256. “We moved abroad for fun. Now we can’t afford to leave”





Ramit Sethi of I Will Teach You To Be Rich talks to Liza and Bradford, a couple with three kids living as expats in Colombia, South America. They earn $120,000 a year, have $273,000 in net worth, and by expat standards, they’re living well. But they have $1,500 in savings, zero savings rate, and they’ve been cycling in and out of debt for years. And Liza has been pushing to move back to Canada nearly every single day for five years.

When Ramit opens their Conscious Spending Plan, the problem isn’t the income. Investments are protected like a sacred object. Savings don’t exist. And a line of credit stands in as a de facto emergency fund. On paper, they look fine. In practice, one bad month away from going back into debt.But the money is only part of the story.

What Ramit uncovers is a dynamic that has quietly been draining both of them. Bradford takes on every financial burden alone, working two, three, four jobs whenever money gets tight. And every time he does, Liza loses her sense of purpose and reason to contribute. Neither of them realised how much damage this pattern was doing. But after years of it, they’re both stuck.

In this episode we uncover:

● The expat “money hack” that became a trap, and why Liza feels stuck abroad● Why moving back to Canada wouldn’t actually improve their finances● Bradford’s taxi fleet business that lost between $60,000 and $100,000, and what it revealed about their patterns with money● The debt cycle they keep celebrating as a win● Why Bradford’s “efficiency” mindset is quietly disempowering Liza● How Liza’s self-worth became tied to what employers will pay her● What it looks like when a couple finally builds a shared financial vision● The follow-up: what Liza and Bradford did differently after the episode

Chapters:

(00:00) Cold open: Can we afford to leave?(01:08) Episode intro + financial breakdown(02:31) Meet Liza and Bradford(05:07) The “money hack” that became a trap(09:30) Five years of the same argument(25:00) The debt cycle begins(32:30) Opening the Conscious Spending Plan(38:00) How much can Liza actually earn?(41:39) The line of credit problem(45:52) Breaking down their system(01:30:00) The pattern hurting both of them(01:33:30) What do you each need?(01:47:00) Follow-up

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Transcript:

[00:00:00] Liza: I’m Colombian, but I grew up in Canada. I wanted to come back and live here as an adult, as a fun experience for like a year or so. But we’ve been here almost seven now. I didn’t sign up to come here forever.

[00:00:10] Ramit: If you were to move back to Canada tomorrow, would you be able to afford it?

[00:00:13] Bradford: I mean, we could get there.

[00:00:15] Bradford: I don’t know if we’d survive a month without like the food bank.

[00:00:18] Liza: I feel like everything in North America has gotten more expensive. Thinking of going back suddenly. It feels like a big leap.

[00:00:23] Ramit: Why is this question about moving back to Canada coming up now?

[00:00:27] Liza: My financial situation kind of changed recently.

[00:00:30] Liza: Then I feel like this desperation of, oh, I need to go find something else.

[00:00:34] Ramit: I mean, I can understand it when things get hard sometimes you just wanna say like, I wanna go home.

[00:00:39] Liza: Yeah.

[00:00:39] Bradford: I don’t want my kids to have the same life that I had where, you know, like I did a few things, but. Later found out it was all my grandparents.

[00:00:47] Bradford: I don’t want to be 70 and and working.

[00:00:50] Ramit: As you sit here and think about the numbers, what does it feel like to you?

[00:00:53] Bradford: I mean, the first word that comes to mind is hopeless. If I’ve gotta put more than that away, I don’t know how to do that without basically just living for retirement [00:01:00] and forgetting how to live my life right now.

[00:01:03] Ramit: Bradford and Lisa moved to Columbia six years ago with three children, and they had a simple plan, try it for a year, have an adventure, but now they’ve been there almost seven years and they are stuck. When they look at their finances, they realize they might not actually be able to afford to leave.

[00:01:21] Ramit: That’s because for years they’ve been cycling through the same old pattern. Get into debt, pay it off, then get right back into debt. I’m looking at their conscious spending plan, which we call their csp. If you want my help with your own csp, you can join my money coaching program at iwt.com/money Coaching.

[00:01:40] Ramit: Let’s take a look. Assets $120,000. Investments, $153,000 savings, $1,500. Keep in mind, they are a family of five debt, $1,300, total net worth $273,000. Their [00:02:00] fixed costs are 68%. A little bit high, but not super crazy investments. 14% savings, 0% guilt-free spending 17%. Okay. I’m noticing 0% on savings, which is the problem.

[00:02:16] Ramit: No savings automatically limits your options like the option to move back to Canada. I’m curious for you, as you are hearing this, what is a time that you felt stuck because of money? Tell me in the comments and please know that I read every single one. And now let’s meet Bradford and Lisa, calling couples from la.

[00:02:38] Ramit: I want to talk to you on the upcoming season of Money for Couples. I am excited to be recording episodes in person live in studio. So if you are struggling with debt, retirement, supporting aging family members, overspending, or talking to your partner about money, apply to the podcast right now. I’ve done some podcast episodes in [00:03:00] person before.

[00:03:00] Ramit: Honestly, I love them. So if you are LA based and you essentially want a free three hour coaching session with me, you can apply right now at iwt.com/apply. Again to be on the podcast. It’s iwt.com/apply. In your application you wrote, we are looking to return to living in Canada, but we are afraid that we are stuck abroad in Columbia, south America because we have been priced out of life.

[00:03:30] Ramit: In North America with rising prices. Okay. If you were to move back to Canada tomorrow, would you be able to afford it?

[00:03:37] Bradford: I mean, we could get there. I, I don’t know if we’d survive a month without like the food bank or like something, I don’t know.

[00:03:45] Ramit: That sounds like No, to me,

[00:03:46] Liza: no, because we would have to find new jobs, so we would have to start over from scratch.

[00:03:51] Ramit: How did you decide to move to Columbia?

[00:03:53] Bradford: I got surplused in my job and we had always talked about it. Uh, I’m a teacher, and so we were [00:04:00] like, you know what, maybe this is the right time. At roughly the same time somebody from a school here contact me, said, I have a calculus position open. Do you want it? And we kind of went Okay.

[00:04:10] Bradford: And then we sold everything and moved in a month.

[00:04:13] Ramit: Cool. How long ago was that?

[00:04:14] Liza: It was almost six and a half years.

[00:04:16] Ramit: Wow.

[00:04:16] Liza: And by the way, I’m Colombian, but I grew up in Canada, so I wanted to go, come back and live here as an adult, as a, as a fun experience for like a year or two or so. But we’ve been here.

[00:04:26] Liza: Almost seven now.

[00:04:27] Ramit: Wow. So you plan to be there for like a year and it’s been now six and a half years.

[00:04:30] Liza: Yeah.

[00:04:30] Bradford: Yeah.

[00:04:31] Ramit: That’s pretty cool. What an adventure. What was the transition like moving from Canada to Columbia?

[00:04:36] Liza: I would say it was fast. Like we decided, sold everything car house furniture within six weeks and we were here.

[00:04:44] Ramit: Wow.

[00:04:44] Liza: Um, partly lack of planning, but we’re also very la like adventurous on. We don’t mind being spontaneous, but we don’t plan for big transitions like this one. Um, so it was quick.

[00:04:55] Ramit: Let’s talk about how much it cost in Columbia versus [00:05:00] Canada. Were you saving money when you moved to Columbia?

[00:05:03] Liza: Yes, if you’re comparing rent to rent or gas to gas or whatever, yes.

[00:05:08] Bradford: Mm-hmm.

[00:05:08] Liza: But the income here is less. So we’re about the same. I would say

[00:05:11] Bradford: part of what’s drawn us to stay is that the things that are cheaper are the fun things. So with a family of five, you know, we can go out for dinner or bowling or the movie and like, we don’t even think about it. It’s like, it’s so cheap.

[00:05:22] Bradford: It’s like, yeah, of course we’re gonna go do that.

[00:05:24] Ramit: Mm.

[00:05:24] Bradford: Whereas, you know, like our utilities are, you know, somewhat similar. Although they’re better now in, in Meine they were worse on the coast. So there’s certain things that are more expensive. Um,

[00:05:34] Ramit: uh, how old are your children?

[00:05:35] Bradford: Three, nine and 11.

[00:05:37] Ramit: Okay. Alright, great.

[00:05:39] Ramit: Um, Lisa, in your application you called your lifestyle, two things that I found very interesting. The first, you called it a money hack, but then you said it now feels like a trap.

[00:05:52] Liza: Yeah,

[00:05:52] Ramit: can you tell me about that?

[00:05:53] Liza: So, yeah, when we came, we thought many people here that are expats, they live here cheaply and they’re making dollars, and [00:06:00] so they can live really well here because it is cheaper to, to live that way.

[00:06:03] Liza: For me, it feels more like a trap because I haven’t been able to get traction here with any kind of jobs. Um, if I work virtually, which I have been doing, freelancing and all that, it’s, you know, I have to hustle to find contracts and all that. And the jobs here that I have applied for or tried to get, they just pace a little that it feels sad for me to be like, maybe here it’s a good salary for the average person, but for me, with a North American perspective.

[00:06:27] Liza: It’s s difficult to be like, oh, I’m gonna work 40 hours a week for so little money. It’s, it’s shocking. So

[00:06:33] Ramit: can you give an example, 40 hours a week for how much?

[00:06:35] Liza: For example, $1,200. So that seals to me like it’s a waste of my time. ’cause I’m like, oh, I’ll be making like in Canadian dollars, like I think I count like $7 an hour and I’m like, that seems sad because minimum wage in Canada is 15.

[00:06:48] Liza: So I could even just go work any minimum wage job and do. Okay. So

[00:06:51] Ramit: And what do you mean by the word trapped? Trapped abroad?

[00:06:55] Liza: Two reasons. One, I think Bradford is very happy here. Uh, he has found a good job [00:07:00] here that he enjoys. He goes out and does things and uh, and I think also he just content to live where we are.

[00:07:06] Liza: Um, I am not as happy here. And so in a sense I feel trapped because we are at odds. He, he’d be happy to stay here forever and I’m not.

[00:07:14] Ramit: Okay.

[00:07:15] Liza: Um, and then on the other side, I feel like everything in North America has gotten more expensive. Thinking of going back suddenly. It feels like a big leap to be like.

[00:07:23] Liza: Now we’re used to paying this much, and now we have to pay $2,000 more a month for rent, or we have to pay, you know, whatever, extra for food. And so I feel like I don’t even know how to make that that work. I guess.

[00:07:33] Ramit: Why is this question about moving back to Canada coming up now?

[00:07:37] Liza: For me it’s because I haven’t found anything here.

[00:07:40] Liza: Like for me, like financially, like in terms of work, it just seems really hard for me to find traction here.

[00:07:45] Ramit: Mm-hmm.

[00:07:46] Liza: But I feel like well at least there, if I go work minimum wage, I’ll make more. Now does it mean that I’ll, I’ll have more buying power? I don’t know, but it just feels really crappy for me to be here and be, you know, if I get offered $7 [00:08:00] an hour, I’m like, dear, see Lake.

[00:08:02] Liza: That seems really sad, so.

[00:08:03] Ramit: Mm. It’s interesting the words you used a lot of feels,

[00:08:08] Liza: yeah.

[00:08:08] Ramit: And seems, mm-hmm. It feels sad. I could be making more in Canada minimum wage. It seems like I should be making more. What do you make of that?

[00:08:18] Liza: Maybe there’s no numbers to back it up. I’m going by a feeling.

[00:08:23] Ramit: Do you do that a lot?

[00:08:24] Liza: Probably. He is the mask guy. He is the calculus teacher. I more go by how I feel.

[00:08:30] Ramit: And, um, what about for you, Bradford? Why now? Why is this discussion about going back to Canada, coming up?

[00:08:35] Bradford: It is a sad prospect to feel like she’s in her best money making years and she’s being offered jobs that pay very little.

[00:08:42] Bradford: It probably doesn’t help when, you know, like she, she sees like, like she said, I do well, I make a mix of pesos and US dollars. Um, I also get, uh, Canadian dollars. We run a company as well. Uh, and so we get Canadian from that. I think the other thing though, to add to it that wasn’t mentioned is just, uh, [00:09:00] probably our parents, uh, you know, like they are, our fathers are both 70.

[00:09:04] Bradford: Uh, my mother’s had some health issues last year and so what we’re trying to figure out is like. Do we need to go back to be closer so that we could see them more? And so I think like that’s, that’s sort of the debate that I think we often talk about as well.

[00:09:17] Ramit: Got it, got it, got it. Okay. When you talk about moving back, first of all, how often do you talk about it?

[00:09:24] Liza: For me? Daily.

[00:09:25] Bradford: I was gonna say,

[00:09:26] Ramit: so like how did the conversations go? Can you just walk me through one of, let’s do yesterday’s.

[00:09:30] Bradford: How about today? An hour ago

[00:09:32] Liza: I got called back for this job, the pay is $1,200. That’s why it was fresh in my mind and I said, I’m gonna have to go back and even if I have to leave you here, I will go.

[00:09:42] Liza: And then you can come later with the kids when the school year ends. So when you finish your contract or whatever, but I may just have to leave.

[00:09:48] Ramit: It sounds like it’s coming up very quickly. Am I reading that correctly?

[00:09:52] Liza: Yeah, for sure.

[00:09:53] Ramit: Bradford, what is your response to that?

[00:09:55] Bradford: Oh, my response, like today was literally, oh.

[00:09:59] Bradford: Can we just not [00:10:00] talk about that today? I think that was my exact words. Honestly, I’m scared about the idea of her leaving for a month, two months, three months, whatever it ends up being. Uh, taking probably our youngest. ’cause I can’t imagine that our three-year-old would do well just here with me and the older two.

[00:10:14] Bradford: I don’t do well away from Lisa. I like, I’m always like, oh, let’s go together. And she’s like, oh, just go on your own. So that really scares me, the idea of her needing to go back. But I, I also understand she’s, you know, she doesn’t feel like she’s contributing to her life, let alone our life, I think sometimes here.

[00:10:32] Bradford: And so I’m try, I, I’m sympathetic.

[00:10:34] Ramit: What is the role that each of you is playing in these conversations?

[00:10:37] Liza: I push and he retreats maybe?

[00:10:40] Bradford: Yeah.

[00:10:40] Ramit: Mm-hmm.

[00:10:41] Bradford: Yeah, I think she’s right. I am very happy here. Um, but I am not oblivious to the fact that she’s not as happy as I am here.

[00:10:48] Ramit: And is this how the conversations go each time?

[00:10:50] Liza: Most of the time.

[00:10:51] Ramit: And they’ve been going on for a long time.

[00:10:53] Liza: Probably five years least until I felt like it was no longer, oh, we’re here for fun.

[00:10:57] Bradford: I’m feeling a little bit like a jerk right now because I think, I think it [00:11:00] probably has usually been her saying, maybe we should go back. And I’m usually saying, maybe we should stay.

[00:11:04] Bradford: I don’t know if it’s ever been the other way around.

[00:11:06] Ramit: Each of you has your position in the boxing ring. You’re each at an opposite corner. You’re, it’s almost like, you know, maybe tug of war is a better metaphor. You’re each pulling, no one is giving anything, and over time it’s just become calcified. Each of you is in your position, you’ve dug your heels into the sand.

[00:11:24] Ramit: How have you approached it? ’cause as recently as this morning, Lisa, you said like, I’m going, maybe I need to go back. You can come back later. That’s one approach. How else have you approached navigating this huge life decision?

[00:11:38] Liza: So there’s the odd comments like this morning where I mentioned it in passing.

[00:11:40] Liza: Um, then there’s the times where I’m like, no, we need to make a decision. And so we set us up time. For example, we did that in July. I got my mom to stay with the kids. We went away overnight. Um, we sat down, we discussed it, and we made a plan sort of, and the plan was, yeah, we’ll stay here. For me it was one to three years for [00:12:00] Brads, two to three years is the reality that we decided as we transition out and then we will go back.

[00:12:04] Liza: That was the decision that we took the time to do. But then we came back here and immediately the breath’s always like, oh, maybe we could stay longer. Maybe we could take six months, maybe another year, maybe. You know? And so for me it just feels a little bit exhausting. ’cause even when we take the time to plan to like, yes, we’re gonna sit down and decide this, then there’s flip flopping back and forth.

[00:12:26] Ramit: I see. That’s interesting. Thank you for letting me know that. First of all, great work on. Taking time away and really giving yourself the time and space to make a big decision. That’s awesome. I’m a little confused. As it sounds like you both agreed it would be two to three years and then you would go back, right?

[00:12:43] Liza: I said one to two. He said two to three.

[00:12:45] Bradford: So we kind of settled on two.

[00:12:46] Ramit: You settled on two. Okay, great. So you come back and then what is this thing about an extra six months? What is that?

[00:12:52] Liza: It’s just that Bradford is Austin, uh, saying, well, we could stay forever. Well, we could buy an apartment here. Well, so it sealed like, even though we [00:13:00] set aside the time to make a decision and technically we decided.

[00:13:02] Ramit: Mm-hmm.

[00:13:03] Liza: Just like in the off commons when I’m always saying we should leave now, or you know, I’m gonna leave and you stay here. Um, in the same manner. He’s like putting in little comments of like, well, maybe we could stay longer or maybe we should buy an apartment here. Maybe.

[00:13:16] Ramit: Why do you do that, Bradford?

[00:13:17] Bradford: I don’t think I realized I did. Um, I actually feel kind of the exact opposite in the sense of like, I’ve already told my boss like I’m done in two years. So in my mind, like it is two years and, and as much as like. I think maybe I do make those comments. I think I’m also feeling them coming the other direction where it’s like, well, I’ll leave next month ’cause there might be a job.

[00:13:39] Bradford: And, and for me, like, I think that’s why then I retreat. Like I don’t, I don’t wanna entertain that. We said two years, let’s just do two years. Maybe. I didn’t realize that I was doing, making those comments that often.

[00:13:49] Ramit: Can I, can I interrupt? I feel like we’re all in a big rush to get to the end here. Does anybody else feel that energy, Lisa?

[00:13:57] Liza: No, I don’t. But I

[00:13:58] Ramit: You’re, you’re raising your [00:14:00] hand.

[00:14:00] Liza: Part of the reason I interject comments that are more rush is because my financial situation kind of changed recently. Like I had a lot, I had two diff two contracts that were big, that were recurring and they both dried up pretty permanently, let’s say for now than I feel like, kind of like this desperation of like, oh, I need to go find something else because we can’t afford to live without us both working, I think.

[00:14:24] Ramit: Is that true? No.

[00:14:26] Bradford: No, we, we, we have lived before with just me working. It’s certainly not as glamorous or, you know, I’m a lot more tired, but I’m very entrepreneurial. So even though I do have a teaching job, I have always had something else that I’m doing. And whenever we need money, for whatever reason, I find more money.

[00:14:43] Ramit: Mm-hmm.

[00:14:44] Bradford: But to, to answer the original question, we can live if just I’m working, but it’s, it’s certainly not as nice.

[00:14:50] Ramit: Do you agree with that, Lisa?

[00:14:51] Liza: No, I don’t think so. ’cause we wrote down the numbers, it comes out to a number and what you make is maybe two thirds, maybe half, depending on what it is. So it [00:15:00] means no going out, no investing.

[00:15:02] Liza: No. So that’s not really living, like we’re just existing and paying just our rent on our gas. Like

[00:15:07] Ramit: that’s a very interesting difference in the way that you both look at money.

[00:15:12] Liza: Yeah. And never would’ve that.

[00:15:15] Ramit: Can you think of a time in the last six months when you were not on the same page with money?

[00:15:20] Bradford: The money itself, I feel like were on the same page, but the stuff surrounding it, like.

[00:15:25] Bradford: Not always.

[00:15:26] Ramit: Well what is an example of this stuff? Surrounding it?

[00:15:29] Liza: Like the way to get somewhere for example?

[00:15:31] Bradford: Yeah.

[00:15:31] Liza: If we lose an income, I hunker down and survive. I cut things down and Bradford is like, no, I’ll go and I’ll work 10 more hours a week. And I’m like, you don’t have 10 hours a week. But I would agree with him like it’s not like we have money fights where we argue about it.

[00:15:44] Liza: Like the day-to-day spending and earning is similar and we’re very supportive in the way we do that. But I think the stuff surrounding is the way we would go about things. I feel like together as a team, we are lacking in financial things. I guess it’s not about Bradford [00:16:00] versus Lisa fighting, it’s more like how do we move forward together?

[00:16:03] Ramit: What do you think the answer is? How do you move forward together?

[00:16:06] Liza: I don’t know.

[00:16:07] Ramit: Well you said you’re not fighting right?

[00:16:09] Liza: Well and maybe we don’t fight ’cause we retreat or we agree or too agreeable and we don’t actually like have the deeper conversations.

[00:16:15] Ramit: When you think of the word fight, what’s the visual that comes to mind?

[00:16:19] Liza: A little bit of yelling, deliberate disagreement. Maybe some tears on my part. Frustration on his part.

[00:16:26] Ramit: In my head, I’m thinking people yelling, doors slamming. Mm-hmm. Somebody sleeping on the couch, like that’s the visual I have of a fight. But the fact is that is not always how fights happen. Fights can happen by simply avoiding the conversation.

[00:16:45] Ramit: Well, that’s true. Or by simply becoming stuck for five and a half years, we just might not use the word fight. We might use the word strong disagreement or wedge in the relationship, but we shouldn’t let the image of a drop down, [00:17:00] scream, fight stop us from articulating if we’re having years long disagreements.

[00:17:05] Ramit: What do you think, Lisa?

[00:17:06] Liza: That makes sense. And that’s why I think that perhaps we, our fights or our disagreements are based on avoidance a little bit maybe.

[00:17:13] Ramit: What do you think, Bradford?

[00:17:14] Bradford: I think we fight around money, but not necessarily about money.

[00:17:18] Ramit: What’s the difference?

[00:17:19] Bradford: We’re not fighting about like, we don’t have enough money, or how are we gonna do it?

[00:17:23] Bradford: Or, you lost your job, or I lost mine. Or the fight is more like, okay, well if we wanna do that, then what are we gonna do? And I just buckle down and do it. I just like go and find another job or another contract or something. And, and Lisa kind of is upset that I’m killing myself.

[00:17:42] Liza: Although it might be related to what you asked about me feeling like money will work out, because the reality is, were you married for a long time?

[00:17:49] Liza: And he does, he figures it out. So I, I don’t have to worry about it because in some way or another he does.

[00:17:54] Ramit: So can I just ask a provocative, obvious question? Mm-hmm. Like, why don’t you just [00:18:00] let it work out, Lisa, if you’re worried, why don’t you just let him work extra and then what’s the problem?

[00:18:06] Liza: I just feel bad.

[00:18:07] Liza: We’re very good at paying off debt. We’re very bad at saving. That’s actually something I say a lot. And so what that means is that we don’t have debt because that’s what we always put our time, effort, and everything into. But when there’s, in seasons like that, usually Bradford works way too much and he really does kill himself sometimes.

[00:18:27] Liza: He is like, had like so much stress that he has, like physical issues and all that. I don’t want him to live like that. And I, I also feel a little bit of pride, uh, like pride in like contributing. And as we said earlier, I disagree. I don’t think we can afford to live a good life if I’m not also working.

[00:18:44] Ramit: So far, we’ve been talking for a few minutes.

[00:18:46] Ramit: If you had to zoom out and assess what you have heard from yourself, what word or words would you use to describe [00:19:00] the way that you’ve communicated the situation?

[00:19:02] Bradford: Maybe in. Defensive like I’m feeling, I’m feeling defensive, at least like, like I need to defend what I’m saying or what is being said when you two are speaking or,

[00:19:13] Ramit: all right.

[00:19:13] Ramit: Defensive. Lisa,

[00:19:15] Liza: maybe. Erratic.

[00:19:16] Ramit: Erratic.

[00:19:17] Liza: That might be partly because like I have a DH, D, and so I’m all over the place a lot. I just feel like I’m always the one that’s kind of changing the plan and partly because perhaps the reason I think, oh, if I go to Canada is better ’cause I want to find the next shiny new thing that I can tap into or the new situation I can get into.

[00:19:35] Ramit: I do feel a bit of chaos. There’s a lot of things swirling around. I’ll give you a couple of examples. We don’t fight about money. We fight around money. Mm-hmm. Like what? I don’t quite understand that.

[00:19:51] Liza: Yeah.

[00:19:51] Ramit: But then in your application you wrote quote, we argue constantly about when to return and how we [00:20:00] keep delaying because we don’t know how to set up a plan to help us succeed.

[00:20:03] Ramit: Yeah. So

[00:20:04] Liza: yeah,

[00:20:05] Ramit: I’m kind of like what’s happening right now.

[00:20:08] Liza: I mean, I think that’s actually is very similar to what Bradford said because we’re not fighting about the actual money. It’s a situation like, it’s like what is the plan?

[00:20:17] Ramit: Then can I ask you like, why did you, why did you come to see me?

[00:20:20] Liza: Because I think you can help people go deeper in terms of the reason why they can’t plan around money.

[00:20:26] Liza: You always say it’s not necessarily about the money or the budget as much as the psychology or the the reason behind it. And so I feel like the deeper issue is not so much the budget, it’s how do we get to these decisions that we agree on

[00:20:41] Ramit: right away? Something is puzzling me about Lisa. Do you notice that she’s talking fast?

[00:20:47] Ramit: She’s got this frantic energy. There’s a lot of overexplaining and I picked up on something else just listening. This constant equivocation, a lot of, well, there’s this, but there’s [00:21:00] also that caveats everywhere. I ask a simple yes or no question, neither of them can answer it. If I am feeling this confused, just listening to them for a few minutes, imagine how hard it must be for them.

[00:21:15] Ramit: I feel a lot of compassion for them because when you are stuck in a situation that is complex, a lot of times we become so muddled that we can’t even see the situation clearly. All of us probably have a friend who’s been in a bad relationship and they just go back and forth and circle around, and to you it might be really obvious what to do, but to them, they are stuck.

[00:21:38] Ramit: Now, they told me they don’t fight about money, but they fight around money. Honestly, that’s not an acceptable answer. It’s too confusing. Someone who understands their money can give me clear, simple answers. Someone who doesn’t understand their money situation uses a lot of random words to dance around the topic.

[00:21:59] Ramit: Now the question is, [00:22:00] are they open to simplifying? And we’re gonna find out right after this, what’s the area of life that you want to spend more on this year? A lot of people will say, health. Relationships. Some people will say, travel. Let’s talk about food and health for just a second. For example, in my life, my wife and I both decided we’re gonna spend more on health, and that means having a personal trainer.

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[00:25:17] Ramit: All opinions are my own and not a guarantee of a similar outcome.

[00:25:21] Bradford: So when you disagree about or around money, it’s about

[00:25:25] Ramit: primarily going back to Canada, is that right?

[00:25:28] Liza: How to earn money and how to, like for example, if I can’t make money or if I’m offered very little money, Brad was like, oh, don’t worry about it.

[00:25:36] Liza: I will just work an extra three hours ’cause I get paid X amount. And so it would take you away longer to make it and I appreciate that, but I dunno, it’s not always like. Fair. I guess, in my opinion,

[00:25:47] Ramit: keep going.

[00:25:48] Liza: I just feel bad that it always has to happen that way, or it often does. So if I have potential to have a career somewhere else or to do better elsewhere, then does that matter?

[00:25:58] Liza: I don’t know, [00:26:00] because just because it can make more money doesn’t mean that what I want in my career or if I want a different job, that it doesn’t matter. You know what I mean? Sorry.

[00:26:12] Ramit: It’s okay. These are pretty big questions.

[00:26:15] Liza: Yeah.

[00:26:16] Ramit: You mentioned the word contributing earlier. I wanna feel like I’m contributing.

[00:26:20] Liza: Yeah.

[00:26:21] Ramit: How much does that play in here?

[00:26:22] Liza: A lot.

[00:26:24] Ramit: Hmm.

[00:26:24] Liza: Like for me, it’s not about percentage and I’m, I’m grateful that I’m not like other people that do 50 50 all the time because. He does one more than me. So I, I am grateful I don’t have that burden, but I also prefer contributing. I like to contribute because a lot of times I’m like, well, we don’t have the money, so I’ll, I won’t do X or Y or I won’t buy this, or, but if I’m contributing, I’m like, you know what?

[00:26:44] Liza: Whatever I worked, we don’t have any issues. I have extra income. I’ll go buy this thing where I’ll do this experience for myself, which when I’m not contributing, I don’t feel like I, I do it.

[00:26:55] Ramit: It’s kind of a tough box. You’ve put yourself into the idea that I, [00:27:00] Lisa, want to contribute financially. Not that I need to make 50 50, but I wanna contribute meaningfully.

[00:27:06] Ramit: When I tell Bradford I wanna do that, he tells me, yeah, you should do it or get a job, but you also don’t have to. I’ll work more, but I feel bad when he does that. So I want to contribute, so then I go and look for jobs, and when I get an offer, I feel bad because it’s not as much as I. Maybe could make in Canada.

[00:27:30] Ramit: So now I feel bad and now I’m contributing. Oh. And if I made my own money, then I would feel more comfortable spending it on myself. But because I don’t, I can’t. So I feel bad.

[00:27:43] Liza: Yeah.

[00:27:44] Ramit: What do you notice about that whole cycle?

[00:27:45] Liza: I put myself on the box and I create the issue.

[00:27:48] Ramit: You put yourself in a box and it’s almost like you, you’re like squeezing it shut with each way that you think about it.

[00:27:56] Ramit: It’s just like you’re tightening the knot. The knot is like [00:28:00] self-created. Mm-hmm. Like we could walk out of this jail cell of self-creation overnight, but you have created a way of thinking about it that each time you think about money and earning, it actually tightens the sell. How does that strike you?

[00:28:15] Liza: I kind of agree, and I kind of disagree

[00:28:20] Ramit: when I said it out loud. It sounded like every layer is designed to keep me, Lisa Small.

[00:28:30] Liza: Yeah.

[00:28:31] Ramit: And the more I went around it almost seemed like more and more panicked. What’s your take on that? Do you agree? Yeah. It’s okay if you disagree.

[00:28:38] Liza: I would not put that burden on myself as much if Bradford made way more money.

[00:28:42] Liza: And so that’s where that comes in, is more that I see the need and I wanna step in and help.

[00:28:48] Ramit: That’s fair. I hear you loud and clear on that. I, I appreciate you saying that. Uh, you also mentioned in your application, Lisa, that you and Bradford are quote, stuck in a [00:29:00] cycle of getting in and out of debt.

[00:29:03] Liza: Yeah.

[00:29:03] Ramit: Tell me a little bit about what kind of debt and why you found yourself in and out of it.

[00:29:08] Liza: So it started, same with student loans. We paid off 120,000 I think, in student loans with interest in five years.

[00:29:16] Ramit: Wow.

[00:29:16] Liza: Um, so it was like hunker down, pay everything, put everything into it, and we did it. That gave us the freedom to come to Columbia.

[00:29:23] Liza: ’cause before that we didn’t wanna come here and have a payment back home that we had to make. So that was that. And over the years, whenever there’s been need, instead of being like, well let’s have an emergency saving, as every money person talks about, we have open lines of credit in our mind. It makes more sense to invest the extra money we have lying around.

[00:29:46] Liza: And then if we run into a tight situation, we use a line of credit ’cause it’s got a low, like a 4% in like, um, interest or something. And then we pay it off. You know, there’s been times when it happened, like we moved with to a furnished place here when we [00:30:00] furnished our apartment from scratch and we bought a car at the same time.

[00:30:04] Liza: It was a big bunch of money that had to come out at once. We put in lines of credit and all that, and then we’re like swinging back to, okay, repayment mode. Do

[00:30:11] Ramit: you like being in debt?

[00:30:12] Liza: No. That’s why we run away from it and we try to pay it off as soon as we can.

[00:30:16] Ramit: How many lines of credit do you have today?

[00:30:18] Liza: We have two.

[00:30:19] Ramit: Okay. You wanna ask me how many lines of credit I have?

[00:30:22] Liza: How many lines of credit do you have for me?

[00:30:23] Ramit: Zero.

[00:30:25] Liza: Well,

[00:30:25] Ramit: why is it that somebody who has more money has zero lines of credit versus somebody who doesn’t and actually has struggled in and out of debt and says they don’t like debt? Has two lines of credit.

[00:30:37] Liza: You don’t see the need to go into debt because you have planned for it, though.

[00:30:42] Ramit: That is partially true in the same way that you don’t see the need to drink poison for an after dinner drink. It’s not that I don’t see the need to, I am actively against it.

[00:30:56] Liza: Yeah.

[00:30:57] Ramit: How do you feel about that?

[00:30:58] Liza: No, I agree with you.

[00:30:59] Liza: I think it’s [00:31:00] better not to get into debt. I really do. Huh. But when the need arises, I don’t know where it else to go. So we have it, but then we pay it off quick. So that’s, that’s where the, the mental gymnastics comes when it’s like, well, it’s fine because

[00:31:12] Ramit: yeah, I feel like I’m in like a gymnastics class right now.

[00:31:14] Ramit: We borrow

[00:31:14] Liza: debt. We,

[00:31:15] Ramit: I don’t want debt. We debt, I hate debt, but if it comes up, we have it, but then we pay it off quickly

[00:31:20] Liza: when you don’t have enough to invest for retirement and to all that, I would rather put any extra penny we have, which we do have sometimes into, uh, whatever index stocks or anything that’s gonna help us long term.

[00:31:33] Liza: Mm-hmm. Rather than have $20,000 in a bank account that just sits there with minimum pay savings in case we ever need it. In the past, it seems like we were taking it from the line of credit and then we would pay it off within a few months. And so it doesn’t seem like it’s necessary because we don’t have infinite amount of money.

[00:31:50] Liza: I dunno. Do you disagree, Brad? I don’t know. You’ve been quiet for a while, so

[00:31:53] Bradford: I dunno. As someone that understands math really well that like. You know, investing that money at [00:32:00] 10% in index stocks and then later if we need to like say buy a car getting dinged at 4% for three months while we pay off the car, that is ultimately better.

[00:32:12] Bradford: Or the other thing we’ve done sometimes is pull money out of those index stocks. Um, that’s probably more rare because we are, I don’t know, we’re, we’re, we are, like she said, we’re good at paying off debt. And so I think that, like, understanding those numbers, for me it makes sense to do it that way, you know, to guarantee that no matter what, we’re putting a thousand dollars a month into index stocks.

[00:32:34] Bradford: Um, and if that means that we don’t have quite enough to buy a car next month, then we’ll pay that off for two months at 4%.

[00:32:42] Ramit: Or for Lisa to feel like she’s in a prison of her own creation because she’s not contributing enough financially, therefore bringing her to tears. Is anybody missing this?

[00:32:58] Liza: No. I

[00:32:58] Bradford: see.

[00:32:58] Bradford: No, no. I’m, [00:33:00] I’m, I’m definitely not.

[00:33:01] Ramit: I mean, you’re talking to a guy who loves investing. I love it. I, I want automatic investing, but I don’t want to see somebody in a relationship cry and, and talk about money in a negative way every single day for five and a half years. There’s a mismatch that’s not a rich life, that’s just being blind and blindly putting your money into something without actually understanding why.

[00:33:23] Ramit: How’s that strike you, Lisa.

[00:33:25] Liza: I agree. And I think part of the reason we invest so much is because, literally, this is funny ’cause Brad Farley says, I don’t wanna work forever ’cause I work so hard. So we do have to make sure we put some money aside so for the future. Otherwise we’re literally not either never gonna retire or we’re not gonna be able to live.

[00:33:40] Liza: And it seems like the goal right now is at least investing because we’re running outta time.

[00:33:44] Ramit: Y’all have a very good reason for everything.

[00:33:47] Liza: Yeah.

[00:33:47] Ramit: But is it working? Yes or no? But

[00:33:49] Bradford: think for me it is working. If I isolate myself. If I, wait, wait,

[00:33:55] Ramit: hold on. If I isolate myself, not include my wife and my three [00:34:00] kids, it’s great.

[00:34:01] Ramit: Yes. I love it. There’s just, uh, 1, 2, 3, 4, uh, problems with that.

[00:34:09] Bradford: Yeah.

[00:34:09] Ramit: Okay.

[00:34:09] Bradford: No, I, I, I, I agree. I completely agree. And, and I think that’s the emotional side is not working. Obviously for Lisa, the numbers work, but that doesn’t mean the, maybe the emotional state is working.

[00:34:22] Ramit: I don’t, I don’t even know if the numbers work.

[00:34:24] Ramit: ’cause Lisa herself said, we don’t have enough to live the kind of life we want if just Bradford is earning. So it’s unclear to me if even the numbers work, Lisa, is it working?

[00:34:35] Liza: It feels like it’s just an income issue for us, I think. ’cause we’re, you

[00:34:37] Ramit: know, just make more and everything will be okay.

[00:34:39] Liza: That’s how I see it, I think.

[00:34:41] Ramit: Okay. You could be right. You could be right. Yeah. If that is the case, why not just take that job in Columbia, 1200 bucks a month. Problem solved.

[00:34:51] Liza: Yeah. Well. Yeah, that might be what we have to do.

[00:34:55] Ramit: Is that not it?

[00:34:56] Liza: Uh, probably not because there’s also the deeper issue. Like I [00:35:00] feel crappy as a, an adult making so little money considering what I know mm-hmm.

[00:35:06] Liza: That I could be making elsewhere.

[00:35:08] Ramit: It is interesting that, in asking both of you, is it working or not? I did not get a clear answer from either of you. To me, that speaks to how muddled all of this is. It’s actually not, like, think about it, it’s not clear if you’re gonna go back to Canada. It’s not clear when it’s not clear if you need to make more money or not.

[00:35:29] Ramit: None of this is clear. No wonder it’s so frustrating. I would probably be crying myself if I were in this situation. Yeah. What I would like to encourage you to do is to not accept this muddled way of thinking for your life. It’s actually not okay to go through life feeling super muddled and doing the thing where each.

[00:35:52] Ramit: A big question in life is like, well, yeah, it’s actually good, but no, it’s actually not. And then like playing both sides of the equation. Like [00:36:00] you’re actually supposed to pick the thing that is best for you, and that might mean making the wrong decision. Sometimes. Who cares? That might mean closing certain doors.

[00:36:09] Ramit: Who cares? As long as you both make the decision that is right for the two of you, you can always correct it later down the line, but you have to be willing to actually call the ball, Hey, this is not working, or this is working. Actually we don’t make enough, or we do make enough. But it has to be crystal clear.

[00:36:26] Ramit: And if I were you, I would encourage you to get a little bit more impatient with the ambiguity of the whole situation.

[00:36:33] Liza: Yeah, that’s true.

[00:36:34] Ramit: In order for us to bring this down to being a little bit more concrete, I’d like to take a look at the numbers. So you both completed the conscious spending plan. What was that process like for both of you?

[00:36:47] Bradford: Emotional.

[00:36:48] Ramit: Oh. Emotional.

[00:36:50] Liza: I was frustrated.

[00:36:51] Ramit: Oh, tell me more.

[00:36:53] Liza: I was frustrated by Brad Bradford because he was getting stuck on some numbers and I was [00:37:00] trying to get the math right in certain ways.

[00:37:03] Bradford: Yeah, it was emotional because I guess, yeah, like there was some arguments there and, and frustrating because our income is so variable.

[00:37:11] Ramit: That’s kind of interesting, even putting down numbers, what should be black and white, both of you described it as emotional and like, if we can’t fill out a spreadsheet, how are we gonna decide if we’re gonna move back to Canada?

[00:37:26] Liza: No.

[00:37:27] Ramit: It reminds me of couples that are planning their wedding and, you know, planning a wedding is the first complex project that most couples go through.

[00:37:38] Ramit: And I remember when we got engaged, I went out and asked a lot of friends, married friends for their advice, and, uh, my brother-in-law, he said. This is gonna be the best year of your life. Like you’re gonna have an awesome time planning the wedding. You’re gonna get to know each other. You’re gonna just have an amazing time.

[00:37:56] Ramit: I loved my brother-in-law’s response because [00:38:00] we chose to make it an awesome year, and that microcosm of planning this complex part of life, it really shows how two people handle complexity and ambiguity and certain numbers. So the CSP to me is like, it’s like a diagnostic tool and I think it’s quite illustrative of how the two of you approached it.

[00:38:24] Ramit: Alright, let’s take a look at the numbers. Lisa, can you read off the word in bold and the number in full next to it for this entire box, please?

[00:38:32] Liza: Sure. Assets, $120,000. Investments 153,670. Savings 1500. Debt. 1300 total net worth. 273,870.

[00:38:48] Ramit: Alright. What do you think about those numbers?

[00:38:50] Liza: It’s higher than I anticipated they would be.

[00:38:53] Ramit: What’d you think it would be?

[00:38:54] Liza: I thought all we had to, our name was our $20,000 carve.

[00:38:57] Ramit: What the, you thought you, you’re, hold on.[00:39:00]

[00:39:02] Ramit: God, I love my job. What the, you thought your assets were $20,000 and it, and then you looked between the couch cushions and you discovered it’s actually $120,000. Is that what you’re telling me?

[00:39:15] Liza: I guess so, yeah.

[00:39:17] Ramit: Alright. That’s pretty cool. Oh, just a random question. Um, Lisa, when you discovered that your assets were 1, 2, 3, 4, 5, 6 times higher than you thought, did it make you feel any better about money?

[00:39:29] Ramit: Yes or no, please.

[00:39:30] Liza: Yes. Really? Yeah, it actually did because, because I felt less behind on, let’s say investing, for example.

[00:39:39] Ramit: Okay, let’s keep going on this then. So you felt better. Like, we don’t have to invest every last dollar. Okay, great. Did you stop the monthly investments that you’re making?

[00:39:47] Liza: No, I did.

[00:39:49] Ramit: Did you close the lines of credit that you have?

[00:39:51] Liza: No. No. It’s a backup plan. So,

[00:39:54] Ramit: uh, and then what about you, Bradford? What do you think about these numbers?

[00:39:57] Bradford: They’re about what I thought they would be, but I also felt like I [00:40:00] didn’t have a lot of faith in them.

[00:40:02] Ramit: Why?

[00:40:03] Bradford: Because so, so much of our money, whether it be the income or whether it be the investments, feels insecure.

[00:40:14] Ramit: Huh? What, what’s insecure about investments?

[00:40:18] Bradford: The ones that are in Canada? Um, I feel like those are fairly secure.

[00:40:24] Ramit: Okay.

[00:40:24] Bradford: And when it comes to my money that’s here in Columbia, um, I mean. I literally have friends, they can’t get their retirement ’cause the government has just seized it.

[00:40:33] Ramit: Really?

[00:40:33] Bradford: So real.

[00:40:35] Ramit: Whoa. Can you pull it out?

[00:40:36] Bradford: Not until I retire.

[00:40:38] Ramit: Oh, it’s locked up there. So, okay.

[00:40:39] Bradford: It’s locked until I retire.

[00:40:41] Ramit: Gotcha.

[00:40:41] Bradford: And then who knows if it’s there ’cause of the, the people in power right now.

[00:40:46] Ramit: Damn. Alright. That’s pretty interesting. I did not know that.

[00:40:49] Liza: Another reason to go back to Canada. No, I’m kidding.

[00:40:53] Ramit: No, I think that’s valid. If, if you feel insecure that the money you are putting in meticulously every single month is [00:41:00] like actually at risk, like a 50 50 shot, you can even actually ever get it, then that is a very valid part of your decision making to go back to Canada.

[00:41:10] Ramit: Okay, let’s keep going down these numbers. I would like to look at the income and this time I’d like to ask Bradford, your gross combined monthly income, what is that number?

[00:41:21] Bradford: Uh, 10,066.

[00:41:23] Ramit: That’s the two of you. So that means that collectively your household income is $120,792. By a show of hands, who here knew that number neither hand is going up.

[00:41:35] Ramit: Thank you very much.

[00:41:36] Bradford: No.

[00:41:37] Ramit: Keeping my average it’s at 50%, but I have had a couple of random couples recently who both of them knew it, so thank you. Now please tell us, just for fun, how did you not know your own household income?

[00:41:50] Bradford: My salary here in Columbia is literally different every single month. And when I try to ask the why try to pass the accountant, why none of them can tell me.

[00:41:59] Ramit: This [00:42:00] is like a classic like different country thing where you go to a different country and you’re just like, how can you not answer this simple question? And they just go like. They just don’t have an answer for you. Literally. I’ve had this stuff happen in India too.

[00:42:13] Bradford: That’s exactly what’s going on.

[00:42:15] Liza: And for me, it’d be easy if I could be like, okay, I make this much times 12, let’s, but I can’t, ’cause like I said, someone once I make a lot and some I, some once I don’t.

[00:42:23] Liza: So it was really hard to figure out.

[00:42:24] Ramit: But we’re in the ballpark. Would you agree?

[00:42:27] Bradford: Yeah. Like, like for instance, if we change the question, do we know that? Like that’s roughly what it is. I would say yes. Like I, I know that we roughly make 10 grand a month.

[00:42:35] Ramit: Did you know that Lisa?

[00:42:37] Liza: No. And for me that number’s hard.

[00:42:40] Liza: ’cause I can look back and see that, but like I said, two of my clients have dried up right now, so I don’t know what’s gonna happen. Like, can I say, okay for the future I’m gonna calculate this much a month. I don’t think I can because I don’t know.

[00:42:53] Ramit: So can I ask you your, what is your approach to that? If I were to say, Lisa, how much are you gonna make in the next 12 months?

[00:42:59] Ramit: What would your answer [00:43:00] be?

[00:43:01] Liza: I don’t know if I can make that same amount of money next year.

[00:43:04] Ramit: Maybe you can’t. Could you make a thousand dollars a month?

[00:43:08] Liza: If I take that $1,000 job, I could make a thousand dollars. So let’s say yes.

[00:43:12] Ramit: Great. Could you make $2,000 a month?

[00:43:15] Liza: Yes, I can probably on average make $2,000 a month.

[00:43:19] Liza: Yeah.

[00:43:19] Ramit: Great. Let’s keep going. Could you make $3,000 a month?

[00:43:23] Liza: I don’t feel secure in saying yes to that.

[00:43:26] Ramit: Okay, good. Fair enough. I appreciate the honesty. So 2000 a month, that’s the number?

[00:43:30] Liza: Sure. Yeah.

[00:43:31] Ramit: Okay. I’m gonna go out on a limb and guess you have never gone through the exercise we just did of how much can I safely, conservatively make for the next year.

[00:43:46] Ramit: True or false?

[00:43:47] Liza: I would say false. I did it once. After listening to you Uhhuh, we projected a budget and we decided that to live the kind of life that we wanted, I had to make $40,000 a year.

[00:43:58] Ramit: Okay.

[00:43:58] Liza: And so [00:44:00] that maybe gave me a little bit of a kick in the pants, be like, okay, I gotta make sure I meet that target.

[00:44:04] Liza: And I think I met it. I don’t know for sure if I did in the last year, but.

[00:44:08] Ramit: You beat it, you made 50,000.

[00:44:10] Liza: Okay, well there you go. But that’s about the only time I would say I’ve done that. ’cause I, I’m more reactive than, that’s why I need help with planning.

[00:44:18] Ramit: You talk to your therapist about this?

[00:44:20] Liza: No.

[00:44:21] Ramit: Why?

[00:44:22] Liza: Like, I don’t have, I don’t have a therapist that I meet with regularly right now.

[00:44:25] Liza: Once in a while they help me with executive functioning. Um, just like, you know, tips and things like that.

[00:44:30] Ramit: Can I suggest that you do?

[00:44:31] Liza: Sure.

[00:44:32] Ramit: I think it would be really good. Okay. I think that part of planning can be helped with techniques and strategies.

[00:44:40] Liza: Okay.

[00:44:41] Ramit: That therapists are really, really good at. So I want to definitely suggest that to you and potentially both of you could go, but certainly individually would be really good.

[00:44:49] Liza: Sure.

[00:44:50] Ramit: One thing that I am pleasantly surprised is that you actually did plan out a number. The two of you sat down and talked about how much you need to make. And guess what? You nailed it. [00:45:00] Not only did you make 40,000, you made like 48,000. Very impressive. Hearing the way you talk about money, I can understand a little bit more about why it feels overwhelming, why also you might like feel like I gotta get to Canada.

[00:45:15] Ramit: Like this doesn’t feel good. From my perspective, it seems frantic and frenetic, but when I’m hearing you explain a little bit more, I’m starting to understand more. Okay. Of why you are feeling that way. Most people are very hesitant to put a number in the ground and commit to making it in the next year, especially beginning.

[00:45:41] Ramit: Entrepreneurs, first of all, they often look at things month to month. Like they’re not thinking about a year down the road. I’m sure it’s much easier and much more common for you to think about what happened last month.

[00:45:53] Liza: Yeah.

[00:45:53] Ramit: Than what’s gonna happen next year. Right?

[00:45:55] Liza: Yeah.

[00:45:55] Ramit: Okay. That’s common. The next thing, beginning entrepreneurs, they don’t really [00:46:00] know how to project.

[00:46:02] Ramit: And so they shy away from it. The feeling is if I say I’m gonna make 4,000 a month and I don’t, then I am a

[00:46:09] Liza: failure.

[00:46:10] Ramit: Failure. So therefore I don’t even want to say any number at all. How much of this resonates with you?

[00:46:17] Liza: A hundred percent, yes. Yeah, that’s cool.

[00:46:19] Ramit: Yes. This is very common, but the ironic thing is that when you actually did pick a number, you crushed it.

[00:46:26] Liza: Yeah, that’s true.

[00:46:27] Ramit: What do you make of that?

[00:46:28] Liza: I guess I’m not as pathetic as I thought.

[00:46:32] Ramit: I don’t know. I don’t think you’re pathetic. Bradford. Do you think she’s pathetic?

[00:46:36] Bradford: No.

[00:46:37] Ramit: Okay. Lisa, do you think you’re pathetic?

[00:46:39] Liza: Sometimes.

[00:46:40] Ramit: Okay. Well, two and a half of us on this call do not think you’re pathetic. I would really like it for it to be three.

[00:46:45] Liza: Okay.

[00:46:47] Ramit: I think we’re gonna get there. I think that every beginning entrepreneur struggles with the same thing you do right now, which is putting a stake in the ground and committing.

[00:46:54] Liza: Yeah.

[00:46:55] Ramit: I don’t think you actually even need to commit to making 4,000 a month. If you don’t feel [00:47:00] comfortable, but you feel comfortable saying 2000 a month and you know that you can hit that number, then we’ll make a life around 2000 a month.

[00:47:07] Ramit: How about that?

[00:47:09] Liza: Okay.

[00:47:09] Ramit: That’s the way that we proceed. I love that Lisa was willing to go there with me to really look at her income goals and to map out what her next year could look like. She’s clearly in a tough spot. Her business is slowing down and she and Bradford don’t have any real savings to lean on.

[00:47:25] Ramit: So when something comes up, they use their line of credit. Now we need to talk about a line of credit because a lot of you are way too casual with a line of credit. A line of credit lets you borrow money when you need it. Okay, that sounds kind of responsible, right? It’s like just in case money. But what blows my mind is how many people treat their line of credit like a piggy bank.

[00:47:48] Ramit: Hey everybody, I’m gonna use my line of credit to renovate my kitchen. I’m gonna use my line of credit to take a trip. Some people on this podcast have used a line of credit to buy a freaking [00:48:00] mattress. Now, I gotta tell you, my mind cannot comprehend using sophisticated financial instruments to add backsplash tiles to your kitchen.

[00:48:09] Ramit: And when I tell people I would never take out debt to pay for a luxury, they look at me with complete bewilderment. Well then how would we ever pay for it? Oh, I don’t know. How about saving money for it? Like you think I’m taking out debt to go to Disneyland? Who told you this is okay? And you can tell this makes people really mad.

[00:48:30] Ramit: The idea that maybe they should not use a freaking line of credit to buy. Bagels, which is one reason that they justify things like home renovations or mattresses as investments. Those are almost never investments. And you know, just as I know that we should not be using debt to pay for luxuries. You don’t need another financial product.

[00:48:52] Ramit: You certainly do not need to leverage debt. You wanna leverage something, leverage reading my book, build up savings, and then you earn the right [00:49:00] to be able to buy nice things. Lisa has created a mental and financial prison self for herself, and with every decision she tightens the lock just a little bit more.

[00:49:11] Ramit: She wants to feel valued, but then she looks at a $1,200 job offer in Columbia and compares it to what she could make at minimum wage in Canada at $15 an hour. And she thinks I’d be worth more at Tim Horton’s. You’re letting Tim Horton’s decide how you feel about yourself if I let other people. Tell me how I should feel about myself then.

[00:49:33] Ramit: Peter 5, 5, 3, 9. Calling me a libtard would ruin my day every morning. Listen, Peter can barely wash his own ass much less make intellectual distinctions about political philosophy. I’m gonna let him decide how I feel about myself in what world. This is what happens when you shrink your field of vision down so small that the only thing you can see is what companies are [00:50:00] willing to pay.

[00:50:00] Ramit: You guys an income does not determine your value. A rich life is so much bigger than that. Ironically, she wants to be valued in her relationship, but she keeps allowing herself to be shrunk down, and Bradford also is playing his part, perpetuating this dynamic. The question I have is, are they actually willing to redefine this dynamic?

[00:50:23] Ramit: We’re gonna find out right after this, one of my life philosophies. Is to fight for simplicity, and the more successful I’ve become, the more I lean into this, I don’t have 12 different credit cards to optimize points. I don’t work with brands who have tons of complicated requirements, and even in my own business, we have streamlined our systems.

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[00:51:27] Ramit: If I’d had a system like this back when I was building IWT, it would’ve changed everything. If your revenues are at least in the seven figures. Get our free business guide demystifying ai at netsuite.com/ramit. That’s netsuite.com/ramit. I know that some of us think better when we write our thoughts out, but for a lot of us, including me, I’m better when I can think out loud.

[00:51:54] Ramit: If that’s you, I recommend you check out Whisper Flow to save you tons of time to bring [00:52:00] your ideas to the page. Whisper flow turns your voice into clean final draft writing inside whatever app you’re already using. Email, slack docs, even text messages, and it works on Mac, windows, and iPhone. So instead of spending all of your time responding to messages, especially while sitting at a computer, you can hit a hotkey speak, and the text appears.

[00:52:21] Ramit: It’s accurate, it’s fast, it’s all formatted. So you can get back to work. Here’s what my friend said about it. Whisper is amazing because it learns the way you speak. So you can send this rambling note as a text message and it kills all the filler words and it perfectly formats it for you. They said it’s much better than using the Apple voice to text feature.

[00:52:39] Ramit: The spelling is way better. If you wanna buy your time back and get back to what matters, check out Whisper Flow. Try it for [email protected] slash ramit. That’s whisper flow.ai/ramit, W-I-S-P-R flow.ai/ramit. Or click the link in the [00:53:00] description below. Okay, so $120,000. Isn’t that a lot of money in Columbia?

[00:53:06] Ramit: It’s a lot, right?

[00:53:08] Bradford: Uh, yeah it is.

[00:53:09] Ramit: What the hell? All right, let’s take a look at the rest of the numbers. ’cause now I’m very curious. Fixed costs are at 59%. I have no issue. I don’t even need to go through it. Investments are at 13%. I certainly appreciate that. I can tell that investing is very important to you.

[00:53:28] Ramit: 13% of net, that’s a solid number. Very nice. Savings are at zero. Okay. I can also tell the savings is not important to you. It’s very clearly revealed right there on screen. And then finally, guilt-free spending 28%, $1,963 a month on guilt-free spending. Is that number accurate?

[00:53:51] Liza: That’s probably accurate, but remember we have three kids.

[00:53:53] Ramit: You don’t need to justify it.

[00:53:54] Liza: No, but what I mean is that’s where it’s going.

[00:53:56] Ramit: Oh, it’s all to the kids, not to us, just to the kids.

[00:53:59] Bradford: So I want, I [00:54:00] wanna, I wanna comment on that. ’cause actually, I think that’s important.

[00:54:02] Ramit: Tell me,

[00:54:02] Bradford: um, it, I think she’s right in the sense it goes to the kids and me. Lisa does not have guilt-free spending no matter what she spends it on, she feels guilty.

[00:54:10] Bradford: Like, I mean, her mom literally sent her money to go and take a class, like a, I don’t even know, two months ago. And she still hasn’t taken the class because she can. She doesn’t, she doesn’t want to spend that money on herself. You know, like I, I feel like I have to tell her, Lisa, go do it, or she won’t, she won’t spend that money.

[00:54:30] Ramit: What’s the voice that goes through your head, Lisa?

[00:54:32] Liza: I don’t know. Maybe I need to give myself more credit and more I don’t. More enjoyment out of our money.

[00:54:39] Ramit: What is something that you have not spent on that you might like to, but Because it’s for the family, it’s for the kids. The money goes to them instead.

[00:54:48] Liza: Maybe that class. Mm-hmm. Uh, it’s just like a public speaking, like a, like a Toastmaster class. Just, I like to do that. Um, I wanna go paragliding.

[00:54:57] Ramit: That’s pretty cool. I really would love for you to be [00:55:00] able to do that, even if not today. I would love for you to be able to know exactly when you can.

[00:55:05] Liza: Yeah.

[00:55:06] Ramit: I think there’s something really powerful about the idea of, this is part of my rich life and maybe I can do it today.

[00:55:15] Ramit: And I didn’t realize it. Or maybe I can’t afford to do it, but we’re gonna set up a plan and I’m gonna know exactly what month and year I’m gonna be able to, which is in a way so anticipatory. So I would love to be able to do that with you today.

[00:55:31] Bradford: Okay. Okay.

[00:55:32] Ramit: So we got the, the key numbers, which are 59% on fixed costs, lower than 60.

[00:55:38] Ramit: That’s very nice. 13% on investments, which is typically higher than most would see, but I think it’s solid, especially for having a higher income in Columbia that allows you to invest a little bit more. We have savings is zero, which explains why you have no savings, but also your mindset of lines of credit really explains [00:56:00] it.

[00:56:00] Ramit: And then finally, we have guilt-free spending, which is high for, for a couple that has nothing in savings, and actually for a couple that has three kids and only has $1,500 in savings. I find that to be unacceptable. Hm. I’m seeing nods from both of you. Bradford, what do you think?

[00:56:20] Bradford: I guess like every time that I’ve had savings, it just feels like it’s doing nothing.

[00:56:24] Ramit: You are, and I hate to say this math brained, and I say that because on this show we have a extreme lack of math that happens. Too many people talking about their feelings, which while valid, they need to add some freaking rudimentary math. In your case, you’re looking at the world, those lenses you have, they’re not just prescription lenses, they’re lenses that talk about yield and return.

[00:56:53] Ramit: And I like return. I like it, but I don’t like fighting about money. [00:57:00]

[00:57:00] Bradford: Mm-hmm.

[00:57:01] Ramit: I don’t like talking about it every single freaking day, and I don’t like the risk of having three kids and a wife and $1,500 in savings. Which would last you one week.

[00:57:14] Liza: Yeah.

[00:57:15] Bradford: Yeah.

[00:57:16] Ramit: You see yourself as a rational person who walks around and you’re gonna optimize returns no matter what.

[00:57:24] Ramit: And yet you have put your family along with Lisa in a position where you have $1,500 in savings, meaning you are one step away from having to go back into debt. A place that you have been many times.

[00:57:37] Bradford: I do see what you’re saying. And remember I told you that in Columbia I have, there’s money in two different places.

[00:57:43] Bradford: So the money that is invested in in stocks here is quite easy to pull out. Like within a few days max. Sometimes I can pull it out immediately. So I do think of that as saving.

[00:57:53] Ramit: Hey, my freaking investment portfolio is liquid. That doesn’t mean it’s savings,

[00:57:58] Bradford: okay?

[00:57:58] Ramit: It’s meant to be [00:58:00] compartmentalized. The minute we start making these things fluid is the minute everything becomes sloppy.

[00:58:07] Bradford: I guess like the money that’s in that save that, that, um, investment account. Yeah, because it’s a different one than the rest.

[00:58:13] Ramit: Yeah,

[00:58:14] Bradford: I do think of it as separate.

[00:58:15] Ramit: Why don’t you just create a savings account?

[00:58:17] Bradford: Because it gets way less yield

[00:58:19] Ramit: savings is not supposed to get yield,

[00:58:22] Bradford: but if it can,

[00:58:24] Ramit: lemme put it this way, you guys can keep doing things the way you’ve been doing it.

[00:58:28] Ramit: When I asked you is it working, you actually couldn’t give me a response. In my opinion, having about a mo a week’s worth of savings for a family of five is not working. In my opinion. Having, um, one partner who can’t go paragliding or, or, or anything for years is not working. The fact that you cannot agree on even how to make a decision about whether to move to a different country or not is not working and the savings is just a small piece of this.

[00:58:57] Ramit: The ability to [00:59:00] transcend your current identities and turn the page to a new chapter, both of you. If you can’t do that, then you’re gonna remain stuck. And today both of you have shown an amazing ability to give me reason, after reason after reason for something, and yet not get the outcomes you actually want.

[00:59:18] Liza: Yeah.

[00:59:19] Ramit: So perhaps it’s time to put those reasons aside and maybe see how people who have more money and are a little bit savvier with money handle their finances. What do you say?

[00:59:31] Liza: Yeah, I think that’s a good idea and I’m open to it.

[00:59:34] Ramit: Okay. The good news about the CSP is that you have money, you have a high income $120,000 in Medellin.

[00:59:44] Ramit: In my opinion, if I’m looking at this as an outsider, I’m like, wow, you’re living life. Nice. I don’t think you feel that way. I actually think that the narrative you have created is that we’re like barely getting by Lisa. True or false?

[00:59:57] Liza: Ah, yeah. It’s true.

[00:59:58] Ramit: And, and the fact is, if you made an extra [01:00:00] $50,000, you’d still feel exactly the same way.

[01:00:01] Ramit: Now I know I don’t have to tell you guys about appreciating things. I’m not even gonna get into that. But I do think there’s a narrative that we sometimes concretize with our money and it’s like, ah, like we, we can’t actually live the way we want to. What if we’re actually living an amazing life and we just haven’t realized it?

[01:00:18] Ramit: Alright, lemme take a look at this CSP here.

[01:00:21] Liza: Can I just interject for a second? Because I think when I was making that amount of money, I felt more like we could live freely and we could spend freely. If we cut that down to like, the $2,000, let’s say. That’s my target.

[01:00:31] Ramit: You wanna do it right now?

[01:00:33] Liza: Sure.

[01:00:33] Ramit: Alright, let’s drop it down to 2000 and we’ll take your net down to what? 1500?

[01:00:39] Liza: Sure.

[01:00:39] Bradford: Um, mine, mine actually goes up too, ’cause I got a bonus. I’m getting bonuses this year that we didn’t put into this, so it should be at, it should be at least seven,

[01:00:48] Ramit: 7,000. Should we make this 5,000?

[01:00:50] Bradford: Yeah, probably.

[01:00:51] Ramit: Okay, watch.

[01:00:53] Ramit: Okay. Wow. Guys, what do you notice? Your fixed cost went from 59 to 64%. Hold on. [01:01:00] Just look at those beautiful faces on screen. What? What’s happening is they’re both laughing, kind of embarrassed. Can you describe what’s happening right now?

[01:01:09] Liza: I guess it’s not as big a deal as I thought. I don’t know.

[01:01:12] Bradford: You chose the right word.

[01:01:13] Bradford: Embarrassed. I was like, right.

[01:01:16] Liza: I didn’t know you were getting a bonus. That’s nice.

[01:01:19] Ramit: This, this drama that we love to put on in our lives, we love it. I don’t mind it. I love drama myself, but it is imperative that we actually look at the reality of the situation and all this circling, all this spinning, and it’s 5% more.

[01:01:40] Ramit: You have the money. To me it’s not, this money part is not that interesting. Moving up 5%, I really couldn’t care less. We could knock this out in five seconds. What to me is more interesting is what do you get out of the drama? Why is it that you did not communicate effectively on getting a bonus on how much you could conservatively [01:02:00] make?

[01:02:00] Ramit: And more importantly, what do you get out of each role that each of you has chosen to embrace? Lisa, what’s going on?

[01:02:10] Liza: I dunno, when we pay off debt is like, oh, control, like on down, like I say like. Spend less. And so I just feel like if we continue to do that, maybe that’s good. It has worked for a purpose in the past and so I guess I feel like maybe I would come on on top if I continue to do the same thing.

[01:02:27] Liza: Because you know, if we spend less and we don’t order our drinks and eventually it adds up to something maybe

[01:02:33] Ramit: Right,

[01:02:33] Liza: because it did in the past, right? When we were paying off debt quickly, it was like, oh yeah, we just spent very little and it, it worked in five years. We paid $120,000. So

[01:02:41] Ramit: Did you grow up in Canada?

[01:02:42] Liza: I moved to Canada when I was 13, but I, my childhood was in Columbia, so.

[01:02:46] Ramit: I see. And what do you remember your family saying about money when you were younger?

[01:02:51] Liza: I don’t remember ’em talking about money too much. Um. I don’t think that we had money conversations per se, but [01:03:00] um, I would say my life was very cyclical.

[01:03:02] Liza: Like there was times when we had very little money where my grandparents had to help pay for things. Um, at the same time my family in Columbia is a little bit prominent and so I had a weird dichotomy where I would go to a country club for a party, but we couldn’t pay rent.

[01:03:18] Ramit: What did you take away from that?

[01:03:20] Ramit: That’s quite a stark difference. Country club can’t pay rent.

[01:03:23] Liza: I don’t know. I feel like money comes and goes in a sense.

[01:03:26] Ramit: What does that mean?

[01:03:27] Liza: You can’t plan? ’cause situations, circumstances come, come at you and then things change.

[01:03:33] Ramit: Okay. And so therefore, what should you do?

[01:03:36] Liza: I don’t know. I guess not worry about it.

[01:03:39] Ramit: Hmm. But you worry about it a lot.

[01:03:42] Liza: Yeah, I guess it’s a small way to feel like I can control.

[01:03:45] Ramit: Ah, so growing up, it sounds like you felt, uh, I cannot control money. Yeah, one day we have it. One day we don’t. One day we’re at the country club. The next day we can’t pay rent. I can’t control it.

[01:03:58] Liza: Sometimes we were doing well and sometimes [01:04:00] we weren’t.

[01:04:00] Liza: Like for example, we were doing great upper middle class, then we moved to Canada and we’re living the immigrant like mm-hmm. So we started again from little and I feel like that was the cycle my whole life.

[01:04:10] Ramit: You mentioned that your family moved to Canada.

[01:04:13] Liza: Mm-hmm.

[01:04:13] Ramit: And it’s hard to move to another country and get traction in careers.

[01:04:16] Ramit: I understand that. Yeah. And yet here you are saying we’ve been in Columbia for 5, 6, 7 years and I wanna go back to Canada. Seems to me there’s a very strong parallel there. Why?

[01:04:31] Liza: So in Columbia, now that I’ve returned, I have access to different resources. My education, my post-secondary was in Canada and all that.

[01:04:38] Liza: And so I don’t know that I would come back to zero, but maybe I would because I’ve been gone a long time.

[01:04:43] Ramit: Weren’t you yourself saying minimum wage jobs in Canada?

[01:04:47] Liza: Well, I’m saying that I could at least make more in a minimum wage there. Job there, then I could then what they’re paying me here. So that feels like I’m being compensated better and I [01:05:00] don’t know worth more.

[01:05:01] Ramit: Stick with me on that phrase. Worth more. What does that mean?

[01:05:06] Liza: Just that I feel like companies that come here to hire, they come here because they get cheap labor. So if I’m here and I’m competing with those jobs, then that is the kind of thing that they expect is that you’re gonna get paid less. Less. But that’s not worth my time to work 40 hours a week for a month to make a thousand dollars let’s say, or 1500 or whatever.

[01:05:24] Liza: I’m like, that’s not worth it in my mind.

[01:05:27] Ramit: Is your mind giving you accurate information about the situation?

[01:05:32] Liza: We ran the numbers multiple times over the last five years and they seem similar, so, okay, so let’s say it’s about the same. Shouldn’t we go there then? And if I can make more, then maybe I’ll feel better about money.

[01:05:43] Liza: Maybe not. I don’t know.

[01:05:45] Ramit: Uh, I’m gonna tell you right now, you’re not gonna feel better.

[01:05:48] Liza: Fair

[01:05:48] Ramit: enough. I’m just gonna tell you directly. Your feelings are completely and totally uncorrelated with how much you are making.

[01:05:57] Liza: Fair enough.

[01:05:57] Ramit: What you said was extremely revealing when you [01:06:00] said worth it. The idea is that if a company pays me $15 an hour in Canada, then maybe I am worth more than a company that pays me the equivalent of $7.

[01:06:12] Ramit: Yeah. In Columbia, until you are able to find your own self-worth beyond what a company will pay you because of labor markets, then you are forever going to be chasing it. We cannot determine, in totality, our self-worth by what a company is willing to pay us. But aren’t there other things to consider? We have three kids.

[01:06:31] Ramit: They grew up here. What’s the quality of life? And on and on and on. I’m not saying don’t move back to Canada.

[01:06:35] Liza: No, no, I understand.

[01:06:37] Ramit: But we can’t make these life decisions because. I think I will make double the amount or maybe a little bit more. That’s not how we make these big major life decisions.

[01:06:46] Liza: I think it’s fine, but I don’t know how to do them then because that’s the conversation.

[01:06:50] Ramit: Okay, we’ll, we’ll get there.

[01:06:52] Liza: Okay.

[01:06:53] Ramit: I’m not here to make couples feel bad. That is not the point of this show, but sometimes things get so [01:07:00] tangled that people cannot see what is happening. They spin, they rationalize, they analyze every option to death. A lot of couples are frankly, too smart for their own good.

[01:07:10] Ramit: They spend their time seeing every single angle, but they don’t realize they’re actually just stuck in place. And you’ll notice they keep trying To help me understand, Ramit, you need to understand why we do this. Let me explain our thinking. I don’t need to understand. They need to change. You see, at a certain point, I don’t actually care why they are doing something.

[01:07:31] Ramit: I care that it’s not working and I care about their plan. Sometimes we need to spend less time making other people understand and more time changing ourselves. And to their credit, they listen. They really listen, which is rare. If you want this kind of help with your own finances, if you want someone to cut through the confusion and help you stop spinning so you can actually make major changes fast, [01:08:00] join my money coaching program at

[01:08:01] Bradford: iwt.com/money coaching.

[01:08:04] Bradford: You do not have to do this alone. Now, let’s see if they are willing to make real changes right now.

[01:08:12] Ramit: Am I gonna see your kids on this podcast in 30 years?

[01:08:16] Liza: Hopefully not. If you do your job right, you won’t.

[01:08:19] Ramit: If I do my job right?

[01:08:21] Liza: Yes. You know, we can, you can

[01:08:22] Ramit: do that. Ah, that’s quite interesting. Can I ask you a, a pointed question?

[01:08:27] Ramit: Mm-hmm.

[01:08:28] Liza: What

[01:08:28] Ramit: if. You do your job, right?

[01:08:31] Liza: Yeah, exactly. If I can do better and and be willing to change, which I am, that’s why I’m here, then I think hopefully we can do better. And the reality is like I always pause,

[01:08:41] Ramit: I already pause. Pause

[01:08:42] Liza: what

[01:08:43] Ramit: we’re talking about, something really important right now. I don’t want you running off into the next topic.

[01:08:47] Liza: Okay.

[01:08:48] Ramit: We’re talking about your kids reproducing the same messages that you yourself are reproducing, that you learned from your parents.

[01:08:57] Liza: Yeah.

[01:08:58] Ramit: How does that strike you? [01:09:00]

[01:09:00] Liza: I don’t know. It’s sad. I guess I’m at least trying to teach them, for example, something as simple as investing.

[01:09:05] Ramit: You teach them about savings,

[01:09:07] Liza: not as importantly as investments.

[01:09:09] Ramit: How would you feel if your kids turn 25 and they have two lines of credit?

[01:09:13] Liza: I don’t think I would mind if they’re empty. Like if they pay off their debt. I don’t want them to be like living on credit.

[01:09:19] Ramit: Why is it that I, the non-parent am like so. Unwelcoming of a 25-year-old kid having two lines of credit, but you’re like, yeah, whatever.

[01:09:30] Ramit: As long as it’s empty. Why is that?

[01:09:32] Liza: Until this conversation that we’re having right now, I didn’t really see the issues with it in that sense because to be honest, we keep the line of credit low. But what I mean is like they keep offering us money. ’cause we get into debt and we pay it off so quickly that banks are like, take another 10,000.

[01:09:48] Liza: And we’re always like, no, take it down. And so the reason I don’t see the issues with my kids doing that is that if, let’s say the pattern repeated itself and you ended up in the same way, I would hope that at the very least they’re not living [01:10:00] on credit forever. It’s like a good backup plan when you don’t have the day-to-day like solvency.

[01:10:04] Liza: It’s

[01:10:04] Ramit: not a good plan.

[01:10:06] Liza: No.

[01:10:06] Ramit: I don’t know how many times I can tell you this. You yourself have been stuck in debt for how many years?

[01:10:12] Liza: I dunno. Comes and goes, but I like, if you wanna just say like, how many months have we had a balance? What, like two, three years, Brad?

[01:10:19] Bradford: Way less. I would say no, the, the line of credit is almost always empty.

[01:10:23] Bradford: It’s almost always at zero.

[01:10:25] Ramit: Okay.

[01:10:25] Bradford: It’s very rarely got any balance on it. So it may maybe like 15% of the time it has a balance.

[01:10:32] Ramit: And, um, Bradford, what about you? What do you remember about your family as it came to money when you were growing up? What did they say?

[01:10:40] Bradford: It was never a conversation, never a topic.

[01:10:42] Bradford: Nothing.

[01:10:43] Ramit: Two people whose families never really talked about money. Hmm. What happened as you got older? Bradford?

[01:10:51] Bradford: As I got older, I started to realize like a lot of the opportunities I did have were because my grandparents paid for it. Mm-hmm. And not that I’m [01:11:00] necessarily saying there’s something wrong with that.

[01:11:01] Bradford: I think my parents did what they could. My dad was, you know, the only one working for the most part. And there was four of us, you know. Um, but I do know that I didn’t, I didn’t want to be that way. I mean, my dad’s 70 and he’s still working and he says he, he really enjoys it. And I do believe he does. But I also, I I don’t actually know if he could retire.

[01:11:19] Ramit: Mm.

[01:11:20] Bradford: And I don’t, I don’t wanna be that, I don’t want to be 70 and, and working. So I started to just sort of learn on my own. I mean, I try to do this for most of my life. Not just money, but just when I know better, I’ll do better, which has gotten me into trouble. I’ve definitely, why? Well, you know, like sometimes I’ve done something that I thought I knew about and I didn’t, and then we’ve lost stuff.

[01:11:39] Bradford: Um, uh, buying some taxis in, in Columbia, we owned a small fleet of taxis, and for a while we made a ton of money on them, and then it went downhill fast, probably because we didn’t understand what owning a fleet of taxis meant.

[01:11:55] Ramit: Yeah. Okay.

[01:11:56] Bradford: And so when it did go south, I couldn’t exit fast enough [01:12:00] to recuperate the money.

[01:12:01] Bradford: So, you know, we lost between 60 and a hundred thousand probably on that. Wow.

[01:12:05] Ramit: What lessons do you bring from your upbringing to this relationship?

[01:12:10] Bradford: One of them would be that if, if we did need something, it’s okay to ask. Another one would be to budget. My parents never budgeted. They still don’t really,

[01:12:21] Ramit: and you don’t keep a budget either.

[01:12:23] Bradford: No, we do.

[01:12:23] Ramit: You do?

[01:12:24] Bradford: Yeah, we do.

[01:12:25] Ramit: Okay. So the 28% for guilt-free spending, you’re tracking some of that?

[01:12:32] Bradford: Yes.

[01:12:32] Ramit: Okay. Alright.

[01:12:34] Liza: We used to do it more regularly, so lately we’ve been busier, so we do it every few months, but not as often as we could.

[01:12:39] Bradford: Yeah, it was, it was monthly for years.

[01:12:41] Ramit: This cycles of debt question is really on my mind.

[01:12:45] Bradford: Mm-hmm.

[01:12:46] Ramit: Because it hasn’t just been once or twice, it’s been for years. Do you consider the cycles of debt a problem?

[01:12:52] Bradford: So my, my answer before this conversation would’ve been no, because the end sort of justified the means now, [01:13:00] I would say yes.

[01:13:01] Ramit: Why?

[01:13:02] Bradford: I mean, if I’m being brutally honest, because you have told me that maybe it’s not a good idea and clearly, you know more than I do if I’m being really, like, I don’t know if I have more of an answer than that.

[01:13:14] Ramit: That’s actually, that’s actually a pretty honest answer, not the answer. I eventually want, but what I appreciate about that is that you, you are open to like, Hey, maybe this guy knows something. I don’t know. I don’t understand why, but like he keeps saying this. This is from your application, Lisa, you wrote biggest challenge and one of the things you wrote under biggest challenge was being stuck in a cycle of getting in and out of debt.

[01:13:41] Liza: Yeah.

[01:13:42] Ramit: You wrote that in your application, but then just a few seconds ago you said, no, it’s not a problem.

[01:13:46] Liza: I just dunno if there’s enough to go around to not like to save and do that. It’s not like we have extra to be like, oh, we’re gonna invest 2000 this month ’cause we have extra. Like

[01:13:55] Ramit: why are you jumping ahead?

[01:13:56] Ramit: You don’t even know your numbers.

[01:13:58] Liza: I don’t know.

[01:13:59] Ramit: I think [01:14:00] really what’s happening right now is you don’t want to save and so you are now creating reasons why it would be hard to save. I think that the model you have seen is that it’s okay to go up and to go down. And going down a little bit hasn’t really costed you anything.

[01:14:18] Ramit: You paid it off in a few months. The way that the two of you describe paying off your debt, it’s like a reward. It’s like an achievement every time. Have you noticed that

[01:14:25] Liza: pride? Yeah, for sure.

[01:14:26] Ramit: It’s like, oh, let’s give ourselves a round of applause. We paid off our debt.

[01:14:29] Liza: Yeah.

[01:14:30] Ramit: And with only a couple of months and, and meanwhile like Bradford’s, like we got extra yield, like round of applause.

[01:14:37] Ramit: We did a great job. So the way you have interpreted using debt is like we’re winning. When I look at it, I’m like, you guys are losing. You may feel like you have won in the short term, but being in debt for years, like what has it cost you? You don’t have anything really in savings beyond 1500 bucks.

[01:14:55] Ramit: You’ve only been lucky that a market in the last 5, 6, 7 years [01:15:00] has only gone up.

[01:15:01] Liza: Yeah, that’s true.

[01:15:02] Ramit: You’ve basically ridden a wave that has propelled every single decision anyone has made to be good.

[01:15:07] Liza: Yeah,

[01:15:07] Ramit: and it doesn’t last. You could keep doing this for a while. You can keep doing it till it wipes you. In your family, you have recreated some of the ups and downs, Lisa, that you saw.

[01:15:18] Ramit: You have the taxi business, which went up, went down. Mm-hmm. You have the debt going up, going down. A lot of people who grew up in chaotic environments reproduce that environment because that is what they know when they hear like calm,

[01:15:33] Liza: boring.

[01:15:34] Ramit: Exactly. And to a lot of people who are overs sensitized, they’re looking for control, but they are creating and responding to and influenced by chaotic environments.

[01:15:45] Ramit: Boring is death to them.

[01:15:47] Liza: Yeah.

[01:15:48] Ramit: What do you think

[01:15:49] Bradford: I want, I wanna respond to something you said ’cause I, I, I don’t know. I wanna make sure that it’s clear. Postpay off student loans. We have definitely been out of debt way more than in debt. [01:16:00]

[01:16:00] Ramit: Okay. What’s the point of this?

[01:16:01] Bradford: We’ve gone into debt twice since, since then In nine years.

[01:16:05] Bradford: It was for very small amounts. For very short times. I’m not saying that necessarily makes it perfect or not.

[01:16:12] Liza: Brad, I Seever meets point in the sense that, for example, we bought all the furniture and we had a lot, thousands and thousands of dollars in debt. And so reactionary you had to go and get another job as you’re working.

[01:16:24] Liza: Yeah. 14 hours a a day or more just to pay that off quickly. But the point is that the cycle is still going up and down instead of just being like, okay, let’s plan for it and let’s buy it that way. And if we had savings, perhaps we could have used those savings to furnish the apartment and buy the car and not have to actually be like, okay, well now we have $30,000 in debt so we better like go and work extra for six months or whatever.

[01:16:46] Liza: And I think that’s the, probably the takeaway from that. And I don’t know, I think it, it does make sense.

[01:16:53] Bradford: I, I guess my question then, to you Ramit is like, is all debt always bad or is there any form of it that is not bad [01:17:00] because maybe that’s my misunderstanding.

[01:17:02] Ramit: In general, it’s bad.

[01:17:05] Bradford: Okay.

[01:17:06] Ramit: There are exceptions.

[01:17:07] Ramit: There are, and I’ll clarify those for you, but in general. For a family that makes $120,000 in Columbia, or for our family who lives in New York and la we have a no debt policy. Why would we go into debt when we don’t need to? If we can’t afford something, then we will save for it, but we are not going to go into debt because we don’t need to.

[01:17:35] Ramit: And it actually makes our decisions so much easier. It makes it crystal clear as to what is inbounds and what is out of bounds. Never a question, never a discussion.

[01:17:45] Liza: Mm-hmm.

[01:17:45] Ramit: So the exceptions are, you know, if for example, you needed to take a mortgage, that’s pretty expensive. Most people will take a mortgage if you need to take a car loan.

[01:17:54] Ramit: That’s pretty expensive. People sometimes often take a car loan student loans. Okay. [01:18:00] Yeah. You know, you wanna be conscious of that.

[01:18:02] Bradford: Yeah.

[01:18:02] Ramit: Business loan, I really steer away from it. I don’t, I don’t take debt. I would rather just. But I’ll tell you like things like, um, going on vacation or furnishing a place, I would never, ever in a million years take debt for that.

[01:18:18] Ramit: Number one, it introduces risk because it’s just one more thing I have to think about and track. And I know these companies are expert at extracting money from me, so I’m not even gonna play the game. Second,

[01:18:29] Bradford: okay,

[01:18:29] Ramit: how much could I expect to reasonably arbitrage? What could I make an extra 500 bucks, even 5,000?

[01:18:36] Ramit: It doesn’t move the needle for either of us. So why would I take on that kind of risk to only make a tiny amount of money? What do you think?

[01:18:44] Bradford: I think I like it. I think it makes me feel a little bit better in the sense that I think the debt that I’m most upset about was probably the taxis, which is business.

[01:18:56] Bradford: So I think that’s good confirmation that that was a bad [01:19:00] decision.

[01:19:00] Ramit: Yeah.

[01:19:00] Bradford: Um, and the, you know, the other would be the furnishing. So furnishing obviously. I like that because that makes that clear. No, we shouldn’t have done that.

[01:19:09] Ramit: Good take. I love this postmortem you’re doing here. I think there’s probably more for you both to look back and be like, let’s take a look at our biggest decisions through our marriage, moving kids, furnishing, taxis, all that, and let’s just like, what did we do at the time?

[01:19:25] Ramit: No judgment, but let’s just honestly write down what we did at the time and then like what went right and what went wrong and what will we do differently?

[01:19:33] Liza: Yeah.

[01:19:33] Ramit: Enormously valuable.

[01:19:35] Liza: Yeah, that’s true. Cool.

[01:19:36] Ramit: Okay. Now if we talk about going back to Canada, so there’s this open question about should you move back to Canada or not?

[01:19:42] Ramit: And Lisa, just so I understand, the, is the main reason that you could earn double or more in Canada?

[01:19:51] Liza: Um, practically, yes.

[01:19:53] Ramit: We need to ground some of these decisions in actual numbers. If you were. To look at these numbers, which I have now [01:20:00] adjusted for you to cut your income by half.

[01:20:03] Liza: Mm-hmm.

[01:20:03] Ramit: So your gross is 2000.

[01:20:05] Ramit: Your net’s gonna be 1500 a month. Let’s say you doubled it. Would the numbers measurably improve?

[01:20:12] Liza: Probably not

[01:20:13] Ramit: correct. In fact, what expenses do you have to account for if you were to move to Canada?

[01:20:20] Liza: More childcare. The biggest issue would be we have less help. ’cause here we have a full-time maid, so I’d have to be working full-time probably outta the house if I wanna get the jobs that I talk about.

[01:20:30] Liza: And then on top of that. I would have no help.

[01:20:33] Ramit: Yep. ‘

[01:20:34] Liza: cause it cleans and takes care of our daughter and all that.

[01:20:36] Ramit: What’s gonna be in your house or apartment in Canada?

[01:20:38] Liza: Furniture. And how are you gonna get that? The, I guess now we have to plan and save. So I guess we can’t leave until that’s been saved up for it.

[01:20:46] Ramit: That’s correct.

[01:20:46] Liza: Because I know what we sell here won’t be enough.

[01:20:48] Ramit: Exactly. I know what you were about to do. About to hop on that plane and freaking take out a line of credit and then buy all this furnishing. We’re not doing that anymore. Okay. And speaking of that, how much is a plane ticket, by the way?

[01:20:59] Liza: A thousand to [01:21:00] $1,200 a person.

[01:21:00] Ramit: That’s more than you have in savings. How are you gonna pay for that?

[01:21:03] Bradford: So that’s why my thing is always about waiting at the end of every year. My school pays for all of us to fly home.

[01:21:09] Ramit: Really?

[01:21:10] Bradford: Yeah. Including if I’ve done the contract, I would. We would all get to fly home one last time.

[01:21:15] Ramit: Wow.

[01:21:16] Bradford: Yeah. So that, that’s why for me it’s always about like in a cycle of like, let’s finish the school year and then we could go back.

[01:21:21] Bradford: But I didn’t want to go back in the middle.

[01:21:23] Ramit: Alright. That sort of up my example, but that’s pretty cool. Oh,

[01:21:26] Bradford: sorry.

[01:21:26] Ramit: Sorry. No, no, no. I appreciate it. We need the honest truth. Okay. So the flights may or may not cost money depending on when you go, but basically if you had to pay, you can’t afford it.

[01:21:37] Liza: Yeah, you’re right.

[01:21:37] Ramit: Okay. Furnishing, you can’t afford that. I don’t know what it’s like in Canada to rent a place, but at least in New York they, you left and right. You gotta put one month down, then last month and 15% for some stupid broker, blah, blah, blah. So there’s gonna be some amount there.

[01:21:52] Bradford: Yeah.

[01:21:53] Ramit: And all of this to make what you made last year.

[01:21:56] Ramit: So what do you think as we’re talking out loud?

[01:21:58] Liza: I don’t know, I just feel like [01:22:00] the job market is bad and things dried up. And honestly like most of what I’ve gotten has been through networking and I’m like, oh, what network do I have here?

[01:22:07] Ramit: It sounds like you’re trying to run away from a difficult time right now.

[01:22:11] Liza: Maybe,

[01:22:11] Ramit: I mean, I can understand it when things get hard. I understand. Sometimes you just wanna say like, I wanna go home.

[01:22:17] Liza: Yeah.

[01:22:18] Ramit: What I’m trying to do is to show you that going home is not escaping your problems. Yeah. You’ll have a whole set of very real problems there, and we can reasonably predict it. Just two minutes ago you said, I don’t know, I, I have no idea.

[01:22:34] Ramit: And then you did an outstanding job of going through all the different expenses that you would encounter. Now I’m asking, you sum it all up for me. If you were to get on a plane, either solo and leave, part of your family or husband comes along, let’s say you were to double your income maybe even a little bit more, would it m materially change your [01:23:00] financial position?

[01:23:01] Liza: Probably not.

[01:23:03] Ramit: I agree. Would it make it better or worse?

[01:23:07] Liza: Probably worse because like I said, here we live like expats compared to the average person around, we can afford a lot more things than the average person. Whereas in Canada, we probably wouldn’t be able to.

[01:23:18] Ramit: So we have less money because moving to Canada has massive transaction costs, startup costs of flying there, furnishing all of that stuff.

[01:23:28] Ramit: We have uncertainty. It’s not even clear what kind of job you could get, what’s really going on here. When you talk about going to Canada,

[01:23:35] Liza: perhaps part of it is that maybe I didn’t sign up to come here forever and I don’t know, I just, I don’t know if I can come to like a full circle decision to be like, yep, because financially it makes more sense to stay here, therefore we should stay here.

[01:23:52] Liza: Because I guess that’s not what I set out to do, but I don’t know, like most of the time I’m reactionaries. It’s not like suddenly I’m like, that’s not my plan. So I, I broke the plan. [01:24:00] That’s why I feel a little bit trapped here. ’cause I don’t know if I could stay here forever. I don’t,

[01:24:04] Ramit: who’s talking about forever?

[01:24:05] Ramit: I’m not.

[01:24:06] Liza: Like, okay, fair enough. So we can make a plan and we can save, so we can furnish our place or whatever. But

[01:24:12] Ramit: I think that you all might end up back in Canada or not. I don’t know. I don’t, I actually don’t think you know either. But my take is moving back right now is reactionary and it is an escape from something that just doesn’t feel good.

[01:24:29] Ramit: And when it doesn’t feel good, I think at least in this case, your tendency is Get away.

[01:24:34] Liza: Yeah, yeah, yeah, absolutely.

[01:24:36] Ramit: If you want to have the option of eventually moving back to Canada, which I think would be great, I think the two of you didn’t move there to be there forever, so you should probably give yourself the option of going back.

[01:24:47] Ramit: Then. I think that the two of you should probably calculate how much you would realistically need to live back in Canada. That includes moving costs, furnishing, all of that stuff. But in addition, [01:25:00] how much would you need to earn to live a reasonable type of lifestyle? It’s not gonna be the same lifestyle as where you live.

[01:25:08] Ramit: It’s probably gonna be worse.

[01:25:10] Liza: Yeah,

[01:25:10] Ramit: that’s okay. But you could start putting money aside in a separate Canada break in. In case of emergency savings fund, let me just give you a simple example. Let’s say you put a couple hundred bucks a month into that thing, okay? That’s not a lot of money. It would take years for you to have enough, but at least you would know the exact month and year.

[01:25:33] Ramit: Okay? If you decided, hey, we don’t wanna wait nine years to be able to move back to Canada, then we need to cut our costs elsewhere and earn more and put more money in that savings account. That’s how we do it. And you could lower that down to maybe four years or three years. Once you get to that point where you have the money necessary, then you too can start discussing whether it makes sense or not.

[01:25:56] Ramit: But until then, I would agree on a plan. I would check in [01:26:00] every December, Hey, are we still on track? Are we still thinking four years from now, we’ll take a look at it and decide if we wanna go back or not. ’cause that’s when we’ll have enough money. Until then, I just wouldn’t think about it because you’re just driving yourself nuts.

[01:26:11] Ramit: Now. I will give you one other option. If you really wanted to move there. Not everything is only about money. And if you’re just like, we’re done here. Okay, you could do it, but you would need to really think about how you were going to do it. In my opinion, I just can’t see a way that you would do it going into debt.

[01:26:29] Ramit: I think that would be pretty risky. So what are the other ways? What could you sell? What kind of cheap place could you live in, et cetera, et cetera, et cetera. I, I simply would not go into debt. That’s out of the question.

[01:26:39] Liza: Yeah.

[01:26:40] Ramit: That strike you. Which of those approaches would you take?

[01:26:44] Liza: I mean, obviously saving and preparing for it is better and it makes sense to me.

[01:26:48] Liza: Uh, I definitely think I would end up in a bad situation if we didn’t do that.

[01:26:52] Ramit: Yep.

[01:26:53] Liza: The question is when do you pull the trigger? For example, my financial situation changed recently. If [01:27:00] I don’t have any income or as much income as we budgeted for, for three months, six months, eight months, 10 months, what does that mean?

[01:27:08] Liza: Like when do I decide, okay, well maybe I’ll start applying to jobs in person. Or maybe Bradford needs to get a fourth job or however many jobs he has. Like

[01:27:15] Ramit: excellent question. If you had savings right now, you would be able to tap it.

[01:27:20] Liza: Mm-hmm.

[01:27:21] Ramit: Okay. But you don’t, and so you have to make other arrangements and I’d like to show you what you can do.

[01:27:27] Ramit: Okay, so I’m gonna put this CSP back up on screen and I would like you to tell me what do you want to do? Because right now you have a problem. You have $0 coming in from Lisa, which means your fixed costs are at 83%, which means that you are spending more than you make every single month. What do you wanna do?

[01:27:46] Liza: We could cut clothing.

[01:27:48] Ramit: Clothing is $150 a month. Okay. Goodbye.

[01:27:51] Liza: I don’t know

[01:27:52] Ramit: groceries.

[01:27:54] Liza: Uh, yeah, we could it cheaper.

[01:27:56] Ramit: Just so everybody knows groceries are $1,400 per [01:28:00] month.

[01:28:00] Liza: Uh, maybe a thousand dollars.

[01:28:02] Ramit: Okay.

[01:28:02] Liza: What else? Brad, what do you think?

[01:28:04] Ramit: Can I point something out? Yeah. How come nobody’s talking about cutting your investments?

[01:28:08] Liza: Because Brad wants to retire at some point.

[01:28:10] Ramit: Your investments are like the most sacred thing to you of all. Yeah. Have you noticed that?

[01:28:15] Bradford: Yeah.

[01:28:16] Ramit: Like it’s like the sacred thing that no one is willing to even talk about. Yeah. No savings. Can’t talk about it. Wife can’t spend money on whatever you want for five years.

[01:28:26] Ramit: Can’t talk about it. I don’t mind investing aggressively. I love it, but the minute you say this is a requirement and everything has to work around it, then you need to get really creative. You cannot be spending $1,400 or probably even a thousand dollars on groceries. You can’t be eating out not even $500 a month.

[01:28:44] Ramit: Like if you wanna do it, fine, but you probably need to both be earning way more money. And you need to not be going out as much. You can’t have it all, not on your income.

[01:28:52] Liza: So I would say two things. One, after reading your book many years ago, I finally automated the 800. So it’s easy to not think about [01:29:00] it.

[01:29:00] Liza: I just always make sure the $800 are in the account by the date.

[01:29:03] Ramit: Okay?

[01:29:03] Liza: And I didn’t do that till five years after I read your book.

[01:29:06] Ramit: Hold on, hold on, hold on. Let me just simmer in the beautiful irony of this, it’s like I have a love-hate relationship, not with you, with myself. Like first of all, the fact that you actually read my book is so amazing.

[01:29:19] Ramit: I would say 90% of the people on this Godforsaken show don’t even read my own book, even though it’s free at every public library in the country. Second, when they read it, do they do it? Nah. They love my jokes from meet sat so funny. Ha ha. I’m not gonna do anything he says. But then I discover an amazing example here.

[01:29:41] Ramit: We have Lisa who read the book many years ago, didn’t do anything in it, but then. Left turn. Did it five years later. Yes. And goes, Hey, it was so easy. I automated it and now the money just rolls in there. I don’t even notice it, but thank you for the example. That was [01:30:00] phenomenal. Carry on.

[01:30:01] Liza: So it seems like changing it now would be hard because it’s automated and we figured it out.

[01:30:06] Liza: And the other thing is, maybe you can help us with this is do we have enough to retire at some point in our lives based on the $800 that we’re putting away? Because if it’s enough, I’m willing to cut it.

[01:30:15] Ramit: Okay. You’re willing to cut it. Are you willing to earn two to $4,000 a month?

[01:30:19] Liza: Yes. If I can find a way here.

[01:30:21] Ramit: Well, you told me that you haven’t even really applied for jobs, you’ve just

[01:30:24] Liza: No, no. Oh, sorry. I meant for the clients that I got that made me good money. Of course, I’m gonna try to my best to keep freelancing and to continue to get contracts and I’m actually like building a portfolio to offer better service.

[01:30:36] Liza: Like I, I am doing all those things. It’s just that I have no confidence right now that I can pull those kind of numbers again. Okay.

[01:30:45] Ramit: Um, Bradford, what do you say? ’cause I know early retirement or retirement is important to you, and you’ve been very disciplined about investing regularly. What do you, what’s your take on this?

[01:30:56] Bradford: That I would rather find a way to make more money or cut [01:31:00] other things than cut that retirement.

[01:31:02] Ramit: Okay.

[01:31:03] Bradford: Do I necessarily need to retire at a specific age of whatever, 55, 60, whatever it is? No, but I want to be able to have the option where I’m working maybe less.

[01:31:15] Ramit: Okay.

[01:31:15] Bradford: And so cutting it down makes me nervous,

[01:31:18] Ramit: depending on a variety of things.

[01:31:20] Ramit: The way we calculate it is you’ll have about $1.6 million when you are 65. Canada has its own unique circumstances, situations. I’ll just tell you what we would calculate in the us.

[01:31:32] Bradford: Sure.

[01:31:33] Ramit: If we were to calculate a 4% rule for safe withdrawal, this is just the back of the napkin guideline, that would mean you’d be able to withdraw about $65,000 per year in retirement.

[01:31:44] Ramit: Yeah. What do you think about that?

[01:31:46] Bradford: I think if it’s just the two of us, that’s probably enough. ’cause I, I don’t, I don’t, I don’t need to be crazy wealthy. I just need to be able to, you know,

[01:31:54] Ramit: I think 60 5K is tough. Uh, yeah. Not owning a house, which I don’t [01:32:00] think we have allotted for in this.

[01:32:02] Bradford: Right.

[01:32:02] Ramit: 60 5K is not enough.

[01:32:04] Bradford: Okay.

[01:32:05] Ramit: Not 20 years from now.

[01:32:08] Liza: Yeah,

[01:32:08] Bradford: yeah. Yeah.

[01:32:09] Ramit: So it’s not enough. And there is some, um, Canada pension plan. I don’t know if you’d be eligible for that or not. Do you know?

[01:32:16] Bradford: I would be, yeah,

[01:32:17] Ramit: you would be. So that’s like 10 K per person. Okay. So like either 75 or 85 KA year, that becomes better.

[01:32:25] Bradford: Okay.

[01:32:26] Ramit: That’s better.

[01:32:27] Ramit: But I guess what, what occurs to me is that for a couple that has like talked about money every day for years, and that is making these big life decisions and sees it differently, you actually should know these numbers. Do you see that you have been focused on one area of your numbers, but not focused on the major key numbers that matter?

[01:32:55] Liza: Yeah.

[01:32:56] Ramit: Why have you been focused on, I wanna go back to Canada, [01:33:00] or I don’t wanna save more money, use the line of credit. Why have both of you been focused on those things instead of retirement numbers? Which it seems is quite important to you

[01:33:11] Liza: because it feels more immediate.

[01:33:12] Ramit: Yes.

[01:33:13] Liza: And to be honest, if I wasn’t married to Bradford, I may not have been saving for retirement.

[01:33:18] Liza: Not because I don’t care about, because I wouldn’t have thought that way. And for him, because he works so hard and he’s always like, oh no, it’s fine. I’ll work more, I’ll work more, then of course he is like, at some point I would like to stop working so damn hard. So that makes sense to me that it would be so important to him.

[01:33:31] Liza: Whereas for me, that I’m kind of work optional in a sense, because he pulls through every time. And I think if I was single on my own, I don’t think I’d be investing in retirement that much. Probably.

[01:33:42] Ramit: That’s pretty honest. Okay. And Bradford, what about you?

[01:33:45] Bradford: I, I gotta be honest, I’m, I’m really stuck and deflated by the fact that 800 or plus a month is not enough.

[01:33:52] Bradford: ’cause I don’t know how I’m going to try and do more than that. So I’m having a hard time even answering your question. ’cause I’m really hung up on that.

[01:33:58] Ramit: Okay, let’s talk about [01:34:00] it then.

[01:34:00] Bradford: That freaks me out a lot.

[01:34:01] Ramit: Tell me why.

[01:34:02] Bradford: Because I don’t even wanna have to work full-time to 65, let alone having to work past that.

[01:34:08] Bradford: And if 800, which I felt like was sufficient, is not gonna be enough, then that means that I’ve gotta either earn more or cut back other places to put more than a thousand. Yeah. I don’t know. I don’t know, man. That really deflates me, really deflates me.

[01:34:24] Ramit: Can I, can I walk you through it?

[01:34:26] Bradford: Yeah.

[01:34:27] Ramit: Okay. First off, I totally understand feeling deflated because you have obviously worked hard and you’ve both talked about money a lot and you’ve put time into automating this, all of that.

[01:34:39] Ramit: Very important. Very notable. My first question is. Why do you think you never calculated how much this would turn into?

[01:34:48] Bradford: I did. I think, I didn’t realize that that wasn’t gonna be enough.

[01:34:52] Ramit: So as you sit here and think about the numbers, what does it feel like to you?

[01:34:57] Bradford: I mean, the first word that comes to mind is hopeless.

[01:34:59] Bradford: Um, but [01:35:00] hopeless. Yeah.

[01:35:01] Ramit: Why?

[01:35:02] Bradford: Because if I’ve gotta put more than that away, I don’t know how to do that without, without basically just living for retirement and forgetting how to live my life right now. I don’t want my kids to have the same life that I had where, you know, like I did a few things, but later found out it was all my grandparents and didn’t have anything else, and I don’t want them to have to not have help for university.

[01:35:24] Ramit: Can I point out something that I’ve noticed you’ve said several times just now?

[01:35:28] Bradford: Sure.

[01:35:29] Ramit: I,

[01:35:30] Bradford: okay.

[01:35:30] Ramit: Why is it all Bradford?

[01:35:33] Bradford: That’s the way it was for my family growing up. My mom contributed very little. Financially when I left home, ’cause I left home at 17, I think she contributed more, but before that she was just watching the kids.

[01:35:46] Bradford: Uh, so it was my dad. And I think that when it comes to Lisa, there’s been sort of two stages. One has been where she didn’t value herself very much back when we were in Canada. And so she didn’t, uh, didn’t, [01:36:00] didn’t feel she was worth more like she or she could make more or she would, she would always like under quote things, in my opinion.

[01:36:07] Bradford: Um, and then more recently it’s just been that she’s had a hard time finding work. And so then, uh, that means that it is zombie to do that, to make sure that I provide enough.

[01:36:19] Ramit: And when money topics come up, your natural instinctive response is to say,

[01:36:25] Bradford: I don’t know. I’ll find more work.

[01:36:27] Ramit: Right? Yes. I’ll find more work.

[01:36:30] Ramit: I’ll take this burden, I’ll take care of it. And what does that do to Lisa?

[01:36:36] Bradford: It belittles her, I guess. I mean, I certainly don’t think that I go there first. I try to, I also feel like I’m very supportive in trying to help her find something. I also think that I’m very driven by efficiency, and so ultimately, eventually it gets to a point where it’s more efficient for me to go and find work or more work I should say, so that I do that.

[01:36:57] Ramit: It’s very insightful, driven [01:37:00] by efficiency. Hold onto that for a second. We’re gonna come back to that. That is the key to some of your own behavior. Lisa, what are you hearing when you hear Bradford talk about how he uses the word I And he takes this earning stuff on himself, and he’s pretty dejected about the numbers.

[01:37:21] Liza: I mean, I feel bad for him, but he does take the burden on by himself, uh, a lot of times, and I feel bad that he feels bad about it. Here’s the thing, I feel like. I am very externally motivated. And for example, when we made the budget and we decided we had to make $40,000, I did it. If not much is required of me, then I probably won’t put that much effort to go do.

[01:37:46] Liza: Not that I won’t put any effort, but I won’t be as desperate to be like, I’m gonna go and make X amount of money that I need.

[01:37:54] Ramit: Okay. That’s quite interesting. Most of the time, is there an expectation? [01:38:00]

[01:38:00] Liza: Probably not, because Bradford can come in and get another job.

[01:38:04] Ramit: And then what happens when Bradford saves the day?

[01:38:06] Ramit: First of all, what happens to Bradford over time as he’s saving the day, working three jobs, what happens?

[01:38:11] Liza: She’s getting exhausted.

[01:38:14] Ramit: Yeah. Burned out physical impairment. Yes. And then what happens to Lisa as Bradford comes in and saves the day yet again,

[01:38:21] Liza: I have no purpose.

[01:38:23] Ramit: Yes

[01:38:23] Liza: or no reason to contribute.

[01:38:25] Ramit: Yes.

[01:38:26] Ramit: Disempowered feeling like it’s not working and wanting to say.

[01:38:31] Liza: Canada,

[01:38:32] Ramit: let’s go to Canada. Bradford, what are you thinking right now? I see you thinking

[01:38:37] Bradford: I’m trying not to, I’m, I was trying not to be emotional.

[01:38:41] Ramit: Why?

[01:38:42] Bradford: I don’t know. I don’t like that I made my wife feel that way.

[01:38:44] Ramit: It’s okay to tell her that.

[01:38:46] Bradford: I’m really sorry, Lisa, if I made you feel disempowered or dejected or removed.

[01:38:52] Liza: Thank you.

[01:38:54] Bradford: I am trying to figure out how to live life, but still be able to [01:39:00] retire, which means that then I’m gonna have to put more than what’s what I’m doing or what we’re doing.

[01:39:05] Ramit: Why is it important to you?

[01:39:07] Bradford: I’ve already had some pretty, uh, big changes to my physical ability, let’s say. Uh, and so I already can’t learn the way that I could even three years ago, and so I don’t want to, you know, be able to finally have time to do those things in 20 years.

[01:39:28] Bradford: Or 25 years. And I want, I don’t want my kids, I want my kids to be able to as well, you know, I don’t want them to have, to not be able to do things because we need to put away more money for retirement. ’cause I already feel like I do say no quite a bit.

[01:39:40] Ramit: Lisa, what role do you need to play in the family?

[01:39:44] Ramit: Finances.

[01:39:45] Liza: Maybe more of qual partner.

[01:39:47] Ramit: What do you hear your husband saying?

[01:39:49] Liza: That he doesn’t wanna work forever. Okay. And so maybe he just needs more support from me to carry more of the, the weight of the, the finances, I guess, which I would like to [01:40:00] do. ’cause I also get gratification. It’s not like I wanna sit on my ass and do nothing so

[01:40:05] Ramit: Great.

[01:40:05] Ramit: Can we play a game called I Need? So the game is you just, you have 15, 30 seconds and you can feel free to say everything you need as it relates to money. What do you need from your partner? This is a chance for you to say what you need, like you’ve never said it before.

[01:40:30] Bradford: I need you to earn enough for us to put into retirement so that we can retire at some point.

[01:40:38] Bradford: And I need you to acknowledge when I am working, not just when I am taking on extra jobs. I find you’re very, you’re very good, Lisa, about telling me or acknowledging what I’ve taken on like a third job or when I’ve taken on, like the extra teaching jobs at night. Um, but I need you to do that even when I’m [01:41:00] pulled back from that and maybe taking a little more care of myself.

[01:41:04] Ramit: Great. Thank you. That was awesome. Lisa, do you wanna react to that?

[01:41:09] Liza: I’m actually, I was actually surprised when he said that he wants me to, to make enough to put away for retirement. ’cause that doesn’t seem like it requires a lot of me. Even if we double the amount, that’s not that much. I can see how maybe I am way more appreciative and like outwardly verbally appreciative of rec and recognize him when he’s working extra and not working the normal job and taking care of himself and having more work-life balance.

[01:41:38] Ramit: Cool. Okay. And what do you need?

[01:41:40] Liza: I, well, I need you, Brian, to keep believing in me and encouraging me to know my worth, I guess in a sense, because that is valuable to me. I think when you say it matters to me, um, and then I also need you to, I don’t know, to not always [01:42:00] come and save me because it’s okay to require things of me, like I appreciate it.

[01:42:04] Liza: It’s not that I don’t, but sometimes I feel like I, I feel less than because. It doesn’t matter if I require anything of me or not, you know, because ultimately you’re gonna figure it anyway. So what is my value and my contribution? I don’t know.

[01:42:21] Ramit: Thank you, Lisa. Bradford, your reaction,

[01:42:24] Bradford: I’m surprised that that means something to you because I honestly, I feel like I’m annoying you when I tell you that you are more knowledgeable and more capable than so many of these people that you’ll compare yourself to.

[01:42:37] Bradford: But I can definitely continue and do it more because I, I do think that you have more knowledge and capabilities than you give yourself credit. Slower.

[01:42:48] Ramit: What about the second thing that she said,

[01:42:50] Bradford: I can definitely, I can try to back off and not try to save you and instead make it more of a team effort on how are we going [01:43:00] to do whatever the goal is.

[01:43:03] Bradford: Instead of getting frustrated and working all out of my efficiency to be like, well, this is the fastest, best way to do it, so let’s just do it.

[01:43:10] Liza: No, I appreciate that because I actually think that’s part of the pattern is that, sure, I don’t value myself enough and so you tell me that I should because of all these talents I have, and at the same time you’re like, oh no, don’t go do that for that money.

[01:43:23] Liza: Let me work an hour ’cause I make triple what you make or whatever. And so then it just kind of makes messages and it doesn’t make me believe that I capable or worth it.

[01:43:33] Bradford: I never thought about the double message.

[01:43:35] Ramit: Extremely insightful. Both of you. I really appreciate how both of you really brought total energy to that.

[01:43:43] Ramit: That’s a really hard exercise. What do I need? I myself struggle asking for what I need and I noticed just so many things that were so beautiful about that. Lisa, I really loved how you said sometimes I need you to tell me like [01:44:00] and don’t save. That was powerful. And Bradford, I really wanted to make sure you heard that.

[01:44:08] Ramit: And that is one of the keys here, which is Lisa. Lisa working on your own self-worth with the help of a therapist. Absolutely critical. Nothing moves forward from your end without that. So it’s gotta happen. Okay? In addition, this idea, Bradford, that you love efficiency. Efficiency is actually not the most important thing in your relationship and that is really important to understand.

[01:44:35] Ramit: There are times and places to be efficient, but this is actually not one of them. In fact, efficiency is poisoning what’s going on. Much better for both of you to add something to this relationship that is totally absent and that is a shared vision of what you were both going for. Right now, there is no shared vision around money.

[01:44:53] Ramit: You know what it is? It’s, Lisa wants to basically like, ah, like let’s do this, let’s do that. It’s [01:45:00] fine. It’ll, things will work itself out. Bradford is like, well, we gotta save for retirement. And so I’ll work two jobs, three jobs, four jobs. And what inevitably has happened is neither of you actually have connected at all.

[01:45:12] Ramit: It’s just the two of you kind of working in parallel, but at odds with each other. Mm-hmm. And so both of you’re like, this sucks. I, Bradford am tiring myself out. I’m getting sick. And then I just found out I, we actually don’t have enough money. This sucks. And then Lisa’s over here like, I wanna work ’cause it adds value and it contributes, but then I’m not getting paid enough so I’m not valued.

[01:45:33] Ramit: So no one is actually really connecting with each other. Do you see that?

[01:45:37] Liza: Yeah, for sure.

[01:45:38] Bradford: Yeah.

[01:45:38] Liza: Now that you say it like that. Yeah.

[01:45:39] Ramit: Okay. So what needs to happen, in my opinion, is a shared vision. You actually cannot get to where you want the way that you’ve been doing it. You have to both be active Bradford, you have to be clear about what needs to happen, as do you, Lisa, what do you both need?[01:46:00]

[01:46:00] Ramit: And then. What you’re hearing Lisa say is like, Hey, I actually want to be held to a higher standard. I don’t wanna be saved. I wanna be a part of this. And then Lisa, it’s important for you to be able to work on yourself and say like, I’m not gonna try to jump to the next shiny thing as you described it, but rather we have a vision.

[01:46:21] Ramit: I’m going to kill it. I’m gonna knock it out just like I did last time. And I know I may not have the clients today, but I know I can get ’em or I can get another job. That’s how we do it as a team. So what is the shared vision?

[01:46:34] Bradford: I think it would be to retire and have the option of moving back to Canada.

[01:46:42] Ramit: Okay. How much do you need?

[01:46:45] Bradford: We said it was 1.6, right? So I mean, I’m guessing then let’s go to like 2 million.

[01:46:50] Ramit: That’s a fair, that’s a fair assessment. So without getting into all of the calculations right now, let’s assume that you need to. Double your [01:47:00] contributions.

[01:47:01] Bradford: Okay.

[01:47:01] Ramit: Let’s just assume that I’m gonna put the CSP up and I wanna see how you’re going to double your contributions to your investments.

[01:47:10] Ramit: Alright? You currently have fixed costs of 72%. You have investments of 18%, which is $920 a month, and then savings are at zero and guilt-free spending is at 9%. Alright. What’s your plan of attack?

[01:47:24] Liza: I mean, I can make more money.

[01:47:26] Ramit: Great. How much?

[01:47:27] Liza: A thousand more.

[01:47:29] Ramit: Okay. So you wanna go instead of 2000, you wanna put 3000, right?

[01:47:32] Liza: Sure.

[01:47:33] Ramit: And how much is the net on that ballpark?

[01:47:35] Liza: Uh, 2,700. I don’t pay a lot in taxes because of my business. Yeah.

[01:47:39] Ramit: Alright. Wow. Holy, your fixed cost just dropped down to 47%. That’s ama. Oh my God. Did we just solve the whole problem in two seconds? Look at this. See, this is how it works. The money flows down, it flows to the bottom like a bucket, and you now have 41% in guilt-free spending, or $3,000 per month.

[01:47:59] Ramit: Now [01:48:00] that’s insane. Y’all do not need to be spending $3,000 if you wanna retire early. So what do you wanna do with the money?

[01:48:05] Bradford: I mean, the stock should probably go to 1.6.

[01:48:08] Ramit: Okay. Alright, so you’re now at 22%.

[01:48:11] Bradford: And then savings, I guess we need to be putting it in there as well.

[01:48:15] Ramit: Yep. Typically, people recommend three to six months.

[01:48:17] Ramit: I recommend six to 12 months.

[01:48:19] Liza: Well, it’s a lot.

[01:48:20] Ramit: It’s a lot of money. So y’all can choose. But like six month is your baseline. So that would be six months times your fixed costs, which is $21,000. You currently have 1500 bucks. So let’s pump that freaking savings account number up. What do you wanna put here?

[01:48:37] Bradford: Probably like a thousand until it’s there.

[01:48:39] Ramit: All right. Not bad. Not bad. A thousand bucks. This is gonna take you about little under two years. That’s not bad to fill up an emergency fund. That’s not bad. Yeah. Guys, this is pretty good. Look at this. So 47% fixed costs. That’s low, lower than most ’cause it’s usually 50, 60%.

[01:48:58] Ramit: And notice that we cut your [01:49:00] groceries, so that needs to change. Next up, investments are at 22% quite aggressive, which is perfect for a couple that wants to retire early and is somewhat starting in their late thirties and forties. Great, I love it. Savings are at 13%. Good. Good. It’s, in my opinion, a little low, but it’s not so bad.

[01:49:19] Ramit: I don’t mind it. It’s fine. You’re gonna get where you need to go in like less than two years. That’s totally fine. Guilt free spending at 18%. Now there is a key to this. It only works if Lisa’s earning $3,000 a month.

[01:49:35] Liza: That’s what I asked for. I am scared of it now, but yes. I asked to require more of me, so I guess I’m in for it now.

[01:49:41] Ramit: Yeah, you just, you were making 4,000 until recently. Mm-hmm. So I know you can make 3000 and I actually think the win comes when you start to beat that number. I’m not gonna hold you to it today. Nobody’s gonna hold you down. You just gotta hit this number. But in my opinion, you’ve probably seen this with your kids, people don’t really respond to [01:50:00] lower expectations.

[01:50:02] Ramit: They actually respond to higher expectations. People as part of a unit want to have a role. Everybody wants a role, kids, adults, everybody. And so to have that role and to say, look, our success is dependent on you doing your part, me doing my part, and us revisiting it. Because our, our relationship is not just about money.

[01:50:23] Ramit: It’s about our kids, it’s about our family, it’s about love, it’s about all that. But we each have a role to play. This is a business, the business of running a household. People love it. They might resist at first, but we all want meaning in life. What I would like for you to do is tighten up these calculations.

[01:50:42] Ramit: Okay? Yeah. Because there are certain things in here that are not properly accounted for that you that are really meaningful. For example, when you hit your savings number, which will happen in like a couple of years, that is a thousand [01:51:00] dollars a month that you can then start investing guys. That’s a lot of extra money.

[01:51:07] Bradford: Mm-hmm.

[01:51:08] Ramit: So you can accelerate your investments, but it is important in my opinion, that you have the savings. Why? Because the path that you have taken until now is this, look at my hand. It’s going up and down. Kind of like a stock chart up and down.

[01:51:22] Bradford: Yeah.

[01:51:22] Ramit: We don’t want that anymore. You paid off your debt.

[01:51:24] Ramit: That up and down is behind you. Never again. The new chapter of your life is like this. Look, look at my finger. It’s like a slow, steady chart. It’s going up. We are not going up and down and up and down and up and down again. Okay? Sure. There might be setbacks. Lisa, you might lose a client for a couple of months.

[01:51:40] Ramit: Okay, fine. Uh, Bradford, you might take on an extra job or lose an extra job. Okay, fine. You might have some emergency. You have to fly back to Canada for fine. But in general, we are doing this. This is the kind of life we are. Engineering means no more lines of credit. We’re not using that anymore. We are building up savings.

[01:51:59] Ramit: The savings [01:52:00] is specifically meant for emergencies. What is an emergency? Buying a new tv. That’s not a emergency. Taking a trip to go to another part of Columbia on vacation, that’s not an emergency. Somebody gets sick and you have to fly back to Canada on the next available flight. That is an emergency.

[01:52:14] Bradford: They are.

[01:52:16] Ramit: It’s going to cost you a little bit. Yeah. That 30,000 bucks could be sitting in the market earning you more, and yet you’re gonna leave it in savings because one day you’re gonna have to tap it and you’re gonna be so thankful that you don’t have to go back into this to get there.

[01:52:31] Liza: Makes sense?

[01:52:32] Bradford: Yeah.

[01:52:33] Ramit: I wanna give Bradford credit, when he saw those retirement numbers, he said out loud, I’m so dejected, I can’t even keep up with this right now. And frankly, I think that’s very powerful to admit. It’s not easy right now. The fact is they don’t have a shared vision. Look at how they operate. Bradford hunches over working multiple jobs, just saying, I’ll handle it.

[01:52:55] Ramit: Lisa’s over here thinking this sucks. I’m moving to Canada without you. And as an [01:53:00] outside observer, what I see is they are very good at coming up with reasons for why things are the way they are. But those reasons are not getting them the outcome they want. Frankly, you don’t need to be right. You need results.

[01:53:14] Ramit: And sometimes that means letting go of explaining and looking backwards and instead reorienting yourself to look forward. What do I want? What do we want? Okay, now that we’ve gotten that out, how are we gonna get there? The good news is they took the first step, they ran the numbers together, they each said what they need from each other, and they really listened.

[01:53:36] Ramit: Now they have a plan. Lisa knows her target $3,000 a month. Bradford knows he doesn’t have to carry it all alone. And they both know exactly what they have to do to make moving back to Canada a real option if that’s what they decide. Now let’s check out their follow ups.

[01:53:54] Liza: Hi Ramit. So it’s been a few days since we last chatted and I wanted to send a little follow up.

[01:53:58] Liza: So I would say that during [01:54:00] the call, my biggest surprise was the fact that our net worth is not zero. Like I really thought we had nothing to our name. So seeing those numbers on paper was really good for me to feel like, okay, our efforts are working and we are building something over time. Um, I would say my biggest takeaway is divided in two things.

[01:54:17] Liza: Number one, um, on the relationship side, as much as I really appreciate the Bradfords willing to step up and support us and meet our needs, um, whenever I’m not contributing as much as he is, I didn’t realize how much that was invalidating, um, my efforts I guess. Um, and so that was a really key moment for us.

[01:54:37] Liza: Um, and I feel like now I understand that my efforts are necessary and they are valued and that gives me a little bit of motivation to continue to work hard and, and contribute. ’cause it does bring me joy to contribute to our finances as well. So, and then on the other side, on the more practical side, I would say that, um, I realized during our call that importance of having an emergency [01:55:00] fund of some sorts.

[01:55:01] Liza: Um, because I realized when we were chatting that perhaps. If the emergency is not external, but if it’s something that happens to Bradford or I, then we could really get into trouble by using our lines of credit as a way to, um, as an emergency fund, I guess. So, um, what we decided to do for that is because our portfolio has grown a lot in the last few years and we have a good percentage of, uh, growth, we decided to sell some of our stock and we’re gonna use that to kickstart our emergency fund.

[01:55:30] Liza: I don’t know if we’re gonna have like a full six months of expensive sitting in our account, but definitely five to 10 grand we’re gonna have just sitting there in case when you jump on. So that’s about it.

[01:55:41] Bradford: Uh, so my biggest surprise, well, I think was definitely that we’re not putting enough away for retirement to, to live as well as I’d like to.

[01:55:48] Bradford: No, it just kinda shocked me. And then I think that the, the thing that surprised me the most was actually just how my efficiency was not always the best answer. Uh, you know, [01:56:00] meaning that like. Whether it meant that my efficiency was actually, and the kind of like rescuing my wife, uh, when we needed that extra little bit of money was actually like detrimental to her.

[01:56:11] Bradford: Or whether it was that, my efficiency in trying to make sure that we didn’t bother with the savings in order to make sure that that money was invested and would get more return, even if it was loosely invested and easy to pull out. And then the, the last one, the thing that we’re gonna try is actually to do that savings, to actually try having it.

[01:56:29] Bradford: Um, and so to put away, you know, 20 grand and, and then just see if that, how that changes things, uh, because. Well, we haven’t done that for a very long time, so to try it and see if that helps.

[01:56:43] Ramit: Listen up. If you want my help with your specific money questions. There are only two ways to get it. First, you can apply to be on this podcast at iwt.com/apply.

[01:56:53] Ramit: Or second, you can join my money coaching program instantly at iwt.com/money [01:57:00] Coaching. In that program, you get access to live virtual events, monthly group coaching calls, live q and as, and an amazing, huge community of other people like you. Check it out at iwt.com/money coaching.