The Tim Ferriss Show Transcripts: Ramit Sethi — How to Play Offense with Money, Plan Bucket Lists, Build a Rich Life with Your Partner, and Take a Powerful $100 Challenge (#524)

Please enjoy this transcript of my interview with Ramit Sethi (@ramit), author of the New York Times bestseller I Will Teach You to Be Rich. Ramit has helped tens of millions of people live a rich life with their money, careers, businesses, and psychology. He hosts more than a million readers on his site, newsletter, and social media. His new podcast, I Will Teach You to Be Rich by Ramit Sethi, reveals real stories about love and money from behind closed doors. Subscribe on Apple Podcasts, Spotify, or wherever you listen to fine podcasts.

Transcripts may contain a few typos. With some episodes lasting 2+ hours, it can be difficult to catch minor errors. Enjoy!

Listen to the episode on Apple Podcasts, Spotify, Overcast, Stitcher, Castbox, Google Podcasts, or on your favorite podcast platform. You can also watch the interview on YouTube.

#524: Ramit Sethi on How Couples Can Talk about Money, Bucket Lists, the $100 Challenge, and More

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Tim Ferriss:
Hello, boys and girls, ladies and germs. This is Tim Ferriss. Welcome to another episode of The Tim Ferriss Show. I’m speaking quickly because we’re going to cover a lot of ground. We have Ramit Sethi.

Ramit Sethi, if you want to get it right, but that’s confusing because it’s R-A-M-I-T space, last name, S-E-T-H-I. You can find him on Twitter and Instagram @ramit, R-A-M-I-T. He’s author of the New York Times bestseller I Will Teach You To Be Rich, has helped tens of millions of people live a rich life with their monies — with their monies! Careers, businesses, and psychology. He hosts more than a million readers on his site,, newsletter, and social media. His new podcast, I Will Teach You To Be Rich by Ramit Sethi, reveals real stories about love and money from behind closed doors.

You can find him on Instagram @ramit, on Twitter @ramit, and you can find podcast episodes at Ramit, you sexy son of a bitch, welcome back to the podcast.

Ramit Sethi: Oh, man. It’s good to be here.

Tim Ferriss: I must say we were talking about this while we were doing a little bit of pregame, but the expectations are going to be very high. You have been on the podcast several times. Some of your episodes are the most downloaded of all time across 600 or so episodes now, so we will need to get to a lot of tactical, practical, and we’re going to discuss a lot of, I think sensitive topics. We’re going to get into some juicy territory for folks talking about couples, money, all things in betwixt and in-between and, or maybe it’s in-bet — is it betwixt and between?

I can’t remember. I’m trying to get to old-timey, but let’s just jump right into it because you and I have had many conversations offline, we’ve had many conversations publicly, and there’s a lot more to explore. As a starter, what are some of the most memorable money conversations that you’ve had in the last few years? Because it’s been a bit since we had our last conversation on the podcast, so a lot has transpired.

Ramit Sethi: The last time we talked, we talked about prenups and what that was like walking in.

Tim Ferriss: Yeah.

Ramit Sethi: I remember giving you a call and I said, “Hey, we could talk about this on your podcast,” and you said, “Wait, you’ll actually share the details?” I said, “Yeah,” and that was very juicy because nobody talks about this kind of stuff publicly.

Tim Ferriss: Right.

Ramit Sethi: After getting married and going through that process with my wife, I thought, “Okay, great. Done deal,” wiping my hands together, “Oh, we’re all good?” and then I started speaking to other couples about their money. I remember speaking to a number of couples. The first one that I spoke to was a couple where one person had over $500,000 of debt.

He was a vet. By the way, interestingly, the people who I speak to who are in the most severe debt are veterinarians. It’s very interesting. He was very nonchalant about it. “Ah, no big deal.”

Like, “We’ll find a way. No problem.” His wife felt totally constrained and constricted. There’s nothing they could do. They were putting off moving because there was this huge looming ghost in the middle of their relationship.

I got interested and I started speaking to more and more couples, and I remember talking to another couple where there was a young woman and she had paid off something like $50,000 of debt, which was very impressive, but whenever her husband said, “Let’s go on a trip,” the first thing she would say is, “Oh, we can’t do that. We can’t do that because my debt,” and so I said to her, “When you finally pay off your debt, do you think you’re going to magically change the way you think about money?” and she was silent. She said, “Yeah?” with a question mark at the end. “Yeah?” which means no. People tend to have this very — it’s a false belief, that one day when they pay off their debt, or one day when they make a certain amount of money, they’re going to magically change the way they think and act about money, and the fact of the matter is, that doesn’t happen, and so that is why I got interested in speaking to couples and they let me in to their conversations, their private conversations about love and money.

Tim Ferriss: Can I just share a quick personal side note? I’m not drunk. I’m not overcaffeinated, people, if you’re wondering why I’m such a loose cannon already today, but I thought you would appreciate this because we’ve had a lot of conversations like this. I’m in a house right now with a brand new washer and dryer, but a few weeks ago, I was agonizing over whether or not to get a washer/dryer because I’d been doing wash and fold and paying kind of by the load to get clothing washed and folded. It was pretty inconvenient, and I was talking to someone about it and I was spending a lot of time considering whether I should continue using wash and fold or getting a washer/dryer.

I mentioned the cost of the washer/dryer and so on and so forth, and I said, “For that, I could do this number of wash and fold sessions, and that, I expect would take X number of weeks or months, and really, I’m only here for a certain period of time,” and at the end, they were like, “Tim, I think you can just spring for the washer/dryer,” but the amount of time that I spent like running this calculus and weighing the pros and cons was a great illustration of a terrible investment of resources — 

Ramit Sethi: Well, it’s deep in you, and I think when you think back to 4-Hour Workweek and some of the analyses you did, you can tell you love the spreadsheet and you love comparing certain things. It’s in you, and for, I think a lot of sort of tech-oriented guys in particular, it’s in them, and we all have something that we just, we’ll — it’s not painful to us to sit there and compare things. We’ll do it forever. I’ll give you an example from one of the people I spoke to.

This one really blew my mind. He goes, “Ramit, I love to get a good deal.” I said, “Okay.” I can already tell where this is going, by the way, and it’s not good, but I said, “Okay.” He said, “Whenever I order groceries online, I hate the idea of overpaying.”

I said, “Really?” He said, “So I open up two tabs. I have Whole Foods on one side and I have whatever competitor on the other. Ramit, you’re not going to believe it. Sometimes they charge $15 for organic groceries, but over here, I can get it for $7.”

I said, “Wow. By the way, what’s your net worth?” Tim, you want to guess?

Tim Ferriss: I don’t want to even hazard a guess. What was the —

Ramit Sethi: $8 million net worth. Now, it’s very easy for us to laugh, and even he laughed as I just sat there silently, staring at him, but what is revealed there is that it’s not a certain number that’s going to change the way we feel about money. If you’re listening to this right now, maybe you have a partner, maybe you’ve had a couple arguments about money or you just don’t see eye to eye on certain things, the easiest way that we rationalize it is to say, “Well, if we just get that promotion or if we just save this much, then everything will be perfect,” but my friend, who I spoke to, who has an $8 million net worth, listening to him, you know it’s not about the dollar value. It’s not, and nothing will change that feeling unless he personally works on it along with his partner.

Tim Ferriss: All right. I want to plant a seed. We’re going to come back to specific questions. I want to ask you what the prying bar looks like, what tools you use when talking to couples that you’ve found illuminating and helpful, questions that people then who are listening might use. Before we get to that, my question is, and we don’t have to spend a ton of time on it, but why did it take you so goddamn long to start a podcast?

Ramit Sethi: Yeah. All of my podcast friends, including you are like, “Are you stupid?” They keep telling me this: “You should have done this 10 years ago.” I’m just slow. You know, I’m just slow.

I don’t know. I don’t know what else to say. I have no good excuse, really.

Tim Ferriss: I don’t buy that bullshit excuse, so you — there has to be some calculus involved here, that somehow led to you doing the podcast.

Ramit Sethi: Well, I asked you.

Tim Ferriss: Yes.

Ramit Sethi: Okay, so I asked you a lot. Over the course of many years, I was like, “Hey, I’m thinking about it,” and you had some great advice for me, “Record this many episodes,” et cetera. The thing that I love about your podcast is you really love interviewing all these different people from across the spectrum. I don’t. My nightmare is waking up and talking to a bunch of people who wrote some book.

I’m like, “Ah, I don’t really — all right. Let’s cut this short. I got to go,” but what I do love is talking to ordinary people about psychology and money, and in particular, the difference between what we claim we want to do and what we actually do, “Hey, I know I should be eating healthier, but I don’t. Why not?”

“Let’s get into that. No judgment, but let’s try to peel the onion and try to figure that out,” and part of that is just myself. I had a lot of things I claimed I wanted to do, but I didn’t really follow through, and when I finally figured out that I could just talk to people and ask them about their money, and they would trust me enough to share real numbers, then I started to be like, “Wait a minute, this could actually work.” After trying it a couple times, I realized, “I could do this for four hours a day every day, and I would love it.” That’s why I decided to try it out.

Tim Ferriss: You also, there are certain things that you’d be willing to do four hours a day that are utterly puzzling and hilarious to me. Just for people who are like, “That sounds like a politician’s answer. I don’t buy it,” I don’t buy it, Ramit. I will tell you, this is also someone who has done very well in business and in life, that’s Ramit, who loves to feed the trolls. You will send me extensive threads of just toying with trolls from email. 

Ramit Sethi: Because, Tim, when do you get a chance to meet someone who walks up to you, in this case, on Instagram, and the first thing they say is, “Fuck you,” and I go, “Are you having a bad hair day? Let’s discuss. What kind of burrito do you like?” and then the responses are just truly unbelievable. 50 percent of them right off the bat, they go, “Oh, I didn’t even know someone actually reads this account,” which leads to another question, “Why on earth would you write into the ether if you didn’t expect anyone to write back?” I don’t know. Do you not find that fascinating?

Tim Ferriss: I do find it interesting, and this is just to lend credibility to your answer. This is just, you choose your sports in a unique way and — 

Ramit Sethi: Just so everyone listening, let’s make sure we capture that. Tim lent — he just said, “Ramit is credible because he spends hours a day interacting with trolls on Instagram.” Tim, I don’t know if that’s helping me out here, man.

Tim Ferriss: That was a bit of a journalist reframe. Let me — so what you’re saying is — by the way, a pro tip to anyone who’s ever interviewed, if someone says, “Oh, so I guess what you’re kind of saying is A, B, and C,” do not just say “Yes” quickly to that because they will take that and they will quote you as saying whatever they just said. They are trying to write their piece in advance by paraphrasing you.

Be very careful. Those are your words, Mr. Sethi, not mine. However, let’s come to the questions. What types of questions, what are some specific questions you like to ask or that people can ask each other, or in the context of a therapy session that they might use that you found useful?

Ramit Sethi: First question I always start with is, “In the last 30 days, can you think of a specific situation where you were not on the same page financially with your partner?” This is a great question for a couple of reasons. Number one, 30 days limits you, otherwise people often feel like they have to give you their whole life history, and I don’t need their whole life history truthfully, I only need a little bit just to advance to the next question. That’s number one. Then, being on the same page is pretty gentle.

Some people get in fights, and some people, they just disagree about, “Who should pay for the check at dinner?” and so it doesn’t have to be this massive 10 out of 10 argument, but I do want to hear where they were not aligned. From there, it just kind of flows because people instantly can remember something from the last 30 days and they love to talk about it.

Then the next question I ask, as I get into it, I’ll ask them, “What is your rich life?” Now, this is a concept that I’ve been talking about for about 15, 20 years on my site, and that is the idea that you don’t have to cut back on lattes, life isn’t about competing, who can be more frugal, there’s more to life than optimizing cell C3 of your spreadsheet, but I want to hear people talk about what their rich life is. I had a young woman whose rich life was, “I want to shop at Whole Foods without counting the prices of whatever I buy.” Okay, that’s fine if you’re just starting out, maybe you’re in $25,000 of debt. She was professionally extremely successful, so with that, I kind of push her. I say, “Okay, let’s say you could do that tomorrow. How much would your shopping cart cost?” 

She said, “Ah, like $100.” 

I said, “Push it. Get something really nice.” 


I said, “You make X hundred thousand dollars a year. Let’s dream a little bigger,” and this is a huge topic that unfolds because again, another interesting insight about couples, most people have never thought about what their rich life is individually, much less what their rich life is together.

Tim Ferriss: Question about this woman, so if she’s making hundreds of thousands of dollars per year, in fact, maybe I’m missing something obvious, but she could very easily afford to spend $150 at Whole Foods, so did she just feel as though she could not or she wouldn’t allow herself to do that, or did she feel like she needed tens of millions of dollars in order to, without guilt, spends $150 at Whole Foods? How did that conversation unfold?

Ramit Sethi: People’s feelings about how they are doing financially are highly uncorrelated with their actual financial status. I spoke to a couple on the lower east side in Manhattan, and they were living in a one-bedroom, and they were saving a lot of money. Their income was $330,000 a year, and I said to them, “How do you all feel you’re doing?” and they said, “We don’t know. We have no idea. Are we doing well? Are we doing horrible? We don’t know!” 

And that’s one of the problems, which is no one talks about money. You have no idea how to benchmark yourself, particularly if you live in a city like Manhattan, where spending is different than living in Chicago, for example, and so they had no idea. When you take a couple look at some basic metrics, “What’s your savings rate?” “What’s your expenses?” “What is your housing costs?” and I said to them, “You guys are doing really well. You should give yourself a pat on the back,” and they’d go, “Okay. Yeah, yeah, yeah. So anyway, we got this question about our accounts.”

I said, “Hold on a second. Let’s celebrate for just a second. You’ve done really well,” and I think there’s a lack of celebration with couples because there’s just so much uncertainty around it.

Tim Ferriss: Yeah. I would imagine there’s a lot of positional economics also in a place like Manhattan, where it’s like if you have three friends who are doing, or appear to be doing substantially better than you are, then you will evaluate yourself very differently than if you are in your peer group doing the best, even if in absolute dollar amounts you are making less in the latter instance, right? I have to imagine that’s also a big part of it. So if you live in a place that is highly competitive with many successful people like Manhattan, your reference point is going to make celebrating, in some respects, more difficult.

Ramit Sethi: I think that’s true, and I think that Americans love to compare themselves to their neighbors. Love it. Well, Americans love to do a few things that are completely irrational. They love to think that if they do certain things, it’ll make them happy, and then they do the exact thing that will make them unhappy. We love it.

We can go into all this, but think about the typical couple living in some suburban city. Think about the conversations that are happening about money regarding their neighbors. “Well, how did Leah and John go on vacation for the third time this year? Maybe we should be going on vacation for a third time this year,” and it doesn’t have to be living in Manhattan. You can be living anywhere.

What’s going on there? The answer is that money is opaque. Money is unclear because you might have a different savings goal than I do, and also, there’s a lot of secret sources of where money comes from. Oftentimes, you’ll find that parents are funding certain things. Oftentimes, you’ll find that people are in debt. Oftentimes, you’ll find someone’s actually just really wealthy and they make a lot more money than you think they make.

Tim Ferriss: Or they’re really in debt and they have the picture of financial health, but they’re funding it by sort of lighting their credit on fire.

Ramit Sethi: Yeah. That’s also possible.

Tim Ferriss: Yeah. Let’s come back to rich life. When you ask someone about their rich life, what their rich life looks like, so you gave us an example of the disconnect between someone’s sort of objective financial status, and then the Whole Foods shopping. What would be your answer? How would you personally answer that? 

Just so we can have an idea of models of what a more fleshed-out answer might look like.

Ramit Sethi: I would say that I want to travel for six to eight weeks, six weeks consecutively at the end of the year. When I fly, I want to fly in this exact airline seat, and when I travel, I want to stay at these three different hotels, and I want to bring one or more family members with me when I travel, and cost is not the first, second, or third issue when I take these trips. That’s an example. Another example would be I don’t want to start working until 10:00 a.m. every day. That could be an example.

Just so everybody knows, I finally boiled these down into what I call Ramit’s Money Rules, so it’s almost like a personal value statement. I’ll give you a couple of them. Some of them are kind of boring and some of them are super permissive. Before I start, I just want to remind everybody, these are my rules, not yours. They should sound kind of crazy if you’re listening to them.

One of them is always have one year of emergency fund cash. Okay, fine. This, you could make it six months or a year, whatever. But here’s another one: never question spending money on books, appetizers, health, or donating to a friend’s charity fundraiser. Now, each of those is very meaningful to me because I didn’t grow up being able to afford appetizers, so now, if I eat out with a friend or whoever I say, “Look, whatever you like on the menu, just order it,” and that feels amazing. What does it cost me, an extra 20 bucks? but it feels incredible. Then, there’s some really big ones, like anytime I take a flight over four hours, business class, or be able to pay in full for large expenses, including a wedding, dream honeymoon, or even a house.

Okay, those are really big, rich life dreams and rules. Most people who are listening like, “Hey, I’m not going to pay all cash for a house.” Totally fine. What I would challenge each person as they think about their rich life is I would love for them to say, “You know what? Every week I love fresh flowers. It feels a little indulgent to me, but it just makes me feel so good, and so I’m going to buy fresh flowers for myself every week.” Beautiful.

Tim Ferriss: Yeah. It’s, I’m kind of smirking as you say that because I’m going to tilt this. I’m not sure if you’ll be able to see it, but — 

Ramit Sethi: Oh, look at that.

Tim Ferriss: I have a, it’s a — 

Ramit Sethi: A beautiful sunflower.

Tim Ferriss: Yeah, there’s a bouquet of flowers right in front of me, and that was actually a recent decision. It’s like flowers each week completely changes my experience of my home.

Ramit Sethi: Why?

Tim Ferriss: Just having a symbol of life and vibrancy, also of change, and having something to care for. If you’re changing the water, it really just fundamentally changes my experience of space and aesthetics in the home, and it’s such a simple thing, so that’s why I’m smiling.

Ramit Sethi: I love it. You know what? Every time I ask people their rich life, and I probe, their first answers are never what we ultimately settle on, but as we start talking about it, and we spend a lot of time really probing and pushing, “Why that? Well, what if you dreamed a little bigger?” and they also smile the whole time, because no one has ever asked them, “What is your rich life?” and really asked them why. Never. Usually, if it’s something like a handbag, something tangible, most people start off by saying like this, “Well, I know. I mean, I guess I’d like a purse.”

“It doesn’t have to be like the fanciest purse, but I’d like this handbag,” and like, “Maybe once every decade, it could be like a nice one,” and I go, “What if it was every year, and what if it was that brand, the most beautiful version of it?” and their eyes light up because no one has ever talked to them about the thing that deep down, they love, what I call their money dial. Instead, it’s kind of seen as frivolous, particularly things like handbags, which I don’t agree with. I think you could buy a beautiful handbag for the craftsmanship, for the functionality, or just because you want it, and their partners are watching this.

Tim Ferriss: For those people who can’t see Ramit right now, he’s winking at me. So I know what to get you for Christmas.

Ramit Sethi: Thank you very much.

Tim Ferriss: Please continue.

Ramit Sethi: And I’m hoping as I’m asking these questions, that their partner is seeing and can model this. Because you’ll usually find that when one partner is nervous because they think that it’s frivolous, that there’s a reason for that, that their partner has said something multiple times in the past like, “Well, you don’t need a handbag like that.”

“You don’t need that kind of car.” And yeah, you don’t need it, but we’re here talking about your rich life to start. We’re going to get to the spreadsheet stuff. We’re going to get to your spending plan, but let’s just start off with your vision of what a rich life is. That is exciting.

Tim Ferriss: If we rewind just back to the blueprint here, not so much a blueprint, but your series of questions, within the last 30 days, where have you not been on the same page?

Ramit Sethi: Yep.

Tim Ferriss: Financially, what does your rich life look like? What are some of the questions that follow, or could follow after that?

Ramit Sethi: Usually, when I find that one person is an overspender and they admit it themselves, I ask them, “Have you ever said ‘No?'” And what I mean by that is, have you ever said ‘No’ to your family, who’s asking you for money? Or have you ever said ‘No’ to your partner when they asked for X, Y, Z? Have you ever said ‘No?’ And almost always, they say, “No, I’ve never done that.”

So you realize at that very moment that there’s a deeper issue than just money. It’s being a people pleaser. It’s not being able to set effective boundaries, things like that. And we get into that. I also ask people, “How big of an issue is this, on a scale of one to 10?” And this is a really interesting response I get.

Tim Ferriss: In this case, what is this? [Not being financially on the same page with your partner] within the last 30 days?

Ramit Sethi: Yeah.

Tim Ferriss: Yep. Okay. Got it.

Ramit Sethi: And almost always, they will say, “It’s like a five out of 10. It’s not that bad.” Now remember, they’ve gotten on a podcast with me where they’re sharing real numbers. They’re sharing fights and challenges they’ve had for years and they’re going, “Oh, it’s a five out of 10.”

So I know that there’s something going on here. I say, “Okay, five out of 10.” What do you think happens if you both disagree about how much to spend at brunch on Saturdays? What do you think happens when you have kids, and then when you decide to move to a different city, and when you have 25 years of this going on? What happens?

And they go, “Oh. Yeah, that’s like a nine out of 10.” I go, “Yeah.” And what do you think happens at nine out of 10? And they realize that when people say, “We got divorced because of money,” it was not fighting over $7 at Target, but it started there. And it calcified over 25 years.

Tim Ferriss: That could be the title of your next book. It could be $7 at Target: Small Disagreements and How They Lead to Big Divorces.

Ramit Sethi: Oh, you are the best at titles, Tim.

Tim Ferriss: I’ll take my customary 15 percent. That’s very reasonable, because we’re friends. Any other questions that you’d like to cover?

Ramit Sethi: No, that’s where we start. That gives me a lay of the land. And I can walk you through an exercise that I do with them. It may be helpful if you think.

Tim Ferriss: Let’s do it. Yeah.

Ramit Sethi: All right.

Tim Ferriss: Great.

Ramit Sethi: So this is one that I actually started with my wife and we were talking about our rich life. And it’s hard when you start talking about your rich life, because you don’t even know where to start. Many of us have spent our entire lives being told what we can’t do with our money, so when you ask people what they want to do, the answers are fairly facile. The Whole Foods is an example. 

So what I did was I said, “Okay, let’s take separate pieces of paper and let’s write down in the next 10 years what’s on our bucket list. And let’s just write it down. And we took 10, 15 minutes. And the way that I thought of this was I was inspired by Stephen King’s National Book Club Speech.

Now, he was living in a trailer with his wife and he was running out of money. And he got a job offer to be a teacher. And his wife said to him, “Will you be able to write?” And he said, “No, I won’t. But at least it’ll allow us to pay the bills.” And she instantly said, “Well, then you can’t do it.”

Tim Ferriss: Wow.

Ramit Sethi: And so that chilling moment, and then fast forward, just a little bit in the future, he signs a massive deal for his first book. A massive deal. He gets the check. He brings it home to his wife in their trailer and he said, “We sat there, we looked at the check, we talked about what we were going to do with the money, and we cried.”

He said it was one of the most beautiful conversations of his life. And I love that. I love the idea that money can be this thing that lets us do more, not less. It lets us dream bigger. It lets us be more adventurous, more generous. So I started off with my wife. I said, “Let’s just write down our bucket list items.” Okay.

So we come back after 15 minutes. She had some interesting ones. She wanted to learn another language. That was just individually, for herself. Together, I think I wrote down, “I want to design a house with you,” because she’s very creative and we’re both into design. And we wanted to have a beautiful 10-year wedding anniversary, in India.

We know the exact place. We know all the people that want to bring with us. Great. We’re talking about this, we’re loving it. We’re having a blast. And I said, “Let’s pick a couple of these and let’s put a dollar value to them.” So we picked the 10-year wedding anniversary. Okay.

And I said, “Okay, pick a number. There’s no way to know the right number, but just pick a number, what you think it will cost.” So she just takes a second and I take a second. And the numbers that we picked were hilariously different. My number was something like five to 10 times bigger than the number my wife picked. And she looked uncomfortable, visibly uncomfortable.

Tim Ferriss: Yeah. I was going to ask you if there’s an asymmetry of wealth, I would imagine the person who has fewer resources may be very nervous about actually speaking honestly, or adding big items or offering big numbers.

Ramit Sethi: Well, you’re totally right. Most people are afraid of dreaming about the rich life at all. Because they feel that once they write it down or tell someone, if they don’t achieve it, then they’re a failure. But in my opinion, that’s just going through life playing defense.

And I’d rather play offense. So what I said to my wife is like, “Look, neither of us know what this is actually going to cost. We just made these numbers up.” But if we’re going to choose a number, let’s go with the bigger one. Why? Because we have a lot of time.

We have eight plus years to save and invest for this. Two, I think we can do it. I know what we can accomplish together. We could do it. And three, wouldn’t it be magical to be able to take all of our friends and family, the people who can’t afford it? Just go to the airport and the ticket will be there for you. Wouldn’t that be amazing? 

And so really coming back to that vision instead of, “Well, it’s actually going to be seven percent return. And I don’t know if dah, dah, dah.” No, this is a vision exercise. So she begrudgingly said, “Okay.” I will say that one year later, my wife has done an amazing job working on her money psychology.

And we revisited this. And she said, “Oh yeah, now I know without a doubt, we can hit that number easily.” And that’s when you’re really aligned with your partner, where the two of you are rowing in the same direction. It’s not one person saying, “Come on!” but it’s both of us saying, “Oh, yeah, we could do this.”

Tim Ferriss: So, may I ask you a very personal, uncomfortable, possibly uncomfortable question, and then you can tell me?

Ramit Sethi: Okay.

Tim Ferriss: So we can also cut this out, if we end up not using it. So you said “We can hit the number.” Was there a discussion with some of these items of how each party contributes to that big goal?

Even though you’re not getting into immediately the nitty-gritty, I understand it’s a vision exercise, but since you’re using the example, I figured I might as well ask. Because I bet this is something that it’s going to be an inevitable topic that people have to navigate.

Ramit Sethi: Okay. I’m glad you asked and I’ll definitely share how we did it. So I think that the reason that we came up with these joint goals, like a 10-year wedding anniversary, is that we both want to contribute to it.

We want to contribute proportionally based on income, but we both want to contribute to it. The thing about my wife wants to learn a certain language, I’m not contributing to that. She makes — 

Tim Ferriss: What language, just out of curiosity?

Ramit Sethi: Finnish.

Tim Ferriss: Okay. Cool.

Ramit Sethi: Yeah. She’s taking a class, she’s doing a great job.

Tim Ferriss: Nice.

Ramit Sethi: And she decided to get her own tutor. And that’s her thing and she’s covering that on her own. And I’m thrilled. I have my own stuff that I pay for. Again, we have our joint accounts and our separate accounts, but I will say that the reason that I wanted to have this exercise is that when we meet once a month to talk about our finances, we have something to look forward to.

We have an exact number that we are saving and investing together for. And we look at it. It’s almost like one of those progress bars. Okay. We’re four percent of the way there. Oh my gosh, we’re now eight percent of the way there. And we can see that this goal, which was so big originally, we’re actually just chipping away at it day by day. That’s magic.

Tim Ferriss: So the once monthly meeting to discuss finances, I want to hear more about this.

Ramit Sethi: Yeah.

Tim Ferriss: What’s the format?

Ramit Sethi: Okay. So you and I talked on our last podcast about checking in, and you had some great suggestions for some questions. And we’ve used those and adapted those for our own relationship. It’s one thing to do a relationship check in. But I also think another really valuable check in is a financial check in. And so the way that we do it is we have a spreadsheet that we’ve built.

It’s custom for us, based on what’s important to us. So we have our expenses that are in there. In the course of a 30-minute call, we will look over our expenses. And the call, by the way, is with a third party who walks us through some of the numbers. The expenses take five minutes because really, most of our expenses are planned for. Okay. I’ll give you an example.

Tim Ferriss: Except for your handbags.

Ramit Sethi: Except for the handbags. That’s right. Well, those are going to be an incoming gift from Tim Ferriss soon enough. Tim, I’ll send you my — 

Tim Ferriss: My private-labeled handbag line. I can’t believe you’ve told the world!

Ramit Sethi: That’s right. So here’s the thing I think about expenses. I think most people, they spend time, all their time, looking at expenses. And it’s really depressing. This is the wrong place to spend a lot of time. What we did instead was we said, “Okay, our groceries are basically the same every single month.” Whatever. Rent is basically the same every single month.

There’s a couple of areas that are variable. So we actually sat down at the end of the year and we planned out. How many trips do we want to take? How much is each of those trips? And we got pretty granular about it. We also know that some surprise expenses come up with things like gifts. So we planned it out appropriately ahead of time.

This is how many people we’re going to give gifts to. This is the amount we’re going to gift. Charity, same thing. And so those are baked in. So on a given month, yeah, we might be a little bit over on food. We might be a little bit under on gas, but it’s basically within parameters. After five minutes of that, we spend way more time looking at our rich life goals.

So we have about five rich life goals that are actively being saved for. That would be the 10-year wedding anniversary. And so each quarter, each month or quarter, we have money going into those goals. And then we have a backlog. You can never have too many rich life goals, because at some point, we’re going to hit one of those goals. What’s next?

Guess what? We got our backlog ready to go. And so that backlog could be hiring somebody to do X, Y, Z, for us. It could be taking this special trip, buying a new car, this type of specific car and model. It’s all there.

Tim Ferriss: What would be your true, but most embarrassing backlog rich life goal to share on this podcast right now?

Ramit Sethi: Oh, my God. This is horrifying. Let me think. Okay. So once I sat down and I asked my friends, I was like, “What is the next level for you? The rich life next level?” And so, one of them was like, “I want a jet.” And one of them was like, “I want to take a trip to Tahiti,” or something like that.

And mine was, “I never want to have to pack a suitcase again in my life.” And they were like, “Are you stupid? That’s like 50 bucks.” But okay, I’ll tell you what it is. Now, the suitcase part, I don’t want to have to carry luggage when I travel.

Tim Ferriss: Okay.

Ramit Sethi: And that’s relatively inexpensive. You can ship it for like a hundred bucks. I just don’t want to. I want to walk out of an airplane free and not sweating because I have a bag that I’m carrying around with me. I don’t know. It feels a little indulgent to me, but it’s like a hundred bucks.

Tim Ferriss: Okay. So shipping luggage as opposed to transporting luggage?

Ramit Sethi: Correct.

Tim Ferriss: Yeah. I know a few people who have done that for many, many years. I know one also, who hates to select clothing to travel with. So he wears black shirt, tan cargo pants every day. Kind of Steve Jobs with a Limp Bizkit twist to it. And same shoes. And so his assistant will pack, I guess they’re gallon Ziploc bags or something like that, with each day’s outfit, because he hates doing laundry also. So he just has all of these versions of the same outfit. And so if he’s going on like a 10-day trip, there’ll be 10 gallon Ziploc bags with each day’s outfit.

Ramit Sethi: This is not what I thought was going to be his rich life, but God bless you. All the best.

Tim Ferriss: That’s why it’s his rich life, Ramit! All right.

Ramit Sethi: Okay, so that’s what we do. So we start off with the expenses. It’s like five minutes. We spend more time on the rich life goals. And then we have an open backlog of questions. There are sometimes things like, “Hey, we’ve got this trip coming up. Do we want to stay here or there?”

“Or should we get this or that?” Things like that. We have a document, a running document that we just track these questions on. And usually within 30, sometimes 60 minutes, we’re good to go for about a month. That’s roughly the structure. I would encourage it for anybody. And I want to add a twist for people.

When you do these meetings, it can be really depressing, because talking about money for most people is really negative. Why did you spend this much? We don’t want that at all. We want this to be a positive experience. So I would encourage if possible, go out to dinner.

Or if you have children and you have the ability to maybe get some help for one hour, two hours, take advantage of that. This is supposed to be a positive experience where you can say, “You know what? I really want to talk about money in a way that benefits both of us. And I would love to get your input. What can we do to make this a great environment for us to have this conversation?” 

Do that and you’re going to be way more set than having it with dinner on the table and people screaming. That’s not going to be conducive to this type of meeting.

Tim Ferriss: So let’s say that you both want that to be the case. Let’s just assume. And this is not from my personal experience, just to be clear. But I would imagine there are cases where you have a couple and one person is an overspender. Maybe it extends further than that.

Like you said, maybe they are a people pleaser. They don’t have clear boundaries with other folks. But nonetheless, the hemorrhaging is coming predominantly from one side. What type of conversation would you recommend for people in that type of situation?

Ramit Sethi: This is really hard, but this is the most common of all. To have these conversations, it’s usually one person effectively dragging the other person to the meeting. That’s not a good place to start. And I’ll tell you what the typical approach is, and then what a better approach is.

The typical approach is to say, “Hey, we really need to get a handle on your spending. This is not working. So let’s talk about money.” Okay. That’s never going to work. So just stop that right now. Another approach would be to say, “Okay, I built a spreadsheet model. Look at tab 16, it’ll show you all the math. And right now, we’re compounding.”

Don’t do that. Nobody cares about compounding. You haven’t earned the right to talk about math at this first conversation. 

The third, and, I think, much better approach is to say, “You know what, babe? I’ve been listening to this podcast episode and they were talking about money. They were talking about a rich life. And I guess I never thought about it this way. There was one woman who said she wanted to be able to go to Whole Foods and just spend without looking at the prices. You’ve mentioned that, right? What would that feel like to you? For me, a rich life would be to be able to get in the car and drive. And if we see a place we like, we can just stop there and we can order whatever we want, without looking at how much it costs. I would love to do that with you. So what would it be for you? I’d love to know.” 

Let’s just pause right there. Notice that in that conversation that we just had, a couple of things I did and a couple of things I didn’t do. First, I set the context. Why am I bringing this up? Feel free to throw the Tim Ferriss show under the bus.

“Oh, I was listening to this show. Some guy came on, Ramit Sethi. I don’t know.” Okay. Do that. Give them a reason. Number two, I was genuinely curious. “Hey, I know you’ve mentioned Whole Foods. What would that be like for you?” I find in couples that have trouble, they have rarely asked the other partner a question, a single question in months, if not years. Okay. That’s number two. Notice what I didn’t do. I did not talk about — 

Tim Ferriss: You mean questions about money, or just questions?

Ramit Sethi: No. Anything. Anything. One of the young women in my episodes, she revealed that she had an alcoholic father. And she and her family had had to walk around on eggshells because of him. She said, “If we’re really getting real, that’s how I was raised.” And you know what happened? Her husband started talking over her. “Well, yeah, that’s why I really want her to have the courage to be an entrepreneur.”

I said, “Man, are you listening right now? Did you know about that?” He goes, “No.” I go, “Would you like to maybe ask her any type of question about this bombshell she just dropped?” Which by the way, reveals everything about the trouble they were having. And he struggled to ask the question. His question to her was, “How do I help you achieve my goals?”

Tim Ferriss: God. Wow.

Ramit Sethi: I was like, “Okay, we’re going to start at ground zero.” And so — 

Tim Ferriss: Tough case. Tough case.

Ramit Sethi: A very tough case.

Tim Ferriss: Dr. Sethi.

Ramit Sethi: But you know what? I think sometimes people in relationships, they do want it to be successful, but they need a little modeling. They need to see what it looks like to actually ask a single curiosity-based question. And so we worked through it and eventually he said, this is the question he asked, which I was so happy about. He said, “What do you mean?” That’s all it was. It was as simple as that. “What do you mean?” 

I said, “We’ve been talking for an hour and a half. That was the first time you’ve asked a single question of your wife.” And I loved it. So this curiosity thing is another thing that happens. And as you get into these conversations with people, you realize, boy, we have these patterns that we’ve been repeating for months, oftentimes years.

And if we need a third party to help us, or if we can just switch locations, let’s go to a nice dinner and talk about it, listen to this podcast, suddenly you can turn the leaf and start that process of building a new relationship with money.

Tim Ferriss: Okay. So I couldn’t agree more. I’ve had to train myself to be better at this. If at some point, though, you need to get to the ER to triage and stop the financial hemorrhaging, you can go directly through the worst neighborhood, yelling and screaming to the ER.

You can also take a detour through the amusement park and make the entry a little easier. But eventually, you get to the ER. And the fact remains that one person is spending a lot more than the other. When they get to that crux, or at the point that that is to be the topic of conversation, how have you seen people do that successfully in the past?

Ramit Sethi: You are right.

Tim Ferriss: Actually, let me ask a better question. Because that implies a bunch of things need to happen, and maybe they don’t. How do you see people successfully solve that situation? That’s a better question.

Ramit Sethi: Ultimately, if they’re going to solve it together, they both have to want to create a vision, a North Star together. It is extremely unlikely. Basically, I’ve never seen it where one person drags their partner and makes it happen. It does not happen. It can work for a while.

But the rest of your life, fighting about everything from the cost of Starbucks and a candle, to the cost of who’s paying for our kids’ college, it’s just a dreadful life. And that’s exactly why people end up getting divorced among many other reasons when it comes to money. What I find is that of the people who change successfully, one, there is a desire to change, and that’s why I ask them “Why now?” It’s never about the dishwasher. It’s them realizing that, “Oh, we don’t have the tools to do this,” or oftentimes it’s them with their son or daughter who will make a comment, and they realize that their toxic money behavior is actually being picked up by their kids. That’s a really common one.

Tim Ferriss: Any examples?

Ramit Sethi: One young woman said to me that her son came up to Mom and said, “Don’t tell Daddy about buying this,” and there was a lot of hiding money and spending in their relationship, just like there had been with Mom’s parents. So it’s passed down generationally. And when I pointed it out to them, I said, “You two could probably make it work over the course of your life. You’re both very resourceful, you’re high earners, but how do you think your children are responding to this?” And their faces went completely white, and they looked at each other and they knew. They knew. They said, “Oh, yeah, my son already knows about this. He told me the other day, ‘Don’t tell Daddy about spending.'” And so that was the thing that got them to make the change.

By the way, it’s not enough to just want to change. Everybody wants to have this smooth relationship with money where we can be abundant and live our rich life, but I also find that there’s a combination of wanting to change psychology and use tools and systems. So psychology; a lot of us think that it’s weird to have a meeting about money once a month or once a quarter. It’s weird. You know the way that most people are raised? Is you don’t talk about money until there’s a fight. That’s the predominant worldview on money and couples in this country.

And so when you shift it and you say, “Yeah, you’re going to have a standing agenda. You two are actually going to have a Google Doc.” One of the most common reactions I get is, “That sounds like a job. It sounds like work.” I go, “Yeah. That’s because at work you’re measured on certain things. You’re trying to bring some of that into your relationship. You can still love your partner and sleep next to them, but you can still have a running agenda.” So that’s one: changing that psychology.

The second is using these systems. Usually when I find that people are — I’m speaking to these couples who have some type of big, major money problem. They are not aligned on basic financial principles, and they’re not using basic systems. Things like, they don’t understand compounding. So one of them goes, “Well, let’s just spend our money because we don’t know how long we’re going to be here for,” or, “We’ll never make enough.” And I point out, “If you guys started saving and investing properly today, you’d have $6 million.” They go, “What?” So that’s number one. Two is just using things like, “Do we have a shared spreadsheet?” Things like that.

I had another couple that was extremely financially sophisticated. They were in the realm of being CPAs. And I asked them, “How much money do you think you make? What’s your net worth?” And the answer between the two of them was off by millions of dollars. Remember, these are highly sophisticated people. So I said, “Why is that?” And the answer is that they are so sophisticated, they had all these exceptions. “Well, this one is here, but this is liquid, and this is not.” I said, “Guys, you’ve got to go back to first grade. Create a one-page Google Doc. Basically write on it with crayon, ‘This is how much we have. This is how much we owe. This is how much we’ve invested.’ And they had to kind of accept that even though they’re super advanced at work, in their personal life they need to start back at ground zero.

Tim Ferriss: Can you think of an example of a serious fight — it doesn’t have to be from your personal experience, but in your experience with all the readers and various couples and so on — something that was a nine out of 10 in severity that had a really simple solution that worked.

Ramit Sethi: Yes.

Tim Ferriss: Does that make sense?

Ramit Sethi: Yeah.

Tim Ferriss: Like something that had been intractable, right? This couple had been smashing their head against a brick wall or against — they’d been smashing each other’s heads together and at an impasse. And then, lo and behold, there was a simple solution.

Ramit Sethi: There’s a couple who lives on the Upper East Side of New York.

Tim Ferriss: All right.

Ramit Sethi: The complaint was, “He has been starting a business. I need him to contribute $100 a month to the household for food, things like that.” They have two children. And he said, “Look, I’m putting everything I’ve got into this business.” So she was very upset because she’s like, “Look, we’re going in the red every month.” Now, I asked him a couple of questions. I said, “How much does your apartment cost?” The rent was $3,800 a month. What they were making was $70,000 per year.

Tim Ferriss: Oh, wow. Okay. All right.

Ramit Sethi: Yeah. So, what’s going on here? Now, they have this — 

Tim Ferriss: That’s pre-tax? That’s pre-tax?

Ramit Sethi: Yeah, that’s correct. They have been fighting about $100 per month. That has been a debate in their household for something like nine months. And there were a lot of tears, there were a lot of real, agonizing conversations, but you know what their real problem was? They were bankrupt in two months and they didn’t even know it.

Tim Ferriss: Wow.

Ramit Sethi: So this is a really difficult conversation we had. And the solution was very, very tough, which was, she had a conception of how she was going to live. Her family lived very close to her, she could visit them every day, but the truth was they needed to move out of the city, and likely move out of the state, and go to a much lower cost of living. Now imagine how it feels to have your entire world that you’ve constructed and the plan for you, your husband, your children, and then on this call you realize that is not going to happen. It’s devastating. It’s very tough. And so they put me in a position of trust to be able to talk to them. And one of the things I told them was, “Look, it doesn’t mean that you have to move away forever. There are lots of things you could do with this company — make it successful, increase your income — but you can’t ignore that this is the real problem in the relationship. Ignoring it will not make it go away. It’ll just get way worse.”

It really goes to show that there are things that we can agonize over for weeks or months, or even years, in our relationship. But sometimes the true problem is way out there in left field.

Tim Ferriss: What did they do? Do you have any idea?

Ramit Sethi: I will follow up with them soon, and I hope to do follow-up episodes where we find out what actually happened.

Tim Ferriss: Post-mortem. It could be the second podcast.

Ramit Sethi: Yeah.

Tim Ferriss: What are some of the other situations that you’ve run into? And actually I’d be curious, after our last conversation related to prenups, although we covered many topics not just prenups, was there any feedback or subsequent learnings from people who heard it or people who read your writing that you found interesting, puzzling, thought-provoking, or otherwise?

Ramit Sethi: Well, the first and most important reaction that I got was people recognizing that prenups are not just some rich asshole trying to screw their partner. I was really happy about that, and I want to thank you for letting me come on and kind of share my own personal experience, because the only way most people hear about prenups is from TV, and it’s super untrue and dramatic the way that it’s portrayed. And so I saw a lot of comments on Reddit, on my Instagram, DMs, people saying, “Hey, I had no idea that’s how it actually works.” So that was very gratifying. Again, as I said in the episode, most people don’t need a prenup. But if you do, if you’re coming in with a preexisting business or a disproportionate amount of wealth, then it’s worth talking about it, and a prenup is something you agree on.

Tim Ferriss: Or, side note, if you may inherit any asset from your family, also.

Ramit Sethi: Yeah. Totally.

Tim Ferriss: So it could be real estate, could be a house. It could be anything. Also a consideration.

Ramit Sethi: I read a lot of Reddit and sometimes I see these conversations where one person goes, “My partner wants me to sign a prenup, and I think that they’re an asshole. I’m going to break up with them.” And then of course there are hundreds and hundreds of comments, and once in a while I will see someone reference that episode. And that makes me really happy. Whether it’s that episode or another place that someone’s really talking about this stuff, I think there’s slowly being a shift where people are starting to recognize, “Hey, this isn’t just assholes.” So anyway, that — 

Tim Ferriss: And for people who — I’m sure it’s easy enough to find, but we’ll create a short link. It’s not legal advice, folks, but it is a fun conversation and very, very detailed. We will just make a short link for people who are interested, so that’ll go straight to that episode. What other tools, questions, exercises, resources, anything that you think might be beneficial to listeners of this episode? The broad topic being couples and finance, couples and money. What other ground might we cover?

Ramit Sethi: Let’s talk about what I call the $100 challenge. And this is for people who tend to struggle spending money on themselves. Now, I can help people with their investments. I can help them change their money psychology. I can often fix their businesses. But if there’s one thing I cannot fix, it’s cheap. I can’t fix cheap people. If you’re cheap, I can’t help you. I’m sorry.

Tim Ferriss: Well, you can help them, but you can’t fix them, unless they want to be fixed.

Ramit Sethi: Yeah, but here’s the thing. They never want to change it. So cheap people, they write me. Tim, this is the one group of people I’ve just decided I cannot help them, because they write me — 

Tim Ferriss: Now, there are levels and there are levels, right?

Ramit Sethi: Yeah. Yeah, that’s true.

Tim Ferriss: We’re talking about NBA all-star cheap, meaning — maybe that’s not the right metaphor to use, but you’re talking — maybe you could just give some examples of what we’re talking about.

Ramit Sethi: I mean, they — 

Tim Ferriss: “Throw out the car deal because we didn’t get the floor mats.” That kind of cheap?

Ramit Sethi: No, no, no, not that, not that. Although I don’t think my dad thinks there’s anything wrong with that.

Tim Ferriss: So I guess that’s a true story.

Ramit Sethi: I’m proving my own point as I say this. It is people who write and they say, “Hey, we’ve saved a bunch of money, but I can’t bring myself to spend it.” And so I’ve developed all these variety of techniques and I say, “What will you do with the money? Dah, dah, dah, dah.” And they acknowledge that it’s irrational, but when I give them something to do about it, they ultimately go, “Oh, actually, it’s fine.” They don’t think that it’s that big of a problem. They minimize it. So I’m going to give everybody a $100 challenge here to try to preempt this problem. Before you become a cheap ass, you take this challenge right now and you can take that fork in the road towards a rich life instead of whatever cheap place you’re about to go to.

So here’s the challenge. In the next 48 hours, I want you to spend $100 on something you love. You cannot spend it on kids, you cannot spend it on pets, and you cannot spend it on charities. It has to be on you. Now, if you’re a high earner, you can take that number and you can multiply it. So for example, if I’m going to Tim, I’m not giving Tim the $100 challenge. Tim’s challenge has a lot more zeros on it, okay? And so, you can decide — 

Tim Ferriss: I can finally get that Botox I’ve been eyeing.

Ramit Sethi: You can decide what the amount is, but the point is it should be meaningful. It should make you think and it should make you go, “Ooh, wow. What am I going to spend that on?” And this is just one little way, one method to start shifting your life towards spending on the things that are important to you. A lot of people, they’re 30, 40, 50, they go, “I don’t actually know what I want to spend on,” and I find that to be a tragedy. I think it’s a tragedy to live a smaller life than you have to. So here they are with hundreds of thousands, even millions of dollars in the bank, and almost as part of their identity, “Well, I don’t — I’m fine. I just eat at Taco Bell.” Listen, I ate at Taco Bell a long time myself. It’s great, okay? But what else can you do with your money and really dream into something bigger, more meaningful? It could be luxurious, it could be adventurous, whatever the case may be. That’s what I want for you doing this $100 challenge.

Tim Ferriss: If that were posed to you, and I’m sure people have asked you this, what would or what have been some of your answers?

Ramit Sethi: Ooh, good question.

Tim Ferriss: Besides the luggage concierge, AKA FedEx.

Ramit Sethi: Yeah. Great question. So my number would be bigger than $100. I would probably do $1,000 to $5,000, and in that price range, what I would do is I would — there’s a few things that I have done. So one is I would take a last-minute trip wherever just to see a friend. I’m going to get on a plane and go wherever they live in the world and just hang with them. It could be as short as two days, it could be five, 10 days. That’s very abundant for me. Two is I love clothes, so I would go and buy the most beautiful coat or sweater that I’ve had my eye on. Boom. I always have a list of things that I’m like, “I’ll get that next.” And three, I love convenience. So it would be, for example, hiring a travel agent and saying, “Okay, this is the type of trip I want. Give me the entire itinerary laid out.” That’s what I would do. What about you?

Tim Ferriss: I was going to say, I came across an amazing cashmere onesie that I think would look amazing on you. So I will send the link.

Ramit Sethi: Wait, wait, wait. I need to tell you something about this, because — okay, years ago — do you remember that site

Tim Ferriss: I do. I do. Yeah.

Ramit Sethi: G-I-L-T.

Tim Ferriss: Gilt Groupe.

Ramit Sethi: Gilt Groupe. Exactly. So at one point, I signed up and I mentioned it in my email list, and I became one of their top referrers overnight. And so basically I had unlimited money on Gilt for years. So at one point they were selling meat, so high-end meat, so I’d just order meat and just send it to my sisters. I’m like, “Hey, keep your eye out in the mail today.” Just crazy stuff. And so one day I said, “You know what I really need from Gilt Groupe is a cashmere blanket. That’s what I need.” Okay. So I go on there and it was there and I ordered it. Okay, Tim, this blanket comes, all right. Of course, it’s beautifully wrapped. And I open it up and it’s the size of — slightly larger than a facial washcloth.

And I go, “This cannot be,” because it was folded into itself. It was very, very premium. And I go, “This cannot be. I must be missing one of the unwrapping things.” So I keep turning it and pulling at stuff. Nothing. And I go back and look at the size. The size is correct. And I was like, “What in the hell is this stupid thing?” Okay. It turns out it was a cashmere swaddle blanket for a newborn. Yes, these exist. I was like, “This is crazy. Who the hell would buy this?” So I don’t have that cashmere blanket, Tim. I returned it. But somebody out there actually bought it.

Tim Ferriss: Well, that’s why I thought the cashmere onesie with the crotch snap release would be perfect for you. So TBD. I don’t want to give too much — TMI on the podcast. This is family programming, after all. What would mine be? Well, I actually — I mean, this might be cheating but I kind of know, in the sense that I have something like this which is something I’ve already committed to, although it remains to be seen whether the travel is going to work. But to have an incredibly gifted musician and teacher come spend a week with me to do intensive hand drumming training at least twice a day.

Ramit Sethi: No kidding.

Tim Ferriss: And it’s not cheap, but it’s not collecting Ferraris. It’s something that I think — I don’t think, I know — even five years ago, I probably would have hesitated to do for whatever reason, perhaps putting it in the frivolous category. Well, I think — let’s be honest, right? You said, “I need a cashmere blanket.” You don’t need a cashmere blanket, you want a cashmere blanket.

Ramit Sethi: Correct. And nothing wrong with that. Great.

Tim Ferriss: No, there’s nothing wrong with it. But I think for me, I would have criticized myself for the expense and the travel and everything else involved, because I think in part, just didn’t grow up with a lot of resources. Certainly enough, we had shelter and warm clothes and everything else, but that would be one example.

Ramit Sethi: Okay. So many things I love about that. First of all, the fact that you have a clear vision of it. I love that. The second, that it’s meaningful to you. That makes no sense to me, but I love that it makes perfect sense to you. I love that. The more dialed in your rich life becomes, the more incomprehensible it should become to everybody else. So, that was beautiful. And then the other thing I love is that it really kind of becomes part of your identity. You and I have talked a lot offline about growing up and the way that we grew up was totally different than Silicon Valley and all this kind of stuff that we’ve become a little bit more exposed to, and you take that with you. I certainly have taken it with me.

I don’t want to just drop money frivolously on everything, but if there’s anything I would say that is impressive about what you said, it’s that you have changed your identity from where you came from, which was great, but now you’re at a different place. And it’s also great to honor that and say, “I can still be the Tim that grew up over here, but I’ve achieved a lot. I’ve been fortunate. I’ve been lucky. I’ve worked hard, and I get to reap the rewards of that for myself and for the people around me.” I think that is an amazing answer.

Tim Ferriss: Thanks, man. It’s also one that I’ve tested. So this would be the second time that I’ve done it, and I think it’s worth noting probably that this isn’t the 90-percent-of-your-net-worth challenge, this is the $100 challenge or the fill-in-the-blank challenge, which is enough to make you perhaps a little uncomfortable if you’re used to being frugal but it’s not enough to do any real damage, so you can actually test. And so I tested it. There are other things I’ve tested that have not been replicated, but in this case — for instance, there are some really fancy meals I’ve gone to and where I’m like, “No, I’m never going to go back to that place.” I don’t need to do that twice. I don’t think it was worth it.

In this case, I decided it was worth it. It helped me further develop a skill, which then persisted after the fact. The teacher himself is amazing, and he’s just fun to spend time with. And some of the experiences we had, like doing an impromptu duet jam session at a friend’s house with a bunch of wine, are memories I really, really cherish. So that one made the cut.

Ramit Sethi: Love it.

Tim Ferriss: And therefore, here we go again. Round two.

Ramit Sethi: Yeah. This is what I want everybody listening to be able to do, is, just like Tim, he tried out a fancy restaurant. “Hey, tried it once. It didn’t break the bank. Cool. I did it, I don’t need to go back there again. On the other hand, I tried this thing.” Boom. Great. That is so different than a life of frugality, which is often coded for fear. The fear that if I go to this Michelin-starred restaurant once, that I’m going to trip and fall and have to go back there every single day for the rest of my life. That does not happen, my friends. And you can just as well say no to things once you’ve tasted them, but you can also say yes to other things. And I love that. So for couples, this is doubly hard because it’s not just you, but it’s your partner.

I remember speaking to one couple and they had not gone on a honeymoon yet, even though they were married, and they were talking about where to go. And one of them goes, “Yeah, let’s go to…” I think it was Indonesia. “Let’s go for four weeks. We’ll have a blast.” And his partner says, “Four weeks? That’s kind of long. We’ll get bored, right? Two should be enough.” Now, think about listening to a couple where one person is actually excited about a honeymoon and the other’s first reaction is to minimize their partner’s dreams. That is really common. They weren’t intending to basically stomp on their partner, but they did.

And so I just kind of gently said, “Hey, why don’t we try this again? And this time, let’s both get excited. You’re excited over here. Let’s get excited as well.” And instead of going into a downward spiral, it went into an upward spiral. “Hey, what if we did that? Oh, my gosh. And what if we also rented a car and we did this?” And you could see and hear the energy change. So again, if you are going out for your first conversation with your partner, one of the things you might agree on is, “Hey, today, just for the next hour, let’s agree that we’re going to pump each other up. We’re not going to minimize each other. We’re just going to pump each other up. That’s all.” And that can profoundly change your interactions about money.

Tim Ferriss: What other advice — so we talked about the $100 challenge is the next 48 hours has to be for you. You can’t dodge it and deflect it to another entity, whether it’s your partner, your kids, your dog. There’s that. What other tools, exercises, questions do you have for people who have trouble spending money? And now that might sound strange, but ultimately, money is this — it’s this piece of symbolism that we trade for something else, whether it’s a feeling or an experience, which is usually upstream of yet another feeling.

You interviewed a couple, as I understand it, that saved millions of dollars, but they seem unable to enjoy it. They have not had a vacation in the last decade. People who struggle over small expenses. Well, what are some other tools in the toolkit or questions, approaches that you use in cases like that?

And this might sound really strange to people like it’s rarefied air. They might be like, “They’re taking this conversation in a direction that will not relate to anyone,” but that’s in my experience, not true. I think the developing competency and comfort with translating dollars into value, whether that is through investing or spending, which is oftentimes another type of investing, I think is a skill that you develop. I don’t think anyone has it innately. So this applies to many more. But since I believe you’ve interviewed this particular couple, what other tools do you have in the toolkit besides the $100 challenge?

Ramit Sethi: So first, I have a lot of compassion for them because everybody teaches us how to save, but nobody teaches us how to spend. Spending is a skill. And my dream is to take someone who’s made money and take them out in New York for two or three days and show them how to spend money commensurate with the level that they are at. Now, please do not DM me and ask me to take you out in New York or L.A. I’m not doing that anymore. Tim, if you want to do that — I think you spend money fine, but please don’t DM me and ask for — 

Tim Ferriss: I’ll make a confession just real quick. So I think I am actually — it has been very hard for me to learn how to spend money. Very challenging. And in fact — I’m interrupting, so don’t lose your train of thought. But the reason I’m interrupting is that literally this past weekend was the first, maybe the first time ever, I have done a proper weekend in New York City with my girlfriend.

Ramit Sethi: Really?

Tim Ferriss: Yeah.

Ramit Sethi: Wait. Is this about to happen? Are you and I going to have a romantic adventure where we’re going to go to a Broadway show together?

Tim Ferriss: I’m open to that. I literally just did this though this past weekend.

Ramit Sethi: How’d it feel?

Tim Ferriss: It felt fucking amazing. And it was outstanding, and we had so much fun, and it brought us closer. And there are things we would do again and some things we wouldn’t do again, but ultimately, it was affordable. And why are we collecting all these M&Ms if not to ultimately use them in some fashion? And that’s not to say you don’t save. I mean, I’ve spent my whole life saving. But as you said, you’re getting the first piece of the puzzle, but then you have to figure out the rest of it. And so please continue.

Ramit Sethi: Thrilled to hear that. And it doesn’t matter whether the amount is $10,000 that you save or a much larger amount. Invariably, if you’ve been saving and/or investing for a while, you will ultimately have an amount where you have to decide what to do with it. And most of us spend our entire lives focusing on just the saving part. But I think probably every single one of us has a parent or a relative or somebody older than us who does not know how to enjoy their money. And they still drive around town to save money on gas. And you say, “Look, you’ve got enough. What are you going to do with it?” And then ultimately they will say something like, “Well, I guess I’ll just give it to my kids.” Your kids don’t want the money. They want you to have a good life. They want you to spend it on the things you love. And so that’s why I’m so passionate about this. So a couple of things that — 

Tim Ferriss: In fairness, some of the kids want the money. But a lot of kids also want their parents to have a good life.

Ramit Sethi: Okay. I did not make an allowance for those people. They’re counting the clock. Oh, that’s sad.

So I have found that you cannot tell people who struggle with spending money, “Hey guys, you really need to spend more money.” It goes in one ear and out the other. It’s not even a factor in their life. That’s why I spend so much time saying, “What’s your rich life?” It’s very much the same — you can’t tell someone who loves chocolate cake, “Cut out the chocolate cake.” Instead, we say, “Hey, let’s add a little bit more delicious chicken. Let’s add some really good asparagus.” Yeah, you still want the chocolate cake. Cool. But it’s probably going to just naturally become a little bit less of a part on the plate.

So when I talk about their rich life, when I understand the texture, the color, I don’t want them to say, “Travel.” I want them to say, “I’m going to Indonesia for four weeks with my beautiful wife. We’re going to sit in seat 2A or 2D. And this is where we’re going to stay. And this is what we’re going to do. And we’re even going to have a food tour and we’re going to do this and that.” Now it’s vivid, vivid enough that they get excited about it.

I also use the stick where I say, “Okay. Right now you’re 38 years old.” This was a couple that I spoke to. And said, “By my calculations, by the time you’re in your 60s, you will have over $26 million. When are you going to start spending your money?” And they looked at each other and he goes, “Well, probably when I retire.” And I just point-blank said to him, “I don’t believe you. Do you believe him?” And the wife said, “No, I don’t. Of course, I don’t believe him. He can’t even spend his money right now.” And so what I encouraged them and what I showed them was, would you rather end up at 60 with some amount of money, or would you rather end up at 60 with just a little bit less money, but a lifetime worth of experience?

Ultimately, when I’m speaking to people like this who find it difficult, they’re just afraid, afraid that they’ll lose it all. And as I probed him, you know what he told me? His dad had lost all of his money late in life. So you often find these family challenges that they cannot escape from.

Tim Ferriss: How did he lose his money? Do you remember? How did his dad lose the money? 

Ramit Sethi: It was in another country and he made a series of bad investments and bad deals and lost it all. So they’ve constantly lived with this fear as, by the way, all of us do, based on the cues we were raised with that I could lose it all or that I’ll never be rich or that the rich are all evil. And those are some of those invisible scripts that we have to work through if we want to work with our partner together towards a rich life.

Tim Ferriss: Where should we go next?

Ramit Sethi: Let me share just a couple of my biggest fascinations that I’ve taken away from these couples. These are the patterns that I’ve noticed, which really surprised me because I thought there would be a couple, but not these ones. The first pattern is that people will work for years and years and years, save their money, but never think about what they want to do with it. One couple, they said that their rich life is that they want to own four cottages eventually. And I said, “Cool, what do you want to do with that?” They go, “I want it to throw off passive income so that eventually we can buy this beautiful RV and go camping with our family.” I said, “That sounds cool. How old will your kids be?” From the sounds of it, their kids would be 65 years old by the time they could do this.

I said, “Can I make another suggestion? What if you rent an RV, you go for two and a half weeks, and you do it 18 months from now after you’ve saved the money to do it?” They had built up this vision of that they had to buy four cottages and then buy an RV to go camping with their kids. The kids would damn near be dead by the time they could do that. Just go rent the RV and go and see if you like it. Okay. So that’s one is: we save and save and don’t think about it.

The next is we often have a ghost in the relationship. Oftentimes, there’s a third party in this relationship, and I encourage them to name the ghost. One of the couples named their ghost Franny, and Franny is the one who’s always concerned about debt because she had debt, always afraid of what can go wrong.

And so not saying that you should try to smother Franny or ignore Franny, but rather acknowledge, “Hey, Franny, I hear you. I do have my debt payoff plan, but I’ve also decided I’m not going to wait and spend nothing while I’m paying this debt off. I’m going to be reasonable and have a balance.” Another pattern is that people create a story for themselves and then they live it. But this story can often be popped like a balloon with just a few questions. So somebody will say something like, “He’s good with money. I’m not.” And I’ll go, “Is that true?” And then she will go, “Oh yeah, yeah.” I go, “Hey, out of curiosity, have you read my book?” “No.” “Do you think if you were to read this book that you might be able to get pretty decent with money?” And that’s a beautiful moment, because suddenly that person realizes that story they’ve been telling themselves may not be true.

I mentioned that people minimize the problem. They’ll say, “This is a four out of 10,” but a four out of 10 left alone in a couple, especially when there’s kids and a mortgage involved, it turns into a nine out of 10. So whether it’s emptying the dishwasher or spending on Starbucks. This one really surprised me, which is: stress is not correlated to the amount of debt. Stress is not correlated to the amount of debt. So there was a couple that had about $600,000 of debt, educational debt. They were two of the most capable, calm people I’ve met. They were awesome. They had this huge amount of debt, but they had a plan, they were aligned, and they were clearly in love the way that they were talking about taking care of each other. That really showed that the amount is not necessarily correlated to the stress.

And finally, people often don’t treat finances in their relationship like a business, and they think that it’s weird to have an agenda or a plan. As I mentioned, there’s nothing weird about it at all. I’ve always been a fan of just doing things that might seem weird, but if they work for you, they work for you. And so for any couple listening, if you have some weird thing you want to do, but it works for the two of you, fantastic. Don’t let anybody, including me, tell you not to do it. Just focus on where you want to get to together with your partner.

Tim Ferriss: Do you have any other recommendations for people listening who want to further explore developing the skill of financial comfort? Which I do think is a skill. I think it has many different component parts. We’ve covered a decent amount already. Are there any other recommendations you might have, resources that you think would help people develop a higher degree of comfort having these conversations? There are books like Crucial Conversations or Crucial Confrontations, I think is the follow-up to it, that can help with these types of things. But any other thoughts, whether they be exercises, resources, anything else?

Ramit Sethi: I’ll give you two. One is, I’m a big fan of the Gottman Institute, and my wife and I took a class there for an entire weekend. And it was very time-consuming and energy-consuming, but it was really worth it just to put a stake in the ground that says, “Our relationship is important to us. We’re setting time aside for this.” So that’s one. And two is I often ask couples to write down what kind of couple they want to be. What do they want people to think of them? And we all know this. We all have a couple friends where when we think about them, a few words come to mind. And I ask them. Oftentimes they’ll say something like they’re generous. They’re fun. And then after they’ve written down this typically very glowing document of what they want to be known as, I ask them, “How do you reconcile that with the conversation we’ve been having about spending money at Target or the pizza place?”

And it becomes very clear that there’s a discontinuity. That’s okay. Now we say, “How can we rewrite our actions to match up?” If you claim you want to be generous, can we just tip an extra 15 percent and just start being known as generous because we are generous? And suddenly they realize, “Oh my gosh, I created this thing, but I haven’t been living up to it.” And it only takes a tiny switch to completely change that.

Tim Ferriss: Yeah. The tipping example is a great one. It’s like, look, if the bill is less than — I’m just making this up. Even if the bill is small, if you just make the commitment to always tip five bucks, it’s incredible how far that’ll go. If you buy a coffee and you tip five bucks, you just made someone’s day. And it really can change how you think about the positive power of money. That’s such a small thing.

Ramit Sethi: I’m so glad we talk about that. My wife and I added that to our line item of expenses, the same as gifts, charity. We added tipping, and we added a number that was big enough that we have to go out of our way to tip larger. It actually is pulling us towards tipping more, not just reflecting what we normally tip. And the same as you, we recognize that a $20 tip to somebody else is incredibly meaningful. Incredibly. And we would rather just work harder and earn more and be able to easily do that. And so when we talk about being generous and charitable and adventurous, this is what money can do for you and can do for the people around you.

Tim Ferriss: Just as a quick personal note. And I’ve mentioned this before, which usually I hate when people say that on any podcast because I’m like, “Well, I don’t want to be the Johnny-come-lately getting this for the 20th time.” But it just goes to show the power of the experience. I have mentioned probably 15 times on this podcast that at some point, when I was 14 or 15 working as a busboy, Billy Joel would come into this restaurant where I worked and he would have a coffee, read a newspaper, and he would tip 20 bucks for his coffee. And that blew my mind. I mean 20 bucks was a big deal to me. And he also took time to chat. I worked up the courage, one shift — I haven’t told this part — over two hours, because he would take his time, to walk up and ask him how he met Christie Brinkley because they were together at the time. And that was incredible.

For those who don’t know, incredible power couple, I mean, and I wanted to ask him. So I worked up the courage. And he turned to me and he talked to me for a few minutes. And to this day, I remember that experience so vividly. I remember what I was wearing. I remember the table he was sitting at. I remember all of it. I remember which side of the table. And in that moment, I remember thinking, “Wow. One day, if I could just be so rich and successful that I could tip $20 for coffee. That is the craziest thing I’ve ever seen in my life.” So you think about the effect that had on me, this really small thing, which I’m sure he’s done 100 times so he would have no memory of it. But this chance encounter, small things really can make an impact. So I’m glad you mentioned tipping.

Ramit Sethi: That’s awesome. And now for everyone to be able to hear, all the millions of people listening to this, to be able to hear that yeah, you can tip 10 percent, 20 percent, 100 percent. Nobody’s stopping you from tipping more. And many of us find it easier to tip or to spend money on others, but you can also do the same for yourself, and there’s no shame in spending extravagantly on the things you love. That is the classic way to create your rich life.

Tim Ferriss: Hear, hear. And if people go to, which will be created by the time this airs and people listen to our previous conversation, we talk about the levers and 10X-ing on very specific things and how you can think through that. But for this episode, we’re coming to a close. Ramit Sethi, Twitter, Instagram @ramit, R-A-M-I-T. His new podcast, I will teach you to be rich by Ramit Sethi. You can find it wherever fine podcasts are served. You can find it also at I’m glad. Better late than never. You’re finally in the audio game, and I’ve been looking forward to you entering the fray. So I have no doubt that it will be outstanding and encourage people to check it out. Is there anything else you would like to share? Any closing comments, requests of people who are listening, anything you’d like to point folks to before we come to a close?

Ramit Sethi: Yeah. I would love to hear from all your listeners, Tim, whether they want to do it through Twitter, Instagram, DMs, whatever. I’d love to hear how your first conversation goes with your partner. This is a real beautiful crux of a moment. You get to start this conversation. It will last you years and years, and it’s you and your partner creating your rich life together. So let me know how it goes. I would be so curious to hear from you.

Tim Ferriss: And if you are not in a couple, I’m going to volunteer you, Ramit, to also get feedback because I know you have means for contending with this, for people who test the $100 challenge in the next 48 hours after hearing this. And then I will get the highlights and the lowlights via screenshots and text messages from Ramit. And I’m going to go order that cashmere onesy for you on Amazon Prime.

Ramit Sethi: Oh, can’t wait.

Tim Ferriss: And then you can wear the infant swaddling cloth on your head. You might be able to fashion that into something, maybe a kerchief for your suit. And look forward to hanging again soon, man.

Ramit Sethi: Yeah. I can’t wait to see you in person.

Tim Ferriss: Yeah. It’ll be really fun to see you in person. And anything else you would like to add?

Ramit Sethi: No, I just — 

Tim Ferriss: You feel complete.

Ramit Sethi: I do you feel complete, and I want to thank you for the warm welcome podcasting land. You have been a fantastic mentor, and you’ve just been a good friend and been patient as I spent the last seven years trying to find a concept that I was really excited about. But now that I’ve found it, it feels right, and I’m, very excited about it.

Tim Ferriss: Yeah. I’m excited for you. I’m excited for your listeners as well. I will teach you to be rich by Ramit Sethi. Check it out,, or you can just search Ramit Sethi on the interwebs and podcasts, and I’m sure it’ll come right up. Ramit, thank you as always for hanging. Great to see you.

Ramit Sethi: Thanks Tim.

Tim Ferriss: And to everybody listening, we will also have links to everything we discussed in the show notes as per usual at And until next time, thank you for tuning in.

The Tim Ferriss Show is one of the most popular podcasts in the world with more than 900 million downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.

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