240. “We book $10K vacations, then panic about money”

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Now is the time for business owners to get ahead, not in January. So find out if you qualify at joingelt.com slash Ramit. That's join G-E-L-T dot com slash Ramit. Three or four weeks ago, we started looking at this very cool tour of the Faroe Islands, where you fly to Copenhagen and then you fly over to the Faroe Islands. How much is this thing going to cost? I can't see that it would cost anything less than $10,000 and it might cost more than that. It's not like, oh, we have $10,000 in cash sitting around that we could just shell out. Oh, we do actually. What's happening right now? Do you or do you not have $10,000 of cash? He had some money, some cash that he was supposed to put into like our reserve fund. Put it in a bad spot. He put it in a bad place and lost it. How much are we talking about? $12,000. I really lost it. I was very upset. I felt very much like I had been betrayed in a way. I have the classic cancer survivor brain of what if it comes back and I have, I haven't done all the cool things. Guys, you're close to 70 years old. We need to be realistic here. The decisions you make today, no joke, they're very important because if you get it wrong, you end up 85 years old, no money, and that's it. We're at the age where our friends are dying. So do you hit it hard and just say we're going to live really hard until we die? What if you spent your whole life working hard, saving what you can, but you still don't know if you can retire? Today, we're going to meet Cheryl and Mike. She's 67. He's 69. They've been married for 12 years, both college professors, and they love to travel. But every time they talk about planning a trip, they argue. Cheryl wants to live for now. She's a cancer survivor who wants to make the most of every year that she has. He says, where's the money going to come from? I'm about to show you a few items from Cheryl and Mike's conscious spending plan. They're actual numbers, which breaks down their net worth, income, and where they spend their money. You can download and create your own conscious spending plan or CSP for free at IWT.com slash CSP. Assets, $455,000. Investments, $517,000. Debt, $186,000. Net worth, $828,000. Now, working a few more years could make a real difference in their finances, but will it be enough to support the kind of life they want? Before we hear their story, I want to hear from you. In the comments, can you tell me, what was a time you spent money on something big and then you instantly felt guilty about it? Let me know in the comments below. How are you both feeling about our conversation today? I'm doing this for Cheryl. Is that right? Yeah. I hate being online. I hate being on camera. I can't stand it. I don't want to. I don't like exposing myself in any way. So it sounds like you are, how would you describe it? Reluctant? Nervous? Reluctantly excited. Reluctantly excited. Okay. All right. And Cheryl, what words would you use to describe how you feel about today? Oh, I'm just flat out excited. Michael's kind of semi-retired. I'm still very much full-time with the side hustle. And so I need to make the decision about when I'm actually going to retire. I don't feel confident enough yet to say, okay, I'm walking away from full-time. Okay. Awesome. Well, I'm excited to talk to you more. Cheryl, in your screening call, you said something that really caught my team's attention. You said, I'm embarrassed that we're this old and we don't have our finances together. And Michael, when you hear Cheryl say that she's, quote, embarrassed, what comes up for you? I know where she's coming from on that because we are this old and there is always these things, you see, in magazines that say, I'm 63 years old and I've got $2 million in savings. Can I afford to retire? And we think, geez, we don't have that at all. What's the timeline to retire for you, Cheryl? I've been saying at 70, which would be two and a half years, three years. Okay. Let's talk about the money discussions in your relationship. How often do you talk about money? I would say probably not much more than once a month. Usually it's saying, are we going to spend this massive amount of money doing this thing that we want to do? Oh, like what? Like travel. Like three or four weeks ago, we started looking at this very cool tour of the Faroe Islands where you fly to Copenhagen and then you fly over to the Faroe Islands. And so you stop at all these gorgeous little inns and hotels and eat at these great places and then you go on to the next one, and the next one, and the next one, and the next one. Who brought it up? Cheryl's the one that usually picks out the vacations. She likes to travel. She grew up traveling. So Cheryl, you brought it up. And then let's talk about the money part of it. When did that part come up? I don't even know. It's come up just in a way of like, are we going to do that this summer? I can't see that it would cost anything less than $10,000. And it might cost more than that. What was your response, Michael? It's not like we have $10,000 in cash sitting around that we could just shell out, but. Oh, we do actually. See, I don't know anything. Whoa, what's happening right now? Actually, now that I think about it, yeah, we do. So where did that comment come from, Michael, that you don't have $10,000 of cash sitting around? I don't know. I just don't think of the savings we have as being there. I guess I just didn't think of it. Now that you mentioned it, yeah, I can see that we do have that amount of money sitting around. Well, it's not sitting around. It's earning interest. I just. I put it out of my mind. Maybe that's the way I think about money. If it's not actually physically in my hand, it doesn't really exist. What do you think, Cheryl? I think that is reflective of Michael's approach to money. He doesn't have much faith or trust in knowing that it's there. I'm not sure he sees the connection that I always see between getting more money and using it to do something that you really want to do. Like, for me, that's the whole point. I love what I do. It's deeply fulfilling. It's wonderful. I never thought I'd have this career, this calling. But it also enables me to do the things that I want to do. And that's how I see money, as like this great tool to get what you want to get, to fulfill yourself. But I don't think Michael has that connection. And I don't think he's ever trusted his own ability to make money for that reason. Yeah, I agree with everything that Cheryl said, that we have a different. relationship to money. When Cheryl was saying about the things that she wants to do, that she thinks up, I was thinking to myself, if it turns out we can never travel again, we need to save our money, I'd say, okay, fine. I got other things that interest me. You guys talk about this kind of stuff around money? Not specifically that, but for the last couple of years, we did hire a financial planner. And so we started having legit conversations about numbers, and things like that. We still have our money pretty separate, for the most part. So when we had to fill out all the paperwork for him, then we started having much more in-depth discussions about what we have, what's coming. So when you started filling out these forms and talking about your money separately and together, what was the first reaction that you had when you looked at everything in totality? I thought it's not as bad as I thought it was, but it's not as good as I would like it to be. Okay. And Michael? Yeah, that's exactly what I thought too. It's not as bad as it could be. could have been. All right. And then what were some of the bumps in the road that you encountered? We both work in a profession where the money comes in very odd ways. Our contracts are just really different from the big world and the way that it works. And then our parents passed away. My mother had passed away a while back, but then my dad passed away and left money. And Michael's mother died six weeks later and she left an estate. And he had some money, some cash that he was supposed to put into our reserve fund. I put it in a bad spot. 12,000. And you put that into some type of, what was it? It was stocks. Okay. You put it into stocks and you lost some of the money. Yeah. Okay. And what did that bring up for the two of you? What kind of discussion? I didn't know about it until we had to tally things up for our financial planner. And I really lost it. I was very upset. I felt very much like I had to do something. I had been betrayed in a way of trust, not the money, but we've always had a very trusting relationship. And so it was weird to me that he just went rogue and it like brought up all this stuff that I sometimes say that he's resistant to making money. He was a lawyer. He made money, hated it, smart, get out of it, do something else. But I sometimes get the feeling like he puts up like a little Teflon shield to keep money from sticking to him. And that's what he did with this money. That was going to be his one big contribution to, to our future. And he gambled it and just lost it. And I just didn't think it was a smart decision. Do you trust each other with money today? Sure. For the most part. What does that mean? For the most part? I'm still like reeling a little bit from the incident. Still got some residual anger, I think. No, not anger, but I tease him a lot. I'm like, you don't have money like hidden somewhere that you're not telling me about or. Why do you say that? Because I thought he. He was doing something with that money that we had agreed on and then he didn't. That's interesting. It's not about the 12K. That number is quite modest in the grand scheme. It's, as you mentioned, a betrayal. What does betrayal mean to you, Cheryl, when it comes to money? Well, when you make a deal, you stick to it. There's no point in making a plan if you're not going to follow through with what you say you're going to do. Okay. Michael, what was your thinking behind that decision? Well, I thought it's not a whole lot of money to put away. And I thought, if I put it into the stock, there's a good chance I could grow it. I could have more money that would contribute more. And it all went south. And the farther I got into the fact that it was going south, the harder it was for me to confront it. And the harder it was for me to tell Cheryl that it had gone this way. It just got worse and worse. And then finally, cut losses. It was, you know, funny thing is I teach logical fallacies as part of this thing. And that's the sunk cost fallacy, you know? And I fell into it. Well, as we all know, just because you know something does not mean you are impervious to it. In fact, if anything, we are all human and you could teach a textbook on something, but gosh, sometimes you find yourself right in that textbook. It's a human condition, isn't it? Yeah. How is your money currently organized? Do you combine your money as a married couple or no? No. Social security and my whatever money I get from my job go into an account that Cheryl is a survivor to and she can access it. And Cheryl's money goes to her account. How do you pay your bills? We kind of, yeah, we divvy it up. That's divided. One of the reasons I went with social security, because at that point, I was an adjunct and I was not making a whole lot of money. And I realized I was past the point where I could start taking social security. And I calculated that I was going to have to pay my bills. And I calculated that the social security would cover our house expenses. It would cover the mortgage. It would cover water, sewer, et cetera, internet, phone. How did you decide this split? It just kind of organically came up that if he could rely on that money every month was very different from the hodgepodge of adjuncting where you're randomly getting checks and sometimes you're not. And so that was like a steady thing that he could contribute. If I remember correctly, I was the one who brought it up. And it occurred to me that I'd be able to contribute to this. Before I took this, I thought I was very much a free rider. Cheryl was paying for everything and I would contribute money, but we didn't share it. And I thought this is a more equitable way to do it, that I would jump in and have a steady income each month that would cover the things that are required each month. It's very interesting. Michael, how many times do you use the word contribute? When it comes to money. Oh, I see what you're doing. A lot, actually. A lot. I'm not surprised. You know why? This was her house. She owned it before I moved in. I relocated to the city where Cheryl lived, and then I got a job here. How does contributing fit into that? It goes along with the idea that Cheryl makes a lot more money than I do because we don't have tenure. That's a big clue. Yeah. The answer is the person in a relationship, who earns less, is almost always obsessed with the word contribution. And Michael is a great example that it doesn't mean anything good or bad about anyone. It's just the dynamic that happens when you have somebody who does not, quote, contribute as much, financially speaking, then they start to become unconsciously uncomfortable with it. And they go, oh, I need to contribute. Oh my gosh, let's talk about this. I can do that. Social security here and there. And I see Cheryl nodding her head. Cheryl? Just for a tiny bit of context, Michael and I were in a relationship and we decided to get married and that we would move here from Vermont, where he was living at the time. We got married in December and six weeks later, I got diagnosed with breast cancer. We thought it was going to be like a nice calm after the holidays, after the wedding, just we'll have time to catch up and boom. It was just a huge slam. And so when he'd moved down here, the plan was that he'd get a job, but suddenly I needed to be supported. I needed somebody to go to chemotherapy with me, go through two surgeries, go through radiation treatment. And I didn't stop working. I was working through the whole thing. So he was so incredibly committed and supportive of me going through this terrible thing six weeks after we got married that I never had expectations for him to just, it wouldn't even have worked if he went and got a full-time job. Like he was driving my car, he was driving my car, he was driving my kid to school and picking him up and coming with me and advocating for me with doctors, doing the whole thing. So it really was never a point where I thought that it mattered that I was making more, that I had this full-time job, that he probably would not find anything other than part-time work. And that was fine. That was fine. That's great. Kudos to you, Michael. And Cheryl, how are you doing health-wise now? Good. That was, it's 11 years. Oh, wow. 12. Oh, congratulations. 12. Yeah. That's amazing. Yeah. All right. Shall we take a look at your numbers? I'm very curious. So this conscious spending plan, I'm going to throw it up on screen in a second. What was it like going through the process and doing the CSP together? Actually, I think we laughed a lot. It was fun to figure out what you wanted on that form versus like where we thought things were. And then also it was a little bit enlightening. I still don't understand it. That's because it seems like the percentages are weird. I'll definitely walk you through it. Do you both feel very competent understanding where your money is going or do you not feel like you have a grasp over where your money is going? I'll tell you that one of the things we laughed about when filling out the CSP, it was like, we get to a line item and we go, I don't know, let me go look that up. You got to remember, most people don't even know how much money they make. Yeah. Forget about how property insurance is or property tax or how much they spend on granola bars. Nobody knows. So I'm not troubled by that at all. Cheryl, do you feel like you understand where your money's going or no? I sometimes say I know where the big money is going. I don't know where the little money's going. What Cheryl just revealed is telling. She knows where some of her money goes, but not all of it. That alone tells me there are likely issues in how she and Mike manage their finances. And it doesn't surprise me. Their money is not fully combined. And when your finances are linked together, it's incredibly hard to see the full picture, let alone to make confident decisions about retirement. You have to remember that for most people, they get most of their information and feelings purely from what is in their checking account. They don't even really factor in what's in their retirement account. And if they have a partner's money that is not linked together, you might as well forget about it. That is why, especially if you are married, it is so important to combine your finances. And have a bird's eye view of what is going on with your money. Retirement money is real, even though it may not feel real to you. Your debt is real, even though it may not feel real to you. All of it is real. You've got to look at it on paper. That is why I recommend you use my CSP. Now, I think Cheryl and Mike's story is relatable to all of us because of one big question they're asking. What if we don't have enough to retire the way we want? This question goes beyond the hold, save, save, save, and we're in accumulation mode. Earn, invest, save, build. For a lot of people, that becomes our identity. And then suddenly, one day, switch gears. Start spending. And you've got to now be okay with those numbers going down forever. This is especially hard for men whose identities revolve around being the provider and often take pride in seeing the number go up. Deaccumulation, the idea of intentionally spending your money down, breaks the script that we have followed for our entire working lives. That script, saving is good. Numbers should go up. You never know what tomorrow might bring. But at a certain point, tomorrow is happening right now. It's kind of like how Indian parents talk to their kids. For years, you hear, don't date. Focus on academics. Don't date. Focus on your career. And then we academically dominate. And then one day, okay, time to get married now. Hey, why aren't you married yet? It's like no ramp up, no gradual change, just time to get married. That's what the retirement transition feels like. Very little guidance, very little planning. Just you're retired. Good luck. Figure it out. I got to tell you, spending money in retirement is a skill. And when you develop that skill, the entire transition gets easier. That is why I talk to you so often about building the skill of spending money now. Because you don't want to wait until you retire. You don't want to wait until you retire. You don't want to wait until you retire to have to grapple with that. Now, when we come back, we're going to dive into Cheryl and Mike's conscious spending plan to see their actual numbers. I'll see you back here in just a second. I'm going to take a wild guess. 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With Skylight Calendar, you can manage events, chores, and grocery lists by assigning colors for each of your family members, meaning no one can say they didn't know what they needed to do. My co-workers say it's a game changer for their families. Plus, it comes with a four-month, 100% happiness guarantee. If you don't love it after four months, you can return it for a full refund, no questions asked. Families are better when they're working together. Right now, Skylight is offering our listeners $30 off their 15-inch calendars by going to myskylight.com slash Ramit. Go to myskylight.com slash Ramit for $30 off your 15-inch calendar. That's M-Y-S-K-Y-L-I-G-H-T dot com slash Ramit. Cheryl, can you read off in this book, the word in bold, and then the number in full next to it for this entire box, please? Okay. Assets, $455,000. Savings, $42,756. And debt, $186,000. Total net worth? $828,756. Cool. All right. So net worth is $828,000. What does that number mean? I vacillate completely between thinking, oh my gosh, that's not enough. Like Michael referenced, people are saying, you need at least a million and a half. And I think there's probably not going to happen. On the other hand, I feel a little proud of myself because I didn't start this career till I was like 50. I did a lot of things before I did this. I worked on Wall Street. I was married to a partner at a major firm and had a very expensive life, as you would expect from an 80s Wall Street multimillionaire, that kind of house. The Hamptons and big apartment in Tribeca and traveling all over the world, doing all those things. And I was very unhappy. And I really recognized working on Wall Street, how unhappy people were who made huge amounts of money. Just very unhappy, snorting coke like there's no tomorrow. Just like really horrible lives. And so I thought, what I want is a life that has some purpose to it, that has some kind of meaning to it. And then I went through a terrible tragedy. My husband died of a sudden heart attack at 36. I was 38. We had made all these plans. We'd bought a 50-acre farm. He would become a doctor. And boom, it was over. So I had to figure out what to do. And so I went back to school and got this degree in philosophy and was not sure what I would ever do with it. But when I found out that I could teach with it, and then I had my son very unexpectedly on my own. And then I did another master's degree. And so I could teach what I wanted to teach and decided to dive into it. So for me, it was the perfect, I'm fulfilled and excited and always challenged. And I make a little bit of money. This kind of money is better than any kind of money I had before. Okay. That's refreshing. I appreciate the vision and the fact that you lived that Tribeca Hamptons life, Wall Street, and then you proactively, affirmatively said, okay, not for me. I want to do this. Was it difficult to go from that lifestyle, Manhattan, et cetera, to making far less money, doing graduate work, et cetera? It was very hard. I think I'm pretty good at being poor when I need to be. I can really pull that off. Michael can too. We're just good at being super frugal if we have to be. It can be really nerve wracking. I always felt like I had a bit of a cushion, but it's still, even when I started this job, I would be looking at it and think, do I have enough money? Do I have enough money? This month. Was the cushion your family? No, it was money that I had saved before I started this career. So I had enough of a cushion that I didn't have to freak, but not enough to live fancy. Hearing your response to my question, what does $828,000 mean to you? You notice your answer. It's what you described was your life. And when I ask, what does this number mean? What I'm really asking is, is it enough? What kind of lifestyle will it give us? Should we feel positive or negative about it? And in order to understand that you have to have a bit of a technical knowledge, it would be like me saying, you have 50 million white blood cells. What does that number mean to you? Average person goes, I don't know. Good, bad. Am I going to die? I don't know. That's how we treat this number. And with a little bit more knowledge, we will be able to have a more relevant answer to the question. So let's just put a pin in that. Both be able to ascertain what this number means to you on a lifestyle basis. Okay. Let's continue moving along. Michael, can you read off your combined gross monthly income, please? What is that number? Combined current monthly 15,949. Great. So together, if we combined your income together, the two of you are making $191,000 per year. Who knew that? I do that because I do the taxes. Okay. Michael knew it. Cheryl? I didn't know that. Not really. Did not know it. 50%. Thank you very much. Keeping my statistic running, 50% of couples do not know their own household income. Why is that, Cheryl? Okay. I'm just going to say it's because we are not paid consistently. Yeah, but you make a certain amount per year. He might make 20,000. Yeah. And he does the taxes. So I very often ask him, what was our income combined last year? What did you think you made last year? 120. What did you think you made? 144. I don't think he told me that. I think he's been, you know, gaslighting. Oh, I told you that. All right. Not hiding any money. Well, that's the, going back to the $851,000, because I do the taxes and realize that, okay, if we cut off right now, getting any money whatsoever, other than social security for both of us, we have $850,000 in net worth. And I said, we got enough to live on for at least eight years, probably 10 years, you know? - No, we're not using that reason. that's not how we make end of life decisions for our finances what the hell boy both of you just went very dark guys you're close to 70 years old we need to be realistic here the decisions you make today no joke they're very important because if you get it wrong you end up 80 85 years old no money and that's it that's the end of the ball game you do not want to die in america in poverty so we don't make decisions by saying ah let me lick my finger and put it in the air and no we get precise especially when we're in our late 60s that's the way we're going to do it okay let's continue along with the csp fixed costs 37 that's quite low this is why i don't trust this i'm not sure what we did you don't trust it well you make a lot of money and your mortgage is 1141 dollars your utilities are modest your insurance is modest you have a financial planner for 150 bucks fine cars only 150 so that's probably paid off debt payments uh 68 dollars a month groceries 700 quite modest clothes 150 co-pays you have subscriptions for 469 a little higher than i typically see but not that big of a deal cats 225 house cleaner 300 manicures and haircuts 75 and home repairs 200 yeah it's all quite modest relative to a take-home income of thirteen thousand dollars a month the two biggest drivers in why this is low actually there's three one is your mortgage is low two is your car payments are low and three your debt payments are low those are the three key drivers as to why this is low most people in your situation even with a equally high income or sometimes even higher their mortgage is way higher their car is like astronomical i'm talking 800 to 1500 a month it's nuts and then their debt payments are quite a bit higher as well sometimes over a thousand sometimes two three thousand dollars a month so there you go believe the numbers they look to be quite accurate to me let's continue along investments at 22 that's pretty good hold on i'm going to take a look here so you are doing a pre-tax 401k or 403b that's fine 800 bucks a month and then we go down to your investments we have three thousand bucks a month in post-tax okay i see some words i don't like we'll talk about those in a bit savings at eight percent which is 500 bucks a month to a long-term emergency fund and 500 bucks to a travel fund okay i like being a to see people's fingerprints on their csp i can tell the two of you like to travel you fund it great this is great i love to be able to see who you are by where you spend your money and then finally guilt-free spending 33 that's cool with me but i will say this is at the higher end of the number typically it's 20 to 35 at 33 you're near the top of that let's take a look at how you described it dining out gadgets travel theater instruments and music paints and paper donation gifts and kids that's four thousand three hundred seventy seven dollars a month so if we look at all these four key numbers fixed costs which typically i recommend 50 to 60 percent yours 37 which means you are saving a huge amount on fixed costs so my natural question is where are you putting the rest of your money where is it going and so we scroll down we go oh they're putting more in investments this makes a lot of sense when you're older and you have not invested aggressively your whole life you should be investing aggressively especially now when you have time so you're at 22 percent plus a little pre-tax that's not a lot of money but you're saving a lot of money you're saving a lot of money you're saving a lot of money you're saving a lot of money you're saving a lot of money you're saving a lot of money you're saving a lot of money you're saving a lot of money you're saving a lot of money you're saving a lot of money yeah okay not bad considering you have an emergency fund of about four months and travel savings of twenty three thousand dollars yeah okay maybe you can save a little bit more but it's fine and then you are spending a lot on guilt-free spending eating out or travel theater books all that stuff what do you make of it as i go through those numbers what do you think cheryl it leaves me with a question should we be saving more aggressively if i want to retire in a couple years should we be maybe not taking fancy trips to the faro islands maybe we should be traveling to connecticut and putting more money into investments for the future michael what's your assessment as i walk through these in an odd way it is reassuring to see that we're not busted you know not broke and i'm glad to hear that we are saving more and our expenses are lower than people in our category but still it feels like we could be doing more we should be putting more away both my parents live to be 94 years old which i don't want to do but i was thinking like will this hold me out until 94. you know geez if you both are concerned about wanting to save more why don't you just save more you clearly can because i have the classic cancer survivor brain of what if it comes back and i haven't done all the cool things what if i haven't gone to the far islands and the norwegian fjords and the machu picchu and all of those things and so part of it is no just live live live because you don't know we're at the age where our friends are dying so do you hit it hard and just say we're going to live really hard until we die what's the philosophy been so far trying to find a healthy balance my parents live to travel my father was an airline pilot so my mother would say she'd buy the cheapest pasta in the store but then she'd book a trip to the galapagos and so i have a lot of that too i don't care about the cars we have old cars period i don't care we have a small cheap house that so i don't care about that stuff but i i do want to have experiences i do want to have all those things because who knows your philosophy has been a healthy balance do you think you've found a healthy balance between saving and spending i'm not sure that we have okay that's an honest answer and michael what has your philosophy been on the finances i agree with cheryl i know that a lot of people they put off experiences until they retire but we saw both sets of parents that by the time they retired they were not capable they weren't able to enjoy these things and so we mutually agreed that instead of putting off these experiences until we retire we have plenty of time to do it let's do it now when we've got money come again so we can spend it and then replenish it and we'll take a couple trips a year what i like is that the two of you have talked about it and you've developed a philosophy i can hear that you're questioning is this right are we doing it right i can hear that but you at least talked about it and you have taken and integrated your family history and said look based on what we learned based on what we observed i think and we think this is what we should do my favorite thing in the world is meeting people who have a point of view i don't even have to agree with it but at least they came up with a point of view for them and a point of view on eating on parenting on travel on their house whatever it is so rare that i love hearing your point of view on money i have a question because coming here i asked you what do you want to get out of today and you told me i want a decision about when to retire i want more knowledge about where our money is going all valid questions all good questions but you engaged a financial advisor and from your csp you're paying them so why not ask them why are we here they seem to take a very automated approach you have it you don't have it there's no nuance in it whereas when i started reading your books and you look at it in terms of what is your rich life rather than am i rich or not rich which seems like most financial planners kind of we've got all this money here's a pie chart blah blah blah it's fine but that's not what like life is like especially at our age it's not the same formula that you create in the way that you look at how you balance your life and your money the difference is that you are asking us questions that lead to better answers than do we have enough money or do we not have enough money that's a good way to put it what's fascinating though is that when you told me what you want to get out of today they were all very mechanical things i don't really believe your answers actually and i don't think you actually believe me either think about it i asked you what do you want to get out of it this is what michael said a solid foundation and more knowledge about where our money's going you don't need me for that you got the csp you got your own credit card reports you don't need me cheryl you said i want a decision about when to retire why you need me for that your financial advisor can give you five different conditions and scenarios under which you can retire if you take social security at this age blah blah blah the only thing that really stood out to me is i would this is what you said cheryl and you added this as an afterthought i want us to be more on the same page that i can help with that i can help with better than maybe your financial advisor but these mechanical questions not only am i probably not the best person in your professional relationship i don't even think you really want to know it because it's probably buried in that 40-page report you got last month what do you think no i think you're right according to our financial advisor i could have retired this year on my birthday like i could have started collecting social security and i opted not to partly because as michael said we had this epiphany that we could travel before i retire i can keep working we have this income coming in i'm just feeling a little ornery about giving up the income because i work so hard to get it to the point where it is and then like i'm going to walk away so can we keep doing this stuff that we want to do and i'm not going to give up on it but i'm going to do with the money coming in but if i reach the point where i just can't deal with being a full-time faculty member anymore will it be okay okay to just give you the short answer right now? Yeah. Because just by pure logic, if your advisor told you that you could have retired this year and you're still working and you are investing over $40,000 per year, then obviously if you want to stop in a year or two or three, of course, logically you can because you're actually going to have more money invested. So what are we talking about? Nobody comes on this podcast for a quick question. Just to be very honest, when a couple opens up with, we just need a little help, I know that's not the full story because those kinds of questions don't make it to my desk. Honestly, if you had a quick question, you would have answered it yourself. When couples say yes to being here, it means there's a deeper problem. And deep down, they know. That's why they chose to speak to me instead of going to some online calculator or a financial advisor. This is very important. If you are in the business of helping people, whether you're a coach, a trainer, or even if you have friends who come to you for advice occasionally, you've got to ask yourself, why are they coming to me? It's probably not that you just happen to be there. There's probably a deeper reason. And sometimes people aren't even aware of it themselves. But what I'm doing with these series of questions is really probing, why did they choose to talk to me? They could have chosen to talk to anybody. Why me? And it's important for them to consciously recognize it. When Mike casually mentioned how long he thinks his money will last, that is a key insight and you need to pay attention. Part of being good with people is being able to listen to a lot of what people say, even to encourage them to tell you more. But then you need to function almost like a sieve. You need to filter things out. Like, have you ever seen those factory videos where a bunch of apples are rolling down a conveyor belt and the robot can detect a rotten apple and it just goes, get the out of here, slaps it away. That's a lot of what I'm doing on this, this podcast. Like people will spend four minutes telling me about the importance of their dog's diet and mentally in my head, I'm like, get the fuck out of here. Oh, wow. Fido. So interesting. I love that you give them wet food, but I'm always listening for something that is extremely illustrative, extremely telling. And when Mike says something about how long his money will last, I go, what? That is important. It's a sign they actually have not gotten precise. With their retirement plan, even though they have worked with a financial planner. And honestly, I understand because working with a financial planner can feel overwhelming. Sometimes they don't speak your language. That's not what we do here. You notice the language that I'm using is very conversational to reach them. I'm certainly not here to sell them a fund. I'm here to help Cheryl and Mike define their rich life and build a crystal clear plan to get there. Now, if you want an actual plan for your money so that you know exactly how to get debt-free, how much money to put aside for that amazing vacation you want to take, if you want to get a full audit of your finances so you can identify where you're spending thousands of dollars without even realizing it, you should join my money coaching program. In money coaching, you'll get access to monthly calls where I will answer your questions directly, plus a community of people just like you, people who want to get unstuck and people who can show you how they made crystal clear progress. Plus, you'll get instant access to my Ramit AI, where you can drop all of your bills and documents and we will automatically audit them for you. Go to iwt.com slash money coaching to sign up. You can use our sponsor ZocDoc. They make it really easy. You just look through the real appointment openings, click what works for your schedule, and book it instantly. And what's great is their appointment happens fast, usually within 24 to 72 hours. That's Z-O-C-D-O-C dot com slash Ramit. It's an all-in-one, digital, smart calendar that syncs with Google Calendar, Apple Calendar, Outlook, etc., making it easier to instantly look at your day, week, or month plans. My coworkers say it's a game-changer for their families. If you refund, no questions asked. That's M-Y-S-K-Y-L-I-G-H-T.com slash Ramit. What do you think called you to see me? You already have a professional relationship There's actually a million other people you can talk to, including a therapist, including advisors and others, accountants, tax people. You had to go through a lot to get in this conversation. Why? I think you get to things that those people don't get to. You get us on the same page. I think that Cheryl thinks that I'm much more of a grasshopper than she is, and she's a late-blooming ant. Hold on. For everybody who's not familiar with these metaphors, what's a grasshopper? What is that referring to? Aesop's Fables, the ancient Aesop's Fable about the grasshopper and the ant. The grasshopper is running around playing his fiddle and having a great time partying and not preparing for the coming winter. The ant is very carefully putting aside things. When the winter comes and there's nothing to eat, a grasshopper is in trouble, whereas the ant has put aside and saved up for the future. Who's the ant and who's the grasshopper? We both were grasshoppers, but I became an ant. I became an ant because I was a grasshopper. I stayed a grasshopper. Okay, and your question is, can we make that work, or does the grasshopper need to turn into an ant? Is that the question? Oh, yeah. Yeah, actually, if we take each other's concerns seriously and not just pawn it off by saying, oh, it'll all work out. Don't worry about it. What if you're not on the same page? Ugly retirement. Neither of us would have what we want. We just wouldn't see eye to eye on what's going on. I don't think we start leading divergent lives, but it would be a thing separating us, and neither of us want to feel like there's anything separating us. That's what Cheryl means by getting on the same page. You two began this conversation. I asked, how are you feeling about being here? Cheryl said, unadulterated excitement. Michael, you remember your response? It was probably like, yeah, I don't want to be here. You said, I'm here because Cheryl, told me to. And you kind of laughed as it was a joke. And I said, is that true? You said, yeah. Yeah. Yeah. Would you say that's being on the same page? Not really the same page. If it's the same pages, people are equally excited about doing something. But I think that is an unrealistic way to look at life. People are never going to feel the same about anything because everybody has their own psychology, their own philosophy about things. What's your favorite meal, Michael? My favorite meal at a restaurant. Would it be Italian food? And in fact, it's probably pizza. Okay, great. Cheryl, what about you? If I'm in a restaurant, it's sushi. Perfect. Y'all ever go out and eat pizza together? We got married in a pizza parlor. Even better. I did not know that. Cheryl, how do you get on the same page with Michael eating pizza when of course your favorite food is sushi? How do you do that? I go eat pizza and then I get him to come eat sushi. It's quite interesting because Michael, think about how that applies to coming on a show like this, right? This might be Cheryl's thing. It may not be yours, fair enough. Not everybody needs this to be their number one thing of the week, but I bet you Cheryl doesn't go, "Michael, I'm going to eat this pizza because I know that next week we're going to sushi." Nobody says that, especially like a long married couple. They don't say it. So when we talk about getting on the same page, I actually think it has less to do with these esoteric financial questions and more about things that we often ignore, the language that we use with each other, tonality, the way that we relate, body language, having a powerful vision that we are both aligned with. It does sound like you've done quite a bit of work on your vision together. I really like hearing the point of view and the shared vision and integrating your family history. I think those things are really what get us on the same page. Just to put it another way, when people are on the same page in a relationship, you can see it and feel it on a day-to-day basis. You can see it if someone drops a glass in the kitchen and it shatters, how do they handle that? That tells you if they're on the same page versus some 30-page financial document. All right, I'm going to try with your permission, I'm going to take a little screwdriver and I'm going to probe a little bit with the two of you. Let's see what comes up because I think we can all stipulate you could have retired already. Every year you're putting away $40,000 a year in investments. That just makes your retirement decision easier. Retire next year, retire five years from now, whatever. As far as financially, each year you work is only putting you in a better financial position. Can we all agree on that? Yeah. Okay. Yeah. Good. We know the answer to that question. Now, let's try to find out how to make the journey a lot more fun. Cheryl, you mentioned a little bit about your family growing up. I'm curious, what did your family say about money when you were young? When I was very young, they didn't have much money at all. Money was always a problem. Right. My father was in the Air Force during the Vietnam War. He was gone a great deal of the time. We watched him fly away and he didn't come back for maybe a year, maybe two years. My mother with her four young kids was always scrambling, trying to figure out how to make it all work very far away from her family. It was always a little insecure and a little bit nerve-wracking for everybody. There was always lots of love, lots of good things, but just not super financially set. My father left the military and went with an airline. It was like a big lag of time. And then the airline in the 70s and 80s was very insecure. Anytime a union goes out on strike, all the other unions have to go out and they were always going out on strike. And there were hijackings happening. It was just kind of a wacky time. So my father would be making really good money and then they'd go out on strike and he'd be substitute teaching and trying to sell real estate and trying to just keep the family going. And then gradually, it got better. He started making a lot of money and we always had the option of traveling for free. And so then my parents ended up with the life that they wanted when they retired. Did you grow up in a house, an apartment? Did you grow up on a military base? No, my parents never wanted to live on a base. We probably lived in a base for very short periods of time while we would settle to the places that we moved. So they always bought houses, which is how they moved up the ladder because things just worked. They'd buy a house and sell it. And then they'd make money and then they'd buy a house and sell it all the way up until the very end, the last house they sold. What do you remember your mom saying about money on those one-year tours that your dad was overseas? What did she say about money? She would often say, we just can't do that. We just can't have that. We just can't do that. And then she had things that were non-negotiable. She loved ice cream, like obsessively loved ice cream. What kind? Baskin-Robbins. Did you ever get the Baskin-Robbins ice cream cake? Yes, of course. For me, that was like the pinnacle of a birthday cake and we couldn't afford it. Like my mom was like, yeah, I wish. No way. And like, I remember, I think one of my friends had a Baskin-Robbins birthday cake with ice cream in it. And I was just like, this is unbelievable. Unbelievable. It's funny the things you remember as a kid. Okay. Anything else your mom said about money or showed behaviorally? When it came to money, spending, groceries, clothes, any of that stuff? She really didn't care about food very much, except for ice cream, which was reflected in her shopping and the way she stocked the house. I would go to friends' houses and think, oh my gosh, they have like real bagels. They have smoked salmon. Whoa. Okay. And then later in life, the splurge of the Galapagos and traveling and things like that, was that in part because your dad was an airline pilot and then they started earning more money? Yeah. Okay. Did your mom work? No. She had trained as a secretary and she worked a tiny bit off and on. And then she did Avon Lady and Weight Watchers Lady. And she did some of those things that she could do on the side on her own schedule, but nothing, no job. Okay. And how many children do you have, Cheryl? Just one. And Michael has two. Michael, you have two. Okay. Anything else, Cheryl, that I should know about your family history as it relates to money? I think I still carry that feeling that your parents can sometimes give you that the sense that they're weighing, should I spend this money on this kid for what they want? When you're a kid, you're like, I want, and sometimes they can't give it to you. And sometimes you think they're juggling in their head. Is this worth it? But when I was a kid, I interpreted that sometimes as thinking I wasn't worth it. Apparently I don't deserve this thing if they've decided I can't have this thing. And then you get a little bit of that. And then you get older and you realize it's not what it is. It's that they just honestly did not have the money for these things, but you still carry that away. How does that apply today? If you're thinking about taking a trip or buying something for the house, are you thinking to yourself, am I worth it to be able to go here? Is that what the connection is? Yeah. The older I get, the more it gets amplified. And then I think, you know what? You made this money. You deserve to do this thing. But it's very new. It's very new. You're saying the last couple of years is when you started having a new voice in your head that said, you earned it. You're worth it. Go ahead and spend that money. Is that right around the time where you engaged with a financial advisor and you actually understood your numbers? That might've been part of it. But I think it was just that I started seeing that I was being maybe too fearful about spending what I had. And then also my son finished college. Like as soon as your kid finishes college, if you've been paying for private school and college, and then suddenly you don't have this big whopping expense every month, it was like, you know what? You can go to London and go to the Chelsea Flower Show. You could do that. I wish more people thought like you. The fact of the matter is a lot of times when people end up paying off their debt and they free up 2000 bucks a month, or they pay off their house or whatever happens. And they have told themselves for 25 years, one day I'm going to have enough. One day I'm going to have a million dollars or whatever. And then they get there. No fireworks happen in the sky. And they find themselves still with the same old fears. Just a bigger bank account. And that's why I always say the way you feel about money is highly uncorrelated with how much you've got in your bank account. So truthfully, I am loving this last couple of years of change where you said, Hey, I'm worth it. I have the money. I'm going to London. I love traveling. That is what I want more people to do, to embrace what they have worked so hard for and to be thoughtful and extravagant with how they spend their money. Great. Thank you for walking me through that. It helps me understand quite a bit more. Michael, take me back all the way back to childhood. When you were young, what do you remember your family saying about money? My father owned his own business. He was a plumbing and heating contractor. And my mother was a housewife. And I remember we couldn't afford to have everything we wanted to. I remember I wanted some toy and there was just no to be able to get this toy because my parents said, no, it's just too expensive. My mother was really good with stretching a dollar. You got to understand, okay, my father was born in 1921. He was a depression kid. My father went into the military, went to World War II, and he met my mother. And my mother was born in Germany of Jewish heritage. So she spent the entire dodging the Nazis. She was basically a Holocaust survivor without going through the camps. My father was in the army of occupation. They met and married. My father had a more of a grasshopper view of money. And I think that might've come from this thing of, hey, we could be dead any minute now. Your dad grew up in the twenties. So he was like eight years old when the great depression happened. That's pretty old. You know what's going on. It means he and his family had a tough time throughout his formative years. Yeah. Very tough, actually. Until he was 16, 17, off to war. How do you think that specific eight-year segment of his life shaped his views on money? He always had this thing that you never throw away anything. It's not like keeping garbage. He wasn't a hoarder or anything, but it was like, let's try and fix this. He was really good with his hands and he would make things last and make things work. This is great. What else? From that eight years of his life. Both my parents had pretty simple tastes in food. When you say a simple taste in food, what are we talking like? Baked potatoes? Yep. Baked potatoes, classic boiled dinner. This is horrible. Wait, keep it coming. I want to know. I remember cube steak. I can actually kind of like cube steak. Cream chip beef on toast. My father loved that and I hated it. We ate tripe, smelt, all these things you can't find in the store anymore. Yes. This is really helping to paint a picture of somebody who grew up in the depression, which we don't get a lot of. opportunity to hear from somebody who had direct experience with someone from there. I'm really appreciating being able to share that story because those memories need to be preserved. Okay. So your dad, they ate the food they could find. We don't even eat that kind of food anymore. Yeah. That's what they could do. Right. I remember in my persuasion classes in college, there was a very famous psychology work done by the U.S. Army who had to convince housewives to eat the worst cuts of meat, neck meat, stuff like that. And so they brought in these psychologists and they created this massive and very successful campaign to convince housewives who were the ones buying and preparing the meat. This is actually the prestigious kind of meat that we're now going to eat. So there's a whole history just of food in America. It's very fascinating. Okay. Thank you, Michael, for sharing that. Your dad gets older, goes to World War II, meets your mom, comes back to the States. Yep. Tell me about the financial history that he had from then on. He came back to where he grew up and got a job at a gas station while he was getting his business off the ground of being a plumbing and heating contractor. And then he ran that all his life. And my mother would always say something like, if it were up to your father, we wouldn't have any money. She was the one that took care of the finances. She was the one that took care of the banks. And what was your dad in her view? He was a good worker and all this stuff. And he was a good provider and a good husband and a good father. But he really didn't know how to put money away for the future, that he didn't think of the future. Michael, see any connection to today? Yeah, I see that. Yeah. The thing is, I don't think your dad was probably bad at money, nor do I think you're bad at money. I don't think that at all. I think there's probably some roles that we take on. And they are often passed generation to generation, often unconsciously. And they are repeated and concretized through these little words, little phrases that family history whispers. Oh, uncle was an alcoholic. Or, you know, she was always great at managing the money in the house. Like these little myths are propagated. They're turned into legends. And then they often become self-fulfilling prophecies. So Michael, what connection might you draw with the role that your dad played with money? And the role that you play today with money? I'm much more like my father in relationship to money, in that my father had the thing of what good is money if it's not to enjoy it? Why pretend to be poor when we can spend a little bit of it? And my mother was always pulling back on that. You feel the same way as your dad? Money is meant to be enjoyed. But at the same time, I got the thing from my mother of saying, oh God, I got to save money because things could go wrong. Really bad any minute now. If you could float above your parents and you could see them not as your parents, but as individuals, almost like a video game character. And they have these different levels. They have empathy and they have cognitive strength and they have warmth and all those things. And you could pick and choose the best of their financial views on life. What would you pick for yourself? To use money, but to. To spend it wisely. Don't spend it foolishly on something that is not going to last or something that's going to break or something that is a fad. My mother used to say, why aren't we rich? We don't go bowling. We don't drink beer. She always said that, but we always had enough money. We were never in this position of bankruptcy or losing the house or anything like that. My mother was more, let's say, had a more nervous approach to money. That's a good word. Yeah. Anxious about, yeah. When I think of nervous, anxious, I think of a deer in the woods and its ears are flickering and it's always hyper aware of what's going on around it. And then I think of a lion or an elephant and they're just like, I'm going to take a nap in the sun because what are you going to do? I'm a lion. Yeah. And I'm not saying one is better than the other. I think we all naturally aspire to be a lion just because of movies and stuff like that. There is value in being vigilant for sure, but there's probably some element of dysfunction in being hyper vigilant about money all the time, especially when you don't need to be. And I see that a lot. I see people being very hyper vigilant, obsessed with spreadsheets, and they really want to explain every freaking line to me. And I just have to gently say, put the spreadsheet away. We're here to talk about something much more meaningful than that. I want to teach you how to stretch out in the sun occasionally and enjoy all the work that you've done. Okay. Thank you, Michael. Very helpful to understand your background. Also, thanks for sharing the story about your parents. Very illuminating. An additional thing about my mother, when she died, as Cheryl mentioned earlier, we had a real hard time settling the estate. And part of the estate problem is that my brother, who was the executor, would find bank accounts that nobody knew about that. My mother had put away in all these different banks around the area. Why do you think she did that? That was because of the precariousness of money, thinking, oh, got to put it someplace. If I spread it out, it's less likely to be all lost. I mean, if I grew up with Nazis running around, I would do the exact same thing. Most likely, many of us would. So sometimes the very peculiar things we find, even our loved ones do, and we just be like, why did they do that? Oh, there's some very, very rational reasons. Very rational, especially in those formative years of life. I think we just hit a record for historical references in one segment. Great Depression, World War II, dodging Nazis, 1970s feminism, 1980s greed, and cocaine. What happened to this podcast? Forget about money for couples. This is a historical podcast now. I love it. Hearing Cheryl and Mike talk about their childhood gives me a much deeper understanding of how they think about money today. Like, take Cheryl. She lived in Tribeca and the Hamptons. If you know New York, that is the elite of the elite. And now she's like, yeah, we live in a small house with a small mortgage, and we like to travel. I like that. It tells me that she's lived both ends of the financial spectrum. It's actually refreshing to hear how she talks about wealth. She had it. She doesn't need it. It's kind of cool to hear. But what really stood out to me is how many times Cheryl has reinvented herself. She lived an extravagant life with her first husband. She had a career on Wall Street. Then her second husband died. She had a baby on her own. She didn't start her current career until she was 50. What I take away from that is she really has this skill of resilience, which happens to be one of the things that I value most. A lot of people get knocked down by one big life event. She's been through multiple changes, and she's reinvented herself. She got right back up and adapted. Michael's story is different. You can hear the generational trauma in his background. His parents literally escaped, not to mention Germany. Decades later now, he talks about money with a sort of casual detachment, like it's just something he hands over to Cheryl. I think he's probably minimizing the effect of his family upbringing on money. Candidly, I'm not sure he fully grasps it. And I say that respectfully because most of us don't. You simply cannot grow up in a household shaped by war, survival, and displacement and not internalize something from that. You certainly learn to be cautious. Understanding their backstories actually provides a lot of clarity on the numbers themselves. And now that I understand that, it's time to go beyond those money messages and to elevate the way they look at money. Go see someone else. Right now, you can use our sponsor ZocDoc. You just look through the real appointment openings. Click what works for your schedule and book it instantly. Now, I understand that this is not the first marriage for either of you. Did the two of you talk about your views on money when you first met? I don't think we did. Did we? No, I don't think we did. Did you discuss a prenup or postnup? No, you could tell by that reaction. I mean, I know the reasons for them, having been in a world where people are very rich and they're marrying people fairly young. And I totally understand it. My best friend had a prenup when she married her husband and smart. Especially if you have children from previous marriages or whatever. It didn't seem like we had enough assets to make a difference. I was making a salary, but certainly not rich. I agree that probably from an asset and income perspective, maybe it did make sense. I'm a little surprised though, because second or third marriage for each, children, and most importantly of all, there's a former lawyer in the room, like one, two, three. And yet, not only did you not do a prenup, which is totally fine, in your case, it probably didn't need to happen, but the reaction when I asked was like, whoa, no, we got a former lawyer in the room. Michael, what kind of lawyer were you, corporate? And in fact, I have to tell you, my ex-wife is a divorce lawyer. Ah, this is crazy. What kind of attorney were you? When I was an attorney, I represented a bank, usually doing real estate closings. And when people would default on loans, I would have to close them. Go to court and argue for it. Very interesting. I am curious, when it comes to your finances, you have not combined your finances. That's one thing that surprises me. Why? You both seem quite aligned in many ways, but not combining the money. Why? We're pretty transparent. So it's pretty clear to me how much money has coming in most of the time and where it's going. And I've never combined my money. It's true. This is my third husband. I've never had joint accounts. What? Why? Because I'm that kind of like 70s raised feminist woman who believes that you have to maintain a certain amount of independence. And I watched that my mother was very much a housewife and very dependent on my father's income. And I could sometimes see the frustration, not that they were not completely equal partners. They got married at 18 and 19 and had four kids by 24. Like they were very much partners, but she was not bringing in the money. And I looked at that and thought, I don't want to do that. I want my own, even if it's my pittance. I remember living in New York out of college. If I had to take a taxi because it was like ungodly pouring rain or snow, I'd be watching the meter. I knew how much money I had in my pocket and you had to pay in cash in those days. And I would be watching the meter and say, okay, stop. I got to get out of here. I'm with you. I remember many times in the city watching that freaking thing tick and going, please don't tick up once more. Please let me just make it to the end of this block. I'll get out of here. I'll get out there. Okay. So that's quite interesting. Totally can at least empathize with you. Obviously I was not raised a woman in the seventies, but in my newest book, I talk a lot about how even in our lifetime, there are people whose moms could not have a bank account without permission. And so when we hear these common phrases, we often hear from women, I need to just put a little bit of money aside in my own account, just in case something happens. This is the Genesis of a lot of difficult conversations that come up. And I think that's what couples have, because a lot of times husbands are like, why are you hiding money from me? And then wife might say, here's why. And it's this whole thing, but there are certain reasons for keeping money to yourself. I happen to agree with that, that each partner should have a little bit of their own money, however much they want in an account that only they have access to. However, I don't think it should be secret. I think that each partner should know there shouldn't be any financial secrets in a marriage. It's toxic. It is the basis of betrayal, a word that both of you have. I was also a widow for a decade before Michael and I got together and got married. So I had already established my own financial life, my investments and my salary and the way that I was earning money and the way it was allocated. And so it's not that easy to meld your financial life as it is to meld like your furniture. You can say, okay, don't bring that wagon wheel coffee table to my house. It's harder to merge up money when you've had very separate. It's not that hard. Come on, Cheryl. I wrote a whole book on it. It's one chapter. I even have a little diagram in there. It's not that hard. The bigger question is, why would we? What does it get us? And then if we agree on those things, then tactically, how do we do it? The tactical part is not that hard, but it's really, it's a question of, hey, we've had our own lives before. Why is there a compelling reason for us to change? I do want to know a little bit about your vision. If you could wave a magic wand, what is your rich life from now for the next 10 years? If I could live a rich life, it would be to have good experiences. As Cheryl said, we're not car people. We don't have, you know, things we want to travel. We want to experience things, want to see things, see new places, be among different people, very interested in music. I would like to visit some jazz festivals around the world. The Montreal Jazz Festival is considered one. I'd like to see some of the smaller ones, like the one in Umbria, Italy would be fantastic. I've never been to Italy. There are several in France. Montmartre is really interesting. How long do you go for? A couple of weeks, not more than that. Great. And you go solo or you go with Cheryl? I would always go with Cheryl. Cool. When you go there, what's the experience like? Are you staying in a hotel, Airbnb? What's it look like? Probably an Airbnb. What are you eating? I actually cook when we go on trips. That's why we do Airbnbs. We spent two and a half weeks in Maine. Michael was in a music camp for the piano for two weeks for jazz improvisation. And I cooked a lot. We always get a decent kitchen. I sometimes pack my knives. I worked as a chef. I like to cook. I cook better than a lot of restaurants cook. And all my friends are like, you cook on vacation. What are you thinking? It's fun for me. It's relaxing. All right. I like it. One of the things she loves to do. Michael, when you just walked me through your life, through going to Montreal and Umbria and cooking, what did that feel like for you as you were walking me through that? Actually, I felt really excited about it, which is interesting now that I think about it, because I'm usually a person who doesn't like crowds. But boy, if there's music, I love it. You know what I find interesting about it? What? Is watching your reaction as you described it. We're actually talking about money, but we're talking about it in a way that excites you. So it's not about financial goals. It's not about years. Yield or withdrawal rates. All of that stuff, important, but mechanical. It's about what are you going to do for the next decade? That most impactful decade that you have. What are you going to do? What does it look like if it's awesome? What does it look like if it's 10 out of 10? And I always like to start there. Start with the vision. Sometimes couples have a very similar vision. In many ways, it sounds like you do. I want to hear from you, Cheryl, too. But it sounds like your vision is quite aligned. Sometimes one person wants to do something. The other wants to do another. That's also a vision. That's also fine. We can usually make it work. But hearing the vision and living in the vision, where are we going? What are we eating? Where are we staying? It provides a lot of clarity for what to do with our money. When we start at the vision, it's this organic, beautiful, living, breathing vision of what we want. Think of it more of a human heart versus an inanimate spreadsheet. Too much of our lives, when it comes to money, we think about money as, dollars and cents in an inanimate spreadsheet. I'm not interested in black and white. I'm interested in a beating heart. But if you get that wrong, or more commonly, if you just skip over it, you'll live your life in black and white for the rest of your time. I don't want that. Cheryl, magic wand, take me through the next decade. What is your rich life? Definitely travel, maybe with some of our kids. I had to travel with my family all the time because when your father's a pilot and you get to fly for free, none of your friends can come. You travel with your family, and it's not always great, but I still think it's a worthy goal. There's still so many places I want to see. I feel like I've been to a lot of places. Like I took myself off to Chelsea Flower Show a couple years ago, and I just booked to go again this May. It's still a dream to go to this place that is so meaningful for crazy gardeners. It's like going to the Oscars. I was actually debating in my mind, what if I flew, Virgin Airways, upper class. As a kid, I flew first class all the time because we flew space available. You got the MTC, and it was often in first class. And then, of course, I grew up. And so my idea was like, it's just this one time. Maybe I will spring for the upper class of Virgin Airways. I've always been curious about it. But I also love when Michael gets excited. And so after I'd been on two trips by myself, I went on a yoga retreat in Greece with a bunch of old friends. And then I did Chelsea. I challenged him to find something. And that's when he found the music camp in Maine. I would like to keep balancing, like, things that he gets excited about, like a jazz festival. But I still like to do stuff on my own. I still like to do the sort of trips that I don't think he'd really enjoy shuffling around Chelsea Flower Show. I just don't think it would make him that happy. So balancing what we each want to do would make me happy. Who pays for these trips? I do. Any issue with that? No, it's funny because I didn't even realize when I looked at the sheet, Michael's paying a lot of the fixed costs. Like a lot. Yeah. You want to talk about that? So here, it's quite interesting. Michael, your income, part-time, and I assume this also includes social security because we have a higher net than gross. So Michael, you are grossing $3,949 a month. And you're netting $3,506 a month. What's really interesting is that you're netting $3,506 a month. is that of your number, net income, 64% of it is going towards fixed costs. But Cheryl, of your net income, which is $9,588, only 26% is going to fixed costs. So basically the person making 25% of the household income is spending 64% of their income on fixed costs. Obviously, if we're simply going by like, is this fair or not? That's not fair. But let's scroll down because it gives us a little bit more color. We see Michael is investing $708 per month, which is 20% of his net income. Then we go over to Cheryl. We see that she's investing $708 plus $1,500 into an annuity for a total of 23%. Remember, she makes more. But where it really becomes striking is the guilt-free spending. Michael is spending 15% of his net income on guilt-free spending. That's $540. But Cheryl, is spending $3,837 or 40%. So if I were to just describe this at a very high level, basically Michael is making much less. He's paying 50-50 on the fixed costs, which is disproportionately expensive for Michael. And then Cheryl is paying a lot more towards guilt-free spending, things like travel, et cetera. What do you both think of that? I think it works because he knows exactly what to expect coming out of this. He knows exactly what to expect coming out of this. What he has, because his amount is limited and he knows exactly what's coming out of it. So when we go out to eat, I pay. When we have other things to pay for, like the trees had to be cut down the other day, that's 800 bucks. I paid the repair costs for things that come in, I pay. Do you ever disagree about spending on something? I don't know. Do we? I don't think we ever have. Okay. Sounds like a no. Typically with a married couple, they would put it all together, and then they would make joint decisions. So when you ask me, hey, Ramit, how do we get on the same page with money? The actual answer is you combine your income and then you make decisions together. And then you can actually wipe out this his and hers and all that stuff. Of course, the two of you can each have some money going towards your own individual accounts. I insist upon it. But the way that you actually get on the same page is combine your money and then make joint decisions. One person owns this, thing. One person owns that. Now I'm going to say one thing, considering that you're both in your late sixties, you're on your second and third marriages, and you don't seem to disagree about your expenses. If you want to keep it the way it is, go ahead. It's your money. Would I? No, I would not. I'll tell you why. Because when my wife and I finally combined, it was like, we are totally unified. And I always say our future is together. And so it just made it structurally. Easier in the same way that the two of you live together. Of course, you would put your money together. With all that said, it's totally up to you. I'm curious to get your reaction. We've found a sort of way to do it together. That keeps me happy as the seventies feminist. Fine. Cheryl sounds like I'm good the way it is. I'm actually most interested in Michael. What's interesting about your situation, Michael, is you seem perfectly fine with the way things are. You're like, Hey, I get to go to my jazz thing and I put my money here. It's fine. I am almost always thinking about the lower earner in the sense of fairness. Is it fair for you? Does it feel equitable for you? And each couple, as long as they understand the ramifications, you can decide what's fair for you. But Michael, I just want to ask, is this fair for you? Sure. It was my idea to pay for the fixed costs out of my account. And it seems fair to me. Maybe we're not on the same page. Maybe we're on facing pages. It's the same story, except different page. We're like two taps on the same spreadsheet. Hey, listen, life is hard enough. We don't need to create problems if they don't exist. I'll take it. Your investments are currently at $517,000. At the current rate that you were investing in three years, it'll grow to approximately $786,000. So that means if you were to withdraw, 4%, you would withdraw about $31,476 a year. Cheryl, you have social security at 70, let's say $46,800. And then Michael, your social security, you're already withdrawing it roughly $22,000 a year, correct? Right. Okay, great. So then that total amount that you would be able to withdraw as of age 70 would be approximately ballpark. $100,000 a year. What do you think about that? Is that enough for you to live on? If you look at the figures, yeah. Let's take a look. So right now, if we were to take out the investments, because let's just say we stop investing, right? And savings, let's just zero that out too. Fixed costs are at 60%, which is actually quite amazing. And when will your mortgage be paid off? When we die. Okay, a long time. Fine, fine. So you would have approximately $3,200 a month to spend. That would include eating out, travel, any fun stuff, et cetera. That's if I strip out all of your savings, all of your investment. So I'm a little curious because we are old. I think most of the people you talk to are younger. The healthcare costs, I had to have an MRI of my brain the other day and it was $350 copay. So it just seems like one of those things, that we don't think about because we have insurance, but they're paying fewer and fewer claims. And I have a medical history. And so that's the part that sometimes I feel like we're not factoring enough in for that. Yeah, I agree with you. I think that especially if you have a family history, especially if you are cutting it close, I never want to cut important items in my life close. For me, luxury is being able to have, have room to spare. And luxury can be as simple as like when friends used to come over to our house, my mom always had extra food. It's not expensive, but it's luxury to know that we could always feed anybody. Same with healthcare. I don't want to cut it close because if you end up needing it, that is the time where you want it. What I notice is that you're currently making $191,000 a year. And what's great is you're investing quite a bit of it. I think that's really smart because we are talking about three years. In some cases, we're talking about three years. Going an extra one year, especially when you're investing $40,000 or $50,000 in a year can actually make a profound difference. So here's what I would do if I were you. Because these numbers are so small, I would go back to my financial advisor and I would say, model these things out for us. Right now, let's just confirm if we retire at 70, how much are we going to have and walk through the numbers together. We're going to stop saving. We're going to stop investing. We're going to be able to use all that money for us. What I think you'll discover is you're, probably a little too close for comfort. Going from $191,000 to $100,000, that's a sharp drop. Gosh, I sure would like that number to be more like $190,000 to $110,000, $120,000. At least that's a little bit more feasible. So that will be up to you to decide. One other lever you have to pull is it's possible that right now, instead of spending the amount you were spending on guilt-free spending, close to 35%, maybe you're going to be able to save a little bit more. Maybe you drop that down by four or 5% for the next three years. You're still traveling a lot. Just being a little bit more mindful of it. Put that money into investments. Give yourself a little bit of breathing room. These are the levers you have to pull. Of course, there's other levers. You could increase your income. If you decided you want to take on a little bit more work, et cetera, that's up to you. I probably wouldn't do that as my first lever, but it's a lever available. Then you have controlled your levers of spending. You understand the math and you have the ability to take on a little bit more work. If you decide you want to take on a little cut back, our financial planner has said along the way, yeah, you can retire then, but you need to reduce your spending or whatever. That's so vague to me. I did want to hear what would be the benefit to not retiring immediately at 70? What would be the benefit to maybe saving a little bit more along the way? Like you said, cutting the guilt-free spending and then also maybe working another year. I have a colleague who's working part-time and he's 80 and he's doing it because he loves it, but it's also nice to make money when you're 80. Yeah, it's nice extra income. A couple of last things I just want to mention. When I see Ameriprise, I go, oh God, because they charge a lot of money. Their fees are crazy. I would like you to understand their fees and I would like you to calculate those fees. Your financial advisor, are they through Ameriprise? Yeah. Oh, f**k. All right. Considering that these dollars are very valuable to you, I would do a careful review. Of your investments, the fees that you are paying, because whenever I see Ameriprise, I see a revenue. flag. Then I see the word annuity, my head explodes. And if possible, you may want to engage with a fee-based advisor, somebody who can pay a one-time fee for, just give me a second set of eyes on this. You spending 500 bucks or a thousand bucks is going to be well worth it. Someone who's not commissioned, they're a fiduciary, and they're going to be able to take a look and say, hey, let me deconstruct all this stuff. That's my suggestion. I'm not saying you have to switch anything tomorrow, but of all the stuff we're talking about where you've got leaks, your fixed costs are totally, there's nothing to change there. Keep it. It's fine. But your investments, I almost guarantee you're leaking out thousands and thousands of dollars per year. I'd love to see it fixed. That's very depressing. Welcome to Wall Street. I know. I learned nothing. It is good. First, they got me on the cocaine. Now they get me on the fees 30 years later. All right. All right. Not bad. Not bad. Not bad. You could fix this stuff. But overall, structurally, you have some key decisions to make. That's fine. I don't mind that. If you're not being satisfied by what your current advisor is doing, find another. There's plenty of other people out there. What surprised you about today's conversation? It sounds like it's not as bad as we maybe thought. It's good to hear that a lot of the things we're doing are working because I certainly have heard in your podcast, it's not always the case. I like to think that we're old enough now that we have had all those issues in our past. And we've come to a place where, like I always say, the older you get, the longer you're with somebody. You fight in shorthand. Like you used to stay up all night fighting. And then pretty soon you're like, oh, no, we can work this out in 15 minutes if we just focus. Then we can get some sleep. But there's also that yawning on top of all the general scariness of what's happening right now, socially and politically, is terrifying. Terrifying. And Michael comes from a Holocaust survivor. And we're like, when do you know? Should I be putting my money in a Swiss bank or like offshore? Like all that's around. I think the whole process of doing this, from the spending plan to this conversation with you, reassured me that Michael and I actually act more like partners than we think we do. Good. Oh, I'm really glad to hear that. Yeah. Michael, what about you? The thing that surprised me is, yeah, we're in a better position than I thought. Not just financially, but I mean, mentally, spiritually, connectedly, and that it's not as frightening as money can seem to be. You've really caused me to delve deep into why I have that particular attitude towards money and where it comes from. And once you know that kind of thing, you can deal with it. Another thing I learned. Was that I'm not nearly as bad with money as I thought I was. I had this voice in the back of my head. You're no good with money, but maybe not. Yeah. Maybe it's time to turn the page on that one. Maybe it's time to add a new voice that says, hey, this is a skill. I'm not bad. And I could actually get pretty good at it. What is something you learned about yourself in today's conversation? Well, I still think very independently about money and finance. Always in the top of my mind that I need to pay attention to this and that it's important to me and that I have gotten to a certain point and I should be a little proud of myself for getting to where we are. And I've always said Michael is Teflon about money. And I know his whole family story and the situation. And I know that explains a lot of things, but actually hearing him talk about it and the questions that you've asked him gave me more insight into some of his ideas about money. That's amazing. That's what I want from each of these conversations. It's very gratifying to me personally and professionally to know that you can still learn new things about a partner who you've known for a long time. It's really enlightening to know that there's so much more we can still learn. I always find it revealing when people actually spend their money on something expensive or something they thought they would love. And then they decide it's not for them. I actually love that. I have done that myself. An expensive car, for example, nice restaurants. Okay. I appreciate them, but I've realized they're just not the thing for me at this point in my life. And that's refreshing. What I love about that is it is not bounded by scarcity. Scarcity is I'm never going to go to a nice restaurant. I don't need those kinds of fancy places. I'm perfectly fine with Taco Bell. Okay, fine. Nothing wrong with Taco Bell. But many times when I hear people talk about spending a little bit more money on something, whether it's going on a business trip, whether it's going on a business trip, whether it's going on a camping or glamping trip, a certain type of food, a certain type of travel, even a freaking flower vase for their house. There's this almost scorn that why would I ever spend money on that? In my opinion, abundance is saying, hey, I work hard. Of course, I want to try a few different things in life. I'm going to sample them. And if I like them, then maybe I'll redo my CSP. If I don't like them, that's equally valuable. Because now I know, I don't need to eat at a Michelin-starred restaurant. Cool. That's exactly what Cheryl and Mike have done. They've lived in expensive cities. They've had big lives. And now, after they've sampled them, they've chosen a simpler path that makes room for what they love most, travel. Interestingly, that mindset is at odds with how they are managing their finances with this financial advisor. Now, there are great financial advisors out there, but there are also a lot of advisors who simply collect fees for substandards. Why do they do this? Because there's a lot of money in charging 1% AUM for clients who don't actually understand how money works. And these advisors in particular love clients who are 50 plus with serious assets that they can charge huge fees on. To me, the most outrageous part of this entire dynamic is that many consumers simply have no idea what they're paying. Like if you ask them, as I have, how much do you think you're paying your advisor? Most of them will shrug. They have no idea. How insane is it that we spend our entire lives agonizing over the price of freaking coffee, and yet we don't know how much we are spending on a financial advisor whose fees often add up to hundreds of thousands of dollars? In what other part of life would this be okay? I want you to be informed. My number one piece of advice for Cheryl and Mike and for you is this. If you are paying an advisor, pull up your accounts. Look at every fund, every fee, every line item. If you are paying someone, I want you to know exactly how much they are getting paid. Today, 10 years from now, 25 years from now. I don't want to know percentages. I want absolute dollar values. No more black boxes. No more trusting someone just because they wear a suit and use words like diversification and send you a Christmas card. If you are paying your advisor a percentage of assets, my suggestion is get out. Find a fee-based advisor, someone who charges a project fee or hourly rate. You can look at napfa.org. Or check out our partners at Facet. Get clear. It's your money and it is your rich life on the line. Now, let's hear Mike and Cheryl's follow-up videos. This is Cheryl following up. Michael and I were surprised at how much we learned by doing the Conscious Spending Plan together. It made us just really thoughtful. We thought we knew more than we knew, but then we also realized we know more than we thought we knew, which sounds crazy. Yeah, we are more on track than we think we are. It's just that we have not been entirely intentional about how we're going to plan out the coming years in budgeting travel, looking at it more specifically instead of being like we've been, which is like, oh, look at this shiny place in Ireland written up in the New York Times. Let's go there. We can do that, but we have to maybe make a more strategic plan about how we're going to do that, how we're going to get there, and how we're going to spend the coming couple of years. Will I keep working? Yeah, 70 maybe. Will I just power up on saving money before I retire in a couple of years? That might work too, but overall, I think that we learned a lot and we were surprised that Rami kind of backed down on the fact that you have to have a joint checking account because what we're doing seems to work. And we'll just change some of the planning that we do to make it, I don't know, more intentional. Yeah. Biggest surprise? Biggest surprise from the conversation is how we weren't nearly as bad with money as we thought we were. And also, one of my things was how much I didn't hate it. I thought I don't really like talking about myself. Biggest surprise was how much the idea that we both have separate accounts, it seemed to blow Rami's mind. It was interesting. We came into this because this is second and third marriages, and it works for us. So why change it? Specific changes we decided to make is to plot more proactively and to think more proactively about the experiences that we do want to take and what we want to do with our money. It was very heartening. It brought Cheryl and me closer together, I think. And actually, we rather enjoyed it. Thanks. It's been, let's see, three weeks since we talked to Rami. I think we have honed in on some of the ideas he had, like working on our subscriptions. We did go in and look at that. We were looking two weeks ago, I needed roadside service where my car wouldn't start. and so we looked at like what's the best coverage we just kind of had stuck with one for a long time but then we looked at it and thought yeah i can save money and get more service so we also met with our retirement planner and we were a lot more proactive and he thought it was a great meeting and i thought yeah that's because we're kind of much more on the same page with each other and thinking a little bit more creatively about what is our rich life we always thought our rich life mostly had to do with traveling but now we're looking at it from other angles too like scheduling in theater trips and where we want to go that's a little more local not as dramatic but also like rameet said maybe saving a lot more cash for things like travel while i'm still working instead of just thinking of it all as retirement money i think a summit of it is like retirement play money if you want my help with your retirement plan please subscribe to my channel and hit that like button if you want my help with your specific money questions you can apply to be on this podcast at iwt.com apply or you can become a member of my money coaching program instantly at iwt.com money coaching in money coaching you get access to monthly calls where i answer your questions directly on a private call and i get the chance to go much deeper on the concepts of money that have made a huge change in my life plus you'll get access to a community of other people like you who will inspire you and push you to live your rich life check out money coaching at iwt.com money coaching