SPI 851: How to Build Wealth as a Couple with Ramit Sethi

SPI 851: How to Build Wealth as a Couple with Ramit Sethi

Ramit Sethi: There was a couple who came to me and said, “We are in over half a million dollars of debt, can you help us?” I was, like, “I’ll help you, but you gotta do it live on video.” Couples coming on live, talking about the most intimate issue of all, which is money.

Most couples have never, ever had one substantive conversation about money. Never! We don’t talk about money in this household. Wrong! You would never say that about riding a bike. Oh, we don’t talk about how to ride a bike in this household. No, you want to put them on that bike and learn and they’re going to fall. Same thing with money.

50 percent of the people I talk to on my show do not even know their household income. 50! How can you ever expect to be confident if you’re not competent?

Pat Flynn: That is my good buddy Ramit Sethi who has a new book called Money for Couples and I wanted to bring him on to set a lot of you up for success and to also dig a little bit deeper into certain decisions that he’s made. Decisions related to his Netflix series, decisions related to his podcast and going video first in that sort of format, and also his decision to get a little bit more prominent with his political stance on platforms like X. It has definitely caused a divide and has drawn a line in the ground with his audience. And I wanted to investigate this a little bit and see what the ramifications and consequences of any there may have been.

So before we get into the interview, I do want to address up front here that we are in a transitional period with the podcast. If you’ve been a long time listener or have listened to more recent episodes, you will know that we are changing the format. So it’s a little bit different today. We don’t have our normal intro, but most of the episodes moving forward are going to be solo episodes with me, teaching in a more keynote style, very specific episodes about certain topics, versus a more general episode, and we will still have interviews from time to time, so keep that in mind, but we are changing it up, but this episode here obviously is an interview with Ramit Sethi from, IWillTeachYouToBeRich.com We needed to get these ahead of time before the break to edit and have ready. So again, bear with us as we make these changes moving forward, but stick around because we’ve got some great stuff coming your way and that includes this episode right here with Ramit. So. Here he is. Let’s get started.

Announcer: You’re listening to the Smart Passive Income Podcast, a proud member of the Entrepreneur Podcast Network, a show that’s all about working hard now, so you can sit back and reap the benefits later.

Pat Flynn: Ramit, welcome back to the SPI podcast. Thanks for joining me on the first episode of the year, my friend.

Ramit Sethi: Thanks for having me back. It’s a total pleasure.

Pat Flynn: Before when we’ve had you on the show, we’ve talked about pricing strategies. We’ve talked about business strategies. You’re coming out with a new book that really got me excited about talking about a new topic with you.

And that is Money for Couples. You know, I am a married man and there’s a lot of people in the audience who are married or who have spouses or partners or who will have in the future. And I think, and I know this from experience as well, a lot of those conversations about money never happen and then can lead to problems.

And we’ve seen these problems on your podcast. You have this incredible, I always use, Ramit, your video podcast on YouTube as the prime example on how to do a video podcast if you’re just doing it remotely. So first of all, I just want to commend you and congratulate you for the success of that show.

How has the YouTube and podcast front been going for you?

Ramit Sethi: Honestly, it’s amazing to hear that because you’ve been in the game for so long, especially on the podcasting side. I’m pretty new to it. And you were one of my many podcasting friends who was like, you gotta get on the podcast world. And I just wasn’t ready, I didn’t have an idea.

Until COVID hit, everyone was doing Instagram lives, and there was a couple who came to me and they were veterinarians, and they said, we are in a terrible financial position, we’re at over half a million dollars of debt, can you help us? I was like, I’ll help you, but you gotta do it live on video. I didn’t expect them to say yes.

And they were like, okay, I was like, what, really? And in the first two minutes, I knew this is the podcast. So couples coming on live, talking about the most intimate issue of all, which is money from behind closed doors. We talk about numbers. Often people cry. We talk about childhood. It’s quite deep and intimate.

And adding video was kind of the second phase, which has been enormously connective. Like I always saw the couples on video, but everyone else just heard them for the first 60 or so episodes to be able to see a couple in person, see their body language, see them look down or look away or, or even connect.

It’s incredible.

Pat Flynn: I know you look deeply into the psychology and the body language of people. And it’s really great to see that on video. Did the video interviews happen before the Netflix series came out or was the Netflix series, I’m so curious about how the Netflix things happen. Like, can you go through that story really quick before we get into some specifics?

Ramit Sethi: Of course, during COVID, I got an email from Netflix. And they said, Hey, have you ever thought about doing a show, also, do you have representation?

First of all, I didn’t really know what representation meant. Like I’m an internet guy. And I also didn’t believe that it was from Netflix because there’s a lot of production companies in Hollywood. So I double clicked the from part of the email and it said @netflix.com. I was like, Oh my God, the only emails I get from Netflix are what’s new this weekend.

So I, I took the email. I remember I went downstairs and I showed my wife. It was a star struck, shocked moment that Netflix was contacting me. And I said, like, look at this. What do you think? And I have to tell you, my inclination was just to say no. Just kind of intuitively, because internet guy, I know my little corner of the internet.

I know how it works. This was a whole different level. And I had to give credit to my wife, Cassandra, because she, she said, like, what do you think? And I was like, I don’t know. She goes, you’ve been doing this almost 20 years, don’t you think you’re ready? And that kind of got me thinking, Oh my God, maybe I am ready.

I’ve done the internet thing. I’ve done the book thing. Let’s take it to the next level. And ultimately I had an amazing time shooting it. Shooting for a show is so different than what I’ve done before. We had a crew, the entire crew, they spin it up and it’s, like, you could say if you count everybody, like maybe 50 people total, there’s cons, there’s editors, there’s cameramen, there’s producers, showrunner, and the way that people think for TV is so different than the way they think for internet.

The best part for me though was being able to go into people’s homes, in the most intimate setting of all, which is their own living rooms, and work with them for months and months to help them improve their relationship with money. That’s why we called it How to Get Rich.

Pat Flynn: How much control did you have over the content and the creative?

Or was that all something that you just had to kind of follow Netflix directions for?

Ramit Sethi: No, I was an executive producer, so I did have a strong say in, in how it worked. I will admit, when you do this something for the first time, It’s happening so fast, you almost don’t know what the boundaries are. It’s like going to a workout class.

You go to a Barry’s boot camp for the first time, you’re just trying to figure out what the hell’s happening for the next 25 minutes. So part of the show was just understanding what’s the process of looking at dailies and giving feedback? And there’s this funny moment where they sent a rough cut, which is kind of like a preliminary version of an episode and everybody gives feedback on it or the EPs and the network and things like that. My feedback was like two three pages like extremely detailed. I like working I want to give specific feedback and my friend who’s a showrunner. She just laughed and said like, just wait.

By the end of the show, you’re not going to be giving that kind of feedback. And it is true. By the end, the feedback is like three lines. It’s like, that doesn’t make sense, there’s a continuity error here, da da da. And you really have to focus on the stuff you can control, but you also know that there’s lots of other people looking at it.

People who are the best in the business at their game.

Pat Flynn: How many people have seen that on Netflix at this point, do you get that data?

Ramit Sethi: Let’s just say millions, millions and millions of people.

Pat Flynn: Millions and millions. And how has that affected your life? What’s life post Netflix?

Ramit Sethi: It’s actually been amazing. When I’m walking on a street in New York or in LA, people have come up for a long time because I’ve been on YouTube and I’ve been on social media. But I’ll say the most amazing thing is that the people who come up to me are totally diverse. Like completely. There are people who probably will never find my newsletter or even my YouTube channel.

But they find me on Netflix. And I’m talking every different age group, socioeconomic, everything. To me, that’s the most amazing part of being on a major network. You get access to people who probably would just never find you. That makes me feel amazing.

Pat Flynn: That’s amazing. Well, congratulations on that. And I know the Netflix series definitely helped the book become a bestseller.

Almost like again, right? It was a bestseller on launch, then it left, and then it came back. And so now you have this next book, Money for Couples. Why was this book the book to write for you right now?

Ramit Sethi: Well, I think that couples and money is one of the most interesting topics there is. And there is not much out there to the level that I wanted.

So when I started talking to my wife about money, I thought it would be easy because I’m Mr. I Will Teach You To Be Rich, Ramit Sethi. And it actually was pretty challenging. You know, we ended up signing a prenup and going through that process was incredibly challenging. We ended up seeing a therapist.

And that was so helpful. She asked us this question, I’ll never forget. The question was, how do you both see money? And she pointed at me first. I knew the answer, right? Like, I didn’t miss a beat. I was like, I could see the rule of 72 floating in front of my eyes. I could see compound interest. It was so obvious, okay?

And then she turned to my wife and asked the same question. And my wife said, safety. Safety? What’s that? What does that have to do with money? And that really opened up a different level of our conversation, which was how do we see money? How do we feel about it? And as a guy who was raised, like, I love a spreadsheet.

I love logic. We were not connecting in a way that both of us felt heard. And now that I have this podcast and Netflix and I speak to so many couples, I see these same exact patterns. I see, it tends to be men, but not always. There might be one partner who’s overly focused on the numbers. And I just see myself in them.

They go, look, it’s so obvious, don’t you see the math? And the other person’s just, they’re speaking a different language. And so to be able to help them connect, Oh, my God, what a gift to be able to bring them together and help them realize we will have enough money is meant not just to hoard it and to save, it’s actually meant to be spent living a rich life.

And when you see couples get it, and then they send me their follow ups, and they’re out walking, having a coffee, or they’re on a very beautiful vacation. That’s when you know they’re actually living a rich life together.

Pat Flynn: This triggered a memory for me. I was 13 years old and I woke up in the middle of the night to screaming downstairs and it was my parents having an incredibly aggressive fight over money, money being spent, money being, you know, just money in general.

And I remember going to bed crying because I thought my parents were going to get divorced as a result of that. And then I woke up the next morning and they were still talking. But they were laughing. They finally figured it out because they finally had a conversation and it took the threat of leaving each other in order to have those tough conversations?

What can a couple do to avoid getting to near breaking point to figure things out so that they don’t have to have an experience like that or traumatize their kids like they did for me?

Ramit Sethi: First of all, thank you for sharing that. And it’s no surprise because so many people who feel certain ways about money, they feel they’ll never have enough, or they constantly feel scarce, or worried, or anxious, or they overspend, it directly traces back to their parents. Directly. In fact, the first question I ask people often is, tell me, what phrases did your family use when you were young about money? Do you remember, Pat? What are the things they say?

Pat Flynn: We can’t afford that, or that’s for rich people, or, you know, there’s a cheaper version of that, or you could save your money.

Ramit Sethi: Whoa! Classic!

Pat Flynn: They’re burned in my memory, dude.

Ramit Sethi: Yeah! And that’s, that’s what’s amazing. So, so many of us grew up with these beliefs. You hear a parent say, we can’t afford it one time, ten times, a thousand times. You really internalize that. And I’ll meet couples who have literally millions of dollars. I talk to couples who are in half a million dollars of debt or they have ten million dollars in the bank.

You never heard conversations like this. And they will express completely bewildering behavior. I comparison shop for strawberries. I have a spreadsheet of fruit. Why is it cost this much? No, we’re never going to have enough. And I’m looking at their numbers and you would be looking at their numbers on the podcast and you go, this does not make sense.

Well, it actually makes sense if you trace it back to how they grew up. And often the numbers change faster than our psychology. So I think the reason that all this is so interesting is that a lot of your audience, entrepreneurs, or they’re thinking about money. And eventually, it’s not just about building a business, it’s about what are you building it for.

And part of that has got to be money. So whether you are solo today, and one day you may be in a partnership, or whether you are in a relationship, that money part is really, really important. It’s not something to be shied away from. That’s a thing that so many people do because they learned it from their parents.

We don’t talk about money in this household. Wrong! You would never say that about riding a bike. Oh, we don’t talk about how to ride a bike in this household. What? I want to protect my kids from riding a bike. No, you want to put them on that bike and learn and they’re going to fall. Same thing with money.

We talk about money in this family because it’s important to us. Sure. We may have made mistakes. We may be in debt. Here’s what we are doing about it. And here’s what your role is in this family. That’s how you start to build connection between the two of you. And then eventually, potentially, with children.

Pat Flynn: So having that open conversation is going to be key.

However, I know that it’s not always easy to have that money conversation, especially if somebody is the financial sort of numbers based person and the other person, it seems like a different language to them. How do you even initiate a conversation like that without it already causing problems from the get go?

Ramit Sethi: So one of the things you know I love is scripts. And I love once in a while you reference the credit card script that you used for my first book. I love scripts. Because I’m just like, just tell me what to say. Come on, don’t tell me all these big words. Clarity. Just tell me the exact words to say and even tell me how to say it.

So that’s what I do in all my books. So, in Money for Couples, I have scripts including how to have your first positive money conversation. You have to remember that most of us believe we need to have the conversation as if you’re only going to talk about money once. It’s ludicrous when you really think about it.

You’re not going to just talk about kids once, you’re not going to just talk about money once. And then the way we talk about money is we only talk about it when there’s a problem. Why did you spend that much at Target? I can’t believe you didn’t leave that much in the checking. Wrong! We got to start talking about it regularly, positively, and proactively.

So your first positive money conversation goes something like this. You know in the past I think that we’ve talked about money, but we haven’t really connected. And it’s so important to me that we get on the same page. Here’s why I think our conversations about money are gonna be awesome. Because it will bring us together, because we can create a vision together, and we can actually have fun.

What about you? Notice me tossing the ball to the partner, okay? A lot of times when I hear couples talk about money, it’s just one person saying it, and then it drops with a thud. We gotta toss the ball back and forth. So the other person says, here’s why I think this is gonna be awesome. Next thing you say is, how I feel about money today, each of you says that, and a lot of times people get quite vulnerable, I feel ashamed, I feel behind, and the other person goes, I feel fine, but I don’t know why you feel that way, okay cool, how I want to feel about money, that’s the third thing, I want to feel confident. I want to feel competent. I want to feel calm. And then you give each other a hug and say I love you and that’s it. You don’t have to talk about everything. You don’t have to get down to the level of your individual investments in your first conversation. Literally give each other a hug and that’s it.

Leave on top is one of the core philosophies of Money for Couples.

Pat Flynn: That’s so smart. I love that. So, again, I recommend everybody check out your podcast on YouTube. It is a thriller every episode. And first of all, the hooks are amazing. But then, like you said, you get into the psyche and you get to see these couples who are just not on the same page and you could clearly, I mean, from the outside, it’s like, come on, like, we’re almost like yelling at the screen. Like, how have you not had these conversations before? But when you’re in it, it’s, it’s difficult. There’s a lot of layers and vulnerabilities. And how often do you find, do some of the couples that you interview, like hide something from the other person, like a embarrassing thing that they might be spending money on that they didn’t want to tell the other person, or, you know, some habit that probably isn’t great that they just keep spending money on. Is that, is that a common thing that you’re finding?

Ramit Sethi: Not as much as you would think. The idea that, you know, there’s one person secretly hiding spending is relatively uncommon. Really, what’s much more common is that one person came to the relationship with their own random beliefs about money.

They don’t even know what they believe about money. They kind of spend a little bit here, they spend a little bit there, they derive most of their feelings about money from how much is in their checking account, and that’s about it. So if I ask them a question like, what is your philosophy on money? They would look at me like I’m speaking Klingon.

Philosophy on money, what are you talking about? If I have enough to have a nice dinner a couple times a week, I’m good to go. That’s the extent of most people’s philosophy. Then, you combine that with another person who has a similarly disjointed, incoherent philosophy, but both of them grew up differently.

So you could be looking at the exact same numbers with your partner, and one of you might be totally anxious and worried, and the other’s like, we’re good. And you bring that together and suddenly you do not have a vision. So the most common problem with money and couples is that the couple lacks a shared rich life vision.

One of them wants to save. Save how much? They don’t know. Save for what? They don’t know. Just save, save, save. Okay, the other goes, I don’t even want to think about money. Money is only talked about when there’s a problem, so let’s just not talk about it. And the two of them are at odds. So the good news is that I actually love helping couples in these situations.

I help them create a vision together. What is your rich life? How do you want to feel? What would it mean if you could use money and be on the same page? And then they start talking and they, they realize most couples have never, ever had one substantive conversation about money. Never! These are couples often who have been married 25 years.

They have jabbed each other. They’ve asked questions when there was a fight, then they paper over it the next day, but they never sat down and said, what is our money for? What would make our lives rich? What kind of values do we want to create between ourselves and for our children? Never had that conversation.

And that is the gift that I get to give them.

Pat Flynn: April, my wife and I, we had conversations even before we were married about what life would look like with kids, what we would want to do, where we would want to be. And we found out both very quickly that we didn’t want a giant house or, you know, fancy cars or anything like that.

We wanted experiences, right? So our rich life is traveling. And when we travel, We don’t care that we’re spending maybe a little more than others on the food there and the VIP experiences at different places. But then we, we totally save money in other places where things we don’t care about, right? We don’t necessarily care about the cars or the fancy materialistic things.

We’re all about experiences. And to understand that that’s both what we wanted up front was so helpful because then we could see even in our checking account getting to the details like, hey, we have this much money saved up for this upcoming trip. And then it inspires us to maybe not have those little things that we’d want to spend money on so that we could have an even bigger experience when we go and travel.

And that was so key. And I feel like I learned a lot of that from you. You taught me when I first came across your brand a long time ago, I was not a big fan. And I don’t know if you’ve heard me tell this story before.

Ramit Sethi: You’re telling me that I Will Teach You To Be Rich made you think does this sound like kind of a scam are you telling me that.

Pat Flynn: It left that impression on me for sure then I met you at FinCon dug deeper into your stuff read your scripts This stuff was actually working and saw that I actually didn’t understand what you meant by a rich life It wasn’t about having loads of money.

It was about having a fulfilled life. Yes, and When you have the dreams that you want and you’re partnering with somebody else who has their own dreams, you have to have these conversations, you have to talk, thankfully, April and I were aligned on a lot of that stuff. What happens if you’re not aligned?

If you have these conversations and you find that you kind of both have different dreams that could lead to, I’m sure, fights or just awkwardness. How does one work together with the other through something like that?

Ramit Sethi: The good news is, you and your partner do not have to agree on everything. At all. What a relief. So, I have a concept called money dials.

Money dials are the things you love to spend money on. And you can turn that dial up, or you can turn it down. And my wife and I, we do have some similar money dials, but we also have different ones. She loves to spend on self care. I love to spend on beautiful hotels. Those two are totally different. The good news is we don’t have to agree on all of them.

Because, one, we talk about what is our commonality. We do have some core values that are really important to us, such as relationships, surrounding ourselves with beauty, fitness, Those things are important, so we make sure to put time and money behind it. But we also set our accounts up, like I talk about in Chapter 9 of Money for Couples, how to set your accounts up as a couple so that it actually backs up your vision of a rich life.

She has her own independent money that is her own, no questions asked. And I have the same thing for me. And that can be used for our money dials. So, I think that there’s actually a really good answer for people who do not share the exact same things they love to spend, which is that’s okay. You can create space for each of you to live your individual rich lives, but what’s more important is to create a shared one together.

Pat Flynn: I want to address the fact that maybe you and I have spoken so far in the world where there’s maybe lots of money available and then we just kind of choose, okay, where do we want to put this money? But how do we speak to and let’s bring it back down for the sort of average person who perhaps is living paycheck to paycheck?

What are the kinds of conversations that couples need to have? Maybe because they’re not So close to living their rich life yet, but they both want that. They’re in the trenches. They’re working hard and they’re trying to make ends meet. What are the conversations that are happening around that, around that time?

Ramit Sethi: Let’s remember that you can live your rich life today and a richer life tomorrow. You can live your rich life while you’re in debt. You can live your rich life. If you’re not making a lot of money, there are plenty of people I know. We’re not making six figures and they are living a very rich life. Money is an important but a small part of a rich life.

So let’s just remember that when I was in my early 20s, for me a rich life was being able to spend money on appetizers. That was personally meaningful to me and it cost like 10 bucks. So what I find when I speak to couples who are either in debt or do not have an abundance of a high income, what I find is this, the most common scenario is that they look at their finances month to month.

That’s it. So if I ask them how much will you have in an emergency fund six months from now, they don’t know. How much will you have invested in December? They don’t know. Or certainly 30 years from now, they have no idea. It’s like driving in the fog, only able to see 15 feet down the road. Think about what that does to you.

You’re sitting there intensely focused on what’s happening right in front of you. And if I ask you, Hey, is the next gas station five miles or 15 miles down the road? You can’t even answer me. Because you’re just going like this, clenched fists. Part of living a rich life, even if you don’t increase your income, even a single dollar, is to give yourself the room to zoom up and look on an annual basis.

So I created this Conscious Spending Plan. It’s this free spreadsheet that you can use and it has a different way of looking at money. Most people have never looked at their money understanding four key numbers. These are the four key numbers that matter. Which is your fixed costs, should be 50 to 60 percent of take home pay, ideally. Your savings, which should ideally be five to 10 percent of take home pay. Investments, 5 to 10 percent higher is better because that’s where the real wealth is created. And then guilt free spending. That’s going out, travel, buying a beautiful shirt, 20 35 percent of take home pay. Now if I ask most people their four key numbers, they have no idea.

Because they are simply trying to make it the next few days clenching their fists on the steering wheel. The challenge to you if you want to live a rich life is you got to zoom out, put your numbers in this categorization and start looking at it on an annual basis.

Pat Flynn: Thank you for that. And that’s, of course, in the book.

And where was that spreadsheet? Is that like on your website to grab?

Ramit Sethi: Yeah, you can just search for Ramit Sethi conscious spending plan and you’ll be able to download it for free.

Pat Flynn: Now, I want to ask a question on behalf of the people in the audience who want to start a business and they’re afraid to talk to their partner about that.

I find this scenario pretty common because a person might come across SPI or another person who’s done really well in business and they have an idea and they don’t want to look stupid or even be belittled for doing something that’s different than what is actually currently making money, right? No, like we’re watching this K drama.

Which one? Right now, called Startup. Oh, highly recommend. By the way, we’re almost done with it. So but in the beginning, there is a couple and the dad, the father wants to start a business. But the wife was like. No, because it’s not guaranteed that you’re going to make money from this thing. He wants to go all in on it.

He sees an opportunity. She’s like, no, you’re going to support this family with the money that you’re making from your nine to five. And they ended up splitting up. It’s in the first episode. So it’s not a big spoiler, but I find that to be pretty common. I have conversations with a lot of people who maybe they don’t get to the point where they’re splitting up, but they’re at least having these conversations or are afraid to have those conversations about a perhaps new direction in life and they don’t want to let the partner down either because you know, I can imagine a person not going down that route because what if they fail then they’re going to let their partner down and look bad, so how do we navigate the psychology around that?

Ramit Sethi: Okay. I love this question because ultimately business is not about conversion rates or even customer accounts.

It’s about who you are, who your partner is, who you are serving. It’s much deeper than just numbers on a page. And I find that the pattern between couples, when one is thinking of starting a business, is identical to the pattern between couples when they are fighting about money. So with money, you will have a couple who, their primary argument is about something like, why’d you spend so much at the gas station or Target?

And they will literally fight about this for 25 years. The same freaking argument and you know, it’s kind of funny, ha, ha, ha, a couple fighting about Whole Foods, ha, ha, ha. It’s not funny. It’s actually keeping you small by fighting about that, which is much easier to fight about than to actually have serious vulnerable discussions about what does money mean to us?

I’m afraid that we’re never actually going to be able to retire. I’m worried about what my parents taught me and I haven’t been able to shake those messages. Same thing with couples arguing about business. It’s like each couple goes to the corner of the ring, and one says, you’re gonna provide for this family, and the other says, but I have a great idea.

But how do we know it’s gonna work? Well, we don’t know, but it’s about taking a risk. It’s all just random, arbitrary words. I’m like, where’s the intellectual rigor here? Let’s freaking break it down. And in order to do that, you need to actually have some substance to talk about. Feelings matter. Feelings are real.

But sometimes your feelings are not enough. In fact, sometimes your feelings lead you astray. You can’t simply make life decisions by saying, that’s too risky. How much risk? Tell me the numbers. Let’s combine feelings with numbers. So I might go something like this. I might say, over the last couple months, we’ve been going through Money for Couples.

We’ve talked about what our rich life is. Our rich life is flexibility. Our rich life is connection. That means like two of us can spend time. Our rich life is loving our children, which means spending time with them. Okay, great. I have this opportunity. I want to start a business. Now, I know that in order for us to have flexibility, we need to be safe.

That means, as we talked about, we agreed on having a six month emergency fund. Right now, it’s at four months. I would like to become more aggressive about saving. For the next few months, I’d actually like to get that emergency fund up to seven months. I want to give us a little bit more of a safety net because I would like to start a business.

Here’s what it means for us. Here’s how much risk I’m going to take. I will give it X month, and this is the revenue that I plan to target. And if it doesn’t work by month four, I will close it down and I will come back and find a W 2 job. I will never put our family at risk, but I want to work with you. I want to have connection with you so that I can take this risk.

That is how you talk about it. Notice, Pat, it’s so different than just, I don’t know, it’s so risky. No! We got to be specific. And that means you have to have done the work of what is our rich life? What is our financial numbers? We got to know our numbers. How much? Do we have in the bank? How much do we need?

What’s our emergency fund? What are we working towards? And then you can start to make big life decisions.

Pat Flynn: Beautiful. I mean, in that scenario, you’re not making it feel like it’s a selfish ask to start a business. We’re doing this together and I, and this is the idea that I have. Here’s how it’s gonna affect us.

And you’ve almost kind of gotten in front of what the objections probably would be by addressing those things up front.

Ramit Sethi: One important thing to remember for couples is you’re not a lawyer litigating with your husband, wife, boyfriend, or girlfriend. You’re not trying to put them in the corner and intellectually eviscerate them.

Okay, that’s not the point. It’s the point is the opposite. You’re actually trying to build connection. So rather than tricking them into agreeing, which is never a good sign for a partnership, you’re trying to always echo the North star. What is our North star? What is our rich life? Here’s how I think it’s fits into the rich life.

But tell me, maybe I’m missing something. Maybe we see it differently. If you think that we should have eight months of an emergency fund instead of six months, we could talk about that. I’m definitely willing to work extra. I want to, I want you to feel good. I want to feel good because we’ve got to do this together.

That is the general philosophy when it comes to making big lifestyle decisions.

Pat Flynn: If you know where you want to go together, then it’s going to be a lot easier to make those decisions to that destination. Do you have an example from somebody on your show or a couple that you’ve worked with who wasn’t defined in their rich life, but then when they were things like ultimately just changed for them as a result of that?

Ramit Sethi: Yeah. And sometimes it changes in a good way and sometimes it changes in a bad way. And personally, I think that’s the beauty of the podcast and the book, which is not everything is tied up with a bow. So, as an example, we had a couple who struggled to talk about money and struggled to get on the same page about living together and spending their money together.

And at the end of every show, we have a follow up. And in the follow up, it was quite striking. I don’t even see the follow ups until the very end when I’m recording my voiceovers. And he said, you know, thanks for the call, it really gave me a lot to think about. And then her follow up came right after that and she said, thanks for the call, I realize that we’re not on the same page, and for that reason we have separated.

Wow. Now, that couple, fortunately, was young, had not committed a huge amount, but I think it’s important. I think that really shows how serious money is. On the other hand, we have really beautifully positive examples of couples. We often have couples that one or both partners grew up with scarcity around money.

And while their earnings have increased and they’ve invested and saved a lot, maybe they’ve been successful in their careers, they cannot bring themselves to spend money. And a lot of times they come on kind of expecting me to give them a pat on the back. Oh, you’re so frugal, so cool, good job. Wrong! I tell them straight up, I ask them, do you know you’re rich?

And they go, rich? No, I mean, we’re comfortable. I’m literally looking at their numbers, it has like 50 zeros in it. I’m like, you’re more than comfortable. Let’s get honest. So first off, I make them acknowledge how successful they have been. They’ve worked hard, maybe they were lucky. A lot of it comes into play, but you gotta admit, where you are if you want to have a good path forward.

And then next I ask him, like, what is your rich life? What do you want to do? And they always, you know, I want to have freedom. I want to not worry about money. I go, how much money do you need to not worry? Couples say something really interesting. They always they’ll say, like, hopefully like 50,000 more or like maybe when we have like 100,000 more.

And I always talk to couples who have 100,000 more, a million more. They never feel any different about money. The way you feel about money is highly uncorrelated to the amount in your bank account. And so what I helped them realize is, it’s actually a tragedy to live a smaller life than you have to. You know, you’re sitting over here worrying about the price of a coffee.

When you were 21 years old, I get it. You don’t have money. I didn’t have money. But when you are grown up, you’ve worked hard, saved, invested, it’s actually a tragedy to still be worrying about those 3 questions instead of focus on those 30,000 or 300,000 questions.

Pat Flynn: Do you think a lot of that is because, I mean, at least for me, I had trouble spending early on.

Because I was worried I wasn’t going to get that money back. Like I wasn’t, like my business was going to fail or, you know, I had gotten laid off. It just all got taken away from me in 2008. So I always had that mindset of like, Oh, this money is money I might not get back. So I’m just going to hold on to it just in case.

I’ve realized over time that I do have what it takes to, if I were in a crunch, if I lost everything today, I could go make money. And I know I can do that. I can figure it out. And so I’m not worried about that anymore. But it took years of me getting over some old habits and old conditioning to believe that.

Do you find that to be the case like this hoarding nature of, of us as humans? Just like if you find a bush with berries, you know, while you’re scavenging, you like take it all and then kind of you’re like worried about not finding the next bush.

Ramit Sethi: Yeah, and I think that it’s quite interesting because it cuts across different socioeconomic status in a different way.

So oftentimes, you know, one of the things I love about the podcast is we actually get to talk about these very concepts. In light of a couple on the show. So here in America, we rarely talk about class structure. Socio economic class structure. But on the podcast, it is so obvious you cannot avoid it.

We’ll have a couple where one person grew up poor, and he’ll often say, Oh yeah, I don’t worry about being poor because I’ve been there once and I can do it again. That’s very common. In fact, by this point, after talking to so many couples, after they say a few sentences about their thoughts on money, I can almost with pretty good accuracy, guess how they grew up, how much money they had, and even what part of the country they grew up in.

For example, the Midwest has very particular money mores versus somebody who grew up wealthy in, say, California. That’s also quite identifiable. So, these things become quite interesting, but you’re exactly right. That this scarcity, is taught, it’s often observed in our family. So it might be your parents, it might be some uncle that became a family legend because he lost all his money or an aunt.

But also, there’s one other thing. In order to be confident with money, you have to be competent. So many people don’t make the connection between the two. They go, I want to be confident with money. I go, cool, tell me your numbers. They don’t know. 50 percent of the people I talk to on my show do not even know their household income.

50! How can you ever expect to be confident if you’re not competent? And that means knowing the basics. How much do I make? What’s my savings rate? At what exact month and year will my debt be paid off? These are basic numbers. They’re not that complicated. I teach them all in the book. You need to know those so that you can be confident through competence.

Pat Flynn: Love it. Thank you, Ramit. As we finish up here, I have a question about something different to ask you. I’ve been noticing on social media lately that you’ve been very kind of open with your political views. We’re not going to talk about politics here, but rather the exercise of being open with your views on certain things in the world.

And it’s, you know, at the time of this recording, it’s a few weeks before the election or a couple of weeks. So it’s kind of hot times right now. So I see you not avoiding those conversations like a lot of people do and often they say, don’t mix business with politics, but you’re exactly doing that. I just love your take and your mindset around that.

Why are you doing that? When it literally creates a divide? I see it. People are not fans of yours because of certain things you say about political views, which In many cases, people would say, don’t, don’t talk about that. You’re, you’re pushing people away from you. Why?

Ramit Sethi: Well, I will say whenever I post about politics, one of the recurring comments I get is stick to finance.

The idea being shut up and drip.

Pat Flynn: Yeah, it’s the same people seeing that every time you say something to like, I noticed there’s recurring characters who always reply to you and they kind of like, I don’t know, they’re just showing up and trying to play that opposing force for you each time.

Ramit Sethi: I don’t find them particularly smart, and I don’t find their argument particularly compelling.

First of all, who are you to tell me to stick to anything? It’s my channel, I’ll talk about what I like. But more importantly, the idea that money and politics are separate is simply nonsensical. Money is inherently political. Politics is why healthcare is so expensive. Politics is why housing is so extensive. Politics is inextricably intertwined with taxation, immigration, education, and on and on and on. So the idea that somebody would tell me to quote shut up and dribble or stick to finance, it’s always the same type of person by the way. They come out, say this thing, they sort of don’t expect me to engage with them. But I do, and I love it. I do it for a couple of reasons. One, I want to show people that it’s not scary to talk about politics. You shouldn’t be scared and you shouldn’t be intimidated. Okay? If a guy like me who has a business and has almost certainly lost some customers because they didn’t respect my views then that’s Then it’s fine.

I’m still here. I’m still happy. I’m having a great time. Second, who would I be if I’ve been successful, made all this money, and I can’t go out there and talk about how important it was that my parents who are immigrants should not be demonized? I think that’s really important. And third, I got to tell you on a personal level, when I was in college, I studied social psychology.

I studied the psychology of cults, lying, deception, and I have conversations with a lot of people through direct message. I find it fascinating to hear how they think. I’ll have these conversations oftentimes for months with different people. And I’m talking about a lot of people. So it’s not a sample size of one or two.

It’s literally thousands over the last 10 years. Sometimes I post the conversations because. I want people to see, not a poll, not a statistic, but what an actual person believes. I think it’s important. I think politics is not something that can be separated. I think it is who we are that determines our money, it determines our family, it determines where we live, how safe we are.

I want to basically show people you can be wealthy and still advocate for higher taxes on the wealthy, like me, my taxes should go up. You can be successful and still advocate for building much more housing so that the young, the poor, the middle class have more housing. And you can be a man and advocate for reproductive rights.

I don’t have to be a woman to, it’s important for everybody. So I’m unapologetic about it. I continue to do it. I also donate. And I think it’s important for everyone to embrace politics, not shy away from it.

Pat Flynn: Yeah. No, thank you for that. And you know, I find as many quote unquote enemies you’re creating as a result of your views on things, you’re also gaining so much more loyalty from people who do believe and do follow along and, you know, are in agreement with you.

Ramit Sethi: I will say that although when I first started talking about politics, I got some pushback. Truthfully, the vast majority of my audience, vast, prefers that women have reproductive rights. They prefer that the ultra wealthy and wealthy are taxed more. They prefer a variety of the thing. They prefer more housing, access to education, health care.

So it’s not actually controversial. These things. The way I see it, it should not be controversial. Should we feed children in public schools? Yes. That should not be controversial. So the fact that people say stick to finance, you can tell that I don’t take them seriously because children being able to eat, that is politics and that is important and we should all be talking about it.

Pat Flynn: Ramit, thank you so much for just sharing the insights of kind of your journey here and what you’ve been up to. And thank you for Money for Couples. I’m definitely going to pick it up. Even though April and I have worked through things and figured things out along the way, I think there’s going to be still a lot of things in here that are going to be useful for couples who do seem to have it figured out.

And it’s especially obviously important for those who are just getting married or just starting to form families together. Do you have conversations in the book related to starting a family and kids and the costs that come with that and that sort of thing as well.

Ramit Sethi: Yes, including what kind of culture do you want to create for money with your children, including when to talk about it, what to say.

So these are very specific scripts that you can use not only with your partner, but also with kids, with loved ones. Yeah, for me, I think that money should be fun. It’s not something to be shied away from. It’s not something to protect your loved ones from. Money is life. That is important. It allows us to live under a roof.

It allows us to eat healthy food. It allows us to be physically active and experience a sense of awe and to be safe. And so for that reason, money should have a light shined on it. And we talk about it in a really positive way.

Pat Flynn: Release date, December 31st. So by the time you listen to this, it is available.

Rameet, where should people go to check it out?

Ramit Sethi: You can get it on Amazon. You can get it at Barnes and Noble or any indie bookstore. And I am very excited for couples to start the year off right with Money for Couples, talking about money in a beautifully healthy way.

Pat Flynn: Let’s go. Thank you for this guide, Ramit.

I appreciate you always coming on the show and looking forward to hanging out with you again soon.

Ramit Sethi: Thank you so much.

Pat Flynn: Alright, I hope you enjoyed that episode and interview with Ramit Sethi. Definitely some hot takes with the political stances there. And if you want to follow along, you can find him on X at Ramit Sethi.

Almost a daily thing for me is reading his responses to some of his audience. And he’s got a lot of raving fans, but he’s got a lot of people who dislike him as well. And I’m excited for his new book. I think this is very important as somebody who’s been married for 16 years now. I can say that definitely conversations about money are very, very important, and it’s important to have those kinds of conversations up front and to have some guide rails in place.

Thanks to Ramit and his book and things like that is absolutely key because it’s about communication, right? That’s how you make it work. So anyway, thank you so much Ramit.

And thank you for listening. Happy new year to you, by the way. And I look forward to what’s coming in 2025. We all do here at SPI. We cannot wait to serve you and we’re gonna have a lot of fun doing it. Alright, cheers everybody.

Thank you so much for listening to the Smart Passive Income podcast at SmartPassiveIncome.com. I’m your host, Pat Flynn. Sound editing by Duncan Brown. The Smart Passive Income Podcast is a production of SPI Media and a proud member of the Entrepreneur Podcast Network. Catch you next week!