"We own two houses, but can’t afford dinner out"

You said we cannot eat out.

Yeah.

Because of our housing.

Yeah. We are supporting two households in two different states. It is eating into all of our ability to do anything else.

I don't want to just exist in the two houses, not doing anything.

Let's take a look at the numbers.

Whoa.

You are essentially spending more than you make.

Yeah.

I've sensed a chill come over the room now.

We both really love our various home bases. For either of us to give up that is really tough.

If you change nothing, what happens?

I don't know.

You would not be able to pay for the houses, right? One or both.

I just need to make more money.

Well, it would work if nothing were about to change in 2 weeks. Is there something happening in 2 weeks?

Maybe a baby.

So like, where does the baby fit in financially speaking? Have we modeled any of that?

I'm anxious. I'm so anxious about having enough savings.

We have to make some decisions that might feel like a little uncomfortable now, but they are a lifetime of comfort. I'm about to speak to Nicole and Drew. They're 39 and 40 years old, expecting a baby in a matter of weeks. And they both live in two different states, in two different homes that they each purchased. Nicole applied to speak to me. Let me read you from her application. She wrote, my partner basically needed me to buy a house. It was a non-negotiable for Drew to stay with me in a house without roommates. So I ended up buying a place. I'm wondering if that was a mistake. She continues on to say, we are unable to eat out and to go to concerts because we are putting all of our funds into houses and needs. It consumes me and worries me so much. Now, if somebody said to me, hey, we intentionally are making this sacrifice because we want to build equity and blah, blah, blah. Okay, but that's not what I'm hearing here. I'm hearing panic. I'm hearing regret. I'm hearing uncertainty, especially with a baby near due. I want to take a look at their numbers by pulling up their conscious spending plan. Okay, let's take a look. Assets, $1.2 million. Investments, $183,000. Savings at $67,000. Debt $986,000. Total net worth $516,000. Now, fixed costs 77%, which is quite high, explains some of the panic that I heard in the application. Investments at 3%. That's quite low. Savings at 10%. Guilt-free spending at 10%. When I look at their financial situation, the word that comes to mind for me is complicated. Two houses, two different states, panic over what to do about their finances, and a baby coming in a matter of weeks. I want to get to the bottom of this. Let's begin by speaking to Nicole and Drew. Let's go back to the moment where you were filling out this application. Do you remember where you were? What was going on at that moment? That called you to apply to Speak2Me?

Yeah, we'd been having a lot of conversations about our housing situation. Given the fact that we are supporting two households in two different states, housing costs are the biggest part of our, I guess, CSP.

And what is the tenor of those conversations that you'd had?

Tough at times. It feels like we have slightly different goals, and that's okay.

Why is it tough?

We both really love our various home bases for important reasons. I have family and community in Southern California, and that's really important to me. And Drew has family and community that, you know, she has built in Maui. And for either of us to give up that community is really tough, and it has been a conversation of, can we actually support two households with our income?

I see.

Yeah.

Okay, let me understand your living situation now. So we have Southern California, Hawaii. What's the situation with the houses?

We are a bicoastal couple. Drew owns a 50% share of her house, um, in Maui, and it generates income through like rent. Um, and I own the house here in Southern California.

The house that you own a 50% share in, is that your primary residence as well?

Yes, it's kind of like a boarding house. Is the structure— it's, um, 2, 3 bedrooms and then 2 studios. Ah, yeah.

Where do you live?

Oh, one of the 3 bedrooms. Got it. Yeah.

We'll look at the income later, but is the income that it generates consistent for you?

Yes.

Okay.

What's inconsistent is the, like, repairs and housing costs that I— because I'm new, so I don't have— I didn't have, like, the numbers all laid out yet as far as what to expect.

Do you make a profit?

Yeah, sometimes. Okay. Okay. Yeah.

And then, uh, Nicole, your house that you live in, that's your primary residence? How many bedrooms does it have?

2 bedrooms, 1 bath.

Got it. Okay.

When I'm not teaching, um, we spend our time in Maui, and during that time I rent out this Southern California home. Ah, and then Drew rents out the 3-bedroom space when we're not in Maui.

Okay, I'm very curious to look at the numbers and see how it, how it plays out. Okay, that's cool. And the time period, like, how much time are you spending in Southern California versus Maui and vice versa?

It depends. It's approximately 50/50 though.

Okay, like 6 months, 6 months?

About. I spend a little bit, I need to spend a little bit more because I teach and I have to be on campus, but Drew will come a little bit later and go a little bit earlier to prepare the house in Maui.

Cool.

So what do you teach?

I teach psychology.

Oh, cool.

Yeah.

All right. What area of psychology?

Developmental and research.

Cool.

Very cool.

All right, awesome. When is baby due?

In 2 weeks. Less than 2 weeks.

What? Oh my God. Congratulations.

It could happen right here, right now, if you're lucky.

Call a doctor.

Best episode ever. First baby?

Yes.

Okay, just so I understand, how long have the two of you been together?

2 and a half years.

Yeah, 2 and a half years. Okay.

Um, married, unmarried?

We're on the road to our domestic partnership.

Oh, cool. Okay, great.

Just more legal hurdles.

Okay, cool.

Yeah.

Now I do want to ask about the housing situation for a second. Nicole, I understand that you were living with roommates.

Yeah.

Um, and I think you were quite conscious of your expenses, is that right?

Extremely so.

Okay.

Um, so I was a really poor grad student for a really long time and made basically no money. I covered my tuition costs, like, I didn't want to take on student loan debt. Um, and so I lived with roommates. And then even when I got my full-time job, I was living with roommates because I was— let's see, my housing costs were like 12%.

Whoa. So you were a full-time professor living with roommates?

Yeah.

I fucking love this. Yeah, this is so—

it was great.

Counterculture. Yeah, I love this. But just think of it, Who in America can even fathom the idea, like, I became a full professor and I am choosing to live with roommates? No, we believe, oh, I made it to this level, now I need an SUV, I need this house, I need that vacation, et cetera. And you were like, no.

No, it was amazing for me. I could save money, I could put money into retirement, things I'd been wanting to do for forever. I was in my 30s when I finally got this job, and it was like, oh my God, I can finally catch up. And I could go like I was living life so well. I could go out to eat and not worry about it. I didn't have to think about a budget because I knew I could cover it.

Yes. Okay. Then in your application, you wrote the following.

Mm-hmm.

My partner basically needed me to buy a house. I was living with roommates when Drew and I met. I was intentional about saving money. It was a non-negotiable. For Drew to stay with me in a house without roommates. So I ended up buying a place. I'm wondering if that was a mistake. Take me back to that conversation.

Yeah.

What happened?

Basically, Drew said that if I wanted her to come and spend time with me, there could not be roommates. So it was like, okay, well, if I want to continue this relationship, I don't want to be fully long distance. That's gonna have to change somehow. I did want to eventually buy a house and I had been pretty aggressively saving. Like I'd been putting $4,000 a month into a fund to buy a house. And so it was like, okay, well, I could just move up the timeline a little bit. You know, instead of 2 years from now, I could just do it now. And instead of the $4,000 a month going into a savings for this house, it will go into the mortgage for the house.

How soon after that conversation did you buy the house?

3 months.

Fast.

Okay, fast.

Drew, what was going on in that conversation for you?

Well, you know, she couldn't come to Maui full time because of her job. And so that would have been the ideal, you know, like, I have a house, come here. And what was going through my mind was like, I can't live with these random people. And, you know, I just couldn't live like that.

Why?

I think there are circumstances where it could have been okay if there was some private space or like a better bathroom situation. It just was— for me, I felt like I was in college and I had been living a different way for so long, I couldn't go back and live like that. Yeah.

Was that like a major disagreement for you, or was it like, Drew, you said this is what I need, and then Nicole, you were like, okay, cool, bought the house?

There was pushback. And actually, we had had the conversation earlier. We had had the conversation maybe 6 to 9 months earlier, and I had said, can we wait for— I think I said a year. And we made it 6 months and she was like, I can't do this anymore. Like, it's got to be either that or I'm just not coming for this next semester. And so I was like, okay, well, I saved for 6 more months. It's not the full year, but it's at least half of it. We can at least start looking. We can see what's within my budget and So I started looking and we found ourselves very quickly, um, out—

the housing market.

Yeah, the housing market was crazy.

How did you decide to buy versus rent?

Okay, so I know your philosophy on buying a house, but, um, and, and I think—

what is my philosophy on buying a house?

That you should know your numbers and only do it if it's right for you.

Thank God. Yes, you are correct.

And you personally don't own a house yet, and that's okay. That's right for you. Um, And so I think at the time the decision was right for me in terms of I did run the numbers. It was within a percentage that was like reasonable, a little on the high end, you know, but it was around the like a third of my income.

Good.

And for being in Southern California, it felt like it was okay. I was already saving the amount that I was going to be putting towards mortgage. It felt like it was an okay decision at the time.

Great.

Yeah.

All of that sounds amazing. Ideal. You ran the numbers. It was roughly within parameters. You had already been saving the amount that you would then pay for the mortgage.

Yeah.

Amazing. So, you know, you've proven excellence that you can do that. I want to know about a time in the last, let's say, year where maybe you were not on the same page with money. Maybe it caused tension. For the two of you? Can you think of a time?

Yeah, we had a fight. Oh, I don't know if it became a fight, but when we were talking under the tree at, um, Nicole's parents' house, I can like see it in my mind. It was just so tumultuous, and I don't actually remember what was happening, but I remember my internal state was like one of feeling so much agitation, like, you know, brewing, that I wanted to just hit the eject button and just be like, I can't do this and I need to go on a walk.

What was the topic?

It was like actual numbers about something, but I did have to like walk away, like calm myself down, and then be like, okay, I can go back and I can talk about numbers for another hour.

Nicole, do you remember the topic?

Yeah, we were talking about, um, housing and school. So Drew is currently in school right now, and so paying for tuition and that's been tough. And then we've had some issues with actually a little bit of instability with the renting situation in Maui, and it's been pretty stressful. And so we were having some really tough conversations about how to make that work.

What was your perspective, like, in a couple of sentences?

Um, there needs to be enough cushion so that if things go wrong, we don't have to scramble to get just anyone.

Okay. And what was your reaction to that, Drew?

Overwhelm. Just like, yes. Like, my, my reaction is yes to, you know, we need to have somebody, we need to have a plan, you know, we need more of a cushion. Um, and then just some overwhelm.

I'm curious about the way you said yes. So you're like, yes, yes, but also no.

Well, I'm like, yes, and I don't know what the numbers are, and I don't know how to make that happen. Yeah, I'm not a numbers person, but I'm getting excited about numbers in life and being more grounded.

I think what actually made it more of a conflict was that I'm really numbers-driven and practical, and it was like, okay, we're gonna need $3,000 for this, and we're gonna need, you know, XYZ amount that we want to put away into a fund just for this, and how do we do that?

And what did you notice about Drew's reaction?

Yeah, um, it was too much detail.

That's what I remember. It was like so— like the minutia of it all was so overwhelming because it was numbers almost to like the cent or something, you know? It was just really intense for me and I felt really frustrated.

Are you used to avoiding numbers?

I mean, sort of. I have dyscalculia, but You know, that's one thing that might contribute to it. And I do feel like I go by vibes, you know, um, and I can like feel the about of something, you know, like a roundabout. Like I'm good with a generalized— like it could be a 5 to 15 and I'm good.

Okay, okay.

There's no need to figure out if it's 895. Like it's too much. Got it.

Got it. And by your smile, I'm taking you treat money differently.

Yes.

How do you do it?

Um, I wouldn't say that I am needing everything to be down to the cent, but I like to know to the dollar for relative things. And then I will— like, I, I'm the one with the spreadsheet, and so I'll look at our 12-month average, or I'll look at a 6-month average for things. And Drew, what do you do for a living?

I am a life coach, and I'm in grad school right now, in my last year to get my therapist license.

Ah, yeah, okay, interesting.

I have been on a mission since I left Taiwan, where I lived my whole adult life. And since moving to the States, I've had to really, like, ground into reality a little bit. I'm very much a dreamer, and I've needed to, um start looking at finances and looking at numbers and think about insurance and, and houses and all of these things that I never really had to consider before.

Before, how were you able to not look at those things?

Oh, just in Taiwan, I was— it's just not such a big thing, you know. I'm not— the rent was, you know, minimal, and I didn't have a car. I didn't have, you know, health insurance is, um, it's Everybody has health insurance, you know, it's not something you have to like get through an employer. So it's just a really different way of living.

Got it.

So coming back to the States for me, or coming to the States as an adult, I felt really destabilized. I felt really behind. I felt, um, there's just a big opportunity to like step into this.

And yeah, I'm getting a few clues that are starting to help me piece together what's happening here. We have Drew. She's a life coach. She's not particularly interested in pinning down specific numbers. Something could cost $5, $15, whatever. We're in the same ballpark. And then we have Nicole, who is structured about her finances. She likes to project things. She likes to calculate things. What do you think? Are these two views on money compatible? Let me know in the comments below. There are so many similarities between personal finance and fitness. And actually, I find that a lot of people, once they get good at money, they actually transfer that to their own personal fitness. Now, part of fitness is also what you eat, and to be able to have any tools that make this easier for you is a huge win in my book. So I'd like to introduce you to Factor, which lets you eat delicious, nutrient-dense meals without all the hassle. Factor is a meal service that delivers fully prepared, ready-to-eat meals directly to your door. And they have a lot of variety. They have over 100 rotating weekly meals, including high protein options, keto, GLP-1 friendly. They even have a Muscle Pro collection for strength and workout recovery. Factor meals include lean proteins, colorful veggies, and healthy fats. Plus they are never frozen and they are ready to eat in under 2 minutes. This is an easy way to try introducing systems into your health, specifically the way you eat. And if I needed healthy ready-made meals, this is what I would use. Let's eat real. Head to factor meals.com/ramit50off and use code Ramit 50 off to get 50% off and one free breakfast item per box for one year while supplies last until October 31st, 2026. That's code Ramit 50 off at factor meals.com. Ramit 50 off at factor meals.com. See website for more details. When you are a business owner, you quickly realize you've got to focus on the things you can control. And there are other things you can't control, like the economy or shipping fees. Now, there's plenty of opportunity in your own business to streamline things like payroll, onboarding, and HR. And those things you have direct control over. You can start doing that today by working with Gusto. Gusto is online payroll and benefits software built for small businesses. It's all-in-one, it's remote-friendly, and it is incredibly easy to use so you can pay, hire, onboard, and support your team from anywhere. Whether you need help with automatic payroll tax filing, simple direct deposits, health benefits, commuter benefits, workers' comp, or 401 matches, Gusto makes it simple and has solutions for nearly every budget. It also helps you save time with automated tools built right in, like offer letters, onboarding materials, all of these things so you don't have to create everything yourself from scratch. Plus, it's simple to switch. Just transfer your existing data to their system and you're good to go. Try Gusto today at gusto.com/Ramit and get 3 months free when you run your first payroll. That's 3 months of free payroll at gusto.com/Ramit. One more time, gusto.com/Ramit. Here's my question for you today. Do you know exactly what you need to do to reach your first $100,000 in investable money? Most people don't. That's why I created the Road to $100K, a step-by-step program that shows you exactly what to do, where to focus, how long it's going to take to get to $100K, and even how to accelerate your timeline. You can learn more at iwt.com/100k. Are the two of you building towards a joint vision of a future together? Have you discussed what that is?

Very much so. Uh-huh. The vision is, um, to have more of a cushion and to retire with money, like put money in towards retirement.

That's it.

That's our vision.

Wait, that's like today and 30 years from now. What about anything in between?

Yeah.

Hold on, hold on. Nicole, I know you have a vision. Okay, go ahead, Drew.

Okay. Gosh, I really haven't gone there in a little bit because I've been in the weeds.

Yeah.

And that feels emotional.

That's okay. Put aside this vision that the two of you have talked about. What's your vision?

My vision is community, my friends, my family. It's one of my favorite things ever to go somewhere, um, like our last one we did Joshua Tree for a week and just have a bunch of friends come and just be together, just totally relax. I love doing that on Maui. I love hosting. I love just having friends come and just enjoying life together. Um, I love really good food. We both love really good food and going out to amazing restaurants and trying different food. And yeah, like my dream, my vision for my life is that work is steady, it's, um, it's fulfilling, it's pretty stress-free, and I just get to enjoy my family and my community and, and nature in the beautiful places that we live.

Got it. Okay, tell me about the role of the baby. Where does he fit in?

Um, he came so fast. We actually thought we would have a couple more years. We were successful on our first try. So that's beautiful and amazing. And it's happening really fast. Yeah, he fits in. He's going to join our lives like we're bringing this baby into our lives, which are going to be filled with love and play and community. And we're just— we're bringing him into our fold. You know, we just want to bring him with us with whatever we want to do. Got it.

Okay, now Nicole, I want to hear about your vision.

One of the things that actually attracted me most to Drew was the fact that we have a similar vision in terms of so deeply valuing community and work-life balance and wanting to live presently, not for the future. Um, so even though we've talked a lot about retirement, I think that's important, I think we are talking a lot about it because we do have a little bit of concern of when that will happen. But the primary thing for us is that we're not waiting until retirement to enjoy our lives. Mm-hmm. Like, my goal for me personally, because I think yours is maybe even a better percentage, but my goal is to not put more than 40% of my capacity as a human into work. Okay. And I want the other 60% for myself and my community and our child and our family. You know, I think that's really valuable. I think sometimes we spend too much of our resources and time working. Mm-hmm. And it's not to say that I don't want to work. You know, I do and I enjoy my work, but I don't want it to take up so much of our lives. I want us to live now.

Got it.

Okay.

That's very helpful. Do you mind? Let's take a look at the numbers.

Yeah.

I want to understand what we're dealing with here. And then I think I'll have a lot more questions. What was it like putting the conscious spending plan together?

It was kind of stressful. Again, probably me because I— it's hard to find specific numbers. I'm like, it's about this number and that's good enough. And, you know, Nicole would encourage me to like go and look and like actually find the number, which was annoying and beneficial. Okay.

Yeah. And what about for you, Nicole?

Uh, it was— I had most of it already, and the parts I didn't have, it was just fun. I enjoyed it.

Did you talk about it together?

Yeah.

Yeah.

Okay. We did. Any insights?

Yeah, I mean, it was very clear the source of our stress.

Which is what, in a word?

Um, housing.

Okay, you'll see.

Our fixed costs are crazy.

All right. Okay, um, let's see. Nicole, can you read off the word in bold and the number next to it for this entire box, please?

Okay, so assets is, uh, $1,252,000. Investments, $183,764. Savings, $67,269. And debt, $986,526.

Total net worth?

$516,507.

Great. Okay, what do you think about those numbers?

It's okay. Yeah, it's like pretty, pretty okay. I, I'm more worried about the other numbers. I think the one thing that I am concerned about is that the savings, it doesn't cover us for very long.

$67,000.

Okay.

Yeah.

Drew, what do you think about these numbers?

The debt number, I know that includes mortgage, but to see it laid out is, uh, astonishing.

Astonishing means what?

Just, uh, shockingly high. I know it's very American and it makes sense in this context, and it feels astonishing.

Okay, Drew and Nicole, you both have mortgage, or let's say a house worth approximately Similar amounts. Yeah, $644,000, $608,000. Exactly. Okay, investments we have, let's just say out of $183,000, the vast majority of that is Nicole's. Would that be fair to say?

Yeah.

Okay, same with savings. And then debt, looking at it, Drew has $11K, a mortgage of $427,000. Nicole has a mortgage of $545,000.

Yeah.

Okay, let's keep going down the list. This time, Drew, I would like for you to read off your gross combined monthly income, please.

$24,725.

Okay, great. How much did you think you made per year?

I mean, I knew how much I made. This was the hard part. I didn't know how much we made.

Yeah, I didn't think about it.

You didn't think about it? Like, did you have a sense?

I just knew it was enough.

Oh, okay. Okay. And in your application, do you recall what you wrote as your income?

Oh, I do. $200K.

$200K. The actual number is— can you read that number off, please?

$296,700.

Only off by $96,000 per year.

No big deal.

That's wild.

That's my job. What do you think about that?

That's our combined annual income?

Yes.

I mean, that's pretty nice. That's a nice number.

So you didn't know that till now?

No, no idea. Okay, because it's not on the sheet. It doesn't normally come up in the CSP, right?

No, you have to multiply by 12.

Yeah, it's really hard. Surprise, surprise.

That's kind of interesting, right?

Yeah.

What did you think?

It's not unexpected. Yeah, I knew exactly how much I made, and I had a sense of how much Drew makes because I know how much rental income is generated and the small amount of coaching income. So I had a sense, but I didn't know it was exactly that. I would have said probably $250,000, which is still pretty good.

So we're either $50,000 or $96,000 more than you thought. So are we done here? Are our problems solved?

No, scroll down, kick us out.

How can that be, though, if this is a money problem and you're now making $100,000 more than you thought? Aren't we done?

That's really cool.

No.

What does this tell you? Because the fixed costs are almost all of that.

Yeah, I see.

Because we're still struggling every month.

I see.

Yeah.

Do you think if you made $50,000 more, the problem would be solved?

No, probably not.

Yeah.

So I'm glad actually that we have this massive disparity that we've all confronted and we can laugh about it because we realize $100K more than we thought and it's still not solving problems.

Yeah.

So let's keep working our way down. Fixed costs. What's that percentage there?

77%.

77%.

77%. So that right there explains feeling stressed out about money, having disagreements under a tree about money, and on and on and on. That explains it right there.

Yes.

It tells me so much about a couple when I see that number. We'll come back and drill down on that. Let's just look at the rest of these. Your investments are at 3%.

Mm-hmm.

So I do want to note that you are contributing $1,200 a month to your pre-tax.

Yeah.

Which is great. And on top of that, 3%, which is $600 a month. It's nice. Not particularly high, but when we combine them, it's, it's fine. Savings at 10%. And then finally, Uh, guilt-free spending at 10%. Is that number accurate?

It's actually really accurate. I know that you think that that's not— it's like actually really accurate. It's actually less than that. It's been a lot less than that because we've been saving up a lot of money for legal funds.

Okay.

Um, because of our domestic partnership and our pay, our baby and adopting and stuff like that.

How much will it cost you, uh, for legal 17,000. 17,000.

Yeah. And I've paid off 12 of it.

So 17,000 in total to have the baby.

Yeah.

Is that right?

And our estate planning. And, you know, we, we've gotten very comprehensive with our paperwork for each other.

It's good to know because, you know, some of this, like, in a heterosexual relationship, you would do it.

Yeah.

Like some legal planning, but some of it not. And I think, um, a lot of people don't know what is involved with same-sex parents having kids.

So expensive.

It's a lot.

Really expensive.

Yeah. Right.

And we did it the cheap way.

Yeah.

Yeah. We have a known donor that is a very nice human being who agreed to help us. Got it. And so we just had to pay the legal fee to do the court documents so that all of us are protected. Right.

But otherwise it would cost tens of thousands, maybe hundreds of thousands.

Hundreds of thousands.

Yeah.

Yeah.

So you know, $17,000 is actually pretty affordable.

Yeah.

I don't think a lot of people know how much it costs to have a baby if you're in a same-sex relationship. I have a couple of friends, they had a baby through a surrogate and it cost them over $250,000. That is shocking. And these are things that if you're in a heterosexual relationship, you may never think about. But I'm very, very grateful that on this podcast we get to meet people from all different communities, all different parts of life, all different financial means to show you what it takes in order for them to live their rich life. So I'm thankful that I get Drew and Nicole here to share some of the numbers, even though they are quite modest in their situation for how much it will cost them to have a baby. Can we drill down on the fixed costs?

Yeah.

All right. So here we are at 77%. I would like to take a look at what these numbers include.

Whoa.

All right. So your rent/mortgage, all of it combined is $10,022 per month. Yeah. So I see 2 properties here, one for $4,000, one for $6,000 per month.

Yeah.

So right there, that's 40.5%.

Yeah.

That's crazy.

What do we know about that number? What should that number be, generally speaking?

Less than a third.

Yeah, less than a third. We say less than 28, but it can be 32, 33 in high cost of living areas, which both of you live in. But at 40, what do we know?

It's really high. It is really high into all of our ability to do anything else.

Exactly. And in fact, yeah, I saw that in your application. You said we cannot eat out. Yeah, because of our housing.

Yeah.

Now, if you came here and you said, look, we've decided We are not eating out for the next 5 years because we made a conscious decision that we want to have these properties for this reason, and we've run these numbers. I would say amazing. You've done all the math. You've decided. Is that the case here?

No.

Okay.

I don't want to just exist in the 2 houses, not doing anything.

Nicely put.

Yeah, that's—

I really like how you put that because that actually describes how so many Americans live.

Yeah.

Let's buy a big old house and then we got to furnish it and then we got to maintain it. And then for what? This is the American dream. Yes.

And then we're trapped.

Then we're trapped. Okay, so you do not want that?

No.

And yet nevertheless, you are here spending 40.5%. Yeah. On housing. Okay, let's look at the rest. Utilities, insurance, car payments at $1,125. That's 2 cars.

That's 2 cars. Okay.

Debt payments at $1,071 a month. What's that for?

For my grad school.

I—

yeah.

How much is your grad school debt?

Oh, the debt I have right now is, is $15K.

And you're paying $1,000 a month for that?

Yes.

Is that all you're going to incur for grad school?

No.

How much is it going to be total?

I'm about to have another $10,000, like $10,200 to graduate. That's what I'm going to need. To pay by the end of May.

So $15K plus $10K.

Yes.

$25K.

$25K.

Okay.

Where's that money going to come from?

I don't know. Ah.

I don't know. Okay. Yeah, that's a question we actually have that we need to figure out.

Okay.

We'll see what we can do.

Okay.

I love this combination here. I never— I don't mind people like tweaking the labels once in a while. That's fine. But this one is great. Clothes slash home slash home repair and renovation. Seems like it would all be in the same aisle. Okay, it's overalls and boots to do the, the home repairs, and it's $1,400 per month.

Yeah, it was really, really high this last year because Drew's house had a massive flooding incident happen, and, um, the kitchen was built in probably the '70s and hadn't been renovated ever.

Yeah.

Um, and so it was like, well, if we have to rip out all of the flooring, we're gonna have to rip out the cabinets. We might as well replace the cabinets because it's—

they were water damaged.

How much did it cost, Drew?

$10,000. Yeah, $10,000 is, I think, what we— yeah.

Now let me ask you a question, because I learned this on Twitter.

Okay.

People on Twitter told me that the landlord can simply pass on their costs to the tenants, and tenants are paying taxes, they're paying their landlord's mortgage, all maintenance. Now, were you able to just pass on those expenses to tenants?

I sure wasn't.

Wow. You're telling me people online don't know what they're talking about? So shocking. So you basically ate the costs. The money had to come from somewhere.

Yes.

And you can try to raise rent, but you charge based on market value, what the market will bear.

And we actually can't raise rent in Maui right now.

Why is that?

Uh, the Lahaina fires, they put in an emergency proclamation that you can't still— it's still active. Yeah.

Yeah.

Okay.

Wow.

Yeah, it's actually— there's a lot of housing-related things, and it's good because it does need to be stabilized anyway. Yeah, we wouldn't raise the rent anyways, but we—

what we did is hired contractors at the lowest cost we could, and then we did a lot of the work ourselves. We laid the whole flooring ourselves. Got it.

Yeah, we did a lot of our own work.

That's cool.

We became knowledgeable pretty fast.

All right, let's look at the rest of it here. We have subscriptions are fine, and then miscellaneous, we have 15%. Did you adjust this? We adjusted it down. Yeah, because you know your numbers.

Yeah, fine.

I believe it.

All right.

So we're at a total of about $17,000 a month, which, you know, is high.

Yeah.

Is it high? I don't know. If you made $10 million a month, then no, it's not. Yeah, it's relative, but it's all relative. And so what we see is 77%. Yeah, that part is high.

Yeah.

Okay.

I mean, I guess I want to point out that starting next year, I will be able to be making more money. Like, I just haven't been so far.

You currently make $10,450 a month.

Yes.

That's a pretty good salary.

Well, still struggling.

You say maybe, maybe, maybe making more will positively affect the CSP. I think that's true. Yes, it will.

Yes.

How much are you going to make, just so we can take a look?

Well, if I go into a private practice, I can make whatever I need to make within the confines of Like, I can make whatever I need to make.

No, no, you can't. I mean, okay, make $1 million a month. Can you do it?

No, I don't need $1 million. What I need to have that in 77%— yeah, be what, 50?

What would be like 50 to 60%? Okay, how much do you need?

Oh, like another $12,000?

More than that. No, you need per month.

Hold on, go ahead, Drew. I like hearing you talk me through this.

Okay, I think I might need another $12K.

Another $12K on top of this? Let's try it. So let me just— I'm just going to— since you make— actually, now that we're looking into this, I'm like, wait a second. Wait, do you pay any taxes? Yeah. Where's the taxes on this? So here's your gross, which is like what you get paid. And your net is the same as your gross.

I paid $330 in taxes, apparently. No, that's not true. I do pay taxes. I pay 4.5% on my local taxes. And then I don't know what the government, the big government taxes.

But like, why is— this number so high? Like, what's happening here?

I don't know. Nicole didn't fix that number for me.

Let's just fix it right now. Nicole, what is the correct number here? Do you know?

My estimate would be like $8,000. Yeah, maybe $8,000.

Let's say that it could be $7,800, whatever. $8,000.

Okay.

I want you to watch what happens to the fixed cost number. Ready?

Yeah. Killer.

No, that's so— maybe that's why I kept it at $10,000.

So for everyone listening and not watching, first of all, get on YouTube. Second of all, that fixed cost number jumped from 77% to 85%. Yeah. Now we have a more accurate representation. So it's high. It's really high. You are essentially spending more than you make.

Oh yeah. Yes, it's tough.

Every month. I've sensed a chill come over the room now, but I would rather have the honest truth here.

Yeah.

Oh, the numbers in the CSP are not right. I'm shocked, but actually I don't mind. I still see comments over and over saying, why doesn't Ramit Sethi's team pre-screen them and work with them to get their CSP? Because I don't want that. It's hard to get your numbers in a correct form. I want to see how you do it because then I can work with you and help you untangle your assumptions. I want to help you understand where you might have taken a wrong turn. Now, there are some clear changes that I see in the CSP, but I'm not going to sit here and lecture them about all the things they should do. I need them to understand first how risky of a situation they are in. If it was just the two of them working stable jobs, making $296,000, they would be at incredible risk. But guess what? One of them is an entrepreneur. That's risky. Oh, and they're about to have a baby. That's risky. They are compounding risk on top of risk. And I want to show them how precarious of a situation they are putting themselves in. It's kind of interesting how people react differently to caffeine. Some people get super jittery with coffee. Some people prefer tea. I found it to be really fun to try to test different sources of caffeine and find what works for me. Sometimes it's a black coffee, sometimes it's matcha. And there's a new way for you to try out a different source of caffeine, one that will not cause you to have a massive energy crash. That's Element's new Lemonade Iced Tea. Element is a tasty electrolyte drink mix and sparkling electrolyte drink made specifically to replace essential electrolytes lost throughout the day. It's used by professional sports teams, Navy SEALs, Olympic athletes, and my wife loves it. Now Element has launched their Lemonade Iced Tea made with full spectrum black tea extract, not isolated caffeine added in later. It's built on the same formula as Element's core drink mix with a meaningful dose of electrolytes, no sugar, no artificial colors, no other weird ingredients. Get a free 8-count Element sample pack with any purchase at drinklmnt.com/ramitsethi. That's drinklmnt.com/ramitsethi. Www.nordvpn.com/Ramit. Try it totally risk-free. If you don't like it, they'll give you your money back, no questions asked. Let's take a look at your to-do list. How many things are on there that you've been putting off for 9 months or more? I'm talking about important stuff like booking doctor's appointments and getting your estate plan in order. We can knock them out in about an hour. You can get your estate plan handled today, for example, with help from Trust and Will. Trust and Will offers affordable attorney-designed estate plans online that you can create in as little as 30 minutes. Everything is state-specific. It's tailored to your needs regardless of what stage of life you're in. And we actually had one of my coworkers create a will using Trust and Will. Here's what she said. Getting started was incredibly easy. In less than an hour, I had a will, power of attorney, last will and testament, and HIPAA authorizations, all of which I downloaded. And if I wanted, I could have them checked by another attorney. Their platform makes it easy to keep these things organized and updated so your loved ones don't have to manage tons of paperwork down the line. Now, you can use an attorney for your estate plan, but that's not an option for everyone. If you know that you have loved ones that you need to protect, Trust and Will is worth considering. Go to trustandwill.com/Ramit to get 20% off. That's trustandwill.com/Ramit to get 20% off. trustandwill.com/Ramit Sethi. So you mentioned that you need to make— why don't we just double what you make and let's just see what happens?

Sure.

Okay. $16,000. And that number drops to 61%. 61%. So you are correct.

Okay.

If you doubled your income tomorrow, you're in a healthy financial position and you'd be able to do quite a bit. What do you think about that?

I think honestly, I think it's doable. Like, as soon as I graduate, I really do feel like I could make that amount and it would just feel like so much relief. Yeah, I think we could keep the two houses.

Great. So that is an option. So let's put a pin in that because at least according to the numbers, that part would work. Yeah, well, it would work if nothing were about to change in 2 weeks.

Yeah.

Is there something happening in 2 weeks?

Oh, I don't know, maybe a baby.

So like, where does the baby fit in financially speaking?

Yeah. Wow.

Yeah.

Have we, have we modeled any of that?

A little bit. What's really great is because we will be spending, um, the first year and a half or so of this child's life in Maui. There's a really good community that's set up there with really great community resources, so our grocery costs are actually going to go down quite a bit.

Okay.

We'll have access to community support that will help with kind of like childcare and things like that, so we're not going to have to pay for childcare. Great. As long as— actually, in either community, we've been really intentional. Like, the community here in Southern California, I have my parents that live 10 minutes away, Great.

And so, so you'll be able to have childcare, let's say, at low cost, no cost? What are we talking about?

For low cost?

Yeah, I would say low cost. How much?

Like an occasional babysitter is the only thing I think we might do.

Exactly.

So that's like how many times a week?

Not even once a week.

Not even once a week.

I would say once a month.

Month for like $200. $200? Okay, that's quite nominal.

Yeah.

And, um, diapers, food, that kind of stuff. What are we talking about?

So food in Maui will be free. Um, what?

Why?

It's just like, it's a paradise. Yeah, so there's an amazing birth collective out there that offers new parents and expecting parents, um, resources.

No kidding?

Yeah.

Yeah, it's highly funded.

It's a government-funded thing, I think. Don't they get government grants?

There's definitely grants. I'm not sure if they're government grants, but they're grants.

Yeah.

They offer it to any expecting or recent parents.

No kidding.

And it's a whole— like, you get a whole bag of groceries every week. You get access to free education classes.

Yeah. Free massages.

What is this called?

Just so everybody knows.

Pacific Birth Collective.

That's so cool.

It's so cool.

You know, like, the fact that I am, like, shocked, and we live in the wealthiest country in the world, really speaks to the— fact of how misaligned we are.

Yeah.

The fact that like, oh, two new parents getting groceries once a week, I'm like, what?

Yeah, yeah.

But like, isn't that something that we would be able to do, or we should be able to do more broadly?

It's amazing. It's sad actually that we don't have access to it here, um, in Southern California, because I've never heard of anything like it, honestly.

Yeah, that's really cool.

And it's not just like a bag of whatever's left over from the grocery store. It's really nice, really nice food. It's all like, for the most part, locally grown, and they give you staples as well. So you can have a stock of rice and beans and canned goods and fresh vegetables, and they give you eggs and chicken, and it's really an amazing resource.

It sounds like your fixed costs with baby are not going to change dramatically. Would that be fair to say?

Yeah.

I don't— I mean, barring any like medical stuff that the baby could have, yeah, that would be the only thing that could come up.

Will both of you continue working full-time?

Yes. Okay.

Yes. I mean, Nicole's on sabbatical.

Yeah, so I'm lucky. I— the timing was— I don't know if it's miraculous, whatever it is, but I was able to, um, be on sabbatical for the next year. So after I give birth, I'll have until the semester starts, and then I'll have our regular unpaid leave, but I have enough sick time to take off 12 weeks.

Great.

Um, and so I'll take off the 12 weeks and I'll start sabbatical.

And I'll have paid sabbatical.

It's paid sabbatical.

So I'll get my full regular pay for a full year to go do research, which I can do from home.

Great.

Um, and I'm really excited about that.

And then my income will stay the same. Um, yeah, minus wherever that $10K is going to come from to finish the school.

Got it.

Yeah.

And now going back to your income potentially increasing, because it seems much more feasible now that I know we've talked about childcare and things like that, doubling your income, like you already make $10,000 a month.

Yeah.

So is doubling your income realistic?

Yeah, because if I'm working as a therapist, um, in addition to being a coach, then I will be able to just see more clients. And yeah, and I'm going to be doing my own private practice most likely. So I get to charge what I need to charge. Got it. Yeah.

And you're comfortable with that because earlier you mentioned, you know, not raising rent even if you could, etc., etc. Are you comfortable charging market rates or even higher than market rates?

I am. I— my vision for my work and what it has been for coaching is that I offer like high-ticket prices, but then there's an there's an expectation or knowing that those people are paying for lower income people who can't afford care. So I will have a sliding scale essentially where I will be able to do sessions for therapy for $30, $60, like a handful. Great. And then there will be people covering that who have the funds. Okay. So morally, ethically, I think yes.

Good, good answers.

All right.

My assessment on this is you have a high income, $300,000 is a high income and potentially going up considerably. So that's great. You also have— you're in the enviable position of having a baby with very low increasing expenses. Like, this is highly atypical. Amazing. And what I always tell people is there's this golden period. Seize it. Enjoy it. Take some of the money, put it towards investments. Take some of the money, save it. Take some of the money, go out and eat. In a way, I've never had a golden period with a baby because baby costs always increase dramatically. But in your case, amazing. You're both going to continue working. You both have childcare. You both have food provided. It's like, okay, amazing. So what do we want to do? I do agree that your investments are low. We can look at what it's going to turn into in the future. Savings are okay. We can talk about what that means. You know, you currently have a few months of emergency fund, right? I think with the baby, you want it to be more.

Yeah, yeah, yeah. Especially in this economy, I'd like it to be 12 months.

Exactly. We want to become a little bit more financially conservative when there are kids in the picture.

Yeah.

So for sure, yes. Good instinct. And then, you know, well, what we see now is your guilt-free spending is down to 1% or $273, which we know cannot be right, which is why we have a problem. You're drying. So we have a problem right now, but a potentially bright future. How do we get from here to there?

Yeah, I feel like taking this opportunity and like having, unfortunately, having felt really squeezed and really stressed did, um, prompt me to want to do so much better and to know the things and to prepare. Um, so I think that having the goal set up for what's happening and where we're going to be putting money and what we're going to be doing, especially when I can start making more income, um, and then sticking to it. And unfortunately, I think we have to keep living really low this next year, like keep our spending super low.

Okay. I think that realistically what I'm seeing is that we're probably going to have to draw down some on the savings if we want to not be miserable all the time. And I don't think we want to be miserable all the time. And to be honest, that's a little scary to me to know that we're going to be going in reverse of where I'd like— like, I'd like to be increasing our savings amounts, and I don't know if it's possible for us to increase our savings amount because the biggest place to cut from is a place we either have to sell our house or, or not. I just don't know where else to cut from, to be honest.

So like, do we— yeah, for the next year, do we just not cut, and do we just I had never even thought about drawing from savings even more. Well, that feels so scary.

That's what you've been doing.

It's exactly what we've been doing.

You've already been doing— you just didn't acknowledge—

I just wasn't paying attention to it. Yeah.

Let's explore what the options might be.

Yeah.

But first, I kind of want to understand what got you here. Nicole, what do you remember your family saying about money when you were young?

So we didn't really talk about it a lot out loud. My upbringing was primarily by my dad's side of the family, who's Chinese. And so we don't really talk a lot about the details of anything. In fact, being here is kind of terrifying.

You don't talk about, like, what, numbers, feelings, what?

Numbers or feelings or anything. And if you ask for help, it should only be, like, within family, like— Even then, like, why are you needing help?

Ah, um, okay.

Yeah, it's pretty daunting, um, being here. It's exciting as well.

I think you're doing great, and I think it's very courageous to ask for help.

Yeah, I agree. I mean, as a teacher, I want my students to ask for help. Yes. So I get the philosophy, and doing it yourself is always a little A little scary.

For sure. Did he teach you about savings, investments?

Saving to some extent. So when I was in high school, he actually, and this, I'm so thankful for this, he had me open up a credit card when I could, so I could establish credit. And he told me, you have to put something on it every month, and then you just pay it off. And every month you can put something on it, but you have to not ever put more on it than you have to pay it off.

It's a good lesson.

Yeah.

Okay.

And have you ever gone into credit card debt?

I have, actually. So, um, when I was teaching adjunct and I was in grad school, I was teaching at like 5 different places. Basically, you have to— an adjunct professor makes a lot less money than a full-time professor. And so I was all over the place, and I knew that if I ever wanted to be able to teach full-time, I was going to have to make some sacrifices. So that my, um, resume is the best because there are so many people that are wanting full-time academic jobs.

Yeah.

And so I was gonna have to do unpaid labor basically so that I could make myself be a good candidate. And that's what I did. So for a year I cut the number of jobs that I worked and I did unpaid labor at school doing University service. I served on Academic Senate, things like that. Did work for my department, things that look really, really good on a resume and you can talk about, but they don't pay you. Yeah, you know. And so I knew at that time, and it was such a privilege, that I was going to go into debt, and I didn't want to ask my dad for help, so I took on credit card debt, and I said, I'm going to get a full-time job this year.

Could your dad have afforded to help you?

Probably.

Okay.

Yeah.

Did you grow up middle class, wealthy?

Middle class. Yeah.

What about your mom? What's her role with money?

Well, not much. Um, my mom, she, um, was diagnosed with cancer when I was 4, and so for the next 5 years she battled cancer. And she didn't do much work. Yeah, but we spent a lot of time making memories.

Yeah.

And so, yeah, I think what I learned was like, memories are important, experiences are important. Yeah, more than anything.

Nicole didn't mention this explicitly, but her mom passed away when she was 9 years old, and you can imagine what kind of effect that has on a child, especially as it relates to money. It's no surprise that some people who lose a parent become even more concerned with safety and security. And I think that is part of what we see here with Nicole. She likes to plan. She wants to make sure that under all scenarios she's okay. And I think that's fine. I think safety and security are a good thing with money. We have to take this need in light of her relationship with Drew. I don't think Drew particularly feels the need for safety and security with money. I think she likes it. I think she wants to spend it on the things that are important to her. But how do we create a way for them to have a compatible view of money together? Drew, what about you? What do you remember your family saying about money when you were young?

Um, so I don't remember anything being said. Well, my parents both came out of poverty. Were from the South, Alabama and Louisiana, and came out of a lot of poverty and a lot of trauma. And they really made a life for themselves. And it's really beautiful. They— I saw for them that money gave them experiences. And we went out to eat at restaurants like 3 days a week. Wow. You know, like they, they really wanted to live it up. And it was really— yeah, it's really beautiful to look back on that now. So I remember when I was a teenager, my parents bought my— both my grandmas tickets to Hawaii to go on a trip with us. And, um, we spent like a couple of weeks on all the different islands with my two grandmas. Um, so there was this like giving, giving to family kind of, um, idea and concept and like just fun, just embracing life and really living life.

How did your parents go from being in poverty to being able to eat out 3 times a week?

They're both really smart. Not that it has to do with being smart necessarily. And they just— they worked hard. They really did just work hard.

And did you say you grew up in— was it Taiwan?

I grew up in Texas for 10 years, and then I was in the Marshall Islands until I was 17. And then for college, I went to college in Alabama where my momma lives.

Ah, got it.

So kind of all over.

Wow.

And that was part of their life. They were like, yeah, we can go live in the Marshall Islands. Let's go.

Yeah.

Let's live it up.

What messages about money do you think you took away from your upbringing?

One that I really had to work through early on when I started working was that you have to work hard to make money. That one, I saw my dad go through that. And work his whole life and to be able to retire and now, um, to not be in like the best shape to do the things that he wants in retirement. Um, and then the other one was that unfortunately money can be used as a tool for manipulation. So there's a lot of like— money can cause a lot of pain actually. And thirdly, to, um, share money and just really like live it up as much as you can and enjoy life with the money that you do have.

The second point you made about money can be a tool of manipulation— was that something you experienced?

I watched it in my family. Yeah.

What'd you learn from that?

I learned a lot about what it means to be a woman and how women couldn't have, you know, bank accounts of their own until the '70s, and how, you know, a lot of women have been stuck in situations that they shouldn't have had to have been in because there was no financial freedom, and how that still to this day kind of carries on with some boomers and other people. Yes.

You mentioned live it up, money, you know, we've got to use it. I didn't hear any money messages about saving or investing. Were those the messages you grew up with or no?

I did actually, you know, I did have some messages growing up around. I remember when I started university, my dad told me, never take out a loan. Do whatever you can to not take out a student loan. He taught me, let's see, when I bought my first car, he said never buy a car new. Okay. Always buy a used car. They will depreciate heavily when you drive them off the lot.

You have a used car or you have a new car?

No, I have a, I bought my car new.

You have a new car and you have a student loan. Okay, 0 for 2 so far. What else?

Sorry, Dad. Um, actually, I vaguely remember this. I think he offered myself and my siblings at some point a sum of money, like $150 or something, if we would read— I think it was a Dave Ramsey book. All right.

And did you?

Wait, Warren Buffett's the good one, right?

Yes.

Maybe it was Warren Buffett.

That's actually pretty— that pretty much encompasses— he's the good one.

He has a good one, right? He's like a family man. He lives like below his means or something. Goes to show you I probably didn't read the book.

Yeah, I mean, okay. So the big takeaway is he offered us money and we still didn't do it. All right. Got it.

Which is funny because you love reading. You will read almost anything.

And I'll listen to this financial podcast like constantly.

Have you read my book?

Yes.

You have?

I have.

We read it together.

Wow.

That was like one of our—

The only guests on this podcast who have ever read my book. This is like amazing. Let me just soak it in for a second.

It's really good.

You should get a gold star.

Yeah. What money messages do you both find that you grew up with that you are now bringing to this relationship?

I think the biggest one is that while money is useful, it's also really scary.

Mm-hmm.

And how does that show up here?

I'm anxious. I'm so anxious about having enough savings and retirement and the economy and not knowing where to put things and like, what happens if the AI bubble bursts and all of a sudden everything's gone, you know?

Are you normally anxious in other parts of life?

Yeah, I'm a more anxious person.

Got it.

Okay, that's helpful to know. Drew, what about you?

There's something about, like, flippancy in a way. Not that I would say I've— I see my family like that necessarily, but that's That seems to be what I've internalized. Like, I'm not taking it too seriously. Wasn't really focused on it. I kind of always was like, it'll work out.

Yeah, it'll work out. I can approximate it.

I can approximate it. Yeah. The actual number doesn't really matter.

Did you grow up religious?

Sort of, but not really. But yes, for sure.

What? Hold on. That was a very interesting answer. What is that?

Well, my dad was excommunicated from the church when I was 5.

Okay.

So it was all around me.

Even though he was excommunicated.

Exactly. And then all my grandparents still went and they were highly religious. And so, yeah.

The reason I ask is when you say, you know, a bit flippant, one thing about people who grew up religious is they often say, God will provide.

And they may know.

Familiar phrase.

Oh yeah. Okay.

Implication being we don't need to pay particular attention. We're doing the right thing. We're good people. We're faithful. God will provide.

Yeah, definitely not relating to the God part, but— and I do, I do feel like I have a lot of privilege in the world, and that privilege also will provide sometimes, you know, it's like I, I feel that I've seen it to be true. So not just God, but privilege.

Got it.

Yeah. I've heard you say literally that you just trust that it'll work out. You trust that it will happen, that somehow the money will come.

It's the secular version of God will provide.

It is.

Or it could be like the hippie, like granola, the woo-woo version.

Life will provide.

The universe will provide.

The universe will provide.

Perfect.

Yes.

Okay. Wow. I think you both really nailed it with the messages you bring. And when you hear each other describe those messages, does it make sense? Some of the things we see on the CSP, some of the things that you disagree about and are worried about.

Totally.

Yeah. Makes perfect sense. I actually love it.

Yeah.

It's interesting to hear Drew's upbringing living in multiple countries, very ambiguous relationship with money. And I think that can be really positive. It allows you to deal with ambiguity well, probably make friends really easily, but it can also make you chafe at the idea of structure. But if you want to live a life where you respect money, where you're not just subsisting but you're actually thriving, giving yourself lots of opportunity, plans are actually a good thing. They can be fun. That's what I'm hoping to show them today. I recently got a comment on my podcast asking if I really use the products that I say I do. And the answer is yes. If I tell you that I personally use and pay for a product or service, I do. That's why in so many Delete Me ads that I have hosted on this podcast, I tell you I pay for this myself. I do. And I have for years. I love this service. That's why I work with them, and that's why I want you to check them out too. Delete.me is a subscription service that removes your personal data from the internet. We're talking about things like your full name, email, phone number, address, even your parents' names, all found and removed. They've been the leading expert in personal information removal for the last 15 years. They were recently named Wirecutter's number one data removal service, and I personally use and pay for Delete.me. And I love it, and I know you will too. You'll get 20% off all consumer plans when you go to joindelete.me.com/ramit and use promo code Ramit at checkout. That's joindelete.me.com/ramit, code Ramit for 20% off. In the application you mentioned, you know, hey, we, we struggle to go out to eat. Yeah, like that. What happened?

Um, Drew went to school.

Yeah.

And then things happened, and then the flood happened, and it—

yeah, it just all— there was a tipping point. And oh, and, uh, there were emergencies that happened, basically. Like, there was a plumbing issue at the house that, uh, we had just bought in Southern California. Oh yeah, which was like $35,000—

no, it was $29,000, but it's still $29,000. Yeah, I had to replace the sewer.

Wow.

All the way into the street. It was, yeah, a disaster. If you are buying a house, make sure that you get a full inspection, and if they don't get the sewer scope through all the way, do not go forward with this house.

I don't even know what any of those words mean, but yeah, yes, get your sewer scopes checked, America.

Yes.

Okay, good, good lesson. Okay, so, so several maintenance items came up that were unexpected.

Yes.

You went back to school, which which implies what, you— it's costing more money?

Yeah, it's—

but your finances are separate, correct?

Our finances at this point are like kind of separate, but we help each other whenever we need. Like, we share an emergency fund and things like that. In terms of legally, we're each other's— we have power of attorney, um, so our names may not be on each other's bank accounts, but we can we do whatever we want with each other's bank accounts.

Got it.

Okay.

Yeah.

So you are legally—

Yes.

Combined.

Combined. Yes.

Got it.

Okay. But I think what's been happening is my expenses through school and then the Maui house, I went through my emergency fund because of the things that came up. And then, you know, Nicole was essentially covering that from her side.

What would you have done if you were not together?

I would say I probably would have reached out to some contacts.

To do what?

To ask for money.

Oh, why don't you just reach out to them right now? Like, who are these contacts?

Yeah, I want to know.

I'm thinking, well, I co-owned the house with a friend. We bought the house together.

Okay, 50/50.

50/50.

Did they cover 50% of the expenses?

No, but all of the rental income comes to me.

What's the split? Like, how do they get money? If we sell the house, how much do they get?

50. Well, we don't know yet.

Huh?

50%.

Yes. 50%.

What is this? What's happening right now?

What the fuck?

It's like, it's, I guess if I invest a lot more time and if I end up investing personal money that doesn't come from the rental incomes, then I would expect to be compensated for that.

What's the contract? No contract?

No, just vibes.

Okay.

What the fuck? Like, I was like, how does a life coach sign a contract? And the answer is they don't.

No, you're just with God, with the universe. I'm like, I trust.

Like, there's a lot of it would seem, perhaps it would make sense if I get a higher percent. I'm like, what does the contract say?

Look, this was 5 years ago me. She was a different human.

Okay, okay, okay.

I wouldn't do it the same way.

I'm about to have a heart attack right now.

Everybody do your contracts.

Okay. And do you talk to this person? Like, are they active?

We're so close. Oh, best friend.

Okay, got it. I need to get my game face back on. All right, so what's the vision for where you live going forward?

Yeah, I think our vision is to be bicoastal, um, because Nicole's job is amazing. So really like taking advantage of that while that's possible. When I actually met her, I encouraged her. I was like, do you want to just quit and move to Maui? Because I was living in a different world, and I'm so glad that she was like, no, we need retirement.

It's really nice to have paid-for health benefits. Yeah, I have a pension. Yeah.

So you're planning to keep both, uh, at least live in both cities, right?

Live in both places, keep our— keep working, but keep our work stress levels at 40% or lower, you know, like not expending too much energy for work, and then just enjoying— like, they're both beautiful places and they offer so much, and just really like enjoying our life. Okay, cool.

Um, question, because baby's coming, at a certain point there'll be school questions. Have you thought that far ahead?

We've had conversations. It's gonna be a conversation probably for the next few years still.

Yeah, which there could be like school expenses in the future possibly, if— or we would do public school. These are just big conversations that need to be had.

Like the bicoastal thing, I think is awesome for adults. Yeah, I know my wife and I are bicoastal, and even if you have like a 2-year-old, 3-year-old, okay, yeah, what about 5, 8, certainly like 13?

Yeah, yeah.

My feeling about it is see where the world's at.

Let's assume the world's at where it is today, meaning there's public school, private school options, etc. So what would you do if you had like a 13-year-old today? What would life look like?

We would have them here for school year.

Here in Southern California for the school year and then summer?

Maui summer. Yeah. Okay.

I have to be here for the school year. I teach during the school year, so it kind of works out that I teach.

Yeah.

Because for the most part, our schedules will fairly align. Yeah. And then summers we'll get to go to Maui.

I like that plan. Your visions of a rich life. Are they compatible with each other?

I think so, yeah. Okay, yeah.

The part about retiring at roughly 60 or so, have you put numbers behind that?

I have, um, but it's gotten off track in the last couple of years. Okay, yeah. So I was looking to basically max out my 403 every year, um,, and I would have easily actually been able to retire earlier than 60 because my pension would have covered part of it, and then my 403 would have matured to a decent place, so I could have pulled 4% and been fine. Um, but, but now I'm not putting nearly as much into my 403 as I used to be because, because of the— well, it's not the house as much as it's like we're covering the renovation and the schooling costs.

Although we know that—

That will end.

That will end, and in fact, your income will go way up.

Yeah, yeah, exactly.

So I'm hoping it can change and shift.

Yeah.

But I figure the like couple of years of pretty low investing, maybe moving my goal from 55 to 60 is reasonable. That's fine.

2 years in the grand scheme generally does not affect people as much as they think. I know that investing early makes a huge difference, yes. But just in general, if people take a year or two and they cut their contributions by 50, sometimes even 100%, and then they go back to where they were, truthfully, over the course of 30 years, it makes a little difference, but not that big. We're talking about small percentage amounts.

Yeah.

So I like to put everybody at ease, especially like young parents. They tend to freak out because they're like, oh my God, I have to cut my contribution rate, blah, blah, blah, blah, blah. It's okay for a year or two. Sometimes people have very high temporary expenses. Okay, loosen up a little bit, give yourself a little bit more, maybe save a few percentage points less, invest a little bit less, feel good, but make a plan. Within 18 to 36 months, we are going back to this percentage and honor it and you will be effectively back on track.

That feels really relieving. Yeah, honestly. Yeah. I've had so much anxiety being in the red, I guess, is what the— yeah, for the last bit of time. And it's like, how are we ever going to catch up again?

Um, yeah, I don't like catching up. That whole thing, catching up, puts you in a bad mental state.

Yeah.

You're a new person today. Let's live in this chapter of life.

Yeah.

Okay, cool. I do want to look at the numbers. My concern is not that Nicole, you will have enough for retiring. That's not my concern at all. My concern is that the two of you do not talk about money at the same level, and that has to happen. It has to. So that is what I would like for the two of you. What do you think?

I would love that.

That feels so good.

Okay.

Yeah.

Okay.

So this is what we're going to do in a second. I'm going to put your CSP backup on screen. I want you to build a plan where you don't need every single thing to go right in order to be okay.

Yes.

There's a classic mistake people make. They're like, okay, in order for us to live our rich life and have our numbers where they need to be, we just need to triple our income, cut our expenses, never get sick, never have any maintenance, like, on and on and on. I'm like, what the fuck?

Yeah.

When we're in planning mode, we always plan as if life is going to be perfect. But when we live life, it's never perfect. And you both know that.

Yeah.

How many things have broken in your house?

So many things. Yeah.

It's been so stressful.

Yeah. Okay, so we're going to be conservative in our planning, which might mean that we have to make some decisions that might feel like a little uncomfortable now, but they are a lifetime of comfort.

Okay.

Okay, let's throw up the CSP on screen.

It's nice.

Our goal is to get your fixed costs to 60%. Okay.

Okay. All right.

What would you like to do to get this number close to 60%?

I have no idea.

I mean, I'm honestly like, I'm just almost like we just hold on for the ride and then starting in May of next year, I start making more money.

That is one possibility.

Okay.

If you take that risk, and everything goes well from now until then, let's just say about a year from now, then your fixed cost will come down to roughly 60% and you will have plenty of money. In fact, I'll show you what it looks like to be able to assign. Let's take a look. I'm just gonna— for easy math, I'm gonna double your net. You're now at 61% fixed costs. If we go all the way down, you have 8 $8,000 per month to play with.

Yeah.

I mean, that's huge. Why don't we say, what would you do with that $8,000 per month?

Half and half. Half and half. Savings and investments.

Okay.

What about guilt-free spending?

So, yeah, we would need like a couple thousand for guilt-free.

Okay.

Yeah, I would say reasonably, if we wanted to—

Hold on. Notice what's happening here. You're about to give me your mathematical answer, correct? And isn't part of what we want to change is this dynamic?

Yes.

Okay, go ahead, Drew.

Yeah, I feel like, okay, let's say we're spending $2,200, we're investing $2,200, and then we're savings are $2,200.

Okay, I like it. I like where you're going. So I put $2,200 for savings. Yeah, your investments are at 10%, your savings are at 16%, and you still have $3,800 a month for guilt-free spending.

I love that.

Maybe we just, um, whatever's left over at the end of the month, we just put it toward a fund, like an investment fund or something?

Let's flip that. Remember how they— have you ever heard that phrase pay yourself first?

Yeah.

Pay yourself first means we put the money in investments first, and whatever's left, we can spend it.

So let's say we put the $38,000 in investments.

Mhm.

You want to see what happens?

Yeah.

All right, I'll add it here. $38,73. Just so you know, you're investing now 24% of gross. That's really high for a high income. That's amazing. Look what happened to your guilt-free spending, right? It's at zero.

Yeah, so we would have to know like what we're spending, what we want to spend every month, and then basically, yeah, invest and save the rest.

Yes, that's one way to look at it, but again, I want to flip it. I— what I like to do is I like to say, how much do we want to save and invest every month? And whatever's left is what we get to spend because we pay ourselves first.

So this is like a, a mind shift that it's almost like it's having a hard time landing in me what you're saying. You're saying know the money that you have, like, um, the free spending.

So first off, know how much you take home every month. Okay, $28,000 per month. So we've got this much to distribute. Okay, next we know that we have some Guideline numbers, less than 60%. You're at 61. I'm fine with that.

Okay.

These numbers, we like to see them roughly at 10% or so. Okay. In this case, you're at 24 and 16. What does that tell you?

That we have a lot.

You have a lot.

Yeah.

And if you want to put an even finer point on it, you can actually calculate how much you will have at age 55, 60, 65. So you can tell if you need to tune that up. But that becomes very precise.

What if we know how much we need by 60 and we know we have 20 years to go hard on investments, then we could just choose that number and put it aside.

I like that. I like that. That's, that's how you do it. Yeah, exactly. That's exactly how you pay yourself first. So I will say that I'm just going to intuitively suggest this investment number probably needs to be higher than 10%, but lower than 24%.

Okay.

If I had to guess, we're talking about the range of like 14-15% ballpark.

Okay, so say 15.

15. So that means you have some money that you can play with and move elsewhere, right? Where would you like to move it?

You mean in the investments?

Nope, in— oh, like it could go to savings.

Oh right, because we're going from $24,000 to $15,000. So yeah, I mean, that could be our guilt-free spending.

I agree. So let's just for the sake of math, let's take $2,200 from investments and move it down here, and that gives you 8%, and it gives you 16% in investments.

That's great.

That's pretty good.

And I feel like $2,200 is doable.

Could you do that? $2,200?

We could do it, and I think we'd be really happy and super comfortable given the cost of living if it was 3%.

Oh, you would like it to be higher. I like that.

Okay.

Yeah, I like, I like advocating for yourself. That's great. The good news is your savings doesn't need to be saving forever.

No.

So you're currently saving $4,400 a month. And just for easy math, $4,400. It's going to take you a while because your fixed costs are high.

Very high.

So you're going to be doing that for a long time. Years. Fine.

Because we need like 12 months. Of fixed cost. Yeah.

You need $200,000 for 12 months. It's a lot. Yeah, it's a chunk of change. But I will say this, it sounds outrageous to a lot of people listening to like, $200,000 in a savings account. But when you have a family unit that is making $300,000 a year.

Yeah.

And your expenses are high, there's a lot of things moving, then you need liquidity. You need cash because if something goes wrong, like a $40,000 flood, what are you going to get it put on a credit card?

No way.

You need to have liquidity. That's what this is. So it will take you years to get there. But there you go.

I'd love to see—

you want to see some projections?

Yeah.

What you were asking for, Drew.

Let me give you a couple of projections here about where you're going to be. So your pension, I believe you told us, gets you what percentage?

If I retire at 60, it will be 70%, I think.

Okay, so let's start with your old situation. If you change nothing, if the income does not double, what happens? You will have about $1.6 million at the age of 60.

Mm-hmm.

Okay, what do you think about that number right off the bat?

It's great if we own our homes and that housing cost is not 40% anymore.

Okay, nicely put. I agree. Drew?

Yeah, I— it sounds like a lot to me. Okay, that I'm surprised by.

Um, let's go deeper. Yeah, if you take 4% of that money every year, you can— and, and you retire at age 65, you can safely withdraw 4%.

Oh yeah, you were just talking about this.

Yeah, yeah.

Oh, 4%.

Okay, yeah, the 4% rule. So that would give you per year of income $67,000.

So we'd have to live on $67,000 a year?

Yeah, we would have to have no housing costs, or housing would have to be paid off. Yeah, so that's one. And what else? Just consider that the two of you make $300,000 today.

Yeah, I mean, our— all of our fixed costs would be probably just going to that basically, and then we wouldn't have any guilt-free spending. Yeah, yeah, we'd be struggling.

I think it would be tough.

Yeah.

Now there is something I want to add— the pension. So the pension at 60% would give you $102,000 per year.

So that's quite a bit on top of the one—

on top of the $67,000. Okay, so that means that per year you would have about $170,000.

That's not bad.

Not bad.

Yeah, that's amazing.

$170K. And assume you keep both houses and pay those off. I don't know if you'll pay them off in time. No, that's a problem.

Yeah, that's why they're— we have a— we both got a 30-year recently. Recently. Okay, so that's 5 years.

So yeah, I'm putting a little bit more than I'm putting a little bit more, but yeah, so mine is 25 years.

Okay, still, how many years until you retire at 60?

21.

Okay, so there's a few years. Well, you might work extra, you might save some extra, put some extra payments. You could do it, you could play with it, but it's not perfect, but it's within the realm of possible.

Yeah, it's doable. And especially if you retire, I could keep working easily, you know, from home.

Can I make a point? I don't like to plan for retirement where, like, we're like, it's pretty close. Yeah, that's not how I live my life. I live my life where if you tell me I need, like, a million, I want to have a plan where with my eyes closed, I come in at $1.8 million.

Yeah.

Because I know that something bad is going to happen and I'm going to have to stop working for a couple of years and blah, blah, blah, blah, blah.

Yeah.

Yeah.

So I don't like this, and I'm sharing it with you because I want you to develop an intuition and a taste for when the numbers don't smell right.

Yeah.

Yeah.

Doesn't smell right to me. Especially a couple making $300K. You don't want to live on less and be like, oh, can we afford grapes? Sucks. Okay, so let's go to the new situation, the one in which we assume that you double your income.

Yeah.

Here's what we got. If you retire at age 60, you will have $3.6 million. That's a lot more than the other case.

Yeah, it's more than double.

Yep. 40 is like 240.

4%.

Wow.

That's pretty— how'd you do that in your head so fast?

She's so smart.

That's fucking impressive.

I just took 1% and multiplied it by 4.

That's very good. Okay, um, listen, like 50% of people on this show don't even know their own income.

Yes.

Well, actually, including this show.

Yeah, yeah.

All right, case in point, your 4% withdrawal number would be $147,000, and then we add on pension at 60% would be $102,000 for a total amount $250,000 per year, which is close to what we're making now.

Yeah, I think that the one thing to consider is that the house in Maui, it generates income. Yes. And so I— even if we were retired, maybe we wouldn't rent out all of the units, so there'd be a little less landlording work, but there could still be income there.

Yeah, and I could still be working a little bit if we wanted an extra like $50K or something.

Feels a lot more comfortable talking about this one, doesn't Yeah, it feels nice. It's like, oh yeah, like we don't have to scrimp on everything.

Yeah.

Okay, so what needs to happen in order for this to become a reality?

I think what needs to happen is I just need to take all this information and live it, essentially.

Yes. I think to be more specific, at least to put in the language I would use, would be you've got to start modeling these things and understanding them. And that happens through engaging. It's like learning how to cook. We can hear about it all day long. The next thing, we want to read a cookbook. That's a good start. But then ultimately, we need to get in there and we need to start, like, trying stuff because some eggs are going to break. We're going to be like, oh, shit. But it's not the end of the world. I have another egg. Let me practice.

Right.

That's what happens with this. When you deeply get in there and start playing with the numbers and typing on the, you know, my compound interest calculator, and you go, wait a second, if we put an extra $100 towards this mortgage, we shave off 3 years.

That's crazy.

Mhm.

That's when you really get it.

Yeah.

Now for the next year, we want to talk about that.

Yeah.

You have a baby coming, which even with all the amazing benefits you have, still introduces ambiguity.

Yeah. Yeah.

Uncertainty. How do you think about that in terms of finances?

It's really scary.

Like, what if the job, for whatever reason, doesn't materialize?

I mean, I don't know. Then we get what we get from Nicole's—

it's not sustainable—

and my job.

Hold on, play it out for me. So let's say that— I'm gonna just make up a morbid situation— let's say you get sick.

Yeah.

And you can't work. What happens?

Oh gosh, it was just like, wouldn't it—

would—

we would be unhappy.

What about the numbers? What about the money?

The money, we would be stressed.

Yeah. Would you be able to afford your expenses?

Well, we're at 85%, correct?

So you're, you're basically spending more than you make right now.

Yeah.

You would not be able to pay for the houses, right? One or both, for sure.

Yes. That's also an answer.

Yeah.

Yeah.

Like, on a very practical level, yes, run out of money. You would run out of money. And when you run out of money, what happens?

We live with Nicole's parents. If we run out of money or you find yourself back in that roommate situation, neither of which are tenable.

They're not tenable. I agree.

Yeah.

So all of this presupposes that you not only graduate, which I'm sure will happen, but it presupposes that. But also you get a job.

Okay.

Doubles your income.

Yeah.

All of it within a year.

Yeah.

I don't know. To me, that's like, that's a lot. All focusing on one thing happening. Yeah, it's like a single point of failure for me.

Right.

I don't like that.

Yes.

If you decided for whatever reason to slow down your education or stop for a while, go part-time, because you're really enjoying time with baby or whatever. Who knows? A parent got sick. Who knows? So would you be open to considering a plan where we don't have everything has to depend on you achieving this major thing?

Yes. All right.

Is there such a plan?

You tell me. What would you do?

Yeah, there is no idea.

What would you do? Ask for help if you're not sure.

How could we possibly I mean, we could sell a house. That's like an obvious big thing.

Is it obvious?

I mean, they're the biggest expenses.

Should we explore what that looks like?

We can.

Let's just, let's just explore.

Huge.

Yeah, let's put the CSP back up on screen. I have no idea what it would look like. Yeah, I don't even know if it's a good idea or not, but I'd like to explore it because it's the biggest numbers.

Yeah.

So which house would you sell?

This is the hard part.

Yeah. I mean, if we want to keep Nicole's great job with all the benefits, then it makes the most sense to sell the Maui house. And the Maui house has a lot of income that comes through it. So it's—

well, let's play it out.

Okay.

So let's model out selling the Maui house. We'll be a little loose with it, but if you sold it today, how much would you get?

1.5. Oh, and then I would get half of that.

So you'd get $750,000.

Yeah, $750,000.

Yeah.

You owe $500,000. You would, you would get $750,000. So that's $250,000 you would get minus taxes, blah, blah, blah, transaction fees. Shall we say $150,000?

Sure.

Yeah, I feel like it would be more, but capital gains.

That's what every homeowner says. Every homeowner's like, I thought I would get a lot more. Actually, they don't even know because they don't look at the numbers. They don't know anything. They go, I I sold it for this much. I'm a gajillionaire. I go, you never factored in. All right, we're just gonna say $150,000. Maybe it's more, maybe it's less, but whatever. Yeah. Okay, so you just got $150,000.

Yeah.

What are you doing with the money?

We have to adjust all of the income levels.

Yeah, we do. So the current income goes down by $7,000. That's how much comes in every month?

Yeah.

Wow, that's a lot.

Yeah, yeah.

That's a big— that's a tricky situation.

That's why it's very tricky.

All right, let's take a look. So this number, which is currently $8,000 net, goes down to $1,000.

Yep.

Is it $7,000 net?

Net. Yep.

Okay, let's take a look. Oh, shit. You're at $130,000.

Yeah.

All right, all right, all right. But we don't have the cost of this anymore. Is it this one?

Yeah, it's that one.

So let's zero that out. Oh my gosh, we're down to 84%, basically the same number. However, what's the difference?

$150,000.

$150,000.

Oh yeah, right.

When we take out the utilities, that's zero.

That $786 becomes zero.

Oh, we take out the car payment and we take out the insurance.

Why does the car payment go away?

Because we only have one car in each city.

Oh, I see. Got it. Okay, yeah, got it. Zero. Okay, wow.

Uh, insurance would—

above the insurance would go out. Okay, yeah, 73%.

Wow.

What about this repair?

Zero.

Be zero.

Zero on that. Okay, what percentage are we at for fixed cost right now?

69%.

That's interesting.

The housing reno. Yeah, on my column it wouldn't be $1,000, it'd be more like $500.

Really?

Yeah, my house doesn't have as much. It's— the square footage is very small in comparison.

What's the fixed cost number?

$65,000. Wow.

What's happening right now?

It went down like 20%, plus we have $150,000.

Just liquid? Yeah, $150,000, which you could use for— give me some options.

Retirement.

You could invest all of it. Yeah, you could. What else could you do?

Emergency fund.

Emergency fund. You could knock out your emergency fund payment in one fell swoop, and then the money you used to put towards it, which is like $4,000 a month, could be used for further retirement. Take a little bit of it and enjoy it, etc., etc. Uh, how about you both go, hey, we love Maui, so we're going to put $1,000 a month aside and we're going to go there and rent a place for a month, a year, but we don't need to maintain any of it.

Yeah. Oh my God, the no landlord stress would be amazing.

No more phone calls. Yeah, no more flight.

There's so many phone calls. Yeah.

So it's an option.

Yeah.

Kind of, um, pleasantly surprised to see that— like, I see a lot of realizations happening for you. What's happening?

Because the house has been a source of stress. Um, it just feels like, yeah, an exhale that we wouldn't have to have that stress anymore.

Yeah.

So that feels nice.

Kind of echoes what you said about the kind of life you want to create, right?

Yeah.

You don't want to spend a ton of time on work.

Yeah.

Being a landlord is work.

Yes, it really is work.

Yeah, we would— I would have to have that fund that you mentioned, like $1,000 a month or more. That would be so essential because I would be so devastated if I had to stay in SoCal all the time and you could never go back.

Yeah, that's not the case.

Right.

One thing that I love doing when I speak to people and help them create their rich life is they often think, if I make this decision, I can never have that again. Like, if I sell a house or if I get rid of my third car, whatever. And I go, wait a second, do you love driving this car? They go, I love it. I love a BMW. I have horrible taste in cars. I love my BMW. I go, why don't you rent it from Turo? Yeah, take it out 2 days, 2 times a month, get a nicer one. And because we have this idea that we have to own it, and if we don't own something, it feels like chopping off part of our arm, we necessarily limit ourselves.

Yeah, I love that. It gives me a sense that there's not just one option.

Yes.

It felt like, okay, we have to just really bear down and like grit our teeth and get through this year and pray that you get enough clients and pray that enough of them want to pay the fee that we need. And if all of that works out, then we'll be okay.

Yeah, it's really high stakes.

Yeah. And we can still do that. Actually. And then if it doesn't work, we have this backup plan. That feels really good.

Yeah, that's really beautiful. Yeah. And you have now upside because you've really, like, cut down your fixed costs. So what that means is if you are able to, let's just say, add 50% to your income, that's like amazing.

Wow.

I mean, you're already crushing it right now as is at $296,000 with $150K liquid. So if you're able to increase your income a bit, wow, that's like thousands and thousands. And if you're able to double your income, I mean, you have more money than you know what to do with.

Yeah.

All because you made one decision now that cascades to the rest of your life. And maybe 5 years from now you go, hey, I actually really want to go back to Maui and have a place of our own. Okay, cool. Well, we have $380,000 in savings. We have this, we have that. What does it look like now that we are both speaking this language at the same level? We can now start to plan ahead, but we're not playing not to lose. We actually get to play to win.

That's cool. That's really cool.

Yeah, I love it. I love seeing it in both of your eyes. Yeah. What are you feeling right now?

I'm feeling excited. I'm feeling connected. I feel like we— this decision that I had for Maui was before I knew you and before this family. And yeah, there's something here about like having it be more intentional for us moving forward and like how there are possibilities and it doesn't just have to rely on me doubling my income. You know, starting in May next year and then having it be sustainable. Because yeah, maybe it's not, maybe something happens, and then we have alternatives.

Yeah, that's so much pressure that I hope you can feel can come off your shoulders. Like, it doesn't have to be everything on you. We can still have a dream life, we can have our rich life and it doesn't all have to be completely on your shoulders.

Yeah.

And we can make it work so that no matter what, you can still have the ocean and the people in the community. Yeah.

I think I would want to see the specific numbers for what, like, a 3-month stay on Maui would look like if we're not just staying with friends and we want to have our own place. And then factor that in. Yeah. And yeah, like, I love that.

I love that you're asking. I would need to see the numbers. Yes, I love that.

That's so cool.

Yeah, you should be really thoughtful and you should factor in airfare and hotel and all that stuff, Airbnb, whatever it may be. But I suspect— I'm not sure, but I suspect that even going there for 2 months at a time or something like that will never equal the cost of ownership. It might feel different because you're actually paying out of your pocket. But when you look at the numbers and you have the full board in front of you, you go happy to do it.

Yeah. Hmm.

Again, it's up to you, your rich life, what you both want.

Yeah.

Yeah, I love that. I love the idea of like figuring out what is the thing that actually matters. And what are we doing to like get there?

Yeah.

So if being in Maui is what matters, do we have to actually own a home to get there?

No. Do we have to be there these specific months? Do we have to do XYZ? What's the important thing that we really need to make happen? We need to be there with our people. Yeah. Cool. What are all the ways to get there? Just opening up the idea of potentially selling the Maui house has changed everything in this room right now. I think that Drew and Nicole feel really good at simply the option of being able to sell their house. It's kind of like a lot of New Yorkers who live in a building with a rooftop. They have a grassy area or a barbecue up there. Do they ever use that rooftop? No, never. But they love knowing it's there. And this is the same thing happening with Drew and Nicole. Just the idea that they could possibly sell the house feels incredibly expansive. But I don't want to let them walk out of here just feeling good. I want to press them a little bit. Okay, so let's talk about next steps.

Yeah. Yeah. I feel like before the baby gets here, if possible, we just run a bunch of scenarios, you know, like, let's look at selling you quitting your job and us just living in Maui on my salary. Let's look at Maui and what it would be to go there for 3 months without the house. And let's look at my different salary possibilities. And yeah, I just— this idea of like the possibilities that are there for us is really fun and encouraging. And then we have that information. And then we can, yeah, be on the same page.

I love that.

You like that?

It's so— it's great to hear you say that. It sounds fun. Yeah, you don't usually use that word.

Yeah, when it comes to money. Yeah, that's actually really cool. Your energy is super positive. Yeah, I like that. And as, as I can see here, and I, and I'm grateful that you're letting everybody else see, it's the vision first and then the numbers second. So, hey, let's— I love that you're like, let's play with what if you quit your job? That's cool. Yeah, kind of unlikely, but I like that you brought it up. And that's— we should play with that. What if we move here? What if we move there? What if XYZ? Everything's up for discussion, and then we can decide what feels right. It's actually fun to do that.

Yeah.

Then we plug the numbers in and say, like, okay, what would it look like? That's obviously not going to work. Cross that one off, right? This could work.

Yeah. We're in such a place of privilege and have so many advantages. And so it is play. It's like we get to play with this money and see what we want to do with it.

Beautiful. It's— I love this abundance. I can hear it in you. Like, we have abundance and we get the gift of being able to choose how we spread it around.

Yeah.

Would there be a date by which you would want to make a decision?

Probably.

This place is home. And to have time to really actually make the decision, I feel like Drew's going to need to be there. I could be wrong.

I see your point.

She's so experiential in her decision-making that I feel like while I could make this decision logically and just in my head hypothetically and stuff like that, That's not the way that Drew makes decisions, and I feel like having them at least a few months, but maybe it could be less, of time there would allow her to feel into like, how much time do I need here every year?

What do you say, Drew?

Yeah, thank you. I feel so seen. Um, that's really sweet, and I actually feel excited by the 3-month proposal. Not that I say yes to it, but what I'm saying is I feel excited by the confines of a deadline that's pretty soon, actually, because it is— this is a big deal. Like, we are not in a good place, you know? And so I think it does require a little bit of urgency. And I could maybe do like a 6-month or something.

There's lots of ways to play it. Yeah, could be 3, could be 4, could be 6. You all can decide. Part of that decision would be modeling out How much are we going to have in savings? How much is it going to cost for us to fly to Hawaii? Now all these things start to really need to be factored in.

Yeah.

And then you have to decide, you know, like, if I'm you and I'm down to $20K in savings, we don't want that. Your fixed costs are too high. We also have to remember that just because you decide to sell doesn't mean it sells.

Oh, no.

Yeah, right.

So there's all these sellers fees and all this stuff.

Yeah, there's like a lot of stuff to happen. And do you need to paint it or rent it? Whatever.

Yeah.

But what I love hearing from you, Drew, is, hey, actually tell me what's on your mind, because I like the confines. I don't mind the urgency.

Yeah.

Another way to look at it would be to say, we can keep this place in Maui, but Drew, this is how much you have to make starting a month from now.

Right?

Yeah. Yes.

And then maybe Drew's like, Sounds great. Get out of my way. Yeah, that's another option. Yeah, but it has to be consistent. It can't be like one-off client. It's got to be consistent, right? Put it all out on the table. My point is, use the numbers to guide you, because if you're down to $20K or $30K, which is not far off from where you are at $67K in savings, you're in a danger zone.

Yeah, yeah, I like that.

Cool. I think that the two of you should jointly figure out your timeline.

Mhm.

And yeah, like if it's me, you know, you have 3 months of expenses, I wouldn't let it get much less.

I see why you said the 3-month number. Okay.

Yeah, yeah, yeah. I don't like to ever have my back against the wall. So the urgency is actually like very functional and it will help you make the right decision.

Yep. Yeah, yeah, I appreciate that.

Okay, you still have decisions to make, but what we've done I think is we've kind of It's like we're in a garden. We've kind of opened up the possibility. Like, we've loosened up some of these plants that have these deep roots.

Yes.

Maybe we're going to be in Maui with a home that we own, maybe in a different form. Maybe you're going to be making what you're making. Maybe you're going to double your income. Who knows? Maybe you're going to work at the place you work for 20 years, maybe 30. I don't know. Is your rich life vision still the same? Or has it changed as we've been talking?

For me, I'm feeling the, the spaciousness, the call for spaciousness, you know, that really used to be such a, like, core value of mine, just to have spaciousness in life. And by that I just mean like not super stressed, not feeling like squeezed on, not feeling like a back against a wall.

Yeah.

Um, and I'm it has been very tight and money has created so much stress. And so I'm really feeling called to include spaciousness in our inner life.

I love that. Yeah, yeah. I feel like community is still core and work-life balance is part of that getting to spaciousness. But it is interesting, I feel like having a sense of what can we be doing to make our lives easier, as opposed to— I feel like we've been holding on so tightly to one specific way of doing it, and it's not necessarily even serving us. Like, it's not necessarily serving that vision.

Yeah, it's really powerful. Spaciousness is a word I have not heard associated with a rich life before, but it makes so much sense. Yeah, it's, it's actually speaking to me as well when you say that. Spaciousness on my calendar, spaciousness even in a room where we have high ceilings and spaciousness in the way that I can think about all the different ways I want to do the things I want to do. There's so many different ways. That's really cool. I love that. And what you mentioned about we've been holding on so tightly.

Mm-hmm.

Yeah, but maybe we need to be relooking at the vision. And zooming out and saying like, are we still doing it or are we just holding on to this thing that's been in our hands for a long time?

Yeah, definitely. It's kind of cool.

Yeah, it's very cool.

I find you're both very agile with the way that you think about these things. Agile. Agility in a rich life, very important because necessarily the world will throw things at you. And, you know, like they have those stories about the monkey. Once you put something in their hand, they can't let go. That's a lot of people. Yeah. Like we just have this idea We have to buy an SUV or a house or this or that, and we just can't let go even though we're drowning.

Yeah.

But the fact that you can now play with these ideas.

Yeah.

Is really impressive.

Yeah.

Thank you. It's really exciting.

It is exciting.

It's felt like drowning, honestly. It's felt like drowning. And this feels like, oh, I could just stand up. We were in the shallow end.

Beautiful. Yes. Yes. That's it.

Love it.

What's going to happen with Drew and Nicole? I actually have no idea. I would say 50/50 odds, which is quite rare after I speak to a couple. 50%, they follow what we talked about today. They make a plan, they go back to Maui, and they realize, hey, we can come back here in different forms, but maybe we don't need to own this house. 50% odds they never get around to making a decision. Life gets in the way. And with a new baby just weeks away, I think it's going to be very difficult to follow a strict financial plan, especially for the next few months, because things are going to become a little bit tumultuous. All I hope is that they remember to zoom out and look at the big picture of their rich life. At 85% fixed cost, they need to make a decision. In fact, not making a decision is the same as making a decision. So I really hope they get aggressive, they get direct with each other, and they decide to potentially sell that place, bank the money, and start over on their joint vision of a rich life together. And now let's check out their follow-ups.

Hi everyone, we're back. Um, I'm not pregnant anymore. And so we have our new baby, which is really exciting. We're definitely living day to day because it's a lot having a newborn. But we have had some space to be able to make some big decisions and definitely some changes in kind of how our dynamic works in terms of talking about finances. I have really tried to take a step back in terms of leading financial conversations and letting Drew really take more of the lead and like Drew handle touching the spreadsheets instead of me. That's a really big shift and it's made things a little bit more spacious in terms of those conversations and more playful. We ran numbers looking at my job and basically all the different scenarios. In regards to my job, we're really deciding that it's just not feasible for me to potentially quit my job and us live solely in Hawaii because the benefits are going to be very hard to match. So because of that, we'll still be a bicoastal family, but we have made some other decisions and changes.

So yeah, so as far as the Hawaii part of the scenario, I also— I have become basically a CSP expert, and I ran a ton of numbers. I compared— I took Ramit Sethi's advice, and I took— I looked at Airbnb costs, I looked at rental costs, compared to buying costs and came up with the best financial scenario to keep our fixed costs at 60% or lower, which is that we're going to sell the property that we have and we're going to most likely end up buying a condo that we pay cash for. So that has been— bless you— so that has been what the numbers show is the best, and I have reconciled that. And I was feeling very emotional about selling the Maui place before. And after, you know, it's been about 6 weeks now, I've had to process it and I'm feeling much better about it because I'm letting the numbers really dictate what choices that we are making, which is a big difference. And also knowing that we wanna lead with our rich life feeling spacious, and that means spacious as in stress-free. And financially spacious. So this is the best option for us. So we're, we're feeling really good about it and really excited to start this next journey with baby and keep our fixed cost to 60%. And then once we sell the house and have our fixed costs at the number we want, we will be putting our savings and investments forward.

Yeah, really exciting.

Yeah, thank you everybody.

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