{"id":118945,"date":"2023-11-07T17:10:35","date_gmt":"2023-11-07T21:10:35","guid":{"rendered":"https:\/\/www.iwillteachyoutoberich.com\/?p=118945"},"modified":"2025-04-07T10:03:39","modified_gmt":"2025-04-07T14:03:39","slug":"129-trin-lucas","status":"publish","type":"post","link":"https:\/\/www.iwillteachyoutoberich.com\/129-trin-lucas\/","title":{"rendered":"Episode 129. \u201cWe spend 154% of what we make, but I refuse to get a salary job\u201d (Part 2)"},"content":{"rendered":"<p><iframe title=\"\u201cWe spend 154% of our income &amp; refuse to change\u201d\" src=\"https:\/\/www.youtube.com\/embed\/T67B7Qtydvo\" width=\"100%\" height=\"400\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><iframe style=\"border-radius: 12px;\" src=\"https:\/\/open.spotify.com\/embed\/episode\/4GI2hZoKtJV9jc6zo1nhuO?utm_source=generator\" width=\"100%\" height=\"352\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>Following up with Trin and Lucas, both 35, we chip away at an unmanageable fixed-costs percentage and broach Lucas\u2019s unwillingness to seek salaried employment while navigating severe trust issues and a checkered past with respect to financial risk taking.<\/p>\n<p><strong>This episode is brought to you by:<\/strong><\/p>\n<p>Masterclass | For unlimited access to every class and 15% off an annual membership, go to\u00a0<strong><a href=\"https:\/\/masterclass.com\/ramit\">https:\/\/masterclass.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>DeleteMe | If you want to get your personal information removed from the web, go to\u00a0<strong><a href=\"https:\/\/joindeleteme.com\/ramit\">https:\/\/joindeleteme.com\/ramit<\/a><\/strong>\u00a0for 20% off.<\/p>\n<p>Facet | Get affordable, accessible financial planning with a flat fee membership. For a limited time, the $250 enrollment fee will be waived when you sign up at\u00a0<strong><a href=\"https:\/\/facet.com\/ramit\">https:\/\/facet.com\/ramit<\/a><\/strong>.<\/p>\n<h2><strong>Tools mentioned in this episode<\/strong><\/h2>\n<ul>\n<li><a href=\"https:\/\/iwt.com\/moneycoaching\">Get Money Coaching with Ramit<\/a><\/li>\n<\/ul>\n<h2><strong>Show Transcript<\/strong><\/h2>\n<p><a href=\"https:\/\/drive.google.com\/file\/d\/1Om95Zj-fkk1CiKk77G1qmKYarW5XUkNv\/view?usp=sharing\">Download the full transcript PDF.<\/a><\/p>\n<p><strong>Transcript_IWT_129_Trin + Lucas<\/strong><\/p>\n<p>[00:00:00]\u00a0<strong>Lucas:<\/strong>\u00a0Sometimes it don\u2019t feel like it\u2019s a together thing. It\u2019s like she wants me to do certain things with both hands tied behind my back and hopping on one leg.<\/p>\n<p>[00:00:09]\u00a0<strong>Trin:<\/strong>\u00a0And I know you\u2019ve been trying, and you\u2019re doing the best that you can, but the way that we are doing things does not work. It does not work. We\u2019ve been in the deficit for months. I feel really stupid because I did not know. I feel like I should have known.<\/p>\n<p>[00:00:37]\u00a0<strong>Lucas:<\/strong>\u00a0I wanted to be financially free when I was 35. I\u2019m 35 now. I\u2019ve moved that goal to 40. The goals that I had when I was 25 to take care of my family, I haven\u2019t even accomplished that, and it\u2019s been 10 years. How much more time is it going to take for me to be able to do that?<\/p>\n<p>[Narration]<\/p>\n<p>[00:00:54]\u00a0<strong>Ramit:<\/strong>\u00a0Welcome to part 2 of my conversation with Trin and Lucas. They\u2019re both 35 years old, married. Lucas has a history of risky investments. For example, he lost over 20 properties in the past. And Trin was recently caught off guard when she learned that their family was running low on cash. When I left them in the last episode, I had just learned that they are spending 150% of their take home pay on fixed costs alone. That number is startling. Fixed cost percentage is supposed to be roughly 50 to 60%, which means that they are broke, and they are running out of money fast.<\/p>\n<p>[00:01:32] In today\u2019s episode, listen for how they individually approach money, and especially listen for how they talk about money together. And as you think about creating a rich life together, you might have heard of the idea of having a monthly money date to help get on the same financial page as your partner.<\/p>\n<p>[00:01:50] What is a money date? What are you supposed to talk about? How do you make sure it\u2019s productive and not just two people spinning their wheels and getting mad at each other? This Saturday, I\u2019m going to be sharing how to have a money date with your partner, including a sample agenda that you can use word for word. You can only get this at iwt.com\/podcastnewsletter this Saturday, November 11th. And it is free. Now, let\u2019s get to the episode.<\/p>\n<p>[Interview]<\/p>\n<p>[00:02:16]\u00a0<strong>Lucas:<\/strong>\u00a0I looked at some of the transactions before too. Over the last six months, six months, we have been spending at least over 2,000, 2,500 on eating out. And I\u2019m like, man, something\u2019s got to happen with this thing.<\/p>\n<p>[00:02:31]\u00a0<strong>Ramit:<\/strong>\u00a0How often do you both eat out? Oh, wow. Look at that uncomfortable. Wow. She\u2019s covering her right eye with her hand, and he\u2019s now putting his hand on the face. When the hand goes to the face, you know you got them. What did you eat out last? What is it? DoorDash?<\/p>\n<p>[00:02:47]\u00a0<strong>Trin:<\/strong>\u00a0Chick-fil-A yesterday.<\/p>\n<p>[00:02:50]\u00a0<strong>Lucas:<\/strong>\u00a0You promote DoorDash.<\/p>\n<p>[00:02:50]\u00a0<strong>Ramit:<\/strong>\u00a0I promote it, but not for you. Everybody else who wants a home delivery, DoorDash, fantastic. They deliver all kinds of stuff. One hour. It\u2019s awesome. Not for you.<\/p>\n<p>[00:03:02]\u00a0<strong>Trin:<\/strong>\u00a0Ouch.<\/p>\n<p>[00:03:03]\u00a0<strong>Lucas:<\/strong>\u00a0All right. So only meant for me. Got it.<\/p>\n<p>[00:03:05]\u00a0<strong>Ramit:<\/strong>\u00a0What\u2019d you get on DoorDash? Tell me.<\/p>\n<p>[00:03:07]\u00a0<strong>Trin:<\/strong>\u00a0Chick-fil-A.<\/p>\n<p>[00:03:09]\u00a0<strong>Ramit:<\/strong>\u00a0Uh-huh. What else?<\/p>\n<p>[00:03:10]\u00a0<strong>Trin:<\/strong>\u00a0Cheesecake Factory.<\/p>\n<p>[00:03:12]\u00a0<strong>Lucas:<\/strong>\u00a0Normally, we usually buy from Longhorns or some place like that.<\/p>\n<p>[00:03:17]\u00a0<strong>Ramit:<\/strong>\u00a0How much does that cost?<\/p>\n<p>[00:03:19]\u00a0<strong>Lucas:<\/strong>\u00a0Anywhere from 45 to a 100 bucks.<\/p>\n<p>[00:03:23]\u00a0<strong>Ramit:<\/strong>\u00a0How often would you say you get delivery or takeout per week?<\/p>\n<p>[00:03:26]\u00a0<strong>Lucas:<\/strong>\u00a0About two to three times per week.<\/p>\n<p>[Narration]<\/p>\n<p>[00:03:30]\u00a0<strong>Ramit:<\/strong>\u00a0Hold on. I just have to cut in here. Do you notice this little verbal tick that Lucas has? I asked him, \u201cHow much does takeout cost?\u201d He said, \u201c45 to a 100 bucks.\u201d I said, \u201cHow often?\u201d He says.\u201d Two to three times per week.\u201d That means they could be spending anywhere from $360 to $1,200 per month.<\/p>\n<p>[00:03:52] One thing that you\u2019ll notice is that people who are not savvy with money consistently use ranges. But how are you supposed to calculate anything based on two to three times per week versus 45 to a $100? You can\u2019t do math on ranges. And what\u2019s really going on here is that deep down people are uncomfortable with their spending, so they make up ranges right in the moment.<\/p>\n<p>[00:04:17] Two to three times per week is probably four. 45 to a $100, add in tax and tip, and it\u2019s probably more like $120 on average. To live a rich life, you\u2019ve heard me say you have to be honest with yourself and the people around you. And that means not using ranges. In fact, be conservative. Look at your ranges, look at your numbers, then add 15% to account for all the stuff you\u2019re forgetting. That is how you start to get more accurate with your spending. Okay, back to the conversation.<\/p>\n<p>[Interview]<\/p>\n<p>[00:04:47]\u00a0<strong>Ramit:<\/strong>\u00a0You know we didn\u2019t even count that on the CSP, right?<\/p>\n<p>[00:04:50]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah, we got into a little discussion about that.<\/p>\n<p>[00:04:54]\u00a0<strong>Trin:<\/strong>\u00a0I thought we put it in there. It said\u2013<\/p>\n<p>[00:04:56]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s focus on the big picture here. You\u2019re spending over $1,000 a month eating out.<\/p>\n<p>[00:05:03]\u00a0<strong>Lucas:<\/strong>\u00a0Easily, yeah.<\/p>\n<p>[00:05:04]\u00a0<strong>Ramit:<\/strong>\u00a0Every month. How are you going to change that?<\/p>\n<p>[00:05:11]\u00a0<strong>Trin:<\/strong>\u00a0I will be doing it. So I will be more strategic with the groceries that I am going to purchase, and then also planning out our meals ahead of time. I actually started this two weeks ago. A lot has come out of it. I realized how much refined foods we were eating, how we need to incorporate more whole foods for ourselves. And that even goes back down to our culture of eating better. Because culturally, neither one of us were raised to eat like that. At first, I saw it as a daunting task, but now I see it as a privilege to be able to provide that for my family.<\/p>\n<p>[00:05:59]\u00a0<strong>Ramit:<\/strong>\u00a0So cool. Oh my God. Okay. So Trin, that is amazing. What you just said is, to me, the culmination of how you change. All this conscious spending plan, it can be seen as daunting. It\u2019s hard to start thinking and talking about money differently, and behaving differently. But once you start to get a few wins under your belt, and you realize, just like you realized, oh my gosh, we need to eat more whole foods, and we started to feel better, it becomes a privilege. And that\u2019s the same thing with money.<\/p>\n<p>[00:06:31] Your car payments, does that include gas when you put your\u2013<\/p>\n<p>[00:06:35]\u00a0<strong>Lucas:<\/strong>\u00a0Yes.<\/p>\n<p>[00:06:35]\u00a0<strong>Ramit:<\/strong>\u00a0All right. What kind of cars you have?<\/p>\n<p>[00:06:38]\u00a0<strong>Lucas:<\/strong>\u00a0Just have one car that we\u2019re paying a loan on.<\/p>\n<p>[00:06:41]\u00a0<strong>Ramit:<\/strong>\u00a0What kind of car?<\/p>\n<p>[00:06:44]\u00a0<strong>Trin:<\/strong>\u00a0Mazda CX5.<\/p>\n<p>[00:06:46]\u00a0<strong>Ramit:<\/strong>\u00a0Mazda Okay. What\u2019s the other car?<\/p>\n<p>[00:06:49]\u00a0<strong>Lucas:<\/strong>\u00a02013 Hyundai Elantra, 2014 Nissan Versa.<\/p>\n<p>[00:06:55]\u00a0<strong>Ramit:<\/strong>\u00a0You have three cars.<\/p>\n<p>[00:06:58]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:06:58]\u00a0<strong>Ramit:<\/strong>\u00a0Why? Why is everybody smiling all of a sudden?<\/p>\n<p>[00:07:01]\u00a0<strong>Lucas:<\/strong>\u00a0Because Trinity said that he\u2019s going to ask us about this. The Mazda is a new addition to our family.<\/p>\n<p>[00:07:07]\u00a0<strong>Ramit:<\/strong>\u00a0As of when?<\/p>\n<p>[00:07:08]\u00a0<strong>Trin:<\/strong>\u00a0April.<\/p>\n<p>[00:07:09]\u00a0<strong>Lucas:<\/strong>\u00a0April.<\/p>\n<p>[00:07:10]\u00a0<strong>Ramit:<\/strong>\u00a0Why did you get that? How come it\u2019s so quiet in here?<\/p>\n<p>[00:07:17]\u00a0<strong>Trin:<\/strong>\u00a0I\u2019ll share that part. In 2019, before we got married, I went to him and told him that I wanted to purchase an SUV. We wanted to grow our family. I had two dogs already. Had a conversation with him and my dad. They suggested my car was only a year and a half away from being fully paid off, that I waited.<\/p>\n<p>[00:07:36] I decided to wait. The urgency of me purchasing the vehicle was I felt that Lucas would not allow me to purchase that vehicle after we got married. I was correct. And so over the years, we have grown our family, and those two cars that he named are small, compact cars. So in traveling, even locally, it is a challenge for our family to all get into the vehicle with car seats and everything.<\/p>\n<p>[00:08:04] So I had been expressing, and not in a nagging way, but I had dropped a gem here or there. It\u2019s like, I wish we could purchase a vehicle. He got approved for a loan back in 2021. Presented it to me at Christmas, and I was like, hey, this is not a smart move right now. I appreciate the gesture, but it\u2019s not wise for us to purchase a vehicle right now, where we are. We ended up getting it because we were at a point where he was like, I really want to go ahead and purchase the SUV. In his eyes, it\u2019s more of a gift for me, which I appreciate.<\/p>\n<p>[00:08:41]\u00a0<strong>Ramit:<\/strong>\u00a0With what money?<\/p>\n<p>[00:08:43]\u00a0<strong>Trin:<\/strong>\u00a0At that time, we were bringing in $12,000 a month.<\/p>\n<p>[00:08:47]\u00a0<strong>Lucas:<\/strong>\u00a0Sorry. All right, babe.<\/p>\n<p>[00:08:51]\u00a0<strong>Trin:<\/strong>\u00a0And so I still, at the time, didn\u2019t 100% agree, but I went on with it because we did need a larger vehicle.<\/p>\n<p>[00:08:58]\u00a0<strong>Ramit:<\/strong>\u00a0So wait, you dropped multiple gems, and then suddenly, you were like, oh no, no, no, no, not me. Is that true?<\/p>\n<p>[00:09:05]\u00a0<strong>Trin:<\/strong>\u00a0Yeah, sure. Yeah, it was.<\/p>\n<p>[00:09:07]\u00a0<strong>Ramit:<\/strong>\u00a0Lucas, do you agree with that?<\/p>\n<p>[00:09:09]\u00a0<strong>Lucas:<\/strong>\u00a0So you asked with what\u2013 multiple gems. So I had always felt bad about saying, hey, I don\u2019t think it\u2019s the right time to get a car right now. I felt bad about it because it was like I was preventing her from having a car and doing what she wants to do with the money. But for me, at the time, I\u2019m like, we don\u2019t make that much money. It\u2019s going to be an extra 300 or $400 out of our pocket, blah, blah. We argued about that. I think we put down either five or 10,000 on it.<\/p>\n<p>[00:09:41]\u00a0<strong>Ramit:<\/strong>\u00a0And how much does the car cost?<\/p>\n<p>[00:09:43]\u00a0<strong>Lucas:<\/strong>\u00a031.<\/p>\n<p>[00:09:44]\u00a0<strong>Ramit:<\/strong>\u00a0How did you decide if you could afford it?<\/p>\n<p>[00:09:47]\u00a0<strong>Lucas:<\/strong>\u00a0Can we afford the monthly payment? Not can we afford this?<\/p>\n<p>[00:09:50]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. And what have I said on this show before about monthly payments?<\/p>\n<p>[00:09:56]\u00a0<strong>Lucas:<\/strong>\u00a0Pop quiz?<\/p>\n<p>[00:09:57]\u00a0<strong>Trin:<\/strong>\u00a0I don\u2019t remember but you did say it.<\/p>\n<p>[00:10:00]\u00a0<strong>Ramit:<\/strong>\u00a0I said never make major purchase decisions based on monthly payment.<\/p>\n<p>[00:10:04]\u00a0<strong>Lucas:<\/strong>\u00a0The other thing I went into it too with our conversation was, can we pay this off in a year or two?<\/p>\n<p>[00:10:11]\u00a0<strong>Ramit:<\/strong>\u00a0Can you?<\/p>\n<p>[00:10:13]\u00a0<strong>Lucas:<\/strong>\u00a0At the time, I thought we could.<\/p>\n<p>[00:10:15]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. All right. How about a savings account? How many months of savings did you have?<\/p>\n<p>[00:10:23]\u00a0<strong>Lucas:<\/strong>\u00a0At that time, how much do we have? Oh, how many months of savings? I don\u2019t know. We had Was it 15,000, 17,000 in the account?<\/p>\n<p>[00:10:38]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s one month.<\/p>\n<p>[00:10:39]\u00a0<strong>Trin:<\/strong>\u00a0April. Yeah, probably one month.<\/p>\n<p>[00:10:41]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:10:42]\u00a0<strong>Ramit:<\/strong>\u00a0When we\u2019re talking about risk, you\u2019re now seeing what happens when you don\u2019t manage risk. You\u2019re not taking away the key lessons to learn. You\u2019re not changing your behavior. I\u2019m confused by it.<\/p>\n<p>[Narration]<\/p>\n<p>[00:10:56]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s zoom out so I can tell you what I\u2019m seeing here. It is really easy to make a series of transactional decisions and miss the big picture, which is what has happened here. They bought a car based on the monthly payment. That\u2019s mistake number one. At the time, they had a high income, which is great, but only one month in savings. That\u2019s mistake number two.<\/p>\n<p>[00:11:18] And, of course, there\u2019s all the considerable risk they\u2019re taking that we discussed in last week\u2019s episode, which, when combined with this decision for a car, made their finances much more risky. That\u2019s mistake number three. In money, you can seem fine for a long time, and then suddenly, one day, everything blows up. You want to avoid that.<\/p>\n<p>[00:11:42] It\u2019s better to live slightly more modestly or take slightly less risk in order to avoid ever getting into a super risky situation. It\u2019s like driving 70 miles an hour instead of 80. Yeah, it seems slower than some cars in the fast lane. It seems like they\u2019re going to get there faster. But by increasing your speed, even 10 miles an hour, your risk goes way, way up. And most of the time, it actually doesn\u2019t save you any meaningful time at all.<\/p>\n<p>[00:12:10] We\u2019ll be right back.<\/p>\n<p>[00:12:12] Now back to the show.<\/p>\n<p>[00:12:14] I asked Lucas and Trin how their finances started crumbling all at once. Listen in.<\/p>\n<p>[Interview]<\/p>\n<p>[00:12:20]\u00a0<strong>Lucas:<\/strong>\u00a0We had a trip. We ended up taking a nice little vacation for our family.<\/p>\n<p>[00:12:25]\u00a0<strong>Ramit:<\/strong>\u00a0Where\u2019d you go?<\/p>\n<p>[00:12:27]\u00a0<strong>Lucas:<\/strong>\u00a0We went to New Orleans. She was having a bachelorette party, so we went there to support her. Nice move. Stayed at a very nice hotel. Never stayed at a five-star hotel before.<\/p>\n<p>[00:12:39]\u00a0<strong>Ramit:<\/strong>\u00a0Which hotel?<\/p>\n<p>[00:12:40]\u00a0<strong>Lucas:<\/strong>\u00a0Four Seasons. So I\u2019m excited. I\u2019m like, Four Seasons. We\u2019ve never been there. We\u2019ve been saving all this money. Let\u2019s treat ourselves. Let\u2019s have this vacation. Boom. Go to the Four Seasons. Come back. I look at the bill. I\u2019m like, oh man. It was 50% more than what I had budgeted on.<\/p>\n<p>[00:12:58]\u00a0<strong>Ramit:<\/strong>\u00a0Is there anyone that we\u2019ve heard in the industry, the only person who tells people a magic number to add to your expense budget when you\u2019re traveling? And isn\u2019t there somebody who says, take the room rate and add 50%? And then everybody goes, 50%? Ramit, that\u2019s crazy. Why are you talking about that? 38% room rate tax, dah, dah, dah, dah, dah. And then nobody listens. And then what\u2019s that magic number that you said again, Lucas? What was that?<\/p>\n<p>[00:13:23]\u00a0<strong>Lucas:<\/strong>\u00a0If you want to do it that way, then I guess it\u2019s a 100% because we did 30% more, and we spent more than that.<\/p>\n<p>[00:13:30]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, you had a good time on that trip. That sounds amazing.<\/p>\n<p>[00:13:34]\u00a0<strong>Lucas:<\/strong>\u00a0It was great. It was great. We were able to bring my mom on the trip as well. So we went back after the trip. Two months later, we ended up moving, again, long distance. And my wife is like, hey, we haven\u2019t had a vacation in a while.<\/p>\n<p>[00:13:52]\u00a0<strong>Ramit:<\/strong>\u00a0Wait, this is after New Orleans?<\/p>\n<p>[00:13:54]\u00a0<strong>Lucas:<\/strong>\u00a0Two months after, yes. And I\u2019m like, what do you mean we haven\u2019t had a vacation? She said, that was a bachelorette party. I didn\u2019t really get to have like fun with the family. We haven\u2019t had a family vacation.<\/p>\n<p>[00:14:05]\u00a0<strong>Ramit:<\/strong>\u00a0 Just so every body knows, Trin is laughing hysterically in the corner over here. Trin, I\u2019m coming back to you. Don\u2019t worry, I want to hear your side of the story. You\u2019re really laughing. All right, I\u2019m coming to you in a second. Carry on, Lucas.<\/p>\n<p>[00:14:17]\u00a0<strong>Lucas:<\/strong>\u00a0It made sense because, at the time, we were having a Nigerian convention in the area, so we said, okay, since we\u2019re moving, let\u2019s just go stay at the Marriott Hotel. We stayed there for about a week and a half or two weeks. Then my mom was there too. So we had a family vacation this time. I don\u2019t know what the other vacation was, or the other trip was. And we moved.<\/p>\n<p>[00:14:41] So many things went wrong on the move, so many things. So I thought the move was going to cost, let\u2019s say, eight or 10,000. It ended up costing 15, as well as that other extra vacation. We get to this place, and there\u2019s a whole bunch of stuff wrong with this place. So we can\u2019t even stay in this house. So we have to go stay in another hotel. We stayed there for about three to five days or something. So that\u2019s more money out the pocket.<\/p>\n<p>[00:15:05] Again, I\u2019m trying to handle all the stuff. I think it was two weeks after that point, I\u2019m looking at the expenses. Before all this stuff happened, on that vacation, I did something that I never ever do. I turned my brain off in terms of finances. Because normally, on trips, I\u2019m in the numbers, like, hey, we budgeted for food.<\/p>\n<p>[00:15:24] We did this, we did that. On this trip, I just turned it off, and it stayed off for another three to four weeks after we got back. So when we got back, I\u2019m like, all right, it\u2019s time to look at the numbers. And I\u2019m like, wait, wait, wait. What is going on here? I see about, I think, 800 or $1,000 in the account. I start feeling anxious or nervous.<\/p>\n<p>[Narration]<\/p>\n<p>[00:15:47]\u00a0<strong>Ramit:<\/strong>\u00a0 I appreciate the honesty when Lucas says he turned off his brain. I think a lot of us do that with our money. What\u2019s really hard is that we tend to turn our brains off and stop using our systems when the stakes are really high. In their case, traveling with family for a long time because their house wasn\u2019t ready, that\u2019s stressful.<\/p>\n<p>[00:16:07] I remember I used to do these huge launches every January, and my body would be a wreck afterwards. The first time I did it, it took me about six months to physically get back to a 100% physically and mentally. I\u2019d be up late. I\u2019d drink way too much caffeine. I would skip my workouts.<\/p>\n<p>[00:16:24] And I learned later that in times of high stress, those are exactly the times to lean on your system. And I think that\u2019s why it\u2019s so important to build your financial system right now. While you\u2019re listening to this, you have peace and calm. You can think ahead. Because at one point or another, we\u2019re all going to get in a stressful situation.<\/p>\n<p>[00:16:42] It might be something with your home. It might be something with your family. Somebody might get laid off. If you don\u2019t have a system to lean on, it is easy to become overwhelmed with stress, close your eyes, and start spending money on whatever\u2019s in front of you.<\/p>\n<p>[00:16:58]\u00a0 Now, if you want help setting up that type of system, you can join my money coaching program at iwt.com\/moneycoaching. I do live Q&amp;A every month. I\u2019d love to answer your questions right there on the spot. And there\u2019s a community of other people just like you. iwt.com\/moneycoaching.<\/p>\n<p>[Interview]<\/p>\n<p>[00:17:17]\u00a0<strong>Ramit:<\/strong>\u00a0What about the credit card debt? How much are you paying on that every month?<\/p>\n<p>[00:17:21]\u00a0<strong>Lucas:<\/strong>\u00a0That varies because I thought that was minimum payments to cards. Every month, we\u2019re probably paying maybe 5,000 on the card.<\/p>\n<p>[00:17:31]\u00a0<strong>Ramit:<\/strong>\u00a05,000 a month? No way.<\/p>\n<p>[00:17:35]\u00a0<strong>Lucas:<\/strong>\u00a0Okay. So this is the complicated thing, whatever. If we start the month out with, let\u2019s say, $6,000 on a credit card, I want to end the month with less than that, probably 0.<\/p>\n<p>[00:17:47]\u00a0<strong>Ramit:<\/strong>\u00a0How much are you paying per month on the credit card debt?<\/p>\n<p>[00:17:51]\u00a0<strong>Lucas:<\/strong>\u00a0I don\u2019t know how to answer that question. I\u2019ll give you an example. Let\u2019s say we paid rent with the credit card. If I paid rent with the credit card and I took the cash and paid the credit card off, how do I answer your question?<\/p>\n<p>[00:18:04]\u00a0<strong>Ramit:<\/strong>\u00a0Why are you paying your rent with a credit card? To get some points?<\/p>\n<p>[00:18:07]\u00a0<strong>Lucas:<\/strong>\u00a0One part was for the points. Two was because we didn\u2019t have the cash at the time.<\/p>\n<p>[00:18:13]\u00a0<strong>Ramit:<\/strong>\u00a0Do you now?<\/p>\n<p>[00:18:15]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:18:15]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Can I just say something? Your overcomplicated system is actually doing you no favors. You can\u2019t get your head around it. And Lucas, even if you don\u2019t know the answers to this, then how can your wife know the answers? And you told me coming on this call, I want to have better communication. I want to have a team. We work together. No teammate can understand a system that only works in your head. That surprised you to hear?<\/p>\n<p>[00:18:44]\u00a0<strong>Lucas:<\/strong>\u00a0A little bit. For me, there\u2019s no system behind it. The right answer is manage it better.<\/p>\n<p>[00:18:51]\u00a0<strong>Ramit:<\/strong><strong>\u00a0<\/strong>Correct.<\/p>\n<p>[00:18:52]\u00a0<strong>Lucas:<\/strong>\u00a0Okay. My thing is, how do you manage this? This is what I\u2019m trying to figure out.<\/p>\n<p>[00:18:57]\u00a0<strong>Ramit:<\/strong>\u00a0What is the number you have at the top for fixed costs?<\/p>\n<p>[00:19:00]\u00a0<strong>Lucas:<\/strong>\u00a0We\u2019re at 154%.<\/p>\n<p>[00:19:02]\u00a0<strong>Ramit:<\/strong>\u00a0You\u2019re broke.<\/p>\n<p>[Narration]<\/p>\n<p>[00:19:02]\u00a0<strong>Ramit:<\/strong>\u00a0Sometimes in my conversations, I have to spend a lot of time getting these facts out on the page so that the couple I\u2019m speaking to realizes the severity of their situation. I don\u2019t blame Lucas and Trinh for not knowing how bad things are because our minds are very creative in finding ways to rationalize and obfuscate painful truths.<\/p>\n<p>[00:19:28] We want to believe that we are conscientious and smart, and we care about our money, but we never want to admit that, actually, we\u2019ve been ignoring it and possibly even just mismanaging it. And sometimes we have to confront the uncomfortable truths that we are broke. That\u2019s what I am doing here, spending a lot of time to get those facts on the table so that we can all start working with reality.<\/p>\n<p>[Interview]<\/p>\n<p>[00:19:57]\u00a0<strong>Trin:<\/strong>\u00a0What are you feeling, Lucas?<\/p>\n<p>[00:20:01]\u00a0<strong>Lucas:<\/strong>\u00a0One, seeing you cry and hearing your perspective on this is hard because it\u2019s not what I wanted for our family. That\u2019s one. But also, I\u2019m feeling overwhelmed and a little bit frustrated as well because I deal with these numbers on a daily basis, on a weekly basis, on a monthly basis, looking into the future as well of what needs to get set up for our family, looking at the things that we also need, and the conversations that we have is\u2013<\/p>\n<p>[00:20:47]\u00a0<strong>Ramit:<\/strong>\u00a0Let me pause you right there. First of all, you\u2019re both in counseling, right?<\/p>\n<p>[00:20:53]\u00a0<strong>Lucas:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:20:53]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. I can tell. And I mean that in a positive way. It\u2019s very beautiful. Very good work. I also noticed that each of you feels this resentment about how the other is treating money. each of you has this need right now to make sure the other person knows that you\u2019re right. But what I didn\u2019t hear was the two of you talking about this problem that the two of you are facing together.<\/p>\n<p>[00:21:32]\u00a0<strong>Lucas:<\/strong>\u00a0Sometimes it don\u2019t feel like it\u2019s a together thing. Sometimes it\u2019s like she wants me to do certain things with both hands tied behind my back and hopping on one leg. How she wants me to do things is like that. And I\u2019m like, what you want me to do is fine, but the how, I can\u2019t do it that way.<\/p>\n<p>[00:21:57] We are going to go down a different path, and she takes that as me saying, I\u2019m better than you in finances. My way is the best, and this and that. I\u2019m not going to lie. I do have control aspects of things because you can see the numbers. Even if we made $5,000 more, we are still in a position where we are broke.<\/p>\n<p>[00:22:22] And that scares me to the point where I\u2019m like, okay, in order for me to accomplish the goals for our family, I need to make $35,000 a month. But that scares me even more because if I made more, guess what? We\u2019re probably going to spend more if we continue down this path, and it\u2019ll\u2013<\/p>\n<p>[00:22:41]\u00a0<strong>Ramit:<\/strong>\u00a0Lucas, do you think that maybe, for the first time ever, Trin seeing these numbers, actually understands the severity of the situation?<\/p>\n<p>[00:22:50]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah. I think so.<\/p>\n<p>[00:22:52]\u00a0<strong>Ramit:<\/strong>\u00a0Haven\u2019t you been wishing that she would actually get it for a long time?<\/p>\n<p>[00:22:59]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:22:59] Do you think she gets it? Trin, do you get where we are right now on a financial position?<\/p>\n<p>[00:23:08]\u00a0<strong>Trin:<\/strong>\u00a0I definitely do, and I also empathize with you that you\u2019ve been carrying that for a long time.<\/p>\n<p>[00:23:17]\u00a0<strong>Lucas:<\/strong>\u00a0Thank you. So through this conversation, was there anything that I said or anything I talked about that I could have talked about in a different way or we can communicate in a different way so that we can be on the same page?<\/p>\n<p>[00:23:34]\u00a0<strong>Trin:<\/strong>\u00a0I really appreciate you opening up and sharing your true feelings, your point of view. And I know that you have tried, and maybe my ears just weren\u2019t open. Listening is a skill, and sometimes I hear you and it goes in one ear and out the other, but I\u2019m listening. I\u2019m your partner, and I\u2019m here to help. And I may be a little emotional now, but in the morning, I\u2019ll wake up, strap up my boots, and we\u2019ll figure this out.<\/p>\n<p>[00:24:12]\u00a0<strong>Lucas:<\/strong>\u00a0And I do want to share something with you, though. I think it was last week or the week before you had said, hey, we don\u2019t have a college or a savings plan for charity. And I think I hit you with a one liner like, oh, okay\u2013 something like that. But that actually made me, that actually made me cry because that\u2019s on my big board of things to accomplish, and that is not the first step for me.<\/p>\n<p>[00:24:39] The first step for me is to have savings and an emergency fund, and then have us set up with life insurance. So I have a step system, or a plan, but I\u2019m like, I can\u2019t even put away money for something that we both think is important for our daughter. Mama\u2019s sick. I don\u2019t even have enough money to take care of mama.<\/p>\n<p>[00:25:07] So the goals that I had when I was 25 to take care of my family, I haven\u2019t even accomplished that, and it\u2019s been 10 years. How much more time is it going to take for me to be able to do that and for us to be able to accomplish the things that we want to accomplish?<\/p>\n<p>[00:25:24]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s beautiful hearing the two of you talk like a team. It\u2019s really the first time, when it comes to money, that I\u2019m hearing that today. It seems to me that if the two of you were totally aligned, you could actually make some big changes.<\/p>\n<p>[00:25:45]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:25:46]\u00a0<strong>Ramit:<\/strong>\u00a0Are you two aligned as parents?<\/p>\n<p>[00:25:50]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah. I\u2019ll tell say yeah.<\/p>\n<p>[00:25:52]\u00a0<strong>Ramit:<\/strong>\u00a0All right. That\u2019s cool. And what\u2019s another part of life where the two of you are aligned?<\/p>\n<p>[00:26:01]\u00a0<strong>Lucas:<\/strong>\u00a0Our faith.<\/p>\n<p>[00:26:03]\u00a0<strong>Ramit:<\/strong>\u00a0Great. You can read each other. You know what they\u2019re thinking. You can close your eyes. You know where they are. You know they have your back. You know if there\u2019s something you\u2019re struggling with, they\u2019re going to be there, and sometimes they\u2019re going to be down, and you\u2019re going to be there. That\u2019s a partner. But not with money. What do you think it would feel like if the two of you were true partners with money?<\/p>\n<p>[00:26:36]\u00a0<strong>Lucas:<\/strong>\u00a0I don\u2019t know.<\/p>\n<p>[00:26:38]\u00a0<strong>Ramit:<\/strong>\u00a0First time you ever really thought about it, right?<\/p>\n<p>[00:26:41]\u00a0<strong>Trin:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:26:44]\u00a0<strong>Ramit:<\/strong>\u00a0Give it a shot. Lean on your faith. Lean on your parenting. Think about what it feels like to know that you have a partner.<\/p>\n<p>[00:26:59]\u00a0<strong>Lucas:<\/strong>\u00a0I don\u2019t want to just talk about crises because, in crises, we already got each other\u2019s backs. Money, faith, parenting\u2013 when that stuff happens. It\u2019s outside of crisis. But you said, how would it look like? When things are going well, it gets even better.<\/p>\n<p>[00:27:17]\u00a0<strong>Trin:<\/strong>\u00a0We wouldn\u2019t have to bring in the four horsemen. And so one of my horsemen is criticism, and his, typically, is defensiveness. And so we wouldn\u2019t have to bring those in because we would know, as you\u2019ve already stated, that I know you have my best interest. You have our family\u2019s best interest. I don\u2019t see you as an enemy. You are truly my partner.<\/p>\n<p>[00:27:40]\u00a0<strong>Ramit:<\/strong>\u00a0I love that.<\/p>\n<p>[00:27:41]\u00a0<strong>Trin:<\/strong>\u00a0I think, for me, it would be pure bliss. And we\u2019ve already spoken to the financial piece, and you know that communication plays a part in that, and so it would literally be bliss and our ideal vision of our kingdom marriage, as we like to call it.<\/p>\n<p>[00:28:00]\u00a0<strong>Ramit:<\/strong>\u00a0Allow me to add one as well. When you\u2019re a partner and when you have a partner, things are simple. Even with all the complexity of raising kids, it\u2019s pretty simple if you boil it down. Feed them, love them, protect them, A partnership with money, yeah, there\u2019s a complexity, especially in the early days.<\/p>\n<p>[00:28:27] But you make a few key decisions, roles. Who does what? What happens if we\u2019re over our spending limit? And then there\u2019s trust, but it\u2019s simple. Right now, this is too complicated. You can tell it\u2019s complicated when there\u2019s all kinds of stuff happening off the page.<\/p>\n<p>[00:28:51] Really, it should be happening on this page, one page, the conscious spending plan. And when there\u2019s all kinds of weird variability, and there\u2019s this, that\u2019s when, man, we\u2019ve taken a wrong turn way back, way back in the rear view mirror. So with your permission, I\u2019d like to try to make some tough decisions right now. How do you feel about that?<\/p>\n<p>[00:29:17]\u00a0<strong>Lucas:<\/strong>\u00a0I\u2019m a little scared.<\/p>\n<p>[00:29:19]\u00a0<strong>Ramit:<\/strong>\u00a0I would be scared if I were you too. Tough decisions are tough. And the fact is, as we heard, the house is actually on fire. You\u2019re spending more. You\u2019re down to, I don\u2019t know, a couple of months of money. And even that is putting you in even further severe debt.<\/p>\n<p>[00:29:41]\u00a0<strong>Trin:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:29:42]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:29:43]\u00a0<strong>Ramit:<\/strong>\u00a0So what we have to agree on is that we can\u2019t make small changes. If we find ourselves 15 minutes from now arguing over, can we cut $15 on our cell phone bill? We know that we have taken a wrong turn because $15 is not going to solve your problems. Do we agree on that?<\/p>\n<p>[00:30:02]\u00a0<strong>Trin:<\/strong>\u00a0We do.<\/p>\n<p>[00:30:02]\u00a0<strong>Ramit:<\/strong>\u00a0All right. So put on your big, bold move hats because that\u2019s what we\u2019re about to do right now.<\/p>\n<p>[00:30:08]\u00a0<strong>Lucas:<\/strong>\u00a0All right, let\u2019s go.<\/p>\n<p>[Narration]<\/p>\n<p>[00:30:10]\u00a0<strong>Ramit:<\/strong>\u00a0What I just did there was shift them from being problem-oriented to solution-oriented. Most people with problems love to talk about their problems. It\u2019s comfortable there. People can even become addicted to talking about their problems. But it is a small percentage of people who can go from problem-oriented to actively looking for solutions.<\/p>\n<p>[00:30:33] And it\u2019s a funny peculiarity of human nature that we\u2019ll complain about something for 15 years, like sweating too much, or not being able to parallel park, or not having enough money, but very few of us will actually look for a solution that could change everything.<\/p>\n<p>[00:30:49] We\u2019ll be right back.<\/p>\n<p>[00:30:51] Now back to Trin and Lucas.<\/p>\n<p>[00:30:53] So I\u2019ve gotten them ready to look for solutions. Let\u2019s see what happens. Remember, their fixed costs are 154% of take-home pay. And ideally, that number should be at 50 to 60%.<\/p>\n<p>[Interview]<\/p>\n<p>[00:31:08]\u00a0<strong>Trin:<\/strong>\u00a0I control groceries in household, and so I say we can go down to 1,000 a month.<\/p>\n<p>[00:31:17]\u00a0<strong>Ramit:<\/strong>\u00a0You want to cut that from 1,800 to a 1,000. How are you going to do that?<\/p>\n<p>[00:31:22]\u00a0<strong>Trin:<\/strong>\u00a0Finding deals. So Publix does buy one, get one. Only purchasing those items for that week. I can do that. I can be a little more conservative with things that we do purchase.<\/p>\n<p>[00:31:37]\u00a0<strong>Ramit:<\/strong>\u00a0So from 1,800, I\u2019m going to move it to a 1,000. I feel confident. Nice. And that number went from 154 to 144 percent of fixed costs. All right, good. What\u2019s next?<\/p>\n<p>[00:31:50]\u00a0<strong>Trin:<\/strong>\u00a0I think for me, we could definitely take a look at the subscriptions. I guess we could cut that in half. Probably 300.<\/p>\n<p>[00:31:59]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s 140%. What\u2019s next?<\/p>\n<p>[00:32:01]\u00a0<strong>Trin:<\/strong>\u00a0Yeah, other fixed expenses are really big. Lucas, do you want to add anything for fixed expenses?<\/p>\n<p>[00:32:10]\u00a0<strong>Lucas:<\/strong>\u00a0We could drop counselling.<\/p>\n<p>[00:32:13]\u00a0<strong>Ramit:<\/strong>\u00a0No, don\u2019t do that.<\/p>\n<p>[00:32:15]\u00a0<strong>Lucas:<\/strong>\u00a0No, not drop it completely. We meet four times a week.<\/p>\n<p>[00:32:20]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, that\u2019s a lot.<\/p>\n<p>[00:32:21]\u00a0<strong>Lucas:<\/strong>\u00a0Not four times a week, sorry. Four times a month. Couples is twice a month.<\/p>\n<p>[00:32:27]\u00a0<strong>Ramit:<\/strong>\u00a0Listen, I\u2019d rather have you cut your grooming, your lawn care, and everything else besides counseling. I\u2019m not joking around.<\/p>\n<p>[00:32:32]\u00a0<strong>Lucas:<\/strong>\u00a0Got it. Got it. Okay. Rosa could come just once a month. Let\u2019s see. Childcare, lawn care.<\/p>\n<p>[00:32:44]\u00a0<strong>Trin:<\/strong>\u00a0I think you could bring that down probably to right around 2,000 if we\u2019re cutting the lawn, the house cleaning, and then grooming.<\/p>\n<p>[00:32:53]\u00a0<strong>Trin:<\/strong><strong>\u00a0<\/strong>Let\u2019s go with\u2013<\/p>\n<p>[00:32:54]\u00a0<strong>Ramit:<\/strong>\u00a0We\u2019re down to 126%, by the way.<\/p>\n<p>[00:32:56]\u00a0<strong>Trin:<\/strong>\u00a0Okay.<\/p>\n<p>[00:32:57]\u00a0<strong>Ramit:<\/strong>\u00a0Tithing and giving, this is $1,242 a month.<\/p>\n<p>[00:33:05]\u00a0<strong>Trin:<\/strong>\u00a0It\u2019s based of 8,000, right?<\/p>\n<p>[00:33:09]\u00a0<strong>Lucas:<\/strong>\u00a0It should be 800.<\/p>\n<p>[00:33:10]\u00a0<strong>Trin:<\/strong>\u00a0Yeah, it should be 800.<\/p>\n<p>[00:33:12]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:33:15]\u00a0<strong>Ramit:<\/strong>\u00a0And are you required to give 10%?<\/p>\n<p>[00:33:19]\u00a0<strong>Lucas:<\/strong>\u00a0Not required, but that\u2019s what we do.<\/p>\n<p>[00:33:21]\u00a0<strong>Trin:<\/strong>\u00a0We prefer to give 10%.<\/p>\n<p>[00:33:22]\u00a0<strong>Lucas:<\/strong>\u00a0I\u2019d rather cut something else, if we\u2019re being honest.<\/p>\n<p>[00:33:25]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. All right. I appreciate it. It\u2019s your money, so you tell me what\u2019s next. I\u2019m the executor right now. You tell me.<\/p>\n<p>[00:33:33]\u00a0<strong>Lucas:<\/strong>\u00a0Okay. What\u2019s next? Maybe the phone?<\/p>\n<p>[00:33:37]\u00a0<strong>Ramit:<\/strong>\u00a0All right.<\/p>\n<p>[00:33:38]\u00a0<strong>Lucas:<\/strong>\u00a0That\u2019s 30 bucks, though. I think we could get that down to 180.<\/p>\n<p>[00:33:42]\u00a0<strong>Ramit:<\/strong>\u00a0180. All right. You know I have a sponsor on this show who does $15 a month.<\/p>\n<p>[00:33:47]\u00a0<strong>Lucas:<\/strong>\u00a0Let me guess. Mint?<\/p>\n<p>[00:33:48]\u00a0<strong>Ramit:<\/strong>\u00a0Yes.<\/p>\n<p>[00:33:49]\u00a0<strong>Lucas:<\/strong>\u00a0Is it reliable?<\/p>\n<p>[00:33:51]\u00a0<strong>Ramit:<\/strong>\u00a0Dude, how are we debating this right now? We literally are doing what I said we are not allowed to do. We\u2019re doing it five minutes\u2013<\/p>\n<p>[00:33:58]\u00a0<strong>Trin:<\/strong>\u00a0I am looking into Mint\u2013<\/p>\n<p>[00:34:00]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m putting50 bucks.<\/p>\n<p>[00:34:01]\u00a0<strong>Trin:<\/strong>\u00a0As we get off the call.<\/p>\n<p>[00:34:02]\u00a0<strong>Lucas:<\/strong>\u00a0How much is Mint?<\/p>\n<p>[00:34:03]\u00a0<strong>Ramit:<\/strong>\u00a0Promo for Mint ever.<\/p>\n<p>[Narration]<\/p>\n<p>[00:34:05]\u00a0<strong>Ramit:<\/strong>\u00a0So far, here are the changes we made to drop their fixed costs from 154 percent to 115. Their groceries went from $1,800 a month to 1,000. Subscriptions went from 600 to 300. Counseling is staying on the books. Tithing is staying on the books at a pretty substantial 10%. They removed lawn care, grooming, and housekeeping. They chopped down their mobile bill with Mint, where you can get great cell phone service starting at $15 a month via mintmobile.com\/ramit. So they\u2019re making changes. Let\u2019s keep going.<\/p>\n<p>[Interview]<\/p>\n<p>[00:34:42]\u00a0<strong>Lucas:<\/strong>\u00a0Do any of the kids need clothes?<\/p>\n<p>[00:34:43]\u00a0<strong>Trin:<\/strong>\u00a0No.<\/p>\n<p>[00:34:44]\u00a0<strong>Ramit:<\/strong>\u00a0Damn, Trin, that is partnership right there.<\/p>\n<p>[00:34:47]\u00a0<strong>Lucas:<\/strong>\u00a0Yes.<\/p>\n<p>[00:34:47]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Clothes.<\/p>\n<p>[00:34:48]\u00a0<strong>Lucas:<\/strong>\u00a0You can put that to zero.<\/p>\n<p>[00:34:49]\u00a0<strong>Ramit:<\/strong>\u00a0Zero. All right. 112. What\u2019s next?<\/p>\n<p>[00:34:52]\u00a0<strong>Lucas:<\/strong>\u00a0Car, transportation, that might be more like maybe 500, maybe 515.<\/p>\n<p>[00:35:00]\u00a0<strong>Ramit:<\/strong>\u00a0If anything, it\u2019s going to be higher because you\u2019re going to get a repair at some point, or parking tickets, or whatever.<\/p>\n<p>[00:35:07]\u00a0<strong>Lucas:<\/strong>\u00a0Oh, I didn\u2019t know that that\u2013 yeah, the simple stuff. Okay.<\/p>\n<p>[00:35:11]\u00a0<strong>Ramit:<\/strong>\u00a0Hey, I have a question. Why do you have car payment at all?<\/p>\n<p>[00:35:13]\u00a0<strong>Lucas:<\/strong>\u00a0Because we have a car.<\/p>\n<p>[00:35:16]\u00a0<strong>Trin:<\/strong>\u00a0You think we should get rid of them.<\/p>\n<p>[00:35:20]\u00a0<strong>Lucas:<\/strong>\u00a0We just bought it.<\/p>\n<p>[00:35:22]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, you shouldn\u2019t have bought it.<\/p>\n<p>[00:35:24]\u00a0<strong>Lucas:<\/strong>\u00a0I know, but aren\u2019t we going to lose money?<\/p>\n<p>[00:35:26]\u00a0<strong>Trin:<\/strong>\u00a0You know what? We will have that hard conversation of selling the car. Let\u2019s do it.<\/p>\n<p>[00:35:33]\u00a0<strong>Ramit:<\/strong>\u00a0You want to have a hard conversation, or you want to just make a decision? Which one do you want to do?<\/p>\n<p>[00:35:38]\u00a0<strong>Trin:<\/strong>\u00a0Yeah. I say it needs to go. I agree with you. I say it needs to go.<\/p>\n<p>[00:35:46]\u00a0<strong>Lucas:<\/strong>\u00a0I\u2019m okay selling it. The part that I\u2019m not okay on is losing the money that we put into it.<\/p>\n<p>[00:35:53]\u00a0<strong>Ramit:<\/strong>\u00a0Lucas, you made a bad decision. Now you have to eat it.<\/p>\n<p>[00:35:56]\u00a0<strong>Lucas:<\/strong>\u00a0I don\u2019t want to eat it. Okay.<\/p>\n<p>[00:35:59]\u00a0<strong>Ramit:<\/strong>\u00a0And notice, by the way, all jokes aside, this is the second time because you made a comment about the collections thing when the credit card guys were like, hey, you need to pay this. And you were like, no. Remember that phrase, cut your nose off to spite your face or whatever?<\/p>\n<p>[00:36:15]\u00a0<strong>Lucas:<\/strong>\u00a0Don\u2019t cut your\u2013 yeah.<\/p>\n<p>[00:36:16]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s this. Yeah, you\u2019re going to lose money. Yes, it was a horrible decision, and yes, you should probably do it anyway because. The worst case is paying 600 bucks a month for however many years when you just don\u2019t have the money.<\/p>\n<p>[00:36:33]\u00a0<strong>Trin:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:36:33]\u00a0<strong>Lucas:<\/strong>\u00a0All right.<\/p>\n<p>[00:36:35]\u00a0<strong>Ramit:<\/strong>\u00a0All right.<\/p>\n<p>[00:36:35]\u00a0<strong>Lucas:<\/strong>\u00a0Make it 120.<\/p>\n<p>[00:36:36]\u00a0<strong>Ramit:<\/strong>\u00a0120 would be what? Gas?<\/p>\n<p>[00:36:40]\u00a0<strong>Lucas:<\/strong>\u00a0Gas. Yeah.<\/p>\n<p>[00:36:41]\u00a0<strong>Ramit:<\/strong>\u00a0In the CSP, I\u2019m going to assume that you sell the car, and then somewhere, you\u2019ll have to add the debt.<\/p>\n<p>[00:36:48]\u00a0<strong>Lucas:<\/strong>\u00a0Okay. And I don\u2019t think we\u2019ll have that much debt either because we did pay money upfront for it.<\/p>\n<p>[00:36:53]\u00a0<strong>Ramit:<\/strong>\u00a0Great. Sell that thing and never look back. All right. What\u2019s next? Feel stuck?<\/p>\n<p>[00:37:05]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah, I feel stuck.<\/p>\n<p>[00:37:06]\u00a0<strong>Trin:<\/strong>\u00a0The only thing that I can think of that would actually put a huge dent in this is the rent.<\/p>\n<p>[00:37:15]\u00a0<strong>Ramit:<\/strong>\u00a0All right, let\u2019s play that out. We got a spreadsheet. Let\u2019s play with it for a second. 2,450. How much could you feasibly pay maybe a further out location, smaller place, less bedrooms, whatever? What could you feasibly pay for it?<\/p>\n<p>[00:37:34]\u00a0<strong>Trin:<\/strong>\u00a0Maybe 18, 1,900. 1,800\u2019s maybe something I\u2019ve seen.<\/p>\n<p>[00:37:42]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s say 1,900. Lucas, how do you feel about that?<\/p>\n<p>[00:37:46]\u00a0<strong>Lucas:<\/strong>\u00a0Not particularly well about it.<\/p>\n<p>[00:37:48]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, I wouldn\u2019t either, but we got to put it in here and see. All the decisions we\u2019re going to make from now on are going to be hard. Everything until this point was easy.<\/p>\n<p>[00:37:58]\u00a0<strong>Lucas:<\/strong>\u00a0You could put 19, but for me, how plausible is that? Moving, that\u2019s more expenses as well.<\/p>\n<p>[00:38:06]\u00a0<strong>Ramit:<\/strong>\u00a0Let me tell you what\u2019s not plausible, is spending 106% of what you make every month on just your fixed expenses.<\/p>\n<p>[00:38:14]\u00a0<strong>Trin:<\/strong>\u00a0Yeah<\/p>\n<p>[00:38:16]\u00a0<strong>Ramit:<\/strong>\u00a0All right. 1,900. Watch what happens. It drops to 99%.<\/p>\n<p>[00:38:22]\u00a0<strong>Trin:<\/strong>\u00a0Okay.<\/p>\n<p>[Narration]<\/p>\n<p>[00:38:23]\u00a0<strong>Ramit:<\/strong>\u00a0Rent is currently $2,450, which is 25% of their gross. Now, in the absence of everything else, that number is okay, but because they have high fixed costs, that number doesn\u2019t give them a lot of margin to play with it. Even after everything we\u2019ve done so far, we\u2019re still at 99%. Something drastic needs to happen.<\/p>\n<p>[Interview]<\/p>\n<p>[00:38:46]\u00a0<strong>Lucas:<\/strong>\u00a0Can you do something else as well? On the income part, for my income, if you put 11,500 net.<\/p>\n<p>[00:38:56]\u00a0<strong>Ramit:<\/strong>\u00a0You\u2019re saying you\u2019re going to make an extra 1,150 per month, right?<\/p>\n<p>[00:39:01]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:39:02]\u00a0<strong>Ramit:<\/strong>\u00a0Is it 1,500 or 1,150? Which one?<\/p>\n<p>[00:39:07]\u00a0<strong>Lucas:<\/strong>\u00a01,150. But the math isn\u2019t adding up. Why is that 8,000?<\/p>\n<p>[00:39:12]\u00a0<strong>Ramit:<\/strong>\u00a0Because I arbitrarily put it in there. Look, look, let me show you what I mean. Lucas, if your gross income is 11, 692, you can\u2019t be making more on the net side. You have to pay taxes.<\/p>\n<p>[00:39:28]\u00a0<strong>Lucas:<\/strong>\u00a0Okay.<\/p>\n<p>[00:39:29]\u00a0<strong>Ramit:<\/strong>\u00a0You basically have to take like a 30% haircut. Okay?<\/p>\n<p>[00:39:35]\u00a0<strong>Lucas:<\/strong>\u00a0Okay, so for the gross income, it\u2019s 15,000.<\/p>\n<p>[00:39:39]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:39:39]\u00a0<strong>Lucas:<\/strong>\u00a0It\u2019s 15, 000 for partner 2 specifically. So in cell C11, 15,000.<\/p>\n<p>[00:39:50]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Watch. So 18,000. So now this has to be adjusted to, let\u2019s say, 13,000. Yeah, if that happens, everything\u2019s great.<\/p>\n<p>[00:40:09]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:40:09]\u00a0<strong>Trin:<\/strong>\u00a0But I\u2019m really glad that Lucas did that because this is the false reality that we have been living in.<\/p>\n<p>[00:40:20]\u00a0<strong>Ramit:<\/strong>\u00a0I know. Exactly. Hold on. You cannot build a model off of hope. Hope is not a strategy.<\/p>\n<p>[00:40:27]\u00a0<strong>Lucas:<\/strong>\u00a0So what if I told you that I already have the income coming in for this month?<\/p>\n<p>[00:40:32]\u00a0<strong>Trin:<\/strong>\u00a0But the issue, is that\u2019s just for this month.<\/p>\n<p>[00:40:35]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, that\u2019s not sustainable. We need to build a plan that is sustainable, or you will constantly be playing this yoyo game for the rest of your life. Forget about financial freedom. You\u2019ll be in debt for the rest of your life.<\/p>\n<p>[Narration]<\/p>\n<p>[00:40:47]\u00a0<strong>Ramit:<\/strong>\u00a0I can hear myself getting heated here. One of the things I mentioned last week is that Lucas is a believer, someone who believes the next big deal is right around the corner. It\u2019s going to solve all their problems. And he just made a mention of next month\u2019s income, which is great, but it\u2019s just one month. It\u2019s really hard to show believers that a rich life is not about one good month or one good deal. A rich life is about radically reconceptualizing your finances so you\u2019re winning every month. But that often means making hard decisions right now.<\/p>\n<p>[Interview]<\/p>\n<p>[00:41:25]\u00a0<strong>Trin:<\/strong>\u00a0Do you understand that, Lucas?<\/p>\n<p>[00:41:28]\u00a0<strong>Lucas:<\/strong>\u00a0When does it actually become a reality for you? What does consistency look like?<\/p>\n<p>[00:41:35]\u00a0<strong>Trin:<\/strong>\u00a0Three to six months of the same consistent income or a baseline of that income. The past three months, that baseline, as you input that number, was 8,000.<\/p>\n<p>[00:41:50]\u00a0<strong>Ramit:<\/strong>\u00a0How do you feel about that, Lucas?<\/p>\n<p>[00:41:52]\u00a0<strong>Lucas:<\/strong>\u00a0I think just in the past, we\u2019ve tried to have this conversation before, and to be honest, I felt like when I told her the projections or, hey, this is what we\u2019re going to make, it got pooped on. And I felt I was getting pooped on. Like, oh, I don\u2019t believe in you. You can\u2019t do this.<\/p>\n<p>[00:42:14] And then when I\u2019ll come back and say, hey, look at what happened over the last three months, or the last two months, or the last four months, she would hit me with, still not consistent. Your income is variable, this and that. And I felt like the goalposts got moved, and then we\u2019ll get into arguing. And then I just go into my own little world of, okay, let me just go do my thing.<\/p>\n<p>[00:42:35]\u00a0<strong>Ramit:<\/strong>\u00a0Lucas, do you understand why that happened, that dynamic? Can you zoom up and observe the dynamic of your communication? Do you know why that happened?<\/p>\n<p>[00:42:45]\u00a0<strong>Lucas:<\/strong>\u00a0I\u2019m not a 100% sure, but it probably has to do with specificity. And the way that I communicate may be a little complicated when I\u2019m giving numbers or\u2013<\/p>\n<p>[00:42:57]\u00a0<strong>Ramit:<\/strong>\u00a0I think those two things. And I think one more thing, which is going to be tough to hear, which is you actually haven\u2019t delivered on what you\u2019ve committed to. Your partner has every right to be skeptical of the numbers you are projecting because there\u2019s a ton of debt here. And I\u2019m not saying it\u2019s only your fault. I\u2019m not even trying to assign fault or anything. I\u2019m just saying that you haven\u2019t earned the trust of consistent delivery. So of course, your partner\u2019s skeptical.<\/p>\n<p>[00:43:27]\u00a0<strong>Lucas:<\/strong>\u00a0I would have to push back on that because over the last three months, yes, the business did take a hit. But if you looked at before those three months and did a three-month average, a six-month average, you\u2019ll see the numbers that I\u2019ve seen. So from one snapshot is, oh, you haven\u2019t delivered. Yeah, right now. But before these last three months, you couldn\u2019t say that.<\/p>\n<p>[00:43:50]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, I love your pushback. I welcome it. I love that you\u2019re engaged, and I hope you know that. I don\u2019t mind that you disagree with me on certain things. In business, any entrepreneur knows sometimes it goes up. Sometimes it goes down. No one, certainly not another entrepreneur like me is going to come down on you because business has been tough for three months. That\u2019s life.<\/p>\n<p>[00:44:13] But when I came here and we looked at your numbers originally, you were spending roughly 150% of your income on fixed costs alone. That shows a gross mismanagement of personal finances. And that\u2019s not three months. That has nothing to do with the last three months. Sure, things are down, but if you were making that much money before, technically, if it were managed, you would have had way more in savings, way more investments. Debt would have been managed, and certainly not all this credit card debt. So it\u2019s not about the last three months. Put that aside.<\/p>\n<p>[00:44:52]\u00a0<strong>Lucas:<\/strong>\u00a0I see that. I see that, and I\u2019m not saying that there wasn\u2019t mismanagement of funds or anything like that, but our savings went to paying bills because of these last three months.<\/p>\n<p>[00:45:05]\u00a0<strong>Ramit:<\/strong>\u00a0Can I ask you something? Did you cut your expenses when the business slowed down?<\/p>\n<p>[00:45:12]\u00a0<strong>Lucas:<\/strong>\u00a0Our personal expenses? No, it probably went up.<\/p>\n<p>[00:45:13]\u00a0<strong>Ramit:<\/strong>\u00a0Exactly. Did you cut your expenses when you had to take care of the surprise medical expenses for your family?<\/p>\n<p>[00:45:21]\u00a0<strong>Lucas:<\/strong>\u00a0Hmm. I see where you\u2019re going with this. That\u2019s where the mismanagement comes from.<\/p>\n<p>[00:45:25]\u00a0<strong>Ramit:<\/strong>\u00a0Exactly. It\u2019s like a football player who used to be super ripped, and then they stopped playing football, and they\u2019re not ripped anymore. Why? Because they used to burn 5,000 calories a day, 10,000 calories a day. They haven\u2019t adjusted to reality. It looks like it\u2019s hitting you now.<\/p>\n<p>[00:45:43]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah, it is.<\/p>\n<p>[00:45:44]\u00a0<strong>Ramit:<\/strong>\u00a0What\u2019s going through your mind right now?<\/p>\n<p>[00:45:47]\u00a0<strong>Lucas:<\/strong>\u00a0Just a little bit of frustration because there is a little bit of wishful thinking there. Good way, bad way. I\u2019m not putting morality on it. There\u2019s a bit of wishful thinking where, oh, the business went down. Instead of looking at the household expenses and having a conversation with my wife of, hey, our three-month average just went down.<\/p>\n<p>[00:46:08] What are we going to do about it? It was, oh, things are getting better. Then the second month happened, and the third month. Now things are going super up, but we have to dig out of this hole that we just created for [Inaudible]. I\u2019m not going to say we. That I created for ourselves.<\/p>\n<p>[00:46:24]\u00a0<strong>Ramit:<\/strong>\u00a0No, no, no, both of you created it.<\/p>\n<p>[00:46:26]\u00a0<strong>Trin:<\/strong>\u00a0Right.<\/p>\n<p>[00:46:27]\u00a0<strong>Lucas:<\/strong>\u00a0Because of the lack of communication and the lack of adjustment. So I will say that I do see that aspect now. It\u2019s like if the income goes down, the expenses have to go down as well. If the income goes up, the expenses need to stay the same. And I didn\u2019t look at things like that before.<\/p>\n<p>[00:46:46]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:46:46]\u00a0<strong>Lucas:<\/strong>\u00a0I didn\u2019t.<\/p>\n<p>[00:46:49]\u00a0<strong>Ramit:<\/strong>\u00a0The amount that you\u2019re spending right now is for a couple that earns $250,000 plus consistently.<\/p>\n<p>[00:47:01]\u00a0<strong>Lucas:<\/strong>\u00a0Hmm.<\/p>\n<p>[00:47:02]\u00a0<strong>Ramit:<\/strong>\u00a0More like 300,000. 300,000 would allow you to have\u2013<\/p>\n<p>[00:47:06]\u00a0<strong>Lucas:<\/strong>\u00a0It\u2019d be nice.<\/p>\n<p>[00:47:07]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, it would be nice. It\u2019ll allow you to actually have investments, and savings, and all the things that you talk about, generational wealth, and all this stuff. You can\u2019t live this lifestyle on the income you\u2019re making. And please listen, the takeaway is not that I want you to go out and try to find a way to make $300,000 tomorrow because that\u2019s actually not going to happen. The first lesson is to manage your expenses much more carefully.<\/p>\n<p>[Narration]<\/p>\n<p>[00:47:33]\u00a0<strong>Ramit:<\/strong>\u00a0This conversation reminds me a lot of Kara and Drake, a couple that I recently spoke to, where Drake had similarly inflated optimism around his earning potential. I love optimism, but I want to balance that with the facts. If somebody tells me that they should be making $350,000 a year and they\u2019re currently making 320, I say, yeah, that sounds great. You could probably get there. No problem. If someone tells me they should be making 350k and they\u2019re currently making 85, that may not be realistic.<\/p>\n<p>[Interview]<\/p>\n<p>[00:48:05]\u00a0<strong>Ramit:<\/strong>\u00a0Trin, do you work full-time?<\/p>\n<p>[00:48:07]\u00a0<strong>Trin:<\/strong>\u00a0I do.<\/p>\n<p>[00:48:08]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. What do you do?<\/p>\n<p>[00:48:10]\u00a0<strong>Trin:<\/strong>\u00a0I\u2019m a training coordinator.<\/p>\n<p>[00:48:12]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. So you make about 44,000 a year, right?<\/p>\n<p>[00:48:16]\u00a0<strong>Trin:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:48:18]\u00a0<strong>Ramit:<\/strong>\u00a0How much can you make?<\/p>\n<p>[00:48:23]\u00a0<strong>Trin:<\/strong>\u00a0In this role?<\/p>\n<p>[00:48:24]\u00a0<strong>Ramit:<\/strong>\u00a0In any role.<\/p>\n<p>[00:48:27]\u00a0<strong>Trin:<\/strong>\u00a0Probably upwards of 60,000.<\/p>\n<p>[00:48:32]\u00a0<strong>Ramit:<\/strong>\u00a0Trin, why are you in this low-paid job?<\/p>\n<p>[00:48:34]\u00a0<strong>Trin:<\/strong>\u00a0I am almost done with school.<\/p>\n<p>[00:48:38]\u00a0<strong>Ramit:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:48:39]\u00a0<strong>Trin:<\/strong>\u00a0Lucas and I agreed that I would take this lower-paying job so that, mentally, I\u2019m not super strained so that I can focus on my dissertation because I\u2019m almost done.<\/p>\n<p>[00:48:48]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, you\u2019re in grad school right now?<\/p>\n<p>[00:48:51]\u00a0<strong>Trin:<\/strong>\u00a0I am.<\/p>\n<p>[00:48:52]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, cool. What is this? PhD?<\/p>\n<p>[00:48:54]\u00a0<strong>Trin:<\/strong>\u00a0Yes.<\/p>\n<p>[00:48:55]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, okay. That\u2019s cool. What are you going to do after the PhD?<\/p>\n<p>[00:48:58]\u00a0<strong>Trin:<\/strong>\u00a0I want to teach.<\/p>\n<p>[00:48:59]\u00a0<strong>Ramit:<\/strong>\u00a0All right. How much will you make there?<\/p>\n<p>[00:49:01]\u00a0<strong>Trin:<\/strong>\u00a0Minimum, probably about 75. That\u2019s just, if I choose to do one job. If I\u2019m an adjunct, more than that.<\/p>\n<p>[00:49:15]\u00a0<strong>Ramit:<\/strong>\u00a0When does that start?<\/p>\n<p>[00:49:19]\u00a0<strong>Trin:<\/strong>\u00a0Probably I will graduate no later than the spring, so a few months.<\/p>\n<p>[00:49:26]\u00a0<strong>Ramit:<\/strong>\u00a0What? How did this not come up anywhere? I\u2019m going back to this CSP. What? It\u2019s like someone just pulls out thousands of dollars a month out of their pocket. What the hell? So your gross is going to be, what should we say? How much? 6,000 a month?<\/p>\n<p>[00:49:43]\u00a0<strong>Trin:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:49:47]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Things get a little bit better. Is that a sure thing?<\/p>\n<p>[00:49:53]\u00a0<strong>Trin:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:49:55]\u00a0<strong>Ramit:<\/strong>\u00a06,000 a month. From currently 3,600 to 6,000 a month. How did this never come up after hours of our conversation?<\/p>\n<p>[00:50:06]\u00a0<strong>Trin:<\/strong>\u00a0Because it\u2019s in progress. I\u2019m just not there yet.<\/p>\n<p>[Narration]<\/p>\n<p>[00:50:09]\u00a0<strong>Ramit:<\/strong>\u00a0 I have to make a comment about this hilarious moment. Trin, Lucas, and I have been talking for literally hours, and suddenly, out of nowhere, I discover this massive income increase that\u2019s coming. And this happens all the time. People will go, oh, nothing\u2019s really wrong. And then three hours in, they\u2019ll go, oh, wait, we actually have $400,000 in debt. Or in this case, I\u2019m about to double my income.<\/p>\n<p>[00:50:30] What\u2019s even more interesting is Trin\u2019s offhand comment. Did you catch it? She said, it\u2019s in progress. I\u2019m not there yet. People find it really hard to accept and bake in future changes into their assumptions. Even the idea of fiddling with a conscious spending plan, which you can literally type in and then erase, just Ctrl Z, makes people uncomfortable. Why?<\/p>\n<p>[00:50:56] Because the psychology here is that people believe once they write something down, they have to do it. And if they don\u2019t achieve that, they consider themselves a failure. this is basically what happens when kids become adults. They lose the ability to play.<\/p>\n<p>[00:51:13] And in your CSP, one of the things that I encourage you, I\u2019m begging you to do with your partner, is you have to be able to play, to tweak, to come up with scenarios, to ask what if we got rid of this car? What if we downsized to a place that\u2019s half the size? What if we increased our income by 70%? Play with it, and see how the numbers flow.<\/p>\n<p>[Interview]<\/p>\n<p>[00:51:35]\u00a0<strong>Ramit:<\/strong>\u00a0All right. That\u2019s amazing. Congratulations on your upcoming dissertation. That\u2019s a ton of hard work. No joke. It\u2019s awesome. That\u2019s going to take a lot of financial pressure off of the family finances. That\u2019s amazing. That\u2019s the number one thing that I would suggest to you, was to get a higher-paying job. Okay. You check the box on that. Fantastic.<\/p>\n<p>[00:51:57]\u00a0<strong>Lucas:<\/strong>\u00a0I got a question for you. You\u2019re an entrepreneur as well. When you said, hey, you\u2019re not going to go out tomorrow and make that, to me, I don\u2019t hear things like that. Not to say that I need to manage my household like that, but as an entrepreneur, you know the drive that\u2019s in us. Once you see a problem, you\u2019re like, okay, how can I fix this?<\/p>\n<p>[00:52:17] I want to make more money. And if you have a plan for that, you\u2019re going to put it into place. So how do I manage the\u2013 I\u2019m not going to call it wishful thinking\u2013 the opportunity side of the business and the income you can make versus the reality side of, okay, this is what it is?<\/p>\n<p>[00:52:36]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, I\u2019m looking at my business. Of all the activities I\u2019m doing, what are the two or three that are going to get me to 15,000 a month? That\u2019s what I\u2019m doing. And what am I eliminating? Because magical thinking entrepreneurs are the ones that constantly are, I can do this, and I can do that, and I can do this. You\u2019re just wasting your time.<\/p>\n<p>[00:52:54] You pick the two or three high leverage areas. You execute them flawlessly. You monitor them every day, and then you get to your number. And if you don\u2019t, you let people go, or you change your strategy, whatever it is. And if that doesn\u2019t work, Lucas, after a month or two, what do you do then?<\/p>\n<p>[00:53:12]\u00a0<strong>Lucas:<\/strong>\u00a0Regroup.<\/p>\n<p>[00:53:13]\u00a0<strong>Ramit:<\/strong>\u00a0What does that mean? Tell me specifically what do you do?<\/p>\n<p>[00:53:16]\u00a0<strong>Lucas:<\/strong>\u00a0Again, figure out what needs to get cut.<\/p>\n<p>[00:53:19]\u00a0<strong>Ramit:<\/strong>\u00a0You\u2019re already going to be doing that. That\u2019s a daily thing. What else? It\u2019s not working after two months.<\/p>\n<p>[00:53:24]\u00a0<strong>Lucas:<\/strong>\u00a0Wait, what\u2019s not working?<\/p>\n<p>[00:53:25]\u00a0<strong>Ramit:<\/strong>\u00a0Your business. You\u2019re not getting the numbers you need.<\/p>\n<p>[00:53:30]\u00a0<strong>Lucas:<\/strong>\u00a0I\u2019m not getting the numbers I need because of a specific reason, though.<\/p>\n<p>[00:53:33]\u00a0<strong>Ramit:<\/strong>\u00a0I don\u2019t know. You can\u2019t fix it. Sometimes you can\u2019t fix things in business. What are you going to do?<\/p>\n<p>[00:53:40]\u00a0<strong>Lucas:<\/strong>\u00a0I don\u2019t know. That\u2019s a weird question.<\/p>\n<p>[00:53:45]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s not a weird question at all. What\u2019s the plan B if this business doesn\u2019t suddenly start making way more than it\u2019s making right now?<\/p>\n<p>[00:53:51]\u00a0<strong>Lucas:<\/strong>\u00a0Oh, I\u2019d have to figure out how to get more income.<\/p>\n<p>[00:53:57]\u00a0<strong>Ramit:<\/strong>\u00a0How?<\/p>\n<p>[00:54:01]\u00a0<strong>Lucas:<\/strong>\u00a0Another opportunity.<\/p>\n<p>[00:54:02]\u00a0<strong>Ramit:<\/strong>\u00a0Like? Can you be specific? I feel like I\u2019m dragging this out of you.<\/p>\n<p>[00:54:07]\u00a0<strong>Lucas:<\/strong>\u00a0If you\u2019re talking about a job\u2013 is what you\u2019re saying?<\/p>\n<p>[00:54:10]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m asking. I want every option on the table.<\/p>\n<p>[00:54:18]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah, I guess. I just don\u2019t want to say things just to say it. If there was something else out in the market that could pay me for my family needs, that 15k gross, is what we\u2019re looking at, or something less\u2013 basically, you put it like this. If there\u2019s a job out there that can pay me more than I\u2019m making from the business consistently, then I would consider taking it.<\/p>\n<p>[00:54:45]\u00a0<strong>Ramit:<\/strong>\u00a0Then Lucas, don\u2019t you think it\u2019s your job to find out?<\/p>\n<p>[00:54:51]\u00a0<strong>Lucas:<\/strong>\u00a0Okay. I already put my energy into making sure that this business not only just a stable can work, but can grow. And I have a plan for that. Not even a plan that\u2019s out here. It\u2019s working.<\/p>\n<p>[00:55:08]\u00a0<strong>Ramit:<\/strong>\u00a0No, I hope it does. But what if it doesn\u2019t? You have essentially no savings. So if things are not basically working perfect every single month for you, you are in really big trouble. I\u2019m not trying to force you to say anything, but let me tell you what you wrote on the application to me.<\/p>\n<p>[00:55:28]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:55:28]\u00a0<strong>Ramit:<\/strong>\u00a0You both, by the way, sent separate applications, which was unusual, but I like it. Did you two read each other\u2019s applications?<\/p>\n<p>[00:55:36]\u00a0<strong>Trin:<\/strong>\u00a0No.<\/p>\n<p>[00:55:36]\u00a0<strong>Lucas:<\/strong>\u00a0I don\u2019t think we got a email transcript of it. No.<\/p>\n<p>[00:55:40]\u00a0<strong>Ramit:<\/strong>\u00a0Can I read off some of the comments that each of you made in the application?<\/p>\n<p>[00:55:45]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:55:45]\u00a0<strong>Trin:<\/strong>\u00a0Sure.<\/p>\n<p>[00:55:46]\u00a0<strong>Ramit:<\/strong>\u00a0All right. One of them said, \u201cIt\u2019s really taking a toll on our marriage and is the only thing we argue about consistently. I\u2019m so frustrated that I am ready to give up trying. We\u2019ve been in counseling for over three years at this point for various reasons, the most recent being finances.\u201d Another, \u201cIf you\u2019re asking how long until we split, I think less than two years if we continue down this path. Sometimes I think of divorcing my partner so that I can focus on building wealth and supporting them from a distance.\u201d That\u2019s pretty serious stuff.<\/p>\n<p>[00:56:17]\u00a0<strong>Lucas:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:56:20]\u00a0<strong>Ramit:<\/strong>\u00a0Your job is to get your finances to be simpler than mine. That\u2019s what it should be. And so if there\u2019s something you don\u2019t understand, then either it exists in my book or probably you should not be doing it. Can I just say that? Probably you should not be leveraging anything. You don\u2019t need leverage. What you need to do is pay off your debt. No more leverage. No more tricks. That\u2019s the truth. Your finances should be quite simple, honestly.<\/p>\n<p>[00:56:52]\u00a0<strong>Trin:<\/strong>\u00a0I like that. I love that, actually.<\/p>\n<p>[00:56:54]\u00a0<strong>Ramit:<\/strong>\u00a0All right. How\u2019s it feel to see a mile down the road after you\u2019re normally used to only seeing 50 feet in front of you?<\/p>\n<p>[00:57:00]\u00a0<strong>Trin:<\/strong>\u00a0Really good.<\/p>\n<p>[00:57:01]\u00a0<strong>Lucas:<\/strong>\u00a0It\u2019s more like the word she used, a privilege. I get to talk to my wife about finances because one day, I won\u2019t or she won\u2019t because we\u2019re not going to be here anymore. We get to go through the pains because on the other side of pain is pleasure, because now we\u2019ll be able to give our kids what we didn\u2019t have.<\/p>\n<p>[00:57:22]\u00a0<strong>Trin:<\/strong>\u00a0It does get me excited. If I\u2019m being completely honest, when we went through the conscious spending plan and made the adjusted numbers, I was really emotional because I was like, there are things that my heart desires. And at this moment, it doesn\u2019t seem like it\u2019s achievable if we continue to do the same thing the same way.<\/p>\n<p>[00:57:50] What is insanity? Doing the same thing the same way, expecting different results. But now, like you said, you\u2019re forcing me to see this structure is going to help you get to that rich life. And you\u2019re not going to get there tomorrow. You\u2019re not going to get there in a year. You\u2019re not going to get there in five years, and that is okay.<\/p>\n<p>[Narration]<\/p>\n<p>[00:58:11]\u00a0<strong>Ramit:<\/strong>\u00a0Trin and Lucas have been pursuing a very interesting strategy. Trin, delegating a lot of control to Lucas. Lucas, pursuing what I would characterize as get-rich-quick aspirations and things like overfunding a whole life insurance policy, which I strongly disagree with. It is going to take them a lot of joint effort to dig themselves out of the situation that they find themselves in, but I believe they can do it if the two of them get truly aligned. Let\u2019s check out their follow-ups. First, Trin.<\/p>\n<p>[00:58:47]\u00a0<strong>Trin:<\/strong>\u00a0<em>\u00a0<\/em>So one of the surprises that came out of the meeting was that my partner felt very similar to what I felt. So we both completed the application separately, but ultimately, we wrote the same, that if this issue was not resolved, and resolved soon, it could lead to the detriment of our marriage. The other surprise was that, as Ramit said, our finances were more complex than his.<\/p>\n<p>[00:59:16] A takeaway. My partner shouldn\u2019t have to carry that load on his own. And yes, we do have certain roles established. That doesn\u2019t mean that he should have to carry the entire financial load by himself. The other thing was that we\u2019ve been living beyond our means. Because it is hidden in our fixed expenses, we see it more as necessities when in actuality they\u2019re not.<\/p>\n<p>[00:59:41] We did decide to sell our car. The other thing that we are going to do\u2013 excuse me\u2013 that I\u2019m going to do is increase my knowledge in finances. I\u2019m going to start by reading Ramit\u2019s book. And the last thing that we plan to do is establish roles that work for our family, me supporting my partner on that financial side, carrying my load for this family. And I consider it a privilege to be able to do so.<\/p>\n<p>[01:00:10]\u00a0<strong>Ramit:<\/strong>\u00a0 And now, Lucas.<\/p>\n<p>[01:00:12]\u00a0<strong>Lucas:<\/strong>\u00a0One of the biggest surprises I got from the conversation with you was the way that I talked about my business income and my personal income confuses people. And my biggest takeaway, or biggest lesson that I got from the conversation was to keep things simple. So from now, moving forward, I\u2019ll be talking to my wife about the gross revenue of the business, the net profit of the business, and what the business paid us, what our family received.<\/p>\n<p>[01:00:38] The other big lesson that I got from the conversation was about the financial freedom aspect of things. I wanted to be financially free by 40, and my definition was where we have rental property or assets taking care of our lifestyle. I don\u2019t have to rush for that. It doesn\u2019t have to happen at 40. The journey is more important.<\/p>\n<p>[01:01:00] And the specific changes that we are going to make, I\u2019m going to personally work on not complicating things, so keeping things simple. We\u2019re going to be looking for a buyer for our SUV, and we\u2019re going to be going through this wonderful book. We\u2019re going to be spending the next couple of years just getting a solid foundation, getting stability, and building up a huge savings, a robust savings account, so that when we do invest in rental properties, it will be way less risky than we are in this position now.<\/p>\n<p>[01:01:30]\u00a0<strong>Ramit:<\/strong>\u00a0 I want to thank Trin and Lucas for being so open with their story. Over the last two episodes, they have shared a lot of personal background, the cultural differences that they brought, the way that they look at money differently. And I have to especially thank Lucas for hearing some of my feedback to him, which cannot have been easy for him to take. I appreciate you, Trin and Lucas. I appreciate you coming on, engaging with me, and I wish you both the best.\u00a0 If you enjoyed this podcast, I\u2019m going to be talking about how to have a money date with your partner, including the exact words to say this Saturday.\u00a0 Get it at iwt.com\/podcastnewsletter.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Following up with Trin and Lucas, both 35, we chip away at an unmanageable fixed-costs percentage and broach Lucas\u2019s unwillingness to seek salaried employment while navigating severe trust issues and a checkered past with respect to financial risk taking. This episode is brought to you by: Masterclass | For unlimited access to every class and [&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-118945","post","type-post","status-publish","format-standard","hentry","category-podcast-episodes"],"acf":[],"aioseo_notices":[],"modified_by":"Vika DD.NYC\u00ae","_links":{"self":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/118945","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=118945"}],"version-history":[{"count":0,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/118945\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/media?parent=118945"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/categories?post=118945"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}