{"id":118947,"date":"2023-10-24T17:23:44","date_gmt":"2023-10-24T21:23:44","guid":{"rendered":"https:\/\/www.iwillteachyoutoberich.com\/?p=118947"},"modified":"2025-04-07T10:04:15","modified_gmt":"2025-04-07T14:04:15","slug":"127-susan-jeff","status":"publish","type":"post","link":"https:\/\/www.iwillteachyoutoberich.com\/127-susan-jeff\/","title":{"rendered":"Episode 127. \u201cOur financial advisor almost cost us $800k. How do we fire them?\u201d"},"content":{"rendered":"<p><iframe title=\"\u201cWe make $665k a year and still feel BROKE\u201d\" src=\"https:\/\/www.youtube.com\/embed\/cCj--DFOn2I\" width=\"100%\" height=\"400\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><iframe style=\"border-radius: 12px;\" src=\"https:\/\/open.spotify.com\/embed\/show\/11ktWYpzznMCpvGtXsiYxE?utm_source=generator\" width=\"100%\" height=\"352\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>Jeff is 50, he\u2019s a specialized surgeon. Susan is 48, she stays at home with their two kids. Their discretionary spending has grown over the years, ballooning at an uncontrollable rate. But their biggest issue is that they\u2019re being taken advantage of by a percentage-based financial advisor.<\/p>\n<p><strong>This episode is brought to you by:<\/strong><\/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<p>Netsuite | Get visibility to everything in your business one one place. Sign up and defer payments, with no interest, for six months at\u00a0<strong><a href=\"https:\/\/iwt.com\/netsuite\">https:\/\/iwt.com\/netsuite<\/a><\/strong>.<\/p>\n<p>Fabric by Gerber Life | Protect your family today with Fabric by Gerber Life. Apply today in just 10 minutes at\u00a0<strong><a href=\"https:\/\/meetfabric.com\/ramit\">https:\/\/meetfabric.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<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><a href=\"https:\/\/drive.google.com\/file\/d\/1bVlTg-4g11e0Ngax0viPXGtVIdRhWSuS\/view?usp=sharing\">Download the full transcript PDF.<\/a><\/p>\n<p>[00:00:00]\u00a0<strong>Susan:<\/strong>\u00a0That it\u2019s a waste of money. That we were fooled by it. That somebody sold it to us, and we didn\u2019t know better then, but we know better now, and that we could make that money work for us someplace else.<\/p>\n<p>[00:00:12]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. So you don\u2019t like being ripped off.<\/p>\n<p>[00:00:15]\u00a0<strong>Susan:<\/strong>\u00a0Right.<\/p>\n<p>[00:00:16] I think that was the saddest part, is seeing your salary and realizing we had so much debt, and it didn\u2019t feel good, and the money didn\u2019t fix the<\/p>\n<p>[00:00:26]\u00a0<strong>Ramit:<\/strong>\u00a0Did you do this conscious spending plan together?<\/p>\n<p>[00:00:28]\u00a0<strong>Jeff:<\/strong>\u00a0We did. It was not the 20 minutes version of the conscious spending plan.<\/p>\n<p>[00:00:33]\u00a0<strong>Ramit:<\/strong>\u00a0How long did it take?<\/p>\n<p>[00:00:34]\u00a0<strong>Jeff:<\/strong>\u00a0About two and a half to three weeks, I believe.<\/p>\n<p>[00:00:36]\u00a0<strong>Ramit:<\/strong>\u00a0What? Three weeks?<\/p>\n<p>[00:00:37]\u00a0<strong>Susan:<\/strong>\u00a0Days, days. Let me tell you. Doesn\u2019t turn you on, I\u2019ll say that.<\/p>\n<p>[00:00:42]\u00a0<strong>Jeff:<\/strong>\u00a0We don\u2019t have a simple financial situation, I will say that.<\/p>\n<p>[00:00:45]\u00a0<strong>Susan:<\/strong>\u00a0Can you just come here, Ramit?<\/p>\n<p>[Narration]<\/p>\n<p>[00:00:46]\u00a0<strong>Ramit:<\/strong>\u00a0This week, I\u2019m speaking with Susan and Jeff. Susan is 48. She\u2019s a stay-at-home mom. Jeff is 51, and he\u2019s a surgeon. They\u2019ve been married for 19 years, and they have two kids ages 12 and 14. Now, if you know my book or if you\u2019ve watched my Netflix show, you know that I talk about financial advisors occasionally.\u00a0 You know that I never want you to work with a financial advisor who charges you a percentage of assets or AUM.<\/p>\n<p>[00:01:15] On the Netflix show, you saw me work with Natalie, and she was going to end up paying millions of dollars right into her advisor\u2019s pocket, all in fees. So I get a lot of questions from people about this, including Jeff and Susan. And I understand that this is a complex topic. Should I hire a financial advisor? How do I find the right one? This is an important one. So I wanted to dedicate an entire episode to this issue. I wanted to show you what really goes into how financial advisors charge you money.<\/p>\n<p>[00:01:45] And also, some of the surprising psychology. When it comes to hiring a financial advisor. Many of us feel good delegating our money to someone else. So for this episode, I collaborated with a partner, Facet, a service that offers affordable, accessible financial planning through a flat fee membership, not a percentage-based AUM fee.<\/p>\n<p>[00:02:09] Today, you\u2019re going to see the look on Susan and Jeff\u2019s face when I show them how much they are paying in fees. You\u2019ll also hear me show them how to graciously get out of their advisor relationship, including a word for word email they can send. Notice what happens, by the way, when we go through their spending.<\/p>\n<p>[00:02:27] Quick message before we dive in. I was reading this article about dating red flags. For example, being a MAGA Republican or listening to Joe Rogan. These are real statistically valid answers that they took on a survey\u00a0 that got me thinking, what would be the top financial red flags in a partner? That\u2019s exactly what I\u2019m going to share in my newsletter coming out this Saturday, October 28th. Make sure you\u2019re on the newsletter so you don\u2019t miss it. iwt.com\/podcastnewsletter. Now let\u2019s get to Susan and Jeff.<\/p>\n<p>[Interview]<\/p>\n<p>[00:02:59]\u00a0<strong>Ramit:<\/strong>\u00a0Susan, what\u2019s the biggest recurring disagreement that you have about money with Jeff?<\/p>\n<p>[00:03:06]\u00a0<strong>Susan:<\/strong>\u00a0The whole life insurance policy.<\/p>\n<p>[00:03:08]\u00a0<strong>Ramit:<\/strong>\u00a0Paint the picture for me. Where were you, and what happened?<\/p>\n<p>[00:03:11]\u00a0<strong>Susan:<\/strong>\u00a0So this has been recurring for a long time, even back when the policy opened 15 years ago. I remember hearing through Suze Orman that whole life insurance policies are not investments, that you shouldn\u2019t have them, that most of the money goes towards paying the financial advisor\u2019s pockets, not really as an investment. And so before children, before we were even making any money, we started that policy. Yeah, I\u2019m always bringing it up. Yeah.<\/p>\n<p>[00:03:43]\u00a0<strong>Ramit:<\/strong>\u00a0Tell me where you were when you brought this up again.<\/p>\n<p>[00:03:46]\u00a0<strong>Susan:<\/strong>\u00a0At home, probably, maybe even at the pool, trying to brunt it.<\/p>\n<p>[00:03:51]\u00a0<strong>Ramit:<\/strong>\u00a0What does that mean?<\/p>\n<p>[00:03:54]\u00a0<strong>Susan:<\/strong>\u00a0He gets agitated about the possibility of\u2013 as Jeff says, we\u2019re so far in because we\u2019ve been paying for it for 15 years. Why stop now? It\u2019s only a couple of hundred a month. Yada, yada, yada. I\u2019m like, it doesn\u2019t matter if it\u2019s a couple of hundred a month. It\u2019s still a rip-off. We could take that money and put it someplace else where it would actually make a bigger difference.<\/p>\n<p>[00:04:18] But I don\u2019t know all the numbers. I can\u2019t say, we\u2019ve already put in this, and this is what it\u2019s worth. You would make X amount of money if you stick it someplace else. And plus, there\u2019s a loan against it. We took out money against that, and I have the numbers for that for how much we owe back at an 8% interest rate.<\/p>\n<p>[00:04:39] So that makes my head explode also, that we owe money. And Jeff says, that doesn\u2019t matter. I don\u2019t care about that because that\u2019ll get paid off if the policy gets paid out. I don\u2019t know how true that is either.<\/p>\n<p>[00:04:52]\u00a0<strong>Ramit:<\/strong>\u00a0Meaning somebody dies, is that what we\u2019re talking about?<\/p>\n<p>[00:04:55]\u00a0<strong>Susan:<\/strong>\u00a0If he dies, yeah.<\/p>\n<p>[00:04:55]\u00a0<strong>Jeff:<\/strong>\u00a0I\u2019m the somebody. Yes.<\/p>\n<p>[00:04:57]\u00a0<strong>Susan:<\/strong>\u00a0He\u2019s the somebody. Yes.<\/p>\n<p>[00:04:58]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, okay. Technically, that is true.<\/p>\n<p>[00:05:00]\u00a0<strong>Jeff:<\/strong>\u00a0No, it is.<\/p>\n<p>[00:05:00]\u00a0<strong>Ramit:<\/strong>\u00a0One day, when you die, there\u2019ll be a payout. All right. Okay. Got it. So Susan, when you bring this up, how did Jeff respond?<\/p>\n<p>[00:05:11]\u00a0<strong>Susan:<\/strong>\u00a0Offensive. Of all the things to worry about, this is the least that we have a problem with in our financial picture that\u2019s not the big picture. Look at the big picture. This is a small percentage of what we have.<\/p>\n<p>[00:05:25]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Got it. And do you agree? Is the whole life insurance a small part of the big picture?<\/p>\n<p>[00:05:32]\u00a0<strong>Susan:<\/strong>\u00a0Yes. I think as far as our monthly investment, yes.<\/p>\n<p>[00:05:39]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. So what is it about the whole life insurance policy that seems to get you upset?<\/p>\n<p>[00:05:46]\u00a0<strong>Susan:<\/strong>\u00a0That it\u2019s a waste of money. That we were fooled by it. That somebody sold it to us, and we didn\u2019t know better then, but we know better now, and that we could make that money work for us someplace else.<\/p>\n<p>[00:05:59]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. So you don\u2019t like being ripped off.<\/p>\n<p>[00:06:02]\u00a0<strong>Susan:<\/strong>\u00a0Right.<\/p>\n<p>[00:06:02]\u00a0<strong>Ramit:<\/strong>\u00a0All right. Got it. Jeff, same scenario three weeks ago at the pool, do you remember this conversation?<\/p>\n<p>[00:06:11]\u00a0<strong>Jeff:<\/strong>\u00a0Not specifically, no. And I guess it\u2019s because it was a rehash of other conversations that all had the same feel. So one doesn\u2019t feel necessarily significantly different than another. I know we\u2019ve had this conversation, and I think my answer since at least recent years has been, if we really want to control our finances, we should focus on other things first because this isn\u2019t really a huge part of what will make us successful or failure.<\/p>\n<p>[00:06:43]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. How long has this conversation been going on?<\/p>\n<p>[00:06:48]\u00a0<strong>Jeff:<\/strong>\u00a010, 12 years, I guess.<\/p>\n<p>[00:06:50]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. 10 years or so of having this conversation. And is it the same pattern where Susan brings it up, and then you respond, and then nothing really changes?<\/p>\n<p>[00:07:03]\u00a0<strong>Jeff:<\/strong>\u00a0More or less.<\/p>\n<p>[00:07:04]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Is it really a problem? You two are fine. I think you have kids, right?<\/p>\n<p>[00:07:14]\u00a0<strong>Susan:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:07:14]\u00a0<strong>Ramit:<\/strong>\u00a0How old are your kids?<\/p>\n<p>[00:07:17]\u00a0<strong>Jeff:<\/strong>\u00a0Almost 14 and 12.<\/p>\n<p>[00:07:18]\u00a0<strong>Susan:<\/strong>\u00a012 and 14. Yeah.<\/p>\n<p>[00:07:19]\u00a0<strong>Ramit:<\/strong>\u00a0Great. So you got a beautiful family. Is this a real problem?<\/p>\n<p>[00:07:25]\u00a0<strong>Susan:<\/strong>\u00a0Yes, because it\u2019s, why give them the money? Why can\u2019t we keep more of our own money to fund what we want to do? It\u2019s the same thing with moving the money out of the investment people that we have now that are charging us 1.24%.<\/p>\n<p>[00:07:40]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, your advisors.<\/p>\n<p>[00:07:41]\u00a0<strong>Susan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:07:42]\u00a0<strong>Ramit:<\/strong>\u00a0Is this part of the conversation as well?<\/p>\n<p>[00:07:45]\u00a0<strong>Jeff:<\/strong>\u00a0Not this one, but it has happened.<\/p>\n<p>[00:07:47]\u00a0<strong>Susan:<\/strong>\u00a0Yeah, we pivot to that too.<\/p>\n<p>[00:07:49]\u00a0<strong>Ramit:<\/strong>\u00a0Hold on, hold on. Let\u2019s take it step by step. All right. So let me start by asking, what do each of you do for a living?<\/p>\n<p>[00:07:57]\u00a0<strong>Susan:<\/strong>\u00a0I\u2019m a domestic goddess, so I stay home.<\/p>\n<p>[00:07:59]\u00a0<strong>Ramit:<\/strong>\u00a0Great. Fantastic. And Jeff?<\/p>\n<p>[00:08:01]\u00a0<strong>Jeff:<\/strong>\u00a0I\u2019m a surgeon.<\/p>\n<p>[00:08:03]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, great. How long have you two been married for?<\/p>\n<p>[00:08:06]\u00a0<strong>Jeff:<\/strong>\u00a019 years next month.<\/p>\n<p>[00:08:08]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, congratulations.<\/p>\n<p>[00:08:09]\u00a0<strong>Susan:<\/strong>\u00a0Thank you.<\/p>\n<p>[00:08:11]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. What was the situation when you met? How did you meet, and what was your financial situation back then?<\/p>\n<p>[00:08:18]\u00a0<strong>Jeff:<\/strong>\u00a0Profoundly different. We met working together. We were both in science, basically technicians in a lab. At this point, I was already starting to consider the possibility of medical school, working full-time, going to school part time to make that happen.<\/p>\n<p>[00:08:37]\u00a0<strong>Ramit:<\/strong>\u00a0What were you making when the two of you were working in the lab?<\/p>\n<p>[00:08:42]\u00a0<strong>Susan:<\/strong>\u00a0Gosh, I made maybe 28,000 a year. That was in \u201998, \u201999, 2000.<\/p>\n<p>[00:08:50]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah, maybe I made a little more, but not much.<\/p>\n<p>[00:08:53]\u00a0<strong>Ramit:<\/strong>\u00a0So maybe the two of you combined made, let\u2019s say, a 100k ballpark. A little less than that.<\/p>\n<p>[00:08:59]\u00a0<strong>Susan:<\/strong>\u00a0Way less.<\/p>\n<p>[00:09:02]\u00a0<strong>Ramit:<\/strong>\u00a0Way less.<\/p>\n<p>[00:09:02]\u00a0<strong>Susan:<\/strong>\u00a0Yeah, in 2000.<\/p>\n<p>[00:09:04]\u00a0<strong>Ramit:<\/strong>\u00a0Wow. Okay. All right. That\u2019s good to know.<\/p>\n<p>[00:09:07]\u00a0<strong>Susan:<\/strong>\u00a0Yeah. And there were times in med school where, yes, he had student loans, but I made 30,000 a year, and I carried both of us.<\/p>\n<p>[00:09:15]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. So that\u2019s quite a bit different than where you are financially speaking today. Did the two of you ever talk about how your financial life would dramatically change one day?<\/p>\n<p>[00:09:26]\u00a0<strong>Jeff:<\/strong>\u00a0No.<\/p>\n<p>[00:09:27]\u00a0<strong>Susan:<\/strong>\u00a0I didn\u2019t believe it. My psychiatrist, who had an MD was like, you\u2019re going to have a lot of money. And I go, I am? Didn\u2019t occur to me. I had no idea. It just didn\u2019t seem real. It didn\u2019t seem like a possibility because I didn\u2019t have money. Being with Jeff was the first time I could even dream of going on a vacation. It didn\u2019t occur to me that you would go around the world, and see things, and do things, and have all these experiences because I was like, how would you do that? That takes so much money. How does that happen?<\/p>\n<p>[00:10:04]\u00a0<strong>Ramit:<\/strong>\u00a0Jeff, what about for you?<\/p>\n<p>[00:10:06]\u00a0<strong>Jeff:<\/strong>\u00a0I don\u2019t know, it just didn\u2019t occur to me to have that next jump to the conversation about what\u2019s going to happen in five or 10 years after we really start working and start getting paid what a physician will make, let alone a specialized physician.<\/p>\n<p>[00:10:23]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. I\u2019m so curious what happened the first time you got the full paycheck, Jeff. Do you remember that?<\/p>\n<p>[00:10:33]\u00a0<strong>Jeff:<\/strong>\u00a0I do. Yeah.<\/p>\n<p>[00:10:33]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Tell me about it.<\/p>\n<p>[00:10:35]\u00a0<strong>Jeff:<\/strong>\u00a0The prorated amount for the rest of the month, plus the sign on bonus and how much taxes came out of it blew me away. I don\u2019t know if you remember that.<\/p>\n<p>[00:10:42]\u00a0<strong>Susan:<\/strong>\u00a0Do you remember what you said? I\u2019ve never been so disappointed in $35,000.<\/p>\n<p>[00:10:50]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah. I was expecting, with what I knew, a gross monthly salary would be the 380 that I signed on for, plus a 50,000-dollar bonus. I was expecting probably at least 50 total. We didn\u2019t make discreet plans, but in the process of trying to get moved and this and that, we had already accrued some debts. We borrowed money from my parents, and that didn\u2019t feel very good, as a doctor, and a specialized doctor, and a surgeon, to have to borrow money from your parents to move, so to speak.<\/p>\n<p>[00:11:23]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. What age were you at this point, Jeff?<\/p>\n<p>[00:11:28]\u00a0<strong>Susan:<\/strong>\u00a040. Yeah, you were 40 when you were finally done. Took him until he was 40.<\/p>\n<p>[00:11:33]\u00a0<strong>Ramit:<\/strong>\u00a0So 40 years old. You essentially started this chapter of your career as a surgeon, where you were being paid a considerable amount.<\/p>\n<p>[00:11:43]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah. Absolutely. Yes.<\/p>\n<p>[Narration]<\/p>\n<p>[00:11:46]\u00a0<strong>Ramit:<\/strong>\u00a0There\u2019s a lot already going on here. Whole life insurance, financial advisors, the fact that Jeff\u2019s salary is very high, but that he only really started earning it at the age of 40. I don\u2019t yet know enough to figure out what\u2019s going on here, but I\u2019m collecting the clues in my head. Now, if you were me, where would you take this conversation? What would you ask next? Think about it because as you listen to this podcast, I want you to hone your own skills as an investigator.<\/p>\n<p>[00:12:15] We\u2019ll be right back.<\/p>\n<p>[00:12:17] Now, back to the show.<\/p>\n<p>[Interview]<\/p>\n<p>[00:12:20]\u00a0<strong>Susan:<\/strong>\u00a0I think that was the saddest part, is seeing your salary and realizing we had so much debt, and it didn\u2019t feel good, and the money didn\u2019t fix the problem. We made 380,000 a year, and it was still like scrambling, still couldn\u2019t do everything. I wasn\u2019t rolling around in money. I didn\u2019t feel any better. If anything, I was more scared because I was wasting it, and I wasn\u2019t being intentional. And that was awful.<\/p>\n<p>[00:12:55]\u00a0<strong>Ramit:<\/strong>\u00a0Were you always scared of money?<\/p>\n<p>[00:12:58]\u00a0<strong>Susan:<\/strong>\u00a0Yes. Yeah, didn\u2019t grow up with a lot of money because I had a single mom and my dad wouldn\u2019t pay child support. So we always had the house, and we had food, and things like that, but we didn\u2019t do anything extra. We never went on vacation. We never went out. I never dreamed bigger.<\/p>\n<p>[00:13:20] Even marrying Jeff, knowing that he was going to be a doctor, it didn\u2019t occur that it would ever be even my money. I was still always still scared that I was going to have to be able to take care of myself and still be able to live within my means, things like that. Yeah. Couldn\u2019t dream big with it.<\/p>\n<p>[00:13:39]\u00a0<strong>Ramit:<\/strong>\u00a0What messages about money do you remember your mom teaching you?<\/p>\n<p>[00:13:45]\u00a0<strong>Susan:<\/strong>\u00a0Have to be very careful with it because there\u2019s no pot of gold.<\/p>\n<p>[00:13:54]\u00a0<strong>Ramit:<\/strong>\u00a0What does that mean?<\/p>\n<p>[00:13:58]\u00a0<strong>Susan:<\/strong>\u00a0You\u2019re not going to have a lot of money. You\u2019re just not.<\/p>\n<p>[00:14:04]\u00a0<strong>Ramit:<\/strong>\u00a0Wow.<\/p>\n<p>[00:14:06]\u00a0<strong>Susan:<\/strong>\u00a0Because of our money situation growing up, that\u2019s why I went to college, because I didn\u2019t want to have to worry about money.<\/p>\n<p>[00:14:14]\u00a0<strong>Ramit:<\/strong>\u00a0Were you the only one in your family to go to college?<\/p>\n<p>[00:14:16]\u00a0<strong>Susan:<\/strong>\u00a0Mm-hmm. Out of my entire family. Huge people.<\/p>\n<p>[00:14:20]\u00a0<strong>Ramit:<\/strong>\u00a0Congratulations.<\/p>\n<p>[00:14:20]\u00a0<strong>Susan:<\/strong>\u00a0Yeah, thank you. Because I didn\u2019t want to live like that. I wanted to be able to have things. I thought my happiness would be in things and being able to buy things, and realize obviously now that that\u2019s not it, but the security of having money because my mom struggled, and she couldn\u2019t do things for us, and that hurt.<\/p>\n<p>[00:14:43]\u00a0<strong>Ramit:<\/strong>\u00a0What else did your mom teach you either explicitly or just through her own actions about money?<\/p>\n<p>[00:14:49]\u00a0<strong>Susan:<\/strong>\u00a0She never really spent it on herself because there wasn\u2019t a lot of extra. If she wanted to dye her hair or do her nails, she did everything herself.<\/p>\n<p>[00:14:57]\u00a0<strong>Ramit:<\/strong>\u00a0I see.<\/p>\n<p>[00:14:58]\u00a0<strong>Susan:<\/strong>\u00a0And it wasn\u2019t even so that she could give it to us because there wasn\u2019t a lot of extra to give, but she was last on the list. If she wanted to do Christmas, she would put it on a credit card and then have to borrow the money to pay off the credit card for my grandparents. My grandparents were very stingy with money. Never did anything fun or good with it. Just wanted to hoard it and hold on to it because what if you lose it? They were from the depression.<\/p>\n<p>[00:15:25]\u00a0<strong>Ramit:<\/strong>\u00a0Where did you grow up? What area?<\/p>\n<p>[00:15:27]\u00a0<strong>Susan:<\/strong>\u00a0Philadelphia.<\/p>\n<p>[00:15:29]\u00a0<strong>Ramit:<\/strong>\u00a0Ah, okay. Interesting. You mentioned that your dad did not pay child support. Did your mom ever reference that as you grew up?<\/p>\n<p>[00:15:38]\u00a0<strong>Susan:<\/strong>\u00a0Yes.<\/p>\n<p>[00:15:39]\u00a0<strong>Ramit:<\/strong>\u00a0What did she say?<\/p>\n<p>[00:15:40]\u00a0<strong>Susan:<\/strong>\u00a0What little I would ever see them talk on the phone and turn into a screaming match over him not paying anything. It was so bad. He went to jail for not paying child support several times. And then for my college tuition, apparently, when they got divorced in \u201976, when I was a year old, part of the contingency was that he would pay for my college. But he didn\u2019t pay for college. And so my freshman year of college, my mom had to take him to court to force him to pay, and he still didn\u2019t pay.<\/p>\n<p>[00:16:15]\u00a0<strong>Ramit:<\/strong>\u00a0How did you pay for college?<\/p>\n<p>[00:16:16]\u00a0<strong>Susan:<\/strong>\u00a0Student loans.<\/p>\n<p>[00:16:20]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. A tortured relationship with money growing up is what I hear. Would that be fair to say?<\/p>\n<p>[00:16:28]\u00a0<strong>Susan:<\/strong>\u00a0And then not knowing how to handle money and going through our 20s and middle 30s, just making lots of money mistakes, overspending, not being conscious, having lots of debt. We\u2019ve learned the hard way.<\/p>\n<p>[00:16:43]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. We meaning you and Jeff.<\/p>\n<p>[00:16:45]\u00a0<strong>Susan:<\/strong>\u00a0Yes. Me beforehand, and then I feel like I dragged him into the mess. He was very conservative when we started dating.<\/p>\n<p>[00:16:53]\u00a0<strong>Ramit:<\/strong>\u00a0So Jeff, what did you learn about money growing up?<\/p>\n<p>[00:16:56]\u00a0<strong>Jeff:<\/strong>\u00a0Raised solidly middle class. A, it wasn\u2019t discussed, but it was never an obvious problem to the kids, at least. And so I think that\u2019s just how my mentality was, is that it just gets taken care of. And even if we don\u2019t have a lot, we find a way. Again, we were pretty solidly middle class. My mom was a stay-at-home mom. My dad worked.<\/p>\n<p>[00:17:24]\u00a0<strong>Ramit:<\/strong>\u00a0What did your dad do?<\/p>\n<p>[00:17:25]\u00a0<strong>Jeff:<\/strong>\u00a0He worked for the city of Philadelphia. We grew up in Philadelphia as well. As a forensic accountant, looking up crooked accountants, and lawyers, and things like that. Didn\u2019t ever really bring his work home. I don\u2019t know the details of his work.<\/p>\n<p>[00:17:39]\u00a0<strong>Ramit:<\/strong>\u00a0Is your dad still alive?<\/p>\n<p>[00:17:41]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah, they\u2019re both still alive.<\/p>\n<p>[00:17:42]\u00a0<strong>Ramit:<\/strong>\u00a0Done a forensic accounting of all the fees you\u2019re paying?<\/p>\n<p>[00:17:45]\u00a0<strong>Jeff:<\/strong>\u00a0He\u2019s not. Although, he had a similar\u2013 maybe not so similar\u2013 but he trusted some money to a person he shouldn\u2019t have as well and\u2013<\/p>\n<p>[00:17:57]\u00a0<strong>Ramit:<\/strong>\u00a0What? Wait, what happened?<\/p>\n<p>[00:18:00]\u00a0<strong>Jeff:<\/strong>\u00a0The story is a little complicated, but he ended up getting a large settlement from the accidental death of his previous wife and left it with his brother-in-law, who was a financial guy, who totally messed it up. And they lost a large portion of that.<\/p>\n<p>[00:18:20]\u00a0<strong>Ramit:<\/strong>\u00a0Oh my God.<\/p>\n<p>[00:18:21]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah, I don\u2019t know the details of what a large portion means, but it doesn\u2019t sound like it was just a couple of thousand. It sounds like it was tens of thousands, if not even more, perhaps.<\/p>\n<p>[00:18:31]\u00a0<strong>Ramit:<\/strong>\u00a0How old were you when that happened?<\/p>\n<p>[00:18:35]\u00a0<strong>Jeff:<\/strong>\u00a0Middle teens, 15, 14, something like that.<\/p>\n<p>[00:18:37]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s pretty old. Old enough to know\u2013<\/p>\n<p>[00:18:39]\u00a0<strong>Jeff:<\/strong>\u00a0To get an idea of what had happened. Yeah. He never really forgot about it, and his sister ended up dying suddenly as well from a sudden illness, and so almost lost contact with the brother-in-law as well for a time. And so there was some confusion around it and a little bit of chaos as well.<\/p>\n<p>[00:19:04]\u00a0<strong>Ramit:<\/strong>\u00a0What was your conclusion from that as a 15-year-old hearing the stories about your dad and his money?<\/p>\n<p>[00:19:13]\u00a0<strong>Jeff:<\/strong>\u00a0The easy answer would be said, that safeguard whom you trust with your money.<\/p>\n<p>[Narration]<\/p>\n<p>[00:19:18]\u00a0<strong>Ramit:<\/strong>\u00a0What do you make of Jeff\u2019s painful family lesson? To be careful who you trust your money with. I\u2019ll tell you what I take away from it. That it\u2019s probably really hard for Jeff to admit he might have made a bad decision with their money. Specifically, I\u2019m referring to the insurance and the financial advisor who\u2019s charging them 1.24% AUM.<\/p>\n<p>[Interview]<\/p>\n<p>[00:19:44]\u00a0<strong>Ramit:<\/strong>\u00a0Is the primary disagreement about whole life insurance and your financial advisor? Is that what it is?<\/p>\n<p>[00:19:53]\u00a0<strong>Jeff:<\/strong>\u00a0I think it is.<\/p>\n<p>[00:19:54]\u00a0<strong>Susan:<\/strong>\u00a0I think so. Yeah, I think so. I have questions about the loan against the whole life policy. I have questions about money for the kids. I have questions about some other things that are, yeah, big like that too.<\/p>\n<p>[00:20:11]\u00a0<strong>Ramit:<\/strong>\u00a0I have questions about how you got into these products. That\u2019s what I want to know. So let\u2019s start\u2013<\/p>\n<p>[00:20:18]\u00a0<strong>Susan:<\/strong>\u00a0These people come to the hospital, and\u2013<\/p>\n<p>[00:20:20]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, they love doctors.<\/p>\n<p>[00:20:21]\u00a0<strong>Susan:<\/strong>\u00a0And they look for doctors.<\/p>\n<p>[00:20:23]\u00a0<strong>Jeff:<\/strong>\u00a0Young doctors.<\/p>\n<p>[00:20:24]\u00a0<strong>Ramit:<\/strong>\u00a0They love them.<\/p>\n<p>[00:20:24]\u00a0<strong>Susan:<\/strong>\u00a0Look for the doctors in residency that are only making 60,000 a year.<\/p>\n<p>[00:20:29]\u00a0<strong>Ramit:<\/strong>\u00a0Let\u2019s just talk about why every financial services company loves doctors. I have doctors in my family too. So first off, we should all acknowledge that doctors have a reputation as being the worst profession in the country with money. Let\u2019s talk about the dynamics here. So you have some 30-year-old doctor who\u2019s a resident.<\/p>\n<p>[00:20:49] They\u2019ve been in school forever. All their friends are making good money for the last 10 years. They\u2019re sitting here making $40,000 a year, and they live in a cramped little apartment, and they work 18 hours a day. And they\u2019re told that someday they\u2019re going to make money, but they never even think about it.<\/p>\n<p>[00:21:06] And suddenly, somebody comes knocking on their door with a free lunch, and they go, oh, this is so cool. We\u2019d love to help you organize so that\u2013 you\u2019re the specialist at this. We specialize in that, and you do what you do best, and we do what we do best. Jeff, any of this sound familiar?<\/p>\n<p>[00:21:21]\u00a0<strong>Jeff:<\/strong>\u00a0Absolutely.<\/p>\n<p>[00:21:22]\u00a0<strong>Ramit:<\/strong>\u00a0All right. So they come specifically for doctors because doctors have effectively a guaranteed high salary, and it\u2019s not that risky of a profession. If you\u2019re a doctor, you\u2019re probably going to be a doctor for many decades. They talked to you about these different products. How old were you when you got into the whole life insurance thing and the advisor?<\/p>\n<p>[00:21:42]\u00a0<strong>Jeff:<\/strong>\u00a0I was an intern. It\u2019s like my second year, my formal intern.<\/p>\n<p>[00:21:48]\u00a0<strong>Susan:<\/strong>\u00a0In New York. About 30.<\/p>\n<p>[00:21:50]\u00a0<strong>Jeff:<\/strong>\u00a02007, \u20188.<\/p>\n<p>[00:21:53]\u00a0<strong>Ramit:<\/strong>\u00a0Was it the same person, by the way, who got you into all these products?<\/p>\n<p>[00:21:56]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah, yeah, yeah. It was a representative of one particular directional company.<\/p>\n<p>[00:22:01]\u00a0<strong>Ramit:<\/strong>\u00a0[Inaudible]. What company was it?<\/p>\n<p>[00:22:03]\u00a0<strong>Susan:<\/strong>\u00a0All our disability life insurance, kids life insurance, term insurance is all in Northwestern.<\/p>\n<p>[00:22:10]\u00a0<strong>Ramit:<\/strong>\u00a0How much insurance do you\u2013 I know, Jeff, you have like professional insurance, but you have term, whole life. What else?<\/p>\n<p>[00:22:18]\u00a0<strong>Jeff:<\/strong>\u00a0I\u2019ve got 3 million of coverage for me. 2.8 of that is term policy at 20-year, 30-year term. I forget which. And then 200,000 is the whole life portion. So like I was saying, it is a very small portion of the life insurance coverage portion. It\u2019s the most expensive part of the life insurance, but it\u2019s still a small part.<\/p>\n<p>[00:22:41] And then I\u2019ve got basically three different disability, own occupation disabilities, so if I can\u2019t operate, it kicks in long-term disability. Enacted pay, 15,000 a month, basically. And then I think when the kids were born, they did sell us life insurance on the kids because of the health and pre approval, and now they can never be denied life insurance thing. We were conned into that. I agree with that.<\/p>\n<p>[00:23:13]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, you realize that?<\/p>\n<p>[00:23:15]\u00a0<strong>Jeff:<\/strong>\u00a0Of course.<\/p>\n<p>[00:23:15]\u00a0<strong>Ramit:<\/strong>\u00a0They sold you life insurance for an infant?<\/p>\n<p>[00:23:18]\u00a0<strong>Jeff:<\/strong>\u00a0Toddlers basically, yes.<\/p>\n<p>[00:23:20]\u00a0<strong>Susan:<\/strong>\u00a0The idea with that is that if they would ever have some\u2013<\/p>\n<p>[00:23:23]\u00a0<strong>Jeff:<\/strong>\u00a0Developed diabetes and become [Inaudible].<\/p>\n<p>[00:23:26]\u00a0<strong>Susan:<\/strong>\u00a0Then they\u2019ll always have coverage.<\/p>\n<p>[00:23:28]\u00a0<strong>Ramit:<\/strong>\u00a0They showed you all these cute little pictures of a baby eating out of a spoon.<\/p>\n<p>[00:23:32]\u00a0<strong>Susan:<\/strong>\u00a0Yeah. And I don\u2019t know how true that is. I don\u2019t know if that\u2019s true. That\u2019s just what they told me. I don\u2019t read policy.<\/p>\n<p>[00:23:36]\u00a0<strong>Jeff:<\/strong>\u00a0It\u2019s not true anymore. Right. It\u2019s not true anymore.<\/p>\n<p>[00:23:37]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s not true anymore, for sure.<\/p>\n<p>[00:23:39]\u00a0<strong>Jeff:<\/strong>\u00a0Right. I think maybe there was some component of that at some point, but that\u2019s long been not a thing. It probably wasn\u2019t even a thing at the time, honestly.<\/p>\n<p>[00:23:49]\u00a0<strong>Ramit:<\/strong>\u00a0As a general rule, anything coming out of an insurance salesman\u2019s mouth is a lie. That\u2019s just a general rule, generally speaking. Okay, they see a doctor, particularly a surgeon, and they go, that\u2019s my kid\u2019s college fund. That\u2019s really the way that doctors are looked at. You\u2019re prey. And you don\u2019t know.<\/p>\n<p>[00:24:11] And I have to emphasize one thing, which is really important to understand, the psychology here, which is like if I go to a doctor, I basically go, look, my back hurts, or my ankles broken, or something. Can you fix it? I don\u2019t know anything about the situation. Maybe I printed out a couple of docs from Google, but really I\u2019m putting myself in the doctor\u2019s hands.<\/p>\n<p>[00:24:33] That concept is drilled into every doctor in med school. You go to the spine expert, go to the, whatever type of doctor. The problem is that that\u2019s not the same analogy in the financial world because Jeff, if I had surgery, I might come to you. And even though you\u2019re not really involved with the billing, you\u2019re not going to charge me 1.24% of my total portfolio are you?<\/p>\n<p>[00:25:00]\u00a0<strong>Jeff:<\/strong>\u00a0Unlikely.<\/p>\n<p>[00:25:01]\u00a0<strong>Ramit:<\/strong>\u00a0Your billing office might charge me, I don\u2019t know, 20 grand or 50 grand, who knows?<\/p>\n<p>[00:25:05]\u00a0<strong>Jeff:<\/strong>\u00a0Right. I don\u2019t know much about\u2013 I do my, thing and eventually, somebody pays them, and I get paid by them, and so on and so forth.<\/p>\n<p>[00:25:14]\u00a0<strong>Ramit:<\/strong>\u00a0Exactly. It\u2019s very compartmentalized. And that\u2019s drilled into you since day one. Of course, if we actually dig into the nuances of how they\u2019re charging and what they\u2019re doing, which we will, we discover that a lot of it is either overcharged or just unnecessarily complex.<\/p>\n<p>[Narration]<\/p>\n<p>[00:25:35]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m going to explain something right now that\u2019s going to blow your mind. Consider that if you go to a doctor, you expect they\u2019re going to take care of you. They\u2019re going to put your needs first. They even take the Hippocratic oath. I will do no harm or injustice to them. If you go to a lawyer, you expect that they\u2019re going to represent you. But if you go to a mortgage broker, or a whole life insurance salesperson, or even most financial advisors, could you expect the same?<\/p>\n<p>[00:26:05] No, most financial advisors are not legally required to put your interest first. Do you understand how insane this is? And understanding why this is allowed is going to blow your mind even more. In finance, there\u2019s a term called the fiduciary standard. A fiduciary is someone who is required to put your interest first.<\/p>\n<p>[00:26:28] Guess who opposes a fiduciary rule? Wall Street. In fact, they\u2019ve actively tried to water it down and abolish it altogether. And along with their Republican cronies, the Trump administration killed the fiduciary standard in 2018. Do you understand what this means? It means if your mom, or your dad, or your grandparents walk into a financial advisor\u2019s office, someone who is presumably supposed to help them, that advisor might sell them some larded up shitty insurance policy or fat fee mutual fund masquerading as a good investment.<\/p>\n<p>[00:27:04] And actually, that\u2019s exactly what happened. After the Trump administration killed the fiduciary rule, sales of fixed indexed annuities soared by 40%. These are piece of shit products. As Bloomberg wrote, \u201cA client would have foregone, on average, an estimated $54,000 in profit per $100,000 invested.\u201d<\/p>\n<p>[00:27:27] Do you understand what I just said? The client would have lost over half their money to these horrible investments. This is why I say money is political. And this is why I get so pissed off about what happens politically, especially when people go, Ramit, why are you talking about politics? Money is political.<\/p>\n<p>[00:27:48] Some of you are out here worrying about the price of pickles while you are secretly letting thousands and thousands and tens of thousands of dollars be taken out of your account for terrible investments. Oh, and yes, there are these arcane discussions in the financial literature. There\u2019s the fiduciary standard or the suitability standard. There\u2019s fee-only advisors versus fee-based.<\/p>\n<p>[00:28:07] Can I be honest? Get real. Do you really expect the average person to understand all the nuances of these details? Of course not. Wall Street wants to make as much money as possible from you. That is why it is so important to avoid commission-based financial advisors, just as a general rule. Their incentives are not aligned with yours. And that is why you should be paying a flat fee, not a percentage. And when I, myself, have used a financial advisor, who I once hired to check my asset allocation, I also paid a flat fee, not a percentage.<\/p>\n<p>[00:28:46] We\u2019ll be right back.<\/p>\n<p>[00:28:49] Now, back to Susan and Jeff.<\/p>\n<p>[Interview]<\/p>\n<p>[00:28:51]\u00a0<strong>Ramit:<\/strong>\u00a0Susan, though, you said you don\u2019t like paying somebody else. You could do it yourself. Technically, when I pay somebody to change my oil, I could do it myself, but I don\u2019t.<\/p>\n<p>[00:29:03]\u00a0<strong>Susan:<\/strong>\u00a0I follow your philosophy. I\u2019m not going to do it myself. I want to pay somebody a flat fee. I generally feel as though most people are good and they\u2019re not trying to rip us off. So that\u2019s what makes me upset even about the current financial advisors that we switched to two years ago. When I did ask them about their percentage, and they told me, oh, it\u2019s roughly around 1%. I\u2019ll never forget, he made this face like, oh, it\u2019s not that much.<\/p>\n<p>[00:29:30]\u00a0<strong>Ramit:<\/strong>\u00a0I know that face.<\/p>\n<p>[00:29:31]\u00a0<strong>Susan:<\/strong>\u00a0And then I was thinking in my head, you\u2019re saying 1%, but what is that really? But I remember thinking to myself, you\u2019re saying 1% because I\u2019m thinking 1% isn\u2019t that much, not 28 percent of the returns of what we\u2019re trying to grow.<\/p>\n<p>[00:29:50]\u00a0<strong>Ramit:<\/strong>\u00a0I know this look that people give you. It happens in luxury purchase. It\u2019s a little, you don\u2019t really talk about fees in certain rooms. And when you ask, here\u2019s the reaction. I will be the advisor who says, oh, it\u2019s 1%, but what\u2019s really important is blank, blank, blank. It\u2019s sort of a, we don\u2019t really talk about money here. That\u2019s inconsequential to us in this room. And by the way, let\u2019s pivot to something much more comfortable to talk about. Sound familiar?<\/p>\n<p>[00:30:26]\u00a0<strong>Susan:<\/strong>\u00a0Yes. That\u2019s exactly what happened two years ago.<\/p>\n<p>[00:30:29]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. When did this financial advisor come around, and what\u2019d they say?<\/p>\n<p>[00:30:34]\u00a0<strong>Jeff:<\/strong>\u00a0So when we moved here, we needed a bank, we needed a mortgage, and our situation was a little more complicated because our house back at the old location didn\u2019t sell. And so we didn\u2019t have the down payment that we were expecting. So there was some complication to it, of course. And our real estate agent basically turned us on to this bank that we use, which overall, we\u2019ve been pretty satisfied with.<\/p>\n<p>[00:30:56]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, I\u2019m already hearing two red flags, but go on. When you said the word realtor, that was a red flag already. All right. That anytime I\u2019m within a city block of a realtor, my skin starts to tingle, and my arm hair goes up. And so that\u2019s number one. And then number two, you said the word bank. I go, oh-oh.<\/p>\n<p>[00:31:11]\u00a0<strong>Jeff:<\/strong>\u00a0We were referred by the banker we were using to the wealth management aspect of the bank.<\/p>\n<p>[00:31:20]\u00a0<strong>Ramit:<\/strong>\u00a0Wealth management. Oh, God. So you sit down, and they got the nice suit, which appeared to be nice, but now in retrospect, you realize it\u2019s not that nice of a suit. They gave you the nice coffee, and they said, tell me about your goals.<\/p>\n<p>[00:31:31]\u00a0<strong>Susan:<\/strong>\u00a0Mm-hmm.<\/p>\n<p>[00:31:32]\u00a0<strong>Jeff:<\/strong>\u00a0Yes.<\/p>\n<p>[00:31:33]\u00a0<strong>Ramit:<\/strong>\u00a0So you said, I\u2019m a physician. One day I\u2019d like to retire, maybe 60, 65. Oh, we could take care of that for you. We want you to focus on what you do, we focus on what we do. And then they took all your money, and they said they were going to invest it.<\/p>\n<p>[00:31:47]\u00a0<strong>Jeff:<\/strong>\u00a0So we rolled over my retirement stuff from the old job into basically brokerage accounts run by them. Still retirement accounts for 401 and 457 basically, or 403. I forget which it was. And so those are still functional. They\u2019re no longer with the original company, Fidelity. Now they\u2019re with First Citizen.<\/p>\n<p>[00:32:06]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, cool. So there you go. The money\u2019s in there, and presumably, you\u2019re contributing to it regularly. It\u2019s growing.<\/p>\n<p>[00:32:13]\u00a0<strong>Jeff:<\/strong>\u00a0Not to that because I guess that was a rollover. Basically, we haven\u2019t touched it more or less since it rolled over.<\/p>\n<p>[00:32:19]\u00a0<strong>Ramit:<\/strong>\u00a0Okay.<\/p>\n<p>[00:32:20]\u00a0<strong>Jeff:<\/strong>\u00a0We have a separate account with my new employer. That\u2019s a retirement account that I contribute about a 1,200 or so a paycheck. We\u2019re paid biweekly now.<\/p>\n<p>[00:32:31]\u00a0<strong>Ramit:<\/strong>\u00a0Who\u2019s managing that?<\/p>\n<p>[00:32:32]\u00a0<strong>Jeff:<\/strong>\u00a0It\u2019s through the principal company, the company, the principal. No one is specifically managing. It\u2019s just one of\u2013<\/p>\n<p>[00:32:39]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s just like a computer, like an index fund.<\/p>\n<p>[00:32:42]\u00a0<strong>Jeff:<\/strong>\u00a0It\u2019s an index fund, yeah.<\/p>\n<p>[00:32:43]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, great.<\/p>\n<p>[00:32:44]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah. I believe it\u2019s a targeted date.<\/p>\n<p>[00:32:46]\u00a0<strong>Ramit:<\/strong>\u00a0Target date fund. Great. Fantastic. Okay. All right. So now that I understand, you have the whole life policy, which is an area of contention. You have this money in the rollover retirement account, which is managed by an advisor, correct?<\/p>\n<p>[00:33:07]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah. An advisor, and maybe his team of whatever, but yes.<\/p>\n<p>[00:33:12]\u00a0<strong>Ramit:<\/strong>\u00a0Charging you approximately 1.2%, but you\u2019re not adding to that account. Is that correct?<\/p>\n<p>[00:33:18]\u00a0<strong>Jeff:<\/strong>\u00a0Correct.<\/p>\n<p>[00:33:18]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. All right. Is there anything else that\u2019s a contentious issue around the money?<\/p>\n<p>[00:33:25]\u00a0<strong>Jeff:<\/strong>\u00a0You don\u2019t like the annuity.<\/p>\n<p>[00:33:27]\u00a0<strong>Ramit:<\/strong>\u00a0Oh God, you have an annuity too. They really got you. 1, 2, 3.<\/p>\n<p>[00:33:32]\u00a0<strong>Jeff:<\/strong>\u00a0I\u2019m glad I\u2019ve\u2013<\/p>\n<p>[00:33:32]\u00a0<strong>Susan:<\/strong>\u00a0Get out of annuity.<\/p>\n<p>[00:33:34]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, tell me.<\/p>\n<p>[00:33:36]\u00a0<strong>Jeff:<\/strong>\u00a0I don\u2019t even remember what that rollover was.<\/p>\n<p>[00:33:37]\u00a0<strong>Susan:<\/strong>\u00a0He says it\u2019s only 30,000. You pulled it out of some accounts, and you said you couldn\u2019t put it into account.<\/p>\n<p>[00:33:44]\u00a0<strong>Jeff:<\/strong>\u00a0Was it the one from Vanderbilt?<\/p>\n<p>[00:33:45]\u00a0<strong>Susan:<\/strong>\u00a0Probably. Yes. And then you couldn\u2019t put it into something else because of taxes or something, so you put it into an annuity. So then my head exploded on that. And then there\u2019s also the long-term savings account that we have the 60,000 in.<\/p>\n<p>[00:33:59]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah, that\u2019s true.<\/p>\n<p>[00:34:00]\u00a0<strong>Susan:<\/strong>\u00a0That goes up and down. And I\u2019m like\u2013<\/p>\n<p>[00:34:03]\u00a0<strong>Jeff:<\/strong>\u00a0That\u2019s a brokerage account as well.<\/p>\n<p>[00:34:04]\u00a0<strong>Susan:<\/strong>\u00a0That\u2019s not a long-term savings account if it\u2019s losing money.<\/p>\n<p>[00:34:06]\u00a0<strong>Jeff:<\/strong>\u00a0It\u2019s a brokerage account as well. That\u2019s through Northwest as well. We don\u2019t have a simple financial situation, I will say that.<\/p>\n<p>[00:34:14]\u00a0<strong>Susan:<\/strong>\u00a0Can you just come here, Ramit?<\/p>\n<p>[00:34:16]\u00a0<strong>Ramit:<\/strong>\u00a0Basically, the dream of everyone who contacts me, I get a 1,000 of these messages a day. What they really want is for me to come to their house, log into all their accounts, fix it, rake the leaves in the front yard, vacuum and iron their clothes, and then leave. I go, hmm, I think I\u2019ll\u2013<\/p>\n<p>[00:34:35]\u00a0<strong>Jeff:<\/strong>\u00a0If you just stopped at the first part, I\u2019ll cook for you and you can hang out at the pool after you\u2019re done.<\/p>\n<p>[00:34:39]\u00a0<strong>Susan:<\/strong>\u00a0Yeah, we pay people to do all the other stuff.<\/p>\n<p>[00:34:41]\u00a0<strong>Ramit:<\/strong>\u00a0Thank you. All right.<\/p>\n<p>[Narration]<\/p>\n<p>[00:34:43]\u00a0<strong>Ramit:<\/strong>\u00a0Now you can see how hardworking, even very smart people can be sold into these type of financial products. Okay. Let\u2019s now take a look at their CSP for some more context. Their assets, $1.1 million. Their investments, 835,000. Their savings, 20, 000. Their debt, 914,000. Total net worth, just over $1 million.<\/p>\n<p>[Interview]<\/p>\n<p>[00:35:07]\u00a0<strong>Ramit:<\/strong>\u00a0Did you do this conscious spending plan together?<\/p>\n<p>[00:35:09]\u00a0<strong>Jeff:<\/strong>\u00a0We did. It was not the 20 minutes version of the conscious spending plan.<\/p>\n<p>[00:35:14]\u00a0<strong>Ramit:<\/strong>\u00a0How long did it take?<\/p>\n<p>[00:35:15]\u00a0<strong>Jeff:<\/strong>\u00a0About two and a half to three weeks, I believe.<\/p>\n<p>[00:35:17]\u00a0<strong>Ramit:<\/strong>\u00a0What? Three weeks?<\/p>\n<p>[00:35:18]\u00a0<strong>Susan:<\/strong>\u00a0Days, days. Let me tell you. Doesn\u2019t turn you on, I\u2019ll say that.<\/p>\n<p>[00:35:23]\u00a0<strong>Ramit:<\/strong>\u00a0What happened?<\/p>\n<p>[00:35:24]\u00a0<strong>Susan:<\/strong>\u00a0We were fighting.<\/p>\n<p>[00:35:25]\u00a0<strong>Jeff:<\/strong>\u00a0We haven\u2019t lived on a budget in a while. We just lived our lives and hadn\u2019t really accounted for.<\/p>\n<p>[00:35:33]\u00a0<strong>Ramit:<\/strong>\u00a0So after 150k, people stopped tracking money. That\u2019s pretty much what happens. All right. Wait, so how did that start a fight?<\/p>\n<p>[00:35:40]\u00a0<strong>Jeff:<\/strong>\u00a0We were just arguing the numbers. There\u2019s no way\u2013<\/p>\n<p>[00:35:42]\u00a0<strong>Susan:<\/strong>\u00a0There\u2019s no way guilt-free spending is $13,000 a month.<\/p>\n<p>[00:35:47]\u00a0<strong>Jeff:<\/strong>\u00a0Right.<\/p>\n<p>[00:35:49]\u00a0<strong>Susan:<\/strong>\u00a0And I\u2019m like, I don\u2019t know what to tell you. We have a teenage daughter, and she won\u2019t stop going to Sephora and Lulu lemon.<\/p>\n<p>[00:35:57]\u00a0<strong>Ramit:<\/strong>\u00a0You can start to understand how, gosh, it\u2019s actually totally realistic that we might be spending a $100,000 a year and not even realize.<\/p>\n<p>[00:36:06]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah. Right. That created a little friction, I guess.<\/p>\n<p>[00:36:10]\u00a0<strong>Susan:<\/strong>\u00a0That\u2019s awful.<\/p>\n<p>[00:36:11]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s just reality. To me, when I hear that\u2013 I\u2019ve had times where I look at my own spending, and I go, oh my God, I can\u2019t believe that I spent that much in the last six months on this one thing. And again, assuming you have the cashflow to be able to make this a lesson, what\u2019s the best thing you can do? You can be like, oh wow, it really got away from me. I need to put some controls in place. Maybe I need to sell a couple of these things or stop doing it, but let this be a lesson to me. Your groceries are 2,800. All right. So you like to eat well.<\/p>\n<p>[00:36:45]\u00a0<strong>Jeff:<\/strong>\u00a0That surprised us as well.<\/p>\n<p>[00:36:47]\u00a0<strong>Ramit:<\/strong>\u00a0Do your kids participate in the grocery shopping?<\/p>\n<p>[00:36:51]\u00a0<strong>Jeff:<\/strong>\u00a0Not much. Rarely.<\/p>\n<p>[00:36:53]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. All right. 2,800 is a lot.<\/p>\n<p>[00:36:56]\u00a0<strong>Susan:<\/strong>\u00a0Dining out was outrageous. I think it was over 3,000 a month, wasn\u2019t it, Jay? It was crazy.<\/p>\n<p>[00:37:03]\u00a0<strong>Jeff:<\/strong>\u00a0It was outrageous, and it was not on good\u2013<\/p>\n<p>[00:37:06]\u00a0<strong>Ramit:<\/strong>\u00a0So you\u2019re spending 2,800 at the grocery store, and then 3,000 eating out. In the last two weeks, where\u2019d you eat out?<\/p>\n<p>[00:37:14]\u00a0<strong>Susan:<\/strong>\u00a0Stan.<\/p>\n<p>[00:37:14]\u00a0<strong>Jeff:<\/strong>\u00a0La Bernadine and Peter Luger Steakhouse in\u2013<\/p>\n<p>[00:37:19]\u00a0<strong>Susan:<\/strong>\u00a0And Peter Luger\u2019s.<\/p>\n<p>[00:37:19]\u00a0<strong>Jeff:<\/strong>\u00a0But that was not\u2013<\/p>\n<p>[00:37:22]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s just one-off. That\u2019s just one-off. How about the prior two weeks? Also Peter Luger, but that\u2019s a one-off also.<\/p>\n<p>[00:37:30]\u00a0<strong>Susan:<\/strong>\u00a0We would have date night, and if we have date night, it\u2019s not unheard of to spend 350 because of a bottle of wine and stuff like that.<\/p>\n<p>[00:37:39]\u00a0<strong>Ramit:<\/strong>\u00a0And your subscriptions are 649 a month. What are these subscriptions?<\/p>\n<p>[00:37:44]\u00a0<strong>Jeff:<\/strong>\u00a0Everything.<\/p>\n<p>[00:37:46]\u00a0<strong>Susan:<\/strong>\u00a0I have a list.<\/p>\n<p>[00:37:47]\u00a0<strong>Ramit:<\/strong>\u00a0Tell me. The world wants to know.<\/p>\n<p>[00:37:50]\u00a0<strong>Susan:<\/strong>\u00a0Apple Music, Spotify, Roblox. We have several charities, but not enough. We should be getting more, which comes up a very small amount. Hulu, ASPCA, Feeding America, Netflix, Crunchyroll, YMCA, SiriusXM, a second Spotify account, Audible, 10% yearly MasterClass subscription, iFit subscription, Peacock car wash, and then a yoga subscription and a spa monthly subscription.<\/p>\n<p>[00:38:30]\u00a0<strong>Ramit:<\/strong>\u00a0All right, what do you think about that as you say it out loud?<\/p>\n<p>[00:38:33]\u00a0<strong>Susan:<\/strong>\u00a0I\u2019ve already marked a few things that, if I don\u2019t use them, to get rid of them.<\/p>\n<p>[00:38:38]\u00a0<strong>Ramit:<\/strong>\u00a0Pets? How many pets do you have? Oh God.<\/p>\n<p>[00:38:41]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:38:42]\u00a0<strong>Susan:<\/strong>\u00a0Five cats and a dog.<\/p>\n<p>[00:38:43]\u00a0<strong>Ramit:<\/strong>\u00a0I knew it.<\/p>\n<p>[00:38:45]\u00a0<strong>Susan:<\/strong>\u00a0The dog itself is 550 a month.<\/p>\n<p>[00:38:49]\u00a0<strong>Ramit:<\/strong>\u00a0What the hell kind of dog is this? It\u2019s like a mortgage payment for some people.<\/p>\n<p>[00:38:52]\u00a0<strong>Susan:<\/strong>\u00a0She is a very sweet rescue, and she had an ACL repair that\u2013<\/p>\n<p>[00:38:57]\u00a0<strong>Ramit:<\/strong>\u00a0Did Jeff do the repair?<\/p>\n<p>[00:38:59]\u00a0<strong>Susan:<\/strong>\u00a0No. And she needs antibiotics which cost 450 a month.<\/p>\n<p>[00:39:06]\u00a0<strong>Ramit:<\/strong>\u00a0Okay. Listen, I understand. I\u2019m not trying to ruin my own career. Fine, you love your dog. The kids activities. Kids are expensive. Fine. Again, you can afford it. Let\u2019s just get it all out on the table then we\u2019ll talk about what\u2013 there\u2019s a few problems here, but just so you know, I\u2019m not coming in here saying you can\u2019t ever have wine. If you want to have a very nice bottle, be my guest. It\u2019s just that it\u2019s bloated. You\u2019re doing that. You\u2019re not thinking about it. There\u2019s no vision and strategy behind it.<\/p>\n<p>[00:39:36]\u00a0<strong>Jeff:<\/strong>\u00a0Right.<\/p>\n<p>[Narration]<\/p>\n<p>[00:39:36]\u00a0<strong>Ramit:<\/strong>\u00a0 I get comments from people saying, I was with you until you told me they made $250,000. Then I checked out. I\u2019m like, what? Do you seriously lack the ability to adapt someone\u2019s story to your own life? Guys, one of the points of this show is that people can feel guilty, or anxious, or fearful about money, whether they make 60k or $600,000. People can have bad money habits at 50k or $500,000.<\/p>\n<p>[00:40:04] In fact, if you feel bad about money at 50k, you\u2019re probably going to feel that way when you 10X your income. This is why I feature people who make 50k, people who make a million dollars a year. I want you exposed to everyone. And for some reason, on the internet, there\u2019s this undercurrent of people who expect everything to be tailored to their exact situation. Your income, your location, your number of kids, your spending, your tax rate.<\/p>\n<p>[00:40:27] That\u2019s not going to happen. If you want that, hire an advisor. What I\u2019m asking you to do is to turn off that voice in your head that says, they\u2019re nothing like me. If someone makes 10 times what you make, you could probably still learn something from them. I learn from people who make more than me, and I learn from people who make less than me, and that is what I\u2019m asking you to do.<\/p>\n<p>[Interview]<\/p>\n<p>[00:40:50]\u00a0<strong>Ramit:<\/strong>\u00a0So let\u2019s talk about income. Susan, go ahead and read me off the gross combined income here. What do you see?<\/p>\n<p>[00:40:58]\u00a0<strong>Susan:<\/strong>\u00a0$55,434<\/p>\n<p>[00:41:01]\u00a0<strong>Ramit:<\/strong>\u00a0665,000. That\u2019s Jeff\u2019s salary. Right, Jeff?<\/p>\n<p>[00:41:04]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:41:05]\u00a0<strong>Ramit:<\/strong>\u00a0And your take home is 426,000 a year. Okay. Very, very healthy salary.<\/p>\n<p>[00:41:11]\u00a0<strong>Jeff:<\/strong>\u00a0Yes, that\u2019s a big shovel.<\/p>\n<p>[00:41:13]\u00a0<strong>Ramit:<\/strong>\u00a0All right. So let\u2019s acknowledge that at 426,000, the game is a little bit different. My wife is a personal stylist, and she often goes into people\u2019s homes. She does a closet clean-out, and she shows me before and after pictures, and it\u2019s quite revealing. People\u2019s closets actually tell you a lot about who they are and how they live.<\/p>\n<p>[00:41:38] What I\u2019m seeing instead is a full closet in your fixed costs, is just a lot of stuff, subscriptions, pets, groceries, the car. Not even the car, but it\u2019s the tolls and this. No, no, no, no. Okay. I\u2019m seeing a lot of knots. It\u2019s just a lifetime of having a high income and being like, we make enough. Let\u2019s get it. But not really saying, hold on a second, we need to do a closet cleanse.<\/p>\n<p>[00:42:08]\u00a0<strong>Jeff:<\/strong>\u00a0Right.<\/p>\n<p>[00:42:10]\u00a0<strong>Ramit:<\/strong>\u00a0And after a while, it just gets overwhelming. You\u2019re just like, I don\u2019t even know what is this stuff, and how do we start over?<\/p>\n<p>[00:42:17]\u00a0<strong>Jeff:<\/strong>\u00a0I like your philosophy of spending extravagantly on the things that are important to you and cut mercilessly the things that aren\u2019t. We tend to spend extravagantly on the things\u2013 like travel. We were just in New York City, and ate at a fancy restaurant, a great steakhouse, and did a couple of great things, but we just don\u2019t really do the cutting mercilessly parts. We just keep slowly adding on now. It\u2019s not extravagant add on, but it\u2019s adding on nonetheless.<\/p>\n<p>[00:42:42]\u00a0<strong>Ramit:<\/strong>\u00a0You\u2019re spending 13,500 on just stuff.<\/p>\n<p>[00:42:48]\u00a0<strong>Jeff:<\/strong>\u00a0On stuff that we don\u2019t really know, honestly.<\/p>\n<p>[00:42:51]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, fine. If you told me\u2013<\/p>\n<p>[00:42:55]\u00a0<strong>Jeff:<\/strong>\u00a0Single biggest expense.<\/p>\n<p>[00:42:56]\u00a0<strong>Ramit:<\/strong>\u00a0What are the real issues?<\/p>\n<p>[00:42:57]\u00a0<strong>Susan:<\/strong>\u00a0But see, I\u2019d rather cut from me, and I think that\u2019s part of the mental activity, or the mental process, is that, yeah, we make all this money, and yet, I\u2019m not going to get my nails done for the next couple of months because I don\u2019t want to spend the @200 a month on me. I rather spend it on something else.<\/p>\n<p>[00:43:16]\u00a0<strong>Ramit:<\/strong>\u00a0Do you know where that comes from?<\/p>\n<p>[00:43:19]\u00a0<strong>Susan:<\/strong>\u00a0Yeah. Childhood. I\u2019m not worth it. I will sacrifice so that everybody else can have something. And plus picking and choosing. Jeff likes to say, you can\u2019t do it all. And so I\u2019m like, you know what? I had pretty nails all summer. Now it\u2019s fall. I\u2019m okay. I can\u2019t rationalize doing everything because when I added up the expenses to do everything, it\u2019s $1,800 a month just for me, to spend on me. I hold back.<\/p>\n<p>[00:43:49]\u00a0<strong>Ramit:<\/strong>\u00a0All right. I think it\u2019s savvy of you, Susan, to recognize that that nail issue is not simply a financial issue because, truly, if you wanted to find 200 bucks or however much it costs, you could find it. It comes from childhood. It comes from watching your mom, and maybe even your mom watching her mom sacrifice and even turn that into a virtue. You don\u2019t have to do that with your household income.<\/p>\n<p>[00:44:14]\u00a0<strong>Susan:<\/strong>\u00a0Great.<\/p>\n<p>[Narration]<\/p>\n<p>[00:44:16]\u00a0<strong>Ramit:<\/strong>\u00a0One of the things I want you to do when it comes to your spending is think about it in terms of percentages, not just how much a hamburger costs. Let me explain why. We can get a hamburger for a couple of bucks at a fast food place, but you can also get a hamburger for $24 in New York sometimes.<\/p>\n<p>[00:44:34] Now, is it outrageous to spend $24 on a hamburger? I don\u2019t know. Is it a special occasion? Is it your anniversary? Is it a once in a lifetime thing? Do you make $10 million a year? We need to know these things. And that is why you\u2019ll hear people, often people who earn tons of money, saying, oh, I can\u2019t bring myself to spend, $40,000 on a car. I go, you make $3.5 million a year. What does it matter to you?<\/p>\n<p>[00:45:01] This is why you have to think about your spending in terms of the percentages that I represent on the conscious spending plan, because you might actually be spending a very high amount on candy, or bread, or cars, but if it fits in the conscious spending plan, you\u2019re fine<\/p>\n<p>[Interview]<\/p>\n<p>[00:45:17]\u00a0<strong>Susan:<\/strong>\u00a0I think a lot of that is also just me not having boundaries with the kids on what to spend. I\u2019m not very good at telling them, we can\u2019t just go to Sephora and spend $125 every two weeks on makeup, and we can\u2019t just go to Lulu lemon. We just dropped $600. I don\u2019t want to say we can\u2019t afford it, so I\u2019m trying to set up a limit of like, I\u2019m going to give you $100 to spend here. How do you want to do it?<\/p>\n<p>[00:45:53]\u00a0<strong>Ramit:<\/strong>\u00a0I\u2019m sorry, what?<\/p>\n<p>[00:45:56]\u00a0<strong>Susan:<\/strong>\u00a0She just showed me something today that she wants to order again. And I was just like, no, I\u2019m not looking at it. Because, especially looking at the CSP, it adds up. It\u2019s every week.<\/p>\n<p>[00:46:11]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:46:12]\u00a0<strong>Susan:<\/strong>\u00a0We put everything on our Amex card, which is how I believe that we overspend every month, because yes, we pay off the Amex every month, but then if we have an 18,000-dollar Amex bill and we pay it off, now we just sold ourselves short for the rest of the month. And I have a hard time saying no. I have a hard time saying, you can\u2019t have it.<\/p>\n<p>[00:46:34]\u00a0<strong>Ramit:<\/strong>\u00a0Because?<\/p>\n<p>[00:46:35]\u00a0<strong>Susan:<\/strong>\u00a0Because she enjoys it, and because I\u2019d never got those things, and I\u2019m trying to be very conscious of living my childhood through her. I want her to be able to have opportunities, which is why she does whatever activity she wants to do, and we don\u2019t look at the cost because just her activities are about $1,300 a month. And we don\u2019t put any budget on that because it\u2019s what she wants to do. So I\u2019m trying to rein it in for myself and give her limits because that\u2019s reality. She\u2019s not going to have unlimited money as she gets older. She needs to learn to work with a certain amount.<\/p>\n<p>[00:47:11]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, I agree. Also, there\u2019s something poignant about you telling me your mom would go without dying her hair, etc., or doing her hair. And then your daughter seeing you go without you doing your nails while she essentially does whatever she wants. These things are passed down generation to generation in the subtlest of ways. What do you think about that?<\/p>\n<p>[00:47:45]\u00a0<strong>Susan:<\/strong>\u00a0Yeah, I didn\u2019t realize that because I just got my dip nails taken off this week, and she\u2019s like, you\u2019re not going to get them done again. And I\u2019m like, no, I don\u2019t need it for the rest of the year. I did it for the summer. I\u2019m good. But in the back of my head, I still think, if we had so much more money per month, then I could do all these other things on top of it, which is crazy with the take home. And I recognize that in myself.<\/p>\n<p>[00:48:11]\u00a0<strong>Ramit:<\/strong>\u00a0Good. It\u2019s not a money issue.<\/p>\n<p>[00:48:13]\u00a0<strong>Susan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:48:13]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s this.<\/p>\n<p>[00:48:14]\u00a0<strong>Susan:<\/strong>\u00a0It\u2019s me. It\u2019s making myself a priority. Okay.<\/p>\n<p>[00:48:19]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah. Again, these things just built up over the years, and we didn\u2019t get rid of one while still starting another.<\/p>\n<p>[00:48:25]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. It just builds on each other. 50 years old. You\u2019ve been in your careers for decades. It gets a little sloppy after a while, but this is actually a great opportunity. It\u2019s like, okay, let\u2019s take a fresh take. Again, with the income, all this stuff can be fixed and fixed quickly.<\/p>\n<p>[Narration]<\/p>\n<p>[00:48:43]\u00a0<strong>Ramit:<\/strong>\u00a0The nails comment. I just have to point this out. This is a couple earning hundreds of thousands of dollars a year, and Susan is rationing doing her nails. It makes no sense. Worse, we see a common trend on this show and in the public at large of moms who give everything to their families, then they spend nothing on themselves, and they unconsciously teach that lesson to their daughters, which then gets transmitted generation to generation.<\/p>\n<p>[00:49:13] It\u2019s literally happened multiple times on this podcast. Remember Episode 31? Lindsay had shrunk her rich life down to shopping at Target. And while she really wanted a massage, she told herself she couldn\u2019t do it. She wasn\u2019t worth it.\u00a0 And when I asked her what lesson she was teaching her daughter, she began to cry.<\/p>\n<p>[00:49:35] If you want to teach your children about money, the best thing you can do is to have a healthy relationship with it. That means you dial in your conscious spending plan. You talk frequently about how you spend money, what you spend money on, why you spend money, including guilt-free spending. Teach your kids that it\u2019s okay to spend money on the things you love if you are saving and investing every single month.<\/p>\n<p>[Interview]<\/p>\n<p>[00:50:01]\u00a0<strong>Ramit:<\/strong>\u00a0All right. So here we have a basic investment fee calculator. We\u2019re going to start with $835,000, which is what is in your retirement account that is managed by somebody charging 1.24%.<\/p>\n<p>[00:50:14]\u00a0<strong>Jeff:<\/strong>\u00a0So that\u2019s everything all said and done, I believe. I think it\u2019s 460 that\u2019s in those two brokerage accounts.<\/p>\n<p>[00:50:21]\u00a0<strong>Ramit:<\/strong>\u00a0Oh, great. Okay. Let\u2019s change it. 460,000. Okay, good. All right.<\/p>\n<p>[00:50:27]\u00a0<strong>Jeff:<\/strong>\u00a0Why don\u2019t we say we\u2019ll live to 85, so another 35 years.<\/p>\n<p>[00:50:30]\u00a0<strong>Ramit:<\/strong>\u00a035 years. Great. And let\u2019s just see what happens to the fees. Your additional contributions to this account are zero, correct?<\/p>\n<p>[00:50:39]\u00a0<strong>Jeff:<\/strong>\u00a0Yes.<\/p>\n<p>[00:50:39]\u00a0<strong>Ramit:<\/strong>\u00a0All right. And let\u2019s just assume you\u2019re getting a 6% return because I saw it\u2019s moderate growth, probably even less. Maybe I\u2019ll even be conservative and go 5%. All right. So 1.24%, correct?<\/p>\n<p>[00:50:58]\u00a0<strong>Susan:<\/strong>\u00a0Yes.<\/p>\n<p>[00:50:59]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s the fee that this person\u2019s charging you. And then we\u2019re going to compare it to just 0% because technically, you can effectively pay close to zero through any brokerages. So let\u2019s go ahead and calculate it. All right. So the difference is? Can you read that number out loud to me, Jeff, that I\u2019m highlighting here?<\/p>\n<p>[00:51:22]\u00a0<strong>Jeff:<\/strong>\u00a0$863,170.21.<\/p>\n<p>[00:51:27]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. 863,000 in fees is the difference. What do y\u2019all think about that?<\/p>\n<p>[00:51:37]\u00a0<strong>Jeff:<\/strong>\u00a0Susan feels victorious.<\/p>\n<p>[00:51:39]\u00a0<strong>Susan:<\/strong>\u00a0No, I\u2019m glad we know now versus 10 years down the road. That\u2019s the thing. The best time to have done it was 10 years ago. Now\u2019s the best time again.<\/p>\n<p>[00:51:52]\u00a0<strong>Ramit:<\/strong>\u00a0It really puts things in perspective, like worrying about wine or something like that, or like the order you got from the grocery store, irrelevant compared to this decision alone. That\u2019s the way I think about it. So Susan, I know you agree. Jeff, tell me about what you\u2019re thinking and what you\u2019re feeling right now.<\/p>\n<p>[00:52:13]\u00a0<strong>Jeff:<\/strong>\u00a0I knew there was a huge difference intellectually. I\u2019ve never really looked at a calculator per se, but I understood the idea of it, changing the growth, and it\u2019s not\u2013 I could wrap my head around it without knowing the numbers, I suppose. But yeah, that\u2019s not a great feeling.<\/p>\n<p>[00:52:37]\u00a0<strong>Ramit:<\/strong>\u00a0The good news is that\u2019s\u2013 sure, you\u2019ve paid fees up until now. But that\u2019s behind us. That\u2019s a sunk cost. We can\u2019t do anything about that. This is looking at what\u2019s going forward. And what\u2019s to me, mind-boggling about these dynamics is the fees become increasingly expensive the more your portfolio grows. Here\u2019s the way I think about it. You know that a bottle of wine that you went and got, the nice bottle of wine? For everyone who\u2019s a wine person\u2013 what bottle of wine was it by the way?<\/p>\n<p>[00:53:10]\u00a0<strong>Jeff:<\/strong>\u00a0Opus one.<\/p>\n<p>[00:53:11]\u00a0<strong>Ramit:<\/strong>\u00a0Okay, great. That means nothing to me, but I\u2019m sure it\u2019s very nice. So 350 bucks. Great. Now, imagine you go to that same restaurant next year and the bottle of wine is 500 bucks. Same one. Oh shit. This is a bad example because the price of wine actually does go up. Forget the wine, forget the wine.<\/p>\n<p>[00:53:27]\u00a0<strong>Jeff:<\/strong>\u00a0I wouldn\u2019t surprise me if that were the case.<\/p>\n<p>[00:53:30]\u00a0<strong>Ramit:<\/strong>\u00a0The mashed potatoes you got. You go, wow. There\u2019s mashed potatoes this time at Peter Lugar, 25 bucks. Next time you go, it\u2019s 75, then 300, then 800, and on and on and on. You go, what the hell? Okay, it\u2019s Peter Luger, but 800 bucks for mashed potatoes?<\/p>\n<p>[00:53:46]\u00a0<strong>Jeff:<\/strong>\u00a0Right, they\u2019re still potatoes. Yeah.<\/p>\n<p>[00:53:48]\u00a0<strong>Ramit:<\/strong>\u00a0You\u2019re getting the same potatoes, but you\u2019re paying three times, four times, 10 times more. That\u2019s often what you get when you pay a percentage-based fee.<\/p>\n<p>[00:54:02]\u00a0<strong>Susan:<\/strong>\u00a0Right.<\/p>\n<p>[00:54:03]\u00a0<strong>Ramit:<\/strong>\u00a0Right now, it appears, from what I could make of it, you\u2019re paying about $6,000 a year in fees.<\/p>\n<p>[00:54:09]\u00a0<strong>Susan:<\/strong>\u00a0Yeah.<\/p>\n<p>[00:54:11]\u00a0<strong>Ramit:<\/strong>\u00a0First of all, that\u2019s a lot. That\u2019s basically 500 bucks a month right there. The thing is you just don\u2019t see it.<\/p>\n<p>[00:54:16]\u00a0<strong>Jeff:<\/strong>\u00a0Right, you don\u2019t see it.<\/p>\n<p>[00:54:18]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. So 500\u2013<\/p>\n<p>[00:54:18]\u00a0<strong>Jeff:<\/strong>\u00a0We\u2019re paying for it.<\/p>\n<p>[00:54:20]\u00a0<strong>Ramit:<\/strong>\u00a0Exactly. And the craziest thing is that, again, just like that mashed potatoes, that 500 turns into 700, 900, 1,800, and on and on and on.<\/p>\n<p>[Narration]<\/p>\n<p>[00:54:30]\u00a0<strong>Ramit:<\/strong>\u00a0Let me give you another crazy way to look at those fees. They\u2019re currently paying 500 a month in fees. Now, let\u2019s just fast forward 35 years or 420 months. They\u2019ll have paid about $863,000 total in fees. That means that in 35 years, they won\u2019t have actually just paid 500 a month in fees. They\u2019ll have paid an average of $2,054 per month in fees, from $500 a month in fees to $2,000 a month in fees.<\/p>\n<p>[00:55:07] This is what happens with a 1.24% fee on a modest 460,000-dollar portfolio that\u2019s not even being added to. And if you\u2019re wondering how the math works out, you can calculate yourself online. Just search for investment fee calculator. That 1.24% fee seems modest in the early days, but it\u2019s back loaded.<\/p>\n<p>[00:55:28] Most advisors make their money when your portfolio grows, which is why they love older people and wealthy people who specifically do not understand commission structures. As Jeff pointed out, they don\u2019t even see it happening, which is exactly why Wall Street loves to charge commissions. It\u2019s like being in a canoe, and you\u2019re worried about running into that huge tanker three miles away, but you actually have 15 little holes in your canoe and you are slowly sinking.<\/p>\n<p>[Interview]<\/p>\n<p>[00:55:54]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s just the fees. And if you were to say, I want somebody to look it over and check into it once a year, I would totally support that. I just wouldn\u2019t pay a percentage-based fee. Fix it, and your net worth will go up.<\/p>\n<p>[00:56:13]\u00a0<strong>Susan:<\/strong>\u00a0Perfect.<\/p>\n<p>[00:56:15]\u00a0<strong>Jeff:<\/strong>\u00a0The hardest thing is the non-confrontational part. Just dumping sounds easy on Zoom.<\/p>\n<p>[00:56:24]\u00a0<strong>Ramit:<\/strong>\u00a0Totally.<\/p>\n<p>[00:56:24]\u00a0<strong>Susan:<\/strong>\u00a0Hey, with peace and love, we\u2019re just telling him this isn\u2019t in our best interest. Thank you very much, but we can hold on our money.<\/p>\n<p>[00:56:30]\u00a0<strong>Jeff:<\/strong>\u00a0From the woman who can\u2019t say to spending $500 at Sephora with a 12-year-old.<\/p>\n<p>[00:56:34]\u00a0<strong>Susan:<\/strong>\u00a0Yeah. Be like, we\u2019re coming up on retirement. We know this is the money we need.<\/p>\n<p>[00:56:39]\u00a0<strong>Ramit:<\/strong>\u00a0Hold on. I think Jeff is making a really good point, which is like, hey, I think this is going to be hard. I hear you loud and clear. Susan, do you agree that that\u2019s going to be hard?<\/p>\n<p>[00:56:54]\u00a0<strong>Susan:<\/strong>\u00a0Yes, I agree. It\u2019s going to be hard, but I think you can say it in a loving manner that\u2019s not like we\u2019re kicking you to the curb. And you\u2019re a jerk. I can\u2019t believe you pulled this over on us, and now we know better. I think it\u2019s just a matter of being like, hey, you know what? We realize we\u2019re paying more fees than we want to do. We\u2019re not comfortable with it. Thank you, but we\u2019re going to be moving the money. And that\u2019s it.<\/p>\n<p>[00:57:19]\u00a0<strong>Ramit:<\/strong>\u00a0So Jeff, I know it makes you uncomfortable, and I know there\u2019s some personal relationship with the person involved. What would be helpful for you? I think the first thing is just to know how much you\u2019re actually paying in fees. We did that today. Do you feel conviction that it\u2019s in your best interest to switch?<\/p>\n<p>[00:57:39]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah, yes. Just the practicality of doing it, honestly,<\/p>\n<p>[00:57:44]\u00a0<strong>Ramit:<\/strong>\u00a0First, the biggest step, 80% of the process is just realizing you need to switch. You did that today. So now it\u2019s down to the details, and these are small, but hard. If you\u2019ve been doing this for a long time. You can send an email to the person, and you can say, hey, John. I wanted to let you know that I\u2019ve decided to move my accounts. I\u2019d like your help in switching the accounts over. What paperwork is required? Thanks for your service. Sign your name.<\/p>\n<p>[00:58:19] Now, of course, you\u2019re going to get back a very panicked email and probably a lot of phone calls. On a practical level, my suggestion is stick to email. You can just say that. I prefer we stick to email. Nothing personal. But I\u2019ve decided to make a change because the fees that I\u2019m paying are not part of my financial goals. You\u2019re telling him the truth, but it\u2019s your goals. They\u2019re not part of my financial goals.<\/p>\n<p>[00:58:48] He\u2019s required legally to transfer your account somewhere else. You\u2019re going to transfer them in kind, in dash kind, so you\u2019re not selling them and triggering a taxable event. You\u2019re probably going to speak to a financial advisor. They can help facilitate the transfer of these, and they can help suggest what accounts would be good. But ultimately, you\u2019re going to have to tell this person that you are moving your accounts away. You can\u2019t just secretly do in the middle of the night.<\/p>\n<p>[00:59:18] So that\u2019s the practicality of it. And if you see this person in your neighborhood, that\u2019s a whole other issue. Is that okay? That\u2019s going to be a thing. In my line of business, I\u2019m like, this is great. Let\u2019s have a conversation. This is easy, but I deeply understand that it\u2019s not easy for a lot of people, especially if you\u2019ve known the person and they\u2019re in your community, all that stuff. The fact is I have this philosophy, just my money is good money.<\/p>\n<p>[00:59:45] That\u2019s the philosophy that I really want for the two of you to have with your money. You want to go to a beautiful resort, you\u2019re going to pay top dollar. You\u2019re never going to negotiate, but you want great service, great room. I\u2019m sure you embody this in parts of your life, embody it in your financial products. Your money is good money, and you should not be paying $800,000 in fees for something you could get the same result with low cost ETFs or index funds and have that $800,000 in your pocket funding your retirement.<\/p>\n<p>[Narration]<\/p>\n<p>[01:00:21]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s how it goes. No need to pay hundreds of thousands of dollars in fees. You can get assertive, you can be polite with your money, and you can say, you know what? I think I can do this on my own. Now, in complex situations. You may want to use a financial advisor. But if you do, you want to pay a flat fee, never a percentage. That\u2019s one of the reasons I partnered with Facet, a service that offers affordable, accessible financial planning through a flat fee membership.<\/p>\n<p>[Interview]<\/p>\n<p>[01:00:52]\u00a0<strong>Ramit:<\/strong>\u00a0So the whole life insurance policy, you\u2019ve paid in how much? Oh God.<\/p>\n<p>[01:00:59]\u00a0<strong>Jeff:<\/strong>\u00a0I could try looking it up real quick.<\/p>\n<p>[01:01:03]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s okay. Back of the napkin or any idea. Susan\u2019s digging in some envelope right now.<\/p>\n<p>[01:01:07]\u00a0<strong>Susan:<\/strong>\u00a0With all my Northwestern accounts. 272 a month is what we pay.<\/p>\n<p>[01:01:13]\u00a0<strong>Ramit:<\/strong>\u00a0And what\u2019s this thing about borrowing against it? Why\u2019d you do that?<\/p>\n<p>[01:01:18]\u00a0<strong>Susan:<\/strong>\u00a0Pay off a credit card way back when.<\/p>\n<p>[01:01:20]\u00a0<strong>Jeff:<\/strong>\u00a0It was way back. Yeah.<\/p>\n<p>[01:01:21]\u00a0<strong>Ramit:<\/strong>\u00a0What the hell?<\/p>\n<p>[01:01:23]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:01:23]\u00a0<strong>Susan:<\/strong>\u00a0Back when making lots of money mistakes. And maybe it was $10,000. And now the outstanding balance 40,000 000.<\/p>\n<p>[01:01:32]\u00a0<strong>Ramit:<\/strong>\u00a0Is this for real?<\/p>\n<p>[01:01:33]\u00a0<strong>Susan:<\/strong>\u00a0Oh yeah.<\/p>\n<p>[01:01:34]\u00a0<strong>Jeff:<\/strong>\u00a0We borrowed from our money.<\/p>\n<p>[01:01:36]\u00a0<strong>Ramit:<\/strong>\u00a0Uh-huh. So where are you paying it back? Oh, you\u2019re not. You\u2019re going to die.<\/p>\n<p>[01:01:39]\u00a0<strong>Jeff:<\/strong>\u00a0I don\u2019t feel the need to. Right.<\/p>\n<p>[01:01:40]\u00a0<strong>Susan:<\/strong>\u00a0We\u2019re going to die. And that\u2019s what he was saying.<\/p>\n<p>[01:01:44]\u00a0<strong>Jeff:<\/strong>\u00a0If had a huge amount come in for whatever reason, I would consider it if everything else was literally paid for kind of thing,<\/p>\n<p>[01:01:50]\u00a0<strong>Ramit:<\/strong>\u00a0It\u2019s called leverage. I\u2019m going to leverage. I\u2019m going to leverage myself. Borrowing against anything is an extremely sophisticated strategy that 99% of people should not do. Anyway, they borrow against it, and then they don\u2019t understand the implications because it\u2019s very confusing, necessarily so.<\/p>\n<p>[01:02:10] And then if you ask them like, hey, have you considered this? Then their answer is like, no, I\u2019m just going to die. What the hell? What kind of strategy is this? Now you can carry it out because you actually have enough money. But this is what I\u2019m talking about when I say you\u2019re making up for a lot of bad financial behavior with just a lot of money.<\/p>\n<p>[01:02:31]\u00a0<strong>Susan:<\/strong>\u00a0So my question is, shouldn\u2019t we just cancel this policy now?<\/p>\n<p>[01:02:36]\u00a0<strong>Ramit:<\/strong>\u00a0I have to look at the paperwork, but this is actually a good conversation to have with an insurance specialist who\u2019s not insurance salesman. But overall, conceptually. I don\u2019t personally see a reason, if I were in your financial situation, that I would be having a whole life insurance policy. There may be tax implications that you need to consider.<\/p>\n<p>[01:02:58]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah, no. It was, again, when I was an intern. It sounded like it made a lot of sense.<\/p>\n<p>[01:03:08]\u00a0<strong>Ramit:<\/strong>\u00a0The whole life insurance salespeople sound good. They\u2019re not good, but they sound good. So look, that was a mistake made in the past. It happened. Luckily, the thing that really matters in your life is that your career has gone phenomenally well. You have a high income. Honestly, to correct a couple of mistakes here and there, even ones that are 50, a 100k, okay, fix it. Move on.<\/p>\n<p>[01:03:32]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah. It\u2019s possible.<\/p>\n<p>[01:03:33]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah. It\u2019s not existential to me at all. The only thing that is existential is acknowledging like, hey, that probably wasn\u2019t a good move. Let\u2019s fix it. And then let\u2019s redirect any money that we change into our rich life. Okay, let\u2019s talk about the kids, because actually this is a key part of the whole thing. Putting aside you\u2019re going to fix the insurance, you\u2019ll fix the financial advisor. Spending wise, do you feel that the two of you are aligned today on your spending philosophy?<\/p>\n<p>[01:04:05]\u00a0<strong>Susan:<\/strong>\u00a0For the kids? No. I don\u2019t want them to have fear. I don\u2019t want them to think that we\u2019re never going to have their back and that we\u2019re never going to help them. I want them to be self-sufficient but know they\u2019re never going to be alone, even financially.<\/p>\n<p>[01:04:25] Because looking at the budget that we spent $800 a month in clothing for just our daughter and $400 at Sephora a month on our daughter, and it\u2019s not an anomaly, that if I just said you get $400 a month to spend whatever way you want and let her make that decision, which I realize a lot of people would think 400 a month for a 12-year-old to just spend whatever she wants\u2013 you know what? We\u2019re spending way more than that now between her Starbucks run and having lunch with a friend. Then it would be her choice to see how she wants to do the money.<\/p>\n<p>[01:05:02]\u00a0<strong>Ramit:<\/strong>\u00a0I like the philosophy. I want to set you up for success, so I\u2019m just going to tweak a little bit of it. Okay. Even though 400 is a ton of money, she doesn\u2019t have the skills because you haven\u2019t taught it to her. So the first point is the two of you have to build the skills together. If I were the two of you, I would do that privately for about a month, perhaps two, just get aligned, focus on bringing your numbers down. You\u2019re going to have to learn new habits. Oh, maybe both of us don\u2019t need to go to the grocery store five times a week. You do this. I do that. Let\u2019s meal prep, whatever. You just stop.<\/p>\n<p>[01:05:40]\u00a0<strong>Susan:<\/strong>\u00a0Right.<\/p>\n<p>[01:05:42]\u00a0<strong>Ramit:<\/strong>\u00a0Once the two of you get a few wins under your belt, then the next step is for you to say, okay, let\u2019s talk about our kids. What\u2019s the vision here?. We want to teach them this, this, this. Right now, if we\u2019re just brutally honest, they don\u2019t have any accountability. They\u2019re good kids, and we\u2019ve given them too much, but it\u2019s going to be hard for us to\u2013 we\u2019re not into confrontation. What are all the potential ways we can go about having these conversations? Map it out. Just put it all out on the table, just like you did the CSP.<\/p>\n<p>[01:06:15] Eventually, you sit down with your kids. I would say this happens. If everything goes really well, six to eight weeks from now, the two of you have refined your spending. You haven\u2019t changed everything. That\u2019s going to be a long time coming. You\u2019ve gotten some wins. You sit down with them. You say, you know what? We\u2019ve realized that we want to take better control of our money.<\/p>\n<p>[01:06:36] And tell them a story about how when you were working, you made $28,000 a year and you were a waitress and the waiter, and all this stuff. Tell them. I don\u2019t know how much they understand about your origin. Tell them about your mom. Tell them the things they don\u2019t know, because I\u2019m interested in you and I just met you, your kids need to know where you came from.<\/p>\n<p>[01:06:59] Then the other thing I would say is, get them involved. They have a responsibility as part of your family. So you\u2019re doing all this grocery shopping. You got to tell them like, hey, we need help. We\u2019ve realized, dad and I, or mom and I, are actually spending way too much on groceries. And we\u2019ve actually created our own grocery budget, and we need your help to go shopping.<\/p>\n<p>[01:07:20] So here\u2019s how much we have. Of course, it\u2019s going to be a very generous amount you can start off with a lot of money and let everybody get a win, and then slowly winnow that number down. But the fact is you actually do need their help because you\u2019re spending thousands.<\/p>\n<p>[01:07:34]\u00a0<strong>Susan:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:07:35]\u00a0<strong>Ramit:<\/strong>\u00a0So you\u2019re legitimately like, I seriously don\u2019t know where this money\u2019s going. Can you help us? Give them a sense of control?<\/p>\n<p>[01:07:42]\u00a0<strong>Susan:<\/strong>\u00a0Yeah. Especially with school shopping, I think we easily spend about $3,500 in a week.<\/p>\n<p>[01:07:49]\u00a0<strong>Ramit:<\/strong>\u00a0Yeah, that\u2019s a lot.<\/p>\n<p>[01:07:51]\u00a0<strong>Susan:<\/strong>\u00a0For school shopping on top of whatever they got for the summer on top of this or that. He picks out a nice pair of shoes, and I just go, okay, because that\u2019s what he wants.<\/p>\n<p>[01:08:01]\u00a0<strong>Ramit:<\/strong>\u00a0That\u2019s because there\u2019s no tradeoffs.<\/p>\n<p>[01:08:04]\u00a0<strong>Susan:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:08:04]\u00a0<strong>Ramit:<\/strong>\u00a0You haven\u2019t built the skill of tradeoffs, so of course, you haven\u2019t passed that skill to your kids. I\u2019ll tell you, in my observation 20 years, the people who have the biggest challenges are the kids of wealthy parents, who grew up. They themselves are not necessarily wealthy, and they were so used to buying all this nice stuff. And suddenly, they\u2019re 23 years old and have no money and no skills.<\/p>\n<p>[01:08:30]\u00a0<strong>Susan:<\/strong>\u00a0Yeah.<\/p>\n<p>[01:08:31]\u00a0<strong>Jeff:<\/strong>\u00a0Yeah. I\u2019m concerned about that.<\/p>\n<p>[01:08:32]\u00a0<strong>Susan:<\/strong>\u00a0I\u2019m going to be acutely aware of that because it\u2019s not reality. They need to have those skills. Yeah.<\/p>\n<p>[01:08:40]\u00a0<strong>Ramit:<\/strong>\u00a0So this is the time. This is the time to do it. It\u2019ll be a little bit painful at first, but then I will say\u2013 just a couple of last things here. This is not all doom and gloom. You get them involved with groceries, which is actually fun because they like to eat. Get them to splurge on a couple of things, get them involved in planning your next vacation. All these things work together, grocery, shopping, shoes, vacation. Now they are starting to intuitively understand tradeoffs, and they\u2019re going to realize the value of money.<\/p>\n<p>[01:09:08]\u00a0<strong>Susan:<\/strong>\u00a0I guess we\u2019re going to be okay. I think once we\u2019re looking at the numbers that would take that panic away from me, that there isn\u2019t enough, which sounds ridiculous, but that\u2019s still the way that I feel. That I don\u2019t have enough to do it all.<\/p>\n<p>[01:09:27]\u00a0<strong>Ramit:<\/strong>\u00a0What I always say is your feelings are highly uncorrelated with the amount in the bank, and here I am talking to a couple making $655,000 a year, and you, like many people making 50 k, a 100k, 200k, a million, say, I don\u2019t feel there\u2019s going to be enough. The key there is feeling. In order to be successful with money, you got to do two things.<\/p>\n<p>[01:09:52] Number one, you got to know your numbers. And today you\u2019ve taken a really big step in knowing your numbers. You have your CSP. You\u2019ve realized there\u2019s tons of fat. There\u2019s literally thousands and thousands of dollars every month that could be redirected. And your quality of life actually won\u2019t even decrease. I actually think it will go up.<\/p>\n<p>[01:10:09]\u00a0<strong>Jeff:<\/strong>\u00a0Probably go up. Yeah.<\/p>\n<p>[01:10:11]\u00a0<strong>Ramit:<\/strong>\u00a0The nails are going to get done. You\u2019re not going to be managing the kids like my new expenses because they\u2019re going to be in charge of it. Groceries are going to be dialed in. It\u2019s going to actually go up and be simpler. Ah, of course you\u2019re not going to be paying all these fees.<\/p>\n<p>[01:10:25] Um, but the second part beyond knowing your numbers is you got to work on your money psychology. Now, you\u2019ve done that by listening to the podcast. You may want to talk to a therapist or a coach. There are lots of folks that you can reach out to for that, just to have a regular way to talk about money and sync up. Certainly, a money meeting between the two of you would be a no brainer.<\/p>\n<p>[01:10:46] If you do those two things, you\u2019re going to be more than okay. Stay in touch. The thing I\u2019m particularly interested in is the conversations with your kids because I think that\u2019s the magic, that\u2019s the crux of this whole thing. The two of you are smart. I have no doubt. The two of you are going to nail it. It\u2019s the one with your kids and changing your relationship with money and kids that\u2019s going to be all the sign of success.<\/p>\n<p>[01:11:14]\u00a0<strong>Susan:<\/strong>\u00a0That\u2019s a lot of emotion there.<\/p>\n<p>[01:11:18]\u00a0<strong>Ramit:<\/strong>\u00a0Tell me the good, tell me the bad, just keep me up to date. I think over the next year, you\u2019re going to see just dramatic changes in how y\u2019all feel and talk about money.<\/p>\n<p>[01:11:31]\u00a0<strong>Susan:<\/strong>\u00a0Yeah. I can\u2019t thank you enough because I think we\u2019re in a different predicament than what I\u2019ve heard on the podcast, but it\u2019s really helped us. And I\u2019m not thinking about what I\u2019m losing. I\u2019m thinking about what\u2019s intentional and what I\u2019m still gaining.<\/p>\n<p>[Narration]<\/p>\n<p>[01:11:49]\u00a0<strong>Ramit:<\/strong>\u00a0Let me share some thoughts about my conversation with Susan and Jeff. First, thanks to Susan and Jeff for coming on here and discussing your finances so openly. Most of us have never heard the fascinating wrinkles that you shared. A surge in salary, financial advisors, and the actual amounts they charge. And of course, spending that has gotten loose as you\u2019ve started to earn more.<\/p>\n<p>[01:12:10] Now, it\u2019s normal for households earning $150,000 plus to stop tracking spending. And actually, there\u2019s some logic to it. At higher incomes, it doesn\u2019t make sense to spend the same amount of effort tracking how much you spent on almonds versus when you were in your 20s. However, you can see what happens if you don\u2019t put in some basic controls. Thousands of dollars on food. Disagreements about money. Susan\u2019s over here, sacrificing getting her nails done when that really doesn\u2019t add up to much money at all.<\/p>\n<p>[01:12:40] When you don\u2019t have control over your spending, you increasingly rely on feelings, which when divorced from the numbers themselves, lead to choices that are not aligned with your rich life. And that brings me to the poor decisions around investments. I told you doctors are known to be bad with money, and we talked about some of the reasons why, but that doesn\u2019t excuse it.<\/p>\n<p>[01:13:02] To be worried about money but be paying 1.24% AUM and a whole life insurance policy is a mistake. Fortunately, a very high salary solves many money problems. So with a few tweaks, I\u2019m very confident that Susan and Jeff are going to live their rich life. Now, let\u2019s hear from them.<\/p>\n<p>[01:13:23]\u00a0<strong>Susan:<\/strong>\u00a0I think what I\u2019ve learned is that I cannot worry so much about the money and having enough of it. I can relax that we\u2019re going to have what we need for retirement. And I think what surprised me most is certainly by really going through the CSP. We were shocked at how much we spent in groceries and dining out.<\/p>\n<p>[01:13:49] Also, we weren\u2019t saving enough, and we\u2019re not giving enough, and that is not in line with what our values are to do with our money, and so we are definitely working that into the CSP. And the specific changes we\u2019re going to make is that we already have an appointment with a fee-based financial advisor. I\u2019m going to call about the long- term savings accounts and move that into a different fund.<\/p>\n<p>[01:14:22] And we\u2019re going to get out of the whole life insurance policy and see what that\u2019s going to take, which is a little bit more detailed-oriented since we have the loan against that. I think we\u2019re also going to start doing family meetings with the kids, which seems to be my biggest emotional crutch, is saying no to the children and finding out a reasonable way to still let them enjoy money also and learn how to manage money, and not let my anxiety control that situation.<\/p>\n<p>[01:14:56]\u00a0<strong>Ramit:<\/strong>\u00a0And now, Jeff.<\/p>\n<p>[01:14:58]\u00a0<strong>Jeff:<\/strong>\u00a0Number one, what did we learn? I reinforced, or at least it was reinforced to me that we\u2019re still in a pretty good place. We have a really big shovel to dig ourselves out of any holes we dug ourselves into. And so that is always helpful. We could certainly be better situated both in terms of our spending choices today as well as our spending choices for the future, and we need to titrate both of those portions of the formula. But overall, I think we learned we\u2019re doing well.<\/p>\n<p>[01:15:33] Next portion is what surprised me. I think the biggest thing was that Susan\u2019s ability to express her understanding in a way that I didn\u2019t see when she and I have conversed ourselves. She\u2019s always come across as lost, and I think you describe it as the doe\u2019s eyes in your early podcasts, when we\u2019ve discussed privately. During our conversation with you, it was much more apparent that she understood more than she was willing to admit when the two of us were just discussing.<\/p>\n<p>[01:16:04] So I hope that continues and that she\u2019s comfortable in that knowledge and ability to express her understanding of that knowledge. Not really surprised me about the conversation, but the subsequent times, the difficulty of trying to get a family meeting like we discussed. And I loved the idea. And we intended to do that this weekend, but between activities, and friends over, and just finding some time to relax, it didn\u2019t happen. So it\u2019s on the schedule for next weekend.<\/p>\n<p>[01:16:33] What are we going to change? I think probably Susan expressed this best is my guess, is we\u2019ve changed some of our plans. We were looking at some renovations to the outside of the house and the outside living area, which we\u2019re putting on hold for the immediate and foreseeable future. And instead of finding a way to pay for that, we\u2019ll move some money into more aggressive investing. So that was number one.<\/p>\n<p>[01:16:59] Number two, we\u2019re scheduling a meeting with a financial advisor we trust to at least have the conversation and start moving in the direction of finding a fiduciary who\u2019s fee-based rather than a percentage AUM-based. And so those are the two biggest steps that we\u2019re taking right now and more remains to be seen.<\/p>\n<p>[01:17:22]\u00a0<strong>Ramit:<\/strong>\u00a0 A couple of reflections. First of all, love the overall follow ups. I\u2019m a little surprised at Jeff\u2019s comment that Susan seems to not have been as open about her financial knowledge than when she finally came on the podcast.\u00a0 I\u2019m not sure what to make of that, but I\u2019m hoping that this is a new chapter where they both have a mutual respect for each other when it comes to their money.<\/p>\n<p>[01:17:41] The renovations, we didn\u2019t even touch on that. The missed money meeting is a red flag for me, one missed meeting turns into two, which turns into five. Of course this can be fixed. Just make sure you put it on the calendar and keep it sacred. Jeff, Susan, don\u2019t lose your momentum to make real change. I feel confident if you get aligned and you make these changes consistently, you\u2019re going to be much, much more comfortable with the considerable income and net worth that you have built.<\/p>\n<p>[01:18:11] Thank you again, Jeff and Susan. If you are looking for a fee-based financial advisor, check out Facet. Facet just created a new exclusive offer just for, I Will Teach You to Be Rich listeners. They\u2019ll waive the 250 enrollment fee for new annual members. And for listeners of this podcast, they\u2019ll give you $500 in your brokerage account when you invest $5,000 within your first 90 days. Learn more at facet.com\/ramit. Sponsored by Facet. Facet Wealth Inc, or Facet, is an SEC registered investment advisor headquartered in Baltimore, Maryland. This is not an offer to sell securities or investment financial, legal, or tax advice. Past performance is not a guarantee of future performance. Terms and conditions apply.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Jeff is 50, he\u2019s a specialized surgeon. Susan is 48, she stays at home with their two kids. Their discretionary spending has grown over the years, ballooning at an uncontrollable rate. But their biggest issue is that they\u2019re being taken advantage of by a percentage-based financial advisor. This episode is brought to you by: Facet [&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-118947","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\/118947","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=118947"}],"version-history":[{"count":0,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/118947\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/media?parent=118947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/categories?post=118947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}