433: Ramit Sethi Revisited: Spend Like Your Life Depends on It

0:00Welcome to the BiggerPockets Money Podcast, where Scott grills Carl and me about why it's so hard for us to spend money. Hello, hello, hello. My name is Mindy Jensen. And with me, as always, is my beach bum co-host, Scott Trench. See that, Mindy? That's me giving you a wave.

0:20It's nice to know you're working hard, Scott. Scott and I are here to make financial independence less scary, less just for somebody else, to introduce you to every money story, because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting. That's right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business, or simply start spending the fortune that you have already amassed. We'll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.

0:49Scott, before we jump into today's show about spending, we're going to talk about a new segment we have called the money moment, where we share a money hack tip or trick to help you on your financial journey. And today's money moment is actually quite counter to what we're going to talk about today. Try a no spending day. I'm super good at that. Prepare ahead of time to not touch your wallet. This may be more convenient on a workday or versus a weekend. Bike to work, pack your lunch, block your Amazon account. If you can learn to do this a couple of times a week, you should be saving more money in no time.

1:29And if you have a money tip for us, email us at moneymoment at biggerpockets.com. Okay, that's all fun to talk about, but that's not really what we're going to talk about. Today, we're going to talk about spending a little bit more and how Carl and I actually have a real big problem with that. AutoTrader is powered by auto intelligence, the hyper personalized way to buy a car. AutoTrader's tools sync with your exact budget and preferences to tailor the online car shopping experience totally to you. Budgeting lets you input your info to see listings in your price range. Search and inventory helps zero in on your dream car.

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4:59And you may or may not know, we were recently on Ramit Sethi's podcast, I Will Teach You To Be Rich, episode 108. And in that episode, Ramit referenced the time that he joined us on our show, episode 243, to talk about his new book and his new podcast. And also at the end of that show, he challenged me to 10x my spending. Here's a little clip from that episode where we were talking about me going on a bicycle trip. So let's go take a listen. Mindy, what would you do if you had to quadruple or 10x your spending on bikes? Tell me. Ooh, I would go on long distance bicycle trips. How would you plan this trip?

5:48Again, 10x spending on this. Look at this discomfort on your face, Mindy. Why? That's because first of all, I don't have any time. I would have to be in the summer because the kids are in school. Mindy, the vision, stick with the vision. Stop thinking about the dollar amount. You have the dollars. I do have the dollars. How long would your rich life bike trip be? Probably two months. Whoa. Okay. Love it. That's amazing. And do you want to have any photos of this trip? Yes. Wouldn't it be nice to have a beautiful professional photo of your family with the sunset behind you? Yes. Probably in your family forever.

6:34What was that? We could just set up a tripod too. Mindy, you could do a lot of things. I can visually see you shrinking outside of the camera range. Can you tell me what's going on with you? This is uncomfortable. Why? Because I don't think about things like this. Yeah. And what do you think about instead, Mindy? Saving. Mindy, you saved. You already won. You have enough. I know. It's time to shift into learning how to spend it. And this skill, you can see it. By the way, I hope everybody can see this because I think you have a lot of courage to do this with me. This is really hard stuff. So Mindy, thank you.

7:12You're being very courageous. This is, you're changing not just your own way of thinking, but what was passed down to you from your parents and possibly their parents. And here we are. Look at this. We're talking about maybe hiring a photographer. It would cost$500. It would cost nothing. It would be a memory in your family for generations. Mindy, you're having the courage to discuss this. You think you'd have the courage to do it? So Mindy, I remember that conversation very, very vividly. And I would love to know, you know, for those who haven't listened to the episode on I Will Teach You To Be Rich, could you tell us what happened with the bike trip and then why you decided to go back on or on to Ramit's show to get more coaching?

7:59The bike trip actually turned into a trip to Germany. My older daughter had a trip scheduled with her school. And that was in a weird time in the middle of summer. So we decided instead to go to Germany with her. She went to Germany and then we flew and met her at the end of her trip and extended her trip and joined her. So that's what we did instead last summer. But Ramit, at the end of that clip, he says, you have the courage to discuss this. You have the courage to do it. And it's not so much about the courage to do it. It's time. I don't have a lot of, I don't have two months to do a frivolous bike trip.

8:57I've got two kids who are in school for nine months. And to take two months out of those nine seems super selfish. And then to take them over the summer, there's just so many things you're trying to cram into a summer. um i will do the bike trip uh what was what was really so wonderful is that scott after that show was like hey mindy we'll figure out a way to get you to go on that bike trip like we'll record in advance so you don't have to worry about the show and all of that i was like wow that's really great but i'm thinking like that's so much time it's more it wasn't so much the money is the time commitment.

9:38And life is just so busy all the time. But I've got a million reasons why I can't do something. I'd love to dig into that. So has that line of thinking changed around the, I don't have time to do that after the episode with Ramit, where I think he challenged that point, right? And there was, hey, here are the things that are keeping you busy. Is that going to change there? How do you think about that response around, I don't have time to do that in a summer going forward? Yeah, that's one of the things that we had discussed on the episode too. We are working to free up our life. We are actively not committing to things that are huge time sucks.

10:29And we are wrapping up the things that we have committed to. So Mindy and Carl, you guys were on the Ramit's podcast, an episode that released in June, less than a month ago. And you talked to him about a lot of coaching points. Could you give us a little bit more of context around what that show was, what you guys discussed, and what the outcomes were? Yeah, Scott, I'll go first here. And I actually wanted to be on Ramit because I don't think I've ever had a healthy relationship with money. Growing up, there was some chaos in my childhood. My dad struggled with alcohol and mental disease. And yeah, I've got some really bad memories.

11:07And I think my reaction to this was to save money. Money was a security blanket. After the Ramit episode aired, I was looking at someone kind of left a nasty Facebook comment on somewhere and they're like, oh, these people have a lot of money. I can't relate to these people. So, and my thought was, I think you're absolutely right. I can't really relate to myself. This money that we have isn't necessarily representative of a great thing. It's representative of trauma. And I can't even, it's there because of the trauma and I need to have a better relationship with it and perhaps figure out a way to change my relationship with money.

11:47So that's why I wanted to talk to Ramit. So, Carl, I think that that message really came through on the podcast. And, you know, I think perhaps harshly that's described as in this, you used this word called cheap. And so I'd like to play a clip from the podcast where that's talked about and then discuss a little bit of that. So what's up with this dynamic here? The two of you both acknowledge you're cheap. The two of you talk about money, constantly focusing on cost. The two of you then tell each other, we should be better. We should spend something. But then you don't. So why do you think that this dynamic is being called out by Ramit?

12:33And why is it so difficult? Why do you guys find it so difficult to kind of spend money and splurge a little bit on more of these experiences? Yeah, I think we've been doing this for the past, geez, how long? We've been married for 20 years and I was like this before I met you. 21? Yeah, 21 years. Time goes by quickly. This is how we've been living our life. This is how I've lived my life. I'm almost 50, and the first four or five years don't count, but anything after that, I was a saver, and it was never in my blood. It was never in my person to be a spender, and it's really hard to flip the switch on that, I think.

13:14I appreciated Ramit's external nudge, and I think we've made improvements since we talked to him. But yeah, 45, 50 years of experience is hard to change. Were you guys aware of this dynamic coming into the show or what was it exposed, as you said? Or did you guys become more aware of it after recording with Ramit? I think we were aware of it. I mean, we reached out to him. We were on his show on purpose. It's not like he called us up and was like, hey, can I ambush you? We called like we applied to be on the show. And we did that because we had heard him on the Mad Scientist podcast pushing Brandon.

13:54And we thought we should probably have a conversation with him, too. I think it would be good to talk to him. Were we aware of this dynamic? I think more of like peripherally. Oh, yeah, we know we need some help. I think he brought it up to the forefront of, you know, you're hoarding this resource. You aren't using it to make your life better. What's the point of having it if you're not going to use it to make your life better? And this conversation, we actually recorded this show in April and it didn't air until June. But we have been having conversations with people around us regarding this topic since April.

14:46And a really great conversation that I had was with Waffles on Wednesday. And they said, you know, we sat down when we made our last move and said, what can we add to our life that would make it better? Or what can we take away from our life that would make it better? And they said, we want to get a house cleaner that would make our life better. And it wouldn't affect our net worth. So I don't know what it was about hearing that. I don't know. It kind of gave me permission to start thinking about spending in a different way. How impactful – at around the same time, Mindy, in the last couple months, you and I have both read and talked about the book Die With Zero, which I think has a similar theme to this and really ties in some of the things that you talked about on Ramit's podcast.

15:44How impactful has that been? And has that kind of changed this notion of spending less as a virtue and thinking about the goal being to spend less, become financially free? kind of attend to these habits that are conducive to building wealth and maybe flip the rules of the game a little bit? Spending less as a virtue came up during the show too. And I never really thought of it as a virtue. Like Carl, I just didn't grow up spending money. My dad's one of seven. My mom's one of eight. They never had money growing up. And then when my parents got married, they continued to spend like they didn't have any money.

16:28And in the beginning, they didn't. And then my dad got better and better jobs. And they continued to spend like they had no money and they invested wisely. And I mean, they continue to spend like they have no money. It's something that just gets ingrained in you. And when you see your parents not spending money, and I mean I remember a conversation with my dad we were at a garage sale and somebody was selling one of those like giant pencils I'm like oh I want this and the guy's like ah just take it and then later I was buying a gift for my mom and I barely had enough money and my dad was pointing out you know oh well if you would have had to buy that pencil instead of that guy giving it to you then you wouldn't have enough money for this gift for your mom.

17:17And that's kind of stuck with me my whole life. If you spend like, here's a dollar, you can only spend it once. So if you spend it, then you can't buy something else. Oh my goodness. This is like that sweet pickles book quail. What's this? This is a book series from the seventies called the sweet pickles. And there's, it's, uh, there's a book about a quail and she doesn't know how she can spend her money so she's trying to decide between this and that oh my god i'm quail does she buy a lamborghini at the end though no she buys a bracelet in a sugar bowl but i mean you don't sometimes you don't think about it until it's like thrown in your face and that was really what was so helpful from this this episode is that it was kind of thrown in our faces i mean honestly I went into that recording with Ramit thinking that he was going to be like, oh, here's some tips for how to loosen up the purse strings.

18:19I didn't, I don't know why I thought he was going to be all nice. Like, oh, we're all in the same financial education space. So, you know, I'll be, I'll just give you some tips and everything will be great. And he starts off with like, no, here's some uncomfortable questions and some really pointed discussions and, you know, Oh, you don't want to answer? I'll wait. We run the EOS system at work. And one of the things they describe is they say there's a difference between being nice and being kind. And nice is, oh, it's okay. And kind is direct, tough feedback that actually helps people improve and get better here.

18:55And I want to go and play that clip now where Ramit gives you, we'll call it, quote unquote, kind feedback here. I don't know how to change. I mean you just spend money that's how you change but that's not no it's not it's not even about how Mindy because we talked about how last time and you didn't do it and again I don't mind that you didn't take the bike trip you took another trip great but the how is not you're not even at the how yet you don't even know why you would want to spend more money in your minds and the dynamic you've created between yourselves and with the relationships around you spending less is a virtue and spending more is wasteful so let's react to that what what did um did that that was that a kind of a wake-up moment what changed as a result of that particular challenge from ramid there that kindness if we want to call His kindness.

20:01You're much more kind than Ramit Scott. Tough love. I think if anything makes you uncomfortable in life, that's exactly what you should do because that's where your growth comes from. So if you don't like to do something, you should force yourself to do it. And that's how spending is for me. And Scott, I'd like to give you an example of something I just did this past weekend. My kid had a ticket to Taylor Swift. She had one ticket and I got there to drop her off. And when I dropped her off, I'm like, man, this seems like it would be pretty cool to go to. I'm a casual fan, but tickets are so expensive.

20:34And then I'm walking back to the hotel and I'm like, you know what? What would Ramit say? I'm picturing like Ramit sitting on my shoulder like the good angel. Ramit would say, buy the ticket, buy the ticket. So I went back and I bought the ticket for$1 ,000. And it was a little bit uncomfortable putting in my credit card number. But after I did it and went to the show, it was great. No regrets whatsoever. So now I'm trying to challenge myself. If there's the slightest hint in my mind that I want to do something, I'm going to go ahead and do it. As long as it's not crazy, I'm not going to go buy a helicopter or something like that.

21:07I'm so thankful. I feel a little bit foolish for saying this, but$1 ,000, I'm just going to go ahead and do it. And there's not a whole ton of opportunities in our life to just blow$1 ,000. But when I can, I will. I also rented a Corvette for an upcoming trip, which will be great too. How long do you think you'll remember that Taylor Swift concert for? Oh, I'm going to remember it forever. It was great. I'm not even a huge fan, casual fan, but it was fantastic. Well worth it. No regrets. I would have paid. Now that I did it, I would have paid five times as much for it, which sounds a little bit ridiculous, but it was spectacular.

21:42This sounds wonderful, but there was another W word that came up over and over and over again in Ramit's podcast, and that word is wasteful. Mindy, I'd like us to listen. Mindy and Carla, let's listen to a quick montage of the number of times that Mindy uses this word in this podcast. Let's go ahead and play that. I am a grandchild of the depression and you did not waste anything back then because you didn't have anything. I don't want to be wasteful. I mean, that's a good thing to be not wasteful with your money. It can't be wasteful. Well, I had some notes up here and my top thing was I don't want to be wasteful.

22:21So I'm crossing that off kind of wasteful. Why is spending money in some cases equated with being wasteful, Mindy? And what's the history behind that? And I also want to get your reaction to, I think, a really telling point that Ramit made on this podcast, which is that any complex system, which a multimillionaire net worth like yours is certainly a complex system, has waste and how that's kind of informed or made you think about things on a go forward basis? How do you react to that? Well, yeah. So I never thought about it being a complex system and complex systems having waste. I just thought about that pencil story from my dad.

23:05And that would have been wasteful if I spent money on a big pencil that I didn't really need. I don't currently own this pencil. if I had known then that it was going to come up so many times, I'd have kept that stupid thing. But I have always wanted to have everything that we spend money on be worth it. And not everything that we spend money on will be worth it. And Carl just mentioned that he's renting a Corvette for an upcoming trip. He sends me a picture. He's like, look at this car I just rented for this next trip that I'm taking. And I looked at him like, you're renting a lime green Corvette?

23:48Yeah, right. He's like, no, for real, I'm renting a Corvette. Why? He's like, well, I was looking, I need to rent a car. And I was looking and it's slightly more to rent the Corvette. But I have always wanted to drive a Corvette. This way, I get to drive the Corvette and get it out of my system or drive the Corvette, discover that I love it, and then I can start thinking about buying a Corvette. But you don't want to buy a Corvette and then discover that you hate driving a Corvette. So I love this. This is a reframing of it, right? Maybe there's a risk of a significant amount of wastefulness in buying the Corvette, but it's not a waste to spend 50 extra dollars or whatever it is, even if it's that much per day, to rent it and try it.

24:35And if you love it, But then all of a sudden there's not waste. There's a trade of money for this experience in this wonderful situation. So Carl, where are you taking this Corvette and why'd you pick it? Why'd you pick that color too? Yeah, it is Southern California in October, which I think will be an epic time to drive a car that does not have a top. I went on this website to rent a car, and every other car was like$500. The Corvette was like$800. I'm like, oh, this will be great. I don't like this about myself, but I'm a car person. We owned a fancy car at one time, an Acura NSX, and this will just be a fun experiment.

25:12I want to dig into something you said, Scott, a moment ago. I do want to spend more. And a conversation I had with Mindy actually this morning is I don't think all of our spending will be successful. I think some of it will be failures. And I think that's a great thing because then we won't have regrets. We'll have spent money on whatever we tried to spend money on and we'll have decided we don't like the experience. A helicopter made me throw up or who knows what went wrong, but we won't have regrets about not spending the money. And we'll know failure doesn't necessarily have to be a bad thing.

25:48Ask Carl where he's taking this Corvette. So you're starting in Southern California. Where is it going? Yeah, I have a friend who works for SpaceX who very kindly offered to give me a tour of the SpaceX facility, which is a bucket list item for me. I love rockets and aerospace. And then I'm going to Camp Fi, which is we've been there together, Scott. Actually, it's a financial independence retreat, which I guess I don't know my crowd. I'm renting a Corvette to take to a crowd of a bunch of frugal people. I might get banned from Camp Fives after that. But if I'm going to get banned, that's better than getting banned for throwing a TV out the window or something like that.

26:28Like, he showed up in a Corvette. He's banned. No more Carl. Camp Fives. I think you're perfect in that crowd because I've been to a couple of the Camp Fives. Great events. Strongly encourage people to look into them. very, very affordable. This is not going to break the bank and you're going to meet a lot of like-minded folks at these things. But I will say that there's a lot of folks at these events that have gone through, I think, very similar challenges to what you guys went through on Ramit's podcast. I think that's probably the most emphasized topic is most of the time, these are multimillionaire, financially independent, self-made people who are really struggling to change the dynamic and actually move away from, for example, that job after reaching well past the point of financial independence, really struggling to do the things that you guys are now doing and are really kind of embracing following your appearance on Ramit's podcast.

27:19So I think you showing up in a lime green Corvette after touring SpaceX is absolutely perfect and is something that will help a lot of people at that event. Auto Trader is powered by auto intelligence, the hyper personalized way to buy a car. Auto Trader's tools sync with your exact budget and preferences to tailor the online car shopping experience totally to you. Budgeting lets you input your info to see listings in your price range. Search and inventory helps zero in on your dream car. You can choose from new or pre-owned, the style of the car and features like engine size, color, all the way down to whether you want a trailer hitch.