{"id":118941,"date":"2023-11-28T14:11:28","date_gmt":"2023-11-28T18:11:28","guid":{"rendered":"https:\/\/www.iwillteachyoutoberich.com\/?p=118941"},"modified":"2026-02-23T15:40:58","modified_gmt":"2026-02-23T19:40:58","slug":"132-cassandra-aldo","status":"publish","type":"post","link":"https:\/\/www.iwillteachyoutoberich.com\/132-cassandra-aldo\/","title":{"rendered":"Episode 132. \u201cWe\u2019re $520k in debt\u2014and he hid it from me\u201d"},"content":{"rendered":"<p><iframe title=\"\u201cWe\u2019re $520k in debt &amp; he hid it from me\u201d\" src=\"https:\/\/www.youtube.com\/embed\/3DN3p33fapg\" width=\"100%\" height=\"400\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><iframe style=\"border-radius: 12px;\" src=\"https:\/\/open.spotify.com\/embed\/episode\/6Z3tlwWZB9l06XlCZ0vUF7\" width=\"100%\" height=\"352\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>Cassandra, 40, and Aldo, 41, discovered Ramit on Netflix\u2014which quickly led to Cassandra discovering the gruesome details of their debt. His goal was to shield her from stress. What he\u2019s done instead is hide incalculable credit card balances, lose thousands on meme stocks, and so much more.<\/p>\n<p><strong>This episode is brought to you by:<\/strong><\/p>\n<p>Mint mobile | To get your new wireless plan for just $15 a month, go to\u00a0<strong><a href=\"https:\/\/mintmobile.com\/ramit\">https:\/\/mintmobile.com\/ramit<\/a><\/strong>.<\/p>\n<p>Inside Tracker | Get 20% off by going to\u00a0<strong><a href=\"https:\/\/insidetracker.com\/ramit\">https:\/\/insidetracker.com\/ramit<\/a><\/strong>.<\/p>\n<p>Methodology | Visit\u00a0<strong><a href=\"https:\/\/gomethodology.com\/ramit\">https:\/\/gomethodology.com\/ramit<\/a><\/strong>\u00a0and use code RAMIT for 10% off your first order of Methodology.<\/p>\n<p>LMNT | Right now, LMNT is offering 8 single serving packets FREE with any LMNT order. This is a great way to try all 8 flavors. Get yours at\u00a0<strong><a href=\"https:\/\/drinklmnt.com\/RAMIT\">https:\/\/drinklmnt.com\/RAMIT<\/a><\/strong>.<\/p>\n<h2><strong>Tools mentioned in this episode<\/strong><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.iwillteachyoutoberich.com\/l-money-made-easy\/\">Money Made Easy Mini Course<\/a><\/li>\n<li><a href=\"https:\/\/www.iwillteachyoutoberich.com\/landing-conscious-spending\/\">Conscious Spending Plan<\/a><\/li>\n<\/ul>\n<h2><strong>Show Transcript<\/strong><\/h2>\n<p>[00:00:00]\u00a0<strong>Cassandra:<\/strong>\u00a0We were getting ready to start the next episode, and I looked over to Aldo, and I said, how much debt are we in? Because I literally have no idea. When he wrote it all down, almost fell off the chair. I was floored. I didn\u2019t know that everything basically was being charged on credit cards, and loans, and things. It\u2019s in, I guess, collections. We haven\u2019t been paying it for the last few months. And that scared the crap out of me. And I was like, why? I felt a little bit of a false sense of security.<\/p>\n<p>[00:00:41]\u00a0<strong>Aldo:<\/strong>\u00a0For me, it was eye-opening as well. I should know better.<\/p>\n<p>[00:00:45]\u00a0<strong>Cassandra:<\/strong>\u00a0He\u2019s the financial guru. He works in finance. He knows all of this stuff. I have friends that go to him for financial advice. So never would I have ever thought we would be in this predicament. So I was very shocked, and I haven\u2019t really slept that great since all of this has come out.<\/p>\n<p>[00:01:07]\u00a0<strong>Narration:<\/strong>\u00a0[Narration]<\/p>\n<p>[00:01:08] Here\u2019s the scenario. Cassandra and Aldo, 40 and 41 years old. They have two kids, 17 and 10 years old. They\u2019re sitting on the couch, looking for something to watch. They stumble across my Netflix show, How to Get Rich. And they start watching, surprised that they\u2019re really into this money show. And soon she leans over and goes, hey, how much debt do we actually have?\u00a0 Aldo, the money guy in the relationship tells her, and she is shocked. That\u2019s where our story begins.<\/p>\n<p>[00:01:39] And as you listen to today\u2019s conversation, I want you to be compassionate because so many of us think that we\u2019re rational robots when it comes to our money. But listening to Cassandra and Aldo is actually a reminder that most people really don\u2019t pay that close of attention to their money. And you\u2019re going to find out what happens when they realize the costs of ignoring their finances.<\/p>\n<p>[00:02:04] Now, before we dive into this episode, I want to let you know a little secret. For the last four weeks, I have been traveling the world only working one hour per week. You probably did not notice because while I was in India, Italy, and Mexico, this podcast released a new episode every Tuesday. Social media posts went out, newsletters went out, everything ran as usual.<\/p>\n<p>[00:02:26] This Saturday, on my newsletter, I\u2019m going to tell you how I\u2019m going to tell you how we decided to take this trip, how we paid for the tickets all across the world, how we chose the hotels, and how I had my business running smoothly while I was gone. You can only get this email on our podcast newsletter this Saturday, December 2nd.<\/p>\n<p>[00:02:46] You can sign up for free at iwt.com\/podcast newsletter. I love to take you behind the scenes of how I live my rich life. You can find that this Saturday iwt.com\/podcast newsletter. Now let\u2019s get to the episode.<\/p>\n<p>[00:03:03]\u00a0<strong>Interview:<\/strong>\u00a0[Interview]<\/p>\n<p>[00:03:03]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah, I was sitting on the couch looking for something to watch, and it gives you like a preview, even though when you hover over it, you were talking about owning a home and phantom costs. It\u2019s not what everyone makes it out to be. And I was intrigued. looked over to Aldo, and I said, how much debt are we in? Because I literally have no idea.<\/p>\n<p>[00:03:29] And he threw some random numbers out there, and they were pretty high. I think I had an idea, but not anywhere near what they really are. And I think I was in shock. I right away got a pen and paper, and I was like, I want to know everything. He proceeded to tell me about other loans, personal loans, and I vaguely knew about some of them.<\/p>\n<p>[00:03:57] I thought they were in the past, to consolidate debt, little credit cards that we had. There was a loan that was supposed to be paid off, and he mentioned this loan in the amount of $66,000 that is not paid off, and not only is it not paid off. It\u2019s in, I guess, collections.<\/p>\n<p>[00:04:20] We haven\u2019t been paying it for the last few months. And that scared the crap out of me. And I was like, why? What happened? But when he wrote it all down, I almost fell off the chair. I was floored. I didn\u2019t know that everything basically was being charged on credit cards, and loans, and things. I felt a little bit of a false sense of security.<\/p>\n<p>[00:04:51]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Aldo, what do you remember about that conversation?<\/p>\n<p>[00:04:56]\u00a0<strong>Aldo:<\/strong>\u00a0It was a tough conversation. I know in the past I\u2019ve brought it up, but I know she gets really alarmed or panic any number I put out there. I\u2019ve been trying to tell her for a couple of years that it\u2019s been challenging, but never really sat down, and I\u2019ve never put enough effort to really sit her down and go over all the numbers<\/p>\n<p>[00:05:19] it was a daunting task. I thought of a number, and that number I gave her was scary enough. And then when I started logging into all the accounts and finding everything out, it was twice as much. I should know better. So a big part of it was just disappointed in myself that. I let it get to this point, this bad, this fast.<\/p>\n<p>[00:05:41]\u00a0<strong>Cassandra:<\/strong>\u00a0Aldo\u2019s a very good man, and he\u2019s always wanted to give me everything, I guess, even the things that I don\u2019t ask for. For the most part, he would do it. If it was a trip or\u2013 we have a basement gym that I love to collect equipment. He would always make it happen. He would tell me we were tight from time to time. We\u2019ll be married almost 18 years down in February. I just let him take care of all that he wanted to. I just let him go all in, and I never looked back all these years.<\/p>\n<p>[00:06:20]\u00a0<strong>Narration:<\/strong>\u00a0[Narration]<\/p>\n<p>[00:06:21]\u00a0<strong>Ramit:<\/strong>\u00a0Why is it so easy to avoid talking about money? Well, for the same reason we don\u2019t talk about our health. Just like money, with our health, we see clues everywhere. We feel aches and pains when we get up from sitting down. Maybe our clothes don\u2019t fit the same like they used to. Maybe we get tired faster.<\/p>\n<p>[00:06:40] But instead of taking an honest look at what we\u2019re eating and our activity levels, we actually concoct these very sophisticated, convoluted stories about how our metabolism is changing, and how this is what happens to everybody when you turn 40, and all kinds of other stuff. And the thing is, everyone around us is doing the same, so we genuinely believe it.<\/p>\n<p>[00:07:03] It\u2019s easy to ignore these problems because they\u2019re not really acute. They\u2019re just little degree by degree. And that\u2019s the same with money, where we have clues, like a partner getting anxious when you bring up money. Or suddenly you see this 27-dollar overdraft fee in your checking account. You just can\u2019t figure out where all the money is going.<\/p>\n<p>[00:07:21] You would think that a person would whip out a calculator and figure it out, but that\u2019s not how humans work. We are not rational robots. And the sooner you understand that, the sooner you will understand human behavior, and the sooner you will be able to change your own behavior.<\/p>\n<p>[00:07:38] Let\u2019s take a quick break to hear from our sponsors.<\/p>\n<p>[00:07:40]\u00a0<strong>AD BREAK<\/strong><\/p>\n<p>[00:07:41] Now, back to the show.<\/p>\n<p>[00:07:43]\u00a0<strong>Interview:<\/strong>\u00a0[Interview]<\/p>\n<p>[00:07:43]\u00a0<strong>Ramit:<\/strong>\u00a0It correct that, Aldo, you\u2019re the money person in the relationship?<\/p>\n<p>[00:07:47]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah, yeah.<\/p>\n<p>[00:07:49]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. And what does that term mean to you? What does that role money person mean to you?<\/p>\n<p>[00:07:55]\u00a0<strong>Aldo:<\/strong>\u00a0Providing stability, paying the bills, setting the trips, putting the budget together.<\/p>\n<p>[00:08:01]\u00a0<strong>Ramit:<\/strong>\u00a0You keep a budget?<\/p>\n<p>[00:08:03]\u00a0<strong>Aldo:<\/strong>\u00a0No, no. Putting the budget on what we thought we were going to spend, and then it always blew up.<\/p>\n<p>[00:08:09]\u00a0<strong>Ramit:<\/strong>\u00a0So your money role is providing stability, planning out the trips. Does Cassandra come to you saying, I want to do this, or I want to get this, and then you evaluate that based on money, or is your role to say, yes?<\/p>\n<p>[00:08:28]\u00a0<strong>Aldo:<\/strong>\u00a0I think I mostly say yes and then try to figure out how I\u2019m going to make that yes happen.<\/p>\n<p>[00:08:34]\u00a0<strong>Ramit:<\/strong>\u00a0Have you ever said no because of money?<\/p>\n<p>[00:08:37]\u00a0<strong>Aldo:<\/strong>\u00a0Not that I can remember, no.<\/p>\n<p>[00:08:41]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. You\u2019ve only been married for 18 years.<\/p>\n<p>[00:08:43]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah. That says a lot. I know. I know it does.<\/p>\n<p>[00:08:48]\u00a0<strong>Cassandra:<\/strong>\u00a0To be honest, it was never in my mind about that. I zoom out, I never thought about money, even though we need money to do all these things. I would actually say that to my friends and stuff. They would talk about their finances and going to do their taxes. And I\u2019m like, I don\u2019t do any of that. I don\u2019t know anything about it. My husband takes care of it all.<\/p>\n<p>[00:09:15]\u00a0<strong>Ramit:<\/strong>\u00a0Was it essentially, I go to work, there\u2019s a paycheck, and there\u2019s a black box. Something happens inside that black box, and like, I\u2019m good.<\/p>\n<p>[00:09:25]\u00a0<strong>Cassandra:<\/strong>\u00a0Basically, yeah. I\u2019m pretty embarrassed to admit it, but I\u2013<\/p>\n<p>[00:09:30]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s very common.<\/p>\n<p>[00:09:31]\u00a0<strong>Aldo:<\/strong>\u00a0I was the black box.<\/p>\n<p>[00:09:33]\u00a0<strong>Ramit:<\/strong>\u00a0You were the black box.<\/p>\n<p>[00:09:36]\u00a0<strong>Cassandra:<\/strong>\u00a0And if something was off in my check, like, you got paid 200 less, he would tell me. I never even looked at my paycheck.<\/p>\n<p>[00:09:47]\u00a0<strong>Ramit:<\/strong>\u00a0But you know what, if l car mechanic asked me, hey, Ramit, what\u2019s your understanding of cars? I literally turn the key. It turns on. I fill up the gas once in a while, and that\u2019s pretty much as far as it goes. Maybe get an oil change. That\u2019s it.<\/p>\n<p>[00:10:03]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:10:04]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s how a lot of people are with their money. As long as it works, that\u2019s as far as we want to go. But the problem is, I think you realized when you asked Aldo, hey, can we go beneath the surface? How does this car actually work? You discovered that, oh my gosh, it\u2019s not what I thought.<\/p>\n<p>[00:10:29]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:10:31]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Aldo, did you ever wish that Cassandra was more curious about money?<\/p>\n<p>[00:10:37]\u00a0<strong>Aldo:<\/strong>\u00a0Yes.<\/p>\n<p>[00:10:39]\u00a0<strong>Ramit:<\/strong>\u00a0Why?<\/p>\n<p>[00:10:40]\u00a0<strong>Aldo:<\/strong>\u00a0we\u2019ve always done a lot of things together, and I feel like this is the one thing that I just did on my own. I didn\u2019t want to stress her out. I just figure I\u2019d take ownership of it and do what needs to be done.<\/p>\n<p>[00:10:56]\u00a0<strong>Ramit:<\/strong>\u00a0Can you think of an example where you did talk about money and Cassandra did get stressed out?<\/p>\n<p>[00:11:02]\u00a0<strong>Aldo:<\/strong>\u00a0I don\u2019t know. We wanted to do maybe more trips, and I know we couldn\u2019t afford more than one, so it\u2019ll be like, no, we\u2019re tight with\u2013 what do you mean we\u2019re tight? We always feel tight. Again, we\u2019re tight. We can\u2019t do it.<\/p>\n<p>[00:11:21]\u00a0<strong>Ramit:<\/strong>\u00a0You end up doing it?<\/p>\n<p>[00:11:24]\u00a0<strong>Cassandra:<\/strong>\u00a0We took three trips this summer. It started with the Aruba in May.<\/p>\n<p>[00:11:29]\u00a0<strong>Aldo:<\/strong>\u00a0That was a last minute thing, and it was a good deal, but it ended up costing twice as much than\u2013<\/p>\n<p>[00:11:36]\u00a0<strong>Ramit:<\/strong>\u00a0Thank you for telling me it was a good deal, even though it wasn\u2019t. Go on. Next.<\/p>\n<p>[00:11:41]\u00a0<strong>Cassandra:<\/strong>\u00a0Then we had a Destin, Florida, trip planned with my family, which we did. And then not even a month later, we went to Cabo with our friends.<\/p>\n<p>[00:11:52]\u00a0<strong>Ramit:<\/strong>\u00a0Where\u2019s the stress? I don\u2019t hear any stress from Cassandra about money. Sounds great. Hey, let\u2019s go to Destin. Let\u2019s go to Cabo. Where\u2019s the stress?<\/p>\n<p>[00:12:00]\u00a0<strong>Aldo:<\/strong>\u00a0No, it didn\u2019t seem\u2013 no, it seemed annoyed. If I say, oh, you have to wait or use a credit card to pay for\u2013<\/p>\n<p>[00:12:09]\u00a0<strong>Cassandra:<\/strong>\u00a0I think I would feel annoyed sometimes because I\u2019d feel like I work hard, and so do you. And I\u2019m like, how do we not have the money. And I just naively thought we have bills. We have a mortgage. So it\u2019s annoying to feel like you can\u2019t do little things when you work so hard, so I wasn\u2019t annoyed at you. I just was annoyed at the fact that we should be able to do those things, as I know we do make pretty good money.<\/p>\n<p>[00:12:41]\u00a0<strong>Narration:<\/strong>\u00a0[Narration]<\/p>\n<p>[00:12:41]\u00a0<strong>Ramit:<\/strong>\u00a0What\u2019s happening here is basically what we do as children. When we\u2019re young, we imagine living in a palace or flying a fighter jet. And as adults, we actually do a similar thing with money. We literally have beliefs about how we are supposed to live. My parents bought a house, so I should be able to buy a house that\u2019s the same size at the same age in the same city.<\/p>\n<p>[00:13:05] Now, first of all, let me say I want you to be able to buy a house. That\u2019s why I\u2019m so vocal about wanting to build more housing, and why I\u2019m so politically active. But if you simply use your feelings about your parents\u2019 situation 40 years ago and blindly make the biggest purchase of your life without running the numbers, then you\u2019re doing the same thing as the kid who says, I want to be a fighter jet pilot.<\/p>\n<p>[00:13:27]\u00a0 We do the same thing with relationships. I knew a guy who was in a relationship with a great woman, and he eventually broke up with her. And some of my friends asked him why, and he said, I never saw myself marrying someone like her. He was referring to her religion. Now, don\u2019t roll your eyes.<\/p>\n<p>[00:13:45] We all have a certain concept of how we expect our life to turn out. I expected to be educated. I expected to have money and flexibility to live wherever I wanted. I expected that from a very young age. Now, if I didn\u2019t have money, honestly, I would find that incredibly difficult to accept.<\/p>\n<p>[00:14:04] I might even ignore the details of my finances and spend as if my vision was true because I would have imagined and even believed it for decades. So when you hear somebody break up with a great partner because their religion isn\u2019t what they imagined, I\u2019m not going to tell you not to judge them. I judged.<\/p>\n<p>[00:14:29]\u00a0 But I can also understand how these deeply held stories affect our behavior, even irrationally so. So today, when you hear them say they\u2019re stressed, and Cassandra says she\u2019s annoyed because they make money and they should be able to spend, what\u2019s really happening is that their vision of life is not aligned with reality. And in Cassandra and Aldo\u2019s case, they\u2019ve simply chosen to ignore reality. And instead, spend, spend, spend.<\/p>\n<p>[00:14:57]\u00a0<strong>Interview:<\/strong>\u00a0[Interview]<\/p>\n<p>[00:14:57]\u00a0<strong>Ramit:<\/strong>\u00a0You watched a show. Cassandra, you finally get very curious. You start asking questions, and that night all the numbers come out, and you are feeling what?<\/p>\n<p>[00:15:13]\u00a0<strong>Cassandra:<\/strong>\u00a0Obviously, shocked. I wasn\u2019t expecting it, but I also felt very hurt. I also knew that I can\u2019t just say, oh, this is all his fault. I have to take my part in it. I just sat back and let him deal with everything. And my thing was always like, oh, he\u2019s the financial guru.<\/p>\n<p>[00:15:35] He works in finance. He knows all of this stuff. I have friends that go to him for financial advice. So never would I have ever thought we would be in this predicament. So I was very shocked, and I haven\u2019t really slept that great since all of this has come out.<\/p>\n<p>[00:15:55]\u00a0<strong>Ramit:<\/strong>\u00a0Hmm.<\/p>\n<p>[00:15:56]\u00a0<strong>Cassandra:<\/strong>\u00a0It\u2019s been hard, but yeah, I felt hurt. I felt like I\u2019ve been living a life that maybe we shouldn\u2019t have been living. I think another big thing that made me feel hurt was I left this part out, but it\u2019s my fault too because I don\u2019t check my paycheck. But apparently my check was being garnished. I get paid biweekly, and it\u2019s $380 that was coming out of my paycheck. I had no idea.<\/p>\n<p>[00:16:26]\u00a0<strong>Ramit:<\/strong>\u00a0For what?<\/p>\n<p>[00:16:27]\u00a0<strong>Cassandra:<\/strong>\u00a0For taxes that we had owed.<\/p>\n<p>[00:16:30]\u00a0<strong>Ramit:<\/strong>\u00a0Oh. Wait, they\u2019re garnishing your paycheck for back taxes that you owe?<\/p>\n<p>[00:16:36]\u00a0<strong>Cassandra:<\/strong>\u00a0Yes.<\/p>\n<p>[00:16:38]\u00a0<strong>Ramit:<\/strong>\u00a0All right. That\u2019s not good.<\/p>\n<p>[00:16:40]\u00a0<strong>Cassandra:<\/strong>\u00a0No. It\u2019s completed now. Actually, my last paycheck was the last one, and I asked him, and he just casually says, oh, that\u2019s the money we owe for taxes. And I\u2019m like, what do you mean?<\/p>\n<p>[00:16:54]\u00a0<strong>Ramit:<\/strong>\u00a0Do you wish that he had brought up these financial challenges many years ago?<\/p>\n<p>[00:16:59]\u00a0<strong>Cassandra:<\/strong>\u00a0I wish he would have told me the severity of it. Yes.<\/p>\n<p>[00:17:03]\u00a0<strong>Ramit:<\/strong>\u00a0Cassandra, it\u2019s interesting to me because you go, I know we had debt, but I didn\u2019t realize the severity of it. What kind of debt did you think you had?<\/p>\n<p>[00:17:17]\u00a0<strong>Cassandra:<\/strong>\u00a0Obviously, the mortgage. And I knew we had some credit cards because he would give me credit cards to use too. More often than not, those credit cards were almost to the max. Whether it was me and him, or if I needed stuff for the kids or something, he would give me a credit card, and I never thought twice. He would tell me it was for the rewards, or the points, or whatever youget.<\/p>\n<p>[00:17:44]\u00a0<strong>Ramit:<\/strong>\u00a0Aldo\u2013<\/p>\n<p>[00:17:45]\u00a0<strong>Aldo:<\/strong>\u00a0It was for the points.<\/p>\n<p>[00:17:47]\u00a0<strong>Cassandra:<\/strong>\u00a0He always told me that. And I was like, okay, what do I know? I just need to get this.<\/p>\n<p>[00:17:51]\u00a0<strong>Ramit:<\/strong>\u00a0Have you heard me absolutely roast these people who come on and talk about points when they\u2019re in severe credit card debt? Have you heard me?<\/p>\n<p>[00:17:58]\u00a0<strong>Aldo:<\/strong>\u00a0Yes.<\/p>\n<p>[00:17:59]\u00a0<strong>Ramit:<\/strong>\u00a0Are you afraid it\u2019s about to happen?<\/p>\n<p>[00:18:01]\u00a0<strong>Aldo:<\/strong>\u00a0Probably.<\/p>\n<p>[00:18:01]\u00a0<strong>Ramit:<\/strong>\u00a0It is. It\u2019s about to happen.<\/p>\n<p>[00:18:04]\u00a0<strong>Narration:<\/strong>\u00a0[Narration]<\/p>\n<p>[00:18:04]\u00a0<strong>Ramit:<\/strong>\u00a0Listen up, you credit-card-point-seeking freaks. If you have credit card debt, forget about your fucking points. Your points are worth one cent. And you\u2019re adding debt to the tune of 26.99%? Do you understand how fast that compounds? Do you understand how many years it will take you to pay that off?<\/p>\n<p>[00:18:22] Of course you don\u2019t, you just want an extra 25,000 points so you can get a free night at a Marriott property that would otherwise cost you $134. What am I even doing on this stupid podcast?<\/p>\n<p>[00:18:32]\u00a0<strong>Interview:<\/strong>\u00a0[Interview]<\/p>\n<p>[00:18:32]\u00a0<strong>Ramit:<\/strong>\u00a0Did you have any concern when you would go on trips, or renovate, or things like that, knowing that you had credit card debt? How did you think about those purchases?<\/p>\n<p>[00:18:42]\u00a0<strong>Cassandra:<\/strong>\u00a0I definitely had concerns. We could start with the reno. The reno was something that we talked about since we bought the house. We had these dreams and visions already, and we knew eventually we would get to it.<\/p>\n<p>[00:18:56]\u00a0<strong>Ramit:<\/strong>\u00a0Who was the first person out of the two of you to say this exact line? Well, it\u2019s an investment, so it\u2019s going to pay for itself.<\/p>\n<p>[00:19:03]\u00a0<strong>Cassandra:<\/strong>\u00a0Aldo.<\/p>\n<p>[00:19:04]\u00a0<strong>Aldo:<\/strong>\u00a0I don\u2019t think I said it.<\/p>\n<p>[00:19:07]\u00a0<strong>Cassandra:<\/strong>\u00a0You didn\u2019t say it word for word, but you made, the value of the home go up.<\/p>\n<p>[00:19:13]\u00a0<strong>Ramit:<\/strong>\u00a0So it\u2019sfree.<\/p>\n<p>[00:19:14]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah. Here\u2019s the problem.<\/p>\n<p>[00:19:16]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Tell me.<\/p>\n<p>[00:19:20]\u00a0<strong>Cassandra:<\/strong>\u00a0He happened to be messing around with stocks. Now, I don\u2019t know anything about stocks and all this stuff. I don\u2019t know. What do you call it, day trading?<\/p>\n<p>[00:19:28]\u00a0<strong>Ramit:<\/strong>\u00a0What the fuck? Is this a joke?<\/p>\n<p>[00:19:29]\u00a0<strong>Cassandra:<\/strong>\u00a0I don\u2019t even know. No, this gets better. So he told me that he made a lot of money in the stocks, and it could afford us the reno, but that we needed to take a loan out to buy all the materials up front. And that his stocks that he was making money on that were going to be big were going to pay off this loan. So I\u2019m like, okay, yeah, this is amazing. We can renovate our house.<\/p>\n<p>[00:19:56]\u00a0<strong>Ramit:<\/strong>\u00a0Free money.<\/p>\n<p>[00:19:56]\u00a0<strong>Narration:<\/strong>\u00a0[Narration]<\/p>\n<p>[00:19:57]\u00a0<strong>Ramit:<\/strong>\u00a0Wait. There\u2019s more.<\/p>\n<p>[00:20:17]\u00a0<strong>Interview:<\/strong>\u00a0[Interview]<\/p>\n<p>[00:20:17]\u00a0<strong>Cassandra:<\/strong>\u00a0A lot of things happened during the rental. Obviously, you budget. We had a number of mind. It was nowhere near that.<\/p>\n<p>[00:20:23]\u00a0<strong>Ramit:<\/strong>\u00a0What number?<\/p>\n<p>[00:20:25]\u00a0<strong>Cassandra:<\/strong>\u00a0I don\u2019t even know. Babe, what was the number?<\/p>\n<p>[00:20:26]\u00a0<strong>Aldo:<\/strong>\u00a0I think 25. So we had saved 30. We weren\u2019t going to have enough because our pool had collapsed. We knew we\u2019re going to need a new pool. So that\u2019s why I applied for a loan. And I invested half of it. So when I invested that half, I should have taken it out. So I put 30,000 to work. I made 189,000.<\/p>\n<p>[00:20:51]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:20:52]\u00a0<strong>Aldo:<\/strong>\u00a0And I didn\u2019t take it out. Even though Cass told me to take it<\/p>\n<p>[00:20:55]\u00a0<strong>Cassandra:<\/strong>\u00a0And this is me not knowing anything about these numbers or anything. He would come to me because he was obsessed, on his phone, looking at these stocks, and he would say, oh, I should take it out. Right? Should I take it out? I\u2019m like, yes, just take it out. I don\u2019t trust it. It\u2019s volatile, obviously. And he didn\u2019t take it out. So that\u2019s the 66,000-dollar loan that now we have in collections. That terrifies me.<\/p>\n<p>[00:21:19]\u00a0<strong>Ramit:<\/strong>\u00a0Hold on. Let me get these numbers right. You budgeted 25K for renovation. You had 30K saved up, so you had a little bit of buffer. What happened then? The pool collapsed, so you had to take a loan.<\/p>\n<p>[00:21:32]\u00a0<strong>Aldo:<\/strong>\u00a0So it\u2019s another 20,000. Yeah.<\/p>\n<p>[00:21:33]\u00a0<strong>Ramit:<\/strong>\u00a020K. So then you took 30K and put it in the market, which really was in an individual day trader stock. Okay. A meme stock. It went up to 189,000. Wow, that\u2019s a good return. You didn\u2019t pull it out. And then how much did it end up at the end? Tell us all.<\/p>\n<p>[00:21:53]\u00a0<strong>Aldo:<\/strong>\u00a0So I ended up taking out 50, and then I lost the rest. I still have them. It\u2019s worth three, five grand, maybe.<\/p>\n<p>[00:22:03]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:22:06]\u00a0<strong>Aldo:<\/strong>\u00a0So I\u2019m just leaving it there, and it is what it is.<\/p>\n<p>[00:22:09]\u00a0<strong>Ramit:<\/strong>\u00a0Maybe it\u2019ll go to the moon another day. Maybe.<\/p>\n<p>[00:22:12]\u00a0<strong>Aldo:<\/strong>\u00a0Doubt it.<\/p>\n<p>[00:22:14]\u00a0<strong>Ramit:<\/strong>\u00a0Hmm. Okay. And the renovation, how much did that end up costing total?<\/p>\n<p>[00:22:18]\u00a0<strong>Aldo:<\/strong>\u00a0So we ended up doing the kitchen, the living room, and the dining room. So that came out to probably about 70, and then the pool was 20. And the pay [Inaudible] was 13,500.<\/p>\n<p>[00:22:34]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, so you budgeted 25,000, and it was 105,000.<\/p>\n<p>[00:22:36]\u00a0<strong>Narration:<\/strong>\u00a0[Narration]<\/p>\n<p>[00:22:38]\u00a0<strong>Ramit:<\/strong>\u00a0I have a few things I\u2019d like to talk about. What does it take for you guys to start listening to what I\u2019ve been saying for the last 20 years? Do I need to bring on more guests to show you how essentially nobody in America runs the numbers on their house? Do I need to bring up more statistics showing you that right now, as of currently airing this episode, it is cheaper to rent than to own in almost every city in America?<\/p>\n<p>[00:23:01] Do I need to keep posting on Twitter and roasting these anonymous accounts who call me stupid and old-fashioned and say renting is throwing money away? You know what? No, I don\u2019t.<\/p>\n<p>[00:23:11] And for the roughly 325 million Americans who think it\u2019s their God-given right to renovate their house, never realizing that even 30 years ago renovations were incredibly rare, and the only reason you think everybody renovates is that you watch HGTV, and in a fit of pluralistic ignorance, you think everyone else renovates their house while in debt, then good luck. Oh, and by the way, when you renovate your house, you almost never make money on the renovations. I\u2019m now done with my commentary on this topic.<\/p>\n<p>[00:23:38]\u00a0<strong>Interview:<\/strong>\u00a0[Interview]<\/p>\n<p>[00:23:38]\u00a0<strong>Cassandra:<\/strong>\u00a0Ifeel stupid. I just never thought that he would do something like that.<\/p>\n<p>[00:23:42]\u00a0<strong>Ramit:<\/strong>\u00a0Why?<\/p>\n<p>[00:23:43]\u00a0<strong>Cassandra:<\/strong>\u00a0Because he\u2019s the finance guy. He works in finance. He\u2019s been in the finance field as long as I\u2019ve been in healthcare.\u00a0What, 20 years?<\/p>\n<p>[00:23:53]\u00a0<strong>Ramit:<\/strong>\u00a0Cassandra, what do you do in healthcare?<\/p>\n<p>[00:23:55]\u00a0<strong>Cassandra:<\/strong>\u00a0I\u2019m a nurse, an oncology nurse.<\/p>\n<p>[00:23:57]\u00a0<strong>Ramit:<\/strong>\u00a0So let\u2019s say that somebody from outside the healthcare field came to you, and they were like, Cassandra, I fractured my toe, and I need to know what metatarsal therapy I should use for this toe. Would you know what to tell them?<\/p>\n<p>[00:24:16]\u00a0<strong>Cassandra:<\/strong>\u00a0Not really.<\/p>\n<p>[00:24:18]\u00a0<strong>Ramit:<\/strong>\u00a0But it\u2019s healthcare.<\/p>\n<p>[00:24:20]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah, but you need an ortho.<\/p>\n<p>[00:24:23]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, it\u2019s totally unrelated. Now, Aldo, what part of finance are you in this vast field of finance?<\/p>\n<p>[00:24:32]\u00a0<strong>Aldo:<\/strong>\u00a0I pretty much refer people with solutions that will work for their retirement, or custodian accounts, or college accounts. So I don\u2019t do the management of it. I just put them in the platform that would do that.<\/p>\n<p>[00:24:46]\u00a0<strong>Ramit:<\/strong>\u00a0Hmm. You see my point?<\/p>\n<p>[00:24:47]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:24:50]\u00a0<strong>Ramit:<\/strong>\u00a0I can also understand, Cassandra, why you were like, he\u2019s the money guy in our relationship. He\u2019s in finance. So he\u2019s got it under control. But let me ask you this. Were you ever concerned? Because we\u2019ve all heard stories about somebody\u2019s husband or wife dies. In our parents\u2019 generation, often it was the husband managing the money. Husband dies. Wife is left a grieving widow, totally defenseless. Did this ever come up for you, Cassandra, concern about that?<\/p>\n<p>[00:25:22]\u00a0<strong>Cassandra:<\/strong>\u00a0Yes, it has. My own life and my parents. My parents are still together. They\u2019re very happy right now, but when I was about 17, 18, they were going through a divorce. And I remember my mom saying, I don\u2019t even know how to write a check. I don\u2019t know what bills we have. I don\u2019t know if I could survive without your father.<\/p>\n<p>[00:25:47] I don\u2019t know. And I remember thinking, oh my God. My dad sat me down when I got my first job and old enough to save for my first car and talked to me about these things, about bills, about credit cards. And it felt so wrong to me that my mom didn\u2019t even know what a check was, how to balance a checkbook, how to do anything in regards to money.<\/p>\n<p>[00:26:16] So you would think that knowing that and the feeling that I got from that, I would take that into adulthood and not want to go that route and be involved. But I don\u2019t know, I guess\u2013<\/p>\n<p>[00:26:36]\u00a0<strong>Ramit:<\/strong>\u00a0Aldo, why do you think that Cassandra went through that very formative experience and yet chose to almost replicate that in your relationship? What\u2019s your take?<\/p>\n<p>[00:26:51]\u00a0<strong>Aldo:<\/strong>\u00a0I think I came into the picture. When we got together and bought our first house, I started taking care of all the bills. She was in nursing school. So again, I didn\u2019t want to give her that stress. So I just took on the job of just doing it all.<\/p>\n<p>[00:27:07]\u00a0<strong>Ramit:<\/strong>\u00a0Where\u2019s this word stress\u2013 tell me about your family, Aldo.<\/p>\n<p>[00:27:11]\u00a0<strong>Aldo:<\/strong>\u00a0My family?<\/p>\n<p>[00:27:12]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. What do you remember about money growing up as a kid?<\/p>\n<p>[00:27:17]\u00a0<strong>Aldo:<\/strong>\u00a0Oh, that was stressful. My parents came from Peru. And I remember we lived with one of my uncles in a two-bedroom apartment for maybe six months that we got there. I never asked for anything because they were always stressing, how are they going to pay the rent, and electric, and\u2013<\/p>\n<p>[00:27:38]\u00a0<strong>Ramit:<\/strong>\u00a0They say that out loud?<\/p>\n<p>[00:27:41]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah, I would always hear them argue about it. My dad is not great with money. He\u2019s always just spending, and I always would see my mom just fight with him because she was more, I guess, on top of it than he was. And then I remember he got fired from his moving company. Something happened. I never really knew what happened, but he was let go from there.<\/p>\n<p>[00:28:09] So he started working with one of my uncles that had a cleaning company. And they started their own cleaning business. And it took off. I never saw them argue as much, until things, I guess, slowed down. They couldn\u2019t keep up with it, and that\u2019s where I would see them argue a lot.<\/p>\n<p>[00:28:27]\u00a0<strong>Ramit:<\/strong>\u00a0What did they say?<\/p>\n<p>[00:28:31]\u00a0<strong>Aldo:<\/strong>\u00a0I could say it in Spanish, but you probably won\u2019t get much out of it. But the whole gist of it was that my dad was just spending without knowing where it\u2019s coming from. He would bounce checks all the time. I remember seeing a statement. They had $3,200 in overdraft fees\u2013 just on overdraft. That\u2019s money gone. And my mom would just always be in the\u2013 they had a little office in the basement and just so angry all the time. [Foreign] It was always something like that.<\/p>\n<p>[00:29:08]\u00a0<strong>Ramit:<\/strong>\u00a0I think a lot of Spanish speakers listening are going to identify with that.<\/p>\n<p>[00:29:15]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah, yeah. But my dad is retired. My brother took over the cleaning business. He made it his own. When my parents bought the house, they had the border with my mom and my brother. So when she passed, my brother became the sole owner but has let my dad stay there rent free because I guess that was the agreement they had. Financially, from time to time, we\u2019re all trying to help\u2013 me, my sister, and my brother.<\/p>\n<p>[00:29:46]\u00a0<strong>Ramit:<\/strong>\u00a0You\u2019ll occasionally send money to your dad, things like that.<\/p>\n<p>[00:29:49]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah, yeah. That\u2019s what I remember financially.<\/p>\n<p>[00:29:54]\u00a0<strong>Ramit:<\/strong>\u00a0How did money feel as a kid? What was the word you\u2019d use to describe it?<\/p>\n<p>[00:30:00]\u00a0<strong>Aldo:<\/strong>\u00a0As a kid, we just didn\u2019t have it.<\/p>\n<p>[00:30:05]\u00a0<strong>Ramit:<\/strong>\u00a0You had it sometimes, right? But then sometimes not.<\/p>\n<p>[00:30:09]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah, it\u2019s funny because I\u2019ve never really asked my parents for anything because I know how stressed they were. I never really cared to go buy expensive things. I do remember once wanting one pair of sneakers, like a Nike Air something.<\/p>\n<p>[00:30:25]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, yeah.<\/p>\n<p>[00:30:25]\u00a0<strong>Aldo:<\/strong>\u00a0Because I knew that they can\u2019t afford that. It was, I don\u2019t know, 100 and something dollars. I don\u2019t remember ever asking them that I want something. I just got it.<\/p>\n<p>[00:30:37]\u00a0<strong>Ramit:<\/strong>\u00a0How about now when your wife asks you for something? How do you react to that?<\/p>\n<p>[00:30:42]\u00a0<strong>Aldo:<\/strong>\u00a0It\u2019s just, oh yeah, we could do it.<\/p>\n<p>[00:30:44]\u00a0<strong>Ramit:<\/strong>\u00a0Is there any connection here?<\/p>\n<p>[00:30:49]\u00a0<strong>Aldo:<\/strong>\u00a0Yes.<\/p>\n<p>[00:30:50]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, I don\u2019t think I need to belabor the point.<\/p>\n<p>[00:30:53]\u00a0<strong>Narration:<\/strong>\u00a0[Narration]<\/p>\n<p>[00:30:53]\u00a0<strong>Ramit:<\/strong>\u00a0Aldo has seen money as a source of stress for literally decades. Now he doesn\u2019t talk about money with his wife because he wants to protect her from the stress. In a way, it\u2019s a loving gesture by Aldo to take it all on himself but probably the wrong approach because, ironically, by not talking about money, he\u2019s caused even more stress.<\/p>\n<p>[00:31:17] We\u2019ll be right back.<\/p>\n<p>[00:31:18]\u00a0<strong>AD BREAK<\/strong><\/p>\n<p>[00:31:19] Now, back to Cassandra and Aldo.<\/p>\n<p>[00:31:21]\u00a0<strong>Interview:<\/strong>\u00a0[Interview]<\/p>\n<p>[00:31:21]\u00a0<strong>Ramit:<\/strong>\u00a0This idea of stress is really interesting, Aldo. From what I hear, money was stressful in your family. And now, as a grown man, you\u2019ve taken on the role of protecting Cassandra from the stress of money.<\/p>\n<p>[00:31:39]\u00a0<strong>Aldo:<\/strong>\u00a0That\u2019s pretty spot on.<\/p>\n<p>[00:31:42]\u00a0<strong>Ramit:<\/strong>\u00a0How do you do that? Give me a couple of examples of how you protect, shield Cassandra from the stress of money.<\/p>\n<p>[00:31:54]\u00a0<strong>Aldo:<\/strong>\u00a0I see where you\u2019re going. Yeah. It\u2019s really not because now, at the end of the day, we\u2019re in debt. I thought I was protecting her, but I was just delaying that. And now it\u2019s a lot worse than had I brought it up two years ago and said, maybe we can\u2019t do the kitchen yet. The pool we had to because that was danger.<\/p>\n<p>[00:32:21]\u00a0<strong>Cassandra:<\/strong>\u00a0I could think of a recent instance where you\u2013 it was the Cabo trip. Good friends of ours were going to celebrate their daughter\u2019s Sweet 16, and they had come to our daughter\u2019s Sweet 16. We took a vacation to Dominican Republic the summer before that. And we\u2013<\/p>\n<p>[00:32:45]\u00a0<strong>Ramit:<\/strong>\u00a0Is this what people are doing at 16? Damn,I\u2019m out of touch.<\/p>\n<p>[00:32:47]\u00a0<strong>Cassandra:<\/strong>\u00a0This is a thing now. I know. It\u2019s not so bad. You get seven days versus one big wedding party, basically. So we both felt really bad and wanted to say yes because these are good friends of ours. And I remember being stressed about it because I was like\u2013 we\u2019re going to be taking\u2013 Aruba wasn\u2019t planned. That was last minute.<\/p>\n<p>[00:33:12] I knew Destin was in July, and this Cabo trip was in August. I\u2019m like, I don\u2019t think we could do this. Oh, when I get my bonus, we\u2019ll just pay this off. So we took that trip, and that trip was expensive.<\/p>\n<p>[00:33:28]\u00a0<strong>Ramit:<\/strong>\u00a0How much?<\/p>\n<p>[00:33:28]\u00a0<strong>Cassandra:<\/strong>\u00a0And come to find out it\u2019s all on a credit card.<\/p>\n<p>[00:33:32]\u00a0<strong>Ramit:<\/strong>\u00a0How much was it?<\/p>\n<p>[00:33:34]\u00a0<strong>Aldo:<\/strong>\u00a0$7,000. It was supposed to be 3,500.<\/p>\n<p>[00:33:41]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah, and that\u2019s what he came to me, and he\u2019s like, oh, the most is 4,000.<\/p>\n<p>[00:33:44]\u00a0<strong>Aldo:<\/strong>\u00a0Aruba wasn\u2019t planned. It was what I thought was a great deal, and we ended up spending twice as much.<\/p>\n<p>[00:33:53]\u00a0<strong>Ramit:<\/strong>\u00a0Seems to be a recurring theme. We thought it was be 25K. It\u2019s 105K. That\u2019s going to be 3,500, 7K. Probably 9K if you factor in everything.<\/p>\n<p>[00:34:05]\u00a0<strong>Cassandra:<\/strong>\u00a0There\u2019s phantom costs.<\/p>\n<p>[00:34:06]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:34:07]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, they really get you. Here\u2019s what I\u2019m noticing. Aldo, I think that you have an identity that you have unconsciously and consciously constructed of your provider. You said that to me explicitly. That\u2019s very common. You are the protector against stress, money stress. So you absorb it all yourself. And when you come around and say, yes, yes, we can do this renovation, yes, we can go on this trip, you become the\u2013<\/p>\n<p>[00:34:44]\u00a0<strong>Cassandra:<\/strong>\u00a0Hero.<\/p>\n<p>[00:34:45]\u00a0<strong>Ramit:<\/strong>\u00a0What was that, Cassandra?<\/p>\n<p>[00:34:47]\u00a0<strong>Cassandra:<\/strong>\u00a0Hero.<\/p>\n<p>[00:34:47]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. The hero. Cassandra, do you think that that\u2019s true?<\/p>\n<p>[00:34:54]\u00a0<strong>Cassandra:<\/strong>\u00a0I do, yeah.<\/p>\n<p>[00:34:55]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s interesting, isn\u2019t it, Cassandra? That the person who you thought was the money expert might actually not be as skilled as you thought.<\/p>\n<p>[00:35:05]\u00a0<strong>Cassandra:<\/strong>\u00a0Very interesting.<\/p>\n<p>[00:35:06]\u00a0<strong>Ramit:<\/strong>\u00a0There\u2019s some valiant things to it. Being a protector, being a provider, being a hero. Those are all positive words. So where has it gone wrong? So far you\u2019re going on a lot of vacations. You got a nice house. What can\u2019t you do?<\/p>\n<p>[00:35:25]\u00a0<strong>Cassandra:<\/strong>\u00a0We\u2019ve gone on these vacations, and we\u2019ve got nice things, but they\u2019re all on credit cards and loans.<\/p>\n<p>[00:35:32]\u00a0<strong>Ramit:<\/strong>\u00a0So what?<\/p>\n<p>[00:35:34]\u00a0<strong>Aldo:<\/strong>\u00a0Wecan\u2019t keep getting them.<\/p>\n<p>[00:35:35]\u00a0<strong>Cassandra:<\/strong>\u00a0We can\u2019t do it. We can\u2019t do it anymore.<\/p>\n<p>[00:35:37]\u00a0<strong>Narration:<\/strong>\u00a0[Narration]<\/p>\n<p>[00:35:38]\u00a0<strong>Ramit:<\/strong>\u00a0In many relationships, the hero, when it comes to money is the person who says yes. They always figure out a way to let you get what you want. They never say no. But in my view, the real hero is one who builds a partnership with their spouse to talk about money regularly, and they truly include their spouse in decision making.<\/p>\n<p>[00:36:00]\u00a0 If they\u2019re a parent, they talk about money regularly, positively, proactively. They teach their kids how to think about money. They teach them what the family thinks is important to spend money on. And they set boundaries. To me, that\u2019s a real financial hero. Let\u2019s take a look at their numbers. Assets, 703,000. Investments, 115,000. Savings, 1,000. Debt, 520,000. For a total net worth of $300,000.<\/p>\n<p>[00:36:31]\u00a0<strong>Interview:<\/strong>\u00a0[Interview]<\/p>\n<p>[00:36:31]\u00a0<strong>Aldo:<\/strong>\u00a0So combined monthly is 13,784.<\/p>\n<p>[00:36:35]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Readthat out. How much do you make per year total?<\/p>\n<p>[00:36:42]\u00a0<strong>Aldo:<\/strong>\u00a0165,408.<\/p>\n<p>[00:36:45]\u00a0<strong>Ramit:<\/strong>\u00a0Did you know that?<\/p>\n<p>[00:36:48]\u00a0<strong>Aldo:<\/strong>\u00a0Yes, but that doesn\u2019t count my commission.<\/p>\n<p>[00:36:51]\u00a0<strong>Ramit:<\/strong>\u00a0Howmuch is that?<\/p>\n<p>[00:36:53]\u00a0<strong>Aldo:<\/strong>\u00a0This year is 70,000.<\/p>\n<p>[00:36:58]\u00a0<strong>Ramit:<\/strong>\u00a070,000?<\/p>\n<p>[00:36:59]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah. I think it\u2019s actually more. My salary is going to end up at 160 this year, total.<\/p>\n<p>[00:37:06]\u00a0<strong>Ramit:<\/strong>\u00a0What the hell? How much is the bonus? You said 70,000?<\/p>\n<p>[00:37:12]\u00a0<strong>Aldo:<\/strong>\u00a0It varies. So my first quarter was 40, my second quarter was 25, my third one was 31, and this one I just got was 32.<\/p>\n<p>[00:37:24]\u00a0<strong>Cassandra:<\/strong>\u00a0But you didn\u2019t just get. You\u2019re getting it\u2013<\/p>\n<p>[00:37:26]\u00a0<strong>Aldo:<\/strong>\u00a0I\u2019mgetting it in November, but the numbers just ended.<\/p>\n<p>[00:37:30]\u00a0<strong>Ramit:<\/strong>\u00a040 plus 25 plus 62 is 127,000.<\/p>\n<p>[00:37:37]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:37:37]\u00a0<strong>Ramit:<\/strong>\u00a0All right, fine. I\u2019m adding it just on the side. That\u2019s positive. Really positive. We can make some serious changes with this kind of income. Your investments are 115k. What does that investments consist of?<\/p>\n<p>[00:37:53]\u00a0<strong>Aldo:<\/strong>\u00a0Our 401Ks.<\/p>\n<p>[00:37:54]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. What else?<\/p>\n<p>[00:37:58]\u00a0<strong>Aldo:<\/strong>\u00a0That\u2019s it.<\/p>\n<p>[00:37:59]\u00a0<strong>Ramit:<\/strong>\u00a0How much are you putting in your 401K?<\/p>\n<p>[00:38:02]\u00a0<strong>Aldo:<\/strong>\u00a010% each.<\/p>\n<p>[00:38:03]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:38:04]\u00a0<strong>Ramit:<\/strong>\u00a0So what\u2019s up with the debt? It\u2019s $2,482 per month.<\/p>\n<p>[00:38:13]\u00a0<strong>Aldo:<\/strong>\u00a0It\u2019s a lot. Personal loans and credit cards.<\/p>\n<p>[00:38:17]\u00a0<strong>Cassandra:<\/strong>\u00a0So there\u2019s one that\u2019s 8,127, so 8,000. There\u2019s another one that\u2019s 16,000.<\/p>\n<p>[00:38:24]\u00a0<strong>Ramit:<\/strong>\u00a0Uh-huh.<\/p>\n<p>[00:38:24]\u00a0<strong>Cassandra:<\/strong>\u00a0And these are personal. The Apple loan is another 16,000 at 13%. Did I say that one? Both of those are 13%, the 16,000s. And then there\u2019s his student loan, about 14,000 at 7%. Oh, yeah, the mortgage.<\/p>\n<p>[00:38:42]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah, but that\u2019s not everything.<\/p>\n<p>[00:38:43]\u00a0<strong>Cassandra:<\/strong>\u00a0Okay. So we have a Capital One credit card. He has an American Express business card, Bank of America credit card, another American Express card, 1,700, 0%.<\/p>\n<p>[00:38:57]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Uh-huh.<\/p>\n<p>[00:39:00]\u00a0<strong>Cassandra:<\/strong>\u00a0This one gets me. Capital One, it\u2019s about 14,000 at 29.99%.<\/p>\n<p>[00:39:09]\u00a0<strong>Aldo:<\/strong>\u00a0We\u2019re still paying off my daughter\u2019s and Cassie\u2019s phone.<\/p>\n<p>[00:39:14]\u00a0<strong>Cassandra:<\/strong>\u00a0And then we have Macy\u2019s, which is 6,200 at 31.74%.<\/p>\n<p>[00:39:20]\u00a0<strong>Ramit:<\/strong>\u00a0What do you buy for 6,400 bucks at Macy\u2019s?<\/p>\n<p>[00:39:23]\u00a0<strong>Cassandra:<\/strong>\u00a0We do a lot of Christmas shopping there. If the kids need clothes or whatever, we usually go there for gifts.<\/p>\n<p>[00:39:31]\u00a0<strong>Ramit:<\/strong>\u00a0Did anybody teach either of you how interest works with credit cards?<\/p>\n<p>[00:39:35]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah. My dad sat me down and talked to me about it, so I know.<\/p>\n<p>[00:39:39]\u00a0<strong>Ramit:<\/strong>\u00a0Uh-huh. Aldo, what about you?<\/p>\n<p>[00:39:41]\u00a0<strong>Aldo:<\/strong>\u00a0Yes. Yes, I do know it very well, but I don\u2019t apply it.<\/p>\n<p>[00:39:46]\u00a0<strong>Cassandra:<\/strong>\u00a0I didn\u2019t know. That\u2019s one of the credit cards that he would give me. That one is under your name, right? And he would give me that whenever I needed something.<\/p>\n<p>[00:39:56]\u00a0<strong>Aldo:<\/strong>\u00a0You had a card for it.<\/p>\n<p>[00:39:58]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah, but you gave that to me.<\/p>\n<p>[00:40:01]\u00a0<strong>Ramit:<\/strong>\u00a0How did I just ask for an explanation of your understanding of interest and now you\u2019re both pointing the finger at each other? The numbers terrify me, if I\u2019m honest. You\u2019re currently spending 94% of your take home pay on fixed costs.<\/p>\n<p>[00:40:19]\u00a0<strong>Cassandra:<\/strong>\u00a0Which is mostly the debt payments, right? And the mortgage.<\/p>\n<p>[00:40:24]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s just zero out the debt and see what happens, shall we? I\u2019m going to turn this into zero just to see. Takes you down to 62. That\u2019s nice.<\/p>\n<p>[00:40:34]\u00a0<strong>Aldo:<\/strong>\u00a0There\u2019s going to be this business loan that\u2019s going to come up where we\u2019re going to have to either settle or start paying it again. And that\u2019s an additional 1,000 a month to our debt expenses.<\/p>\n<p>[00:40:49]\u00a0<strong>Ramit:<\/strong>\u00a0What is that business loan?<\/p>\n<p>[00:40:52]\u00a0<strong>Aldo:<\/strong>\u00a0That\u2019s was a business loan that we took out. I took out two years ago on a business that I had that closed down.<\/p>\n<p>[00:41:03]\u00a0<strong>Ramit:<\/strong>\u00a0Can you settle?<\/p>\n<p>[00:41:04]\u00a0<strong>Aldo:<\/strong>\u00a0No, not yet. We have a year to settle. Because I missed three payments, they sued for the entire thing.<\/p>\n<p>[00:41:12]\u00a0<strong>Ramit:<\/strong>\u00a0Hmm.<\/p>\n<p>[00:41:13]\u00a0<strong>Aldo:<\/strong>\u00a0So it\u2019s a big debt that we\u2019re not going to be able to make it unless we can pay as much debt as we can in the next year.<\/p>\n<p>[00:41:25]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019swhat you have to do. So you\u2019re right. Right now, the over overage is almost all debt. And if we look at the debt, which we\u2019ve now written down here, we have a bunch of personal loans. We have student loans.<\/p>\n<p>[00:41:41]\u00a0<strong>Aldo:<\/strong>\u00a0We\u2019re still missing some cards.<\/p>\n<p>[00:41:43]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah, I didn\u2019t finish.<\/p>\n<p>[00:41:45]\u00a0<strong>Ramit:<\/strong>\u00a0Oh,you didn\u2019t finish. Oh my God. Sorry. Okay. What else besides Macy\u2019s?<\/p>\n<p>[00:41:48]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah, Macy\u2019s scared you. Island Federal, 2,300 at 12.99.<\/p>\n<p>[00:41:54]\u00a0<strong>Ramit:<\/strong>\u00a0Uh-huh.<\/p>\n<p>[00:41:56]\u00a0<strong>Cassandra:<\/strong>\u00a0Care Credit, and then the last one is City Credit Card, which is about 10,000 at 29.99.<\/p>\n<p>[00:42:08]\u00a0<strong>Ramit:<\/strong>\u00a0All right. What\u2019s the total amount of all those loans added up?<\/p>\n<p>[00:42:11]\u00a0<strong>Aldo:<\/strong>\u00a070, maybe?<\/p>\n<p>[00:42:12]\u00a0<strong>Cassandra:<\/strong>\u00a0No, it was\u2013<\/p>\n<p>[00:42:14]\u00a0<strong>Aldo:<\/strong>\u00a0It was 90.<\/p>\n<p>[00:42:20]\u00a0<strong>Cassandra:<\/strong>\u00a0110,882.<\/p>\n<p>[00:42:29]\u00a0<strong>Ramit:<\/strong>\u00a0Does that include your mortgage?<\/p>\n<p>[00:42:32]\u00a0<strong>Aldo:<\/strong>\u00a0No.<\/p>\n<p>[00:42:34]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019ll put it back up on screen.<\/p>\n<p>[00:42:35]\u00a0<strong>Cassandra:<\/strong>\u00a0Oh, oh, the 66,000 from the loan that we\u2019re not paying. And then the 2,500, that\u2019s in collections for JCPenney\u2019s.<\/p>\n<p>[00:42:50]\u00a0<strong>Ramit:<\/strong>\u00a0What? Did you shop there in 1998 last time?<\/p>\n<p>[00:42:52]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:42:55]\u00a0<strong>Ramit:<\/strong>\u00a0JCPenney. Oh my God. My mom tookwhen I was in sixth grade.<\/p>\n<p>[00:42:58]\u00a0<strong>Cassandra:<\/strong>\u00a0Oh my god, I\u2019m so embarrassed.<\/p>\n<p>[00:43:05]\u00a0<strong>Aldo:<\/strong>\u00a0I\u2019ve never gone in that store. She took credit\u2013<\/p>\n<p>[00:43:07]\u00a0<strong>Ramit:<\/strong>\u00a0This is amazing. Is it still around?<\/p>\n<p>[00:43:10]\u00a0<strong>Aldo:<\/strong>\u00a0No, they went bankrupt.<\/p>\n<p>[00:43:12]\u00a0<strong>Cassandra:<\/strong>\u00a0So he tells me, oh, they\u2019ll forget about it. Don\u2019t worry about it. And I got a phone call the other day.<\/p>\n<p>[00:43:17]\u00a0<strong>Ramit:<\/strong>\u00a0I don\u2019t believe they just forget about it. They just sell their debt. All right. Oh yeah. We just forgot about 66,000 in debt. We forgot about that one. Okay.<\/p>\n<p>[00:43:27]\u00a0<strong>Cassandra:<\/strong>\u00a0The 2,500 from JCPenney\u2019s. And I think it was 800 in like CityMD bills. Should be around 110?<\/p>\n<p>[00:43:37]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. That sounds about right. So you have 110,000 in debt.<\/p>\n<p>[00:43:41]\u00a0<strong>Aldo:<\/strong>\u00a0No, no, it\u2019s more than that. The 110 is without that loan.<\/p>\n<p>[00:43:45]\u00a0<strong>Cassandra:<\/strong>\u00a0Can\u2019t be, babe. There\u2019s no way.<\/p>\n<p>[00:43:47]\u00a0<strong>Ramit:<\/strong>\u00a0Can we all agree that the fact that you don\u2019t even know within $20,000 how much debt you owe is a problem. Whether it\u2019s 120 or 200,000, it doesn\u2019t change the fact that we need to come up with a plan for it. Would you agree?<\/p>\n<p>[00:44:01]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:44:01]\u00a0<strong>Aldo:<\/strong>\u00a0Yes.<\/p>\n<p>[00:44:02]\u00a0<strong>Ramit:<\/strong>\u00a0All right, should I just tell you what\u2019s going to happen here? Because I\u2019m just going to\u2013 let\u2019s just cut to the chase. Stop using your credit cards. None. End it. No more charging stuff. What do you think of me saying that? I\u2019m getting very interesting looks on both of your faces.<\/p>\n<p>[00:44:19]\u00a0<strong>Cassandra:<\/strong>\u00a0I\u2019m totally on board for that.<\/p>\n<p>[00:44:21]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:44:22]\u00a0<strong>Cassandra:<\/strong>\u00a0There\u2019s something else that, I guess, it\u2019s a good and a bad thing, but last month\u2013 I don\u2019t know if this is a good idea. This is before we knew that we were going to get to speak to you. We took 13,000 out of my 401K.<\/p>\n<p>[00:44:38]\u00a0<strong>Ramit:<\/strong>\u00a0Why do this?<\/p>\n<p>[00:44:39]\u00a0<strong>Cassandra:<\/strong>\u00a0Topayoff\u2013<\/p>\n<p>[00:44:41]\u00a0<strong>Aldo:<\/strong>\u00a0Topayoff two big credit cards.<\/p>\n<p>[00:44:43]\u00a0<strong>Ramit:<\/strong>\u00a0You took a loan against your 401K.<\/p>\n<p>[00:44:45]\u00a0<strong>Aldo:<\/strong>\u00a0No, no. We withdrew.<\/p>\n<p>[00:44:47]\u00a0<strong>Ramit:<\/strong>\u00a0Youtookanearlywithdrawal?<\/p>\n<p>[00:44:48]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah. Because we weren\u2019t going to be able to make it to pay off all our debts and not put anything on cards.<\/p>\n<p>[00:44:57]\u00a0<strong>Ramit:<\/strong>\u00a0What happens when you take a loan from your 401K or withdraw from your 401k? What happens?<\/p>\n<p>[00:45:06]\u00a0<strong>Aldo:<\/strong>\u00a0The withdrawal cost us a lot because there\u2019s a penalty, and there\u2019s interest. With the loan, we\u2019re paying ourselves back but not at the rate of whatever the market\u2019s growing. It\u2019s a fixed rate. But the reason we were trying to pay off more debt is to help improve the credit and apply for a home equity line to put all the debt into one.<\/p>\n<p>[00:45:31]\u00a0<strong>Cassandra:<\/strong>\u00a0I\u2019m always weary of quick fixes, which is, again, why I didn\u2019t really want to pull out from my 401K. It hurt me to do that, but I thought maybe it\u2019d be faster. The way Aldo put it, it made sense.<\/p>\n<p>[00:45:52]\u00a0<strong>Ramit:<\/strong>\u00a0That was a bit of a Freudian slip, wasn\u2019t it?<\/p>\n<p>[00:45:54]\u00a0<strong>Cassandra:<\/strong>\u00a0I know.<\/p>\n<p>[00:45:55]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m not for get rich quick stuff, but I thought this would be faster.<\/p>\n<p>[00:45:59]\u00a0<strong>Narration:<\/strong>\u00a0[Narration]<\/p>\n<p>[00:46:00]\u00a0<strong>Ramit:<\/strong>\u00a0This is one of my favorite categories of responses in personal finance. When someone says, I know we\u2019re not supposed to time the market, but\u2013 and then whatever they say after the word but is going to be 100% market timing. Here, in Cassandra\u2019s case, she says, I\u2019m wary of quick fixes, but here\u2019s this quick trick to get us out of debt faster.<\/p>\n<p>[00:46:22] Let\u2019s take a quick pause to hear from our sponsors.<\/p>\n<p>[00:46:25]\u00a0<strong>AD BREAK<\/strong><\/p>\n<p>[00:46:26] Back to the episode.<\/p>\n<p>[00:46:27]\u00a0<strong>Interview:<\/strong>\u00a0[Interview]<\/p>\n<p>[00:46:27]\u00a0<strong>Ramit:<\/strong>\u00a0The real value is in you two understanding what series of decisions got you into roughly 150 to $200,000 of debt. What do you think it was?<\/p>\n<p>[00:46:44]\u00a0<strong>Aldo:<\/strong>\u00a0Justgoing\u2013<\/p>\n<p>[00:46:45]\u00a0<strong>Cassandra:<\/strong>\u00a0Mindless spending.<\/p>\n<p>[00:46:47]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah, carelessness and not making enough money.<\/p>\n<p>[00:46:52]\u00a0<strong>Cassandra:<\/strong>\u00a0And always wanting to get the kids everything they want, everything that they need.<\/p>\n<p>[00:46:58]\u00a0<strong>Ramit:<\/strong>\u00a0Why? Why do you want to get them everything they want and need?<\/p>\n<p>[00:47:03]\u00a0<strong>Aldo:<\/strong>\u00a0As a parent, you don\u2019t want them to not have new clothes for the school and new sneakers, and going on trips.<\/p>\n<p>[00:47:14]\u00a0<strong>Cassandra:<\/strong>\u00a0And they\u2019re expensive\u2013 electronics, things. It\u2019s just a lot of nonsense that we\u2019ve been\u2013<\/p>\n<p>[00:47:22]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah. We like making memories with them, and doing the trips, and taking them out.<\/p>\n<p>[00:47:28]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. These kids have jobs?<\/p>\n<p>[00:47:31]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah, to annoy us.<\/p>\n<p>[00:47:32]\u00a0<strong>Cassandra:<\/strong>\u00a0My daughter does. My daughter just got her first job over the summer.<\/p>\n<p>[00:47:36]\u00a0<strong>Ramit:<\/strong>\u00a0Oh good. What\u2019s she making?<\/p>\n<p>[00:47:39]\u00a0<strong>Cassandra:<\/strong>\u00a0Minimum wage.<\/p>\n<p>[00:47:40]\u00a0<strong>Aldo:<\/strong>\u00a015 an hour.<\/p>\n<p>[00:47:41]\u00a0<strong>Cassandra:<\/strong>\u00a0Yeah. She\u2019s bringing\u2013<\/p>\n<p>[00:47:43]\u00a0<strong>Aldo:<\/strong>\u00a0Saving for a car.<\/p>\n<p>[00:47:44]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s not bad. 15 an hour. Great place to start. I don\u2019t mind that. Teach her some saving skills, which you yourself are going to be talking about with your family. That\u2019s awesome. So actually a very formative moment. If I were to ask your oldest, 17-year-old, what have you learned about money from your parents, what would she tell me?<\/p>\n<p>[00:48:06]\u00a0<strong>Aldo:<\/strong>\u00a0Probably to save. Keep telling her to save her money and not spend it.<\/p>\n<p>[00:48:11]\u00a0<strong>Ramit:<\/strong>\u00a0Hold on. Hold on. I got to pull this up real quick. What\u2019s that number right there in your savings?<\/p>\n<p>[00:48:17]\u00a0<strong>Aldo:<\/strong>\u00a0A 1,000. She has more than that.<\/p>\n<p>[00:48:19]\u00a0<strong>Ramit:<\/strong>\u00a0Your daughter has more than you in savings.<\/p>\n<p>[00:48:22]\u00a0<strong>Aldo:<\/strong>\u00a0Yes, like $50.<\/p>\n<p>[00:48:23]\u00a0<strong>Ramit:<\/strong>\u00a0And you two earn over $200,000 per year. What else would she tell me she\u2019s learned about money from her parents?<\/p>\n<p>[00:48:32]\u00a0<strong>Aldo:<\/strong>\u00a0She\u2019s had a bank account since she\u2019s 13, so she budgets. She\u2019s never overdrawn.<\/p>\n<p>[00:48:39]\u00a0<strong>Cassandra:<\/strong>\u00a0I feel like we could learn more from her because she\u2019s\u2013 even just little babysitting jobs here and there, she puts it away.<\/p>\n<p>[00:48:48]\u00a0<strong>Ramit:<\/strong>\u00a0AIdo, remember how we spent some time talking about your family growing up and what influence that had? The word stress coming up, and things like that. Let\u2019s fast forward 10, 15 years in your daughter\u2019s future. Cassandra, you too. 10, 15 years in your daughter\u2019s future. Maybe she\u2019s in a serious relationship. Money is starting to come up. What is she flashing back to that she learned about money from her parents?<\/p>\n<p>[00:49:20]\u00a0<strong>Cassandra:<\/strong>\u00a0I feel like it\u2019s a big part of our lives. We talk about it not just now. Even before. I feel like if she were to ask for things\u2013 I\u2019m guilty. And my first thing is, oh, we don\u2019t have the money for that.<\/p>\n<p>[00:49:36]\u00a0<strong>Aldo:<\/strong>\u00a0I don\u2019t know. I don\u2019t know if I read it somewhere, that it wasn\u2019t a good thing to have your kids think that we\u2019re not financially stable when we say we don\u2019t have this or we don\u2019t have money for that.<\/p>\n<p>[00:49:52]\u00a0<strong>Ramit:<\/strong>\u00a0Are you financially stable?<\/p>\n<p>[00:49:55]\u00a0<strong>Aldo:<\/strong>\u00a0No, no, no, I don\u2019t think so.<\/p>\n<p>[00:50:01]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m not saying you have to tell your kids every little detail. But here\u2019s also going the complete opposite direction and saying, we have unlimited money. There\u2019s a magic box. And all you have to do is ask. And if you want a car, vacation, and this or that, clothes, you might have to ask twice. We might tell you we don\u2019t have the money, but if you ask three times, it\u2019s always a yes.<\/p>\n<p>[00:50:27] The dynamics, I think\u2013 I don\u2019t even know your daughter. I\u2019ve never spoken to her, but I think if she comes on my podcast in 20 years, what she would tell me would be, I observed that my mom didn\u2019t really log into the accounts, and she earned money, and it went into the family account. And if she ever wanted anything, she asked dad, and dad always said yes. And therefore, what do you think her conclusion from that would be?<\/p>\n<p>[00:51:00]\u00a0<strong>Cassandra:<\/strong>\u00a0Therefore, I\u2019ll just\u2013<\/p>\n<p>[00:51:02]\u00a0<strong>Aldo:<\/strong>\u00a0She\u2019ll fall in the same pattern.<\/p>\n<p>[00:51:04]\u00a0<strong>Cassandra:<\/strong>\u00a0Why would I want deal with it later?<\/p>\n<p>[00:51:05]\u00a0<strong>Ramit:<\/strong>\u00a0Correct? Not really what we want to teach our kids.<\/p>\n<p>[00:51:13]\u00a0<strong>Cassandra:<\/strong>\u00a0I want her to say that I\u2019ve invested some of my money.<\/p>\n<p>[00:51:22]\u00a0<strong>Ramit:<\/strong>\u00a0Nice.<\/p>\n<p>[00:51:24]\u00a0<strong>Cassandra:<\/strong>\u00a0And then I would want her to say that if I don\u2019t have the means for it, I\u2019m not going to spend it unless I have budgeted and saved for it, whatever it might be.<\/p>\n<p>[00:51:37]\u00a0<strong>Ramit:<\/strong>\u00a0Aldo, what about you?<\/p>\n<p>[00:51:39]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah. I want her to learn to use money properly so she can enjoy her life, get whatever she wants, knowing that she could do it, have that confidence of knowing what to do, how to\u2013<\/p>\n<p>[00:51:56]\u00a0<strong>Ramit:<\/strong>\u00a0What if can\u2019t get it? What if she can\u2019t afford it?<\/p>\n<p>[00:52:00]\u00a0<strong>Aldo:<\/strong>\u00a0Then she shouldn\u2019t get it or work harder to get it, not put on a credit card.<\/p>\n<p>[00:52:08]\u00a0<strong>Ramit:<\/strong>\u00a0Really? Tell me about that. Have you ever told her that?<\/p>\n<p>[00:52:15]\u00a0<strong>Aldo:<\/strong>\u00a0No, I don\u2019t think I have.<\/p>\n<p>[00:52:18]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s hard for parents to be like, don\u2019t put it on a credit card when you have $50,000 of credit card debt.<\/p>\n<p>[00:52:23]\u00a0<strong>Aldo:<\/strong>\u00a0Yeah, I think that\u2019s probably why I never brought it up.<\/p>\n<p>[00:52:27]\u00a0<strong>Ramit:<\/strong>\u00a0Every parent has a little bit of, do as I say, not as I do, but there\u2019s a limit where even you\u2019re like, look, I can\u2019t even BS you about this. What are we going to say? And what\u2019s up with your daughter\u2019s college. Is she going to college?<\/p>\n<p>[00:52:44]\u00a0<strong>Aldo:<\/strong>\u00a0She wants to, yeah. We\u2019re talking about community college for the first two years, and then she would want to make a decision where she would go from there.<\/p>\n<p>[00:52:55]\u00a0<strong>Ramit:<\/strong>\u00a0Have you two made any commitments about funding?<\/p>\n<p>[00:52:59]\u00a0<strong>Aldo:<\/strong>\u00a0No. We feel about bad about that. It\u2019s something we wanted to do. We just didn\u2019t plan it right.<\/p>\n<p>[00:53:11]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s the unfortunate reality. I am glad, I have to say, that you haven\u2019t told her, hey, we\u2019ll pay for everything. I\u2019m really glad that you seem to have had some discussions about community college. I think there\u2019s a lot of amazing options.<\/p>\n<p>[00:53:31] And listen, I hope that after a couple of years, if you were to be extremely aggressive about your payments, you might be in a better position to at least offer a little bit of help. But right now, it would be very difficult to do that. Any reactions to that, Cassandra?<\/p>\n<p>[00:53:56]\u00a0<strong>Cassandra:<\/strong>\u00a0It\u2019s hard. I never thought that I would be in this position where I couldn\u2019t help her. \u2018So it\u2019s hard to hear. when I first saw all of this, I told Aldo, I don\u2019t see us getting out of this anytime soon. He always tries to make it look better, and he\u2019s like, no, we could do this in two. I don\u2019t see it being more than two, three years. And I\u2019m like, I\u2019m thinking more like 10 years. I don\u2019t see how we can get out of this.<\/p>\n<p>[00:54:41]\u00a0<strong>Ramit:<\/strong>\u00a0The good news is we can fix it. We can fix some of the personal loans, the credit card loans, all these loans. And then we can start off at least feeling a bit more breathing room to create a new chapter with your money. I think that would feel a lot better. Don\u2019t you think?<\/p>\n<p>[00:55:03]\u00a0<strong>Aldo:<\/strong>\u00a0Yes.<\/p>\n<p>[00:55:03]\u00a0<strong>Ramit:<\/strong>\u00a0And you\u2019re going to show her what you are doing about it so that she can see, oh my gosh, my parents are really having to change their lifestyle, but they\u2019re doing it. It\u2019s also a very positive message. And I think that\u2019s the kind of message that she would be lucky to have 10, 15 years from now. Let\u2019s talk about what you can do.<\/p>\n<p>[00:55:35] Two things that occur to me. Number one, I don\u2019t hear you talking about dramatically cutting back on expenses, which I\u2019d like to talk about, but two, you have these credit cards that you took the 401K withdrawal for. What about all these bonuses that are coming your way every quarter? What about using that money?<\/p>\n<p>[00:55:57]\u00a0<strong>Aldo:<\/strong>\u00a0That\u2019s the plan. I\u2019m going to get 17,000 after all taxes in November, and we wanted to take two cards off in November.<\/p>\n<p>[00:56:08]\u00a0<strong>Ramit:<\/strong>\u00a0Where\u2019s the $127,000, Aldo, that you\u2019re making this year in bonuses?<\/p>\n<p>[00:56:12]\u00a0<strong>Aldo:<\/strong>\u00a0It\u2019s the end of the year already, so we\u2019ve used it up. I would pay off cards and reuse them for trips or expenses. It\u2019s just been a cycle.<\/p>\n<p>[00:56:25]\u00a0<strong>Ramit:<\/strong>\u00a0If I were sitting in your situation, every additional bit of income that I got would be split between debt and building up a savings account. I would make a black and white rule. That\u2019d be rule number one. And we can talk about what percentage that can be, but if it were me, it would be something like 85%debt, 15% savings. That\u2019s what I would do. Number one.<\/p>\n<p>[00:56:58] Number two rule would be no more spending on credit cards at all. Put the credit cards, lock them away. No more using them. All they are is one directional. You\u2019re paying them off as quickly as possible. And the minute they get paid off, personally, I would close the accounts.<\/p>\n<p>[00:57:17] And then black and white rule number three is I would become extremely honest about where we are going to spend our discretionary money because I think the two of you spend a lot more than you realize, clothes, trips, et cetera. All that money that you have spent, I would take it going forward, and as much as possible, I would direct it towards the credit cards and the savings. Simple. Three rules. What do you think?<\/p>\n<p>[00:57:50]\u00a0<strong>Aldo:<\/strong>\u00a0I agree.<\/p>\n<p>[00:57:51]\u00a0<strong>Cassandra:<\/strong>\u00a0I wanted to close credit cards. I told him, I think we\u2013<\/p>\n<p>[00:57:54]\u00a0<strong>Aldo:<\/strong>\u00a0I thought I would hurt your credit for the future because\u2013<\/p>\n<p>[00:57:58]\u00a0<strong>Ramit:<\/strong>\u00a0What,though? Tell me what concerns you about that.<\/p>\n<p>[00:58:02]\u00a0<strong>Aldo:<\/strong>\u00a0Like I said, our plan was to improve credit so we can get the home equity line and then pay everything off. And at that point, we could close everything and just have one big loan with a lower rate and try to tackle just that one loan with everything we can put into it.<\/p>\n<p>[00:58:23]\u00a0<strong>Ramit:<\/strong>\u00a0What could go wrong with that plan?<\/p>\n<p>[00:58:28]\u00a0<strong>Aldo:<\/strong>\u00a0If we don\u2019t pay it.<\/p>\n<p>[00:58:31]\u00a0<strong>Cassandra:<\/strong>\u00a0We lose the house.<\/p>\n<p>[00:58:33]\u00a0<strong>Aldo:<\/strong>\u00a0Then we would have to sell the house.<\/p>\n<p>[00:58:37]\u00a0<strong>Cassandra:<\/strong>\u00a0You\u2019d fall back into debt if you didn\u2019t close all the cards off.<\/p>\n<p>[00:58:41]\u00a0<strong>Aldo:<\/strong>\u00a0No, we would have to close the cards. The plan was to close them and just put it all in the home equity. But yes, there is the risk. If we can\u2019t make the payment, then it\u2019s a risk we\u2019re taking that we would be forced to sell the house to pay off that debt.<\/p>\n<p>[00:59:03]\u00a0<strong>Ramit:<\/strong>\u00a0Would your past spending suggest that this would be a successful way to go or not?<\/p>\n<p>[00:59:13]\u00a0<strong>Aldo:<\/strong>\u00a0The past, no. But I think both of us being hyper aware on our expenses will give us a chanceto lower our minimums from 2,400 to 1,000 and now put that additional 1,400 to pay down the principal.<\/p>\n<p>[00:59:33]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s possible. It\u2019s possible. In the best scenario, it could work.<\/p>\n<p>[00:59:39]\u00a0<strong>Aldo:<\/strong>\u00a0But you don\u2019t think we can make it work?<\/p>\n<p>[00:59:42]\u00a0<strong>Ramit:<\/strong>\u00a0I think that I look at people\u2019s spending behavior, and it tells me\u2013 the best predictor of their future behavior is what they currently do today. Today I see debt upon debt upon debt. Home equity line seems essentially like another get rich quick opportunity. It\u2019s yet another thing that\u2019s going to come down from heaven and save us. And I don\u2019t love it.<\/p>\n<p>[01:00:16]\u00a0<strong>Narration:<\/strong>\u00a0[Narration]<\/p>\n<p>[01:00:17]\u00a0<strong>Ramit:<\/strong>\u00a0 In almost all cases where I speak to people in severe debt, they look for a magic bullet. The first thing they say to me always is, we just need to earn more money. And then the second thing they talk about is some type of credit card game, usually either consolidation or balance transfers.<\/p>\n<p>[01:00:39] Now, those can be useful tools, but candidly, that\u2019s just wishful thinking for most people in these situations. People in severe debt will talk about every other option except actually changing their spending and making an automatic debt payoff plan. This is literally in chapter one of my book.<\/p>\n<p>[01:01:01] If you are listening to this or you\u2019re watching this on YouTube and you\u2019re in a lot of debt, the one message I want you to hear today is that there is freedom in going through the fire. That means if you want to truly pay off your debt, there are no gimmicks, and there are no tricks.<\/p>\n<p>[01:01:20] You have to take a hard look in the mirror. You have to ask yourself what decisions brought you here, and then you have to change your entire relationship with money and debt. It will be hard, but you can learn this skill, and you can get stronger. And I know, having worked with many people who were in debt and have paid it off, that there is a light at the end of the tunnel.<\/p>\n<p>[01:01:45]\u00a0<strong>Interview:<\/strong>\u00a0[Interview]<\/p>\n<p>[01:01:46]\u00a0<strong>Ramit:<\/strong>\u00a0In this case, if you were to plug in all of your debt into a debt payoff calculator\u2013 I\u2019m going to encourage you to do that. And what you can do is you can start to play with, first off, which should you pay off first? If you\u2019re the most sophisticated, you would pay off the one with the highest interest rate first.<\/p>\n<p>[01:02:10] You can also see, how much would it help you to pay off an extra a $100 a month, an extra $250 a month with the balances? An extra 250 a month would make a massive, massive change. Have you run a calculation like that before?<\/p>\n<p>[01:02:31]\u00a0<strong>Aldo:<\/strong>\u00a0No, but we were looking at doing the snowball effect and the avalanche one. So the snowball on the smallest one and try to focus on that. And we were doing the minimums on everything else. And when I get my bonus, pay off the one with the highest interest.<\/p>\n<p>[01:02:49]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, let\u2019s take a look. All right. You can pay off your debts in five years if you pay off 3,200 per month. Keep in mind that\u2019s more than you\u2019re paying, but actually somewhat reasonable. Do you know why? Why is it reasonable to pay off 3,200 instead of 2,500 that you\u2019re currently paying off?<\/p>\n<p>[01:03:25]\u00a0<strong>Aldo:<\/strong>\u00a0Because of my bonuses.<\/p>\n<p>[01:03:27]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. And any reduced spending, travel, all these groceries, all this stuff, HelloFresh that you used to spend. This is five years of aggressive debt payments. It shows that you\u2019ll pay 41% in interest alone. Totally wasted money. $80,000 of interest you\u2019re going to pay just from not looking at money.<\/p>\n<p>[01:04:00]\u00a0<strong>Cassandra:<\/strong>\u00a0It\u2019s so crazy. It\u2019s money thrown away.<\/p>\n<p>[01:04:11]\u00a0<strong>Aldo:<\/strong>\u00a0That\u2019s why we completely stopped using credit cards and changed our mindset to pay as much as we can with anything we have additional.<\/p>\n<p>[01:04:21]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. Go ahead.<\/p>\n<p>[01:04:25]\u00a0<strong>Aldo:<\/strong>\u00a0If you ran the same numbers at, say, 10% with the home equity, you still wouldn\u2019t like that idea?<\/p>\n<p>[01:04:34]\u00a0<strong>Ramit:<\/strong>\u00a0No.<\/p>\n<p>[01:04:35]\u00a0<strong>Aldo:<\/strong>\u00a0I think we could get out faster.<\/p>\n<p>[01:04:37]\u00a0<strong>Cassandra:<\/strong>\u00a0It\u2019s like swapping money around, isn\u2019t it? My concern is that that number seems very high a month, and I feel like it would leave us with nothing left to do anything at all. I know my habits aren\u2019t going to be anywhere near what they\u2019ve been, but I also know that there\u2019s holidays, and there\u2019s things that come up.<\/p>\n<p>[01:04:59] And just the thought of not being able to take the kids away, like on one vacation, I\u2019m just nervous that there\u2019s not going to be any left over for living. I don\u2019t want to be miserable either the next five years.<\/p>\n<p>[01:05:16]\u00a0<strong>Aldo:<\/strong>\u00a0Do you think we\u2019ll fall back in the same pattern?<\/p>\n<p>[01:05:18]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. I think you\u2019ll your house, and I think you\u2019ll find a new way to get into debt.<\/p>\n<p>[01:05:24]\u00a0<strong>Narration:<\/strong>\u00a0[Narration]<\/p>\n<p>[01:05:26] I want to recap why I am being so direct with Cassandra and Aldo in this very moment in this conversation. Because in their history, they have a failed meme stock, they have loans and credit cards that have gone to collections, they have garnished wages for back taxes, credit card debt we couldn\u2019t even calculate, out of control spending, and a 401K withdrawal, not to mention many other huge red flags.<\/p>\n<p>[01:05:54] Recall that they are 38 and 42, two kids, $540,000 in debt, and they make about $165,000 a year. But as you just heard, they were not satisfied when they found out that to pay off their debt, it would take them over five years. So I gave them another option, a more extreme option. I suggested that they take 80% of their bonuses and put it towards debt.<\/p>\n<p>[01:06:21] But I also pointed out what it would mean for them. It would severely limit their day-to-day spending. I suggested that they commit to no vacations for two years. Keep in mind that they took three trips this summer. I told them that under this plan, nobody can get laid off. I suggested that they have to stop using credit cards immediately.<\/p>\n<p>[01:06:43] And I suggested that they cut their phone bills, subscriptions, clothes, groceries, and guilt-free spending to the bone. And if they did all of these things and they executed perfectly, their debt payoff would take about two and a half years. Let\u2019s take a listen to what they had to say in their follow-ups.<\/p>\n<p>[01:07:02]\u00a0<strong>Aldo:<\/strong>\u00a0What I learned was that setting some automation can really help us not only stay on focus but handle our finances much better. What surprised me the most is seeing how short of a timeframe we can really get out of all this debt. Our plan is to set some rules and definitely stay focused on our debt calculator schedule.<\/p>\n<p>[01:07:26] By putting 80% of our income into bills and expenses and 20% to savings, it\u2019s really going to help us tackle all this debt and get out of it in hopefully under three years. So yeah, definitely excited to put all this knowledge in play and learn what are ways to handle our finances so we can teach our children to do that moving forward. So thank you, again, and we\u2019ll chat soon.<\/p>\n<p>[01:07:56]\u00a0<strong>Cassandra:<\/strong>\u00a0Mostly what I learned is that I can\u2019t just sit on the sidelines. We\u2019re a married couple. We\u2019ve been married for 18 years, and I should have been more involved in our finances and not just pretend or ignore it really. I think what surprised me the most is that we can get out of this without any quick fixes.<\/p>\n<p>[01:08:18] I think the right way to do it is how you said. We can aggressively pay off our debt. And we plugged in the numbers again, adding a little more to our debt each month, whether it means taking off from certain expenses or not eating out as much, maybe skipping vacation this year, the difference that it makes on the timeline as far as paying off our debt.<\/p>\n<p>[01:08:43] So our plan is to pay off our debt in two years and 11 months. We plan on sticking to this. So we have a whole payment schedule. We used the debt payoff calculator, and we plan on sticking to it. And hopefully, everything goes smoothly, and we\u2019ll be out of debt in less than three years, which is amazing. I did not expect that.<\/p>\n<p>[01:09:04]\u00a0<strong>Ramit:<\/strong>\u00a0Now, here\u2019s my question to you. Do you think they can do it?<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cassandra, 40, and Aldo, 41, discovered Ramit on Netflix\u2014which quickly led to Cassandra discovering the gruesome details of their debt. His goal was to shield her from stress. What he\u2019s done instead is hide incalculable credit card balances, lose thousands on meme stocks, and so much more. This episode is brought to you by: Mint [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","om_disable_all_campaigns":false,"_lmt_disableupdate":"no","_lmt_disable":"","_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[290],"class_list":["post-118941","post","type-post","status-publish","format-standard","hentry","category-podcast-episodes"],"acf":[],"aioseo_notices":[],"modified_by":"Nasrin","_links":{"self":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/118941","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/comments?post=118941"}],"version-history":[{"count":0,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/118941\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/media?parent=118941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/categories?post=118941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}