“We’re $520k in debt & he hid it from me”

We were getting ready to start the next episode and I looked over to Aldo and I said, how much debt are we in? Because I literally had no idea. When he wrote it all down, I almost fell off the chair. Like I was floored. I didn't know that everything basically was being charged on credit cards and loans and things. It's in, I guess, collections. We haven't been paying it for the last few months. And that scared the crap out me. And I was like, why? I felt like a little bit of like a salt, a false sense of.

Security, you know, for me it was eye opening as well. I mean, I should know better.

He's the financial guru, he works in finance, he knows all of this stuff. I have friends that go to him for financial advice. So never would I have ever thought we would be in this, in this predicament. So I was very shocked and I haven't really slept that great since all of this has come out.

Here's the scenario.

Cassandra and Aldo, 40 and 41 years old. They have two kids, 17 and 10 years old. They're sitting on the couch looking for something to watch. They stumble across my Netflix show, How to Get Rich. And they start watching, surprised that they're really into this money show. And soon she leans over and goes, hey, how much debt do we actually have? Aldo, the money guy in the relationship, tells her. And she is shocked. That's where our story begins. And as you listen to today's conversation, I want you to be compassionate because so many of us think that we're rational robots when it comes to our money. But listening to Cassandra and Aldo is actually a reminder that most people really don't pay that close of attention to their money. And you're gonna find out what happens when they realize the costs of ignoring their finances. Now, before we dive into this episode, I wanna let you know a little secret. For the last four weeks, I have been traveling the world, only working one hour per week. You probably did not notice because while I was in India, Italy and Mexico, this podcast released a new episode every Tuesday. Social media posts went out, newsletters went out. Everything ran as usual. This Saturday, on my newsletter, I'm going to tell you how. I'm going to tell you how we decided to take this trip, how we paid for the tickets all across the world, how we chose the hotels, and how I had my business running smoothly while I was gone. You can only get this email on our podcast newsletter this Saturday, December 2nd. You can sign up for free@iwt.com podcast newsletter I love to take you behind the scenes of how I live my rich life. You can find that this Saturday. Iwt.com podcastnewsletter now let's get to the episode.

Yeah, we were sitting on the couch looking for something to watch, and it kind of gives you, like, a preview, even though, like, when you, you know, you hover over it. And you were talking about owning a home and phantom costs, you know, it's. It's not what everyone makes it out to be. And I was intrigued. I looked over to Aldo and I said, how much debt are we in? Because I literally have no idea. And, you know, he threw some random numbers out there, and they were pretty high. I think I had an idea, but not anywhere near what they really are. And I think I was, like, in shock. I right away got a pen and paper, and I was like, I want to know everything. He proceeded to tell me about other loans, personal loans, and I vaguely knew about some of them. I thought they were, you know, in the past to consolidate debt. You know, little credit cards that we had. There was a loan that was supposed to be paid off, and he mentioned this loan in the amount of $66,000 that is not paid off. And not only is it not paid off, it's in, I guess, collections. We haven't been paying it for the last few months. And that scared the crap out of me. And I was like, why? What happened? But when he wrote it all down, I. I almost fell off the chair. Like, I was floored. I didn't know that everything basically was being charged on credit cards and loans and things. I felt like a little bit of. Like a salt. A false sense of security.

Okay, Aldo, what do you remember about that conversation?

It was a tough conversation. I know in the past, I've kind of brought it up, but I know she gets really alarmed or panicked when, you know, any number that I put out there. I've been trying to tell her for a couple of years that it's been challenging, but we've never really sat down, and I've never put enough effort to really sit her down and go over all the numbers. It was a daunting task. I thought of a number, and that number I gave her was scary enough. And then when I started logging into all the accounts and finding everything out, it was twice as much. I should know better, right? So a big part of it is I was just disappointed in myself that, you know, I let it get to this point, this bad, this fast.

Aldo's a very good man, and he's always wanted to give me the thing. Everything, I guess, even the things that I don't ask for. For the most part, he would do it. Like, if it was a trip or, you know, I. We have a basement gym that I, you know, I love to collect, like, you know, equipment. He would always make it happen. You know, he would tell me we were tight from time to time. We'll be married almost 18 years now in February. I kind of just like, let him take care of all that he wanted to, and I. I don't know, I just kind of let him go all in, and I never looked back all these years.

Why is it so easy to avoid talking about money? Well, for the same reason we don't talk about our health. Just like money. With our health, we see clues everywhere. We feel aches and pains when we get up from sitting down. Maybe our clothes don't fit the same like they used to. Maybe we get tired faster. But instead of taking an honest look at what we're eating and our activity levels, we actually concoct these very sophisticated, convoluted stories about how our metabolism is changing and how this is what happens to everybody when you turn 40 and all kinds of other stuff. And the thing is, everyone around us is doing the same, so we genuinely believe it. It's easy to ignore these problems because they're not really acute. They're just little degree by degree. And that's the same with money, where we have clues like a partner getting anxious. When you bring up money, or suddenly you see this $27 overdraft fee in your checking account, you just can't figure out where all the money is going. You would think that a person would whip out a calculator and figure it out, but that's not how humans work. We are not rational robots. And the sooner you understand that, the sooner you will understand human behavior and the sooner you will be able to change your own behavior.

Is it correct that, Aldo, you're the money person in the relationship?

Yeah.

Yeah. Okay.

And what does that term mean to you? What does that role, money person mean to you?

Providing stability, paying the bills, setting the trips, putting the budget together.

Keep a budget?

No. No. Okay. Putting the budget on what we thought we were going to spend, and then it always blew up.

So your money role is providing stability, planning out the trips. Does Cassandra come to you saying, I want to do this or I want to get this, and then you evaluate that based on money, or is your role to say yes?

I think I mostly say yes and then try to figure out how I'm going to make that yes happen. Okay.

Have you ever said no because of money?

Not that I can remember, no.

Okay, well, you've only been married for 18 years, so.

Yeah. But there's a lot.

To be honest, I've never thought money was ever. It was never in my mind about that. Like, zoom out. I never thought about money. Even though we need money to do all these things, I would actually say that to, like, my friends and stuff. Like, they would talk about their finances and going to do their taxes, and I'm like, I don't do any of that. You know, I don't know any of anything about it. My husband takes care of him at all.

Was it essentially, I go to work, there's a paycheck, and there's a black box. If something happens inside that black box, and, like, I'm good, basically.

Yeah. I'm pretty embarrassed to admit it, but I.

It's very common.

I was a black box, you were the black box.

And I, you know, if something was off in my check, like, you got paid, like, you know, 200 less that he would tell me. I never even looked at my paycheck.

But you know, what if, like, a car mechanic asked me, hey, Ramit, what's your understanding of cars? I literally turn the key, it turns on. I fill up the gas once in a while, and, like, that's pretty much as far as it goes. Maybe get an oil change. That's it.

Yeah.

That's how a lot of people are with their money.

It's just as long as it works.

That'S as far as we want to go. But the problem is, I think you realized when you asked Aldo, hey, can we go beneath the surface? How does this car actually work? You discovered that. Oh, my gosh. It's not what I thought.

Yeah.

Okay.

Aldo, did you ever wish that Cassandra was more curious about money?

Yes. Yeah.

Why?

We've always done a lot of things together, and I feel like this is the one thing that, you know, I just did all on my own. I didn't want to stress her out rather than, you know, I just figure I'd take ownership of it and do what needs to be done.

Can you think of an example where you did talk about money and Cassandra did get stressed out?

I don't know. We, you know, we wanted to do maybe more trips, and, you know, I know we couldn't afford more than one, so they'll be like, no, we're tight. We, like, what do you mean, we're tight? We always feel tight again. Well, we're. We're tight. We can't do, you know, we can't do it.

Did you end up doing it?

Well, we took three trips this summer. It started with the ruba in May.

That was a last minute thing and it was a good deal, but it ended up costing twice as much.

Thank you for telling me it was a good deal, even though it wasn't.

Go on next.

Then we had a destined Florida trip planned with my family, which we. We did. And then not even a month later, we went to Cabo with our friends.

Where's the stress? I don't hear any stress from Cassandra about money. Sounds great. Hey, let's go to Destin. Let's go to Cabo. Where's the stress?

I don't think so.

No, you didn't seem. No. Seemed annoyed. If I say, oh, you have to wait or use a credit card to pay for whatever.

I think I would feel annoyed sometimes because I'd feel like I work hard and so do you. And I'm like, how do we not have the money? And I just naively thought, we have bills, we have a mortgage. It's annoying to feel like you can't do little things when you work so hard. So I wasn't annoyed at you. I just was annoyed at the fact that we should be able to do those things, as I know we do make pretty good money.

What's happening here is basically what we do as children when we're young. We imagine living in a palace or flying a fighter jet. And as adults, we actually do a similar thing with money. We literally have beliefs about how we are supposed to live. You know, my parents bought a house, so I should be able to buy a house that's the same size at the same age in the same city. Now, first of all, let me say I want you to be able to buy a house. That's why I'm so vocal about wanting to build more housing and why I'm so politically active. But if you simply use your feelings about your parents situation 40 years ago and you blindly make the biggest purchase of your life without running the numbers, well, then you're doing the same thing as the kid who says, I want to be a fighter jet pilot. You know, we do the same thing with relationships. I knew a guy who was in a relationship with a great woman and he eventually broke up with her. And some of my friends asked him why, and he said, I never saw myself marrying someone like her. He was referring to her religion. Now don't roll your eyes. We all have a certain concept of how we expect our life to turn out. I expected to be educated. I expected to have money and flexibility, to live wherever I wanted. I expected that from a very young age. Now, if I didn't have money, honestly, I would find that incredibly difficult to accept. I might even ignore the details of my finances and spend, as if my vision was true, because I would have imagined and even believed it for decades. So when you hear somebody break up with a great partner because their religion isn't what they imagined, I mean, I'm not going to tell you not to judge them. I judged. But I can also understand how these deeply held stories affect our behavior, even irrationally. So. So today, when you hear them say they're stressed and Cassandra says she's annoyed because they make money and they should be able to spend, what's really happening is that their vision of life is not aligned with reality. And in Cassandra and Aldo's case, they've simply chosen to ignore reality and instead spend, spend, spend.

You watch the show, Cassandra. You finally get very curious, you start asking questions, and that night, all the numbers come out and you are feeling what?

Well, obviously shocked. I wasn't expecting it, but I also felt very hurt. Like, I also knew that I can't just, like, you know, say, oh, this is all his fault. I have to take my part in it. I just kind of sat back and let him deal with everything. And my thing was always like, oh, he's, you know, he's the financial guru. He works in finance. He knows all of this stuff. I have friends that go to him for financial advice. So never would I have ever thought I. We would be in this. In this predicament. So I was very shocked, and I haven't really slept that great since. Since all of this has come out. You know, it's been hard, but, yeah, I felt hurt. I felt like I've been living a life that maybe I. We shouldn't have been living. Like, I think another big thing that made me feel hurt was I kind of left this part out. But it's my fault, too, because I don't check my paycheck, but apparently my check was being garnished. I get paid bi weekly, and it was $380 that was coming out of my paycheck. I had no idea for what. For taxes that we had owed.

Oh, wait, they're garnishing your paycheck for back taxes that you owe. All right.

That's not good.

No, I mean, it's completed now, actually, my last paycheck was the last one, and I asked him, and he's like. He just casually says, oh, that's. That's the money we owe for taxes. And I'm like, what? What do you mean?

Do you wish that he had brought up financial challenges many years ago?

I wish he would have told me the severity of it, yes.

Cassandra, it's interesting to me because you go, I know we had debt, but I didn't realize the severity of it. What kind of debt did you think that you had?

Well, obviously the mortgage. And I knew we had some credit cards because he would give me credit cards to use, too. More often than not, those credit cards were almost to the max. Whether it was me and him or, you know, or if I needed stuff for the kids or something, he would give me a credit card, and I never thought twice. He would. He would tell me it was for the rewards or the points or whatever you get.

Like, although it was for the points.

He always told me that, and I was like, okay, well, you know, what do I know? I just need to get this.

You heard me. Absolutely. Roast these people who come on and talk about points when they're in severe credit card debt.