"We’re in our 40s and forgot to invest. Are we screwed?"

You spend $10,000 a month.

Now that we're, like, combining finances, can I buy this, like, $500 dress now, or how does this work?

That's where some of my apprehension comes in. How is this going to work with the amount of money that she spends?

According to this, you might be spending more than you make every single month.

I'm pretty much spending exactly as much as I'm making.

Just because you write it all down in these spreadsheets doesn't mean that it's accurate or it's actually working.

You don't have enough money to do all this stuff. Guilt-free spending, you're at a negative. Like, it would make no sense for the two of you to be making $179,000 and not be able to go out to a coffee. Investments are— Shane has $143K, Nicole has $96K. That's too low. You're 40, is that right? Mm-hmm. You got to be investing. We got to put that money to work. What you are at risk for is not having enough money as you get older. You better start investing aggressively today. For those of you in a relationship, when was the moment where you combined your finances? I'm not just talking about combining a bank account. I'm talking about when you really felt that you were a financial team, when you saw money not as mine and theirs, but Hours. I'll tell you that for me, that shift was harder than I expected. I had been talking about money, thinking about money every single day for decades. Nobody asked me any questions about how my automation flows were set up. I never had to justify anything or discuss it. None of it. When my now wife and I got engaged, we started seriously talking about money. Then we got married. That singled 'em. The total control over my money. I realized that chapter had to close, even though I was really proud of my system, my way of doing things. Now I realized it was about our money and us having conversations and sometimes me being wrong. Today I am speaking with Nicole and Shane. They've been together for 8 months. They're getting married in 11 days, and they're both in their 40s. She's 40. He's 48. And until now, they have spent years doing money their individual way. Nicole read my book 3 years ago, and as a result, she built a rich life around travel and great food and buying a $500 dress whenever she feels like it. Shane is a natural saver. His job covers almost all of his living expenses, so money has never really stressed him out. They have two very different financial lives, and now they're trying to build one together. Let's see what the numbers say on their conscious spending plan. If you want my help with your own CSP, you can join my money coaching program at iwt.com/moneycoaching. Assets: $245,000. Investments: $239,900. Savings: $265,000. Debt: $171,664. Net worth: $588,000. Fixed cost: $36,000. Wow, that's low. Investments, 14%. Savings, 42%. That's interestingly high. And guilt-free spending, very low at 8%. Okay, right away you can see that they have done a lot right. But remember, Nicole built her rich life for one. The question is, how do they combine their finances to start working as a team? Let's find out. So I understand that the two of you are recently engaged and planning a wedding. Congratulations. When's the wedding?

In 11 days.

How long have the two of you been together?

Since about May of this year.

Oh, hey, listen, my parents met, 7 days later they were married. You know, that's how it goes sometimes. Where'd you all meet?

Online.

Okay, cool. And obviously I want to talk about money today and many other things, but What was the first time that money came up when the two of you were dating?

So we were hanging out and we were talking about how much money we made per month. And she told me that she made $12,000 a month. And I was like, oh, you make more than I do. Congratulate. You know, I was very proud of her. And she said, of, of that $12,000, how much do you think I spend per month? It was kind of just like a cute game. We were just, you know, flirting. She has very fine tastes in things, and she doesn't let her money kind of bog her down in going after what she wants. So my guess was $4,000, you know? And I was like, "That sounds about right." And she was like, "No." And I thought she was saying no like I was high, but then I kind of looked at her facial expression, And I'm like, "Oh, it's higher?" And she's like, "Yeah." And I was like, "Six?" And she's like, "No." And I was like— now I'm sweating, you know? I'm like, "Eight?" She's like, "No, baby." And I'm like, "Well, how much do you effin' spend a month?" You know? And she's like, "Ten?" And I was like, "You spend ten?" Effin' $1,000 a month? Like, what do you spend all your money on?

When you heard $10,000, what'd you feel?

I was very scared. I didn't know how, you know, because that's totally contradictory to, you know, I guess my vision of saving or spending. I just thought it was really high. And then she kind of told me like what she spends her money on. And so that's kind of where our first conversation about, money started.

What was your impression, Nicole, of that conversation?

Uh, I did think he was scared after that conversation, and we had had conversations prior, um, about the way that I travel and that I do travel a lot, and that isn't something that he does. So I kind of knew that I was spending more. Um, plus from where I lived into where I live now, like, the spending changes quite a lot, and the clientele that I have for my business, they spend a lot of money. So I remember thinking like, oh, that was definitely more than he thought, but then feeling the need to sort of explain myself. Like, in that $10,000, you know, $3,000 of that is savings every month. Like, because I track, as you might see on our expenses, uh, I track like every dollar I spend, only because I just wanted to know Are you explaining your own spending to me right now? Yeah.

Why?

This is what I felt like I needed to do for him, so I did it.

Why?

Um, because I really liked him and I was excited and I knew this was going to be something, so I didn't want to, like, scare him away with my, like, spending.

I'd like to read something from your application, Nicole. You wrote, I have been living my rich life and now I am unsure of how to incorporate a marriage and child into it. My current lifestyle will not sustain these exciting changes. Shane has a unique living situation where all his housing, food, and utilities are covered. I feel judged by my lifestyle. What did you mean when you wrote that line in the application?

Now that we're like combining finances, it's like, I do feel like, is this a— can I buy this like $500 dress now, or how does this work? Because in my rich life that was fine, but now as a couple I want to— I want it to still be fine. And maybe it's something I needed to reconcile with myself too. But before I wouldn't have thought anything of it, and now I'm thinking about these expenses in a way that I haven't before because it didn't really matter.

Shane, when you hear Nicole say, I feel judged by my lifestyle. What's your reaction to that?

I guess initially when I just heard you state that and her confirm that, I was trying to think back to when I've been judgmental. And I guess I've, you know, using humor, raised an eyebrow at some of her purchases. I felt uncomfortable. With some of her purchasing. And I guess my worry is that how are we going to start a family and maybe buy a house down the road if we're not strategized to save to do those things? So, you know, I'm sorry if you felt judged, Nicole. My intention was to never judge you. It's always to understand you.

Nicole, you mentioned your rich life. You said, I'm living my rich life. What is your rich life day to day?

I read the book, um, the I Will Teach You to Be Rich 3 years ago, I want to say, and implemented it for myself as a single person. So I've put 5 different savings accounts together for the things that I've sort of prioritized being travel, uh, expenses of like extravagance, meaning the $500 dress has sort of become a joke between he and I. Um, but if I wanna buy that, you know, there's an account for that, so I don't really think about it. I don't typically cook too much. That's kind of changing too. So I had a pretty large budget for dining out. And I guess the fourth one is I pay for, um, my sister's children to attend school.

What do you feel when you just explain those buckets to me?

I feel great about them.

I love it. I love when people feel great about spending money intentionally that they can afford. That's awesome.

No, it felt, it feels really good. I mean, I have been on really amazing trips. I've been to Switzerland and Germany and Austria. And, you know, I had a bucket for that.

I love that. Well done. Shane, do you have an equivalent setup in your finances for what Nicole just described?

I do not.

Okay.

Okay.

Does what she is saying, does it make sense to you having separate savings accounts?

Yes, it does. Think the intentionality of doing things in the way that she has, uh, set them up, you know, allows her to feel so great about her spending and know that she's going to be okay and that there's no guilt in what she's doing. And that's, that's great. I envy that.

You envy it, but you have not set the same thing up in your own fin— without judgment, I'm curious why not.

You know, why I haven't done that is because I haven't really needed to do that because I don't have many fixed costs for what I do for a living. And I never had to worry about money. Whatever I wanted to do within reason. I mean, you know, if I want to go out and buy, you know, a very nice sweater jacket, fishing gear, go skiing, I can do that. And I don't even have to look at my savings account because I know the money's in there.

Let me understand what you both do for a living. Nicole, can you start?

I started a babysitting nanny service, so I place nannies and babysitters with families. I have an app that families can go on and book through, and then I have a list of sitters that are distributed accordingly. And then I work for 3 or 4 of those families specifically, mostly traveling with them.

What a cool job. All right. I love that. And, uh, Shane, what about you?

I work for a nonprofit that's a long-term residential recovery program for college-aged young men. And I've recently been promoted to the acting chief operational officer and the vice president of operations.

Cool. And just so I understand correctly, you mentioned you don't have— I think it's rent or other fixed costs like food. Is that because you are housed at the facility?

Yes.

Okay. So what other benefits do you get? Just so I know, housing, food, anything else?

Sometimes transportation, cable. I just basically all costs. Yeah. Except for cell phone.

Wow.

Amazing.

That's quite amazing. Yeah.

Right. So all that money I get to save, it just goes into the bank.

Cool. How do you feel about that? It's quite an interesting job. I mean, an interesting career position to have all fixed costs covered. How do you feel about that?

It feels great.

What happens when you get married? Will your housing situation change?

Yes. So I'm going to move in with Nicole. She's renting.

All right. Gotcha. Now, Nicole, you said in your application you are, quote, unsure how to incorporate marriage and a child into your rich life. What, what do you mean? What part feels hard to incorporate?

Hopefully we'll be having a baby soon, and I will not be able to sustain the life that I'm currently living in terms of work, uh, because I won't be able to travel and be away for, you know, months and weeks on end. So essentially my income and my part of the agency will kind of go away. I'll still have, um, sitters working for me, but that pretty much cuts my salary, like, in salary in half. So obviously, you know, the $500 dress either needs to be like reallocated or not purchased in the same way that it has been up until now. And it is important to both of us that I, you know, stay home and, and with the child and, and not traveling.

And the question is, how do we make it all work? Is that right?

Yeah. I'm not walking away from the agency entirely, so I'll still have the babysitters working for me, but that's— it's about 50/50.

Okay.

So your income will drop by, let's say, half.

By half. Yeah.

All right. So this is interesting. And just conceptually, what do you think is the answer here? If the high earner is going to take a 50% pay cut and add on a child. What's the solution here?

Well, then I won't need the travel savings account anymore because I'm probably not gonna be going anywhere. My spending needs to go down.

You're spending— you're saying conceptually should go down.

Okay, right.

Anything else?

Yeah, I mean, Shane is planning on participating in my monthly expenses, but my fixed costs are fairly low where I'm renting.

Okay. Shane, you got anything to add here?

I think we're going to be able to do this successfully. I just think that there's some planning that needs to go into it. I obviously want Nicole to be happy and not feel like she's making a tremendous sacrifice in doing this because this has all been extremely joyful. Uh, for me, and I think this is one aspect that, um, I don't necessarily think we've been avoiding, but we've been so busy that we really need to take some time to focus on this solely to kind of make some progress of like planning on how we're going to continue to live in a situation where our money works for us. We're both happy, are, we're aligned and our priorities are in sync.

Okay. I agree. Sounds good. I want to look at your numbers. What was it like to do the conscious spending plan together?

It was fun.

Any surprises?

No, she already told me how much she spent a month, so that wasn't a surprise.

Good. And Nicole, were you surprised at all?

Yeah, no, I don't think there were any surprises. We had been having those conversations. We'd have those sit-downs.

All right. Let's take a look. Now you have your money separate right now. You're not married, but as of 11 days from now, you're going to be married. So we have all of them individual and combined, which is very helpful. Nicole, can you read off your numbers here and the word in bold next to it, please, for this entire column?

Assets, $20,000. Investments, $96,400. Savings, $100,000. Debt, $4,300. Total net worth, $220,700.

Okay. And Shane, can you do the same thing for your numbers, please?

Sure. Assets, I have $225,000. Investments, I have $143,500. Savings, $165,000. And debt, $167,364. Total net worth, $366,136.

This is quite interesting. What do you make of these numbers?

They're awesome. Wow.

Okay, cool. Nicole?

They're great. I think. Yeah, I think they're great.

So I want to point out that Nicole makes more than Shane, but Shane has a higher net worth by approximately $140,000. Nicole has $20,000 in assets. Nicole, what are those assets?

Uh, my car and some jewelry.

Okay. And then Shane has $225,000 in assets. What's that? What are those assets, Shane?

I, uh, bought a townhouse. I have a car and a boat.

Um, investments are, uh, they're, they're kind of comparable. Not really. Shane has $143K. Nicole has $96K. So about 40, 50% more. Okay. Let's move on. Savings. Kind of similar cadence. We have $100K for Nicole, $165K for Shane. That is striking to me because the way that you described your finances was Nicole spends like a lot. Right. And, uh, and then Shane has no fixed costs whatsoever. So he puts it all into savings, but actually the numbers are not too far off from each other. That's kind of interesting to me. And then finally, debt. Nicole has $4,300. Nicole, what kind of debt is that?

I just had LASIK eye surgery, so that'll be paid off. I have an account for it.

Oh, okay. You have the money, you just financed it because it's like 0% for 6 months or something.

Yeah.

All right. And then what's your debt, Shane?

Uh, student loans and mortgage.

All right. Overall solid. Just kind of interesting to see the difference in the way you describe you know, how much you make and your expenses, and then where we end up with the net worth. The way you described it here and in your application was, I, Nicole, run this quite glamorous business, and I make a lot of money, and I love nice dresses and traveling, and that's cool. I save for it, and, you know, it's great. Shane was— you called yourself a saver. You were kind of shocked that she might spend $10K a month, and you have no fixed costs. So you save all of it. That's kind of interesting. I would expect maybe some different numbers here. They're kind of similar even though your financial situations are quite different.

Yes. And seeing the numbers out there and my, I guess, shock of how much money Nicole spends. Why should I be shocked? She looks like she's in a similar financial situation than I am and she's doing everything that she wants to do and that's great.

That's interesting. Like maybe like your feelings are not correlated with how much money is in the bank. Yes. That's quite interesting. All right. Let's go down to the income. Nicole, what's your gross monthly income?

$10,192.

All right, cool. And Shane?

$9,949.

Is that the new salary after your promotion?

Yes.

What was it before?

Probably $6,000. Around $6K.

Whoa. So you just got like a 50% increase?

Yes.

Damn. All right. Round of applause on that. That's great work. How's that feel?

It feels amazing. And it feels really great to be recognized and entrusted with all of the operations of this organization. It's wonderful.

That's amazing. I love it. Both of you, well done. And Shane, especially that 50% salary increase is, is awesome. So, um, combined, the two of you make $241,000 per year. By a show of hands, who knew that number? What? Both of you? Really?

Yeah.

Yeah. Wow.

We've been talking about it so much. So, all right.

Another round of applause.

This is fantastic.

And what do you think of that number? $241K household income.

That's amazing. Um, I— my only thought is the, like, hovering over, that's going to drop on my end.

Yeah. All right. But, like, we'll get to that.

Today is great.

Okay. Shane?

I think it's unbelievable, all things considered.

Are y'all doing a prenup?

No.

No.

No?

We talked about it. I think it was brought up by Nicole. She said, oh, we need to have a prenuptial agreement. And I gave her, like, a side eye. I was like, what are you talking about? Isn't this—

conversation's supposed to go the other way around, you know, and implying that men are supposed to bring it up for women.

Yeah, you know, it's just kind of like the old adage of, oh, you better get a prenup, you know.

Yeah, but we're living in 2025. Your female partner makes more money than you.

Yeah.

So what's the problem?

I think it potentially invalidates our love and commitment to each other in marriage.

Okay. One thing that I have often seen is that when what we often think of as gender issues are often power issues, and when gender is disentangled from the situation, what you discover is that whoever is in power will act like the person who used to be in power. Case in point, what you just said, Shane, is extremely interesting and extremely typical of when a man brings up a prenup and his fiancée or girlfriend goes, I don't want that, it feels unromantic, etc. And then everyone goes, oh my God, this is like this asshole guy and this ignorant woman. And it's a gender thing. But actually, when we disentangle gender, because now we have a lot of women earning more than men, as we see here, and a high-earning woman goes, hey, I think we should get a prenup. And then you'll see the guy saying exactly the same thing as she used to say, exactly word for word. So it's not necessarily gender related. Of course there's gender issues related to prenups and all kinds of money, but it's also power. Does everybody see that here?

Yes.

Whoa. Nicole, when he said, hey, I'm not really into it, it kind of invalidates our love for each other, what was your response?

I think I remember. In multiple podcasts you mentioning, you know, it wasn't a great experience for you and your partner at the time either. And I thought like, okay, I could really push this, but I'm gonna support Shane in this, in that like we're going to be married in the Catholic Church. You get married for a very specific reason to someone, and it is forever. Um, as even the business owner who, you know, let's say this doesn't work out and, uh, I own a company that is successful. I, I know in my, like, heart of hearts he's not coming for it, and I didn't feel the need to, like, push back further. I had the conversation. I was— I felt really great about his response, and I felt fine. I feel great about moving on from it.

Nicole mentioned that she asked about a prenup, and then Shane wasn't interested, and then she let it go. Okay. First of all, that's a huge mistake. There are certain questions where once you ask it, you can't just let it go. Like, when I brought up a prenup with my now wife Cassandra, I knew that by bringing it up, it was going to happen. It had to. I was not bringing it up casually. Hey, what do you think about this? No, it was, hey, this is really important to me. Let me tell you why I'm nervous. Let me tell you why I'm bringing this up. Let me tell you what this means. And to Cassandra's credit, her response was, I wasn't expecting this, but I'm willing to learn. She was open about it, and that changed everything for us. In our case, it did not stay easy. At first it was fine, then we got lawyers involved. All these numbers were going back and forth. Neither of us really felt understood. And after months of going back and forth, Cassandra said, like, this is not going well. We need to go see somebody. Went to see a therapist. That therapist really opened up our eyes to realize we saw money completely differently. There was trust, there was fear, there was pride. There was so much of what this prenup represented. Surprisingly, having these conversations, even when it got tough, brought us way closer together. We talked about money in a way we never would have had we not signed a prenup. That's one of the reasons that I love talking about it and destigmatizing this idea. I also want to recognize that it is unusual historically for a woman to bring up the idea of a prenup, but it's happening more and more. Of course it is. Many women are now earning more than men, particularly in urban areas. So I want you to start thinking about rethinking these gender norms. If one of you has a complex financial portfolio or you have rental properties or a business or whatever, it makes a lot of sense to explore the idea of a prenup before you get married. My friend with a small business recently told me he uses over 20 different tools to optimize his business. 20! And I was like, why? He said, it just happened. And that is true. When you are an entrepreneur, when you run a business, you start with one tool, then you add another, Soon you've got a stack that's super complicated. A lot of times they don't even talk to each other. Candidly, I don't even want to think about how to log in to 20 different platforms, which is why I recommend starting with something like NetSuite early on. It makes building your systems easier right from the start. NetSuite is the number one AI cloud ERP trusted by over 43,000 businesses. It simplifies your business into a single platform. Including your financials, inventory, commerce, HR, and CRM, all in one place. Plus, it uses an AI-built system to automate your routines and deliver actionable insights, as well as cut costs. From software and IT services to healthcare, equipment manufacturing, financial services, and other great American industries, NetSuite delivers a customized solution for your business. If I'd had this system back when I was building IWT, it would have changed everything. If your revenues are at least in the 7 figures, get their free business guide, Demystifying AI, at netsuite.com/ramit. The guide is free to you at netsuite.com/ramit. Again, that's netsuite.com/ramit. Exciting news. One of our longest running sponsors, Element, has just launched their new Lemonade Iced Tea, and it's built on the same formula as Element's core drink mix, but now with a full full-spectrum black tea extract for a natural source of caffeine. It makes a great blend because you still get that same meaningful dose of electrolytes, but now with a source of caffeine that won't cause you to crash later. LMNT 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. Ramitsethi.com. Try it totally risk-free. If you don't like it, they'll give you your money back, no questions asked. All right, your gross income, $241,000 a year combined. Wow, that's a lot. Fixed co— what the hell? Your fixed costs are 36% combined? Okay, just look at these numbers. $1,400 for your rent. Nicole, where do you live?

We live, um, on the East Coast, coastal Connecticut. Um, but I moved here, uh, during COVID and got a really great deal on an amazing apartment that we would be staying in for that, because that's probably— it's at least 3,000 from my place now.

Whoa.

Just happened to move here at a really great time.

Okay, well done. This actually explains a lot when you, you talk about buying a beautiful coat and things like that. Well, guess what? You can probably afford to do that when your individual fixed costs are 49%, and that primarily traces back to having extremely cheap housing. Beautifully done. Let's keep going. Combined, you've got all the basic stuff. Nicole has $750 that runs through the business. Is that right, Nicole?

So website, um, marketing, text messaging, things that I need for the company. I put all my business expenses in that.

You put your business income in here as well.

Yes.

This is kind of confusing. Okay, listen, as an entrepreneur, you have a business credit card, right? Oh God. This actually explains everything. That, that 1.2-second pause actually explains everything. Did everybody catch that? I go, hey, you have a business credit card, right? She goes, I go, ah, fuck. Now I see why this is all messed up. Okay, Nicole, explain it to me.

It's very organized. Can you put it back on the screen?

Yeah, happily.

Okay, do you see how also I put dining out? That's— these are like, these are fixed costs because these are things that I have allotted for in my, in my expenses, in my savings accounts.

That's not—

but what I didn't have because I didn't— I don't have debt and I don't have a car payment, but these are, these are costs that I— these are things that I spend money on every month. So I think that the, the business expenses should be in there as fixed costs. I have to keep the website up. I have to run the text messaging. I have to pay for the marketing. Why are you looking at me like that?

I, this is fine because it doesn't materially change anything. Whether the $750 for your business expenses is here or where it properly should be, which is on your business account, like your QuickBooks or whatever you use, that's really where it should be. It's not really material. If that number were $7,500 a month, then we would have to rip this thing up and, and redo it. But truthfully, it doesn't really change the numbers. Your business should have its own set of accounts. It should have its own business savings, checking, credit card, and expense line. So all of those are counted somewhere else. You could have a business CSP if you want. This isn't really set up for the business. This is a consumer version. But you could do a QuickBooks, or you can use my friend Mike Michalowicz's book. There's a lot of ways you can track your business finances. Um, but when it comes to the CSP, this is your income and your personal money. We want to keep the business stuff out of it because that is truly separate. Okay. That's just conceptually how to think about it.

Can I push back a little bit? Because even if my income personally of me traveling goes away, that expense still stays there. So that's why I would identify it as a fixed cost because my company is still going to be running.

Yeah. But, um, if your income goes away or gets cut in half, you can deal with the expense separately on your business line. Like whether you keep it or not, it needs to be separate. And this is another reason you have an accountant. You're the, you're the accountant.

I'm everything.

Uh-huh. And okay, hold on. Why don't you have an accountant?

My grandfather does my taxes. He's 91. It's great.

Your accountant would tell you everything I'm telling you right now. They'd be like, get a business credit card, don't commingle your funds, and on and on and on. So just get an accountant, okay? They'll sort this all out. It's not that big of a deal anyway. It's fine.

Okay.

All right, moving along. Groceries at $500. That's pretty low. That's because you eat out a lot. All right, fine. Clothes at $300 each. Each of you is buying $300 a month of clothing. Is that right?

Easily.

Yeah. Recently. Yes.

Phone. All right. Subscriptions. One of you is $50. That's Shane. Nicole's $497. What is that? Fitness?

Multiple fitness. Peloton, Apple, Netflix, Hulu.

Yeah.

What's the most expensive one? Is it a gym?

Yep. Gym. 150.

150. All right, fine. Look, truthfully, if y'all have a combined fixed cost of 36%, I really have nothing to say. Do it. It's working. Do whatever you want. Great. Shane has a fixed cost of 18%. And, uh, Nicole has 49%. Which is great. Investments, 14%. So we have Nicole doing 9%, $883 a month. What is that $883 going towards, Nicole?

Um, that is a 401 now.

All right. And then, um, Shane is contributing $512 a month and $1,000 a month. Shane, where's that investment money going towards?

401. And, uh, my brokerage account, just picking stocks a couple times a year.

Like what stocks?

Researched blue chips, uh, ETFs. I try to time the market, I guess, like when there's a dip, I'll just take like a bunch of money that I have in savings and strategize like a bunch of stocks to purchase once a year, a couple times a year. And then I, Forget about it. Just see what happens.

Can you forget about that strategy and use a better strategy that will make you hundreds of thousands of dollars more?

That's why I'm here, Ramit Sethi.

You shouldn't be doing what you're doing, but at least it's better than doing nothing. So in that way, like, you've got a handle on how you're investing. At least, you know, you have, you have this time every 6 months, every 12 months you log in. I appreciate all that. Like, the mechanics are really good. The timing, the marketing is extremely detrimental to returns. It's like one of the worst possible things you could do, but you could fix it. So I'm not going to beat you up too much. Look, you're investing $1,500 a month, couple minor tweaks, and you seem quite open to it. You could actually turn that into a lot of money.

That'd be great.

Cool. All right. I respect it. So between the two of you, 14% invested each month of net. That's pretty good. That's pretty good. How do you all feel about that?

Yeah, I feel good about that number. I don't do any of those projections. I have no idea what happens there, like what that looks like in 10 years or 15 or whatever. I haven't done any of that.

So who would want to know how much money we're going to end up with later in life? Who would, who would care about that?

I think we both got to $100,000 and we just don't know how to get from there to the next level.

It's actually quite insightful. What you're saying, Shane, because getting to $100K is very impressive in and of itself, and it requires to have good underlying mechanics. What I mean by that is, you know, you can kind of brute force your way to saving $10K. You know, you might even be able to brute force your way to $25K, in some cases $100K if you have a high income. But if you don't actually know how it works. It's kind of like getting lucky in Vegas. But like, if you don't understand how the game is played, you're always going to lose, but you're going to lose big and you're going to lose fast. With investing, you're like, well, what do we do now? And as an example, it's kind of a flag to me when you go like, oh, we don't project. We don't project. But actually, like, if you don't project, if you don't have a sense of how much are we going to have, is that enough? What kind of lifestyle are we working towards? Then all of this is just playing in the weeds. So I'm going to help you do that. I'm going to help you project so that we have a sense of where you're going.

Okay?

Yes. Your savings numbers are shocking. They're quite shocking. I'm going to put them up on screen. 42% saved. And if we break it down, it's 47% for Shane and 38% for Nicole. Let's go through it. On the vacations, Shane saves $150 a month. Nicole saves $450 a month. That actually tracks really well. Nicole likes to travel. Seems like perhaps a little bit more extravagantly. She's saving more. Makes perfect sense. Gifts. Shane is saving $1,000 a month for gifts. Nicole is saving $100 a month. Emergency fund, $250 and $150 for a total of $400. Just scrolling up to your savings, you have $265,000 in cash. Savings. You have pretty much way too much in savings. Do you all realize that?

Yeah, that's the, the scariest part about looking at all of this is we have a bunch of money sitting in, you know, mine's in a credit union, hers is, uh, in, you know, in an account, and it's not even earning, you know, high interest.

Nicole, you have $100K sitting in savings, but only $96K invested. Why?

Probably also because I don't have the business separated, so I do need to have— I need to have a lot of money, cash, so that I can send the money out to pay people before I get—

you need this separ— you see why you need it separated? Because that revolving amount that you need for cash flow, that's fair. Your business might be heavy on capital demands, but that's got to be over here in a business account, and it cannot be here because you're just letting all this cash just sit here. Now maybe you take $80K and send it to your business account, fine, but that $20K needs to be put to work. It needs to not just be sitting there, and that's what's happening because it's all commingled and sloppy. It's like a sloppy junk drawer. All right, moving along. Wedding, honeymoon, children's tuition, baby, and a house— speaking of junk drawers— is all one savings category, and you all are saving almost $5,000 a month for it. You know, minor stylistic thing, I don't like that it's all combined, but the fact that you're saving $5,000 a month is really impressive. Do you know, like, how much you are saving for a house?

Not right now. We were about $2,000 a month each. Yeah, each.

So $50,000 a year. And, like, how much do you need for a down payment?

I don't think we're going to be purchasing a home for at least 5 years. So I don't know.

Okay.

A house, uh, $450,000, $500,000.

Yeah. So you need like $100,000.

$100,000.

Yeah.

Which we have, but then, yeah.

You know what I hear when the two of you describe your money? It's like some of the tactics are, are implemented well. You have very low fixed costs. You have money going to very specific dedicated named accounts. All that stuff is great. Like your mechanics are pretty good. But there's no vision. There's no why. You actually have a vision between the two of you. We're not going to buy a house for the next 5 years. We want to have kids. Like, like, you have this stuff talked about, but it's not showing up properly in the way that you work with numbers. You have the ground level mechanics, which is also powerful, but you don't have that thing in the middle, which is like, how much do we need? How much are we saving for? How much are we going to have when we retire? There's just this entire chasm of missing information. And so what I suspect happens is it allows you to just save, save, save, or have these random disagreements, but you don't actually have something specific that you're working towards. As an example, it's like, we need to save for the next 17 months and then we're done. That would actually feel so good. But right now it's just like, ah, we got to save more. Yeah. How does that strike you?

I think you're spot on. I think for myself, I've always checked my account balances, which was very infrequent, probably like 6 times a year because I always knew it was increasing.

I want to encourage you to think about it a little differently. What you just said is the equivalent of a baker saying, I think this pie is going to be good because it's rising.

Yes.

Like, mm, I don't think that's how bakers actually operate. Like, a good baker is going to understand quantity and sugar and whatever bakers do. What you're saying is like, as long as the number's going up, I'm good. But like, y'all are operating at a different level now. You have hundreds of thousands of dollars. You're about to get married. You're talking about a house and kids and all. You've got to actually understand more about how money works.

Yes. All right. Absolutely.

All right. And then the final thing I'm noticing here— oh, God, I'm going to get roasted from all these freaking bakers online. All these bakers coming to me saying pies don't rise. I'm telling everybody preemptively, don't comment to me about my lack of baking ability. I already know. Trust me. Every day I come on this podcast and I expose myself to a new corner of the internet who I don't want to hear from, and I allow them to make fun of me, which is actually the worst. Why do I do this? All right, your guilt-free spending is 8%. Is that true? Uh, Nicole indicates that her guilt-free spending is $348 per month. Nicole?

It is only because I've already baked everything into my fixed expenses, like my fixed costs. Like dining out is in my fixed costs. It was one of the line items.

Yeah, yeah, I remember that.

And my dresses are in there too because it's part of my savings. So it's not accurate, but it is accurate.

Shane, what was my number?

$1,013 per month.

Yeah, that sounds about right.

What do you spend that on?

Fishing gear, skiing gear, coffee, eating out, buying gifts. All right. Yeah, that's about it.

Out of curiosity, I'm going to try to do something. Let me show you, Nicole. I'm going to do this with you right here. Okay, so check this out. I'm taking your fixed costs, which are your discretionary thing. We're talking about your Dining out for $500. Okay. I'm going to zero that out up here and then clothes for $300. I'm going to zero that out as well. That's $800. So now you're spending $1,148, which is 12%. That sounds more realistic. What that does is it actually provides us a slightly more accurate view. Your fixed costs are now 41%, still super low, actually lower than they used to be. Your savings is at 38%. That's high. That's really good. Investments at 9%. No, we're going to fix that. That's too low. Because why would you be saving 38% but only investing 9%? Doesn't make sense, right? For young, relatively young— you're 40, is that right? Mm-hmm. Yeah. You got to be investing. We got to put that money to work. And then finally, you got $1,000 I don't know. You talk about like living a cool life. Looks like you have a very nice shirt on yet you're only spending $1,100 a month on discretionary. I'm not sure I believe it.

I don't believe it either, Ramit Sethi.

Something's not adding up here. What do you think it is, Nicole?

No, I think that's accurate. There is another tab on your CSP that has all of my detailed expenses.

Oh, let's look.

And they're all categorized.

All right. Let's take a look here. This is from this month. We have Pottery Barn gift of $42, hotel $381, health membership for $65, a gift for $140, some health vitamins for $32.60, $21 food at a movie, clothing for $475, dinner for $118. Doesn't that seem like more than $1,000 already?

Yes. The most important part is this. So I have total expenses of the entire month. I'm over what I've made this month by $2,498.

Meaning you're in the red by $2,500.

Right.

There's several problems on this sheet. Can you spot them?

That it's over the $1,200 that I'm allotted.

That too. So we know that your CSP number's not accurate. What else?

I don't— oh, my business is in here.

Yes, that's a huge problem because we can't fix this because we can't even get accurate numbers because it's all jumbled together. This is why you've got to use a separate credit card. This is just one of many reasons. You don't want somebody suing you and then they come after your personal money either. And Shane, you're about to be on the hook for that as well if you all combine your money. You need to have protection, separate accounts, liability, all that stuff. But you also just need to be able to look at your numbers and be like, oh my God, am I up or down on my personal and my business? And right now you can't tell any of it. How is it that your CSP says $1,148 when it's obviously you're spending a lot more?

Um, I think it is still quite accurate because some months are so different, but I think it is really because my business is in there.

It's possible, but I would say from looking at a lot of people's finances, I doubt it. I'm going to encourage you to go back, clean it up, strip out the business stuff, and do a more detailed analysis of your personal expenses for the last 3 to 6 months. And you'll be able to find some trends. I suspect it's probably double or triple. That's my guess. Because nobody who shops and travels like you spends only $1,148 a month. No fucking way. I mean, how much did your haircut cost? It looks like a very nice haircut.

I can do this myself.

You did it yourself? No.

Yeah.

Wow. That was actually a very good response. That was a very good response. Hey, it's possible I'm wrong. Just find out the numbers and follow up.

I'll— yeah, rather than defend myself, I'll find out the actual number. Totally. I think, you know, I don't have a set income every month. I can kind of play with it, and it is a bit of a game to like play.

I've always said that just because you write it all down in these spreadsheets doesn't mean that it's accurate or it's actually working.

I think that's right. Let me explain why. So I have a lot of people who come on this show, and in your case, Nicole, you have an abundance of money. So an abundance of money, like you got $100K over here and $20K over there. And you got all this stuff jumbled together, but if something goes wrong, you can just like float it, which I suspect is happening quite a bit. You may just not know it. I have couples that are in the opposite situation. Everything's jumbled together, but they don't realize they're 2 months away from running out of money. I remember a couple on this podcast, they were 2 months away from running out of money. It was a very difficult thing to realize, but how do you get to that point? You know, you have some bills due now, you have Property tax due quarterly. It's just not all clear. And suddenly you can float it for 6 months, sometimes 5 years, and then you hit a wall and it all collapses. I don't think you're at risk of that right now, but what you are at risk for is not having enough money as you get older. I see this pattern all the time when I talk to couples. One partner tracks every single dollar. They have custom categories in some color-coded spreadsheet. They log into their money app every single day. And in heterosexual relationships, this person is almost always the woman. When I ask them, what do these numbers mean? The ones that you spend hours every week tracking? They have no idea. They track it all the time. But all of that work is aimed at exactly the wrong target. Take a look. Nicole is meticulous. She has savings accounts for specific goals. She knows exactly what she spent on her last vacation. She could tell me what she ate out, how much it cost last Tuesday. But what's the point? Do you know when you can retire? Do you know how much you can afford on a car or a house or a vacation? Please listen carefully. Your job with your money is not to jot numbers down. You are not a stenographer. Your job is to know your key numbers cold. Specifically, what do these numbers mean? Not what did I spend on takeout last month, but am I saving enough? Are my investments on track? Have we jointly defined what our rich life is? And then are we using our money to live it? Those are the meaningful questions you should be asking. Nicole has built something really impressive, but for all that careful tracking that she is doing. There's something crucial that she's been missing entirely. And right after this, we are gonna find out what it is. What's the area of life that you want to spend more on this year? A lot of people will say health or relationships. Some people will say travel. Let's talk about food and health for just a second. For example, in my life, my wife and I both decided we're gonna spend more on health. And that means having a personal trainer. 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Head to factor meals.com/ramit50off and use code RAMIT50OFF to get 50% off and free daily greens per box with new subscription only while supplies last until September 27th, 2026. See website for more details. I was at a dinner recently and my college friend mentioned somebody I had not thought about in about 20 years. Out of curiosity, when I got home, I Googled him and within the first few results, I learned he was married. Name of his 3 kids were out there and exactly where he lived down to his street address. That took 2 seconds of searching. Now, if you want all that information out there, great. Most people do not, which is why I pay for and use a tool called DeleteMe. I don't want data brokers or random people knowing my personal information, and I bet you don't either. 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. Shane, your debt is listed at $167,000, but $0 is going to debt every month. Is that because you're paying your mortgage?

Yeah. So I purchased a condo that my, uh, mother lives in, so I'm covering the HOA fees and my student loans are in deferment right now while they figure out the whole, uh, income-driven repayment plan.

How much is your student loans?

Between $55,000 and $60,000. I, uh, qualify for the Public Service Loan Forgiveness program, so if I make $120,000 months of qualifying payments, the rest of it is removed.

Great.

Forgiven. So I'm planning on doing that. Great.

All right. That's a good answer. You know your numbers, you know what's going on, and you're waiting. Fantastic. You all have answered my questions about that. Now I want to ask you a question. As it currently stands, if we project out until— Shane, you are 65 years old.

I would say not enough. But around $600K.

What's the number, Nicole, that you suggest you're going to have by 65?

Oh, let's go with a million.

Million bucks. Actually, the answer is $1.7 million as we project. How's that sound to both of you?

Great.

It's not enough to live where we live.

Really? Well, that, that's interesting because both of you, one says great, the other says not enough.

With a child and the schooling that we'd like to have them go to and me not work, that you're projecting at the amount that I'm making today.

Yes, I am. Can I give you a little bit more context on that number?

Sure.

Most people, when they hear a number that's $600K, $800K, $2 million, they don't really know what it means. Like, what does that mean? This sounds like a lot of money sitting around in my junk drawer. But actually, if we use something called a 4% rule, it's a very simple back of the napkin math. It allows us to withdraw 4% from the time we retire until we die and safely know that we're not going to run out of money. You would be able to safely withdraw $68,808 per year in what's called safe withdrawal income for both of us. Yes.

It's not enough.

It's not enough. Let's add in Social Security. Let's be conservative. I don't know, $50,000, $60,000, $130,000 in safe withdrawal income. Again, I'm ballparking loosely. Mm-hmm. What do y'all think?

Not enough.

What does it make you think when you hear this?

That we need to plan to invest or learn about investing now so that that number increases. So the next time we do this, uh, we know these numbers and we don't have to worry about it because we know that at retirement age we're going to have X number and we're going to both say, that's great. Okay.

So you want to invest more? I agree conceptually. Nicole, what does it make you think?

That I need to decrease my spending significantly so I can invest more. I guess it's just, it makes me want to like change what I'm currently doing because it's not enough. It was enough for me as a single person, but it's not enough for us as a couple and a family.

It's not enough. And actually, it's interesting to me that you jump right into, I need to cut my expenses. But like, can I just show you the numbers? Look at this. How much are you spending on your discretionary expenses per month according to this?

$1,148.

All right. So you cut it by half and you now have $500 extra a month to invest. I think that would be a good idea. Fine.

Right.

Is that a lot?

No.

Where's a lot of money sitting around in your finances?

In my savings account doing nothing.

You have $100,000 sitting in your savings account doing nothing. That's one thing right there. You could invest a lump sum of $50,000.

So you want that to be in more investment instead of savings?

I don't want anything. I want you to think about what is your rich life, what is important to you, and then potentially to reallocate money accordingly.

Right. I'd like to reallocate it.

Okay. All right. My point is you don't have to jump to immediately, um, like, I got to spend less on dresses. Maybe, maybe not. And actually, that's, that's not really going to move the needle very much at all.

Right.

But more importantly, we can't decide what you need to change without actually having an honest accounting of what you're spending. That's a real problem. Like, if we want to put $50K right now into investments, could we? I don't know. Do you need that money for business or is it purely for savings? And on and on. So that's why I want you to really know your business versus personal. Okay. I don't think that, uh, $1.7 million is enough by the time you retire. I think it's possible you have less because your income might go down, Nicole. And do you plan to return to the workforce after you have a baby?

Yes, but it'd probably be at least a year, if not longer.

Right. Okay.

All right. So we gotta leave some room for that.

Mm-hmm.

Um, Nicole, you mentioned that your business income varies from month to month. How much does it vary?

So the business income is pretty consistent. That is, you know, from usually around $5,000 to $6,000 a month. I just hired a marketing team to do some more marketing and hopefully to bring in more business so that it can back-end me. Moving out of the business.

Nice.

Um, I also started, uh, doula training, which will be something that I can do with the baby and closer to home. So I have been preparing for this. So what varies is really me. So for example, October, I didn't work a single day. By work, I mean I wasn't physically anywhere.

How much do you charge as a nanny?

Uh, $500 a day.

What about when you travel?

Still $500 a day.

Let me, let me ask a question just because I'm curious. So you're working with wealthy families. If they travel, so they'll hire you as a travel nanny. You go with them. What are some places that you've gone?

Spain, Scotland, Ireland, London. Cool. Hawaii.

What's the travel arrangements? Do you sit in economy with the kids or what?

It depends on the family. Usually wherever they're sitting is where I'm sitting. They're in first class, I'm in first class.

Got it. So for a full-time one-week trip, you'd be paid like $30— what do we say, $500 times 7 days, right? All right, that's cool.

Plus I'd have all expenses paid for, right? Like all housing and food, anything I do, anything I do with the kids, it's all taken care of.

How did you get into this?

I got into it actually to pay my student loan.

Mm-hmm.

So I worked full-time and I babysat on the side, and then it got to the point where I could only be in one place at one time. People were giving my name to a lot of different people, and I started hiring my friends to babysit and kind of brokering it. So I would, you know, have the babysitter go to their house, the family would pay me, I would pay the babysitter. I saved up enough money to build a platform. So that the families could just log into my website and make the bookings themselves. And then it made— it streamlined everything so that it sends out a message to the sitters, which emails the client, and, you know, all that stuff is done after the fact.

And this is in the Northeast?

Yes.

And this is for a babysitter?

Yeah, this is like nights, weekends, fill-in nanny type of jobs.

Pretty interesting. All right, cool. Thanks for walking us through that. I think a lot of people are curious about how does it work at the wealthy or ultra-wealthy level for nannies, night nurses, babysitters, et cetera. It's a whole industry, very helpful to the families and wealthy families, particularly those who talk to each other and who live in certain geographical areas. They know this stuff, they talk about it. It's a very common thing. So I like to shine a light on this just as an example of what's possible. All right. So you make $5,000 from the agency that you run, and if you're working ballpark, you're making about $5,000 a month from that direct work. Is that right?

Correct.

Okay. So the $5,000 is going to go away at some point. All right. Have you all calculated what happens when that money goes away? How does it affect your numbers?

We know that it's going away, but we haven't really discussed what that, uh, looks like.

Why don't we just do it right now? So Nicole makes $10,000. Let's just say $10,000 gross. And $9,500 net. Uh, what the fuck? I also don't believe that. What about taxes?

Right. So I kind of did that for taxes. That's another savings account.

Do you know what you're netting every month? I'm going to guess it's like $6,000, $6,500, something like that. Actually, how, how does this math work at all?

$6,500 is definitely more than that.

It's more than that. All right. Let's go to $7,000. If this is true, this is how much you're netting. Then your fixed costs are actually 55%, which is not nearly as low as we thought. Your investments are at 13, your savings are at 51, and you're actually spending more than you make every single month.

Right.

Is that possible?

Yes.

Oh, Shane comes out of left field.

Yeah. Come in.

Shane, care to comment?

Yeah. I, you know, I, I'm with Nicole and I see, you know, the, amount of money that she spends. And I think that's where some of my apprehension comes in is, you know, when she's sending me, you know, pictures of houses on Zillow and schools that are kids who have yet to be born, how is this going to work with the amount of money that seems to be spent each month? And I think, you know, we joke with each other, like, after the wedding, we got to reel it in, like, reel it in. And but I, I hate putting, you know, guardrails on her spending.

Let's not do that.

Okay.

Okay. Yes. Have the wedding. But there is an entire worldview that I am starting to uncover regarding your money that is concerning. It works because you have a big buffer of cash. That's pretty much the only reason this thing works. If you didn't have that big buffer of cash, Nicole, I suspect you would be in financial trouble. I mean, according to this, and I think this is understating it, I think that you might be spending more than you make every single month. Correct me if I'm wrong.

I think I'm pretty much spending exactly as much as I'm making. Some months it's under, some months it's over.

And what do you think about that?

I think it works because I can always take another job.

You have the mentality of a gig worker, right? A gig worker, a shift worker. They say things like, I can always just pick up another shift. You're paid very well, but the problem is at a certain point you can't do that. And you're, you're actually starting to think about that with the potential entry of a baby. Mm-hmm. So if you're spending what you make right now, what do you do when your income drops by half?

And everything needs to drop by half. That's what I was having the conversation with Shane, like, I don't know if I can contribute $2,900 into our savings account for a house and all that when I'm not making as much as I'm making now.

But, but also like, why, why is it even $2,900?

I can, I can answer that question. So when I first met Nicole, she was house shopping. And so she was looking at houses and she told me how much her rent was. So I anticipated that she could afford to have about a $4,000 mortgage per month because of how much the houses cost that she was looking at. And I said it would probably beneficial as things started to get serious for us that you have you know, some disposable income of at least $2,000 additional, you know, considering what your rent is. So why don't we, why don't we put that into a high-interest savings account? I'll match it, and we'll just keep doing that. Um, so when we do want to buy a house, we have, you know, like you said, $100,000 to put down, and we're not even sweating that money. That's where that number came from.

That's a, that's a reasonable answer. It shows some foresight. I appreciate that. To me, it's, it's a good start. It's missing a few things. Like you told me you don't plan to buy a house for 5 years, potentially longer. What do you think?

I guess it depends.

Yeah.

It's not high priority for me.

Okay. So then let me, let me entertain a guess here. I'm going to guess that neither of you said, hey, if we're not planning to buy a house in at least 5 years, maybe 7, maybe 8. Should we consider just investing the money? I'm willing to bet nobody said that.

Oh, I've said it.

You said it?

Yes.

Wait, you said it. And then what was the response? I'm very shocked. Pleasantly shocked. What was the response?

Let's wait till we do Ramit Sethi's show and see what he has to say about this. Yeah. Okay.

No pressure. Why are all your answers kind of good? Kind of good.

All right.

I got, I got a few more questions for you. Nicole, you track all of your spending, like you manually put it in, manually categorize. What does it get you?

It helps me understand like how much more I'm spending than I'm making or how much less, like where I'm at.

And then what do you do with that information?

Um, I, I adjust. Like I knew, for example, in October that I wasn't going to be working personally. Um, so I don't spend as much. And I know that August I work every single day, so I can like house that because I don't spend anything either because all my expenses are paid for. I work November, I didn't work that many days, so I can kind of see where I'm at at the end of each month. Like, it doesn't feel like a burden to me. It doesn't stress me out. I just like it.

60 seconds of you explaining all this meticulous information that you— and then at the end you go, I don't know, I just like it. I actually think it's the last thing you said. I think you like it. I think it feels comforting. I think it feels like control. What if you didn't do it? I don't know.

I probably— now at this point, I know how much I spend every month. Like, either I spent $500 on a couple of skirts at Bloomingdale's, or I spend $500 up for here. Like, it all ends up like net-net being about the same number every month.

Let's assume that's true. That's right now with you making $10,000 a month gross. What happens when you make $5,000 a month gross? Mm-hmm. Your margins become a lot tighter, right? This is why when people make $35,000 a year, they actually do need to track down to the line item because they don't have the margin that somebody making $100K, $150K, $200K has. That's quite striking, I think. I'm not trying to pick on Nicole, but this is what happens when your conscious spending plan is sloppy. We started this review thinking that their fixed costs were low. That wasn't true. And just entering net income in the wrong spot threw everything off. Once that happens on the CSP, all the downstream numbers are wrong. Now, I want to point out that I see a lot of comments online from people getting frustrated when couples come on this show and they have an incorrect CSP. People want my team to screen them ahead of time and to work it over with them. We shouldn't get messy CSPs. No, I totally disagree. I want to show you reality, guys. This is how most people track their money. They don't even use a CSP, and when they do, it's wrong. That is not a weakness of the CSP. There is no magical solution that will make the first time you track your money perfectly accurate. This takes work. It's complex. And the point of this podcast is to show you the journey that people go through to live their rich lives. Like, if I want to show you how somebody lives, I want to go into their house with a camera and see all these shoes are all over the place. There's a freaking spoon in the bathroom sink. Why? I want to embrace the messiness. Because that's real. I don't want to tidy things up for you. Nicole has been able to operate like this because she has cash sitting around that masks a lot of these weaknesses. But in fact, the way that she's set things up makes it almost impossible to see what's really going on. Many of you have the same problem because you have money flowing in all these weird different accounts. It's not clear what's going on. You're pulling from your savings randomly. And I see this especially happening with business owners. They move money around and mix accounts, and as long as they have enough in the checking account, they think it's fine. But that only works if you're tracking random numbers and ignoring these big real questions like, are we saving enough? Can we retire? So next, I want to understand where these habits are coming from, because they did not magically appear. They were systematically built, I suspect, from a young age. So I want to find out where that started. Can I understand a little bit more about how you both grew up with money? Shane, what do you remember your family saying about money when you were young?

My dad always carried a knot of money in his pocket and he would, I remember specifically he took out like a $100 bill and he said, you see this, Shane, this is just paper. They'll make more and you can go get more. So don't worry about it. And my mother was the saver.

So when he said they make more of it, what did he mean by that?

Don't let it control you. You know, don't, don't worry about it. If you get it, spend it, enjoy life.

What did he do for a living?

He was a bookmaker before online gambling. You know, on the East Coast, you needed a bookie to place bets.

Oh, that was him?

That was my dad.

Oh, wow. Yeah. Okay. How? Dumb am I. I was like, oh, he was quite a literary figure. He was doing bookbinding. I'm like, yo, Indian people don't grow up knowing what a bookie is, especially not on the West Coast. Wow.

Okay.

That explains it. Okay. So he said, don't let it control you. You can just make more, which in his industry, I can see why he said it.

Yeah.

What was his financial situation as he got older?

Not great because in that line of work. You know, it's all cash-based, so there was no investing, I guess, much to the tune of, you know, how Nicole is a high-end gig worker. My dad always knew that people were going to continue to bet and the house would always win. And as long as people continued to bet, he would always get his 10%. So that's how it works.

That's very interesting. Cash workers often not paying attention to tomorrow because today is quite lucrative and the structure of the business is just set up to focus on today. Okay. Um, and your mom, you mentioned, was a saver.

Yeah, she was, uh, I mean, my, my dad passed away dead even. He broke even in life financially, you know, didn't leave me anything. Um, and my mother was always anticipating a spot where the family would need money. And I think it was typical of if we wanted something, my mother would, you know, go to her stash and pull out money so that we could do that. So that was the emergency fund. You know, I know my dad would flip my mom a couple hundred like every week and say, put this away. And then over the course of years, like, That's how it worked, you know.

What did she work?

My mother always had, like, a side hustle of house cleaning business. She used to babysit kids at the house. She always worked, though. She would do that or she would have a part-time job.

What do you think you learned about money when you reflect back on your mom and dad?

My parents spent their money on me. They sent me to a private Catholic school. So I was around individuals that had money, had nice things, and got to learn how that happened, right? Like what they lacked was investing for their future.

You have $143,500 invested. Where is that money invested?

It's invested in 401 and I have a brokerage account.

Okay. And like within those accounts, What investments have you chosen?

Uh, basically stocks. I have a couple Vanguard ETFs.

Would you say your dad was a gambler?

Yeah, absolutely.

Do you have any of that gambling instinct in you or gambling tendency in you?

No.

No.

Wow.

Well, I saw the, you know, my father was the house, right? So he was able to teach me, you know, if we went to a casino, he'd say, do you see this property? Do you think that they got all this money to make this place how it is by giving all their money away, you know? I know that my dad never lost when he was a bookmaker, right? Like, he just went and picked up all the money, did the simple math, and then put the money in, you know, his jewelry box or whatever. So, so I was taught never to put a dollar into a slot machine or, or play a table game. There are no sure things.

I love the idea of parents teaching their kids the ins and outs of their wisdom and their profession. I used to have a personal trainer who had kids, and he would post videos of his little kids kicking a ball. And I thought to myself, like, he was an athlete and his kids are going to be athletes. And watching that transmission of tacit knowledge was just really special. It was really cool because my parents put us in sports and stuff, but they were not athletes. It wasn't something that they just did naturally, but they did it with academics. It's no surprise that my siblings and I turned out the way we did. We were in the same way that my trainer taught his kids day in and day out, same way your dad taught you about How bookies and gambling actually works in the house is the same way that it worked for us.

Yeah, it was special.

Nicole, uh, what do you remember about your family saying about money when you were growing up?

My mother, uh, controls most of the finances in the household. So my dad would have to like give my mom the receipts of like if he took cash out of the ATM. Um, and her saying was always like, we don't have money for that.

Mm.

And so I got a job when I was 14 because I got $100 a year to buy school supplies or clothes that I wanted, and I wanted something else beyond that. And she's like, we don't have money for that. And I was like, oh yeah, I'm gonna go get a job because I want that thing, right? And then, you know, that's kind of how I've always worked. My grandfather, I would say, is probably the most influential person in my life in terms of finances. So he worked a full-time job and then he ran a tax service. So he always kind of had a side hustle, and he retired. He's still alive.

Your grandfather ran a tax service and you don't have an accountant?

He's my accountant, but now he's 91, so I really need to—

Yo, this 91-year-old is watching this right now and he's like, I told my granddaughter, separate accounts, no commingling. You're right, Grandpa. Okay, go on.

Yeah, so he worked a full-time job and did tax on the side, and he retired at 88. Like he was doing taxes until like just a few years ago.

All right, that's pretty inspirational.

He really like lived like the luxurious life that I thought, like my mom was very like, everything's very tight.

Mm-hmm.

The thing I really took away from my parents would be like, we saved to buy the thing. Like that was really important. And my grandfather to me was like, we just buy and like spend, but he also had kind of the money for it. But another, like, awakening to me is now he's in his 90s, he wants to stay at home, and it's really expensive to stay at home with, like, the care that he and my grandmother need. I'm looking at how much it's costing him, and I'm like, wow, I don't know if I'm gonna have that much, you know, at 91.

Hey, Nicole, you're not gonna have that much, right? Unless you change.

And so I'm kind of in, like, a panic mode of, like, oh my gosh, I'm watching this man who did everything right, you know, have enough, but it's getting harder for him.

What messages did you take away from the way your parents raised you with money and your experience with your grandpa?

I don't know.

Okay, can I ask a couple of probing questions?

Sure.

Do you bring the desire to live a luxurious life like your grandpa?

Um, yes.

Okay. Uh, do you bring the desire to want to be in control of money?

Mm, yes, but I'd like to not.

Okay, fair enough. Do you bring the feeling of scarcity with money to this relationship?

I don't think so.

Okay.

I really disliked that comment that my mom would always say of we don't have money for that. I never wanted to feel that, which is why I brought that like gig mentality. Like, I had a full-time job and I started this babysitting agency because I was like, I want to have enough to not have to like say no to something that I want to do.

Okay, quite interesting. What do you both make of your upbringings? And I'd like to ask you to assess the others, like Shane, what do you notice about Nicole's upbringing with money and her relationship with money today? And then Nicole, I'd like you to ask the same thing about Shane.

Yeah, I believe that what she's just described as her upbringing and what she's shared with me perfectly personifies, you know, her relationship to money and what she does bring into this relationship. I'm gaining a better understanding or have gained a better understanding of why she is the way she is. Uh, I really value and appreciate how she, uh, approaches money and, you know, it really doesn't seem to affect her. And I'm understanding more of, you know, it's like, it doesn't matter now because I'll just make more.

Yes. Okay. Thank you. Nicole.

I think more of his like mother's side shows up. In our relationship of like not wanting to spend money and like wanting to save it and like keep it rather than his dad's side of like spending it.

How would you describe in a word or two your identity as a couple as it relates to money?

I think it's very confused. In the way that my business asset and personal are messy.

I agree. Beautiful description. That's really apt. Shane?

Yeah.

Un— unsettling and unplanned. Nice.

All of these are great. I really appreciate them. As I always say, in order to live a rich life, you have to be honest with yourself and honest with the people around you. I think those were extremely descriptive, accurate words. The good news is we can fix all that. But I feel unsettled and confused when I look at the numbers. And if I feel that way, I know that you feel that way. And just getting through more things like getting married, going through the new year, that's not going to solve any of this. Whether you have the wedding 11 days from now or 5 years from now, these underlying issues are things that need to be examined. They need to be interrogated. They need to be jointly improved. Okay. So in order to do that, I want to shift a little bit to the future. So Nicole, we started this conversation about money, talking about your future rich life. With a new child not aligning with your current rich life. What do you say about creating a new rich life vision for the two of you?

That sounds great.

Shane, what do you say?

I love that.

Beautiful. So tell me, if we had a blank page, which we do, what travel, what experiences, what moments as newlyweds, as potential parents, are important to you in your rich life?

Say private education for our children, boat, ocean, house on the coast, travel. Uh, that's— that would sum it up.

Okay, Nicole?

Yes, uh, private education is very important to me as well, and travel Travel is important.

Okay, what else?

I'd like to just adjust that dining out number to be at home, of like eating at home.

Like you want to have dinners together more often, right? At home. Great. Can I make an observation? Private education, a boat, a house on the coast, travel. If you're all living on the East Coast, this is a very expensive lifestyle. Do you know how much it would cost to make this happen?

Millions a year.

Yeah, maybe a million.

You could— I'm good.

So I'm not here trying to squash any rich life dreams. I'm just trying to understand how much of this is like a dream versus a vision. A rich life vision is something that we can reasonably achieve. What do you think?

My priority of a house on the coast is much lower.

Okay.

The other things are much more important.

Private education, $60K a year.

So it's not as bad here.

About half that.

About half that.

$30K a year.

All right.

And then you already have a boat.

He'd like, he'd like a larger boat.

You want a bigger boat?

I do.

How, how, how much does a new bigger boat cost?

Um, I could probably find one for about $50,000.

Okay, great. $50K. And then the travel, how much per year?

So currently I spend about $7,500 a year. I'd like to have that number cut in half for smaller experiences.

All right. Another thing that's really important to me is I don't want Nicole to have to go into these years of austerity. I want her to continue to live how she's lived and not worry about like what we're worrying about or what she's worrying about, because I think making the adjustment backwards is a lot difficult, more difficult to making the adjustment forward. Right.

I agree. Adjusting downward is very difficult. How do you do it though, if you have one partner who's the higher earner whose income is just cut in half and expenses have gone up significantly up? How do you make that work?

I guess we have to do what we have to do for through planning and being, you know, and going through in this examination and being more organized to have a plan to return to this. But in the addition of a child, you know, I don't think it's possible to get back to this. And I'm worried that, you know, are Nicole, are you going to be happy when you can't live this lifestyle, you know, 2 years from now? Is it gonna affect you?

I am going to be quite happy to do that. Like, yes, do I love having the $500 dress or the shirt? Yes. But it's like, the family and a husband was like far more important to me than— I'm happy to do those things. Like, really, I, I don't— I'm not going to feel resentment. I want to do it. That's, that's more important to me.

Nicole, you mentioned that you're nervous about buying a house. Why is that?

I think I'd rather have the lifestyle of being flexible and like travel and doing private school and staying home rather than feeling this burden of a house.

Shane, how do you feel about that?

I don't care where I live. I really don't.

That's cool that you both are on the same page, and I actually agree without knowing details of where you live, especially with the rent you have. It's like, oh my God, you're saving so much every single month. Incredible. But can I make a gentle suggestion? And that is to Nicole, you got to stop sending those Zillow links.

I've been telling her this.

Sometimes when we are trying to make a change with our money, we are doing things that are habitual. We're sending out Zillow links because you love looking at them, and it's just like, oh, look at this one, look at that. But it's actually sending really mixed messages to your partner. So my gentle request would be don't do it, don't send it anymore, and more importantly, find something else to occupy your time, because you cannot send mixed messages to your partner. But more importantly, you cannot send mixed messages to yourself. How do you feel about that?

That feels very fair.

Love it.

Great.

Okay, can we take a look at the CSP then? Let's see what kind of changes we might be able to make. So looking here, we have some confusing things still on the CSP. I want to try to make them clearer right now so that we can actually make some decisions. So Shane's income is going to stay roughly the same. He's just at about $10,000 a month. Great. Nicole's income, her gross income currently is about $10,000 with a net income of $7,000. I would like to change that to see what happens. So we can simulate a 50% drop in income. Okay, so we're going to take that down to $5,000. Is that fair, Nicole?

Okay.

All right. And then what is our net going to be?

$3,500.

Yeah, $3,500, maybe a little bit more. Let's say $3,800, ballpark. All right. Whoa. Watch what just happened. So right now, your fixed costs— if we're just doing Nicole, you're now spending more than you make every month, but you're moving in together. Which is a financial benefit because it's combining two incomes without raising your rent. Your fixed costs are still at 47% joint. That's quite amazing.

Is it? Yes.

Let me tell you why. Typically, the fixed cost number, I encourage people to keep it between 50% and 60%. And that's hard to do, especially these days, because housing is so expensive. So there's a lot of people I talk to who are at 62%, 64%, sometimes 73%, which is why they start to feel stressed out about money. But you all are not even close to 60%. And do you know why that is? It's because of this. It's your housing. I want to show you just to simulate the difference. Let's say you all got a new place. Okay. How much would a new place cost you?

It would be like $4,000 a month.

$4,000. Shane, you, you agree with that?

I was going to say $3,600.

All right. $3,600. Right away, your fixed costs jumped to over 60%. Right away. So you can see that that is a key driver of affordability for you. The fact that you have this extremely inexpensive housing option. Groceries, it probably needs to go up a bit. Probably not a huge amount. What do you say?

I would say that needs to probably go to $1,000 with all of us eating at home.

I agree. It needs to go to $1,000. Should we make the change?

Sure.

We got $1,000. You're now at 67% on your fixed costs. What else? Certain gadgets and whatever you're going to get for the baby, that needs to be included here. We certainly need to include diapers. We need to include whatever else. How much you want to put for that?

800.

800. Okay, cool. Yeah, fair. Let's put 800. Watch. What's this number up here? 74%. What do you notice so far?

If we were living like most other people live, we would be really stressing about money, but we have—

Yes! Yes. This is what money is for. This is what planning is for. Planning is not about how much did I spend last month on a dress? That's irrelevant. I mean, it's nice to know. Yeah, you should track it, I guess, to some extent. But we're talking about life changes. This affects everything. Should I leave my job and cut 50%? Should we wait 3 months to have a baby? Do we need to move and upgrade into a different apartment or a house or whatever? Do you see how big of an impact this makes. It's like a crystal ball into your future. Okay, I agree with what you said, you would be stressed out. Let's not do that. Shall we reduce some stuff?

Yes, please.

Yeah, let's take your rent back down to $1,895.

Yeah, yeah.

All right. And then your groceries, we're gonna have to keep them at $1,000. All right. What else did we change? Oh, the $800. Let's zero that out. So we're down to 51%.

Not bad.

Not bad. You have margin to play with because this is 51%, and I typically recommend people keep this number to 50 to 60%. You have 9% margin to play with. Conceptually, where would you put that 9%?

Investments.

Yes, I agree. Exactly. We're in our 40s. We realize that we don't want to retire with $1.7 million. We want more. So yes, I would take that roughly 9% and I would invest it. Investments, we're at 22%, which is great. You could probably push it up a little bit, but we'll see. Savings are at 64%. No way. That's way too high because money that is saved is not actually growing, right? We can't be saving. $7,000 a month. That's insane. We need to be putting more of that money to work. So what do you want to do?

I would like to invest at least $5,000 of that a month.

You want to invest $5,000 out of the $7,000?

Okay.

Yeah, if we can afford it.

Well, we'll find out. Nicole, what do you say?

I'd probably feel better about $4,000.

Y'all are just like picking random numbers out of the air.

Yeah.

I suspect this happens like more than right now? Should it be $4,000 or $5,000? Nobody really knows. What matters is, number one, just general proportions. What should we be putting more money towards or less money towards? When I'm looking at savings, I'm thinking to myself, hmm, do we need $600 a month saved for vacations, which would be, you know, roughly $8,000 a year?

We only need about— well, I said $3,500 because that is the few vacations that I wanted a year. So, yeah.

So let's round up because I think I don't want to have you feeling totally restricted, but let's put $400 a month, which would be $5,000 a year. It's nice to have a little buffer. So I just created some extra margin or extra cash flow for you. That money is flowing down here. Okay. To your guilt-free spending, but we need to make some adjustments right now. Because it's in the negative. Do we need $1,100 a month for gifts?

No, probably $200.

$200. Great. Do we need, uh, $400 a month for an emergency fund? Yes, we do. How much do we have in an emergency fund right now? Look up here.

All right. Okay. Okay. Okay.

Only a small $265,000. You need an emergency fund. You don't need to be saving $400 a month when you already have $265,000.

Okay.

It makes no sense. You have filled up your emergency fund and beyond. That $400 a month would be better allocated where? Right.

Investing.

Investing.

Probably investing. Mm-hmm. That's how we think about it. So we eliminate the emergency fund because we already have that. Your savings is still at 50%. Why? Oh, because you're saving $4,900 a month for all of this other stuff. I like that you're saving for a baby, by the way. I wish more parents did this. There are going to be unexpected expenses that come up. It's great to get in the habit of saving, but I think you already nailed it up above. You're saving $800 somewhere.

We didn't— it's not in there anymore.

Uh-oh.

Let's fix it.

Is $800 enough? Like, we want to make sure. I want you to be comfortable.

I would be comfortable with $1,200 a month.

Let's just see how this affects everything. Okay, your fixed costs are now at 62%, so it's not like y'all are just saving a bunch of money. We actually need to act like any other couple, meaning you need to be quite thoughtful about what you're doing with your money. You can be a little less thoughtful when your fixed costs are freaking 38% or, or 51%, but at 62%, that's it. You're actually over the recommendation. And that's okay because don't stress out. Young parents, I always give them a little bit of extra grace. You might not be able to save as much as usual, as invest as much as usual for a, for a time period, but don't stress out. It's okay. That's what money is for, for these moments in time. Okay. Your investments are at 22%. Your savings are still at 50%. That's insane.

Yeah, we can change mine to $1,000.

That's $1,000 a month or $12,000 a year. Okay. And Shane?

Yeah, you can dial mine down to $1,000 as well.

24%. What is this $2,000 a month going towards?

That's for my sister's children.

Ah, okay. All right.

Yeah, it's a non-negotiable right now.

Non-negotiable. Okay. Gotcha. And Shane, what's your $1,000 going towards?

I don't know what it's going into.

Great answer.

Yep.

I love the honesty. What do we need to be saving for?

Yeah, we still do need to save for the tuition.

Yeah, I guess I'd be saving for our child's tuition. That's— I think that's very legitimate.

What age do you start paying this tuition?

8.

Oh, okay. So you don't need this money for 8 years. I don't know what the rules are for saving or using a tax-advantaged account for a child for private school tuition. I'm not aware of that, but you should definitely look into that. Okay. Things like 529, et cetera. But in addition, just conceptually, if I knew I wouldn't have to pay tuition for 8 years, I would be investing that money because I don't want it sitting around for 8 years earning minimal interest, perhaps losing to inflation. I want that money growing. And 8 years is a relatively long time horizon. So something to think about. It's exactly the same decision my wife and I made about our money for a down payment for a house. We're like, do we want to buy a house anytime in the next decade? We're like, no. So we just invested the money. Boom. Let it grow. And that allows us to buy a bigger house or a higher down payment or whatever. That's what I would suggest. So technically, I take that $1,000 and I put it towards investments. Watch. I'm going to call this tuition. And I save $1,000 here. Whoa. Now I really, really like this because look at these numbers. They tell a story. The story is that you are investing 31%, which is extremely high, and you are saving 15%, which is pretty high. Do you all see that?

Mm-hmm. Yes.

Okay. Now there's only one problem. You don't have enough money to do all this stuff. And the reason I can tell that is if you look down here, guilt-free spending, you're at a negative $389. You actually need positive. Like, it would make no sense for the two of you to be making $179,000 and not be able to go out to a coffee. So we were overspending somewhere. What do you think?

Investing?

Yeah. I think you probably are investing too much. As it stands, you are investing $35,000 a year.

So I guess we need to pick the number that we're comfortable with retiring at and our annual income and then dial and work backwards.

Yes, working backwards is great and we should do that. Um, actually, should we just do that right now?

That would be really great.

Let's use my investment calculator. Here we are. Let's plug in your numbers. Here's the number you are starting with today. $239,900. How many years until you, uh, the oldest person is 65?

17.

So what is the number you see on screen right now?

2.1 million.

2.1 million. What we do is we take that number and multiply it by 0.04, which gives us about $84,000 a year in safe withdrawal. Again, this is real back of the napkin, but it gives us a rough sense of the numbers. What do you all think about that?

Too low.

Too low. Yeah, I agree. Nicole?

Too low, but definitely closer than where we were.

Yeah. Um, as an example, just consider that the income you're working with in your CSP is $179,000. Do you want to go to $84,000 in retirement?

Right.

I wouldn't.

No thanks.

Yeah, exactly. No thanks. Like, I'm not gonna let that happen. So what are our other options?

Win the lottery.

Not that option. Oh, spoken like the son of a bookie. Not that option.

Invest more.

Yes. How though?

Get a raise.

Yeah, I think that's right on. Similar to that, get a raise. Nicole?

I hired a marketing company for the agency in hopes that, you know, there's really unlimited potential in my business.

So grow your business and grow your income. Yes. Can I throw some out?

Please.

Mm-hmm. Uh, Nicole could keep working. You could not send your kid to private school. Both of you could start a side business. You could take the hundreds of thousands of dollars you have in savings and invest some of it.

Yeah, I wanna invest $100,000, $50,000 each. Just start.

You want to see what the effect of that is?

Yes, please.

All right. Let's take a look. Here we are back at the calculator, same numbers. Right now it says you're starting with $239,000. Let's say we add $50,000 to it. So instead of $239,000, it's $289,000. Look at the number at the bottom. From $2.1 million to $2.2 million.

It's nothing.

It's not very meaningful. Do you know why it's not that meaningful? Because you're only investing for 17 years.

Yeah.

You don't have enough time for it to compound. So let's add a little bit more. It was $239,000. Let's make it $339,000. Oh, we're at $2.4 million. Okay. You know what really moves the needle is the time. You have to remember, how old are each of you?

I'm 48.

I'm 40.

Yeah. All right. So there you go. So because we're talking about a limited amount of time for this to compound, time is really your friend. So let's just, let me show you what happens when instead of 17 years, let's go up by 1 year at a time. Okay. 18 years makes it $2.6 million. Notice how quickly it's growing now.

Yeah.

Let's make it 19 years, $2.8 million. You're making more from your investments per year than your salary. 20 years, we're at $3.1 million. Just to make the point, 25 years, you're at $4.6 million.

So by adding 8 years, it more than doubles. Yes. Yeah.

What, what does this tell you?

We need to at least put that $100,000 in.

Yes. What does it tell you about your behavior with money until now?

It's not responsible for the retirement we're trying to have.

It's cost you a lot, like hundreds of thousands of dollars to let the money sit in a savings account. All of this tracking of like random categorization isn't worth 12 months of this compounding.

Yeah.

In other words, you better start investing aggressively today. That's the takeaway I would have. Thoughts?

I 100% agree with you.

Cool. Nicole?

Mm-hmm. I have— yeah. And I have at least 25 years.

Yeah, you have a lot of time. I don't think you're going to run out of money. That's not the problem here. The question is, are you going to live the kind of lifestyle that you want?

Okay.

And I think it's actually really cool that you both were pretty clear about what are non-negotiables to you. Including private school, etc. And I think it's pretty cool that you are like, oh, we can stay in our place for a while and save some money there. What I'm trying to do is help you connect all the pieces together so that you can make decisions for your lifestyle right now and for retirement and travel and those kinds of things. What changes do you think you're going to make?

Can you go back to the CSP? Because I think as of right now, I still have no dollars. Yeah, to have fun with.

There definitely needs to be something there. Take a look, you're in the negative for guilt-free spending. Not tenable.

And this is at least a year down the road, but yes.

What do you want to do?

Well, we're going to invest the additional $100,000. I want it to be aggressive for the next 2 years because I'll be able to work while I'm pregnant.

If it were me, what I would do is I would keep a year's worth of emergency fund. And how do I calculate that? Easy. I go down to fixed costs. It's $6,800. So I would multiply that by 12. That's $82,000. I would keep $82,000 in an emergency fund and the rest of it I would invest because that money now is going to be very, very powerful to me down the road. Right now it's literally just sitting there doing nothing. Now, if you want to leave a little bit extra, you want to leave an extra $20K or $30K, okay, fine. I always like to be a little bit conservative, but in general, you got like $150,000 or $170,000 that could be better allocated, in my opinion, towards investing. If your long-term goal is having a higher net worth, how does that strike you both?

That sounds great.

Yeah, it sounds great.

Good. So that right there will give you a little bit of an edge as you start to invest. Coming down now. Your fixed costs are pretty low. Could you cut some of it? Maybe a bit, but not much. You know, you could maybe cut $100 off subscriptions, but like, what's the point? I would try to get it down to 60%. It's here that is an issue, which is you're investing 31%. You know, you can reverse engineer the whole thing, but just conceptually, 20, 22, 23%. You're quite a bit over. So let's try to drop this down a bit. Well, the reason is you have, you're investing for very expensive tuition and you got a committed $6,000 a year for your niece or nephew. This amount right here, Nicole, this $550 for your niece or nephew, it actually should be a fixed cost and we could move it up to, we'll call it tuition. By the way, whoever's spending $300 a month on clothes, no more. Sorry. Now you're at 65% fixed costs. You can make it work. You can, but you can't get a new car and you gotta stay in the same place. So we're down here. It's looking okay. Savings are at 5%. I don't mind that. You already saved up so much money. You have a fat emergency fund. Your investments are at 31%. I don't think that's going to work. Let's just drop this down to $500 and see what happens. All right. So what I did was I took one of your investment accounts from $1,000 to $500 a month. You're still investing 26%. You now have $411 or 4% for guilt-free spending. It's a better number. I think this number needs to be higher. I don't think the two of you can get by every month only spending $411.

Absolutely not.

I want it to be like a little limiting.

How limiting? Because right now it's $411.

I know, which is like, what, $100 a week?

That's both of us. Yeah, that's not just you, that's me and you.

I know, like, I upped the grocery because I want to, like, I want to reel this in in order to make the long-term goal, like, happen. So whether $400 might not be enough, but I want it to be a low number. Because the other things are far more, like, important to me now than being able to dine out.

Can I make a point? I actually think it's really cool that you are doing this ahead of getting married. You are thinking about some kind of tricky questions about combining quite different lifestyles. And there are some obligations that we have, you know, taking care of niece or nephew. There's a potential baby, but we don't know when. And then 8 years from now, there's two. Like, there's a lot of uncertainty. We are not looking for the perfect math at this stage. We're not looking for that. What we are looking for is just general thrusts that put us in the right universe. So when it— the initial math told us that you're going to end up with $65,000 a year in safe withdrawal income. That's not enough. We all know that. So you needed to make rapid changes, which you did. Okay. But what is not counted here when we talk about you having 2.6 or 2.8 or 3.1 million is when is Shane going to retire? What's not clear here is Nicole's income. And Nicole, you may decide, hey, I have the baby. I can't go back to traveling as a nanny, but I am going to find another way to make income with the baby, right? Or I'm going to wait 2 years, 4 years, 6 years, whatever the number is. So there are lots of things that you can change. You don't have to get it perfect right now. These are really high leverage things to talk about. You know, hey, what are the big things that we want to do in our life that will make it extraordinary and meaningful. It's your rich life. I don't think you need to have all the perfect answers today. Okay. As you get older, though, you do need to— it needs to come into sharp focus. And at 48 and 40, you got to be making some aggressive moves. So what I'm happy about is that you're talking about this now and that you happen to have $265,000 sitting in cash. That's nice. Um, I think that if you really take time and look at your old habits of relating to money, you might discover like, hey, you know, we were like doing pretty well in certain areas, but in other areas we were just blind to it. Oh, okay. That's in the past. What are we going to do now? So when I look at your numbers, I think certain things are pretty straightforward. You have a low rent, huge, amazing advantage. You both have a couple of things. You're like, this is important to us. There are certain things I still don't know the answer to. Like you mentioned, you both would like— maybe there's a boat, maybe there's a house on the coast, et cetera. I actually don't know how to make that happen with your current income. It might not be possible. It might be the case that you rent a boat once in a while, or that, you know, you do an Airbnb type thing. That might be possible. Lots of creative ways to accomplish it. I do think that we made some tough assumptions, like in this entire calculation, Nicole, I assumed your income was already cut by 50%, but it's not. You're actually making an extra $4,000, $4,500 per month until you have a baby. So that's a lot of extra money that we didn't account for anywhere. My point is, you don't have to get everything perfect, but you have to know the general framework of where you want the money to go. You have time. You have a lot of time before your income goes down. And so I would use that time really wisely. In 11 days, Nicole and Shane are getting married. Yes, their numbers were messy, the accounts were all confusing and tangled, the CSP took a lot of work to figure out, and there's still questions that we haven't fully answered. Fine, I don't expect perfection on these calls. What I want you to understand is that most couples spend months planning a wedding without ever sitting down and asking How much do we have? How much can we afford? What is our philosophy on money? And to Nicole and Shane's credit, they did that 11 days out from their wedding. That takes a lot of courage. Here's what I want you to take away from this episode. Every day you leave money sitting in a savings account without investing it, you are losing money. I'm not talking about an emergency fund. I'm just talking about, "I don't know where to invest. Investing feels like gambling." No, we are getting over that today. I have a freaking book, "I Will Teach You to Be Rich." You can get it from any public library in the country. Some of you are losing a dollar a day in lost investment returns. Some of you are losing much, much more. Can you imagine I came to your hometown, kicked your freaking shoddy door down and said, "Hey, give me $75 today." And then I just tore it up like a bully, like, Biff from Back to the Future 2. And I said, I'm come back tomorrow, do the same thing again. And I did it every single day. That's what's happening because you're letting your money sit in your savings account. That is the math of compounding working against you. Don't do it. Fix it. Nicole and Shane, they have the income, they have assets, and now they're starting to have a shared vision. Private school, a home someday, a rich life. Now they have the tools and the urgency to start building their rich life using the money that they have. Now let's check out their follow-ups.

Hi, Ramit. It is Shane and Nicole. We are a few weeks post-interview and we are officially married. Yay! And we had a few updates for you.

Yeah.

Hi, Ramit. We both funded our Roth IRAs. I had never had a Roth IRA, so I funded 2025 and 2026, which was really great. We both put $50,000 from our savings into our individual investment account, and we're gonna pretty much like tranche that out over the next 6 months just in case anything happens in the market. What else did we do, baby?

I have separated my business expenses. We hired an accountant, so we have an appointment with him in the coming weeks. I opened a personal checking account to be separated from the business checking account, and then we opened a joint credit card to benefit miles and travel, which is one of our buckets. So thank you again. It was very fun speaking with you, and Here's our— there's our update. Thanks so much.

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