what's that fixed cost number right now?

101%.

Yeah, you're spending more than you make every single month.

So now that's about exactly where we're at, where We're just right at the border of what we— yeah, we tinker.

Groceries are a test.

Under, over, under, over, under. Like, we take—

Do you understand that when you spend 103% on fixed costs, you actually are way underwater because you also have travel, which is not included in fixed costs? You also have gifts, you have eating out, you have all the discretion. Tens of thousands per year. So you are spending far more than you make every single month.

Now it makes sense why he's so worried and stressed.

Agreed.

Did you know this before now?

I knew it. I just left a few things off, I guess, for you to see.

You want me to— you want to put me through my paces?

I want you to earn this.

Okay.

Right.

So what do you all think about that?

I don't know how we're going to pay that tuition bill this year coming. It's a big one.

Yes, it's a huge amount. What else are you realizing? Because you had problems before tuition was being covered. You still had problems.

I mean, we have to allocate savings before spending somehow. Yeah. I don't know.

Are you realizing that this is a pretty bad situation?

I guess so. Yeah.

Kevin, what are you realizing?

Yeah, I agree with what you're saying, but I have a tendency to look at it a little different where, okay, we're getting through the year, we're behind a little. A good distro could bring everything back.

And then what?

And then we did have a decent cushion, which if it didn't get wiped out, I don't know if we'd be sitting here today.

What happened?

The house needed It was mold.

There was mold. The kids were having health issues, and we went to a doctor that was recommended that didn't take insurance. And the treatment was, at the time, not covered on insurance.

You had, like, really bad mold in your house?

Yeah, really. Like, black mold covered the entire bottom under the vinyl floor of the basement.

Oh my God. With 5 kids?

Yeah. And each kid had it. And the doctor visit was $11,000 per kid.

What? How much did it cost? For mold remediation.

That was all this that we just mentioned was about $400,000.

And we didn't— and then for some reason we didn't have the right home insurance. We didn't get back anything. Barely anything.

Half a million dollars for mold. Horrible. Is it all fixed now?

There's a little work to be done, probably $10,000 to $15,000 worth.

I mean, the money part, this sucks, but just the idea of like this thing could be lurking Yeah. Anywhere, everywhere with kids is like—

yeah.

Is the plan to get the remediation again?

I don't know. We didn't even talk about it. Luis said, let's get here. Okay. I didn't even— we didn't talk about it yet.

Fair enough. You can fight one battle, 2 battles, even 3 battles at once, but 10 battles, just too much.

Yeah. Okay. Now I have 2 kids on herbal remedies, which has been fantastic, and they're doing great. What is it? Every month it's about $500 a month for that. Oh, and then the human growth hormone for my daughter. She stopped growing with all this health stuff. And so that's another $1,000 a month.

I want to point out a couple of other things on your fixed costs. Groceries at $4,000 a month.

At least.

That's higher.

Just Friday night dinner costs $500 between the meat and the groceries and whatever it is.

$4,000. What do you think about that number for a family of 7?

I don't know. I have no idea. Is it high?

It's really high.

I really like— I go to Trader Joe's and then I'll fill in in the more high-end grocery store near us, like just whatever my certain things. But most of this— and then the meat is really, really expensive.

And is that a necessity to eat meat?

Yeah.

I mean, that amount?

I don't—

nothing goes in the garbage. The answer is no. Nothing goes in the garbage.

Like, we're eating. It's not like food waste. It's like—

That's not what I'm talking about.

I'm saying, could you have pasta, or do you need the meat? Yeah, because pasta is a 10th of the price.

Could you eat what I ate when I was a kid? Then again, my family didn't make $96,500 a month, so I can understand why you're like, hey, not buy organic chickens.

Kosher organic chickens.

Yeah. How much does that cost out of curiosity?

Like $28, $30 for a chicken.

Okay, $30 for a whole chicken. And how many of those do you buy?

Um, well, on Friday night I buy one, but then I'll, you know, there's a roast, there's a chicken, there's a, um, a vegetable, there's another like meat dish, there's rice, there's— then there's like the salads. And, you know, there— it's a big meal every Friday night.

You know I love these stories. We didn't go to Vail, we went to Europe. It was cheaper. We love points. Shabbat dinner every Friday. Oh, and we have to have kosher meat. Think about what any of these stories individually represents, and then all of them combined. These stories are basically ways to distance themselves from having to make tough decisions about money. I'm not sure the two of them have ever actually said no when it comes to money, because of course we have to do this dinner. We have to have this type of meat. We have to go on this vacation. Actually, we're saving money. We're actually really economical. These types of stories make it hard for me to actually deliver on what people come to me for. It's fascinating. They will write these applications, they will go through a ton of screening, and when they come to me, they almost put a force field up by telling these stories. They don't realize what they are doing, but they are trying to insulate themselves from me getting—

Money.

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Okay.

One, I feel on shaky ground because Not only are the numbers incorrect, which I don't mind, again, most people have incorrect numbers the first time, but we're off by maybe $25,000 a month. We're not off by $2,000 a month. We're off by tens of thousands a month. That's number one. Number two, when I ask some questions about things like food, you actually have really good answers. Like, well, we have this thing on Friday and then Tuesday, and there's a lot of people, et cetera. All that may be true, but that doesn't solve a problem here, which is like, if we can't even agree that, oh, maybe we're spending kind of a lot on food— $4,000 a month is an astronomical amount.

Is it?

Yes. Most people who come in to speak to me as a couple, maybe they have a young kid, they spend roughly $800 to $1,000.

With one kid?

Yes, but most of them don't shop to a number. As the family grows, of course it's more expensive, especially as the kids get older. They're eating a lot of food, no doubt. But there are economies of scale to be had. And at 5 kids, here's the fact. If you want to feed your family like an amazing set of food, you could do that. Absolutely. You can do that. You have the income to do it. But you can't do that and do tuition and do summer camp and do vacations and do the insurance that you have and the mold remediation and— and— and when was the last time either of you said no to spending money?

She brought up wanting to send one of the boys on a summer— it's like a 3-week program. For them to go. I said no to that.

That's fine, Margo. What about you?

I don't know. It's more me consulting with Kevin. Should we purchase this, or can we purchase you know this right now?

So you ask him, can we purchase this, or can we do this thing? And then he says, not right now, or go ahead.

Yes, we can. Yeah.

And and what are you realizing from his mastery of these numbers?

I don't think he's aware of the numbers.

Exactly. So when Kevin responds to you, yes, we can do this, or no, we can't, where do you think it's coming from? Because it's not the numbers.

Based on, I guess, his bank account and credit card bills.

I think it's just a vibe. How do I feel today? Do I feel good? Do I feel bad? Did I get these orders in? What's the distribution maybe going to be 3 months from now? It's just a vibe, right?

Like I said, I'm a giver. Like, why did my son need the car? Yeah. And then I'll sit and my own brain, I'll say, well, he's going to spend $300 on Ubers to get around, and then he's going to be on us for our cars when we don't have it. And that's just another burden to deal with.

This is vibes. This is what I'm talking about.

All right. So I said, get the car. Makes sense for a few hundred dollars more. For him to be independent, go to work.

What do you mean independent? You bought him the car. That's not independent.

Well, he has to get to work. So if he can't get to work every day, I'm paying for him to get to work. So I think, and I still do, that I would spend more money on him if I didn't get him the car.

Are we here to make changes? Are you here to explain?

I'm telling you why.

But I don't care about that. I appreciate knowing, and I want to know some of the why, but I'm not interested in rehashing the stories, because the more you tell me the stories of why you're doing what you're doing, whether it's the food or whether it's the car for your kid, the more you concretize your narrative about yourself. Well, Ramit, I told you, look, we had this, and then we had that, and I figured this, and if he didn't do that, then he would have done that. And now you just spent 3 minutes explaining to me, and where are we?

The cars is a big example because it's hard for him to make the change, but You know, I'm willing to downgrade my car. I called, you know, get a Kia. There's a Kia with a third row. How do we get rid of it? No, it's too much of a hassle because you can't give the— they'll charge us more to give the car back. But okay, we have to go further and try to find a solution on how to get rid of the car and get a cheaper car, even though BMW won't let us cut the lease early. But like, still.

No, that was a significant cost to get out of it.

You all are just doing it again. In fact, you're doing what I just told you you're doing. You're going right back into the story. I don't care. I'm not trying to be disrespectful. You came here because you want change, but what you are doing is you're just rehashing the old story and explaining why. Do you want to walk out of here being like, we told this guy all the reasons we changed nothing, but we told him all the reasons we do what we do? Is that what you want?

No, we want the solution.

Okay, so why are we going back and telling me about your third wheel and this and that? It's irrelevant.

No, because you're looking for ways for us to save.

No, I'm not. I haven't even gotten there. I'm looking for you to understand what is going on here. and you don't yet understand it? Why is it that your wife comes to you and says, can we do this? And you give her an answer. Why do you give her that answer?

It's in that moment of what's going on.

Exactly. You just arbitrarily pick yes, no, the sun is in orbit. What?

That's based on things that are going on in my life.

Right. But there's no use of actual numbers.

Right.

And until you both realize that your understanding of reality is so out of alignment with the numbers, then you will keep making decisions based purely on vibes. Right now, you make very close to no decisions based on numbers. Why? Because there's such an abundance of money, at least seemingly. With a high income, it's like, do we really need to track the price of Pringles?

No.

Who gives a fuck? But the problem is, it's not just Pringles anymore. It's multiple cars, multiple properties, camps, multiple tuitions, and on and on and on. And it actually has gotten to the point where even at $1 million a year, you actually can't keep up. So you have choices. What are the choices you have?

We need to cut costs.

You could cut costs. What else?

Make more money.

You could make more money. Anything else?

I don't know. What would be else?

We already spoke about discussing it together, and that's good with plans.

Yeah, I think that's really good. Coming up, doing it together is a good part of the process. I totally agree that needs to happen. Out of cutting costs and earning more, which one are you more philosophically inclined towards? Do you want to earn more or do you want to cut costs?

Earn more.

You want to earn more? What do you want?

I think we're both Always trying to earn more. So the only thing we can change is how much we spend.

Okay, amazing. So you propose, Margo, focusing on cutting costs, and Kevin, you propose earning more. So do you see right here, right now, you're already out of alignment right there with that fundamental question? What approach should we take? If you don't actually talk about that and agree on it, then each of you is rowing in a different direction for the next 10 years. So how are you going to come to a resolution on that?

Discuss it more.

We have to really sit down and get all the numbers on paper.

Well, we just did it to the T. I mean, yeah, you can improve your accuracy, I agree. But you all are here. You might as well make a decision right now. Earn more or cut costs?

If we can have earn more in our power, that we would have had it already. So we have to cut costs. What choice do we have?

I'm trying to think of areas where we can cut and how much it would save us at the end of the day. I don't know those numbers. So cutting costs for now is probably a good strategy until there is more earning. And then hopefully we'll know what to do with the extra earning as we leave here and get some advice from you.

Mm-hmm.

But until then, it looks like if I earn more, we're going to spend more, and it's going to be a cycle.

What's the decision?

Downgrade our spending. It's just— it's a nerve-wracking thought because I don't feel like I'm overspending.

And I think, where? Where can I cut costs?

We keep doing that. Okay, where could we cut? Okay, but I'm not going to buy less food. How could we buy less food? We're not going to not send their kids to To a private school next year.

Okay.

They're not ready to change their schools.

Or vacations. That's what happens when we discuss cutting costs. We don't know where to cut them or how much value that cut would bring to the table.

I don't think we know how to cut costs. I don't know. I think we know how to live differently. This is what we've been doing for 20 years.

And, you know, it's what we've been doing forever. Earning, spending, earning, spending, spending, spending.

I think we have to allocate a certain amount of time a week where we sit down and we put our time and effort into this. And it's going to be a project, but it has to get done.

Okay, that was good, but that doesn't work for me. Okay, I'll tell you why. You all just gave yourself homework. Okay, but what better scenario will you have to make big, bold decisions than literally right here with me watching.

But we need your guidance. We don't know what to do.

Okay, well, you can ask questions, but what you did— you didn't do that right now. What you did was there's a feeling of discomfort in the room because, holy shit, we're actually having to talk about this substantively for the first time in a long time. And unconsciously is like, oh, this shit feels bad. So let's do this. Let's agree that we need to sit down. and talk about it, and we'll do it, and it's going to be hard, but we'll do it. It all sounds great. It's very PC. It's very nice. The problem is you didn't do the one thing that matters, which is make decisions right now.

What decision? Like, where we're going to cut the cost?

Are you going to cut costs? I did not hear both of you agree to that.

Yes, we're going to cut costs. I agree to that. Do you agree to that?

That's the first time I heard a question asked. That's the next thing I want to point out. Do the two of you ask each other questions, or do you just talk?

We just talk.

Exactly. You cannot get where you need to go by just talking at each other. Because what's happening is, although you are both quite polite, which I appreciate, if I had a sport right here on the table, it would be like boxing. Not that you are fighting each other. That's not what I'm saying. But you are each in your own corner, and you come to the middle to basically deal blows. They just happen to be like, this is what we need to do. Well, what about this? I can't do this. And there is no team. And how can you be a team if you don't ask questions of each other? Hey, what do you think? Oh, you say we can't cut groceries? Tell me more about that. I don't buy the groceries, so I don't know, but what is that like? And then you say, hey, you mentioned it's not going to be a good year. What do you mean by that?

I've definitely asked those questions. We've looked at it.

I don't think you've asked a single question substantively about money of Margot while we've been sitting here.

Not while we've been sitting here. But when we do discuss it and I take out the The credit card bills.

Oh, you go, what is this?

No, I say, how do you— what could we do without? And it comes back as, I'm getting what I need to run our home. So how much pushback can I get? Should I tell them, don't buy food or buy less of the food?

Yes.

But also asking that question when you have a credit card bill in your hand and saying, what can we do without? While I think, Margo, you need to be more open to spending less, a lot less. I do think that waving around a credit card bill does not evoke cooperation, especially if somebody is a mom of 5 and she's running the household and somebody's coming in saying, like, what can we do with this? Even I would be like, I don't know. I'm running this shit. If you want to do it, you do it. But what are you talking to me about?

That's exactly it.

It's not setting up a healthy conversation right here. We can have a healthy conversation in therapy. Do you two see a therapist?

No. Not really. Once in a blue, if we need, like—

Would you be open to it?

Yeah. We have someone that we talk to once every so often.

Kevin?

Yeah, I don't mind.

Amazing. Great. I highly recommend it, in part because having these conversations, having a facilitator who can help point out certain things you definitely do not notice on your own, invaluable. We've done it. A lot of my guests have done it. Highly recommend. Okay.

It's funny, I could do it in my business but not in my personal life.

So isn't that the way it is?

Why? Yeah, I can't figure it out.

It's funny, actually, that's a great way to put it. I can't figure it out, so therefore I'm going to get help. If I'm the two of you making $96,000 a month, I'm like, we come first. We, the two of us. Because without us, everything else falls apart. Kids are unhappy, houses go away, everything dies. So we will put ourselves first. What is it going to take? Well, we need to be communicating. And even though, yes, we're nice and we love each other, obviously everybody needs a little help sometimes.

Yeah.

Boom.

Not denying that.

Yeah. Okay. When you've looked at how your money is set up, the way that you talk about money, the way that you both see money, do you think your money setup is simple or complicated?

It's definitely not simple.

It's not organized. It's messy.

Okay. You want to fix it?

Yes.

Good answer. Kevin?

Of course.

Okay.

I want to know, Margo, what you remember about money when you were a kid. What did your family say about money?

My family didn't talk about money much. There was enough of it. And my dad was the breadwinner. My mom, I remember every Sunday night, my dad would leave cash on my mom, on her bathroom sink on the side for her. And that was her money for the week. And it was never really discussed. It was never a stress. It was never an issue.

Did they say any phrases you remember, like money doesn't grow on trees, or we can't afford it, or spend money on education? Any of those things?

No. Maybe once in a while. You know, it's too expensive.

Did you have a job when you were a teenager?

Yeah, I was a tutor through high school, and I was a lifeguard in the summers, and I worked at summer camp, and I saved all that money, and I invested it from a young age. And that's my investments. You serious? Yeah. And then anytime I made money, I would put more into it.

You have half a million dollars in investments that came from you as a teenager?

No, part of it. A portion of it is also stocks that my grandfather bought me that I never sold. I held on to.

Cool. This thing about your grandparents gave you investments and then you as a teenager invested your money, it's all quite interesting to me. Who talked to you about investing? Most teens don't know about it.

Nobody. I would get a little bit of cash from my grandparents, and my dad's like, I'll put it in your bank account and I'll save it for you. We're going to save it. So I would always save. And then when I worked at camp and lifeguarding, my friends would spend their money at the end of the summer, and I would put it in, give it to my dad to put in my bank account. So I never spent any of the money that I made. I always put it into the stock market.

Great. Kevin, what do you remember your family saying about money when you were younger?

Money was an issue. There was not much of it. I'm the youngest child. I worked from a young age, 15. I was working same system, making, spending, doing well. Spending, saving. I was never taught any kind of managing money skills in any way, shape, or form.

What did your parents do for a living?

My dad had retail stores. My mom did— she was, you know, stay-at-home mom.

Okay.

And then he was in the ticket business, which was very successful. But then there were some state regulations that come into place, and when he lost that, I was about 13. So from then on, I really never went to him for money. Never asked.

Did he struggle with it?

Yeah, they both did.

Okay.

Are they still alive?

My mom is. Your mom.

How's she with money?

Right now she's supported by the brothers and sisters.

Got it.

We support her. They did have 2 homes. They sold them. They lived off them. They spent it. Invested some that went bad. Not the smartest sequences.

Do you think your dad knew how to manage money? Seems like he knew how to make it.

He could make it at times. He was unbelievably creative, but he had no clue how to manage it. It was in his suit pocket.

And did he spend a lot?

No, my mom did.

Your mom spent a lot. What'd she spend it on?

Whatever. Like clothing, brand names, names, Shoes, clothing.

Does this sound familiar? Not that it's an identical situation. Not even that you spend on shoes, but, like, the dynamic. Dad is good at making money. Do we know anybody like that?

Sort of. Yeah.

You.

Yeah, me. I know.

There's only 3 of us in this room.

He doesn't think so.

No, I know.

What the hell's going on here? What?

I don't know that he thinks he's good at making money, though.

You said it 20 minutes ago. I'm good at making money. Nobody taught me how to save. What's the reluctance of admitting this?

It's not a reluctance of admitting he worked and worked and worked 7 days a week. Okay, I do. But he didn't enjoy anything. So maybe that's part of the problem. I saw that and I'm like, what kind of way is this to live? Work, make money, not enjoy it.

Oh, okay. So got it. So we've got to enjoy the money that we make, hence the nice living standard of living. Okay, fine. Fair enough. Your mom, she spent a lot of money on things around the house.

Materialistic.

Materialistic.

Okay.

Again, I'm not applying directly here.

It's fine.

I haven't quite heard that. But think of the way that you wave the credit card bill around and bring it to your wife. What is the implication behind that?

Well, first, to get an understanding of why it's 9 pages long. Second of all, to— I don't know, really. I don't have an answer for that.

Is it possible that you see her, at least in part, as spending a bunch of money that doesn't need to be spent?

I think that. But then the few times we do do a review, I'm like, okay, makes sense. You know, food is food. Education's education.

Not really.

Camp's camp.

Not really.

It is in our world. And that's sort of the—

Do you think that might be the problem?

We live in a community where everybody sends to one of 3 schools and everybody sends to one of 3 camps and everybody—

What's the phrase? Keeping up with the—

Joneses.

Y'all.

But they're looking at us like we're the Joneses.

This is the problem. It's called pluralistic ignorance. Everyone is in on it. But no one wants to admit it.

I feel like there's no escape from it.

Of course there is.

We looked at a public school for my son. Yeah. We told him that you're going, your grades are not— we're not going to bust our butts to send you to private school. You're not even working that hard. It's the first time in 16 years that his grades are up. But do we pull him out for the last 2 years of his high school and put him in public school?

Him alone is $50,000 a year.

So sorry, I'm not interested in the stories again. I'm not interested in rehashing that. And I actually—

No, not a story. How could I put him in an environment that he has never been in that's filled with things that we don't believe in?

It's just one part of the picture.

I know. So that's, that's why the decisions are hard. So we keep doing it.

Keeping up with the Joneses.

No, keeping up with what community values. I wouldn't say Joneses so much, but our community values. The value of learning our heritage, being in an environment that we feel is safe for our child.

Okay.

Not in a public school environment.

Guys, I'm not pushing you. It's not my place to tell you to send your kids to public school, private school. It's up to you.

No, I'm just throwing this out that these are part of the decisions we have to make. So I'm always going to make the one that I feel is going to benefit my child.

Keeping up with the Joneses. Boy, don't I love this! And it is a rare opportunity that we see today where we have a couple that is literally keeping up with the community around them. And I pointed this out to them, and did you notice their response? Oh well, I mean, we're not really keeping up with the Joneses. This is our tradition. These are our rituals. Think about what that represents. That answer is almost an impenetrable story that I cannot argue against. What? Who am I, Ramit Sethi, to come here and say, "Well." Oh, um, those traditions are actually putting you in the poorhouse. I can't really say that. So they expect me to go, well, I guess that makes sense. Not gonna happen on my watch. Not on this podcast, Money for Couples. I will not allow couples, whether they are earning $75,000 a year or $1 million a year, to thoughtlessly spend and then assign the blame to their heritage. to their rituals, to the community that they live in. No, you chose to make those decisions. And if you want to, that's okay, it's your money. But we cannot blindly say, well, I do that because everybody else did that and that's what I saw growing up. Okay, and you're an adult. It's time to take responsibility for your decisions. And we're gonna start doing that right now. This episode of Money for Couples is brought to you by our friends at Wildgrain. Recently, I saw someone online complaining about the price of a croissant If you want to make that yourself, be my guest. In fact, send me the video of what the output looks like. I'm not spending my time making great pastries at home, and neither are you. But if you want the next best thing, which is having them shipped to your door, check out Wild Grain. Wild Grain is the first bake-from-frozen subscription box for sourdough breads, seasonal pastries, and even French butter made by small independent bakers right to your door. Everything bakes straight from Frozen in 25 minutes or less, always made with simple ingredients you can actually pronounce. My coworker loved her recent shipment, including their blueberry lemon donuts. Plus, Wild Grains boxes are fully customizable. In addition to their classic variety box, they have a gluten-free, vegan box, and a protein box available in flexible subscriptions you can skip or cancel anytime. If you're looking for an easy way to enjoy bakery-quality food at home, I definitely recommend giving Wild Grain a try. The fan favorite apple cider donuts and other fall seasonal products are back for a limited time, so make sure you order before they sell out. Visit wildgrain.com/ramit to get $30 off your first box, plus free croissants for life. Again, that's wildgrain.com/ramit for $30 off your first box and free croissants for life, or use promo code RAMIT.

At checkout.

You do not have enough money to send your kids to private school starting now. You have no money set aside for college for your kids. You have no retirement for yourself, although you do have 2 expensive properties which you could sell. But you both are extremely reluctant to discuss that.

No.

Because fundamentally, you don't trust yourselves. Any money we have, we as a couple spend it. So having our money in real estate, at least it's locked up so even we cannot spend it. At least that is safe.

But it's also an asset. It's not an unintelligent thing to say, let's have our savings in real estate.

On one hand, you're telling me having an asset is intelligent, it's smart, it's going to grow in value, it has grown in value. On the other hand, in your own application, you're telling me we live month to month, making over $1 million a year, and we can't figure out how to spend less.

So we need to cut costs.

Okay.

If I put your numbers back up on screen right now, we would get nowhere.

Why?

Because when I've asked you about groceries, you were not willing to concede even $1. When we talk about school, you're not willing to concede even— in fact, you doubled down. Vacations, have not heard either of you entertain even the concept of that. In fact, if anything, you're underestimating how much you spend. And you have this idea, oh, we're actually saving money because we didn't go to Vail. It's actually quite good. We love points. Where are you going to cut? You two actually read the situation better than you think because you both said, where are we supposed to cut? Exactly. In the situation you have put yourself, where you live, the choices you have made, you have actually created a knot that is so tight it is impossible to untie unless you decide to play an entirely different game.

We're open to that. You are? Yeah.

Okay, Margo?

Yes. What's the entirely different game? Like, move?

You tell me. Let's play it out. What are some options if your goal is to stop being stressed about money while making $1 million a year, to actually feel good about money? What else would be the vision here? What's the rich life vision?

Well, I'd like to build my summer home.

Okay.

I'd like to— I would love to have a ski home one day.

Ski home? Where's it going to be?

I don't know.

Okay. And then the summer home, where would that be?

Summer home we have already, which we just want to build.

Okay.

And, um, yeah, not being stressed about money, being able to spend in a way where we feel like we're living a comfortable life and we're also saving at the same time. Okay.

Want to add anything?

Rich life vision is, in my opinion, at the least, having savings, something to show for it at the end of the year that you could move forward with because life's moving quickly. In 20, 30 years, when I turn around, we've married off our kids and we're looking at each other, we want to have, like we said in the beginning, our assets, of course, if we can hold on to them. But we want to have money where we can enjoy that time. I don't want to be working at 80, 77, 75, but I could have a few fantastic years and work and the knots untied. And there are ways to save and put away that money. I just have to learn how to actually do that.

I'll tell you, some, especially with a business owner that's consistently making a million bucks. A million dollars can make up for a lot of financial mistakes.

A lot.

Like, if you're making a million dollars, there's just so much cash sloshing around that you can kind of make things work. I'll tell you when it stops. Usually it stops when somebody stops making that kind of money, like their business goes down. And as a business owner—

I've had years now that that happens.

Exactly. We all know business owners, it goes down, down, down, down, down, and it goes down forever. And that's over. So that's number one, when that ends. Number two, it ends when the person is unable to sustain anymore. Maybe they get older, injured, whatever. And then third, this is the most rare, is when they simply have such high expenses that they just can't keep up with them and they just drown. In your case, it may be a combination here. The expenses are astronomical. You could untie the knot line by line, or you could simply say, like, this isn't the way we want to do it. But I'll tell you why I think it's difficult for everybody right now, is that this is what you've known. And Margo, you said we were born into the knot. What do you mean by that?

I was just going to say that we live in a community that is very traditional, and it's the same schools that I went to as the school where my kids are going to. And The holidays cost a lot of money. The cost of living is so much higher, even when you account for inflation, that the percentage of my income of what I'm paying for tuition and food and just basic cost of living compared to my parents is such a larger—

Astronomical.

It's so much more astronomical. So they were able to do it and it made sense. But now I think there's a lot of couples my age that are having the same struggles to keep up and keep this lifestyle. Fair.

I totally agree. It's very insightful. And your conclusion thus far has been what?

Something has to give. Something has to change. Something has to give.

What has been giving so far?

What has been giving is every single penny of what we're making.

And more.

And more.

You're spending more than you make. You're basically hoping it all works out. Maybe next year you take a nice $100K distribution that might cover some debt you've accrued, but What happens the year after and the year after? Essentially what you've done is you've taken on a massive amount of risk.

Massive.

It works until it doesn't. One question I have, Margot, is you mentioned your dad used to help with the tuition. How many kids was he paying for in private school?

It was just that he would offer to pay for just like a portion of one of the school's tuitions. This year, was it like $70,000.

$70,000 out of how much?

Our total was what, over $150,000?

$200,000.

And then you mentioned that he will not pay for the tuition. What happened in that conversation?

We just felt like we wanted to be independent and not have to ask. This is our family, and it's something that we should be doing on our own.

Okay, I appreciate that. Is this the first time you've looked at the numbers of how much it's going to cost for Paying for a private school for everybody?

Um, we know the numbers because that's one of the biggest expenses that we have. I think it's the first time that we looked at it in the context of what are, are we spending on other than that, and what is he making.

So what, what do you think? Where's the money going to come from?

Hence I put on the application— that's, that's when I put the application in.

Oh, from cutting out the course.

I'm like, you know, how do you think we're gonna do this next Cutting in other areas to support that.

We feel very strong about that.

Okay, but where are we going to cut?

Shall we look?

Shall we look?

Okay, I'm going to put these up on screen, but let me just— let me suggest something. You mentioned private school is very important to you for the kids. Is paying for their college important too?

Yes. I don't know that they have to go to American private university that costs $90,000 a year. Now, I'm okay with City University. I'm okay with international.

How much would you put aside for them? Do they have a blank check? Somebody wants to go to NYU, can they go? Is there a number?

We're living month to month. We're not planning. We're living month to month.

Exactly. Because the two of you are not willing to pick numbers. So that is what we're going to do now.

Oh, my God.

I take a lot of joy in this. It might not be as joyful for you, but for me, it's quite fun.

So happy that we've brought you joy from Brooklyn, New York.

So let's, let's recall a couple of things here.

Assets.

What's that number again? Can everybody say it out loud? 1, 2, 3.

$11 million.

$11 million. Never heard a more morose group of people talking about $11 million. Oh, $11 million. Oh, $11 million.

No, we're very thankful. We're very extremely, extremely fortunate and thankful. There's no question about it.

Yeah, yeah, yeah. I heard you guys say that before, but I don't feel it.

We're very nervous. We have a big— we're nervous.

I appreciate that. That is honest. We are nervous.

This is not a joke. This is not a joke. I have 5 kids to support. We have a crazy tuition bill coming up. We do not have a plan.

This is the first time I have heard a sense of urgency from you. This. You are finally saying, as the clock ticks down, we do not have a plan and we are nervous. And I appreciate that because finally you might be ready to change.

Yeah.

This is not a joke. It's not. You have 5 kids, you have very high expenses, and as long as everything keeps going great, yeah, you could kind of make it work, sort of. But the day it doesn't, you are in serious trouble. And if it happens 2 bad years, It's over. Well, you got $11 million, but you're going to have to make some really tough decisions you don't want to. So it's time. Now, normally what I tell couples is they need to get these numbers to less than 60% on the fixed costs. What I would like to do is spend 60 seconds max, max, going through your fixed costs and each of you calling out what you can, what number you can reduce your fixed costs to? Who wants to go first?

Save the car payment.

Okay.

What do you want to take it down to?

Half.

How are you going to do that?

Get rid of my car. Use my son's.

Love it. Love it. Dad is repoing his own son's car. I fucking love it.

Good job. All right.

$1,200. Very nice. That takes you down to 105%. Margot, you're up next.

Groceries. We could take it down to 3.

How are you going to do that?

Figure it out through Trader Joe's.

Yes, good answer.

Figure it out.

Three thousand. Okay, you're up, Kevin.

What's all this miscellaneous things that we forgot?

My CSP automatically adds fifteen percent because most couples do not carefully track their fixed costs, and they have expenses that they do not account for, such as maintenance on their car, some pet accident, whatever whatever stuff they don't account for. If you are in a financially difficult position, you cannot. afford to have 15% just unaccounted for, especially when it's $6,680 a month. All right, so what number should we have that is your overflow buffer that's reasonable but under control?

$200 for miscellaneous a month.

Y'all have 3 teenage kids. Put them to work.

Like what?

They are the ones who figure out what's miscellaneous. You ever gotten them involved in the money?

They just ask for money and he says yes.

Yeah, they ask for money because they are not involved in it, just like they ask for food because they don't have to cook it. But maybe when it comes to miscellaneous, we can cut this number down to, I say, $1,000.

Okay.

Because we are going to effectively enlist the help first of each other and second of our kids. Because by the time they get older, by the time they're 18, 19, they need to know this stuff. They need to know how to plan a grocery list, how to plan a vacation. This is how kids learn so you can change the trajectory of their lives. All right, we're at $1,000 here. Y'all are at 91%. Okay, let's move on. $2,000 a month for clothes? I don't think so.

Like, you want to lower that number?

I love my job.

There's 7 people in the house.

Yeah, where do they shop?

Like, really, the kids? I try to really—

Amazon Basics.

Don't tell me that bullshit. Where else do they shop?

We're Zara, H&M.

Yeah, we're very Zara, H&M, J.Crew. I don't buy brand name, but you know.

You just bought me this.

It's very nice.

$10, J.Crew, when they're on sale, extra sale. That's where I buy him his stuff.

Wow, I'm impressed.

I have had these for 6 years.

Guys, I don't—

Those, $63, Bloomingdale's on—

I mean, y'all can talk all you want. You can play the sitcom game with each other, but our time is running out and you're gonna go home saying, wow, we really had fun there today.

Cut to $1,000. Cut it in half.

I'm not going to just make up numbers.

What's a normal number for that?

A normal number for that. Well, let's break it down. Kids, how much do you want to give each kid per month for clothes?

In other words, give each kid their own allowance.

Sure.

And let them work with it.

Wouldn't that be a great way to teach them?

Yes.

I bet you they wouldn't be buying J.Crew anymore. I don't know. Who cares? It's up to them. Figure it out. And if they can come to you and if they go, this isn't enough, you go, okay, make the case, put a PowerPoint together and make a proposal. But right now, this is how much you get. Good luck. Y'all taking so much burden on yourself, especially with 5 kids.

So much burden.

And yet you're just like giving them what they want. $2,000 a month for 5 kids. It's a lot of money. Pick a number. It's way less than this.

So $1,000.

Okay. All right, let's try $1,000. And that means you have to pick a number that each of them gets.

That includes my clothes.

You're not getting any new clothes for a while.

Got it.

I feel like this is preposterous because we have a couple that's worth $9 million. But with the expenses you have incurred every month, like $13,000 of private school per month, there are no new clothes. These are the trade-offs you end up having to make if you want what you said you want. We want savings. We want to have upward trajectory, not downward. Well, then you have to make tough choices. If it were anything, it'd actually be probably less. than that. It's probably more like $700 a month, if that. We didn't spend, as a kid, $100 a month on clothes. We didn't. We got cheap clothes from Kmart and Target. We didn't know any better. Your kids live in Brooklyn, so they do know better. That's part of the not. So it's going to be very difficult for you to be like, here's $100 a month, good luck. They're going to look different than their friends. A lot of quiet over here. What's happening right now?

Okay.

Are you realizing?

Yeah.

What are you realizing?

Realize we don't have to do some of the things we do.

Yes.

That the kid— yeah, we're giving too much to the kids, for sure.

Yes. And that the costs of the situation you have put yourself in are more than are immediately apparent. Where you live, the community you live in, it costs more than just The mortgage and the schools. It's also the food and the type of clothing. None of these things would be normal in a different community or geographic area. So again, if you want to live there, it's fine. It's up to you. But these are the costs that you—

Yeah, it comes with—

Comes with the price tag. Exactly. I'll put it at $1,000. I don't know if you'll hit it, but I think you could easily. Easily. Well, y'all are at 89%. It's still too high. You're spending more than you make every month. No money for college, no money for savings.

That's, that's the price we pay with this tuition bill. Yep.

So what you are now seeing is that you have structurally put yourself in a position where you just don't have enough money every month. And it is crazy to say that making $96,500 per month, but you are paying multiple kids private education. In New York. That's it. What do you want to do?

I don't know. If you start to cut out the tuition, you're talking about life-changing events. So it's off the table.

Can I make a proposal? Sure. First of all, I really like what's happening right now. You two gave it a fair effort. You did. You did a nice job bringing some numbers down. That was good. I'm noticing that you are both realizing this is not as easy as you thought. I appreciate that. And so now we're going to make some tougher decisions. All of this based on what you told me you want. You want to be able to have a comfortable life. It is important to you that you send your kids to private school, et cetera, et cetera. Okay, so how are we going to do it? Well, there's one number jumping out at me right here. What's that number?

You want to sell my summer home?

The assets.

Assets.

$11 million.

Vacations.

So right now you're at $11 million, and presumably those numbers grow over time because they are your houses. Well, first off, they cost money. That I didn't really even see.

Upkeep is tremendous on homes.

Where is that? I don't see it here. Another $30,000, $40,000 missing per year, at least.

That much? For what?

A proper way to do it is to take your house and take 1% to 3% of the purchase price every year for maintenance. Every year. Now, I know, and you know, the prices in Brooklyn, Manhattan, et cetera. When I estimate how much it would cost me to own, it's like 3% plus because everything is expensive there. People don't understand how much it costs.

To get the plumber to come to the house is $350.

I had somebody come. I got to tell you something. I rent a place there, and we have this fridge. And I told— I love posting on Twitter about how I rent, not own, because people think I'm stupid and they don't understand costs in New York, Brooklyn, whatever. The handle on our fridge was loose. Do you know how much it costs for somebody to come and fix a fridge handle? This is a nice fridge. I estimated at least $1,000, probably double. 3 guys wearing booties came into our apartment, came, looked at it, go, we don't have the right part. Come back.

Yeah.

A few days later.

We've been there.

Imagine how much that costs in New York. So the upkeep on your home's very expensive. You are cash poor. You're losing money every month, but you have $11 million in assets. What's occurring to you right now?

Rent out our summer home for the winter.

That's one way to go. Why don't we put all the options out on the table?

Well, the business is in there. Should we take that off?

No, I think it's fair to put it in there. $2 million is fair. Keep it there.

Okay.

What about with the houses?

What other options are there than selling one, renting one?

Those are the options. You never put those out on the table. Sell them, rent them.

What—

how would that change your picture?

What could we get for the summer house?

I don't know. I never put it out there.

How much could you sell it for?

$2 million.

It's not bad. And then the house you live in, that's the big one, right? What is that, like $6.56, whatever, $7 million?

That's— yeah, about between $6 and $7 million.

Damn. $7 million house and spending more than you make. This is house poor.

But every year it goes up.

Yeah, but where's the money?

I hear you.

And then is there another house?

No.

No. Land or something you're building or all that stuff?

The summer home.

That's the one in Jersey?

Supposed to go to the ground.

Ah. What do you think, Margo?

We have plans, but there's nothing going to happen. We're not going forward with anything.

So are you open to renting it?

Renting it out?

Yeah.

The winter? Yeah.

Are you open to renting out for the summer?

No, because where would I go?

Right. Are you open to selling it?

I don't want to be open to selling it. That's my summer home. That's my future summer.

Are you open to not taking any more vacations for the next 10 years? Yes.

10 years? Yes.

Really?

I'm not— I don't— I'd rather not. I don't want to sell my homes.

I love that answer. You're willing to not take vacations for the next decade if you can keep your house?

With the hope that I'll start making money and Kevin will start making more money. And in 2 years, where it is out. And so that's a big relief.

Well, he's got to go to college.

I don't know that he's going to college. We'll see.

One way or another, though, like, the next kid's gonna go to college.

Like, it's always going to be expenditure.

There's a factory you've got with 5 kids that even if one doesn't go, whatever, there's gonna be something else. So I appreciate maybe one or two won't, fine.

But I just feel like once we— in 2 more years, once we have that You know, we'll be done with college and we'll be out of high school. That's another— like, that's a relief.

Can you tell the kids we're not going to pay for college? Would you be open to that?

No, I would not tell them I'm not going to pay for college. But he can go to Hunter College or Baruch, which is a good business school, and you pay city tuition prices. It's not—

He's going to pay or you're going to pay?

Good question.

What's the answer?

I don't know. I'd probably tell you in 2 years when the time comes.

You all are the parents. You decide what's to—

So maybe we don't have to pay full tuition next year. He found himself a job there that he's going to start working next year. Why do I have to pay my son's second year full college tuition and dorm? It's a big bill. Why do I have to always be struggling for the kids?

Again, that's something where we came from. They're constantly building up their kids, bringing them into the businesses that they created.

I understand. My parents are the same way. My community is the same way. They will spend an effective unlimited amount for education for their kids, even if it puts them into debt. I understand deeply. However, my group of Indian parents and my parents' friends, their spending was radically different than this. First of all, they didn't make this kind of money. But second of all, we didn't go to private schools, camps, vacations, none of it. We had no clothes. Like, go look at an Indian kid's picture. We don't look good. Indians have an Indian glow up. Why? Kids— Indian parents want us to not look that good, so we focus on school. Again, I'm not saying it's right or wrong. Different communities, fine.

Right. It's just—

But like, the math is the math. And I want to say one thing. It would be difficult for me as a kid whose parents live in a $6 or $7 million house and take quite nice vacations and stuff like that. For them to put me into, let's say, $95,000 of student loans, that would be difficult. Again, it's up to you. If you were to be like, we're not paying it, I'm like, cool, I'll help you tell them. But is something a bit out of whack? What do you think, Margo?

I agree. I agree. Again, it's the system that we're tied into.

Yes.

The elementary and high school tuition is so high. And now with the cost of living being so high and it's like almost impossible to pay, we're tinkering on just being able to get by. But we don't— we don't— this has happened to us for so many years now.

What do you think I would do?

You would— well, you don't own a home, so I would assume you would sell one of the homes.

That's correct.

You're a believer in renting.

I'm a believer in running the numbers.

Yeah.

What else would I do?

But you would sell something that you know is going to appreciate. Like in 18 months.

Also, there's the rental market. The rental market in here is like slim to none.

I'm sorry, are we asking me what I would do, or are you trying to convince me you're—

No, what worries me is that I burned through that money.

That's because your dad did that, and that's what you've seen, and that's what you know. But there are people who do it differently.

But I'm right, and, and I don't— with investing and putting away money and making that money work for you, it's not my specialty.

So what? You ever, you ever heard of a book called I Will Teach You to Be Rich? See it right there?

Yes.

You ever read it?

I have not.

It's not your specialty because you never did the elementary.

I don't know. We look at assets as very important value. But I hear you. And I did bring it up.

He did bring it up.

Okay, so back to your original question. What would I do? What do you think I would do?

What would you do? You would sell the home?

What I would do is I would talk to my partner and I would say, What do we want? What do we really want? Because our whole life we grew up here, we went to these schools. Now our kids go to these schools. Everybody we know is around us. Every Sunday we do the same thing. Every Friday night we do this thing. We know it's our ritual, it's our heritage, what we know. We make a ton of money and we have not been able to get ahead in many years. And we take one step forward, it seems like two steps back, even when we Save four, five, six hundred thousand dollars. This thing comes out of left field and just kneecaps us. Do we want to go the next thirty plus years like this? More importantly, what are we teaching our kids? Because it sure seems like the lessons our parents taught us about money, which were close to none, are the ones that we are teaching our kids. Keep up with the Joneses. Of course, we want continuity. Live in the same neighborhood. It's going to be even more expensive for them. How are they going to compete? How are they going to even keep up? So if we don't make changes, they are going to be in our position in 15, 20, 30 years, but it's going to be even worse for them, and they're not going to know why. So we can't just delegate this and pass it on to them. We got to actually make changes now. It's going to be hard. Because this is what we know. So what do we want? I think we want, as a family unit, to understand the value of money. I think we want to enjoy our lives. I think we want to set our kids up for success. We want to teach them valuable lessons. How do we do that?

Well, we—

first of all, we make a lot of money, so earning more is not really on the table. I hope we do, but we already make $1 million. We can't make it work. $2 million is going to be the same thing. We have assets. We probably need to tap into some of those assets. There might be one house. We sell that house. How many years of private school tuition would selling that house get you?

It would get us through a 5-year period.

5 years? That's not enough.

Why don't we send the fuck to school for the next 2 years in Jersey?

What about the other kids?

I cannot move them.

I can't do that.

Okay. Absolutely not. It's not an option. But the high schooler— well, the— why can't we take a loan for the college one?

Where's the money coming from?

For— we'll pay it monthly. Let him pay some of it. He's working.

That doesn't solve the problem.

Why?

Because that's a drop in the bucket.

Is it?

Yeah.

It's $30,000.

Y'all are spending $150,000 plus per year On kids' education.

So if you take that down to 120 because you're minusing the the older one, that's not a drop in the bucket. If you take that's good.

Keep going. I like that.

Okay.

What else?

I like it. So right, and he can pay it. And if he wants to go to my dad and ask him to help him, he can do that.

Great. That's good. One. What else?

Okay. Goes to school in Jersey, which is half the tuition. That's 50.

That's some hard decisions we have to discuss and make. It's not going to be made here.

Okay, but he's selling my houses so that we can pay this tuition where he's not even flourishing in this private school. We're killing ourselves to get through this tuition, and he's not a studious kid.

Talking about these things does not mean you are making the decision.

No, of course. I know that.

Margo is on a roll here. I actually want you to encourage her because the two of you have not been able to unlock this. She's on a roll. You could see it, right?

Yes.

If you're getting help, meet her energy and exceed it. You go like, oh my God, that's a really good idea. Never thought of that. What else could we do tomorrow?

We gave an option. So if he takes out a loan, let him start to contribute. We'll meet him where he's at, and the rest will be have to pay over time. In other words, we need your help. We're in a position where we're spending more than we're making, and we need you to chip in for the tuition. And I also don't need to give him $300 a week. It's ridiculous. Let him work this summer, save it, do the best he can. Let him start to hustle a little bit. I don't know.

Okay, that's awesome. So that's $50.

That's $30.

So he needs to find a way to do it.

He needs to find a way to do it.

So you can cut that down to $50 a week. Good luck. Looks like you're eating ramen. Fine. Figure it out.

And his tuition.

His tuition. Who's paying that? He is?

We'll pay a portion of it now. So maybe cut that in half. $15,000 will be a loan for when he finishes and he's working, he can pay it. And the other $15,000 he has to pay, I guess, half, and we'll pay half.

You want to see what would happen if we took it down?

Sure.

Watch this number at the top right. Fixed costs drop down to 80%.

That's it. We're still at 80%. And we still have to get to 60%.

Yep.

We have to get to 60%.

No, you don't have to. You could keep it higher. You are in a very expensive time in life, et cetera. But right now you have very little liquid cash. It's actually terrifying because you have about a month's worth of savings. If something happened to you, y'all are in big trouble. One month's worth of savings and your expenses are astronomical. Even with these changes we made, it's $40,000 per month.

Is there anywhere else we can cut without selling the houses? What— so what if we did rent out? Is it worth it to do that?

I mean, we'll just net out, uh, $2,500 a month. Okay, watch what happens. Your fixed costs drop 3%, 77%. It's interesting, but not that interesting. I once had a woman on this podcast who wanted a beach house and She was saving every last penny, and it was causing her a lot of anxiety and stress. And I asked her, what is behind this beach house? And she told me that she grew up, they went to the beach. She wants the same thing for herself. And I said, it sounds like a lovely vision. Is it possible there are any creative ways to get to this beach house? And I proposed to her, what if she just rented a nice one for a week or 2 or something like that? And it kind of struck her. She was dumbfounded. She had never considered it.

It's the same knot.

It's—

I grew up there. The kids go to camp there. I love my summers. Like, it's like we say that the year is so hard, but we have like all my friends are there. We have girls. It's like, it's really very important part of my life.

I get it.

Everyone picks up from Brooklyn and goes to—

They go to this same Jersey Shore area. It's like a migration.

Can I, can I tell you my perspective here?

Yeah.

So I'll never tell a couple, a family, like, pack up and move to Ohio so you can sell. I get that. It makes no sense, especially when you have your community embedded where you are. But where you are in this community is not serving you, at least financially speaking. And obviously it's not serving you relationally because you all flew all across the country to see me. So this is not working. And again, it's not working. And you're having great years. A million bucks a year is fucking awesome as a business owner, but it's not working. So if it were me and I wanted to stay with my community, but I couldn't make this work, this is what I would do. Big, bold changes.

Okay?

Easy for me to say. I know that. But that's why you came to me. I would get rid of one or both houses. I don't know which ones. I would find a place that's more inexpensive. I know it's difficult for 5 kids. I know that. I know this is not easy, but this is why sometimes we need to hear from someone else. I would not own a second place. We simply cannot afford it. Finally, with the school, the kids would have to not be in private school. It's just not feasible. Now, if I could do that for 3 or 4 or 5 years and bank a shitload of money, and I would know the exact amount we need to have, which would allow us to pay for the kids' college, perhaps, if that's a priority. have a retirement and know the exact number that we need so we never have to go down, but rather go up. And I could do that for 5 years at $1 million a year. If you actually contained your costs dramatically, you could lock away hundreds of thousands.

Also, if we have $8 million earning interest and bringing in more money, it's more money.

Massive.

We've had this conversation. Don't think we didn't.

Okay.

Liquidate.

Yeah.

Cash rich. Invest it, rent.

Yeah.

Step away from a lot of the problems. It's so hard to do when you're doing it for 40, 50 years of your life. You're living in that same situation. It's hard to just say, okay, liquidate. I'll have $8 million in the bank. Great. It will earn X. I could still make this. We'll compound it.

Mm-hmm.

But we're living a completely different lifestyle than we're mentally and physically used to.

It's really hard.

It's a tough one. I mean, I love that option, but then the other part of me says, how could I do that? How could I step away from the community I was born into?

Why step away? Maybe it's a little bit different neighborhood. Maybe it's a few blocks away.

It's a little different.

I know it's not the same. I get it. Even a block away can be totally different. I get that. But again, this is not working.

His parents sold their houses.

Yeah.

Went through the money.

Listen, it lasted them 20-some years.

How about we make sure that doesn't happen?

How?

Y'all could invest in simple funds. You'll be fine. I'm not promising some get-rich-quick bullshit. It's simple. What— the investment part is not the hard part. It's the two of you getting aligned on expenses. But if you had I don't know, $8 million, just interest.

$240,000.

Yeah, $240,000 a year in safe withdrawal income coming from that. So he would still be making, let's just say, $1 million a year. So you're still bringing in the current income, plus you would have an extra $240,000 a year of money, which you could use however you see fit, probably saving.

But that money would go towards rental of The home and the summer home, it would equal $200,000.

Well, if you chose to spend that much, it would.

I mean, I have a lot of people to house.

Yeah, well, like he said, you can go to a different area where it's a little bit less, but you're still within the community.

Well, you wouldn't be in Brooklyn, that's for sure, because there's nothing less than $10,000.

Listen, I hear you.

Here's the facts. Having multiple kids in private school, plus college, plus cars, plus Food, all that stuff. It just doesn't work. There's no magical answer that I can give.

I know.

What do you want to do?

It's a lot to be discussed. We have to sit down and discuss things. But yet, at the end of the year, if I make double the income with our habits, who knows if there'd be anything left anyway at the end of the day?

There would not.

But so we'd have to come up with a system, put it into effect. And make some hard decisions that we don't want to.

The one thing I want to say is time is not on your side. Y'all are getting older, and high income can help if you start late in life.

Okay.

Luckily, again, you have millions of dollars of property. That's an enviable asset to have. So my message to you is, from the surface, it seems okay, kind of like the way you look at your neighbors and you're like, How are they doing it all? And maybe they are with parents' help. Maybe they make even more money than you think, or maybe they're in similar situations where they're just like, oh my God. But when you have a family of 5 where you live, in those schools that you're in, with the lifestyle, which I understand, even $1 million a year, it's really difficult. 20 years from now, I'm going to be hopefully doing this Podcast. Say I have one of your kids come on and I ask them about how they grew up and I ask them what they learned from their parents about money. What are they going to say?

I mean, any of them would say we had a great life. We have what we need. We're getting it all. Our parents gave us— are we teaching them the value of money? I would say Probably not so well.

Okay.

I think that they witness us struggling and arguing about money. And I think that— I don't know that they feel the actual value and, you know, of what things cost because they get a lot. What is the right way to have them being a part of this financial situation?

Outstanding question. At 4 or 5, they should be watching you click a button to pay the credit card bill, even if it's a not real button. Help me push the button. Great job. This lets us have a roof over our head. Get them involved. Have fun. At 7 or 8, they're coming to the grocery store with you, and you're talking about, here's how much we have to spend. Can you help me do it? Age-appropriate, small numbers. Keep that going. 10, 12, they should be planning, they should be the ones picking what's on the menu when you're eating out. Here's how much we have. What are we going to get? Where are we going to go? As they get older, we're talking about that same principle, the grocery store, the restaurant. Now it's with bigger amounts of groceries. Birthday party, here's the amount. What do you want to do? It's up to you. You've got to make the trade-offs. You've got to tip the vendor, all of that. Then it's buying a car. Then it's taking a family trip. By the time they graduate, they know taxes, tips. They know what it's like to get ripped off. They know maintenance costs. Right now, how much do your kids know of those things?

We don't even know. We don't go into a vacation, like, calculating exactly how much we're planning on spending.

Right.

That's not effective.

No, but they see it. They just don't know how to—

They have some sort of concept of money. Yeah, but they don't have a concept of it in relation to how much we have available to spend. And so what about a 16-year-old?

They should be close to running part of the household when it comes to finances.

Like, for example?

They should be investing. They should be having a certain amount of money. I would not be giving a 16-year-old a bunch of money to go out and buy clothes. Compared to how much money they have to invest. Sure, they can have a little bit for fun. For sure, they're a 16-year-old. Enjoy. But they're talking about the difference between saving and investing, something that the two of you do not do. So all of this is a bit moot until the two of you get aligned, because you cannot do the thing where you go, do as I say, not as I do. They'll read right through that. They're too smart. So I appreciate the questions. They're awesome questions. But until the two of you actually are dialed in with your money, then Until your fixed costs are at 60%, even 65%, and you're saving at least 10%, 15%, investing 10%, 15%, guilt-free spending is way down, they're just going to see this as a show, as a charade. And I don't think they've ever seen you make tough decisions about money.

And if we had money to invest, where would it go? 401 or what?

401 is a great place to start, especially with the options you have. Or perhaps a SEP IRA. There's a few different types of accounts that business owners have access to. You could pick simple index funds. That's where I have the majority of my money. It's really simple. Can't predict the future, but we can see that typically it's returned about 7%, 8% after inflation every year. That's a lot of money. So the investing part is not difficult. The suggestion I have is that the two of you do start a book club, each of you. If anything, I would actually involve your older kids and be like, we're all going to read this together.

Okay.

If you want to change things, you need to really take it seriously. And your kids would actually need to see that. If I talk to them in 6 months, I should ask them what happened as of 6 months ago. Holy shit, my parents really changed. And I would challenge you to think about what that change is and what you want them to see, because right now they are equipped to leave the house, graduate college, not really knowing anything about money. Then I don't want that for them. I don't want it for you. The stories that we tell ourselves through the generations are incredibly sticky, and they can be things like, of course we send our kids to college. They can be things like, of course we buy a house. So when I am speaking to this couple and I am even proposing the idea that perhaps they can't afford to send multiple kids to private school, Perhaps they can't afford to pay for their college. Perhaps they might need to sell a beach house. You can see that it almost does not compute.

Why?

It's not that they're stupid. They're very intelligent. It's that we are talking about generations of beliefs that have been passed down. It's not easy to get rid of those things. One of the key lessons of Money for Couples is that money is not just about numbers on a page. It's about beliefs. It's about social systems. It is about things that are passed down consciously or unconsciously, orally or not. And that is exactly what we are seeing here. A system, an interlocking system of beliefs that are showing up right there on their CSP, where they live, what schools the kids go to, what activities, even where they go on vacation. But Sometimes those beliefs simply do not align with where you are financially, and that's when you have to make some very difficult decisions. My point is not that they should sell the house immediately. My point is that I don't think they've ever even considered the alternative. What if we took the money and invested it? What if we took $500,000 of that and put it aside for the kids' education, or $1 million? What if we felt less stressed and actually had a vision together? But until they can rid themselves of this restrictive story, we must own houses, we can never sell until we die, they will be in this position forever. My wish for Margo and Kevin is that they systematically deconstruct the stories that they have surrounded themselves with. You do not have to spend $4,000 on groceries per month. You do not have to send 5 kids to private school, including college. You do not have to live in 2 different houses until the day you die and struggle with money because that's what everybody else does. You choose. Right now, in a way, it almost seems like they are on autopilot with their stories and You cannot live a rich life on autopilot. So Margo and Kevin, I wish you the best. Please keep in touch. I appreciate you coming on here. It's a difficult conversation, and I really hope you're able to make some huge, bold changes. Now let's check out their follow-ups.

Hi.

Our biggest takeaway from the conversation with Ramit was that it's not about cutting lattes, but our fixed costs are so high, and that's what's taking us over budget every single month. So the changes that we've decided to make was getting rid of our most expensive car and downgrading our second most expensive car. We've also set a lower grocery budget as well as miscellaneous.

Miscellaneous.

Like clothing budget with not just intentions, but we're going to have concrete numbers that we're gonna stick to. And we are going to start doing financial planning as a family. We've ordered I Will Teach You to Be Rich, and we're going to sit down with each kid as well as the family as a whole and start discussing money and our finances and what's appropriate for each kid at every age and start to get them involved in the process. Um, from, from this age on. Thank you again, and we look forward to checking in again.

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