Ramit Sethi talks to someone carrying $1.2 million in debt after a $75,000 pay cut, a $120,000 pool, and a house purchase. Their fixed-cost ratio hit 179 percent. They just lost their job.
Don't want a big house. Don't want a fancy car. Just want the debt gone.
You took a $75,000 pay cut. You bought this house, but then you still decided to build a pool?
Yeah.
How much did the pool cost?
Like $120,000. That was just the pool.
Where does the money come from for all of these things?
Everything goes on a credit card.
Did you run math? Wow, it got extremely silent in here. What is this number?
179%.
Which I believe may be the highest fixed cost number I've ever seen.
Oh, no.
You are drowning. Yeah.
I think in my head, if we don't buy a house again, we won't get into that situation.
But you will. I just feel like we've failed. The question that should consume you is, how did we get here, and what's going to stop us from getting right back in here? And I'm not hearing much of that. It is just a matter of time until you run out of money. The clock is ticking.
