“We’re worth $2.3M… but we’re still cutting coupons”

You wrote the application, correct?

I did, yes.

Some of the words you used were awful. Arguments, sad, seemingly insignificant, frozen, paralyzed. It's like I can't breathe.

I'm actually shocked. He's been able to kind of juggle the money as he has been able to. But recently Brian has talked about retiring early, within the next year and a half. That has completely paralyzed me and the fight was awful. Since I don't know anything about his income, I don't know if we're prepared. And I am the saver. I am the planner. I don't want to lose this life that I have. I love it, we love it. And I don't want it to go away.

Meet Brian and Rachel. Brian is 56. Rachel is 51. They're both lawyers. This is Brian's second marriage and he has two 22 year old daughters. Now, Brian recently mentioned that he wants to retire in the next two years, which caused Rachel to start panicking about their finances. In today's conversation, I want you to listen closely for ways to apply these lessons to your own finances. I think you're going to hear how our money psychology shrinks our viewers to only consider one or two options. But I also think that you're going to hear how you can expand your vision of what's possible. And if you could do that, you'll often find creative ways to live a rich life. If you've been enjoying this podcast where I speak to couples and share their real numbers, their income, their net worth, their debt, all of it, then do me a favor, go over to Apple Podcasts and please leave a written review. It really helps us grow the podcast and it's also something that I can share with my team who helps produce this amazing show every single week. So do me a favor, go over to Apple Podcasts, leave a written review, and it will be a big favor for me and for my entire team. Thanks for watching and thanks for listening. I have to tell you that I really enjoyed this conversation. So listen in as we meet Rachel and Brian.

The one thing that got us into this huge argument was about money and it was crazy. It was like we. It was like we were from two different universes and we weren't even speaking the same language and there was just all kinds of misunderstandings on both sides and it was really bad. It was really horrible. I have been trying to talk to him about money recently because he seems to have been dropping kind of some hints that he might be have some, having some issues paying some of the bills. It wasn't Something that I could specifically put my finger on. But I felt like I really needed to talk to him about it. And he kept actually asking, why do you, why do you keep bringing this up? Why do you keep asking?

What was your intention when you walked into that office? What were you really trying to get?

I was trying to help. Honestly, I feel like I have a bigger cushion than he might have. And I wanted to see if there was a way that we could, I could help him out so that he didn't feel pinched.

Did you say that to him?

No. He went on his computer and he. He wrote this post it note. And he said, there, there you go. Here is the amount of money that I have left over at the end of the month. And I said, well, that would feel horrible. Like, I don't want you to feel that way. So what if I just contribute? You know, like the bills have gone up, the ones that you're responsible for. And we haven't changed our agreement since it. Since the beginning. He and I have always kept all of our finances completely separate. So his income goes into his accounts. He pays certain bills. Out of those, whatever is left over, he has the ability to go ahead and do whatever he wants with that same thing with my on my side.

Okay. All right. All right. Brian, I'd like to ask you your perspective on that meeting. Do you remember being in your office when that happened?

I do, yes.

Walk me through your recollection.

It was actually, ironically, I was paying bills at the time. I had come to the conclusion that that particular month was. Was going to be tough. I, I've never not paid the bills, so I don't recall that part of the conversation where I would have said I can't pay the bills. I believed her. But I also think I was at that sort of standpoint where I was frustrated and probably feeling. It's probably my old Italian pride. Like, you know, I'm. I'm traditionally, you know, the babe, the bill bear. I probably reacted in a way that I don't, I don't normally react. And I felt badly about it. It wasn't some knockdown, drag out thing, but we were definitely raising our voices at each other.

I do remember him saying that it was probably his pride that got in the way.

How did you receive that when he said that to you? It's pretty unusual, honestly, to hear somebody say that.

It felt amazing. And I felt badly that I had approached him in a way that even caused this. I was just trying to help.

I like to just understand a little bit More about the relationship. So I understand this is both your second marriage, is that right?

No, just Brian's second marriage.

Brian's second marriage. Rachel, your first marriage.

Correct.

Okay, sorry about that. Glad I clarified. And how long have you been married for?

Eight years.

Okay, great. You kept your money separate. Was that a conscious decision or was it. We kind of just slid into it because we never joined our accounts.

I think it was a bit of both, to be honest with you. Our expenses have gotten a little more higher as we, as, as the marriage has gone on. I, we talked about it when we were first getting together. We each had a comfort level with keeping our, our account separate. But with the understanding, I think that, you know, we, based on our income levels, we were going to be able to pay for. I was going to be able to pay for the utilities. We have the second property that, that she is primarily responsible for, that she pays the bills for. So I, My, my understanding is we kind of went into it with the plan to kind of keep things separately unless something happened and we couldn't anymore.

Just out of curiosity, why did you decide to keep it separate? Not that it's right or wrong, it's.

Just a little unusual from my perspective. I think it was just something we were both used to. Rach has always just been meticulous with her finances. I, even in my first marriage, was response. I was the only person with an income. My ex wife wasn't working, so I kind of got into that habit of paying for everything. And I felt like I didn't want to put pressure on Rachel and I didn't think that I needed to.

Makes sense. That's typically what happens. So when you got together, you kind of talked about it a little bit. You both decided, hey, we're in our late 40s. We've been doing this our individual ways for a while. Let's just kind of keep that going. Let's make an agreement on, I pay for this, you pay for that. That's how it's gone for the last eight years.

Actually, from my side, I would say that is not why I went into it.

Oh, tell me.

To be perfectly honest, Brian had had some trouble with money in his marriage, and I had heard about that. And I, as he said, have always saved. I did not want to be in a position where there were money issues. I also came into the marriage with property. And honestly, I wanted to make sure that nothing happened with that property, that we didn't lose it, that I was the one that was taking care of it. I was the one paying bills on it. And I was the who is responsible for all of the bills on it.

Okay, that's a different story. Which one is it?

I'm. Wow. I'm really kind of surprised. The money problems that I think Rachel's referring to, my ex wife had put a lot of money on a credit card and she was somewhat irresponsible with money. And so part of my divorce settlement was actually paying that lumps, a lump sum to her to kind of and pay off her her debt. So that I, I felt I was coming into the marriage pretty free and clear. So I didn't mean to act all surprised when Rachel said that, but I, I, I am actually very surprised.

That was quite revealing. It's actually very common that couples learn something new about each other on this podcast. And the reason is that most of us stop having deep conversations after we date for a while. This is especially true around sensitive topics like how we feel and money and frankly, anything else that we walk on eggshells around. The first clue I noticed was that their money is separate. That's not necessarily bad. Although most successful couples tend to have their finances joined together, what separate accounts usually reveal is that the couple never had a series of specific conversations about money. And almost always separate accounts reveal that they don't have a joint rich life vision together. You can also tell that their financial system is clunky with one person randomly paying certain expenses. Then they have to decide on vacations every single time. The third clue is that Brian and Rachel realize they have totally different perspectives on why they keep their money separate. However, the next clue was that this is Brian's second marriage. Now, it's very common that second marriages have separate finances, often because money was an unhappy issue in their first marriage. I do want to add that I appreciate their communication style, especially him admitting his pride was getting in the way. We'll be right back. It's funny how when it comes to one of our hobbies, you can actually involve a ton of rich life techniques around it. When it comes to my coffee, I have a spreadsheet of different beans that I want to try, and I order from them regularly. I also would wake up in the morning and have this dirty French press that I had to scrub. I decided I'm going to spend $29, get a second French press. Now, I always have a clean French press ready to go. Now. If you love morning coffee, let me give you a quick suggestion. It's one of our sponsors today. Trade Coffee, a subscription service that makes it so simple to discover new coffees and make great coffee at home. Trade partners with top rated independent roasters so you can get the best quality coffee sent right to your home. Now, maybe you already know what you like, or maybe you are new to specialty coffee and you need some help. Either way, trade makes it easy to discover new coffees. They'll send them fresh to your home on your preferred schedule. So upgrade your morning routine with better coffee. Right now, trade is offering our audience a free bag of coffee with any subscription@drinktrade.com ramit that's drinktrade t r a d e.com ramit r a m I T for a free bag of coffee with any subscription purchase drinktrade.com ramit I have a program called Earnible where I teach people how to find an idea, start a business and then grow it. Now, one of the things I've learned is that the technical part can be really tricky. Used to be challenging. You'd have to set up a WordPress site, pick plugins, hire a designer, then a developer, all kinds of confusing stuff. But the truth is, things have changed in the last decade. If you've ever wanted to create a business off of your unique expertise, then I want you to check out today's sponsor, Thinkific. And I'm happy to recommend them because I actually use them myself for our digital programs. Thinkific is a leading platform for creating, marketing and selling online learning programs. You can use it to easily build courses, communities and memberships to make an impact for your customers. And they have all the features you would expect, plus quizzes and custom domains. So my suggestion, if you have created an online program, you're looking for a website, a way to serve your customers, check out thinkific.com to learn more. That's Thinkific. T H I N K I F I C.com now back to the show. How often do you talk about money in your relationship today?

Often in terms of trips. In terms of, well, now more recently, bills.

Like how often daily, weekly, Monthly? What are we talking about?

I would guess weekly, probably. Rachel, more than I. Rachel, you agree weekly?

You bring it up.

Yes, but more in a way like the grocery wouldn't accept my coupon or something like that.

Hold on, hold on. I just need to look at your income really quick. Okay, thank you. Just wanted to confirm that.

Okay, I deserve that.

How much time do you spend cutting coupons every week? Tell the truth.

Actually, Brian's the one that cuts coupons.

There's the irony, right? I do, I do.

What coupons are you the most proud of. You get the two for one, three for one. What do you get?

It's the $20 off for the purchase over a certain amount, which is ironic because you still have to pay that certain amount to get the $20 off. So I think I fool myself sometimes.

I know I grew up. My mom was a master coupon cutter and just had a file. Just boom. Every. She knew every date. Exp. Date. All of it.

Yeah, I get it.

Rachel, when you think about money, what words come to mind for you?

Fun, freedom, and saving.

You wrote the application, correct?

I did, yes.

Okay, so some of the words you used were awful, argument, sad, seemingly insignificant, frozen, paralyzed. It's like I can't breathe.

Yes.

You remember writing that?

I do, absolutely. And all of those fit. Up until now, money has been representative of fun and freedom. But recently, Brian has talked about retiring early within the next year and a half, and that has completely paralyzed me, and the fight was awful.

So overnight, you started feeling differently about money after he brought up potentially retiring?

Yes, because we would be living only on my income for a while, and since I don't know anything about his income, I don't know. Oh, if we're prepared. And I am the saver. I am the planner.

So you keep your finances separate being married eight years, but you don't. You each don't know about each other's income, expenses, anything?

Not at all.

But then this bombshell comes out. Brian goes, hey, I'm thinking about retiring right around the corner. And what. What did your mind start telling you?

Holy. What do we do? I didn't know anything about anything. I didn't know anything about what he had saved. I didn't know anything about what the bills were that he was paying. He's always talked about retiring, but it became serious about a year ago where he really decided that this is really what he wants to do. And Brian has always been very cavalier about this. So every time I've tried to talk to him about it since, he's been like, oh, we're fine. Everything's fine.

Ah, are you fine, Brian?

I believe so. Our plan is, before I retire, the house is completely paid off, which is probably our greatest expense. I would have a retirement account to. To draw from, so we wouldn't just be on Rachel's income. So that's kind of one of the things that I didn't really understand about that part of the conversation is, is why she was under the impression that we would have to be living on her income. I would have to take A little bit of umbrage with the word cavalier. I certainly. I. I don't want to discount what she's feeling, and I certainly didn't mean to give you that impression, but I'm fairly confident.

Rachel, I'm curious Brian's reaction, saying, not only do I think we will be okay, but I think we're going to be quite easily okay more than okay. How does that make you feel?

I wish it would make me feel secure, but honestly, it doesn't. I wish I would feel comfortable.

What would make you feel secure?

Honestly, I don't know. I really don't. I think the amount of money that he's talking about that he would get in retirement is significantly less than what he thinks it is. So I don't know. There isn't a number that I could put my finger on. Honestly, I don't. I don't know. Brian and I have an amazing relationship. We travel the world together. We have tons of fun, and we have a lot of respect for each other for how hard we work. And I love the way that he provides. But my fear is, if his income is gone, that we won't be able to live on the money that he's bringing for retirement. Also, I don't want to lose this life that I have. I love it. We love it, and I don't want it to go away.

It's striking how many Americans follow the exact same script with their money, but they don't realize it. Here we understand that they want to pay off their mortgage early. A big clue. And that she's afraid of having enough while he tries to reassure her. I would say that probably 90% of Americans think exactly this way. And yet, if we examine these concepts a little more deeply, everything falls apart. For example, you heard me ask Rachel what would make you feel secure? And she just simply said, I don't know.

I almost. I almost had a. I almost lost a house. I almost had a house be repossessed because I lost my job. And I had to actually move to take a job in a different city and get an apartment there in order to pay for the mortgage payments on that house, while the guy that I was dating at the time and living with lived in that house rent free, expense free. And I know that that creates a lot of my fear.

Do you want to send him a message worldwide right now? You want to say anything to him? Go ahead. The airwaves are yours. You can say anything you want.

No, it's all good. It's all been forgiven.

It worked out well, that's enlightened of.

You and Brian's my guy, so.

Okay. I love it.

Beautiful. That is interesting though. Can you just take me back to what money messages you received growing up from your parents?

You saved and saved and saved.

You grew up in the Midwest?

Yes.

Okay, keep going.

Yeah. You worked as hard as you could in order to bring in money. You saved it for some indeterminate period. Like you didn't even say, I'm going to save it till retirement and then I'm going to spend it or enjoy it. It was just, I'm going to save it forever and just keep piling it up. That you didn't go into debt unless it was good debt, and good debt was buying a house. But mostly it was just you worked and worked and worked and worked and worked in order to maximize your income in order to bring in as much money as you could.

Okay, and what did they do for a living?

One was a teacher, one was a librarian. They're semi retired.

Okay, is it for the money or. Cause they enjoy it?

I think it's for the money. They worked to save up money until retirement and then they retired. They took a short period of time off, maybe a year, and then they were back to trying to make money again. I don't know.

What's their financial situation now?

I think they're really well off from what I understand, but they just want to continue to bring in money.

Okay, so they taught you these thrifty, frugal lessons early on. What about going to college? How did you pay for that?

They did pay for that and they helped me out with the bills. Grad school, same thing. They paid for that and they helped me out with the bills.

Whoa. All right. And then as you got into your 20s, what happened? Was there ever a day where they stopped paying?

Yeah.

Are they still paying?

No. Oh, God, no. Yeah, they stopped paying.

Okay, so you graduated from grad school and then it was kind of like, okay, you're on your own.

Actually, no. They came to me my last year in grad school and said that they needed me to buy a house because they needed to take money off their taxes and they needed a write off.

What the hell? All right.

I said I didn't think it was a good idea. I hadn't graduated, I didn't have a job, and I didn't know where my income was going to be once I graduated.

Did you end up buying the house?

I did, because they told me that either way they were going to stop paying for my rent at the time.

So you get the house. And then what happened after that?

So I graduated, I got my first job, and I was working at it for about a year, and then I was running out of work and they told me that they couldn't afford to pay me anymore. So they gave me two weeks notice. I got every job that I could possibly find right away in order to pay for the mortgage and the expenses on it. But it was draining my savings account. So I actually asked my boyfriend, who was living with me at the time, if he could help me out, if he could loan me money.

And then did he?

He said no. He said he was sorry, but I needed to figure it out on my own.

What do you think about that? Looking back now.

It sucked. Oh, my gosh. They actually had me take out a school loan. They put the down payment on it, and then they had me take out a school loan in order to pay for it.

This is what we call, you know, being given a gift with Strings attached, like 30 years of strings. It just keeps coming.

It wasn't until later till it kind of hit me that my savings were being drained and I was getting really close to my bank account being at zero.

And how did you feel then?

I was terrified. I didn't know what to do.

And then when your boyfriend said no, how'd you feel then?

Terrified. Desperate. Confused. Angry.

Angry at him? Angry him. Okay. Did you ever call your parents and ask them to help?

I did.

What happened?

They said they would not.

Why?

Because I had just come back from my first trip overseas and they told me that I should not have taken a vacation. I shouldn't have taken a trip, and I should have known better and had listened to them.

Wow, that's difficult to hear.

It's very difficult.

How old were you at the time?

Probably been around 26 or so.

It's like, what am I supposed to do as a 26 year old? Like, sit in this house that I didn't even really want? That's it for the next 35, 50 years, just sit.

Right. I actually asked them that, like, what are you supposed to do? And they said, wait till retirement.

Let's review the financial lessons that Rachel learned from her Midwestern family. First, frugal parents told her to save, save, save, then work, work, work, and then die. Second, they paid for a lot of her early life, including school. Third, then they told her she needed to buy a house for a tax write off, which worked until she got laid off. And then suddenly they told her they couldn't help her because she'd taken a vacation, and instead she should have sat on her porch and waited until retirement. What a beautiful circle of life. I'll call it the American Buy, then die Cycle. Hold that thought. We'll be right back after this. Let's get back to Brian and Rachel. She has another very formative money experience that she shares with me right now. A little birdie told me that you used to have a financial advisor. Is that true?

Is that true?

Oh, God. Yes. Yes.

Why are the. Oh, God. I thought financial advisors are always great. After all, the Vanguard behavioral study told me that they add 1 to 3% returns. That's why every AUM financial advisor tells you that you need a financial advisor. Are you telling me that's wrong?

I am telling you that is completely wrong.

What happened, Rachel?

I got a phone call after I lost that first job. I got a phone call about a year later from a financial advisor, and he said that my former employer had hired him to handle the retirement accounts through that office. So he made arrangements for us to meet.

I know. He paid for the coffee. That's so nice. What a nice guy. And then what happens at that meeting?

He talks to me about what my plans are. And I say that I want to save money for retirement. So he starts to talk to me about a Roth ira. He actually didn't mention anything about safety. He just said, I know that your goals are growth, and you need to have a financial advisor that watches your accounts. Because if you are invested in an account with another, like, Vanguard type place and the fund starts to lose money, you want somebody watching over it so that you can get out of it right away like a hawk.

The minute the market goes down. My local Midwest bank works faster than any number of milliseconds that the high frequency traders in New York work at. Fine. I have to say, I am surprised he did not mention safety. They love to mention safety, especially with women. They love it. It drives me insane. Okay, go on. So he says, growth, you go, sounds good to me.

I actually asked him how much he was charging. Like, I was like, what are the fees? Like, what am I paying for this?

Tell me.

He told me not to worry about it, Mother.

This guy. It's so dismissive. Well, you know, the fees are the fees. You know, it's nominal. But what we're really focused on is long term. We want to make you money over the long term, right?

Yes. He wasn't really making money from it. He said since I wasn't writing him a check, he's like, I mean, you're really not paying for me? I mean, really, That's a lie.

That is a straight up lie. Like 100% a lie, as you later discovered, I assume.

I called him on it and I said, there's no way you're doing this for free, so just tell me, like, what this is. And he's like, well, it really varies. I can't really tell you. And I was like, well, okay, give me a range. And he's like, well, with most people it's about 1%. Some pay 1.25 and then others pay about one and a half. But he's like, it's really not that much money. And if you think about it, you really want somebody to be looking over these accounts. Exactly.

He's coin operated.

He's. He's very smart.

He's. He's like those, you know those things you used to take your kids to in front of Kmart? Like you put a quarter in and you ride the merry go round.

That's.

He's coin operated. You, you transfer over an IRA and he just harvests those AUM fees. All right, so he's charging you like, let's say 1%, but that's just the fee. Then there's all the backend fees that he's secretly charging. Right. What kind of funds did he put you in?

I was invested in what he called a funds, I believe he called it. And those are front loaded funds. And I asked him what that means and he said all of the money comes off the front when you get it, when you invest in them. And I was like, oh, I don't want that. And he said, no, that's really what you do want because your goal is the long term and your goal is retirement and long term returns. So you really want that money coming off the top and then it's gone and you don't need to worry about it anymore. And then all you need to focus on are the returns.

Let me translate. I'm going to add a large, fat, larded up fee on top of this fund and I'm just going to put it right at the front. So it's essentially like you buy this fund and this fat fee just goes to the advisor, and it takes years for you to basically work that fee off. And then once that fee is worked off and you've been paying fees the whole time now you can actually start to get the full benefit of that mutual fund, which actually usually turns out to be not a good fund anyway.

Yes. So we meet once a year I actually, sadly enough, invested with that guy for over 12 years.

Wow. How much total did you invest?

$5,000 a year, times 12 years to $60,000, maxing out the Roth for 12 years.

And what happened by the end of 12 years? Or are you still with this guy?

No, I. I totally got rid of him. I started to kind of get suspicious towards the end because he wouldn't really give me an answer. And I was reading about investing and I kept saying, like, I don't really want to pay fees, I don't want to pay loads. He kept saying, don't worry about it because you're making money. Which was true. Actually, the statements that I got, I didn't really look at how much money I was making, but all of the funds that I was invested in and with each statement had a positive return in the list.

What happened eventually to make you decide, I'm done with this, I started reading.

More about investing and said, I think I want to actually do this myself. And he said, well, you're going to lose all your money. And I said, what do you mean? Like, I've been investing with you for a while, so what does that mean? And he said, oh, well, you're invested in B funds. And I'm like, what's that? And he said, they're backloaded funds. And I asked him what that meant and he said, you have to be in these. You have to be invested for a certain period of time to not have to pay fees when you sell, when you get out of the fund. And I was like, well, how long are the ones that I'm invested in? And he was like, well, I'm not really sure, but I think most of them are the ten year ones. And that's because you said you wanted to stay with us for the long term. I mean, you said you wanted to. Yes. So I actually did stay with him for a couple more years. But I started actually paying attention to the statements that I'd gotten from the bank because I thought honestly that if I started to pay attention to the statements, I could figure out how long I needed to be with them until I could actually sell. And it was unbelievable. It was so eye opening. I had kept every single statement that I'd gotten, every quarterly statement that I'd gotten for the entire period. I started looking at the returns and they were like, nothing, nothing, nothing. It was like $10.47. Everyone actually had a plus on every single statement, so each one was making money. But when you actually figured out what that percentage was, it was unbelievably low. And then some of them were like a dollar and seven cents or something like that. And I was like, oh, my God, what is happening to my money? Because that's the one thing that he would always emphasize every time I met each year, he'd be like, well, you're looking at your statements. I'm sure you're seeing you're making money. And I was. I would always look down the statements. I would see the positive, you know, the plus sign. And I wouldn't really pay attention or do the math on how much I was making. So I was making nothing. And then I started realizing how often they were turning over my money. And it was unbelievable. Seven funds that I would be invested in, you know, each quarter, at least five to seven of them. Every statement would be like, turned over. I was tracking it and it would be like, oh, this fund is gone, and now it's this new fund and this fund is gone, and now it's this new fund and this one is gone.

You know what they were doing with that?

And then they were adding, you know, like two new funds. Every statement, I have to assume it's fees.

Fees are part of it. So sometimes they do it because they get trading fees. That's absolutely true. And then sometimes because they're all part of the same fund family at a bank. A lot of these funds are complete dog. So after a while, they shut down the underperforming funds and through a process called survivorship bias, they only leave the quote good funds, and then they introduce new ones. So to the investor when they go to the website ten years later, all they see are five star funds. Oh, these funds are all amazing. Well, all the dog ones got taken out back with a bullet put in their head. You never know that. They're not required to tell you that. It's a very, very subtle trick that the average investor would not know about, except you got smart, so you got out. What'd you do with the money now?

I decided to move it into a Vanguard fund. He talked me out of it for a couple of years, but finally I just realized there's no way to get to the 10 years because you're constantly taking my money in and mo around and taking it out. So there's no way to avoid those fees. The sad thing was that I. Oh, God. I maxed out a Roth at $5,000 a year for 12 years at 6. So I had $60,000 in there. When I went to contact Vanguard to roll my money over, I asked Them what the balance was on the account and found out that my $60,000 contribution had decreased to like $56,000 and some dollars. I lost my part of my contribution. I not only lost any money that I would have gained in that account, I actually lost part of my full contribution. And so I contacted Vanguard and I, in order to not just feel so defeated, I deposited the difference in the money into the Vanguard account in order to at least have my beginning balance be $60,000. Because I just felt awful. I didn't have that money to waste. And that's 12 years, more than 12 years gone. But I do have to say I have had that money in a Vanguard account for about 10 years now. And that's. I've never put another dime into it. And that $60,000 is now over $230,000.

Wow.

I've never done anything to it. Right.

The advisor told her, if you put money in a Vanguard fund and you lose it, nobody's watching over it. Yeah. Okay. When I warm up my chicken for 60 seconds, you think I pull it out at 48 seconds, I go, oh, magnifying glass. Is there still salmonella in there? Can I put a thermometer in there? No, I let the chicken cook. It's exactly what you're supposed to do with your investments. By the way, did you catch the other thing? After 12 years of investing and paying $60,000 in fees, she actually had less money than when she started. This is one reason why I discourage you from paying a percentage based fee to any kind of advisor. You want to pay a flat fee, Love it. Hourly fee, Great. Do not pay a percentage based fee, though. If you want someone to help you with your investments, you can check out one of our sponsors, fassit, where you can get your own CFP for a flat fee. Check them out, including the special deal they have for IWT listeners@ facet.com ramit.

It made me mad too, because I always thought that I would be able to sort of recognize somebody that didn't have my best interests in mind.

Yeah, you caught it 12 years late. And I really wish that you had not had to go through that. But you got smart and I appreciate that. And you're seeing the results in your portfolio, so.

Yes, yes.

Glad you got out all right. Yeah. Round of applause. Exactly. All right. How do you feel about that entire experience, Rachel, when you look back on it, what words come to mind for you?

You angry, confused, taken advantage of?

If I can, I'd like to add one more word for you to Maybe add to your repertoire as you look back, which would be proud.

Thank you. I appreciate that. Actually, after I lost all that money, I didn't look at my accounts until like a couple of weeks ago to prepare for the show.

What was that like?

It was shocking. Like the balance is much, much higher than I ever.

You like that vanguard money, huh?

I do. I am very, very happy with that.

Honestly. Amazing. I don't mind someone making a mistake with their money. Not even one that lasts for years. What I absolutely love is that Rachel got wise and she took control of her money. She analyzed those statements and she had the courage to call her advisor on his BS and move away to a low cost brokerage. And all those tricks you heard, A funds, B funds, survivorship bias are just scratching the surface of the weapons that Wall street uses to siphon money away from individual investors like you and me. That's why I'm so focused on you understanding how money works. I don't need you to understand every technicality of investing, but I believe that the majority of your money should end up in your pocket, not some aum advisor who's really a salesperson disguised as an advisor and is instead using your A fund money or your financial fees to pay for his BMW. No, you can get my book from Amazon, Target, any independent bookstore, or the library to take control of your own investing. And if you need help, join my money coaching program.

My parents, we were probably upper middle class is what I would say.

They.

I went to private schools for grade school, high school. Those were paid for by my parents. College was paid for by my parents. Grad school was paid for by my parents. They gave me my first down payment on the house.

How much did they give you?

It was 10%. It was about $15,000.

What year are we talking about?

That would have been 1996, I believe.

Okay.

My dad is much like her parents hard work ethic. You know, you, you, you work hard, you move up, you earn more, you save, you invest. So more recently I've sort of, especially in, in my relationship with Rachel, she's really sort of filled me with vigor for, for that type of attitude again towards it. But growing up, I think I was a little bit more sheltered with money. I probably didn't have the appreciation for it.

Would you say you were spoiled.

Boy? In all honesty? Yes. I hate to use a negative word, but I think it's a fair word. I would say I was spoiled. Yeah. Okay.

All right. And then you have two children. How old did you say they are?

They're 22, they're twins.

Okay. Did they go to college?

They did. Ironically, my, my father who is still with us, paid for their college. I paid some of it. He paid the majority of it.

Did you tell him, hey, I'm going to need some help from you or did you ask him how did that happen?

No, he is that dad slash grandpa that just he was a CEO of a bank for a long, long time. Did well, he retired early, which may be. I want to follow in those footsteps in a way and he had planned all along since their birth that he told me from day one.

Got it.

To allow him to do that.

That's cool.

Yeah, I appreciate that.

All right, so they're 22. Are they done with school now? Well, they are.

One is considering going back to school and she's probably going to have to decide here in the next few months. The other one graduated, is working a part time job and still trying to figure some things out, I think with career and whatnot.

Well, congratulations to 22 year olds who are at least for now done with school. That's a big accomplishment as a parent, so congrats to you.

Thank you.

What is the financial relationship between you and your daughters now?

So one of them currently the one that's thinking about going to grad school is fairly self sustaining right now, is making enough money. She has two part time jobs but she lives in a house with, well, depending on the month, four, four to six other girls and makes enough to pay her share of the bills and still live fairly comfortably. The other one is the one that I'm helping out a little bit more. I'm still paying about three quarters of her rent and helping her a little bit with the bill. She makes enough to barely scrape by but I don't really want her to do that. So I'm continuing to contribute some towards her monthly expenses and then I'm paying for both their auto insurance and medical bills at this point as well.

What about their cars?

Yes, back to my dad when they both graduated, his gift to them was cars.

What did he get him?

Used car 2012 Elantra and a2012 Civic. But they're running, they're okay. They're gonna. Those cars will probably last a few more more years.

But how much are you paying for your second daughter that you mentioned? You know, part of her rent, et cetera. How much is that per month? Month total?

Well, it was 1400amonth. Now we've cut it down to 700amonth to see how she does. She had about $5,000 in a savings account and she is starting to drain that. So I don't know that the 700 just is, is sustainable. We haven't talked about increasing it yet. But it's something that I've, that I've been thinking about.

What about decreasing it? You ever talked about that?

We are encouraging her to look for a better job to the point where I, we can be eliminated altogether. I think we're kind of hoping that something hits and she, she eventually gets to the point where she can make enough to be sustained, self sustained. But no, I have not specifically said we're going to cut it down even more. I think there would be. Well, there's already been some back and forth. There is a certain amount that we were, myself and my dad were allotting her to help her get through college. She graduated two years earlier than my other daughter. She got a two year degree versus a four year degree. But then when we pulled back the money, the response was, well, you planned for four years, I only went two. So where's the rest?

So how'd you respond to that?

I was taken aback. I said that's not how this works. That money was earmarked to get you through school, not through life. Maybe I should have cut it off altogether. I don't know. Maybe that was a bad parenting decision. I don't know. But that's when I ended up cutting it in half.

I think that as people get older, I want them to as much as possible eliminate any open ended expenses they have with no end in sight. Ones that are not core to them. So if I were in your position, speaking as a total third party who doesn't know the family dynamics or anything, I'll say, look, if you want to help your kids out, great, do it, but just set a time limit. What I'd like to do is I'd like to, for the next three months we're going to keep things the same. Then we're going to ratchet it down to this, then we're going to ratchet down to that. I want you to succeed. I don't want to take away any support immediately, but I also need to look out for my own retirement.

Yeah, Rachel and I ironically had just had that discussion a few days ago that that might be the best perfect path. So I think you're absolutely right.

What do you think? If you had to diagnose what's going on right now, what would you say? I thought Brian's story was really interesting about his dad helping him even Spoiling him. And now I noticed that he's paying for one of his grown daughter's rent, and when he mentions reducing that number, she resists. What we can see here is that the way we treat money is passed down from generation to generation. Let's get back to the show.

Brian is trying to protect me by being more confident about the money so that I don't feel anxious. And I think he is paying out more money than he really has because he doesn't want me to have to pay more.

Got it. All right, Brian, what do you think's going on here?

I think that's actually a pretty fair statement. I do want to protect her. I know how she feels about money. I know how she worries about it. I don't want to use the word minimize necessarily, but I kind of try to have this demeanor where, you know what it is going to be. Okay, we'll, you know, we'll. We'll figure it out. We'll. We'll look at the numbers and go from there. But, yeah, I. I love her to death. I don't want her to worry. I hate when she worries. I hate when she's upset.

Why do you hate when she worries?

I. I just. I. I honestly, I love her that much. I don't. I know how she. She struggled growing up with a lot of the monetary issues and the parental issues and whatnot. And I know she is so good at. At saving money, and she's on Quicken, you know, more than I'm on, you know, in court, and that she is just so good with it. And I don't want her to. I don't want to knock her off that path if I don't have to. So I'm probably being, well, overprotective, but that's kind of my nature. Not saying that's good. I. But I do think that that is a big part of it.

I appreciate that. What do you think about that, Rachel?

Oh, I think it's amazing, and I love that. But if it is causing him anxiety, if it is causing him to struggle, I would never, ever want that for him, and I really want to help him out.

I'd like to look at the numbers that you two put together.