Episode #184: “I survived a plane crash. Is stressing about money really worth it?”

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[00:00:05] Ramit: On today’s episode–

[00:00:06] Chloe: He lives in fear of everything– all the what if’s.

[00:00:08] Ryan: I don’t want to be like my parents. And unless I start working on it right now, we’re going to be right there.

[00:00:15] Ramit: Meet Ryan and Chloe.

[00:00:15] Chloe: The narrative in my household was always, you need to study hard and get a great job, and you’ll be rewarded. And so far that has come true.

[00:00:23] Ramit: Ryan is 38, and he’s a pilot in the Air Force. Chloe is 33, and she’s an economist. They struggle to spend even though they’re on track to have millions of dollars in retirement.

[00:00:34] Chloe: “I’m going to save, save, save at the expense of my own happiness.” That’s the narrative that has followed him.

[00:00:39] Ryan: I like the way we live. I just want to make sure we can keep it up.

[00:00:41] Ramit: Chloe wants Ryan to stop criticizing every purchase she makes.

[00:00:45] Chloe: I want to be trusted, and I want you to assume the best intent.

[00:00:49] Ramit: And stop stressing about his looming retirement from the military.

[00:00:53] Ryan: If I don’t get a career that makes the same income level where we’re at, then we can’t live at the same style.

[00:00:58] Ramit: Can Ryan master his money psychology so he and Chloe can start enjoying their Rich Life right now?

[00:01:05] Ryan: I don’t know how to change my view. And I don’t want to be 65 years old and we’re sitting on $15 million.

[00:01:12] Ramit: Let’s meet Ryan and Chloe.

[00:01:14] All right. I am going to be speaking to Chloe and Ryan. Chloe is 33. Ryan is 38. The key issue is they have a difference in opinion of money. Chloe wants to live, as she calls it, the high life, private school, etc., for the kids. She says that Ryan chicken littles his way through life. Okay. This was all set off when he met her parents and considered they’re spending irresponsible.

[00:01:49] All right. Let’s look at the CSP. Not again. $2 million in net worth, and they’re in their 30s. Okay. All right. This is the kind of conversation I’m going to be having today. All right. Let’s see. $1.7 million of that is investments. So we’re not even talking about the house. They have $1.7 million in their 30s. All right. Look at the income. $31,000 a month, $379,000 a year.

[00:02:24] Fixed costs at 49%. Fine. Investments are at 28%. That’s 28% of $379,000. Savings at 6%. But they already have $90,000 saved. And guilt-free spending is 17%. All right. Well, I don’t think we’re even spending too much time on the numbers today. So some guesses before I get into the conversation. Obviously this has some connection to the way that they were raised with money.

[00:02:54] Looking at $2 million of net worth of which 1.7 is liquid investments probably. We’re talking about tens of millions of dollars here. So this is obviously not simply about money. I do look forward to talking to them. I think each story is unique. And for me, the valuable thing about conversations like this is that a lot of my readers and my viewers are going to end up in a position where they have more money than they ever thought they would.

[00:03:22] And a lot of people, when they get to that point, they’re going to realize whether it’s 2 million, 5 million, 20 million, oh my God, I’m starting to sound like the people on Ramit’s podcast. That is because just having more money doesn’t necessarily make you feel better about it. So one of the reasons that we get the chance to talk to folks who have a lot of money, one, we have access to them. They trust me. Two, it really shows you a crystal ball into your future. So let’s see what Chloe and Ryan have to say.

[Interview]

[00:03:50] Chloe: We have this looming retirement date that’s hanging over us, and it’s bringing up a lot of fear for Ryan. It’s bringing up a lot of feelings of excitement and looking forward to the future for me. But I feel like I’m being reigned back a little bit because of that fear. And that’s that constant give and take that we have had in our relationship for the past 12 years.

[00:04:12] I get excited about the future, buying a different house, moving to a new location. I love to look at real estate. I love to look at what I could potentially live in and picture myself there. And I like to dream long term. And then I’m always reminded of, but we don’t need that. We could live in a square box and be fine. And look at how much we could save and how much we could invest if we did that. So it’s always this give and take of I want, but Ryan is always very realistic with, but do you need it?

[00:04:47] Ramit: Ryan, how would you characterize your role when it comes to money in your relationship and Chloe’s as well?

[00:04:58] Ryan: I set the limit. Chloe dreams, and I’m like, “Okay. Well, here’s where we’re really going to be at.” You want that size of a house. I don’t think we need that big. Let’s cut back to this size. And then Chloe goes into the defense mode. And so it’s almost like I’m the, Debbie Downer on the aspect of the money aspect and saying, “Where are we at? Did we pay attention to the budget? And do you think you really are holding to the standard of what we expect with spending?”

[00:05:25] Ramit: Do you like being Debbie Downer?

[00:05:27] Ryan: No. And no matter how hard I try, I think I do it to Chloe quite a bit. The question being like, “Did we really need that?”

[00:05:36] Ramit: How many times a week do you think you say that?

[00:05:38] Ryan: Oh gosh. It’s probably once a week or so. Just recently you came back from Target or Walmart, and I was like, “Wow, how much did we get there? What all did you need to get?” And in reality, it’s all stuff that we needed, but I see extra bags, and I’m like, “Did we really need all that?”

[00:05:56] Ramit: Okay. Ryan, what’s your take on the difference between needing something and getting it just because you want it?

[00:06:06] Ryan: That’s hard. A need is the basic needs– food, water, shelter. And anything past that is an expanse want.

[00:06:15] Ramit: Chloe, how many times a week do you think that Ryan says, “Do we need that?”

[00:06:20] Chloe: I would say it’s probably three or four times a week.

[00:06:23] Ramit: Wow. Everybody noticed it went from one to four– a magic number. I don’t know if you notice, but when people talk about eating out, whatever number they first tell me they do per week, you always triple it to get the real number. This case, quadruple it. Hmm. All right. What do you make of that?

[00:06:40] Chloe: At least once or twice a week, Ryan is logging in and saying, “$200 at Walmart? What’d you get?” And I’m like, “Oh, yes. It was this, this, and this.” But I immediately get put on the defensive. And we’ve had this argument conversation many times, and he’s like, I’m just making sure that the card wasn’t stolen or nothing got charged that we weren’t expecting. But for me, I immediately jump onto the defense of, “Well, now I have to defend everything that I’ve purchased, and I don’t like that.”

[00:07:05] Ramit: Just out of curiosity, you two have been together 12 years, right?

[00:07:09] Chloe: Right.

[00:07:09] Ramit: Okay. In that time, how many times has your credit card been stolen?

[00:07:13] Chloe: Zero.

[00:07:16] Ramit: Hmm. Can’t be too safe, huh?

[00:07:20] Ryan: Never too safe.

[00:07:23] Ramit: The credit card obviously is just a tiny symptom of something much larger that’s going on, but it’s good to know what just happened. That’s quite revealing. Chloe, how would you characterize your role when it comes to money in this relationship?

[00:07:41] Chloe: I am an equal breadwinner. Ryan and I bring home about the exact same income. I can spend equally because I earn equally. I don’t need to report to anybody. I don’t need to be responsible to anyone other than myself. And I want to be trusted, and I want you to assume the best intent, that I’m not just going to go buy something frivolously. That’s not my personality. And he knows that.

[00:08:07] Ramit: Ryan said that he is a Negative Nancy or Debbie Downer. What are you?

[00:08:15] Chloe: I’m very content with what we make and where we have the lifestyle that we have right now. I just want it to continue.

[00:08:23] Ramit: You said, “I prefer to live a high lifestyle with nice homes and value private education for our two children.”

[00:08:31] Chloe: And we have that now.

[00:08:33] Ramit: So you’re like, “We live a great life, and I am content continuing to live that life.”

[00:08:39] Chloe: Correct.

[00:08:40] Ramit: All right. I respect it. Okay. And so you are content and Ryan is Debbie Downer.

[00:08:49] Chloe: Worried.

[00:08:50] Ramit: Okay.

[00:08:51] Ryan: Yeah.

[00:08:52] Ramit: You want to stop this lifestyle, Ryan?

[00:08:55] Ryan: No, I like the way we live. I just want to make sure we can keep it up.

[00:09:01] Ramit: Can you?

[00:09:02] Ryan: Right now, yeah. It all looks good. It does. The numbers look good.

[00:09:08] Ramit: All right. What are we doing here then?

[00:09:11] Ryan: I’m afraid that when I go to jump out of the military, and if I don’t get a career that makes the same income level where we’re at, then we can’t live at the same style.

[00:09:23] Chloe: He lives in fear of everything. All the what ifs. The sky is falling. What if you don’t get promoted again? What if you lose your job? What if I can’t find a career? What if my pension doesn’t cover what we need it to cover? What if I don’t get x amount out of my pension? What if the military stops the pension? What if the 529 isn’t there for us? What if the GI bill isn’t there for our kids? What if the military changes that? It’s always a if.

[00:09:50] Ramit: Wait. Even I’m getting exhausted just listening to these. It’s got to be a lot.

[00:09:55] Chloe: Yeah.

[00:09:56] Ramit: Ryan, is this true?

[00:09:58] Ryan: I do like to think of multiple contingencies. Yes. I look at like, what are all the plans that are going to fail in this war? What else could happen? What if Chloe lost her job where then we couldn’t continue that way?

[00:10:12] Ramit: So if you weren’t in the military, you would’ve been an actuary or a churn analyst for a SaaS company, right? Because they’re just focused on all the things that can go wrong.

[00:10:26] Ryan: Probably a pretty good fit.

[00:10:27] Ramit: Damn.

[00:10:28] Chloe: The biggest irony in that is that’s my job.

[00:10:31] Ramit: What do you do?

[00:10:32] Chloe: I’m an economist. I work in the actuarial department.

[00:10:35] Ramit: What? Wait. So why aren’t we just listening to the actuary on this call? What’s the problem? Ryan, is it possible this is not simply about numbers?

[00:10:45] Ryan: Oh yeah, it’s definitely not numbers. That’s why the night we sat down and we were listening to the podcast, Chloe’s like, “We need to put in, because it has nothing to do with numbers, Ryan” And I was like, “You’re absolutely right. It doesn’t. It has to do with my own personal feelings.”

[00:10:57] Ramit: Okay. That’s pretty insightful. Knowing is part of the battle, so great. I’m happy to hear that.

[Narration]

[00:11:03] Ramit: We’ve got Chloe, who’s a self-described dreamer, and then Ryan, who’s clearly a worrier. As we heard Ryan say, he’s looking ahead to his upcoming military retirement, and he’s stressing about every possible outcome. That’s got to be emotionally exhausting. I also noticed this very common dynamic where the husband thinks of himself as the logical partner, the one who sets the limit.

[00:11:28] She dreams, I bring her back down to earth. I hate this dynamic. I truly hate it, which is deeply gendered and always forces the wife to defend her choices. Listen up. Guys, if you’re creating a culture where you are constantly questioning your wife, literally four times a week, you’re not being a good man or a good partner. And in fact, you’re going to create a corrosive financial culture in your household.

[00:11:54] Men worry, but we are taught to express it in different ways. One of the ways that we do it is questioning our partner. Are you sure you need that? Because I, the logical person, surely knows better. And that is exactly what is happening here. If you have worries, that’s fine. Deal with them. But do not take them out on your partner in a way that causes them to shrink and have to defend themselves.

[00:12:20] But I also want to recognize that Chloe and Ryan have accumulated a lot of money. The reason I think they are such an interesting couple is that at a certain point you might have more money than you ever thought you’d have. The question is, will you know how to enjoy it or how to use it? In fact, will you have enjoyed the process along the way?

[00:12:44] Chloe and Ryan, especially Ryan, are a crystal ball into what happens when you have a lot of money, but you can’t change your feelings of scarcity and worry. I’m going to look at their CSP right up front, and then we’re going to spend more time breaking down what’s actually happening here.

[00:13:01] We’ll open up their conscious spending plan right after this quick break to support our sponsors.

[00:13:06] Now back to Ryan and Chloe.

[Interview]

[00:13:08] Ramit: Let’s look at the numbers. Ryan, will you read off the word in bold and then the full number next to it?

[00:13:16] Ryan: Assets, 965,000; investments, we’ll call it, 1.8 million; savings, 90,000; debt is 753,000. With a total net worth of 2,073,000.

[00:13:31] Ramit: What do y’all think of those numbers in your 30s?

[00:13:35] Ryan: They’re awesome.

[00:13:37] Chloe: Yeah.

[00:13:38] Ramit: Whoa. We got a wealthy couple who actually feels good about their money. This is amazing. All right, good job so far. You got a house. Great. You got 1.8 or so million dollars in investments. That’s extremely impressive. How’d you do that?

[00:13:55] Chloe: I would say a lot of this is credit to Ryan. Although I have an economics and finance degree, I was not savvy with ETFs or investing.

[00:14:05] Ryan: She came home one day and she’s like, they’ve got this thing. It’s an employee stock purchase plan thing. And I was like, “Oh, I don’t really know quite what that is.” And she’s like, “Well, it sounds like I can buy the stock at a discounted rate or something.”

[00:14:17] And I’m like, “Wait. What? You can do what?” So I was like, “Let’s look into that.” And she pulls it up, and it said it buys at, I think it was a 15% discounted rate from the lowest price point in the six-month period.

[00:14:28] And I looked at her, and I was like, “Holy [Bleep].” And I looked at our spreadsheet and she goes, “Well, I can’t afford to buy that.” And I go, “I don’t care. I can buy it.” And I go, ” We’re buying that entire thing.”

[00:14:41] Ramit: I like the excitement. What got you excited about that, Ryan?

[00:14:45] Ryan: I knew that it would be an automatic 15% return, which on top would probably be around a 30% return, which is just going to grow. And it had the capability for us to pay for both masters that we were doing at the time. It had the capability to build a better house that we were going to do. And if we had the assets to be able to put into it, to build right now, then why not?

[00:15:06] Ramit: Yeah. I like that. I assume part of that is responsible for the $1.8 million in investments, right?

[00:15:14] Ryan: Yeah. I got a loan in college. It’s a cool graduation loan that they give to military academies, and I put that straight into investments and let it start growing.

[00:15:25] Ramit: Ryan, how often do you log into your accounts?

[00:15:30] Ryan: Every day.

[00:15:31] Ramit: You log in. What do you see when you look at the numbers?

[00:15:34] Ryan: We’re doing good. We’re doing a good job. And sometimes I’m like, “Hey, Chloe. It looks like the market did really good today. We made $15,000.

[00:15:44] Ramit: Is that possible? You could actually make 15k in one day from the markets movement?

[00:15:48] Ryan: Yes.

[00:15:48] Ramit: And then when you tell Chloe that, that’s a lot of money. Obviously, you’re like, “Oh my god, that’s exciting.” And when you tell Chloe that, what’s her reaction?

[00:15:57] Ryan: She’s like, “Oh yeah, cool. Yeah. The market is doing kind of some interesting things.” And she usually brings the news into what, why she thinks that occurs.

[00:16:06] Ramit: I like it. All right. So you’re bringing it up. Chloe’s receiving it. She’s amplifying it. She’s coming back to you. She’s saying, “Oh, this happened too.” That seems pretty cool. How do you both feel about that conversation?

[00:16:18] Chloe: I think it’s a positive conversation because we have grown financially to a point that I think Ryan has a lot of pride.

[00:16:28] Ryan: Yeah. Absolutely.

[00:16:29] Ramit: Let’s keep going down the income list. This time, Chloe, I’d like you to read off the combined monthly income.

[00:16:37] Chloe: Yeah. Gross monthly income, 31,623, net 25,000, pretty much.

[00:16:44] Ramit: All right. So you two make $379,000 a year combined. You’re making 31k a month gross, or 24k a month net. Great. That’s a lot of money. Let’s just look at the expenses. Fixed costs are 49%. That’s amazing. They should be relatively low because you have a very high income. But I just want to congratulate you.

[00:17:05] You’ve obviously done a great job keeping your costs low. I have no comments on this at all. I do want to highlight a couple of things for people listening. Your car payment is, with gas and all that stuff, 905. Fine. Your private school and childcare is $4,000 a month. Fine. It’s a lot of money, but you earn a lot, and you obviously prioritize it. Fine. Dogs, 150. Grocery, 700. Great. And subscriptions are 422. Fine. There’s nothing here that is surprising for a high-income dual-income family.

[00:17:44] Your CSP leaves fingerprints, and what we see here is that you have a nice place. $4,900 a month for your mortgage and HOA. You prioritize private school and childcare. Fine. And you can afford it. Fine. And there we go. All right. Let’s move on to investments. 28% of net. That’s impressive. So you are currently investing almost $7,000 a month.

[00:18:08] Great. That, tied in with the amount you have, explains why you have so much. You have high incomes, you invest every single month, and you invest a lot. That’s fantastic. No comments. Savings at 6%. Relatively low. I do note that you have $90,000 in savings. So if I had to guess, I’m guessing you already have that apportioned out.

[00:18:29] Some of it’s an emergency fund, some of it’s a blah, blah, blah. They’re nodding yes, of course. Fine. And then everything else is 17%. I typically recommend 20 to 35%. All right, fine. 17%. What is this guilt-free spending of $4,318 a month? What do you spend that on?

[00:18:45] Chloe: Eating out, primarily.

[00:18:47] Ramit: 4,000 bucks on eating out? What the[Bleep]?

[00:18:49] Ryan: We probably spend around 1,000 a month on eating out.

[00:18:52] Ramit: Yeah. What’s the rest?

[00:18:54] Ryan: Well, to be honest, you’ll probably hate to hear this, but at the end of the year, usually what we do is the savings has grown over a certain amount, and it’s not into buckets, it’s not into the emergency, it goes and gets invested, which ends up usually being about another 30 to 40,000 a year.

[00:19:10] Ramit: I can’t believe the positions I’m sometimes forced into. People know me as like the personal finance guy, and I’m like, “Why the [Bleep] are you investing 40,000 extra dollars per year?” You have to know how much is enough, and then we have to actually stop ourselves from simply blindly continuing to save and invest.

[Narration]

[00:19:28] Ramit: Can you guys stop lying to yourselves? Putting $4,000 a month in your guilt-free spending, but it’s actually only 1,000, and then you just sweep the money and invest it at the end of the year, what is this? A Shakespeare play? Why are we putting on such a drama to pretend that we actually spend our money guilt-free?

[00:19:43] There are lots of great things to acknowledge in their finances. Yes, they’ve been highly disciplined for years. They both have high incomes. Their savings and investments are in fantastic positions. And I have to note, they also can talk about the big picture, which is quite rare with couples. But they are not skilled at spending their money.

[00:20:03] Yes, spending money is a skill. The problem is that almost everybody teaches you how to save, but nobody teaches you how to spend money meaningfully. And it just happens that I love to teach this. Step one is identifying your vision so you can determine where you want to spend. In order to do this, I need to better understand who Ryan and Chloe are and what they actually think of money.

[00:20:29] Now, before we dig into that, I need a quick favor from you. Hit this Subscribe button because it really helps my team and me grow this channel.

[Interview]

[00:20:35] Ramit: Let’s talk about your visions of money. I’m very curious. So, Chloe, you said that you had a lifestyle that you had envisioned. What do you mean by that?

[00:20:44] Chloe: My parents live in very nice houses. My dad was a contractor, so he was able to build nice houses for other wealthy people. And by virtue we lived in those houses.

[00:20:55] Ramit: Hence the interest in real estate.

[00:20:57] Chloe: Yes, for sure. I went to private school because that was something that my mom very much valued. We traveled the world because that was also something she valued. So I lived a very, very high lifestyle from the time that I was a kid. And the narrative in my household was always, if you want to continue living this lifestyle, you need to study hard, get a great job, and you’ll be rewarded. And so far that has come true.

[00:21:27] And I hope to continue that narrative to our kids, that if you want something and you are accustomed to this, and this is something that you put a lot of value in, you’re going to have to work for it.

[00:21:39] Ramit: I appreciate that narrative. That’s common narrative among the wealthy. They go, “Look, of course, this is nice. Yes, it’s very nice. We’re fortunate, etc. If you want to do this, you’re going to have to work.” Okay. When was the first time you both talked about money, really talked about it?

[00:21:58] Chloe: It was pretty early on. I recall pretty much the first time he met my parents. That was a pretty early conversation, maybe within the first couple of months. And then, we took a trip a few months after that to my parents’ house, and I do recall Ryan pulling me aside and saying, “You know I can never give you this.” And I said, “I’m okay with that.”

[00:22:26] Ramit: When you said that, were your fingers crossed behind your back? Come on.

[00:22:29] Chloe: Maybe. I think I took it upon myself to say, “Well, I’m not going to leave it all on you. I will contribute to this equally. If this is what I want, I’ll make it happen myself.”

[00:22:40] Ramit: That’s cool. I respect that. Did you tell him that?

[00:22:44] Chloe: I think so.

[00:22:45] Ramit: Mm-hmm. Ryan, do you remember that?

[00:22:48] Ryan: I do remember. I remember specifically going to her house because her parents’ house was beautiful. It is. It’s an amazing house. You weave all the way up into the canyon, in through the gates.

[00:22:58] Ramit: There’s a gate. There’s a gate. Oh my God. This is so good. Okay, go on.

[00:23:02] Ryan: Big, massive door, one of the biggest doors I’ve ever seen on a house. You open it up, and you walk right in, and it’s got beautiful timber beams. It’s perfectly decorated, pristinely decorated. We went downstairs, and I was actually a little sad and nervous, and I told Chloe, I was like, “I don’t think I can make this happen.” I had set to do a military career, and I knew that my income potential in the military for 20 years was not going to get us to that level.

[00:23:29] Ramit: I have to say, it’s quite impressive that you said that. That takes a lot of courage to speak up, especially as a guy. You’re walking into your potential in-law’s house, and then to have the wherewithal to pull her aside and just share your fears, quite courageous. Where did that come from?

[00:23:52] Ryan: For me it’s always been I see a marriage as a combined thing, and that’s how I was raised as both equal partners. And so I think to me, part of being those equal partners is sharing that life and what our vision is of it. And I wanted to make sure we were on the same page before we started going even further.

[00:24:12] Ramit: Honestly, very impressive the fact that you talked about money. Just that simple back and forth to me is really revealing in a very positive way. Okay, great. I’m with you so far. What happens next? What’s the next big money conversation?

[00:24:27] Chloe: When we moved in together. We decided to rent our first house together, and we also got a credit card together. We decided to put all the expenses for us living combined on the credit card. And then every month we would split it up equally, and I would send money to him and then he would pay the bill.

[00:24:51] But just by virtue of that, I reported to him, if you will, when it came to the end of the month. Anytime I bought something for our new house, I think bookshelves was one of them, Ryan was like, “Do we really need that?” And I was like, “But it frames the TV so well. We need them.”

[00:25:09] Ramit: We’ve established that “do we really need that?” is Ryan’s phrase of choice. Looking back, did you really need that bookshelf?

[00:25:22] Chloe: No, it wasn’t a need.

[00:25:23] Ramit: Okay. Could you afford it?

[00:25:26] Chloe: Absolutely. They were Walmart 100-dollar bookshelves.

[00:25:29] Ramit: I like to understand a little bit more about the money dynamic in the household. What happens around Christmas when it comes to purchases?

[00:25:34] Chloe: Every Christmas I’m the primary person that does that. Ryan is very hands off when it comes to gifts. He is not a gift person, doesn’t find joy in purchasing gifts for other people. I find a lot of joy in that. And I’m really excited for Christmas. It’s probably my favorite time of year. It was a time of year when I was a kid that brought a ton of joy to me. I love it to be decorated. I just bought a new Christmas tree. This is our third Christmas tree now. I bought it with my own money, so Ryan didn’t have to give me a hard time about it.

[00:26:04] Ramit: What’s that about?

[00:26:06] Chloe: Early on when we moved in together, we had what we call no-questions-asked accounts. And it really was intended to be no questions asked. The same amount gets deposited into those accounts at the first of every month, and we can do what we will with them. But it doesn’t always turn out that way.

[00:26:22] Every time I order something, a shipment chunk comes to the house, Ryan says, “What did you order?” And he does say it, half joking, but there’s always a little bit of truth in that. He is inquiring what I ordered, whether it was necessary and how I purchased it.

[00:26:39] And I always say, it’s my no-questions-asked money. You can’t say anything about it. And then the conversation usually does stop. But I use my no-questions-asked money as a way of getting out of a conversation about needs versus wants. I use it all the time.

[00:26:55] Ramit: Okay, got it.

[00:26:56] Chloe: My no-questions-asked is very low at the end of the month, whereas Ryan, I don’t know how much he has in it, but I’m guessing tens of thousands because he’s never spent a dime out of it.

[00:27:04] Ramit: What? Is that for real, Ryan?

[00:27:06] Ryan: Not tens of thousands, but I do not spend as much. I think the most recent thing that I bought was a leaf blower that I bought out of no-questions-asked.

[00:27:14] Ramit: Okay. First of all, amazing. Could not be more gendered if I tried it. The dude on this call goes, “I don’t really spend much, man. I’m just a simple guy. The last thing I got was a leaf blower.” How much do you have in your no-questions-asked account, Ryan?

[00:27:29] Ryan: 5,500.

[00:27:32] Ramit: Okay. And how about for you, Chloe?

[00:27:34] Chloe: Probably $100.

[00:27:35] Ramit: How much do you each contribute to that account every month?

[00:27:39] Ryan: 250 a month.

[00:27:44] Ramit: You have two years of expenses in there. All right. All right. All right. I think I’m starting to understand what’s going on. But Ryan, let me ask you this. So Chloe orders whatever she wants. She has the right to. It’s her money. And you both agreed it’s no-questions-asked. But then the first thing you do is literally ask her, “What’s that about?” Doesn’t that violate the rules?

[00:28:12] Ryan: Yes. But if an Amazon package shows up, I don’t know if it came out of a no-questions-asked money or not.

[00:28:18] Ramit: Right. So the Amazon box shows up. What goes through your head, the first thing when you see that box?

[00:28:26] Ryan: The first thing I fight to try to make sure I don’t ask her about it, and I can’t hold back. So I say, “Oh, what do we buy?”

[00:28:35] Ramit: Trying to be real friendly about it. So like, “Hey, what do we want to have for dinner? And also, what’s that box over there?” Real casual, right? But it never comes off casual.

[00:28:45] Chloe: He literally sends our 5-year-old to say, “Mom, what did you order?

[00:28:49] Ramit: Whoa.

[00:28:49] Ryan: No, he does that more now on his own. He’s very well learned that from me.

[00:28:54] Ramit: Oh wow. He, your five-year-old, learned to be deployed and asked this question, what’s that about? Hmm. That’s so interesting. I wonder what will happen one day when he gets married and when his wife brings home a box. What do you think he’s going to ask her?

[00:29:09] Ryan: That’s why we need to fix it now, because he’ll ask the same thing.

[00:29:12] Ramit: Right. Okay. Good. All jokes aside, money messages get passed down generation by generation, and we have the chance to change them, amplify them, alter them, and I like a good joke. I love it. But probably a lot of things that could happen if he continues absorbing that.

[Narration]

[00:29:37] Ramit: To all the men listening, do you see how your seemingly innocent question, do we need that, gets passed down generation to generation? Do you see how the identity you’ve created for yourself as the logical, reasonable guy who helps your dreamer wife stay grounded is actually an even deeper example of the problem here?

[00:30:00] What if you actually established that you and your partner both expect to have a high level of involvement in the finances? What if you had a candid series of conversations where you said, “Look, my expectation is that we’re both partners. We design a plan together, and we each take ownership of some parts of that plan, and we trust each other?”

[00:30:20] Of course, we’ll track a few key items. Of course, we’ll review it once a year, but we are running a business together, the business of running the household. So I never want to question the areas you own, just as I know you wouldn’t question my areas because we trust each other. What do you think? What do you think of that plan? What would your expectations be?

[00:30:41] Guys, that is how you create a healthy culture of money in your household. Not by nitpicking on Amazon boxes, then letting your son see it and suddenly he starts to question his mom about why she bought this. I’m getting so [Bleep] pissed right now. And I get even more mad when I hear Chloe describe what she spends her no-questions-asked money on.

[00:31:04] We’re going to hear more about that right after this short break from our sponsors.

[00:31:08] Let’s get back to the conversation

[Interview]

[00:31:09] Chloe: I don’t spend my no-questions-asked money usually on anything for myself. It’s usually things for the kids, matching pajamas for them that aren’t a necessity, or a Christmas tree, or some sort of decor item.

[00:31:25] Ramit: Ryan, what does it strike you hearing your wife say she doesn’t even spend her guilt-free spending money on anything for herself?

[00:31:36] Ryan: It is sad to hear that a little bit. On the same end, I don’t think I spend my money on anything for myself either.

[00:31:44] Ramit: If I heard my wife say, “I don’t spend anything on myself,” and we made the kind of income that you two make, it would be different if we made 40 grand household income. We just don’t have the money. And if my wife had had two kids, and especially one recently, if she said that, I would feel really sad and disappointed in myself. Disappointed that I had not helped create the family money culture where she could get her nails done or get a candy bar, whatever, go to a movie, anything that she would want to do for herself.

[00:32:32] Ryan: It doesn’t come to my mind to spend money in that realm. And I don’t know. It’s hard to think of spending in that way.

[00:32:45] Ramit: Is it hard to think of spending money beyond what you need?

[00:32:50] Ryan: Absolutely.

[00:32:51] Ramit: When do you get to do that? How much money do you need to have?

[00:32:56] Ryan: There is no number. I don’t know how to change my view. And I honestly said, “I don’t want to be 65 years old and we’re sitting on $15 million.” At that time I’m not going to spend, because I’m going to be the same exact way, and I won’t know how to spend. It struck us, and I was like, we need help learning how to do that.

[00:33:16] Ramit: Okay. I respect that. I really do. I talk to a lot of wealthy people who struggle to spend, and I like the conversations a lot. I can understand because I grew up not wealthy. I saved, I earned a lot. I grew my business. I became wealthy. So I really understand that spectrum.

[00:33:35] But also now having money, I have learned how to spend it meaningfully. So when I talk to wealthy people who want to learn how to spend money, the sad truth is most of them don’t change. So here’s the thing. I’ll tell you the dynamic right now. They’re like, “Yeah, yeah. I want to learn how to spend.” I go, “Cool, let’s talk about it.”

[00:33:52] And then I go through some examples, we start putting them through some exercises, and they’re like, oh [Bleep], this feels really horrible. I don’t like this because it makes me worry 1,000 times more than I worry. I think I’m just going to go back to my normal life where I accumulate tons of money, and I’ll deal with this another day. That’s what happens. Ryan, do you think you can change?

[00:34:17] Ryan: I do. I’d like to really try. I think one of the biggest things, there was a pretty big change that occurred in our life due to an accident about two years ago, and that has really changed my view of how I want to really take on shifting stuff.

[00:34:36] Ramit: What happened?

[00:34:38] Ryan: I was in a plane crash.

[00:34:40] Ramit: Can you tell me a little bit more?

[00:34:42] Ryan: I was trying to live a little bit of my Rich Life. I had a buddy that had a plane, and we were doing backcountry flying, and the engine quit on us, and we ended up having to put it into trees. Thankfully, we both made it, but it was a pretty big experience that happened. And it made me realize that life’s pretty short, and I want to have that quality time with my family and my kids.

[00:35:16] Ramit: Chloe, what was that like for you?

[00:35:20] Chloe: It was life changing, obviously. He was in Montana. I was in Colorado. I was home with our, at the time, 3-year-old. We were at a movie together, and I remember knowing that something had happened. I had a feeling. I was getting phone calls in a movie, and I couldn’t answer. And then I couldn’t wait any longer. We left the movie, and I was given the news that Ryan was trapped in the plane and that they were attempting to cut him out, and they weren’t sure what was going to be happening.

[00:35:55] I had to figure out what to do, whether I needed to bring our son up to Montana to possibly say goodbye to his dad or leave him in the care of family while I went and spent two weeks in the ICU. The latter is what ended up happening. I’m proud to say that I was very instrumental in his recovery. Spent two weeks in the ICU with him, life-lighted him back down to Colorado, spent another multiple weeks through another hospital, admittance for complications from the crash again, and many weeks of physical therapy and other therapy that we all went through.

[00:36:34] Ramit: My gosh. I did not know this, and I have never spoken to anyone who has been in a plane crash. I’m so glad you’re okay, Ryan, and obviously for your family. Ryan, when you think about what you took away from that, you mentioned, “I don’t want to let life go by.” What did you mean?

[00:36:54] Ryan: I didn’t want to lose the quality time experiences with my son and my wife, and I wanted to be able to capitalize on that as much as I possibly could.

[00:37:05] Ramit: How has that flowed into your day-to-day life now?

[00:37:10] Ryan: I think it’s changed my view on work pretty drastically. I still work hard and love the mission I do, but at the end of the day, there’s always a time. Stuff can be done tomorrow because I’m going to get home, and I’m going to eat dinner with my kid. I’m going to eat dinner with Chloe. If the kiddo or Chloe says they want to do something, I’m like, “Yeah.” Try to take on a view of how can we make it happen?

[00:37:33] Ramit: Did anything change for you after this crash and of course after physical therapy and all that as it related to money?

[00:37:40] Chloe: One of the biggest things for me was we’re sitting in the ICU for a couple of weeks, and Ryan basically said, “I’ve survived a plane crash. What the hell? Let’s buy a fancy car. I can go race it up and down the street and live my best life. Let’s go to Disneyland. Let’s take our kid.” He was gung-ho for a period of probably a month, maybe two months.

[00:38:02] And then I think slowly over time that part of Ryan fell back away, and he defaulted back to his old method. After the crash, he somewhat abandoned, if you will, the hobby of general aviation, and I think has replaced it with pool maintenance and investment maintenance.

[00:38:30] Ramit: I forgot about that. That’s another one of the guy code. You got a leaf blower, and you got to have your pool maintenance. Very good. So were you surprised that he went from the race car, the Disneyland, all that, back to where he was before?

[00:38:47] Chloe: I wasn’t surprised. I was sad. I saw glimpses of, gosh, this could be the way forward. This could be our new life. We can live a little. This has been a life-changing experience. And I really tried to hold onto that for as long as I could. And when I saw it slipping away, we got in a lot of arguments. We ended up going to marriage counseling in large part because of how I felt. I got these glimpses of who Ryan could be when it came to finances, and then it was slowly getting stripped away.

[Narration]

[00:39:15] Ramit: I had no idea this happened. What’s fascinating is how stable human nature really is. People often believe that they’ll have this life-changing experience and everything will be different. Like, I’ll win the lottery, the clouds will part, and suddenly I’ll be happy. That rarely happens. You win the lottery, two months later, you have similar problems.

[00:39:37] You go on an amazing vacation, feels great for the moment, but for most people, four weeks later, you’re still stressed out about the same things. Ryan got in a plane crash, and for a short time he changed everything, but then he defaulted to his old method, as Chloe put it. This is why it’s so hard to truly change your relationship with money.

[00:39:58] You can do it. But making that change is not simply buying a pair of shoes or sheets or even setting aside $100 per month to spend on something you like. To live a Rich Life, you have to go much deeper than that. When we come back, we’ll look for clues in Chloe and Ryan’s past to help us understand where they are today.

[00:40:18] We’ll be right back after this short break.

[00:40:21] Now back to the show.

[Interview]

[00:40:22] Ramit: I want to understand a little bit about your upbringing with money. I’d like to start with you, Chloe. I know that you mentioned you grew up wealthy and private school, etc. When you think about money, what age did you learn about investing?

[00:40:36] Chloe: Real estate was a pervasive conversation from the get go. My parents invested in the best neighborhoods, bought the crappiest house, tore it down to the ground, built something beautiful, and it was always sold to a wealthy family prior to even the framing being completed.

[00:40:52] Ramit: Right. So what age would you say you were when you first heard about the concept of real estate investing?

[00:40:58] Chloe: Probably 10 or so, when I was able to understand that my parents were buying homes on spec and remodeling them or rebuilding them and then selling them for profit.

[00:41:12] Ramit: Quite interesting, don’t you think? 10 years old learning about a highly sophisticated type of investing. This is very typical of wealthy kids. People who have financially savvy parents are often taught this stuff way earlier than others. Okay. So you continued growing up. Teenage years, anything happen as it relates to money?

[00:41:33] Chloe: I do recall asking my parents for a brand name outfit of some sort, probably some–

[00:41:38] Ramit: Which brand? Hold on. Let’s go back.

[00:41:39] Chloe: Juicy Couture sweatsuit.

[00:41:41] Ramit: Juicy Couture. Okay. All right.

[00:41:45] Chloe: That’s what was popular. And I remember my brother pulling me aside and saying, “Chloe, mom and dad can’t really buy that for you because although we go to the same school as these very wealthy families and we live in a neighborhood and a house that is just as nice as they do, mom and dad work very blue-collar jobs, and they don’t bring in the kind of income that your friends’ parents who are lawyers and doctors bring in. And so we are not them.”

[00:42:19] Ramit: What did you make of that? It’s quite interesting.

[00:42:22] Chloe: It hit me hard. And it immediately put into perspective that I felt lesser than these other girls that I went to school with because my parents couldn’t afford to get me a Juicy Couture sweatsuit like it was nothing.

[00:42:37] Ramit: Ryan, did you know all this?

[00:42:38] Ryan: Mm-hmm. We’ve talked a lot about it. And there one thing she didn’t share, college.

[00:42:44] Ramit: Oh yeah. Tell me about that.

[00:42:46] Chloe: My brother is three and a half years older than me, and throughout him going to college, I never had any implication that my parents couldn’t afford to put us through college. But I think that realization came about the summer between my first and second year of college. I was going to a private liberal arts college, very expensive.

[00:43:06] And the conversation happened around my parents selling the current house we were living in because they were building their dream house, which is the house that Ryan talks about up the canyon. And the conversation surrounded, you’re going to have to take out more student loans to pay for this because we’re building the house, and we’re in the thick of that, and we can’t help you. I made the choice to transfer to a state school because the tuition would’ve been a sixth of what I was paying in student loans.

[00:43:35] Ramit: That’s a big deal. I think a lot of people, maybe including myself, would’ve been like, I’ll just deal with it later. I’m going to stick around. I have my friends at this college. I’m going to finish off, and then I’ll deal with the financial thing later. That’s very impressive.

[00:43:51] Ryan: I tell her all the time, she does great things. But I recognize, I think there’s something deeply ingrained in me, and then there’s also the fear. And I think the fear comes from things I’ve seen with her mom.

[00:44:05] Ramit: Oh, okay. Let’s talk about that.

[Narration]

[00:44:07] Ramit: Before we talk about that, I wanted to share what Chloe wrote about their money challenges in her application to the podcast. “It was really fueled when Ryan met my mom early on when we were dating and saw her spending habits and what he perceived as my parents irresponsible, lack of saving for their future.” Let’s get into this.

[Interview]

[00:44:31] Chloe: My parents have three homes, and all of them are equally as beautiful and luxurious as the first one he described.

[00:44:38] Ramit: There’s two of them, and they have three homes.

[00:44:41] Chloe: Yes. Something happened pretty early on in our engagement/marriage, leading up to our wedding. My parents were willing to pay for our wedding, and then we got a call from my dad that they were looking to buy this condo in Mexico. But in order for him to get the loan on this other property that they own, he needed to not be the co-signer on my car loan any longer.

[00:45:08] This was literally two months leading up to our wedding that this happened. And we were also in the process of buying our first home, so it was stressful for us to take on paying a car, especially a car that had 0.9% interest. We didn’t really need to do that, but we were put in this situation where we had to do that.

[00:45:25] So I think there’s a little bit of resentment or worry that comes from Ryan that these situations where they want to live this lifestyle of having all these beautiful homes and traveling the world, but they can’t really fund it easily.

[00:45:40] Ramit: So Ryan, you think she’s going to become like her parents?

[00:45:44] Ryan: I think that’s a viewpoint that gets stuck in the back of me that I’m trying to get rid of.

[00:45:48] Ramit: This is actually comical because it’s like one of those movie scenes where one person says something on the phone, but then the other one hears it wrong, which then sets off this cataclysm. Watch this. Chloe, have you ever talked to your parents about exactly why they needed to pay off the car loan? No, right?

[00:46:07] Chloe: No.

[00:46:08] Ramit: Well, I highly encourage you to do that because it’s going to totally change the narrative that you two have. So basically, he wanted to reduce the amount of debt that he had outstanding. He wanted to get a better loan. So my guess is they’re like, we need to reduce the amount of debt. It’s going to change our credit profile. So let us just pay it off. And you guys were like, “Oh no. [Bleep]. They’re probably in dire straits.” We’ll pay it off, even though it puts us in this position. And now it’s become this thing. I am willing to bet that’s what happened.

[00:46:40] Chloe: I think that’s exactly what happened. They have multiple investment properties. They were probably just using one to leverage it.

[00:46:45] Ramit: Is that going to change the way that you think, Ryan, about this family history?

[00:46:51] Ryan: No.

[00:46:52] Ramit: No, of course not. The facts have changed, but my feelings have not. All right, that’s honest. But I don’t get it.

[00:47:01] Ryan: It’s the complete opposite of the way I grew up, which is what’s scary to me.

[00:47:05] Ramit: I understand that, but it’s what wealthy people with a lot of real estate do. All right, fine. Okay. Chloe, are you on the same page?

[00:47:13] Chloe: They’re very opinionated that real estate is a very good investment. They tend to speak negatively when it comes to our choice of investing. They think that the stock market is–

[00:47:24] Ramit: What? Index funds?

[00:47:25] Chloe: Yeah, they think that the markets are risky. In 2008 everyone lost their 401Ks and people couldn’t retire. It was dire straits.

[00:47:32] Ramit: That’s actually really funny, but very common, because real estate and stock market investors tend to be mutually exclusive. Literally all the people who get mad at me online when I post about real estate because they bought a house, blah, blah, blah, they don’t understand the stock market at all. And then the stock market people look at real estate. They’re like, “Why the [Bleep] would I lock all my money up in this illiquid high transaction fee, high maintenance cost, having asset.” All right, fine. All right. Ryan, I want to hear about your childhood. When you grew up, what’d your parents say about money?

[00:48:10] Ryan: Live slightly above the means of what you need to have, and then save so that you’ve got a comfortable living for the rest of your life after you’re done working. I can remember back when, gosh, probably eight or nine years old, we went to the local credit union, and I was able to open a savings account for myself.

[00:48:29] My friends all had video game systems, and I was like, “Man, I want a video game system.” My mom’s like, “You don’t need that. You don’t need that. If you’ve got money in your thing, then you can go buy it yourself.” So I went and bought it from ShopCo, bought a game for it, plugged it in, started playing. And then I was like, “Man, I just wasted my money on this.” And I actually put it back in the box. I took it back like a day later, took it back, returned it and put my money back into the savings account.

[00:48:55] Ramit: Did you grow up religious?

[00:48:57] Ryan: Yeah.

[00:48:58] Ramit: Yeah. Little bit of self-flagellation going on. Whoa, look at Chloe’s face.

[00:49:05] Chloe: We’re not religious now, but I think that’s the narrative that has followed him. I’m going to save, save, save at the expense of my own happiness.

[00:49:15] Ramit: Mm. And even when I save up wisely for the thing that I want, when I get it, I don’t really need this. I can survive and I can be a good person without needing these material things.

[00:49:32] Chloe: And the guilt that has followed him, and I think still follows him with every purchase that he deems unnecessary.

[00:49:38] Ramit: Ryan, you agree?

[00:49:39] Ryan: Yeah. We had a massive garden. Almost all of our vegetables were from the garden, and we would all tended to get them. We hunted, so almost all the meat that we had was from there. We would do a grocery tip once a week, and my parents had the coupons and everything ready to go, and we would buy just what we needed.

[00:49:56] Ramit: First of all, I just want to say, I don’t think there’s anything wrong with the way you grew up. Your parents were teaching you about opening up an account at a credit union. That’s awesome. They were teaching you about needs and wants. That’s awesome. They were obviously very frugal in terms of what you ate. And then they taught you, save your money. If you want a Sega, go get it. These are very valuable lessons.

[00:50:21] Ryan: Yes.

[00:50:22] Ramit: However, what went wrong? Because would you agree that you don’t have a healthy relationship with money today?

[00:50:31] Ryan: Yeah, I agree. And it’s because everything is always a savings. They didn’t spend on themselves either. I know my parents didn’t spend much on anything that they had because they were trying to save it. They wouldn’t go above anything that they needed. So I saw that my entire life growing up.

[00:50:48] We would get a few wants here and there, like you sprinkle a couple wants because that helps make you a little happy, but you don’t get a ton. Christmas was an example too. Santa gave you one awesome, cool gift, and then you got one or two gifts from the family, and that was the good thing. And it was usually, you get some underwear. You get some socks.

[00:51:08] Chloe: And some savings bonds.

[00:51:10] Ryan: Yeah, I got savings bonds.

[00:51:11] Ramit: Why did all our parents love to give us savings bonds like the worst. Literally the worst possible thing you could give. The kids can’t use it. It’s just this freaking thing. You put it in an envelope, and you lose it, and it basically pays nothing.

[00:51:24] Chloe: And do you know how difficult it is to actually cash out a savings bond?

[00:51:27] Ryan: I had to go to your favorite bank to cash a lot of them.

[00:51:30] Ramit: What? Wells Fargo?

[00:51:31] Ryan: Yes.

[00:51:31] Chloe: Yeah.

[00:51:31] Ramit: [Bleep] them.

[00:51:33] Ryan: But they have a limit on how much you can cash out each time.

[00:51:35] Ramit: Wait, how much were you cashing in?

[00:51:37] Chloe: A lot.

[00:51:37] Ryan: I probably had around $20,000 in savings bonds.

[00:51:40] Ramit: Hold on. Guy’s talking like he’s living like a subsistence farmer and all of a sudden he’s telling me he’s got 20k in savings bonds. Where did that come from?

[00:51:48] Ryan: My parents, my grandma, and my uncle had bought me– almost every birthday, I think, and every Christmas I got a savings bond, anywhere between 50-dollar bonds up to 500-dolar bonds.

[00:51:59] Ramit: 500 bucks, that’s a lot of money, man. Who’s wealthy in your family? Grandparents.

[00:52:04] Ryan: I wouldn’t say they were wealthy, but they saved, and they were able to pass down pretty good wealth to my parents. And my parents did the same thing. They worked. I would argue that we were upper middle class my entire life.

[00:52:16] Ramit: You’re upper middle class?

[00:52:18] Ryan: Mm-hmm.

[00:52:18] Ramit: You know the way you talk is not upper middle class. You realize that, right?

[00:52:22] Ryan: Yeah. I think part of it, my mom grew up on a farm in the middle of North Dakota, and she tells me stories of how they rode horses to school, and they milked the cows for food. And so it was very much, you don’t do anything more than you need. And they all worked the farm. That was their job.

[00:52:39] Ramit: Would you say that they were poor?

[00:52:41] Ryan: They didn’t have running water until they were seven years old.

[00:52:44] Ramit: Okay. I think that’s poor. Think about this. Your mom grew up poor. She became upper middle class, which is amazing, but she retained some of the same mentalities as not having running water. Passed that on to you. You freaking graduated with $20,000 in savings bonds. That’s rich for a kid. That’s a lot of freaking money. And now here you are with your own kids passing down that mentality of not even having running water. But do you realize that in just one generation, how much has changed socioeconomically for you? You’re a pilot in the military.

[00:53:25] Ryan: Yeah.

[00:53:26] Ramit: So your finances have changed, your living situation has changed, but this has not changed, your psychology.

[00:53:34] Ryan: Right.

[00:53:35] Ramit: Okay. Now we’re starting to get somewhere. What if you just keep going on like this? You’ve done a great job. Your parents taught you to save. You’ve saved, invested, etc. You’re going to be good. You’re going to have a lot of money. What if you just keep going like this?

[00:53:52] Ryan: Well, then I just die and give a lot of money to my kids. It’s boring.

[00:53:57] Ramit: Yeah.

[00:53:59] Ryan: My parents are prime example. We lived in the same house all the way till I was 30 years old is when they decided to go buy their dream home. I don’t know exactly what my parents have, but I would guess they have more than $10 million in retirement, give or take.

[00:54:13] Ramit: Your parents have more than $10 million?

[00:54:16] Ryan: Probably. And I hate to say it. I don’t want to be like my parents. And unless I start working on it right now, we’re going to be right there.

[00:54:24] Ramit: I love that. I love that. All jokes aside, you have a lot of things to thank your parents for. They have obviously taught you some really valuable lessons, and I think that’s incredible. I think a lot of people would be lucky to have grown up the way you did with those lessons. I think that probably they didn’t understand the implications of some of the things they were doing.

[00:54:44] When you repeat things like needs versus wants 10,000 times to your kids growing up, they really believe it. When you surround their financial education with a religious shroud, kids absorb that, and they internalize things like guilt and shame. And when you don’t model having a healthy relationship with money, which of course must include spending on some things that make you happy, then your kids will never pick up on it.

[00:55:13] The good news is the two of you are obviously incredibly intelligent, and you both function in many ways really well as a team. And for me, the biggest thing here, Ryan, is you saying like, “Look, my parents taught me a lot of great things, but I don’t want to be them when I’m their age. You haven’t built the skill of spending money meaningfully or, in your case, really spending money at all.

[00:55:41] It’s quite striking that for a grown man, father of two, husband, can’t list off a few things he’s bought in the last, say, five or so years, 10 years. I would say that’s probably an unhealthy relationship with money, especially considering how much you have.

[00:56:00] I think that really what we’re going to discover is that at the point you are in your life, you already have the things you need. You checked all those boxes. So now it’s almost like you’re going into this scary world where what you were taught as a kid is this new chapter of your life is all scary and bad, but that’s exactly where you need to go.

[00:56:21] Otherwise you end up with $10 million or, in your case, more, and no idea what to do with it. We actually have to build the skill so that the next time we talk, I go, “What are you spending 4,000 bucks a month on?” And you just lay it out for me. You go, “Sit down, Ramit. I’m about to break this [Bleep] down for you. We have a coffee addiction. We brought in a barista to our house to teach us how to brew it. Then we do this thing and this trip, and we take our kids and blah, blah, and we do a date night,” and on and on and on. How would that feel to you two?

[00:56:54] Chloe: It’d be nice. I don’t remember the last time we went out on a date night.

[00:56:58] Ramit: What? Why? You don’t have enough money? Only $1.8 million invested. How much do you need?

[00:57:04] Ryan: I think the biggest thing for us is trust in childcare.

[00:57:08] Ramit: Let’s talk about that. I will say you are paying 4,000 bucks a month for private school and childcare, and you both work, so it’s a necessity. Let’s just talk about it for a second. Dream with me for a second. Let’s say that it was important for the two of you to go on a date let’s just start at once a month. How could you do it?

[00:57:33] Chloe: It’s hard for us. We obviously are in the military, so we don’t live near any of our family. And we move every three to four years, so we have to build a new community every time we relocate. We’ve lived here for 18 months or so, and we just haven’t yet established that community of trust.

[00:57:48] Ramit: Yeah.

[00:57:49] Chloe: So it’s been difficult.

[00:57:50] Ramit: Okay. I think it’s going to happen. It’s just a matter of time. Fine. What else would be in your Rich Life?

[00:57:59] Chloe: I would love to take a trip just Ryan and I. We haven’t done that since our honeymoon. I would love to just be able to leave the kids with one of our families and go somewhere.

[00:58:10] Ryan: Funny enough, I even told Chloe the other day when we applied for the podcast, I said, “You know what we should do? I know Ramit has wanted to do stuff live. Why don’t we fly out to New York?” And then this happened super fast, and we were talking on the phone, so we didn’t get the chance.

[00:58:26] Ramit: But I like your energy behind that. It’s quite expansive. Can we talk about how that might be possible?

[00:58:34] Chloe: It’s tough. My mom works now again, so she wouldn’t as easily be able to take care of our kids, and she’s one person I trust implicitly with being able to take care of our kids.

[00:58:44] Ramit: Can I say something? Normally, I would be like, okay, I get it. But the thing is, you have $2 million, and you’re investing $7,000 per month. And you’re telling me you can’t take a freaking three-day trip? I’m not even saying leave the kid behind. Bring them if you want, whatever. We can talk about all the options. But if you’re investing $7,000 per month, then we don’t have a lack of money here. We have a lack of creativity. So I’m going to push it back again, back to you. How could we make that happen?

[00:59:19] Ryan: We call Goo up, which is who we call grandma. And we say, “Hey, grandma. Come on down. You take PTO. We’ll pay you for your PTO that you’re having to take since you’re not working.”

[00:59:30] Chloe: I’m just thinking bigger here. I know there’s Au Pair services or nanny services that are highly trusted. Expensive as hell, but highly trusted.

[00:59:40] Ramit: Love that idea. Amazing. What else?

[00:59:44] Chloe: We could bring my parents along if they wanted to come along.

[00:59:47] Ramit: Okay, great. So you could bring your parents with you. Fantastic. What’s different right now about the way we’re talking versus the way you typically talk about money?

[00:59:56] Chloe: We’re thinking big. We’re not worried about the cost, putting it into a spreadsheet, making sure that it makes sense. We’re just throwing out big ideas.

[01:00:07] Ramit: Ideas first. Visionary ideas first, costs later. When we’re dreaming, we do not talk about costs. We talk about what would be magical, amazing. So many of us stop ourselves from our dreams before we even dream them. We let the tail wag the dog. We let the cost drive the vision when the vision is what should come first.

[Narration]

[01:00:34] Ramit: I have to cut in here because this is such an important moment. You know how I’m always talking about the fact that money alone won’t change your feelings? Look at what’s happening here with Chloe and Ryan. They have tons of money, but they haven’t gone on a date in a long time. Why? Childcare. This is a problem money can solve. But not the way they’re thinking about it.

[01:00:57] They’re still playing small– a common pattern I see with people who have money. Remember Episode 131? Matt and Ruane had millions, and they wanted to spend time together. But when I asked why they couldn’t hire someone, for example, to handle their laundry, Ruane said they can’t do my laundry the way I want it done.

[01:01:20] If you have millions of dollars and you can’t find someone to do your laundry or a babysitter to take a couple hours away for the two of you, you don’t have a money problem. You have a creativity problem. Notice that neither of them is saying that they’re petrified of being away from their kids. We’re not talking about that.

[01:01:38] They’re simply saying we don’t have childcare. And once you solve that, that small problem in the overall big picture of your Rich Life, that unlocks the ability to use money to solve bigger, more complex, more important problems. To put it another way, you cannot let a babysitter get in the way of you living a Rich Life, especially with millions of dollars.

[01:02:03] Listen as I push them. Suddenly Chloe reveals how their attitudes towards childcare have been holding them back. Listen.

[Interview]

[01:02:11] Ramit: The minute you solve this childcare question with somebody you really trust, no compromises, deeply, trust them, the minute you can start to think, not just five minutes out, but 30 minutes out, then a day out, then a month out. So all we’ve got to do is focus on this specific question. How do we find trusted childcare that we both feel good about? How might you set up a process to make that happen?

[01:02:41] Chloe: We need to be more willing to throw more money at it, to be honest. I think we tended to be frugal with hiring young high school, college girls, and I think we just need to be willing to really hire a professional, an expert. And if it costs us 30 bucks an hour, it costs us 30 bucks an hour.

[01:03:02] Ramit: This is what we’re debating? 30 bucks an hour. [Bleep] looking at 69.07 going every month to investments. Guys, do you see how 30 bucks an hour has stopped you from taking a trip to New York?

[01:03:14] Ryan: I still have the fear of when I don’t have a job or I try to swap careers. Is our savings enough to continue through it, which it’s irrational because we ran the numbers purely on our 401Ks, and it shows even if I stop working, we’ll be perfectly fine.

[01:03:33] Ramit: Right now, when you think about money, it’s worry. And so it will be very easy for you, Ryan, to go the rest of your life being like, what about this? What about that? And you will literally just escalate your way right into your parents. So we actually have to make changes that feel uncomfortable and actually are different. Chloe identified something really spot on, and that is, “Wow, we’ve really been trying to cheap out on some stuff.”

[01:04:02] When you tell me, we’ve been trying to basically pay as little as we can for like something really important, first of all, childcare for your kids, but also not just for your kids’ safety, although that’s first, but for the connection between the two of you, I go, “Guys, come on.” That’s not just being frugal. That’s just being cheap. And your relationship needs care. Chloe, I love that you said, “Hey, let’s actually put more money behind it.” I love that.

[01:04:28] To me, this is one of the biggest things you can do. And once you do that, then the dominoes start to fall to enable you first at least just a night out dinner, then dancing, and then perhaps New York. Beautiful. Imagine you start going out once every two weeks for a date. First few times it’s going to be difficult. Your son’s probably going to not want to see you go. But you tell him, “Here’s what we’re doing.” And as he gets more comfortable, especially because he’s having fun at home, you tell him why. What would you tell him? Why are mom and dad going out?

[01:05:05] Ryan: We would tell him we’re investing in each other. Tonight, that’s what we said to him. Mommy and daddy are going to somebody that’s going to help us talk about how we get better with money, and that’s an investment in us to help our family grow better. He was like, “Okay.” And we said, “It’s like kindergarten. You go to kindergarten to learn how you do stuff so you’re better.” And he’s like, “Oh yeah.”

[01:05:26] Ramit: I love that. That is great. What if he pulled out my book? What if he was like, is it a low-cost investment? Because I don’t like those front end lows.” It’s a real waste of money. Okay. So great job messaging that. I would love for you to carry that on to other examples.

[01:05:50] Chloe: Carrying that over to trips. “Buddy, we decided that we’ve worked really hard, and we all deserve a vacation. And we’re going to invest in spending time together as a family in this fun place.”

[01:06:03] Ramit: I love that. Can I just tell you, your CSP does not even indicate to me for one second that you two are out of control with your spending, not in the slightest. I think that the two of you simply have not connected deeply on what your Rich Life is. So Ryan, you’re playing defense for the last 40 years. Spending money is bad. Needs, needs, needs. Wants are bad. Wants are not bad.

[01:06:34] Once you have earned enough to be able to afford these, you should be delighted to be able to get them. You’re still investing, you’re still saving, and we’ve worked so hard to be able to get these wants. Thoughts?

[01:06:48] Chloe: I would like Ryan to find joy in spending money and find joy in buying things for the kids like I do, and buying things for other people, buying things for me. I would love for that to be part of it. And I think that what he’ll end up finding is that that incorporates quite well into his Rich Life. He just doesn’t really know it.

[01:07:11] Ramit: Sometimes being generous is the cheat code to learning how to find joy in spending money.

[01:07:16] Chloe: Yeah. I think he’d find joy in it, and I think he would understand why I spend the way that I do, because I find joy in that.

[01:07:24] Ramit: What do you think, Ryan?

[01:07:26] Ryan: I think what I would look at is if I could buy things that would give me more time with the kids.

[01:07:32] Ramit: You have 5,500 bucks in your guilt-free spending account, right? All right. Let’s use some of it. Let’s say 2,000 bucks. Can we make a plan right now? Let’s do one for the kids and one for Chloe.

[01:07:42] Ryan: For the kid, I think I’d like to buy [Bleep] a trip on the carousel or whatever it is thing. For Chloe, she does like to have newer clothes. Schedule her a massage.

[01:08:00] Ramit: Love it. Everybody, look at Chloe’s face, by the way. Just ear to ear grin right now. Look at that smile. All right. Keep going, Ryan.

[01:08:08] Ryan: Get a car detailing for her car so she doesn’t have to worry about it. Try to help find somebody, a house cleaner, to clean the house.

[01:08:15] Chloe: It gets overwhelming when you’ve got two kids, and I don’t have the time. I would like to be able to devote to it.

[01:08:21] Ryan: If we get a house cleaner, it releases the time for you and I to actually go and play with the kids and not have to think about that, or build Legos or whatever. It is an investment in both of us, is being able to have that quality time.

[01:08:36] Chloe: I would like that. I’d like to be able to spend our weekends going on adventures as a family instead of being strapped down to, oh gosh, I’ve got to clean this bathroom this weekend, and I’ve got to do this laundry, and I’ve got to do all of the things to get ready for the following week.

[01:08:50] Ramit: Good. Love that. This is a 3-dollar question for the two of you. You should have somebody in there by Friday. Boom. Done. Question answered. And I want to emphasize to you, the first person you bring in might not be good. That’s okay. That’s totally fine. That’s life.

[01:09:08] The second person you bring in might not be good, but you’re getting better. Each time you’re like, “Ooh, they didn’t clean behind this. They need to do this laundry.” You’re documenting it like a freaking SOP. The third person comes, you got to a laminated document. It’s like a checklist. Who am I talking to? A freaking pilot. Read the checklist. They go, “Oh, what about this?” You go, “It’s on page 6a. Have you not read the checklist?”

[01:09:29] Chloe: Yeah.

[01:09:30] Ramit: Can I show you guys something? Look at your conscious spending plan. So your guilt-free spending currently says you spend $4,318 a month, which we all know is a lie. It’s way less. I think you told me you spend 1,000 bucks a month eating out, so you basically have $3,000 that ends up just getting invested.

[01:09:48] Do you see that you’ve been under investing in your own relationship and Rich Life? What if you just actually respected the CSP and said, “Hey, we have $3,000 a month to be spending on our Rich Life, guilt-free.”?

[01:10:08] Ryan: Yes.

[01:10:11] Chloe: 100%.

[01:10:11] Ramit: That’s the key here, is all the stuff on the CSP, which is like fixed costs, investments, savings, that’s where you’ve been spending so much of your time. But the fact is you already won. All of those are dialed in. They’re great. But you’ve been neglecting the last part, guilt-free spending.

[01:10:35] And it shows. It shows because there’s a fake number there. You don’t even spend it. You’re only spending 25% of what the CSP tells you. That explains everything. Explains why you’re scrubbing the toilets, why you haven’t gone on a date, and on and on and on. To me, this is so beautiful. It doesn’t mean you’re bad people. Not at all. It just means we know where you need to be spending the majority of your time.

[01:11:01] Chloe: I think you nailed it. I think we absolutely have not been investing in ourselves. Look what we have to show for it. But at the end of the day, is that going to sustain us? Sure, financially, but emotionally, I don’t know if it would.

[01:11:18] Ramit: I totally appreciate that. You have enough money. You’re going to have many times more than that. You know that. But I want you two to have a super strong relationship with each other, with your kids, with yourselves, and of course with your money.

[01:11:38] I think it’s really cool that you have gotten yourself to the position where you can retire from the military and be really thoughtful about what your next choice is. Is there anything on this CSP that stands out to you that you are worried or concerned about?

[01:11:55] Chloe: I think Ryan looks at how much our mortgage is and the house we want to move to next, and I think that that number scares him, especially once he drops down to possibly only having a pension after he retires from the military.

[01:12:10] I take the perspective of what if we paid cash? What if we liquidated some of our investments and we paid cash for a house and then our fixed costs every month were lower and it wasn’t as stressful if changes to our income shift?

[01:12:24] Ramit: Fair enough. That’s a good option. Or don’t buy the house until you know Ryan’s next career.

[01:12:34] Chloe: Right.

[01:12:35] Ryan: We’ve talked about that actually a lot for this next move, is potentially we will rent in the area that we want to go to, start to learn the market and everything like that and figure out where we want to live and let things stabilize, and then we will buy that house.

[01:12:49] Ramit: Love it. If you’re not going to be earning money for a while, that’s actually fine. You got the pension. You have all this money aggressively saved and invested. Fantastic. Take some time. You earned it. Chill for a little while. But probably don’t take on a 1.5-million-dollar purchase when you’re not sure how much you’re going to earn.

[01:13:10] That would just basically create– the next chapter of your life is like,[Bleep], I got to work to pay this thing off. And I don’t want that for you. I love that you work. I love that you help your family. I love that. But I also want more for you at $1.8 million in your 30s. So risk management. Probably don’t take on a huge asset until you know you can carefully cover it.

[01:13:32] The other thing that’s way more interesting is, what do we want our life to look like? This is where you have to start with a vision because maybe the next job you get, you actually don’t need to make that much money.

[01:13:47] Ryan: That’s actually been the biggest conversation piece we’ve had. because I can roll from a job right now, right into doing the same thing and making 250, 300k a year on top of my pension. And I was like, “But I don’t want to do that.” I actually want to work from home. I want to have flexibility with my kids.

[01:14:06] It doesn’t matter if it makes less. Because I’ve got the pension to soften the blow on it. And Chloe and I have talked about that a lot, is like, yeah, I want to do something that I have a lot of love and passion for. And it may take that float to get there.

[01:14:23] Ramit: Cool. I love that. I love that you have gotten yourself to a position in life already in your 30s where you can start to have these type of conversations. I would encourage you to start with the vision. And I know that’s hard for you, Ryan. It’s very hard for you to come up with a vision because, since childhood, it was drummed into you like, needs not wants.

[01:14:40] Okay. I have a couple of just final things I want to share with you both. There’s this phrase I read in a book once. It said, “When your partner whispers something, treat it like a scream.” Meaning Chloe has said openly, “I want you to get me gifts.” I love when someone is that direct. It just makes it so easy. You want me to get you gifts? I will get you gifts. Beautiful.

[01:15:01] So Ryan, that is where you start to spend your time and money. Right now you have a story you tell yourself. I’m not a gift giver. That could be changed in a week. But just the idea of you getting gifts for her, I think would be amazing. Second, becoming decisive. I think that will be strategic for you. So I am decisive.

[01:15:23] And just asking yourself, in every part of my financial life, and maybe even non-financial, where can I become decisive? The example we did with the house cleaner is a classic one. For me, if I was finding a house cleaner, it would be Monday, by Friday they’re in the place cleaning it. Boom.

[01:15:40] Finally, I want you to just use this metaphor in your life now of turning the page. You have a new chapter of your life. You already won in chapter one. You crushed it. You saved, invested. And you’re still doing it, so great. But the new chapter, it’s time to write what that chapter is for yourself. That chapter is having fun. That chapter is being generous. And I think importantly, that chapter is starting to understand where you like to spend your time and money. You got to learn for you.

[Narration]

[01:16:09] Ramit: I want to thank Ryan and Chloe for sharing their story. What an amazing couple. Let’s check in and listen to their follow-ups. Up first, Ryan.

[01:16:17] Ryan: Hey, Ramit. Great talking to you the other night about a challenge that I’ve had in the money world for quite some time with myself, which is that frugality and cheapness that I’ve been trying to work through, but it’s always seemed like a very large mountain decline. And having that talk with you and Chloe the other night really gave a lot of support and confidence to continue to turn that page and reshape that money narrative.

[01:16:40] I’m going to look for that positive look on money, and I’m dubbing this saying that I’m looking to buy quality time. And in doing so, I set a goal for that, which is actually going to be buying one quality time event or activity per month for the next three months. And that’ll get us to the new year and then hopefully reassess that after that and hopefully buy more quality time.

[01:17:00] In doing so, was super decisive after we talked and already made a couple of things. One, I hired a house cleaner. They start tomorrow, which is going to be great, and that’s going to buy some quality time with Chloe and I and the kids. And then two bought the Ferris wheel ride that the kiddo really wanted to do.

[01:17:16] The whole family’s going to do to that this weekend on Saturday. And then a piece, not necessarily buying quality time, but trying to help me not be as concerned about it, I moved all the bank accounts, the credit card apps from the front page of the iPhone to the back page of the iPhone.

[01:17:31] So it turns me away from wanting to check that, or it’s not right in front of the face. I still do have a long ways to go, climbing that mountain and trying to turn the page on that narrative. But I know the support from Chloe as well as you and others in my circle are going to really help be able to climb through that, so thanks.

[01:17:49] Ramit: And now Chloe’s follow-up.

[01:17:51] Chloe: Hey, Ramit. So quick update. Following our conversation, I think our natural tendencies for me to be more of the big picture dreamer and Ryan to be more of the downer continued to persist in the discussions that we had over the next couple of days. But I also recognize that it’s completely unrealistic for me to expect that Ryan now has all the validation that he needs to have a healthier and more joyful approach to spending the wealth that we’ve worked really hard to build.

[01:18:17] I think my biggest takeaway is that I need to be less defensive and recognize that he’s coming from a place of fear and guilt when he thinks of spending money, and that my role is to be more encouraging and express my support to him more often, even with the smaller baby-step changes that he makes.

[01:18:33] Ryan has already taken really decisive steps toward finding ways that we can utilize our money to ease my mental load and allow for us to have more quality time as a family. I’m also really proud to say that I didn’t end up reimbursing our joint account from my no-questions-asked money for the very unnecessary, but also very wanted purchase of our third Sand Lake Christmas tree.

[01:18:56] I’m working on feeling more confident with making those unnecessary purchases for our kids from our joint account instead of needing to hide behind my personal account as much. So thanks again for all of your help. I know that it’s only going to continue to get better and we’re going to continue to support each other as it does, so thank you.