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1:01

to csp at iwt.com. And

1:03

make sure you're signed up for

1:05

the newsletter at iwt.com/podcast newsletter, because

1:08

I'm going to be breaking down the most

1:10

interesting examples that I get. We've

1:16

invested the majority of the money

1:18

from the house into an oil

1:21

operation. You

1:23

invested one million into

1:25

one fracking operation. Mm

1:28

hmm. Several different fracking

1:31

operations. I feel like the system

1:33

is rigged, right? Yeah,

1:35

against you. With all the

1:37

RRA's and 401ks and mutual funds

1:39

and money advisors. No, no, not that.

1:43

The oil game is rigged against you. No, see,

1:45

I don't see it though. I

1:47

see it like when the deck

1:49

is stacked against you and every now and again,

1:51

you get like a perfect hand and you go big

1:53

with it. And that's where I'm at. Actually,

1:56

she has told me I should get a job probably 10 times

1:59

and she. reminds me about every

2:01

other week that I'm under-employed. You're a

2:03

smart guy, you should be out there

2:05

making more money. It can't

2:07

wrap my brain around why he doesn't get

2:10

a job. Like, it's really hard for me

2:12

to understand that. I just want money saved. I want

2:14

enough to cover everything every month and a little bit

2:16

of extras. He wants the moon and the stars and

2:18

all the things in between. Welcome

2:24

to part two of my conversation with Sandra and

2:26

Brad. Sandra's 46, Brad is 48. And

2:29

they've been fighting about money for almost 25 years. Brad

2:33

has even contemplated divorce. She

2:37

agonizes over spending their

2:39

money every month. She

2:41

keeps spreadsheet after spreadsheet. He

2:44

used to earn $800,000 a year, but then their income dropped.

2:49

Unfortunately, their spending did not. And they

2:51

recently realized that the investments they'd been

2:53

making for about 25 years were

2:56

only getting them about 3%. And

2:59

they were being charged crazy fees. As

3:02

a result, Brad has taken their life

3:05

savings, about a million bucks,

3:07

and invested it into an oil

3:09

operation. I

3:11

just discovered that at the end of our conversation last

3:13

week. And so far, that

3:15

investment has been paying out. But

3:18

Sandra is extremely worried about

3:20

their finances. What you're

3:22

going to hear right now is Sandra

3:25

discussing a deep need for safety. And

3:28

Brad feeling like he's been forced

3:30

to make decision after decision to

3:32

play caterer. I

3:36

never wanted to sell our house. And

3:40

that was a really hard decision

3:42

to make because this is something I

3:44

don't think was on the application. When we first

3:46

got married within four years, we bought 23 rental

3:48

units. What?

3:52

Because we read Rich Dad Poor Dad and

3:54

we wanted to be real estate investors. And

3:56

we held on. Well, how many?

3:58

You must own. six or seven thousand

4:01

units by now because all you have to

4:03

do is buy a few units and then

4:05

cash flow them and then you just buy

4:07

more and then they just print money. It's

4:09

free, right? Yeah, it's so free. We

4:11

only had enough money to buy really old,

4:14

beat up ones and we're not fix it

4:16

people. And so it didn't go

4:18

well. Brad had some health challenges. And

4:20

so when we got to having 23, we

4:22

had some issues

4:25

come up and we sold them

4:28

all within about six months. We

4:30

intended to keep them like long

4:32

term and Brad got Bell's

4:34

Palsy and it was a really, really hard

4:37

time for us. And we had two little

4:39

kids and it just was too much. And

4:41

so we sold them and bought just a

4:44

regular single family home and moved into it and it was really

4:46

peaceful and it was a nice change. But

4:48

I think I've always looked

4:50

back and kind of wish we'd kept at

4:52

least a couple of the properties. And so

4:54

when we had just our one home left

4:57

and we were renting a house in Wyoming and he's

4:59

wanting to sell the one that we still have that

5:02

has appreciated so much, I just really didn't want to.

5:04

I felt very attached to

5:06

keeping it and keeping this house.

5:09

Do you know why you felt attached to it? It

5:11

felt safe to me. It felt like we'd have a

5:13

place to go back to. We didn't own very much

5:15

on it. It just felt secure. It felt very

5:18

secure to have this house. And would

5:20

you say it's fair to characterize your

5:23

desire with money primarily as

5:26

safety? 100%. Yes.

5:28

Safety, security. I spent

5:30

money saved. I wanted enough to cover everything every month

5:32

and a little bit of extras. And then what do

5:34

you think Brad's is? He

5:36

wants the moon and the stars and all the things in

5:38

between. Yeah. Okay. So

5:41

I've kind of had a couple of thoughts through

5:44

the last 25 years rumbling around my head,

5:46

but it's starting to clarify

5:48

for me. Maybe a

5:51

pattern that's happening here. Sandra's

5:54

desire for safety

5:56

and security are 10

6:00

out of 10. The only

6:02

way to really satisfy

6:05

that safety and security

6:07

is with a lot of

6:09

money. And that's been proven

6:11

out over a relationship together.

6:13

The only time where there

6:16

hasn't been like this constant

6:18

dread or fear or horribleizing

6:21

our financial situation is when there's a

6:23

ton of money, which

6:25

may lead to some

6:27

intense desperate acts, i.e.

6:30

23 rental units, oil,

6:33

commission-based jobs, event

6:36

businesses, etc. in

6:39

what might be a foolish attempt, but

6:41

an attempt nonetheless

6:44

to satisfy safety and

6:46

security. That

6:50

was as deep as

6:52

it gets. Is that the

6:54

first time that you've made that realization?

6:56

It's the first time I wrote it

6:58

down in that much clarity. One thing

7:00

I really applaud you for beyond

7:03

making the connection is that

7:05

you also identified some of your own behavior

7:07

as risk seeking. I love

7:10

that you made those connections. 23 rental

7:12

properties, commission-based jobs,

7:15

and then oil rigs.

7:18

All three have a very common thread through

7:21

them. I love that you

7:23

did that. And that's

7:25

impressive self-awareness. Sandra,

7:30

zooming out and reflecting, what

7:32

do you hear from Brad? I

7:36

hear that he believes

7:39

that he's doing these things for me and not

7:41

for him. I hear that he's

7:43

up against something that

7:45

is really challenging. That

7:47

it's how

7:49

can he ever make enough money to make everything peaceful

7:53

and happy for me? And that

7:55

it's kind of this losing battle that

7:57

he takes on things that

7:59

he's not. consider probably the word

8:02

you use is risky because he's trying to

8:04

seek that, you know, magic bullet

8:06

that's going to just make it all work. Okay.

8:11

If you want to say anything to each other, I definitely want

8:13

to ask you more questions, Sandra,

8:16

but I don't want to get in the way of the

8:18

two of you. This seems like a very important moment for

8:21

the two of

8:23

you. And I agree, it's important, but it feels like a

8:25

powder keg. If we start

8:27

peeling back layers, it's going to get, it's

8:32

going to go dark pretty quick. Would

8:35

you agree with that, Sandra? I think

8:37

it could, but I also think

8:39

that it is, it

8:42

is just pretty awesome that

8:44

you've spent the majority of your

8:46

life now trying to do something that makes me

8:48

happy. And I think that's

8:50

really sweet. I think it shows

8:52

that you really love me and you love our

8:54

family and you just really do want to just

8:56

take care of us. And

8:59

that's awesome. I like that. Cause sometimes I

9:01

think that there's a different motivation, but I like

9:03

that motivation. I like

9:06

when you two are connective like this. You

9:08

work with a therapist. We

9:10

have off and on. We don't have one right now.

9:14

Would you be open to seeing one?

9:17

No, I think we should always. Is

9:20

there room in the budget? Trust

9:23

me that I can find room for that. Trust

9:26

me. So Sandra,

9:28

I wanted to hear what you think

9:30

about the oil investment. I

9:38

didn't want to do it for a really

9:40

long time. I think I

9:42

just was tired. I was tired of, you

9:45

know, not having enough and I was

9:47

working two jobs and he was

9:49

working two jobs and it was just really,

9:51

really hard. And his friends been

9:53

doing the investment for a while. So, you know, when he

9:55

wanted to do it, honestly, I kind of felt like I

9:58

was more, I won't stop you. But

10:00

I don't support it if that

10:02

makes sense. But in a way, because I didn't

10:04

say no, I feel like I did agree. Right?

10:07

Is that the kind of thing where it's like, I'm

10:10

not going to say no, but when

10:12

it ends up

10:15

disastrously, then I'm going to tell you I told you so.

10:18

Yeah, kind of, which isn't very nice

10:20

to hear. But I also decided

10:22

that mentally, if we lost all of the

10:24

money, that it would be

10:26

okay. It was the only way that I could be okay

10:29

putting the money in. It was to get to a place

10:31

where I knew that basically we could

10:33

be kissing a million dollars a day. How

10:35

would you be okay? Just so I know? Just

10:38

stoically just figure it out the same

10:40

way like my mom always figured it out when all the money

10:42

was gone all the time. Because I

10:44

didn't know how else to make that decision

10:46

and be supportive of it because I felt

10:48

very nervous and still do feel nervous

10:51

about it. I'm nervous. I

10:53

know. Putting 100%

10:55

of a family's investments into one

10:57

private deal? Yeah. That's

11:01

terrifying. My feelings about

11:03

it were any dividends

11:05

that come back are not to be touched

11:07

or spent until everything is returned. Why?

11:11

I didn't want it to turn around and put it back into

11:13

something else because it was like I wanted

11:15

to make sure we got our money back if we could.

11:17

Well, hold on. Explain that to me. So

11:19

like you put a million dollars in there, you're getting paid,

11:21

let's just say 20K a year.

11:24

So you're going, I don't want to use any of this money.

11:27

I'm going to just let it sit in this account because

11:30

I want to get all of my money

11:32

back. What does that mean? And

11:35

how the initial investment was returned, it

11:37

didn't feel like I wanted to spend

11:39

it. It felt like, I

11:41

don't know, re taking your gambling and then you're

11:44

taking all your winnings and you keep on gambling

11:46

with them. I'm like, let's just get what we

11:48

can out of it in case the whole thing

11:50

implodes. That doesn't make sense to me because

11:53

you're telling me that every month you're stressed

11:55

for the last several months you've been in

11:57

the red. But meanwhile, you have 20. 20K

12:00

a month coming in from this oil investment,

12:02

and because of the way you feel about

12:04

it, you're not allowing yourself to use it.

12:07

We have to use it. We don't

12:09

have any money to pay the bills if we

12:11

don't use it. So isn't that the worst of

12:14

all worlds? You are, in your own mind, betraying

12:16

yourself using the money, and then you feel horrible

12:18

about it. And meanwhile, Bob's like,

12:20

what are you talking about? I got 20K

12:23

a month coming in from this oil thing. And he's

12:25

like, what's the problem? Yeah. Exactly

12:28

what's going on. Uh huh. The

12:32

oil is so different to me because it's

12:34

everything that we accumulated and worked for our whole

12:36

lives. And I feel like we blew so much

12:38

when we did have a lot of money. And

12:40

now everything that we have

12:42

that we've worked for her whole life is

12:45

all resting in one basket. And I

12:47

agree with that. I agree. I agree. I'm

12:50

freaked out by it. I want to talk about that. I

12:53

agree. However, when

12:55

we're talking about the 20K per

12:57

month, you're going

12:59

like, all of that makes

13:01

me feel bad. So

13:04

I don't want to engage with it at all.

13:06

Like leave it alone, put it over there. I

13:08

hope it all turns into 100%. And

13:12

then like, oops, I got to take

13:15

from that to pay our bills. That's

13:17

what you're feeling, right? Yeah. And

13:19

every month we have to take from it. And so

13:22

it leaves me feeling very just

13:25

freaked out about it all. I

13:27

don't see a logical reason why we don't

13:29

earn enough money from earned income as

13:31

opposed to investment income to just pay

13:33

our monthly expenses. Can

13:35

we talk about that? Should we look at the numbers? I

13:38

don't know. Brad, do you have anything else you want to say?

13:40

I get scared to look at the numbers. How

13:42

was it going through this CSP together?

13:46

It was fine until we actually started.

13:51

Okay, tell me more. Well,

13:54

we had it open. We had it planned on the

13:57

calendar. We had a limited window because I was going

13:59

to be a... on and he was going to

14:01

be gone. So we had to get it done

14:03

in that window and that we could not agree

14:05

on our income. And so it kind

14:07

of just went downhill from there. That's like one of the

14:09

top numbers. I know. You couldn't agree on your income. Okay.

14:11

Because you have a variable income. We have

14:13

variable income. We didn't know what we should

14:15

include, but we shouldn't include. We went

14:17

through several of the things like we kept going through

14:19

the list and I had my

14:22

little spreadsheet open, but like he

14:24

was getting madder and madder. And then I can't

14:26

remember, Brad, you got up and left, but I

14:28

don't remember what the final

14:30

nail was that precipitated

14:32

him leaving, but it, hold on. I want to know,

14:34

Brad, what happened? Okay. So we were

14:36

going through the lineups. We started with the income

14:38

number. This is the first

14:40

number you started with. Yeah. Well, this is an

14:42

important one. It goes back to our, um, I

14:45

forget the name that the word that Sandra used,

14:47

like, like the fair, the word fair. What was

14:49

the adjective you had for fair? I

14:52

don't know. Equitable.

14:55

Equals. So I am,

14:57

I am not contributing at a high level

14:59

at this point. Okay. And

15:02

when, when she says that she feels

15:04

like we should be able to have

15:06

our income, meet our expenses, I

15:09

interpret that as saying that Brad,

15:12

you need to get your crap together

15:14

and get a full-time job. You need

15:16

to stop playing around. It's time for

15:18

you to go and get some middle

15:20

management software, sales position so that

15:23

we can meet that Delta and have a little bit

15:25

of extra. So, so that'll happen. Did she ever say

15:27

any of that? Actually, she has told

15:29

me I should get a job probably 10

15:31

times. And she reminds me

15:34

about every other week that I'm

15:36

underemployed. Underemployed.

15:38

What does that mean? I'm not

15:40

making enough money. You're a

15:42

smart guy. You should be out there making more

15:44

money. Sandra, how often you say

15:46

that? Probably every time

15:49

we talk about money, it can't wrap my

15:51

brain around why he doesn't get a

15:53

job. Like it's really hard for me

15:55

to understand that. And so I think it just

15:57

is a frustration. And so

15:59

what do you get? out of that? Being

16:02

right. Yeah. Because

16:04

I don't want to work a full-time job either

16:06

and I haven't enjoyed it and it's not always

16:09

awesome but I do it every day so it

16:11

just is kind of, I

16:13

just don't understand it. I can't seem to see it

16:15

from his point of view with that. But

16:18

why he's he won't do that. Do

16:21

you need to understand it? No,

16:25

but it feels unfair. Okay,

16:27

well that's different. But the

16:29

understanding part, there's a lot of things you

16:31

don't understand. Yeah. Probably never going to.

16:34

What do you need from

16:37

Brad? From

16:41

an emotional point of view or a

16:43

financial point of view? Let's say financial.

16:47

I need him to bring home $5,500 a month. Okay. All right.

16:54

That is something that we

16:56

could have a discussion about and I think it

16:58

could probably go a lot healthier than ever

17:01

using the word underemployed. Would

17:04

you agree? Yes,

17:07

but he is a very smart man

17:09

and he is very talented and he

17:11

could do something more than what he's

17:13

doing. So I think that's why underemployed

17:15

comes in. What if he

17:17

had said you're under parenting the four

17:20

kids? How do you think you would have

17:22

responded? I know I'm a

17:24

boss mom. I'd probably just give him a little swot. But

17:26

I probably would be offended by it. It

17:29

would definitely hurt my feelings. Probably when, especially when

17:31

times are. Yeah, it's not always easy.

17:34

When everything's going wrong and he said, why don't you just take

17:36

control of this? You're a smart woman. You're under

17:38

parenting them. You're not living up to what

17:40

I need from you. How do you think you would have taken it? Yeah,

17:43

I don't know how long we would have stayed

17:45

together if he talked like that. Honestly,

17:48

this is awful to hear. I

17:51

hear sarcasm, disdain and

17:53

insult after insult. I've

17:56

been married for five years. There

17:58

are a lot of couples that have been married for a lot longer,

18:01

but it is hard for me to hear

18:05

or even imagine a married couple that would talk

18:07

to each other like this. The

18:10

conscious spending plan that I give to

18:12

couples is in many ways

18:14

a testing ground to

18:16

see how they come together to talk

18:18

about money and literally get on the

18:20

same page. I'm not

18:23

even particularly concerned if their numbers are

18:25

right or wrong. Honestly, the

18:27

first time people do the CSP, most of

18:29

their numbers are wrong and that's okay.

18:33

What I'm looking for is

18:35

how they collaborate to write

18:37

down a few basic numbers from their

18:39

life. And to

18:41

hear Sandra and Brad describe their experience

18:45

is ominous. I'm going

18:47

to share their numbers with you. If

18:49

you'd like to download the CSP

18:52

template to plug in your numbers,

18:54

you can get it for free

18:56

at iwt.com/CSP. We'll be

18:58

right back. Thanks

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Rules and restrictions may apply. Now

22:16

back to the show. Brad

22:18

and Sandra's numbers, their assets are 80,000. Their

22:21

investments are 1.27 million. Savings,

22:25

50,000 and debt is 85,000 for

22:29

a total net worth of $1.31 million. Brad,

22:35

talk to me about your income. What is your

22:37

gross household monthly

22:39

income? So we started

22:41

going through the line items and

22:43

the way that she had defined

22:46

income was we could only include

22:49

fixed income on a monthly basis. Okay.

22:53

So I am grateful in

22:55

my heart that she has been working for the last

22:57

year and a half. It has

22:59

saved us. It has kept the ship afloat. And

23:02

I agree to some degree,

23:04

I'm underemployed, and I start

23:07

making moves for investments to

23:09

try to bridge that gap.

23:11

So that's another conversation. There's

23:13

another side gig that I do. I'm a professional

23:15

announcer for a running event company all over the

23:17

country, and I love it. And I make about

23:20

$14,000 a year. Now

23:23

our conversation was, well, what did we do?

23:26

She left it off of the

23:28

initial documents, and

23:30

I suggested that that should be something that we

23:32

should account for. But she said, you didn't actually

23:34

get paid in this particular month because it's usually

23:36

a race season cyclical

23:38

contractor type payment scenario. So

23:43

she decided that that was not income that we

23:45

could use. So that was difficult.

23:48

I don't think I was intending to start a fight

23:50

with it. And we were writing notes on

23:52

the side to ask questions and so, of you.

23:55

And so one of them was the income question. I didn't really

23:57

know how to manage that. So I

23:59

just wanted to. to be accurate. All

24:01

right. So just so

24:03

we know, that's $113,000 per

24:06

year. Did either of you know

24:12

that that's how much you make as a household? I

24:16

don't think I knew that exact number because I

24:18

knew how much I made, but with Brad being

24:20

so fluctuating, I wasn't sure what he made.

24:24

So that's actually like not

24:27

horrible. I basically am in

24:29

the middle of a complete career change.

24:33

So at some point after

24:35

mortgages dried up, Sandra

24:37

came to me and suggested that perhaps you

24:39

should look at becoming a school teacher. And

24:42

this is in like July

24:44

or August of 2023. So

24:46

just several months ago, I

24:48

thought becoming a teacher would be

24:50

fantastic. I could enjoy

24:52

entrepreneurial opportunities and mountains in the

24:55

summertime, and then I could provide

24:57

a steady income. It's the exact

24:59

opposite. Sandra said that it

25:01

would be something that she appreciated and

25:03

they've got a good retirement. I've got

25:05

15 years from four or 17 years

25:07

from however many years between 48 and

25:10

65 to continue to build like a real

25:12

solid retirement type of

25:14

a scenario. I moved heaven and

25:17

earth to become a school teacher from

25:19

July until September. And

25:22

it turns

25:24

out you have licenses to

25:27

become a school teacher and

25:29

it's a complicated process. I

25:31

found a nice scenario teaching

25:34

community college finance classes. I'll be

25:36

teaching accounting down the road, but

25:39

it was only part time. But I thought

25:41

this would be, and it

25:44

wasn't my first movement. I probably wouldn't

25:46

have been pursuing this unless Sandra had

25:48

been like, listen, this is something that

25:50

I think you should pursue. And I

25:52

thought if this is like her wish

25:54

for me, then perhaps I won't be

25:56

as underemployed as for the

25:58

part time scenario. I'm just not making a lot. lot of

26:00

money at this point. So it did with

26:02

our 113,000 per year, we're still on the low side.

26:06

We're still not making as much fixed

26:08

income as we do monthly expense, but

26:11

we are heading in the right direction. It's

26:13

something that's just really difficult to wrap my

26:15

arms around how upset Sandra is with the

26:17

whole scenario. Like this is something that you

26:20

asked me to do. You actually

26:23

whispered in my ear one night. I'm

26:26

the Brad whisperer because

26:28

she suggested. So what

26:32

do you want Brad? Do you want her

26:34

to understand? Do you want

26:36

to make more money? What is it that you want? I

26:40

think my first goal is just

26:43

to have her satisfied so

26:45

that she can have peace and so she can be

26:47

happy and so that she will not be on my

26:49

back. Alright, well let's see

26:51

if we can get there. But I think there's probably

26:53

bigger things

26:56

at play here. I think that you have

26:58

narrowed your vision down to what

27:01

do I need to do to not get

27:03

those text messages once a month because

27:06

that will mean she's satisfied and trust me, that's

27:08

not the issue here. This

27:10

is a common pattern where one partner,

27:12

usually the husband, will do something to

27:15

quote, get my wife off

27:17

my back. We've heard it.

27:19

I hate it. And when it

27:22

comes to money, this often involves

27:24

reassuring her. We're going to be fine.

27:26

We're going to be fine. Although

27:28

as we've heard in multiple conversations

27:30

on this podcast, partners

27:32

are often looking for certainty,

27:34

not reassurance. Those are two

27:37

separate things. Second,

27:39

they will finally engage with

27:41

money only to stop

27:44

after a few weeks. And this is

27:46

common with avoiders, especially ones

27:48

in debt. Or

27:51

in this case, Brad will take on

27:53

a job so she will quote, not

27:55

be on his back when

27:57

he is previously repeatedly described.

28:00

working a nine-to-five like

28:02

losing at life. I

28:05

also noticed that they get hung up on how

28:07

to handle variable income. This is

28:09

something that paralyzes a huge amount of

28:12

couples and to me this is

28:14

very confusing. It's like someone who wants to be a good

28:16

parent but they're totally paralyzed

28:18

with whether they should buy original or

28:20

honey nut Cheerios. They're obsessed with the

28:22

decision. They agonize over it but

28:24

it honestly takes five minutes to figure out and move

28:26

on. Choosing your serial

28:29

or how to handle variable income

28:31

is honestly nothing in the grand

28:33

scheme of creating a rich life.

28:36

I've literally discussed how to handle variable

28:38

income on this podcast multiple times in

28:41

my book which nobody on this

28:43

podcast ever reads and in my

28:45

money coaching program. The

28:47

point is they use that as

28:49

an excuse not to move forward

28:51

when in reality it's the tiniest

28:54

of speed bumps and by using

28:56

that as an excuse they get

28:58

to avoid doing the real substantial

29:00

often hard work. Obviously there's

29:02

a lot going on here. Let's

29:04

go ahead and look at your fixed

29:07

costs. Alright what's

29:09

this number here Sandra? Alright

29:14

so you're spending 99% of your household income

29:16

on your fixed costs. Yeah.

29:18

Okay so that's why you're stressed

29:21

out about money every single week now. Okay

29:24

I understand that. Brad you understand

29:26

that? Yes. Alright. We'll

29:28

come to the line items in a minute. Let's just keep going.

29:31

Your investments are at 238%. That's definitely not true. This number which

29:33

is $20,500.

29:36

That's your monthly average distribution from the oil

29:38

rig. That needs to

29:47

count as income. Sandra?

29:53

Yeah. Brad's really happy right

29:55

now. What about you? I

29:58

don't... It's

30:00

income. Yes,

30:02

I know it is incoming money I

30:06

get that so what's what's what's

30:08

holding you back here? It's

30:13

just not money coming in and it should be no different than

30:15

the other money coming in but it It's

30:19

like it's like eating and taking a

30:21

little bit of our Our struggles

30:26

and trials and work and all the things

30:28

we did for 25 years and spending it

30:30

on toilet paper That's

30:32

how it feels to me. What's the alternative? Not

30:35

having toilet paper It's

30:37

not a very good alternative so

30:41

It is literally income That's

30:44

dividend income Now do I

30:46

think that that oil investment is a good idea? No, hell

30:49

no but Do

30:51

you need to do something with 20,000

30:54

a month for the time

30:56

period that it's coming in? Yeah, you

30:58

need to use that money properly So

31:01

let's separate the two things first of all the

31:04

money's coming in All right.

31:06

Secondly, what are you spending

31:08

your money on? That's a separate issue. We'll

31:10

tackle that as well Okay, but

31:12

we've got to admit and acknowledge that you've got roughly

31:14

20,000 a month or more coming in every month Let's

31:20

do something with that While while

31:22

the going is good. Okay. Okay. All

31:24

right. So where do we put

31:26

this? Uh It's

31:29

got to go up to income Mm-hmm

31:32

Brad is this you making two thousand nine hundred sixty

31:34

six dollars a month? Yes. All

31:37

right. So let's just say three thousand for easy

31:39

math Uh, your

31:41

oil number is twenty thousand

31:43

five hundred Where

31:46

does that go that's gross Yes,

31:50

all right look this is not a competition of

31:52

who makes what you two are married Just

31:56

because I put it under brad is

31:58

irrelevant. We could just as well put it

32:00

under Sandra. I just want to clarify that because

32:02

I don't want this to become any type of

32:05

dynamic. Everybody okay with that? All right.

32:07

And if you needed to, you could add another category

32:09

if that makes you feel comfortable. It's not the point.

32:12

At 23,000, what do you net off of that?

32:16

I'm going to just put it at 16,000. Why?

32:19

Who the hell knows? Is

32:21

it wrong? It's definitely wrong. This number

32:23

is 100% wrong. However, are

32:27

you going to get into trouble when you

32:29

discover the actual number? Probably not. Probably not.

32:32

Got it. All right. 16,000. Okay. That significantly changes.

32:36

What the ****? This

32:38

changes everything. At

32:41

least we can breathe. Look what just happened. Sandra, what

32:43

did the number change from 99%? What

32:45

is your fixed cost now? 40%. What am

32:47

I even doing here?

32:51

Number one, the

32:53

source of your stress on a weekly

32:56

basis has been this number. What's this

32:58

number now? 40% instead

33:01

of 99%. That

33:04

problem is fixed at least for

33:07

the time being. Yeah.

33:09

I don't think this number is going to last

33:11

forever. Okay. But

33:13

at least for now, we've

33:15

put that fire up. Okay.

33:19

Are you with me, Sandra? Yes, I totally

33:21

can see that. Yeah. Brad, are you with

33:23

me? Yes. All right. Now,

33:27

oh, back to the

33:29

good old days. What's that song by Steve

33:31

Wynwood? Back in the High Life Again? Here

33:33

we are. Oh, boy.

33:35

We got Brad and Sandra netting $12,000 a

33:38

month. Back in the High Life again.

33:43

Bring it, Ruby. What are

33:47

you guys going to buy with $12,000 a month? Nothing. You're not buying

33:51

stuff. Nothing. Not at all. Not for

33:53

a family of six. Oh,

33:56

well, things that we need. No

33:58

$25,000 bedroom. I'll

34:01

tell you what, at least now

34:04

we've got something to work with in the short

34:06

term. Agreed? Agreed.

34:09

Let's talk about that and then we'll talk about what

34:12

to do about this oil thing and all the money

34:14

coming in. How about that? Okay.

34:17

I've seen this phenomenon happen where

34:19

one partner simply denies the reality

34:21

of their financial situation. We

34:24

previously had on guests who didn't like how

34:26

they had made money and they simply refused

34:28

to acknowledge it. That's

34:30

happening here. Sandra hates the

34:32

oil investment. It worries her, which by

34:34

the way, remember she agreed to and

34:38

her not being able to separate

34:40

the investment itself from

34:42

the dividends it's paying. The

34:45

reality is they're making $20,000 a month in dividends. You

34:49

have to acknowledge that. You have to account for that.

34:52

And when we did on the conscious

34:54

spending plan, it changed everything. The

34:57

real issue is not the 20K a

34:59

month. The real issue is that they

35:01

have so many layers of distrust and

35:03

contempt that they can't really

35:05

communicate about this one thing. Let's

35:08

keep going. So your rent is $3,000 a

35:10

month. Your insurance is

35:12

$774 fine. Life

35:14

insurance, $100. Okay. All right.

35:17

You have term life insurance for four kids. Is that it?

35:20

No, that's just my term and

35:22

Brad's term. Mine's a lot more. He's

35:24

like 90 a month and his is like 38.

35:27

All right. Good. Well,

35:29

at least you don't have some larded up whole life insurance policy. Good.

35:32

No, we decided to not go down that road years ago

35:34

and it was sold to us. So how nice.

35:37

Just for everyone watching, I love that

35:39

here we have parents of

35:41

four children, four

35:44

and their term life insurance policy is only $132 per

35:46

month. What does that

35:48

tell you? Freaks out there paying $800

35:50

a month for some cash value. Bullshit.

35:52

Stop it. All right. Your

35:55

car payment is a total of $1,600 a

35:57

month. What the hell

35:59

is going on here? Well, there's car

36:01

and gas. So car is 30. I

36:04

know how to add. Why are you paying that much? Because

36:09

when we were making a lot with

36:11

loans, I bought a Telluride. How

36:13

nice. Yeah, it's

36:15

very nice. My Honda Odyssey that we'd

36:17

driven for 12 years literally went

36:19

up in smoke and that

36:21

was the car that we bought to replace it. How

36:23

much did this thing cost? It was $54,000. Hold

36:28

on. I'm having a flashback. Just

36:31

a moment. Deja Vu. Somebody

36:34

recently saying, it sounds

36:36

like we spend a lot of money on

36:38

anything. Who's that person? But

36:42

if you just spend money on a few

36:44

big things over 25 years, I don't

36:46

think that counts as spending money on a lot of

36:48

things. Like I'm wearing

36:50

clothes that I've had since my daughter was born

36:53

and she's 15. So I'm

36:56

still not into those things. So

36:58

here's my point. My point is not that you couldn't

37:00

afford the Telluride. Clearly you could if you're making $80,000

37:02

a month. Okay, fine.

37:05

I have no problem with that at all. What

37:08

I'm challenging you is that the

37:11

identity you have created for yourself

37:13

around money might not

37:16

be fully accurate with

37:18

reality. And

37:20

on this call, both of you have

37:22

shared your identities around money a lot.

37:26

What you will do and what you won't do. Have you

37:28

noticed it? Not

37:31

till you pointed it out. Why don't you tell

37:33

me what your identity is? Sandra first. Mine

37:36

is that I am frugal

37:38

and careful and not

37:41

extravagant. Wow. All very charitable

37:43

descriptions of yourself. Like all

37:45

frugalistas. I'm selective and

37:47

I don't need anything really fancy.

37:50

Okay. It might be true in the course of 25

37:53

years. It might be true. Might there be another way

37:55

to describe it? A

37:58

little bit on the cheap side. with stuff

38:00

I don't care about. Okay, what else?

38:03

Is it? It's a little

38:06

martyrish. Uh-huh, you're a

38:08

martyr. If we can't do this, I'm not going

38:10

to do it. I wear my 15 year old sweater, look at me. And

38:13

also, what about the thing about like

38:15

50 categories and then sending angry

38:18

comments to your husband? What's that? Control,

38:22

like massive

38:24

funding to just control it all and have it

38:26

all just manage just so. Right. And

38:28

you thrive off of worrying because if you're not

38:30

worrying, then what are you doing? I

38:34

don't know. I'm not very effective or

38:36

contributing. That's my contribution is worrying about

38:39

it. Is there a way to be

38:41

good at money and not worry? I

38:44

believe there is. I just have not figured it all

38:46

the way out yet. Okay. So do you

38:48

see what I'm saying about your identity?

38:50

Yeah, it's totally

38:52

constructed. You don't have to worry

38:54

about all these things. If you don't want, you

38:56

get something out of it. It's

38:58

now become automatic and habitual.

39:02

But you're making $29,000 a

39:05

month currently, even though the number is

39:07

temporary. Don't

39:09

you think when you were young, you thought, Oh, when I make $30,000 a

39:12

month that I'll stop worrying

39:14

about money? I don't think I ever

39:16

thought I could make that much in a month. So

39:19

yeah, I mean, it was much less. We celebrated

39:21

my first raise when I went from 19,000 to 23,000 a year. We're

39:26

so excited. Do you think it's time to get rid

39:28

of your old identity? Yeah,

39:30

it would be nice. I'm trying

39:32

to take this step by step. There's

39:35

an obvious elephant in the room, which

39:37

is investing their entire life savings in

39:39

a private oil investment. But I can't

39:41

jump right to that. It's too big.

39:44

So here was my approach. First, I wanted to

39:47

hear how they handled the CSP, which

39:49

was not great. But we talked about it. Then

39:52

it was to help Sandra understand that $20,000

39:55

a month of dividends is indeed

39:57

income. Then it was to help

39:59

Sandra recognize. She tells us a lot

40:01

of stories which are clouding for view of

40:04

their finances. But we definitely

40:06

have more work to do. Was.

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43:24

as their responses take us in

43:26

wildly different directions. Let's

43:29

keep looking at these numbers here. So

43:31

assuming we're working with the money that's coming

43:33

in every month right

43:36

now you're investing 2% I

43:41

don't think that's acceptable especially not for a couple who's

43:43

making 30k a month what do you all think agreed

43:47

agreed what do you want

43:49

to

43:51

do I know what I would like to do I'd

43:53

like to max out my 401k because

43:55

that's my 401k on that line there I'd

43:58

like to max that out and And then I don't

44:01

think we would qualify anymore for

44:04

a Roth based on everything you're telling me. So

44:07

I don't know. No, couples who make 30k a month don't

44:09

qualify for a Roth, but you have other options. I want

44:11

to max everything out. Meaning, if

44:13

we do an HSA, put as much in as we

44:16

possibly can, put as much as we can into the 401k. But

44:19

there's a limit to how much Brad wants me to

44:21

invest every month. So I don't want to take all of

44:23

the money and put it in that. Why?

44:28

Because I feel like we need to agree on it. Okay,

44:32

talk about it. Yeah, this is

44:34

the crux of the conversation in terms of

44:36

your CSP. You have

44:39

90% of your money in

44:41

one incredibly risky

44:44

investment. Now

44:46

it's paying money out right now. Honestly,

44:49

I don't know how long it's going to happen. So

44:52

what, what is your overall strategy for how

44:54

to deal with that money coming in? What

44:57

is your approach in like one sentence each?

45:00

Brad, what's yours? Reinvest

45:03

the returns. Okay. And Sandra,

45:05

what's yours? Reinvest

45:08

it in long term investments. Okay.

45:13

I understand both of your perspectives. How are

45:15

you going to come to a resolution? Something

45:21

that I proposed that when we were having. Why

45:24

don't you talk to each other? Okay. What

45:27

I proposed about splitting

45:29

the return money that was coming from the

45:32

dividends. And then we each get to decide

45:34

how we invest those portions. That's

45:37

what I proposed to solve some of this angst

45:40

that we were having. So once the money

45:42

is taken care of for the difference

45:44

between, you know, so that we paid our expenses for

45:47

the month, then what's left

45:49

we're dividing that. And then we

45:51

can decide what we want to do with it. And

45:55

I feel like an easy way for us to solve it.

45:57

This is awkward silence. Okay. I

46:00

think Sandra, I

46:02

understand that. And the night

46:05

that we spoke about the long-term

46:07

investments, it was in the middle

46:09

of crisis and it was horrible

46:11

conversations. So at this point, and I

46:13

think I think they've actually readdressed it.

46:15

So the 401k

46:17

and the IRA and the long-term

46:19

scenarios, I think there's definitely a place

46:22

for it. There's another investment

46:24

that I'm still in the middle of

46:26

researching, which is purchasing another business. I

46:30

am more likely to

46:33

look at business opportunities, but

46:36

I do very much appreciate

46:39

index funds because

46:41

Warren Buffett said so. But

46:45

if Warren Buffett said so, do you really

46:47

respect or is that sarcastic? No, that was

46:50

respect. So that's what sent me down this

46:52

rat hole of figuring out the whole financial

46:54

advisor master and just feeling quite depressed about

46:56

where our funds have been. Hold on. Sorry.

47:00

Sorry to cut in. Just a question on that, because I

47:02

think it affects everything else. You had a bad

47:04

experience with your investments over the last 20 years

47:07

or so. I think probably to be

47:09

fair, you weren't paying attention to it. You

47:12

delegated it to a financial advisor. You never really learned

47:14

how this stuff works. And

47:16

I totally respect that you have a bad taste in your

47:18

mouth about it. Do you think

47:20

that your past is negatively affecting your

47:22

future? Yes. So

47:27

index funds, based on the

47:29

new information that we've

47:32

been learning and studying and researching, I think there's

47:34

definitely a good place. Is 401k maxing

47:36

out of 401k? Isn't it like $23,000 per

47:38

year? Yeah.

47:41

And I'm on board to max them out. Does

47:45

that mean with an index fund? I would say

47:48

probably yes. So do I have

47:50

an answer at this point? No, because I'm super

47:52

confused. Probably my

47:54

financial advice to myself is

47:57

do what Warren Buffett told his wife to do when

47:59

he died. And he said

48:01

he hopes that his wife is going to take his

48:03

fortune and put it in the S&P 500. Wait,

48:07

do you want to do that? Because that's not what you're

48:09

doing right now. You're doing the opposite of that. Just

48:12

talk to me about this. What do you want to do

48:14

with $12,796 per month? How

48:18

much of that do you want to invest? In

48:21

long-term savings or long-term investments, I would say

48:23

half of that. Half? All

48:26

right. Watch.

48:28

That's 29%. Okay? Okay.

48:33

This is what we're going to start with. What

48:35

do you all think about these two numbers? These are the

48:37

important numbers. $6,000 a

48:39

month and 29%. What

48:41

do you think about that, Sandra?

48:45

I think that's good. That makes me feel

48:47

really good. I think it's

48:49

a good step to take. Okay.

48:53

Why? Do you have any quantitative? Is it

48:56

just a feeling? Well, it's just

48:59

a feeling, but I think it's a good compromise between

49:01

the two of us and what we have as our

49:03

goals. Because if he wants to invest in a business,

49:06

then that leaves him with half of it to do something

49:08

with a business, and then half of it is long-term.

49:11

You're saying 50-50. What about the

49:13

guilt-free spending and savings? What about that? I

49:15

don't know. You didn't account for it. Fine.

49:18

Yeah. I didn't account for that. All

49:20

right. What do you think, Brad? Putting

49:24

aside each month invested. That's 29%

49:27

for your investments. What do you think about

49:31

that? That sounds like a good starting point. Okay.

49:34

Just so I'm hearing you clearly, you're

49:36

saying whatever's left after you're covering your

49:38

fixed costs, you're

49:41

happy to put that towards investments. Yeah. I'm

49:44

hedging it back because we need to have a

49:46

little bit of fun. We haven't got to talk

49:48

about our rich life at this point. All

49:51

right. Let's say... I'll give you $1,000 for... You

49:56

need some money. I'll leave it to you to how

49:58

much your guilt-free spending is. Okay? Very

50:00

little concern that you're way

50:02

over spending on guilt-free spending Sandra. Do you have

50:05

that number under control? Yes,

50:07

we do not really have much guilt-free spending

50:09

going on. Yeah, okay So like I wouldn't

50:11

mind if you were to say hey, let's

50:14

give ourselves just a little bit. I'm talking

50:16

like 250

50:18

500 a month, but just as a number if I

50:21

had to ballpark it it would be like 7%

50:25

maybe 10 like maybe Why

50:29

let me tell you why? I'm

50:32

gonna be very direct in a

50:34

way that I'm ordinarily not on this when

50:36

I have conversations because

50:39

what you have demonstrated to

50:42

me what you've told me in your

50:44

conversations 25 years of Disagreeing

50:47

about money is Really

50:50

really a long time

50:53

and it's hard to get out of that Especially

50:55

with the boom and bust habit that you've both

50:58

gone through For

51:00

you to actually meet in a

51:02

place that Sandra you

51:04

feel safe and you

51:07

feel like there is some consistency

51:09

in planning that's what

51:11

you need and Brad for

51:13

you to feel respected that you

51:15

can be given a goal and

51:18

then be given Free reign to

51:20

achieve that goal That's

51:22

also challenging The

51:26

fact that you've invested all

51:28

this money in one oil

51:31

thing Tollifies me I

51:34

would never do it ever ever. There's

51:36

no single investment in my portfolio that represents

51:38

more than a Few

51:42

percentage points and even all

51:44

my individual stocks represent less than 10% Okay This

51:48

is the opposite of diversification. I'm

51:51

happy that you're making money right now But

51:54

I strongly suspect that in a matter

51:56

of months The

51:59

money is gonna stop or it's gonna dry up. And you're

52:01

gonna hear all kinds of excuses, but

52:03

these private investments are, they

52:06

love what they call dumb

52:08

money. And it is a bit

52:10

of a derogatory term. It's the

52:12

mom and pop investors, typically doctors and dentists.

52:14

That's how they describe them. And so these

52:16

Wall Street guys come and just take them

52:18

for everything they're worth. Now, right now you're

52:20

getting the money. I hope

52:23

it continues, I genuinely do. For

52:25

right now while the money's coming in, I

52:28

would aggressively invest that

52:30

money in diversified index

52:32

funds. I'm like, I gotta

52:34

get it out of this oil thing

52:36

and into simple low

52:39

cost funds as quickly as

52:41

possible. That

52:43

is me being as direct as possible. I can't tell

52:45

you what to do with your money, but

52:47

I can tell you that if I'm looking at it, I'm going, oh

52:50

my God, I'm taking this

52:52

money while the going's good, I'm gonna

52:54

invest it aggressively, put it away and

52:56

secure our future. How

52:59

does that strike you? It

53:02

is very direct. The

53:05

dumb money is struck a chord.

53:09

And my initial reaction is to

53:11

defend myself and to defend the

53:13

group that we're into, that at

53:15

least the average investment into this

53:18

project is for individuals closer to

53:20

40 and $50 million. For

53:23

what it's worth. That said,

53:26

investing it into index funds and repositioning

53:28

it, I think that was always part

53:30

of the plan, but

53:33

we've had a big question mark as

53:35

to what that next investment looks like.

53:38

And I hear you loud and

53:40

clear that diversified index funds sounds,

53:43

and to a degree, we're leaning in

53:45

that direction. The

53:47

point is if you want to

53:50

have additional money for alternative investments,

53:54

I think start a business, get a job.

53:57

You figure that out, but you can

53:59

put. the money in your 401k, you're going to max

54:01

that out. You can max that out fat like in a month.

54:05

You're going to eventually end up putting

54:07

money in a taxable account, which

54:09

you can reach into, but

54:12

don't. A couple of observations

54:14

on that lengthy exchange. First of all,

54:17

kudos to Brad. He was coachable on

54:20

hearing some of what I had to say.

54:22

And I appreciate that. Some of this is

54:24

not easy to hear. I also want to

54:26

talk about that phrase I use dumb money.

54:29

I hardly ever say anything like that, but

54:31

this is such an egregious mismanagement

54:33

of risk that

54:36

I had to be utterly direct. Nobody

54:38

wants to be called dumb money. Okay.

54:41

The phrase itself is pretty crass, but

54:43

the concept that Ma

54:46

and Pa investor, they

54:48

are there as marks to take their

54:51

money. And for private investments, which far

54:53

more often than not end up underperforming

54:55

the S&P 500, Wall Street is masterful

54:59

at marketing them as unbeatable. You're

55:01

going to make tons of money

55:04

and people buy into this. This

55:06

happens in private equity, even happens

55:08

for really rich, wealthy, sophisticated investors.

55:11

They end up underperforming the S&P 500,

55:14

but I'm worried about Brad. I'm worried

55:17

about Brad and Sandra's life savings

55:19

being put into a single private

55:21

oil investment. We'll be

55:23

back after this. I

55:26

get tons of email every single day, and

55:28

I want to give you a behind the

55:30

scenes look at how I manage emails from

55:32

my team, from my family, and from you.

55:35

I use a piece of software called Superhuman, and

55:38

this is an email software that I

55:40

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55:42

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55:44

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55:47

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55:49

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55:51

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55:53

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55:55

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55:58

cluttered with a bunch of subscriptions. everywhere.

56:01

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56:03

you barbarians who literally click and

56:05

peck through every single email. U

56:08

to mark it unread, S to star it, J

56:10

or K to cycle through messages. I use keystrokes

56:12

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56:15

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56:17

don't want to send them an email on a

56:19

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56:30

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56:35

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57:01

Now back to Sandra and Brad. Sandra,

57:03

what do you think about my comments? Fairly

57:06

direct comments regarding your financial situation.

57:10

I think it's perfect. I want

57:12

the money somewhere that I know it's going to be

57:14

there when we need it when we're older. I think

57:16

it's a safe gap against ending

57:18

up in a situation that my

57:20

parents are in where they don't have that money. I feel

57:23

like it's kind of the best

57:25

of both worlds as far as, hey, you

57:28

know, Brad, you got to do this awesome scary

57:31

investment and now we can

57:33

take the proceeds from that and put it somewhere

57:35

safe so that we know we're going to be

57:38

taken care of and we're not going to be

57:40

burdening our kids and making them worry that we

57:42

don't have enough to take care of ourselves. I

57:44

feel like it's the best of the options.

57:48

Yeah. I'm in total alignment

57:50

that it needs to be repositioned as quickly

57:52

as possible. I

57:59

can't even say it, locking it,

58:01

locking up the whole million. Maybe that's what needs

58:03

to happen. That's how you build

58:05

the serious wealth. You

58:07

got to let it compound. Let's

58:10

take a look at some numbers here. I just want

58:12

to show you, because I think the two of

58:14

you have pretty ambitious goals. You've tasted what it's

58:16

like to make a lot of money. And

58:19

once you taste that, you kind of want to go back.

58:23

In your case, that was a very difficult lesson

58:25

to learn, because if you taste

58:27

it and you don't stay

58:30

at that level, it's quite

58:33

devastating to come back down.

58:35

Would you agree? Definitely. Yeah.

58:37

But this is your opportunity right now.

58:39

You're basically in the same situation. And

58:42

you're getting very lucky. So

58:45

take advantage of it. Let's take a look at some numbers here

58:47

for compound interest. How

58:49

much you have currently invested in just

58:51

like index funds and other low retirement

58:54

type accounts? 250. $250 or $1,000? $1,000.

59:02

You know you're talking to a couple with a

59:04

lot of money when they just throw numbers around. I'm

59:06

like, are we talking like on your couch or

59:08

250? What are we talking about here? All

59:11

right. $250,000 is currently invested in index funds? Yes. All

59:19

right. And you're planning to

59:21

invest how much per year? If

59:25

we did 29% of

59:27

the income, right? Is that what we were looking at?

59:29

Yep. Oh,

59:34

gosh, I'm not good on the spreadsheet. It was about $5,000 per month,

59:36

right? Yeah. $12,000,

59:39

$60,000 a year. About 60 grand.

59:42

All right. Let's say you two, what

59:44

do you like? How old? 48? 48.

59:47

48. Let's say. All right. Let's say 10

59:49

years. 58. Just to see, okay? I

59:51

just want to show you. And then what

59:53

interest rate should we assume here? It's definitely not 3.8% per month.

59:57

What should we assume per year? Seven

1:00:01

yeah, let's do seven. All right.

1:00:03

What do you think this vendor is gonna be? What

1:00:06

I don't even know I hope it's really

1:00:08

high I Have

1:00:11

no idea 1.3 million Not

1:00:14

bad. All right, let's play it out. Let's just

1:00:16

keep going a little bit. Huh? This assumes

1:00:19

no increase Alright,

1:00:22

this is a bit aggressive 5,000

1:00:25

a month. I hope you can keep that up

1:00:27

for 10 years But that

1:00:29

is a really high income. All

1:00:31

right, let's do the good and let's do the

1:00:33

bad Let's play it out in all different forms Let's

1:00:36

say that you're able to keep maintaining five thousand

1:00:38

dollars a month investments Right, which is

1:00:40

sixty thousand a year and instead of ten

1:00:42

years. We keep it at 15 years same thing 2.3

1:00:46

million starts to really grow as you go a

1:00:49

little bit 3.5 million after 20 years Okay,

1:00:54

impulsive. Mm-hmm. So first off

1:00:57

Right now we are assuming that

1:01:02

$20,500 is coming in every single

1:01:04

month as an oil dividend. Okay

1:01:08

if If

1:01:11

that comes in you've already created a

1:01:13

plan where Approximately

1:01:16

six thousand of those dollars go

1:01:19

into investments All

1:01:21

right for

1:01:24

guilt-free spending It

1:01:26

definitely should not be six thousand dollars a

1:01:28

month You

1:01:30

want to just fix this right now should we just do

1:01:33

this? I hate homework. Let's just do it Right

1:01:36

now you have five thousand seven hundred ninety six

1:01:39

dollars left over per month. That's too much to

1:01:41

be spending on guilt-free spending. Okay Let's

1:01:44

get aggressive. Let's play around. Let's

1:01:46

put four thousand more. Holy. Oh

1:01:49

my god. This is amazing I

1:01:51

just put four thousand dollars additional

1:01:53

in investments. That's ten thousand a

1:01:55

month Now that's

1:01:57

aggressive. What do you all think? Aggressively

1:02:00

aggressive. I like that, but keep in mind,

1:02:02

it's paying $20,000 a month. Doesn't

1:02:07

it make sense that half of that should be going

1:02:09

to investment? Hell, if it was me, and if I

1:02:11

didn't have all these other expenses and stuff, I would

1:02:13

take $20,500, take every

1:02:15

last cent and diversify it into

1:02:17

the market. That's what I would

1:02:21

do. So the fact that half of

1:02:24

this money is being eaten up by

1:02:26

other expenses, what does that tell you? That's

1:02:30

the part that I don't like. Yeah, it just tells me that

1:02:32

we have not enough regular

1:02:34

income. Yeah. Yeah.

1:02:36

Yeah. Just so you know, the two of you

1:02:38

look at money totally differently. Brad looks at money as

1:02:42

net worth. That is

1:02:44

what Brad is concerned with. Brad goes,

1:02:46

what are you talking about? We don't

1:02:48

have enough money. We have $1.3 million

1:02:50

and we're drawing from that and it's

1:02:52

paying us. We are millionaires. Net

1:02:55

worth. And there's validity

1:02:58

in that. I personally look at my

1:03:00

financial situation by net worth

1:03:03

first. Sandra

1:03:05

is saying, why do I care

1:03:08

how much money is locked up in some oil thing? We

1:03:11

are losing money every single month. It's

1:03:14

in the red. And I'm sitting over

1:03:16

here trying to move things around like Tetris and

1:03:18

there's just not enough money. Yeah.

1:03:21

Both of you can be right,

1:03:25

but that doesn't solve anything just because you feel

1:03:27

right. That got you 25 years, but that didn't

1:03:29

solve your financial problems. In

1:03:33

my opinion, when you get

1:03:35

to a certain level of your finances, net

1:03:38

worth starts to become more relevant,

1:03:40

more interesting. It's

1:03:42

where you focus more of your time on cashflow.

1:03:46

You want to keep an eye on it. Right

1:03:48

now, it appears like to

1:03:50

Brad, he's like, well, that's what we're

1:03:52

doing. Like we got a million bucks.

1:03:54

It's paying out a huge amount. What

1:03:57

do I care about? You know, some tiny amount here, there.

1:03:59

It's fine. Santa says like I don't

1:04:01

even count the $20,000 a month. We can't do that.

1:04:03

It's real money. We got to count it as income

1:04:05

Okay, but let's also play

1:04:07

what happens if this doesn't work out

1:04:11

So let's say you're able

1:04:13

to do this for one more year $300,000

1:04:17

in your principal and then this

1:04:19

oil thing vanishes and You

1:04:22

lose it all it's gone It's

1:04:25

very real possibility. How much

1:04:27

money can you? Contribute now

1:04:30

to your investments with our

1:04:32

current income none. Yeah zero Alright

1:04:35

and ten years to grow 7%

1:04:39

you have five hundred ninety thousand dollars by the time you're

1:04:43

58 years old what's the

1:04:45

percentage of this actually happening here? I Hope

1:04:50

it's low, but I really I don't

1:04:52

even know make it up

1:04:54

ballpark. I'm like 50%

1:04:59

5050 could go either way. Okay Brad. What do you think? The

1:05:02

worst-case scenario. Yeah 20% that's

1:05:05

pretty high Brad you can't

1:05:07

control what's happening with the oil thing. That

1:05:09

ship has sailed whatever is gonna happen with is gonna happen But

1:05:13

now what if the money goes to zero? We

1:05:15

need to grapple with that. All right. Are you all

1:05:17

ready to do this? Yeah. Yeah. All

1:05:19

right. So here we are. I Am

1:05:24

going to take this number. This is in

1:05:26

your gross income and I'm

1:05:28

simply gonna delete it because I'm gonna

1:05:30

assume that that money just stopped alright,

1:05:34

so we're back to 2966

1:05:38

I'm not even getting into the fact that that

1:05:41

and gross are the same whatever and

1:05:44

You're back to 99% fixed cost. These numbers look

1:05:46

familiar, right? Yes What I look at all the

1:05:48

time there are two things you can control number

1:05:50

one you can control what you do with the

1:05:52

money When it comes in Which

1:05:55

I think we've agreed you're

1:05:57

gonna aggressively invest it in

1:06:00

diversified funds, whether through

1:06:02

a 401k, HSA, taxable account, whatever,

1:06:04

speak to your account. What's

1:06:08

the second thing you can do, Brad and

1:06:10

Sandra, for that matter, to

1:06:13

mitigate against ending up almost 60

1:06:15

years old with $600,000 in

1:06:18

the bank? I

1:06:20

earn more income. So

1:06:24

it looks like creating a part-time

1:06:27

job into a full-time position.

1:06:30

Fully employed, what, 10,000, 12,000 per month? Okay,

1:06:35

fair enough. Put a pin in that. I'm

1:06:37

coming back to you, but I love what you just said. Sandra, what

1:06:39

about for you? Right

1:06:43

now, I do work full-time. I could probably

1:06:45

make more. I like what I'm

1:06:47

doing, but I mean, I could probably do

1:06:49

something different. I work remote from home, and it's

1:06:51

a really flexible job, so it's nice with the

1:06:53

kids that we do have here at home to

1:06:55

be able to take care of them and such.

1:06:59

I mean, I could do something different there. I

1:07:02

was working full-time at the same position, and

1:07:04

then I was doing massage at night, and

1:07:06

it was very lucrative, and so that's why I

1:07:08

was doing it, because it's a lot of tourists, and

1:07:10

so you're making about $100 an hour doing massage. It

1:07:13

was a pretty good gig, actually. Make

1:07:16

an extra $1,000 a week, just working a couple nights.

1:07:19

That's an option, and I have a high business

1:07:21

that I would love to grow doing Ayurvedic health

1:07:24

coaching, but it's something I've

1:07:26

dabbled with for years, and I've not

1:07:28

ever really seen that grow much, so

1:07:30

I don't have a lot of confidence in not

1:07:32

becoming something that's stable. How

1:07:35

do you decide, out of the two of you, what

1:07:39

you're going to do about your income? Because

1:07:41

right now, it's easy to just ignore it. You're like, what

1:07:43

do we care? We're making $29,000 a month. Let's

1:07:48

just hope that everything goes well, but

1:07:51

hope is not a strategy. Yeah,

1:07:53

that's, I think, the most uncomfortable thing about

1:07:55

this whole conversation. When

1:07:58

I get stressed about this, I try and figure out all different ways. ways that

1:08:00

I can earn more money and I

1:08:03

just don't want it to become my problem to

1:08:05

solve the whole thing by myself and

1:08:08

so I don't want to keep on trying to find

1:08:10

new ways. So can you what

1:08:12

would you say in a way that would

1:08:14

be connective to Brad and

1:08:17

not a jab? Brad

1:08:19

I think we need to have a we need

1:08:22

to decide together here's

1:08:24

how much our family needs how do we want

1:08:26

to provide that income and maybe it's doing

1:08:29

a business together maybe it is something like that but I think

1:08:31

it has to be something we're both comfortable and

1:08:33

happy doing and happy with. So

1:08:36

yeah I think that the full-time

1:08:38

teaching scenario is it's still the

1:08:40

right path to take. I mean

1:08:44

we don't have a huge delta that or a huge

1:08:46

difference that we're trying to solve but

1:08:49

and I know it makes you very uncomfortable

1:08:51

but it

1:08:55

still feels like that's that's a good way to to

1:08:57

make this work the best. So

1:08:59

the total gross teacher would

1:09:02

be 63,000 on

1:09:04

year one which would be 5,250. Okay and

1:09:06

then plus we would have another 14,000

1:09:13

for the year or the

1:09:15

contractor scenario that. Alright fine I added

1:09:17

it in. Okay

1:09:21

alright so here's what I just changed for

1:09:23

everyone listening. Instead of Brad's

1:09:26

gross income being 3,000 it's now 6450. They

1:09:28

both make the same

1:09:32

gross income they both make the same net

1:09:35

and their combined gross monthly

1:09:37

income is $12,950. Alright your fixed costs are

1:09:39

now 75% that's high. And

1:09:47

by the way oh

1:09:49

definitely not we got to change all this

1:09:51

investments needs to go to zero zero

1:09:58

zero savings and

1:10:00

then you got a little bit of money left over. You

1:10:05

could put a little bit of savings maybe. Yeah,

1:10:08

you could put like a thousand bucks a month into

1:10:10

savings, I agree. Yeah,

1:10:13

and you could put like 500 a

1:10:15

month into investments. You'd be

1:10:17

doing 7%, which, let

1:10:21

me tell you what I see at 7%, because I

1:10:23

typically say investments five to 10%, but

1:10:25

of course more is better. If

1:10:28

you two were 25 years old, I

1:10:30

would say like, yeah, 7%, good. Enjoy

1:10:34

Taco Tuesday and put 7% in, and

1:10:36

as your income increases, you're

1:10:39

gonna compound and all that stuff, but you're

1:10:42

48 years old. So

1:10:45

the consideration changes. What

1:10:50

do you all think about where I'm going with this? Not

1:10:54

enough income? Yeah,

1:10:56

not enough income, and time is

1:10:58

getting short to start compounding. Yeah,

1:11:02

totally agree. I mean,

1:11:04

you know what happens if

1:11:06

you put $500 a month into, at

1:11:11

your age. I mean,

1:11:13

let's just take a look. We've got 17 years

1:11:16

until we're 65. All

1:11:18

right, let's play that out. I mean, you'd have $987,000. It's

1:11:23

not bad, it's not bad. You

1:11:26

know, your withdrawal on that, let's

1:11:30

just even say 4%, 40,000

1:11:35

a year, it's not a lot to live

1:11:37

on. No, that's bad. Definitely

1:11:40

not a mess. It needs to be like 4 million

1:11:43

to be able to comfortably have a nice

1:11:45

life at that point. Yeah. And

1:11:50

every year starting

1:11:52

right now that

1:11:54

you're not contributing

1:11:57

a substantial amount. to

1:12:00

investments becomes harder and

1:12:02

harder. You see what I'm saying? I

1:12:05

do. Might there

1:12:07

be a way that you could look

1:12:10

at other options while slow

1:12:14

still working part-time? Are

1:12:19

you interested in that? You don't sound that interested. I,

1:12:22

I, I'm not, I'm

1:12:25

not, uh, we, uh,

1:12:28

yeah, I'm just not. What

1:12:30

are you going to do if, if, uh,

1:12:32

if, if we're in the worst case scenario, which we are

1:12:34

the oil thing we're talking about, if

1:12:37

the oil thing died, then I would be, I

1:12:39

would be bailing on the teaching scenario and I

1:12:41

would be looking for the 10 to $12,000 per

1:12:43

year. What

1:12:45

is that? It's whatever

1:12:48

I could find for 10 to 12,000. I haven't explored

1:12:50

yet. I don't, I don't know what that would be, but

1:12:52

I would say if I'm fully employed, if I'm like making

1:12:54

the money I should be making, it would be in that

1:12:57

space. Okay. There's like

1:12:59

a full-time middle manager

1:13:01

cubicle scenario. So yeah.

1:13:03

So yeah, if it

1:13:05

goes belly up, then I'm absolutely willing to suck

1:13:07

it up and to have that direction. Do

1:13:11

you want to teach? I

1:13:13

would love to teach. I've been doing it for

1:13:15

the last three months. It's spectacular. What

1:13:18

do you think Sandra? I think that he's

1:13:20

a great teacher. I think it's a good stable

1:13:23

thing for him. I don't think that the income is

1:13:25

as high as what he could do. But if the

1:13:28

oil continues, I think it's the perfect place for him to

1:13:30

be. I think him saying he's willing to

1:13:32

do a full-time job is really a

1:13:35

good step. You know, if he needed

1:13:37

to do that. I'm happy to get

1:13:39

a full-time job that I can make that commitment.

1:13:41

Sandra, if the oil goes belly up, I will

1:13:43

get a full-time job. Hey,

1:13:45

I like that. That's good reassurance

1:13:47

there. Just to reiterate once

1:13:50

more, let me tell you why we're talking

1:13:52

about potentially making more income. Even

1:13:54

though their oil investment is currently paying

1:13:56

off, it's giving huge

1:13:58

returns. Based

1:14:00

on pure math, that's unlikely to continue. If it

1:14:03

were to continue to be one of the best

1:14:05

investments in the history of the world. But

1:14:08

Sanders is also recognizing that this is a

1:14:10

severe risk. This is one

1:14:12

individual investment. It could dry up. It

1:14:14

could stop paying for whatever reason, regulatory

1:14:16

risk. And if

1:14:18

this thing goes away, we are sunk. Can

1:14:23

we agree that that's

1:14:26

how everyone in this

1:14:28

conversation feels? Is that fair? I'm

1:14:31

not as dire on that conversation. And

1:14:33

I appreciate you painting the picture of

1:14:35

it. It's doomed to fail at this

1:14:38

point. It has been performing fantastic.

1:14:41

It's not dumb money. These are

1:14:43

$60 million investors that are putting

1:14:45

money into this project. You're fortunate

1:14:47

enough to be tied into these

1:14:49

big investors. I hope it works.

1:14:53

We're paying a doomsday scenario,

1:14:55

and I can appreciate that.

1:14:58

It's kept me up at night, but I don't believe

1:15:00

that that's the likely case scenario. There's some place in

1:15:02

the – and then what if it's the best case

1:15:04

scenario? We'll talk about that as

1:15:06

well. But Brad, I don't hope that this thing

1:15:08

fails. I hope it crushes it. But

1:15:11

if it doesn't, right

1:15:14

now there's no plan forward. And

1:15:16

you're out of money in a matter of months. I

1:15:21

couldn't run a two-person relationship like this,

1:15:23

much less a six-person household. Yeah,

1:15:25

that's fair. All

1:15:27

right. So we

1:15:30

got a plan for the best and

1:15:33

the worst case scenarios. We

1:15:36

talked about worst. We

1:15:39

said, look, right now the money's coming

1:15:41

in. Invest that aggressively. What

1:15:44

if you make, instead of 20,000, what if you make 40,000

1:15:46

next month in dividends? Because

1:15:51

that's happened, right? You've got to pay 40,000

1:15:53

in a month from this oil thing, right,

1:15:55

Brad? Here's my suggestion.

1:15:57

If you make 40K instead of 20K in

1:15:59

a month, literally take

1:16:01

all your numbers and double it.

1:16:05

Don't mess with it, don't tweak anything,

1:16:07

it's all percentage based. That's

1:16:09

it. So instead of this thing being 10,000 a

1:16:11

month, it's 20,000 in a month

1:16:14

for your investments. That's literally

1:16:16

it. What

1:16:19

is that huge smile on Sanders face? Look at that smile.

1:16:22

I'm like, cause that would be awesome. It'd

1:16:26

be really great. Okay, Brad, do you

1:16:29

understand the principle? Just doubling the percentage?

1:16:31

Totally good. All right. Now,

1:16:34

Sandra, I wanna raise something that Brad brought up,

1:16:36

which is like, will it be enough? Yeah.

1:16:41

Are you gonna feel good about

1:16:43

money if you're

1:16:45

executing on this plan? I'd

1:16:47

like to say yes. I don't know if I

1:16:49

would feel good, but I think having

1:16:52

a plan is very much still

1:16:54

secure to me, knowing

1:16:57

that we're making strides, that we're working

1:16:59

towards it, that it's not

1:17:01

just counting, but Costco membership in that

1:17:03

line, that it's money's being set aside every

1:17:05

month, and we know that it's gonna be there for us

1:17:08

when we need it. So that I think is

1:17:10

very helpful. I don't know if I'll feel like amazing

1:17:12

all the time. I don't know. I think that would

1:17:15

be silly to think that I would, but I think

1:17:17

it would give that layer of, we're

1:17:19

doing something really good with the dividends from the

1:17:21

oil, so I can not worry about them so

1:17:23

much now. And how could you continue

1:17:25

to work on the way you feel about money? Okay.

1:17:30

I don't know. Read your book again and get

1:17:33

more coaching on money and spend

1:17:36

time really working on my mindset around it.

1:17:38

Of course, you can join my coaching program.

1:17:40

Yes, all that, yes. But

1:17:43

also, you're a therapist. Yeah.

1:17:46

Like, where's the money for that? Oh,

1:17:48

that's true. I should probably bet that is a line. So

1:17:50

it's an area of spending. Discretionary. Is that

1:17:53

instead of the Caribbean? Honestly, it's one of the

1:17:55

most important things that two of you can spend

1:17:57

your money on. And if you wanna do it

1:17:59

individually. Do that too. Yeah.

1:18:01

You're right. That

1:18:03

should be spent. We often

1:18:06

give ourselves these labels, often very charitable.

1:18:08

If it doesn't show up on our calendar and

1:18:10

in our CSP, it's probably not as true as

1:18:12

we think. I'll give you

1:18:14

an example from my own life, one you might not expect. As

1:18:18

I'm talking about generosity, I'm like, no, I'm

1:18:20

a hotel guy. I love

1:18:22

hotels. Guess what? That shows

1:18:25

up big in my spending and it shows up

1:18:27

on my calendar and it shows up in my CSP. And

1:18:30

so should anything that's important to you. So if in

1:18:32

your relationship with four kids and 25 years of marriage,

1:18:35

this relationship is important to you, then

1:18:38

it should show up in your spending. Okay.

1:18:41

Well said. I think

1:18:43

when you talk about safety, Sandra, that's

1:18:47

a word. But

1:18:50

had you been able to both have the

1:18:52

skills of going deeper on that, which

1:18:54

you can learn those skills, you can become equipped to do

1:18:56

that. And I think Brad would have said,

1:18:58

Hey, I hear you saying safety.

1:19:01

I want you to feel safe. I

1:19:03

want to feel safe. Sometimes I'm scared. I

1:19:05

want us to both feel safe. He said,

1:19:07

or what would safety mean to you? And

1:19:10

then Sandra would probably say, Oh, I don't know. You know, I

1:19:12

want to have like enough that we could comfortably get by. And

1:19:14

then Brad would say like, tell me more. Is

1:19:18

there a number? Because sometimes

1:19:20

I feel like, gosh, even

1:19:22

when there was a big number,

1:19:25

sometimes I worried that that

1:19:27

wasn't enough. But then

1:19:29

I think maybe we just didn't get specific about

1:19:32

what we need from each other. So I'd love

1:19:34

to know from you, what does safety look like?

1:19:36

Tell me, let's write it down and I'll try

1:19:38

to get there. Have you

1:19:40

ever had that conversation? No,

1:19:44

no, we've not. What

1:19:46

do you notice about how different that is than some

1:19:48

of the conversations you have had? A

1:19:53

lot more positive and it's a lot

1:19:55

more unified,

1:19:57

connected. It's

1:19:59

like supporting. each other instead of being adversarial.

1:20:02

Yeah. What do you notice Brad? Yeah,

1:20:04

same. This stuff is hard. If Brad

1:20:06

is willing to say, and what

1:20:08

I would recommend is you

1:20:10

all get a piece of paper and write it down. What

1:20:13

are our fears? What are our

1:20:15

agreements? Brad is point blank saying,

1:20:17

look, if the oil money stops, I

1:20:19

will get a job and I will make X

1:20:22

dollars. What

1:20:24

a relief. That

1:20:26

feels good. Then Sandra is

1:20:29

probably going to talk about, here's

1:20:32

what I will do more

1:20:34

of, and here's what I will do less of. Sandra,

1:20:38

I think probably some of that is, words

1:20:41

like underemployed, it's got to be

1:20:43

off the table. Yeah. It's just devastating.

1:20:45

There's got to be some things that are just

1:20:47

off limits. The

1:20:51

frantic texts, there's probably no

1:20:53

reason for that. I mean, I understand the

1:20:56

fear. I understand that. Being

1:20:58

frantic is not going to get you

1:21:01

what you want. It's actually going

1:21:03

to be more important for you to connect with Brad. I

1:21:06

would propose you take that big old budget and throw

1:21:08

it in the garbage. I

1:21:11

would do it theatrically. I would actually print that thing

1:21:13

out and be like, look, we're going to have a

1:21:15

ceremony and it's going to be called,

1:21:18

buy-buy budget, toss that

1:21:20

thing in, light it on fire, have some fun

1:21:22

with it, give each other a high five and

1:21:24

start all over. And

1:21:27

you're both involved. Skin in

1:21:29

the game is going to change the dynamic between the two of

1:21:31

you. What do you think? I

1:21:35

love that. Brad?

1:21:37

I'd like to give a shot. Maybe we

1:21:39

should do it like very close to our

1:21:42

mayoral counseling meeting. I

1:21:45

think that's awesome. Either right before or right after. Fantastic.

1:21:48

I love that. Gosh, it feels like we have

1:21:50

some certainty around these things. What do you think?

1:21:54

Yeah, that feels good. That

1:21:56

was really good. I think we

1:21:58

made some progress in this conversation. And I'm

1:22:00

thankful to Brad and Sandra for

1:22:02

having such a candid, difficult conversation with

1:22:04

me and with each other. I

1:22:07

also think it was pretty hard. There's so

1:22:10

many layers here of resentment

1:22:12

and misunderstanding and identities and

1:22:14

stories that's difficult to disentangle

1:22:16

them. What I appreciated was

1:22:18

the honesty about how they both felt and

1:22:21

some agreements about what they're

1:22:23

going to do with their money. Now

1:22:25

please listen to their follow-ups. First

1:22:28

let's hear from Sandra. So I would

1:22:30

say the biggest surprise in my

1:22:32

call was probably the

1:22:34

emphasis that was put on our

1:22:37

investment in the oil. I mostly just

1:22:39

wanted to resolve how to account for

1:22:41

it. I would say my biggest takeaways

1:22:43

were that my husband and I are

1:22:45

actually more on the same page than

1:22:47

we thought. And

1:22:49

we've made some really good strides as far

1:22:52

as setting up some investments and also

1:22:54

creating a really clear vision of what

1:22:56

we want together. I think

1:22:58

from that call I was able to see that

1:23:00

it's important that we both get involved in the

1:23:03

money, that we both spend time discussing it

1:23:05

and going through it, and that

1:23:07

we're more of an active participant and that

1:23:09

managing the money does not mean, depending on

1:23:11

those, that it's having a bigger vision

1:23:13

for what we want for our future. So thanks

1:23:15

for your time. It was great to visit with

1:23:17

you and thanks so much. As

1:23:20

for Brad, I received an

1:23:22

email from Sandra. She wrote, Brad

1:23:25

will not be sending a follow up video.

1:23:28

He felt very attacked on the podcast

1:23:31

and does not want to engage further.

1:23:35

I'm hoping for the best for Brad and Sandra. And

1:23:37

again, I thank them for coming on and sharing

1:23:39

their stories. Thanks

1:23:43

for listening to I Will Teach You To Be Rich. I'm

1:23:46

Ramit Sethi. Please follow the

1:23:48

show on Apple, Spotify, or

1:23:50

wherever you listen to podcasts. If

1:23:53

you haven't read I Will Teach You To Be

1:23:55

Rich, my book, pick up a

1:23:57

copy. You can get it at any bookstore or

1:24:00

any library. library and it will show you the

1:24:02

specific tactics for how to build

1:24:04

the I Will Teach You To Be Rich system into

1:24:07

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