Money Habits: How to Create a Rich Life with Ramit Sethi and lewis Howes

Ramit Sethi 0:00 And, and this is a key thing I want everybody to pay attention to. Everyone teaches you how to save money, but almost no one teaches you how to spend it. So what do high earners do with their money? Why do some people spend money on business class tickets? I used to think it was stupid. [laughs] "We're all getting to the same place anyway." [laughs] And yet, as you earn more, you start to change your calculus-

Lewis Howes 0:20 Yeah

Ramit Sethi 0:20 ... of spending, and hopefully we can talk about some of that. [upbeat music]

Lewis Howes 0:38 All right. Welcome everyone to the School of Greatness Podcast. We've got my man, Ramit Sethi, in the house, brother.

Ramit Sethi 0:43 What's up?

Lewis Howes 0:43 Good to see you, man.

Ramit Sethi 0:44 How are you?

Lewis Howes 0:45 Very excited, man. I'm back in New York. It's always good to be here.

Ramit Sethi 0:47 Yeah.

Lewis Howes 0:48 I have so many memories of us, like eight years ago, walking around the city.

Ramit Sethi 0:51 Yeah, basically eating kati roll.

Lewis Howes 0:53 Kati roll, [laughs] man.

Ramit Sethi 0:54 Too good.

Lewis Howes 0:55 Oh my gosh. I haven't been there in years.

Ramit Sethi 0:56 McDougal and Bleecker, check it out.

Lewis Howes 0:58 So good. So bad for you-

Ramit Sethi 1:00 It's horrible

Lewis Howes 1:00 ... but so good.

Ramit Sethi 1:01 But so good.

Lewis Howes 1:02 And, uh, just running around in Union Square, just, like, hanging out with street performers.

Ramit Sethi 1:07 Yeah, man. I miss you out here.

Lewis Howes 1:08 I know, man.

Ramit Sethi 1:09 [laughs]

Lewis Howes 1:09 I gotta come out more often. I love it here. Uh, Ramit has been on the podcast before. We'll link that up, but I'm excited about this one. He's got a book that's 10-year edition coming out soon, but you can get the current edition. It's called I Will Teach You to Be Rich: No Guilt, No Excuses, No BS, just a 6-week program that works. And I always talk about how I got out of debt is with this book. I, I read it eight, nine years ago, and I had college debt. I had some credit cards I was still kind of, like, figuring out, "What do I do with my money?" And transferring it over and stuff like that. And I read this six-week plan, got out of debt. Now, I had the cash to get out of debt as well, but I also just got structured with my life and my finances. And something crazy happens. When you get organized with your finances and your money, it's like the stress starts to go away or there's new type of stress, which is, like, learning how to make more and learning how to manage it, uh, better once you have more. But the stress went away from feeling like, "I don't have the control in my life in this area." 'Cause they don't teach you this in school.

Ramit Sethi 2:08 No, they don't. And thank you for sharing that because, you know, I sit here and I write this book, and I write my emails to my email list and my social posts, but it never gets old hearing a real person in front of me telling, telling me how they used the book to change their life.

Lewis Howes 2:25 Game changer, man.

Ramit Sethi 2:26 Yeah.

Lewis Howes 2:26 Game changer.

Ramit Sethi 2:26 I appreciate that because, you know, a lot of this money is not just money. Like, it's great that you can have $20,000 in your bank account or many of my readers, they use this. It came out in '09. They did exactly what the book said, and now they have hundreds and hundreds of thousands of dollars, which is amazing, but I think the more meaningful part of it is they start to realize, "Wow, I can use money as a tool-

Lewis Howes 2:47 Mm

Ramit Sethi 2:47 ... to create a rich life. Money doesn't have to be this thing that's bad. It doesn't have to be this thing that everyone tells me what I can't do. No lattes, no jeans, no nothing. I can actually use it, and if I wanna fly business class, I can. If I wanna buy something really nice for my parents, I can." And you start to almost open up your life and realize, "Oh, money's not holding me back. It's actually amplifying what I really wanna do."

Lewis Howes 3:09 Mm-hmm. I wanna talk about, uh, two different things today. One, for those who are earning a lot of money, what should, what should they be doing with their money? Because there's actually a new problem. Once you earn a lot of money, if it's just sitting in the bank, that's actually a bad thing, I think.

Ramit Sethi 3:24 Yeah. Totally.

Lewis Howes 3:24 There's actually-

Ramit Sethi 3:24 And nobody talks about it.

Lewis Howes 3:25 Yeah, no one really talks about it. So there's a lot of high earners who are listening, so what are some of the things... And listen, there's a lot of things you can invest in. There's real estate, there's stocks, there's, um, you know, starting businesses. You can invest in other people. There's even-

Ramit Sethi 3:39 There's Lewis Howes Conference.

Lewis Howes 3:40 There you go. Yeah, Summit of Greatness. You can invest in a lot of things. And then, so I wanna talk about that. What do the high earners do with their money?

Ramit Sethi 3:47 Mm.

Lewis Howes 3:47 How can they manage it at a high level? How can they save taxes? How can they do all these other things to really earn more and save more? And then also, for those in the, I guess, 100,000 and below range a year, what can they really be doing so they don't feel so stressed and overwhelmed about their money? Because they're probably a little bit in debt, using too many credit cards. Maybe they're buying too many things that they shouldn't be buying at that stage, um, and they're behind in their finances, or they feel overwhelmed.

Ramit Sethi 4:15 Yeah.

Lewis Howes 4:15 So I think I wanna start with the high earners first-

Ramit Sethi 4:17 Okay

Lewis Howes 4:17 ... because you've been good at teaching this to kind of, like, the 60 to $150,000 a year earner. This is kinda, like, I think that book is kinda in that range. Wouldn't you say maybe up to 200,000 a year?

Ramit Sethi 4:28 I think so, but then what happened was the people who followed the advice-

Lewis Howes 4:32 Started making more

Ramit Sethi 4:33 ... they're balling.

Lewis Howes 4:34 Yeah. [laughs]

Ramit Sethi 4:34 They have hundreds of thou... They're like, "What do I do with all this money?

Lewis Howes 4:36 Yeah.

Ramit Sethi 4:36 I don't know what to do."

Lewis Howes 4:37 And that's the challenge.

Ramit Sethi 4:38 It's, it is a challenge because, uh, you can't really talk about it online.

Lewis Howes 4:42 No.

Ramit Sethi 4:42 Y- you go onto Reddit, and everyone's like, "Oh, I, you know, I rewarm my oatmeal nine times, and I can get a lot out of it." It's like, I don't wanna take advice from you oatmeal warmers.

Lewis Howes 4:50 Right.

Ramit Sethi 4:51 And then, uh, if you talk about it publicly, people are kinda like, "Dude, boohoo."

Lewis Howes 4:57 "What a jerk."

Ramit Sethi 4:57 "What a problem."

Lewis Howes 4:58 Yeah, yeah.

Ramit Sethi 4:58 "What a jerk." And actually-

Lewis Howes 4:59 [laughs]

Ramit Sethi 5:00 You know, look, if you have been successful, if you followed a program, whether it's my program or anyone's program, you've invested, you've saved, you now have new challenges. And-

Lewis Howes 5:10 Mm-hmm

Ramit Sethi 5:10 ... your, your biggest question is, what's next? Like, I sort of won. I won that game of personal finance. What's next?

Lewis Howes 5:17 I'm not in debt.

Ramit Sethi 5:18 I'm not in debt, so 99% of advice doesn't apply to me, and people telling me, you know, I should, uh, s- I should cut my pieces of bread in three to save... No, that doesn't apply to me-

Lewis Howes 5:28 Right

Ramit Sethi 5:28 ... because I have earned and saved a lot. So then, then you start to say, "What's next? Am I missing something?" And finally, and what I think is actually a highly advanced question is, what do I do with this money?

Lewis Howes 5:40 Mm.

Ramit Sethi 5:41 Not, and, and this is a key thing I want everybody to pay attention to. Everyone teaches you how to save money, but almost no one teaches you how to spend it. So what do high earners do with their money? Why do some people spend money on business class tickets? I used to think it was stupid. [laughs] "We're all getting to the same place anyway."

Lewis Howes 5:58 [laughs]

Ramit Sethi 5:59 And yet, as you earn more, you start to change your calculus-

Lewis Howes 6:01 Yeah

Ramit Sethi 6:01 ... of spending, and hopefully we can talk about some of that.

Lewis Howes 6:03 You know what's interesting is I used to s- I used to sit in the back middle seat coach, like Southwest or, like, American, whatever- The cheapest flight is what I would look for, and now I look for only first class-

Ramit Sethi 6:16 Mm

Lewis Howes 6:16 ... or business class.

Ramit Sethi 6:17 Mm.

Lewis Howes 6:17 I should say business class. And I look for, can I get it for free? Can I get it with points?

Ramit Sethi 6:21 Nice.

Lewis Howes 6:22 As, I don't wanna pay still for it, but I do sometimes because, like for example, I just went on a trip to, um, this event called 29029, which was you hike for 36 hours, the equivalent of Mount Everest.

Ramit Sethi 6:37 Wow.

Lewis Howes 6:38 You go 22 miles high. It was in Vermont a couple weeks ago, and I'm still recovering from it. My legs are sore still. And I said to myself before I went to this event, I was ran out of points. I was out of points, but I was like, "I'm gonna pay for a first class flight or business class 'cause I don't think I'm gonna be able to move my legs."

Ramit Sethi 6:55 Yeah.

Lewis Howes 6:55 "And I'm gonna be so uncomfortable on this five-hour flight on the way back to LA. Like, I need some space."

Ramit Sethi 7:01 Yeah.

Lewis Howes 7:02 And it's gonna be worth the f- the price for the flexibility and the freedom in that moment. I don't care if I could've bought a laptop with that money. That's what I used to think, like, "It's $1,000 for a flight. I can buy a laptop with that. I can buy a new iPhone." Now it's more for me about, like, do I feel good? Am I recovered? Is it, am I gonna feel good when I get home so I can work harder and earn more?

Ramit Sethi 7:25 Yeah.

Lewis Howes 7:25 And that's the way I think.

Ramit Sethi 7:26 I love that, and I wanna unpack a couple things you just said-

Lewis Howes 7:29 Yeah

Ramit Sethi 7:29 ... in that example. First off, when, when anyone says, you know, "I bought a business class ticket," notice the almost instinctive reaction.

Lewis Howes 7:36 Yeah.

Ramit Sethi 7:36 It's like, "Ugh, this, you know, what a show-off," and, and all these other things that come along with it.

Lewis Howes 7:41 Yeah.

Ramit Sethi 7:41 And I wanna challenge people. I have this principle I call the D to C principle, and it, instead of, uh, being derisive and saying, "Oh, so stupid. That's ridiculous. I would never do that," I actually wanna encourage everyone to be C, curious. Why would a guy like Lewis intentionally spend money on a business class ticket? Man, he, he earns good money. He has a lot of options. He must know something-

Lewis Howes 8:05 Mm

Ramit Sethi 8:05 ... that I don't, and I wanna understand why. So from D to C, and if you start to take that perspective, especially on high earners and how they spend their money, all of a sudden you stop saying, "That's ridiculous," or, "If I had a million dollars, I would never do that." Instead you say, "Why did that person spend on that?"

Lewis Howes 8:22 Yeah.

Ramit Sethi 8:22 And I wanna know. Maybe I don't agree. Maybe, you know, you become a multimillionaire and you don't wanna spend on business class. You just don't care. But it's, it's interesting that you do it, and I'd like to know more.

Lewis Howes 8:32 Yeah. That's the reason I did it for that. And on the way here, I actually didn't have points as well-

Ramit Sethi 8:36 Mm-hmm

Lewis Howes 8:36 ... for this flight. All my, uh, points were used for booking first class tickets for the, the speakers at the Summit of Greatness, so I used it all on that. And, um, so I, I c- I didn't wanna pay for another first class ticket, or actually I think they were full, so I said, "Okay, what's got the most leg room?" So I always do exit row.

Ramit Sethi 8:55 Yeah.

Lewis Howes 8:55 I just upgrade a little bit to get the exit row and have that leg room.

Ramit Sethi 8:58 I think the question we're all wondering, Lewis, is, uh-

Lewis Howes 9:00 I'm a giant, though

Ramit Sethi 9:00 ... when are you gonna get that private plane and then fly me out?

Lewis Howes 9:03 I, it's funny. I was thinking about this actually last week. I was like, "Do I ever desire having a private jet?"

Ramit Sethi 9:08 Yeah.

Lewis Howes 9:09 I don't know if I'd... I mean, listen, I, it'd be great to have so much money that you don't have to think about it. You can afford a jet, and you don't feel bad about it.

Ramit Sethi 9:15 Mm-hmm.

Lewis Howes 9:15 I think, sure, if I had that much money, I would do it. But what I care more about is knowing 20 people that have private jets.

Ramit Sethi 9:23 Okay, so let's talk about this.

Lewis Howes 9:23 And having free rides with them whenever I want to.

Ramit Sethi 9:26 Yes. So-

Lewis Howes 9:27 That's what I like more

Ramit Sethi 9:28 ... and that is actually very revealing. So I wanna share a, another principle we have, which is this concept of money dials. And money di- if you think about 10 dials in front of you, and each of them represents a different area of life that people spend on, it turns out that each of us has one money dial that we love spending on, and what you just said is extremely revealing.

Lewis Howes 9:51 [laughs]

Ramit Sethi 9:51 Your money dial, I would be willing to bet, is relationships.

Lewis Howes 9:54 Oh, yeah.

Ramit Sethi 9:55 Okay, so relat- so I have a friend, Nick Gray. Nick Gray loves hosting people at his house. He, every day he's trying a different party. He's testing stuff. He invites people over. He does all kinds of crazy stuff. He loves relationships. That's his money dial. And a money dial, the reason I say it's a dial, is you, you start off, you know, you, maybe you have a couple people out to dinner, and you, as you start to get more money and more success, you turn that dial until you are totally dialed in. You have the perfect appetizer.

Lewis Howes 10:22 Mm.

Ramit Sethi 10:22 You have the perfect icebreakers. You have maybe friends who have jets. You're really turning that dial. There's other money dials. The most common one is frugality. Most people actually focus on cost above all else, and you can tell because when they buy something, what's the first thing they say?

Lewis Howes 10:38 They look at the price.

Ramit Sethi 10:39 They look at the price, and they tell everyone else, "I got this for 60% off."

Lewis Howes 10:42 Oh.

Ramit Sethi 10:43 Okay? So that's, that's frugality.

Lewis Howes 10:44 They brag about how discounted they got it, the deal they made.

Ramit Sethi 10:47 It become part of their identity, whereas for you, dude, I see your photos. I see your conference. Your identity is about relationships.

Lewis Howes 10:54 Yes.

Ramit Sethi 10:54 Now, there's a few others. There's wellness, which is more and more common, and you'll see people, they have the perfect diet. They have a chef. They, and I'm talking when they really dial it in. This is the point of a-

Lewis Howes 11:05 They have a full-time trainer. They have-

Ramit Sethi 11:06 Yeah

Lewis Howes 11:06 ... yeah.

Ramit Sethi 11:06 This is the point of an ad- a, advanced personal finance, which is you don't have to have a trainer when you start off, right? You can, but you went and you searched for five hours. You found the perfect program. But as you have more money, you start to say, "I want better results. I want faster results, and I have money. I'm gonna throw it at the problem." Mine, my money dial is convenience.

Lewis Howes 11:27 Mm.

Ramit Sethi 11:28 So I love convenience.

Lewis Howes 11:29 Me too.

Ramit Sethi 11:29 And I wake up-

Lewis Howes 11:30 Everything's delivered to you.

Ramit Sethi 11:32 Everything's delivered.

Lewis Howes 11:32 [laughs]

Ramit Sethi 11:32 I have a chef. When I leave to travel, I have this thing called a travel protocol that gets activated with my assistant, and my plants get watered. My email gets handled differently. I mean, it's like I've been thinking about this for the last 15 years.

Lewis Howes 11:45 [laughs]

Ramit Sethi 11:45 I'm a psycho, but that's my money dial, and I love it.

Lewis Howes 11:48 Wow.

Ramit Sethi 11:48 Like, so-

Lewis Howes 11:49 So you'll pay a premium for that money dial-

Ramit Sethi 11:51 Exactly

Lewis Howes 11:52 ... to have convenience.

Ramit Sethi 11:52 But I could not care less about certain other money dials.

Lewis Howes 11:55 Yeah.

Ramit Sethi 11:56 Other common ones that a lot of people watching probably have, or listening, is travel. So at a basic level, people say, "I like to travel," but imagine you've truly, truly become more advanced and you've become more successful and you wanna throw a lot of money at the problem because you value it Suddenly maybe you're going three months a year. Maybe you are leading excursions. I mean, there's... You can just expand your mind as to what you could possibly do beyond the typical eight days of vacation a year. So I share this with everyone because I like to challenge people to do something.

Ramit Sethi 12:26 Take a look at your spending from the last-

Lewis Howes 12:28 Mm

Ramit Sethi 12:28 ... two to three months and ask yourself, "What is my money dial?" And your money dial is the thing that you love to spend money on, it's the thing that gives you joy, and it's the thing you w- you could spend endless amounts of time optimizing.

Lewis Howes 12:42 And feel good about it.

Ramit Sethi 12:43 And feel good about it. And so the reason, once you know your money dial, then it enables you to do two really cool things. One is you can cut back on stuff you don't care about, okay? So if you just don't care about wellness or if you just don't care about travel, that's okay. You can cut the spend to that. But I think the cooler thing is it allows you to take that money and now spend extravagantly-

Lewis Howes 13:03 Wow

Ramit Sethi 13:03 ... on the thing you love, which is your money dial.

Lewis Howes 13:05 [clears throat]

Ramit Sethi 13:06 So if, if you're Lewis, suddenly you don't mind throwing a lavish dinner for your-

Lewis Howes 13:11 Yeah

Ramit Sethi 13:11 ... friends with a performer and all kinds of crazy stuff because that's your money dial.

Lewis Howes 13:15 Yeah.

Ramit Sethi 13:16 No need to apologize for it. So for everyone, especially the advanced folks who have money, you, you gotta think now, you're at a different level. You're not just trying to cut your debt. You're not just trying to cut back. You actually can spend on the things you love, and that to me is really exciting.

Lewis Howes 13:31 So figure out your money dial-

Ramit Sethi 13:32 Yeah

Lewis Howes 13:32 ... and spend more intentionally on those things, as opposed to spending lots on everything.

Ramit Sethi 13:37 Exactly.

Lewis Howes 13:38 Yeah. Well, I mean, for me, it's funny you say that because I almost always pick up the check on every meal.

Ramit Sethi 13:43 Mm-hmm.

Lewis Howes 13:43 It doesn't matter if it's a smoothie or, like, a few hundred dollar meal with a bunch of people. It's like I always wanna pick it up-

Ramit Sethi 13:49 Yeah

Lewis Howes 13:49 ... 'cause I wanna be investing in relationships.

Ramit Sethi 13:52 Mm-hmm.

Lewis Howes 13:52 I don't even know where I learned that. I think I learned it because I was poor for a couple years and people used to always pick up my tab, and I felt bad.

Ramit Sethi 14:00 Yeah.

Lewis Howes 14:00 But I also felt like, man, they really took care of me, and I wanna make sure that everyone else feels like they're taken care of around me.

Ramit Sethi 14:05 I feel that way when I was a college student. Everybody picked up my checks 'cause I would invite a lot of people. I, like, I'd email CEOs and just be like, "I'm interested in what you do. Can we grab coffee?"

Lewis Howes 14:14 But I'm poor. Yeah. [laughs]

Ramit Sethi 14:15 Yeah, and, and, you know, it's nobody will ever let a college kid pay for a meal.

Lewis Howes 14:18 That's true.

Ramit Sethi 14:19 Never. And I... And the truth is, like, they had more money than I did, too. But now I feel really fortunate that picking up a check, whether it's 10 bucks or a couple hundred bucks, makes no difference to me.

Lewis Howes 14:30 Yeah.

Ramit Sethi 14:30 But it can make the difference to somebody else.

Lewis Howes 14:32 Absolutely. I love that, man. Yeah, the money dial. I'm, but I'm also always trying to save.

Ramit Sethi 14:37 Yeah.

Lewis Howes 14:37 Like, I'm w- I'm willing to spend, but I wanna save a lot if it's gonna be expensive. I'm like, how... I'm always telling my assistant, like, "Look for the deal. Look for the deal."

Ramit Sethi 14:46 Mm.

Lewis Howes 14:46 Like, even if it's 1,000 bucks, try to get it half off.

Ramit Sethi 14:48 Okay, so, so that's-

Lewis Howes 14:49 I'm willing to spend-

Ramit Sethi 14:50 Yeah

Lewis Howes 14:50 ... but save me money, too.

Ramit Sethi 14:51 Okay, so that's, that's a great point that I wanna demystify a little bit about high earners. Uh, a lot of folks think that once you make 250K or 2.5 million, whatever the number is, that suddenly you're just throwing money around left and right.

Lewis Howes 15:06 No.

Ramit Sethi 15:06 And that's not quite correct. It might seem like that because to spend, say, $7,000 for a business-class international flight just seems like, oh my God, that's so crazy. But I want you to get more nuanced. Uh, you're telling your assistant, say, "I don't mind spending, but save."

Lewis Howes 15:21 Yes.

Ramit Sethi 15:22 What I do with my financial system is I set a target each year. This is how much money I'm gonna save and invest, and those numbers are aggressive. There's... That's a lot of money.

Lewis Howes 15:31 You're going hard.

Ramit Sethi 15:32 Yeah, like every year.

Lewis Howes 15:33 So like 10%, 30%.

Ramit Sethi 15:34 Yeah, so anywhere between those ranges. And we have folks who-

Lewis Howes 15:37 Of what you earn.

Ramit Sethi 15:38 Correct.

Lewis Howes 15:38 Yeah.

Ramit Sethi 15:38 And the- and then remember, whenever I make any unexpected income, let's say I did a speaking gig or something.

Lewis Howes 15:44 Yeah.

Ramit Sethi 15:44 Yeah, I might get myself some... I might go out to dinner, but the rest I'm just putting straight into investments.

Lewis Howes 15:48 Wow.

Ramit Sethi 15:49 Okay? So that money grows aggressively. And I, I also wanna remind everybody, especially the entrepreneurs watching, I know you have a lot of entrepreneurs. You wouldn't believe how many entrepreneur friends I know who have a good business, and they don't invest at all. And that's a huge mistake.

Lewis Howes 16:02 What should we be investing in if you have a good business?

Ramit Sethi 16:04 Simple, low-cost, target date funds is a great way to go. Entrepreneurs-

Lewis Howes 16:09 Is that index funds or-

Ramit Sethi 16:09 Yeah, index funds.

Lewis Howes 16:10 Yeah, yeah.

Ramit Sethi 16:10 They, they get a little too smart for their own good. They say, "I could just put that money in my business." And I always say, "Look, I'm glad you have a business that's throwing off tons of cash. That's awesome. Most businesses don't last-

Lewis Howes 16:20 Yeah

Ramit Sethi 16:20 ... 80 years."

Lewis Howes 16:21 Yeah.

Ramit Sethi 16:21 So be smart. Give yourself a small plan B. Put 5K a month, 10K a month, whatever's appropriate for your level of success. And hey, maybe your business does really well. That's awesome, but maybe one day something goes wrong. Always wanna be prepared. You never wanna have your back against a wall. So I just wanna encourage everybody-

Lewis Howes 16:41 Mm

Ramit Sethi 16:41 ... whether you're making 250K or 2.5 million for the high earners here, don't get too smart for your own good. Keep investing and saving.

Lewis Howes 16:48 What are the three or four main things you invest in with that 10 to 30% a year?

Ramit Sethi 16:52 Yeah.

Lewis Howes 16:53 And does it change year to year?

Ramit Sethi 16:55 Yeah. A- a- I'll kinda walk you through for the high earners, and then-

Lewis Howes 16:58 Yes

Ramit Sethi 16:59 ... we can talk about people 100K and less. So once you have a certain amount of capital, you do have a few opportunities that you probably didn't have before. Um, everybody has this idea that, you know, the rich have all these crazy tax breaks and captive insurance and this and that, and I've looked into all that stuff, right? I know about-

Lewis Howes 17:17 Building insurance companies and all these other things, right?

Ramit Sethi 17:19 Yeah.

Lewis Howes 17:20 Yeah.

Ramit Sethi 17:20 S- here's the truth. The truth is-

Lewis Howes 17:22 Some of the stuff is a little sketchy, but yeah.

Ramit Sethi 17:24 Definitely. And I'll, I'll say my core values are that when it comes to things like taxes-

Lewis Howes 17:29 I love your principle on this

Ramit Sethi 17:30 ... I'm very conservative. I'm like, dude, only in this country could I have been this successful.

Lewis Howes 17:36 I love this mindset. Yeah.

Ramit Sethi 17:37 I'm happy to pay my taxes. It means that I had the opportunity to create something great. And if I pay an extra 5,000 or 30,000, it doesn't change my life at all, and I want to be able to give back to the society that enabled me-

Lewis Howes 17:52 Mm

Ramit Sethi 17:52 ... to do what I do.

Lewis Howes 17:53 That's a powerful mindset, and it, and it gets you away from... You still wanna optimize tax breaks that are out there.

Ramit Sethi 17:59 Yep.

Lewis Howes 17:59 But it gets you away from trying to constantly look for some of the shortcuts or, like, s- schemes or something. It's like-

Ramit Sethi 18:06 Y- y- yes. I've always found that the people, especially entrepreneurs who talk about tax breaks all the time, are typically the most unsuccessful ones.

Lewis Howes 18:14 Wow.

Ramit Sethi 18:14 Two reasons. One- Why are you talking about tax breaks instead of growing your business?

Lewis Howes 18:18 Yeah.

Ramit Sethi 18:19 And two, it's a very scarcity driven mindset. "Ooh, I only have this much that I have to protect," when really you can just grow the pie and your taxes are simply a proportion of-

Lewis Howes 18:29 Just make more

Ramit Sethi 18:29 ... just make more. Now, yes, you do want to optimize and take advantage of all, uh, legal tax breaks. So as you earn more, you do have more opportunities. You have, uh, not only your 401 [k] , you have all kinds of advanced, uh, IRA options.

Lewis Howes 18:45 Mm-hmm.

Ramit Sethi 18:45 You have HSAs, you have a variety of things. But at a certain point, if you're making enough, you're gonna max all of those out.

Lewis Howes 18:50 Yep.

Ramit Sethi 18:51 Okay, so-

Lewis Howes 18:51 So what do you do when you max it all out?

Ramit Sethi 18:52 So then the next step is to simply create a taxable account. It's just a typical non-retirement account, just at Vanguard or where, I use Vanguard, whatever you want, and you just continue to invest. So that's one, and that's gonna keep making you money over the long term. It's just you're not gonna get those tax breaks from a 401 [k] and IRA, et cetera. The other thing is as you accumulate more and more assets, you're gonna start to notice a lot of different people are gonna come with opportunities. I, dude, I get text messages from these crazies. They're like-

Lewis Howes 19:20 Investments

Ramit Sethi 19:21 ... "Hey, I'm opening up a bar in Brooklyn." I'm like-

Lewis Howes 19:22 [laughs]

Ramit Sethi 19:22 ... "I don't want your stupid bar. I'm not investing in that. I could burn my cash easier."

Lewis Howes 19:26 Yeah. [laughs]

Ramit Sethi 19:26 But you're gonna wa- as you start to accumulate a lot, you're gonna wanna do, have a little fun with your money when it comes to investing.

Lewis Howes 19:32 Mm-hmm.

Ramit Sethi 19:33 So some people wanna do crypto. I think a lot of these people are complete nut jobs.

Lewis Howes 19:37 It's crazy, man.

Ramit Sethi 19:37 Okay? The, look, you crypto-

Lewis Howes 19:38 I put a little bit in there just to, like, have fun.

Ramit Sethi 19:40 Yeah.

Lewis Howes 19:40 But I was like, "Thank goodness I didn't put more in there," because everyone's losing their money now. [laughs]

Ramit Sethi 19:44 Exactly, and they're, you know, they're all ... Okay, I don't even wanna get into crypto-

Lewis Howes 19:46 Yeah

Ramit Sethi 19:46 ... 'cause I'm gonna get a lot of angry emails. Hey, if you wanna email me about your angry crypto opinions, just send it to trash@iwillteachyoutoberich.com.

Lewis Howes 19:52 [laughs]

Ramit Sethi 19:52 Don't send it to me. But you know what? I like what you said.

Lewis Howes 19:55 Mm.

Ramit Sethi 19:55 You took a little bit, you had some fun.

Lewis Howes 19:57 Mm-hmm. Yeah, had some fun.

Ramit Sethi 19:58 5 to 10%, once you've got all your other stuff automated, you've got your index funds locked down, HSA, your different accounts, um, I don't have any problem. I think you should take 5 to 10% and you should have some fun with it. For me, I did angel investing, and I basically learned that I suck.

Lewis Howes 20:13 Yeah, me too.

Ramit Sethi 20:14 My angel investing's not good.

Lewis Howes 20:15 I haven't made any money from my investments.

Ramit Sethi 20:16 Yeah, my deal flow sucks. My choices were okay. Some hit, most didn't. I basically just wrote that money off, but it was fun, and it allowed me to have an outlet.

Lewis Howes 20:25 And you learned-

Ramit Sethi 20:26 I learned

Lewis Howes 20:26 ... and you got to meet people-

Ramit Sethi 20:27 Yeah

Lewis Howes 20:27 ... and you, yeah.

Ramit Sethi 20:28 Yeah. So if you wanna do crypto, if you wanna invest in somebody's bar, you wanna do angel investing if you're qualified, et cetera, be my guest. But don't jump to that first. Get all your stuff automated, and at a certain point, the compounding is so insane, you will start to actually earn more from your investments than you will from your income-

Lewis Howes 20:46 From-

Ramit Sethi 20:46 ... even if you're making 500K a year.

Lewis Howes 20:48 From the index funds you're talking about-

Ramit Sethi 20:49 Yeah

Lewis Howes 20:49 ... if you're investing in that.

Ramit Sethi 20:50 Yeah.

Lewis Howes 20:50 What if the market's going down or up? Should you even worry about that? Let's say you put a half a million in.

Ramit Sethi 20:54 Yeah.

Lewis Howes 20:55 It went up 100,000 over a couple years, but then it went back to the original investment. Should you be like, "Oh my gosh, I need to take this out"?

Ramit Sethi 21:02 [laughs] Do not do that. I'll give you a g- a real example.

Lewis Howes 21:04 I just put two years of my money into this, and it's still the same amount.

Ramit Sethi 21:07 Okay.

Lewis Howes 21:07 Should've just left it in the bank.

Ramit Sethi 21:09 No, you shouldn't have left it in the bank. All right, so this happened to me just, uh, about two weeks ago. So the market went down.

Lewis Howes 21:15 Mm-hmm.

Ramit Sethi 21:15 And, uh, I hardly ever log, I log in about once a month to my investments.

Lewis Howes 21:19 Just to see, like, oh, what's-

Ramit Sethi 21:20 Yeah

Lewis Howes 21:20 ... yeah.

Ramit Sethi 21:20 And really, you should not be checking your investments.

Lewis Howes 21:23 Check every 10 years. Yeah. [laughs]

Ramit Sethi 21:24 Yeah. [laughs] Once a month is good, and, like, don't, you're not a day trader.

Lewis Howes 21:28 Yeah.

Ramit Sethi 21:28 Okay, so, so I happened to log in, and I saw that in the 11 days of that month, in one of my accounts, I had lost $75,000.

Lewis Howes 21:37 [whistles]

Ramit Sethi 21:37 Okay, so for everybody listening-

Lewis Howes 21:39 Hurts

Ramit Sethi 21:39 ... yeah, how would you react if you lost $75,000 in 11 days?

Lewis Howes 21:43 Most people would be freaked out.

Ramit Sethi 21:45 They'd be freaked out. They would pull their money-

Lewis Howes 21:47 Take the money out.

Ramit Sethi 21:48 Yeah, which is exactly the opposite of what you should do. That, so everyone says this common thing, and they just roll their eyes, "Oh, buy low, sell high." But in reality, they actually buy high and sell low.

Lewis Howes 21:59 Mm-hmm.

Ramit Sethi 21:59 Do you know what I did? I did nothing. I logged in. I felt no emotion. It wasn't like my life is over. It was like watching someone offer me concrete to eat. Like, I felt nothing. I'm like, "Uh, nah, it's fine. Whatever." I just closed the window. The key there is every month my system is automatically investing. It's called dollar cost averaging. It's just automatically investing, and you should set the same thing up, too. You shouldn't be paying attention manually. You shouldn't be sending a check.

Lewis Howes 22:25 No.

Ramit Sethi 22:25 It just works automatically. And so I knew this month the market is down, and if you think about any other thing you buy, if the price of toothpaste goes down, you're happy. If the price of milk goes down, you're happy. The only time we get weird is when the price of the market goes down, and then we're like, "Oh, let me pull all my money out." Bad move. The price went down. If you're young and you have a long time before you need the money, you're getting the market at a discount.

Lewis Howes 22:52 You should get excited.

Ramit Sethi 22:53 You should get excited. So I just said, "Great, it went down. Fine. Doesn't bother me," and I just closed the window, and a few days later, my system will just purchase it again. So it's up, it's down, it doesn't matter in the short term, but over the long term we know that the market tends to return about 7 to 8%-

Lewis Howes 23:10 Mm. Over time

Ramit Sethi 23:10 ... over time.

Lewis Howes 23:11 Yeah.

Ramit Sethi 23:11 But o- but it can go up, it can go down.

Lewis Howes 23:13 Yeah.

Ramit Sethi 23:13 And so you do not wanna be paying attention in the short term.

Lewis Howes 23:16 Let's say you've got a half a million to a million dollars-

Ramit Sethi 23:19 Yeah

Lewis Howes 23:19 ... extra cash-

Ramit Sethi 23:20 Okay

Lewis Howes 23:20 ... laying around. You've maxed out all your IRAs. You've got five to 10 grand a month going to your index funds. You've got, you've dabbled in the, uh, the, the smaller investments and startups, and you've kind of, you've done it all.

Ramit Sethi 23:33 Yeah.

Lewis Howes 23:33 Got a little bit in crypto. You've, you've tried everything. What should you do with that extra million dollars a year?

Ramit Sethi 23:38 Okay, g- great question. First off, um, this is like somebody saying to a, a fitness instructor, you know, "I've done everything. What should I do next?"

Lewis Howes 23:49 [laughs]

Ramit Sethi 23:49 And that, you know what that fitness instructor's gonna say? They're gonna say, "When you say everything-

Lewis Howes 23:52 [laughs]

Ramit Sethi 23:53 ... what do you really mean? Like, show me. Do y- are you doing foam rolling? Are you doing this? Do you, are you all balanced?"

Lewis Howes 23:57 Yeah.

Ramit Sethi 23:57 For the person who's doing this, I'm gonna give you your answer, but I'm gonna first say are you sure? Have you planned out, so you know that 10 years from now you're gonna buy a house. Do you have a 20% down payment set aside?

Lewis Howes 24:09 Mm.

Ramit Sethi 24:09 I do, and I have no plans to buy a house anytime soon, but I have 20% set aside for a house.

Lewis Howes 24:14 For that moment, yeah.

Ramit Sethi 24:15 Yeah, for when it, so I, I already plan- ... for what I know is coming, even though I have no interest in it today. What about the first year of your kid's life? Do you have that set aside? What about X, Y, Z? Are you taking care of your parents when they get older?

Lewis Howes 24:26 Mm.

Ramit Sethi 24:26 Um, one thing that, that I really love to do is, um, talk about relationships. So I love to invite my family once a year for a big, big vacation where we can all stay in a house, and there's a, you know, like a chef and all this stuff, and we can all be there, and the kids can be playing. Is that something that's important to you?

Lewis Howes 24:42 That's cool.

Ramit Sethi 24:42 Right? So plan for that. Now, if you've done all that stuff, you got your six-month emergency fund, you've got your investments automated on autopilot, and you still have money left over, you're in an awesome position, and now you can do a couple of things. One, if you wanna keep growing that money, you can simply invest it in a non-retirement taxable account, and that money will grow like crazy. If you're putting in 10, 20K a month, that money will turn into massive amounts. And you can ... If you guys don't believe me, just go s- uh, search for compound interest calculator, Bankrate has a really good one, and plug in 20K a month for 10 years, and that's it. Just stop and watch what happens as that money grows.

Lewis Howes 25:21 What is that? 7 or 8%?

Ramit Sethi 25:22 Yeah, at 7% returns, and watch what happens.

Lewis Howes 25:24 Right.

Ramit Sethi 25:24 It is ... It, it becomes like an, a tsunami.

Lewis Howes 25:27 [laughs]

Ramit Sethi 25:27 You cannot stop it. So that's one. The other thing is if you wanna invest in a little bit of fun stuff, if you're like, "Hey, I wanna take 10% of this and invest in, like, this crazy investment my buddy's starting to think," go ahead. Just be prepared to write it off. Maybe it works, maybe not. And then from there, you should also remember-

Lewis Howes 25:43 Mm

Ramit Sethi 25:43 ... a third thing, and nobody really talks about this. Maybe it's time to increase your quality of life.

Lewis Howes 25:48 Mm.

Ramit Sethi 25:48 Maybe instead of, uh, staying in the middle backseat-

Lewis Howes 25:51 Right

Ramit Sethi 25:52 ... it's time to upgrade to the exit row.

Lewis Howes 25:53 Mm, [laughs] right.

Ramit Sethi 25:54 Right?

Lewis Howes 25:54 Or business class or whatever, yeah.

Ramit Sethi 25:55 Business class, or maybe it's time to eat at a different restaurant. Maybe it's time to really think about your money dial and say, "Hey, I always claim that wellness is important, and yet I'm still eating, like, the same old thing I used to eat 10 years ago. Maybe it's time to upgrade what I eat, and, and where I work out, and all that kind of stu- my, my gear." You can do that.

Lewis Howes 26:13 Yeah.

Ramit Sethi 26:13 You've made it. You already won the basic game-

Lewis Howes 26:15 Right

Ramit Sethi 26:15 ... so now you get to benefit from it.

Lewis Howes 26:17 What about real estate? 'Cause a lot of people ... You're their ... I hear people that are all in on real estate investment-

Ramit Sethi 26:22 Yeah

Lewis Howes 26:22 ... or they're kind of, like, all in on the market.

Ramit Sethi 26:24 Uh, yeah. I, I think that real estate ... So a lot of people are gonna hate me after I say this. I know you guys have all been told, uh, since you were, like, two years old, "Real estate's the best investment ever," and it turns out that's not really true. A couple of things that might surprise people.

Lewis Howes 26:36 If you're buying one home.

Ramit Sethi 26:37 If you're buying a house and living in it.

Lewis Howes 26:39 If you're buying multiple units or buying multiple homes-

Ramit Sethi 26:42 Yeah

Lewis Howes 26:42 ... and that's your business-

Ramit Sethi 26:44 Yeah

Lewis Howes 26:44 ... it might be a better investment.

Ramit Sethi 26:45 Correct.

Lewis Howes 26:45 Yeah.

Ramit Sethi 26:45 Let, let me make the distinction. So most people in America are told that the American life, the American dream is graduate from college, get married, buy a house, white picket fence, 2.5 kids, and you made it. And I think we all just have to look at people who are a little bit older than us to realize that might not be our American dream. We might wanna travel more. We might wanna work remotely. I mean, here we are on the middle of a weekday-

Lewis Howes 27:10 Yeah

Ramit Sethi 27:10 ... chit-chatting and sharing it with millions of people. This is our dream. So I wanna challenge people to really question what you've been taught. That's number one. Number two, most people who buy a house and live in it think that it is the best investment. But most people have never run the numbers.

Lewis Howes 27:25 It's like my piggy bank.

Ramit Sethi 27:26 Yeah, they think that. They don't understand that when you spend money on a house, you've incurred tons of phantom costs. You have taxes. You have maintenance. You have all kinds of things that you don't count. And if you actually factor all those numbers in, real estate often, in fact, many times, is not a great investment at all. It's a place to live, and you have these phrases like, "You're throwing money away on rent." It's not true. Uh, "Your landlord's making a profit, otherwise they wouldn't do it." That's not true. Your landlord can't charge you whatever they want. They can only charge you what the market will bear.

Lewis Howes 27:57 The market, yeah.

Ramit Sethi 27:57 So if you search my name and real estate, you'll see all the numbers played out. Now, on the other hand, if you are a real estate investor and you're-

Lewis Howes 28:05 Yes

Ramit Sethi 28:05 ... disciplined, that's a different story, and that can be effective. But mom and pop who, who are thinking that they bought their house in 1970 for $200,000 and now it's worth 600,000, they think they made 400,000. Actually not. If they had taken that money and put it in the market, they would probably have much, much more.

Lewis Howes 28:25 Really?

Ramit Sethi 28:25 Yeah.

Lewis Howes 28:26 Wow. And less headache.

Ramit Sethi 28:27 Way less headache.

Lewis Howes 28:28 Well, depending if they looked at their investment every week, maybe they'd be more stressed up the, the level it's going up and down, but-

Ramit Sethi 28:34 Yeah. Yeah, so, and, and, y- listen, if you go ... I will buy a house one day, okay? So I don't want anyone to think that I'm telling you never to buy a house.

Lewis Howes 28:40 Yeah.

Ramit Sethi 28:40 If you wanna rent for the rest of your life, you absolutely can. Many people in New York, San Francisco, and other high cost of living cities-

Lewis Howes 28:46 LA, yeah

Ramit Sethi 28:46 ... they rent. No, there's no shame in that. I rent by choice. I could buy a place tomorrow, cash, and I choose to rent. Um-

Lewis Howes 28:55 Why do you choose to rent? After you've been here for 10 years-

Ramit Sethi 28:58 10 years

Lewis Howes 28:58 ... and you've been renting the whole time.

Ramit Sethi 28:59 Yeah. Yeah, on purpose.

Lewis Howes 29:00 And how much is that, do you think? Over-

Ramit Sethi 29:04 So-

Lewis Howes 29:04 Over half a million dollars.

Ramit Sethi 29:05 Oh, yeah. It's a lot of money. I re-

Lewis Howes 29:06 Well over

Ramit Sethi 29:06 ... I rent a nice place.

Lewis Howes 29:07 Yeah.

Ramit Sethi 29:08 Um, why do I do it? Because-

Lewis Howes 29:10 Could've used that money on something else. You could have put it into-

Ramit Sethi 29:12 I did. I put it in the market and I made more. And-

Lewis Howes 29:15 Because you didn't put it into a home-

Ramit Sethi 29:16 Correct

Lewis Howes 29:17 ... where it was a lot more money up front.

Ramit Sethi 29:19 C- uh, it was more money up front. I used that money. Instead, I put it in the market. But there's also other reasons, too. I couldn't get, for the amount I'm paying where I live, if I were to-

Lewis Howes 29:28 Mm

Ramit Sethi 29:28 ... buy a place in the same building or ar-

Lewis Howes 29:30 So much

Ramit Sethi 29:30 ... it would be four times more expensive. So that's the first. Second is maintenance. I'm gonna give you an example. Uh, I woke up one day and the doorman was knocking on my door. It was, like, 8:30 in the morning on a Saturday. He's like, "Sir, sir, do you mind if we come in and take a look at something?" I said, "Okay." And we go into the living room, and there's a pool of water just sitting there.

Lewis Howes 29:46 In your apartment?

Ramit Sethi 29:47 Yeah. It had dripped down three levels.

Lewis Howes 29:50 [whistles]

Ramit Sethi 29:51 So I was like, "Oh my God." They're like, "Sir, go back to sleep. We'll take care of it." That day they came. They repaired the floors, not just of mine, the ceilings-

Lewis Howes 29:59 Oh

Ramit Sethi 29:59 ... for the next two levels down. That's probably likely to have costed them, let's just say 50K, maybe 100K 'cause it's Manhattan and it's a weekend service. Who knows? That's not my fee.

Lewis Howes 30:09 You didn't pay for it.

Ramit Sethi 30:09 No. And, and I, and I said, "Great, that's their problem. I'm going back to sleep, man. I got another hour of sleep here." So I want everyone ... You don't have to believe me You don't have to believe what someone else does. All you need to do is run the numbers. That is my only suggestion to you. Go to a buy versus rent calculator. Make sure you plug in all the fees, not just the taxes, the realtor fee. Uh, if you get a bigger place, you're probably gonna get more furniture for it.

Lewis Howes 30:34 The HOAs or the-

Ramit Sethi 30:35 All that

Lewis Howes 30:35 ... yeah, the lawn-

Ramit Sethi 30:36 Yeah

Lewis Howes 30:36 ... maintenance or-

Ramit Sethi 30:37 Yeah

Lewis Howes 30:37 ... trash service-

Ramit Sethi 30:38 All that

Lewis Howes 30:38 ... whatever it is. Yeah.

Ramit Sethi 30:39 The, the key thing I think, whether it's a house or investments, my point to you guys is take your money seriously.

Lewis Howes 30:44 [clears throat]

Ramit Sethi 30:45 Once you take your money seriously and you put some time in it, whether it's this book or wherever you wanna get your information, you're gonna be better off for it. You don't wanna delegate this to somebody else.

Lewis Howes 30:53 Mm.

Ramit Sethi 30:54 I want you to understand it, and once you understand it and you automate it and you make a few good choices in life, you never have to worry about lattes or appetizers again.

Lewis Howes 31:03 Mm. How'd you make the emotional shift when you're, when you started renting an expensive apartment and you're like, "Man, if I added all this up after a year, that's close to a down payment on a nice house in the Midwest-"

Ramit Sethi 31:15 Mm

Lewis Howes 31:15 ... or maybe I could buy a whole house in the Midwest," you know what I mean?

Ramit Sethi 31:18 Yeah.

Lewis Howes 31:18 How do you emotionally rationalize that, where you're not frustrated like, "Oh gosh, I just spent 10 years-

Ramit Sethi 31:26 Yeah. You-

Lewis Howes 31:27 ... throwing this money away"?

Ramit Sethi 31:28 [laughs]

Lewis Howes 31:28 'Cause sometimes I feel that way. Sometimes like, "Man, I just spent a lot of money these last few years."

Ramit Sethi 31:33 Well, let me ask you this, um-

Lewis Howes 31:35 But I like the freedom and the flexibility of not having to incur all those other-

Ramit Sethi 31:38 Yeah. What do you like to eat? You like strawberries?

Lewis Howes 31:41 No.

Ramit Sethi 31:41 Okay. What do you like to eat?

Lewis Howes 31:43 Some good steak and veggies.

Ramit Sethi 31:44 Okay, steak. Well, once you, when you buy a steak and you eat it, do you feel like you just threw your money away on that steak?

Lewis Howes 31:51 No, I enjoyed it.

Ramit Sethi 31:52 But it's, where is it? I don't see it. Where's my investment?

Lewis Howes 31:56 Right.

Ramit Sethi 31:56 In fact, isn't it coming out in the toilet in a couple hours?

Lewis Howes 31:59 [laughs] It is, yeah.

Ramit Sethi 32:00 So what are we talking about here?

Lewis Howes 32:01 Yeah.

Ramit Sethi 32:01 You get value out of a steak-

Lewis Howes 32:03 Mm

Ramit Sethi 32:03 ... just like you get value out of renting. Now if you want to incidentally build equity, that's great. But remember-

Lewis Howes 32:10 Right

Ramit Sethi 32:10 ... you can also lose equity. Right now in Manhattan, do you know rents are down?

Lewis Howes 32:14 Is it?

Ramit Sethi 32:14 And it's, yes, and so are prices of houses if you wanna buy. They're going down every month.

Lewis Howes 32:18 Wow.

Ramit Sethi 32:18 A lot of people are like, "Oh my God, it's so expensive." Sometimes, but sometimes it goes down 5%, 10%. Some of these neighborhoods are down 15%.

Lewis Howes 32:25 No way.

Ramit Sethi 32:26 Yeah, so a lot of people don't realize it. In fact, I did a survey of my readers. I said, "Do you think it's possible for real estate to decrease?" Over half the people said no. They had never even thought about it. So I want people-

Lewis Howes 32:38 Remember 2008, 2009?

Ramit Sethi 32:40 Memories are short.

Lewis Howes 32:40 [laughs]

Ramit Sethi 32:41 You would think they would remember, but they don't.

Lewis Howes 32:42 Right.

Ramit Sethi 32:43 I heard people, dude, they had three houses. They bought it. They were destroyed financially. They had, their credit was ruined. They had to give up these houses and their identity as an investor, and three years later they're like, "I think I wanna buy another couple houses."

Lewis Howes 32:54 Wow.

Ramit Sethi 32:55 It just goes to show, I'm not saying they're stupid. It's not that at all, because a lot of people have gone through this. It's the idea that the propaganda to buy a house-

Lewis Howes 33:04 Mm

Ramit Sethi 33:04 ... or to follow a prescribed set of rules for the American dream is so powerful that even losing your own houses doesn't change people's perspective.

Lewis Howes 33:12 So how do you teach people to overcome the emotional rationalization of blowing their money on rent?

Ramit Sethi 33:19 Okay. It's funny-

Lewis Howes 33:20 Besides that story you just told, which-

Ramit Sethi 33:22 Yeah

Lewis Howes 33:22 ... helps me.

Ramit Sethi 33:23 I'll tell you what. I, I wanna acknowledge that it's real because, uh-

Lewis Howes 33:26 It's a fear that people live with.

Ramit Sethi 33:28 Yeah, and I'll, I'll give you an example. Like I call it the handshake effect, and it's when people would come over, uh, to my apartment f- for the first time and they would say, "Wow, this is a amazing view." And then they always say the same thing in New York, "Do you own this place?"

Lewis Howes 33:41 Mm.

Ramit Sethi 33:41 And we're, we're like shaking hands, right? It's like we just met.

Lewis Howes 33:44 Oh, right away.

Ramit Sethi 33:44 Just met.

Lewis Howes 33:44 How much you pay on this place a month?

Ramit Sethi 33:45 Yeah, how much you pay? It's classic New York. And I say, "No, I rent." And it's that moment where if I had said I bought, they would be like this, "Wow."

Lewis Howes 33:54 Yeah.

Ramit Sethi 33:54 "Yeah, it's really cool."

Lewis Howes 33:55 Pretty impressive.

Ramit Sethi 33:55 "Really cool." Yeah. And you kind of get this, this-

Lewis Howes 33:58 Pride

Ramit Sethi 33:58 ... this pride.

Lewis Howes 33:59 Yeah.

Ramit Sethi 33:59 And then I, and then when I don't say that they get really confused, 'cause this is the I Will Teach You To Be Rich guy, but also he rents, and I thought renting is for people who can't afford it, but I, you know. They don't understand, and they give me this look, and I realized that so many of us are looking for somebody to approve of us while we are shaking their hands.

Lewis Howes 34:20 Mm.

Ramit Sethi 34:21 Someone we don't even know.

Lewis Howes 34:22 Wow.

Ramit Sethi 34:22 And so instead of getting your approval from somebody you just met 10 minutes ago or from your parents, who probably are not the most sophisticated investors, if you're watching this show you know, you talk about greatness, and being great means choosing your own path. Sometimes you might choose to buy. I have no problem with that if you ran the numbers and you consciously decide. Sometimes it means you don't. But if you wanna live the life of greatness, you need to be comfortable making different choices than what other people expect.

Lewis Howes 34:50 Mm. Zing. I like it, man. What, do you have like a spreadsheet? I'm just curious about how the way you think about your money.

Ramit Sethi 34:57 Yeah.

Lewis Howes 34:57 Do you have a spreadsheet or some type of system where you're, kind of have all these things logically mapped out where you know exactly where all your money's going and where you wanna put it in five or 10 years?

Ramit Sethi 35:08 Yeah.

Lewis Howes 35:08 Or is it-

Ramit Sethi 35:08 In fact, it's even more, it's, it's e-

Lewis Howes 35:10 It's like scientific. It's like-

Ramit Sethi 35:12 Yeah, it's like Minority Report.

Lewis Howes 35:13 Really?

Ramit Sethi 35:13 Like I wake up and I just go tsh, tsh, tsh.

Lewis Howes 35:14 Yeah, yeah.

Ramit Sethi 35:14 No, it's, this is what I did. So my money dial is convenience.

Lewis Howes 35:17 Yeah.

Ramit Sethi 35:18 Okay? So as I became more advanced I realized it was time to put on a new lens.

Lewis Howes 35:23 Ah.

Ramit Sethi 35:24 And I think this is really important for people. Many people when they're starting out, they think that, uh, growth is linear, that basically, you know, I'm dribbling the ball, I'm gonna use a sports analogy-

Lewis Howes 35:33 Sure. Give it to me

Ramit Sethi 35:34 ... and I'm on thin ice because I don't know anything about sports.

Lewis Howes 35:36 [laughs]

Ramit Sethi 35:36 You know, I dribble 10 times a minute, and as I get faster I'm gonna dribble 20 times a minute. Okay, this is a horrible analogy-

Lewis Howes 35:43 Sure, sure

Ramit Sethi 35:43 ... but just go with me. At a certain point you're not just counting the number of dribbles. You're actually counting ball handling. You're c- you know, you're counting whatever else you're doing. With money it's the same. You're not just creating a more sophisticated spreadsheet as you grow.

Lewis Howes 35:58 Mm.

Ramit Sethi 35:58 You're actually changing the way you think about money. So I'll tell you what I did.

Lewis Howes 36:00 You're changing the sp- you're reinventing the spreadsheet.

Ramit Sethi 36:02 You're not even using a spreadsheet.

Lewis Howes 36:03 Oh.

Ramit Sethi 36:03 So I'll tell you what I did. Uh, I started off doing everything myself, and that's what's in this book. It shows you exactly how to go from I don't even know where my money's going or I have 5,000 bucks sitting in my savings account to everything is running automatically and I spend less than 60 minutes a month on my-

Lewis Howes 36:20 Wow

Ramit Sethi 36:21 ... investing. That's in the book. But what happens when you get to the next level? I'll tell you what I did. I realized that it wasn't a good use of my time to be manually tracking anything, even for 60 minutes a month, because things had become complex. I had multiple investments, I have a business-

Lewis Howes 36:36 Different accounts, everything, yeah

Ramit Sethi 36:37 ... all that. So I found what, what I call a personal CFO, and what I did was I worked with them and I said, "Here is exactly what I invest in. Here are my core values. Here's how I want you to deliver me information once a month." So they created a, basically a dossier they hand to me every month.

Lewis Howes 36:57 Huh.

Ramit Sethi 36:57 They send it. And it's in the format that I want. Why? Because I'm the boss, and they're, they're working for me. So it shows me a couple of core things. What's my net worth? What were any spending areas that I need to be aware of? I typically have two spending areas that I track that, that are, are more variable. Like, sometimes I'll go out, uh, and buy more clothes. That's a variable area for me. I said, "Look, I love cashmere. What am I gonna do?"

Lewis Howes 37:22 [laughs]

Ramit Sethi 37:23 Okay. And then another one I think is, um, eating out-

Lewis Howes 37:26 Mm

Ramit Sethi 37:26 ... or travel. Aside from that, all my expenses are very stable. Like, I spend the same amount on stuff. I've had the same apartment for 10 years.

Lewis Howes 37:35 Yep.

Ramit Sethi 37:35 Like, I, I'm not going crazy. I'm, I'd rather save my money and invest it and spend a little on the stuff I love. We talk for 15 minutes each month, and if anything needs to be changed, they handle it. So for a lot of people, the next step is not necessarily just doing what you're doing but better, it's actually a whole different way of looking at the problem.

Lewis Howes 37:54 Where does someone find a personal... What is it? A personal-

Ramit Sethi 37:57 Personal CFO

Lewis Howes 37:58 ... CFO.

Ramit Sethi 37:58 For a lot of people, the basic thing you can do to start with is to get a bookkeeper.

Lewis Howes 38:02 Mm-hmm.

Ramit Sethi 38:02 And, you know, we have this advanced personal finance course, and we talk about how to find them. A bookkeeper is a good thing to start with if you've got a business or if you've got, you know, a few hundred thousand dollars a year coming in, and you've just got a number of accounts and maybe-

Lewis Howes 38:14 Yeah

Ramit Sethi 38:14 ... you have kids and stuff like that. Okay, they can help you organize things. As you get more sophisticated, a s- a personal CFO, which can be part-time, or if you're really sophisticated, it can be full-time-

Lewis Howes 38:25 Mm-hmm

Ramit Sethi 38:25 ... they can help you do more sophisticated things.

Lewis Howes 38:28 Interesting.

Ramit Sethi 38:29 Uh, and, and they pair, they work directly with your accountant, your bookkeeper, all that stuff.

Lewis Howes 38:33 Okay. Got it. Okay.

Ramit Sethi 38:33 Yeah.

Lewis Howes 38:34 Interesting.

Ramit Sethi 38:34 Yeah.

Lewis Howes 38:35 Just go on Craigslist and look, see, personal CFO. [laughs]

Ramit Sethi 38:36 Yeah, you can do that. And the b- the best place you do it is honestly you ask your friends.

Lewis Howes 38:40 Mm.

Ramit Sethi 38:40 Your friends who have, uh, sophisticated net worths-

Lewis Howes 38:44 Right. Ask them what they're doing. Yeah, yeah.

Ramit Sethi 38:45 Ask them.

Lewis Howes 38:46 Before we get into the, the strategy for those who are making 150,000 a year and less on how they can really optimize everything, I'm curious, who are the high earners that you talk to for advice privately behind the scenes, in the special secret rooms, on the private jets? Who are those mega earners that you learn from?

Ramit Sethi 39:09 I have a CEO group, uh, a CEO council that I belong to, and we're really candid with each other about where we spend our money. Some of them are married, some of them are divorced. Um, how does that play in relationships, all kinds of stuff. So that's one. Uh, it's like a f- it's like-

Lewis Howes 39:26 Is it like a New York group, or is it a, a all over the world, or-

Ramit Sethi 39:29 Yeah, it's distributed

Lewis Howes 39:29 ... gotcha

Ramit Sethi 39:30 We're all over the place. We're all-

Lewis Howes 39:31 Talk online, you meet in person.

Ramit Sethi 39:32 Both. We meet in person, uh, twice a year, and we talk on the phone about once every month and a half. And I think that's important, uh, for everyone listening and watching, which is have a group of folks that are ambitious and that wanna succeed. What's interesting is these guys aren't in my field at all. I actually prefer that.

Lewis Howes 39:49 Mm.

Ramit Sethi 39:49 We're not talking about, you know, online stuff. That's not the point. We're talking about culture, we're talking about life, we're talking about relationships. And I think that's great. Uh, I also have a lot of entrepreneurial friends, uh, who will share stuff just off the cuff. We're hanging out. And then finally, you know, my audience, like a million readers a month, and they're emailing me the craziest stories.

Lewis Howes 40:10 Really?

Ramit Sethi 40:11 They're telling me everything. People are, they crave talking about what's going on with money because no one else will.

Lewis Howes 40:18 Wow.

Ramit Sethi 40:18 And so I hear the best stories from my readers, and that's what I get to kind of bring to everyone else.

Lewis Howes 40:24 Why is it hard for us to talk about money? Why is it scary?

Ramit Sethi 40:28 Yeah.

Lewis Howes 40:28 Why don't we talk about it enough with our friends or family?

Ramit Sethi 40:32 Yeah.

Lewis Howes 40:32 Why is that?

Ramit Sethi 40:32 There's one great study showing people would rather talk about their sex lives than their amount of credit card debt.

Lewis Howes 40:38 [laughs] I love that.

Ramit Sethi 40:39 I think that's totally true.

Lewis Howes 40:39 It's true.

Ramit Sethi 40:40 100%. And think about what money means. Uh, it means that you were successful-

Lewis Howes 40:47 Mm

Ramit Sethi 40:48 ... in this culture. And I'm here, you know, no- people know me as the I Will Teach You To Be Rich guy, and I have always said money is an important but small part of living a rich life.

Lewis Howes 40:59 Mm.

Ramit Sethi 41:00 Just because you make more or less doesn't mean we're better friends. Not at all. Has nothing to do with that. Uh, but it is important for people to be in control of their money, whether they're making $15 an hour or $15,000 an hour, and there are people I know who make that. So, uh, that just simply shows are you in control of your life at whatever level you are. It's embarrassing for people.

Lewis Howes 41:22 Mm.

Ramit Sethi 41:22 They're never taught this.

Lewis Howes 41:23 Mm.

Ramit Sethi 41:24 And then suddenly they graduate, and they're supposed to know what tax withholding is-

Lewis Howes 41:28 [laughs]

Ramit Sethi 41:28 ... and what a 529 and 401 [k] and all this crazy stuff is.

Lewis Howes 41:31 Yeah.

Ramit Sethi 41:32 Nobody taught it to them. So, uh, my goal here, the reason I'm talking about this, is for people to feel more confident about their money, for them to take control, and for them to stop being afraid and listening to random people giving them advice.

Lewis Howes 41:44 'Cause I feel like it's hard when you're making 150,000 or less, it's hard to talk about it and feel comfortable talking about it with your peers who are in the same category 'cause everyone kinda feels embarrassed.

Ramit Sethi 41:54 Yeah.

Lewis Howes 41:54 I know I felt that way.

Ramit Sethi 41:55 For sure.

Lewis Howes 41:56 And if you stay in that space, it's gonna be hard to get past it.

Ramit Sethi 42:00 Yeah.

Lewis Howes 42:01 So what's the conversation starter that someone who's making 150K or less, or very little, what's the conversation starter they can have with a peer or a family member or a parent or a friend-

Ramit Sethi 42:13 Mm

Lewis Howes 42:14 ... or a coworker that's not gonna throw someone off, but that's going to activate the conversation about money?

Ramit Sethi 42:20 Okay. Having the conversation, if you... Most people don't want to. Most people don't want to, and that's okay.

Lewis Howes 42:26 Right.

Ramit Sethi 42:26 If you simply wanna improve your own money- Uh, do that and you'll become a role model to other people. And I think that's probably the most effective way. But if you do wanna have a conversation, you know what I would do honestly? Not to plug my own thing, get my book, get somebody else's book, it doesn't matter. Get a book and say, "Hey, I, I realize I need to learn about money."

Lewis Howes 42:47 Read a, any book about money.

Ramit Sethi 42:48 Any book.

Lewis Howes 42:48 Yeah, yeah, yeah.

Ramit Sethi 42:48 Okay. "And does anybody here wanna join me and let's do a little book club?"

Lewis Howes 42:54 Ooh.

Ramit Sethi 42:55 So suddenly it's not-

Lewis Howes 42:56 Smart

Ramit Sethi 42:56 ... it's not you and me talking about our money, which really reflects our value in this society, okay? I use value in quotes.

Lewis Howes 43:03 Mm-hmm.

Ramit Sethi 43:04 It's, let's talk about this book, which is a third party in this dynamic, and we can say, "I agree with this guy. I disagree. I, I, I really like how-"

Lewis Howes 43:13 Let's try this.

Ramit Sethi 43:13 Let's try this-

Lewis Howes 43:14 Yeah

Ramit Sethi 43:14 ... and like let's see... So suddenly it becomes an experiment as opposed to your worth X or my value is Y. And that's really something you can-

Lewis Howes 43:22 Mm

Ramit Sethi 43:22 ... work on together.

Lewis Howes 43:23 I like that. Yeah. Bring something else into it-

Ramit Sethi 43:25 Yeah

Lewis Howes 43:25 ... um, to the mix. Okay, let's talk about the 150,000 a year and under people.

Ramit Sethi 43:30 Yeah.

Lewis Howes 43:30 They've been, you know, working hard jobs. They've been trying to save their money, but it just seems like they haven't been able to get past whatever it is, 50 grand a year, 100 grand a year, 150K. They've been kinda stuck, or they've crossed 100 grand a year and more problems have come to them-

Ramit Sethi 43:45 Mm

Lewis Howes 43:45 ... because they're making more and spending more.

Ramit Sethi 43:46 Yeah.

Lewis Howes 43:47 And they feel more broke than ever because they have no clue what they're doing with their finances still. It's the end of the year. They're about to start a new year soon, and they feel overwhelmed or just clueless still about, and educated about their money and what the, what their options are-

Ramit Sethi 44:06 Yeah

Lewis Howes 44:06 ... for just being, having peace of mind, structure, organization, and knowing that they don't have to stress about it and they can go earn more and it's gonna pay off for them. What's a few simple things that they should be doing right now to have a checklist to do before the end of the year to then crush for a whole 12 months moving forward?

Ramit Sethi 44:27 All right. I'm gonna give you something called the ladder of personal finance, which tells you where your money should go. Okay, this is just step-by-step, put your money here, and if you wanna know all the details about it, you can check out the system. So-

Lewis Howes 44:40 It's in the book too, the, the-

Ramit Sethi 44:41 It's-

Lewis Howes 44:41 Yeah

Ramit Sethi 44:41 ... in great detail in the book.

Lewis Howes 44:43 Got it.

Ramit Sethi 44:43 All right. So if you've got some money lying around, what should you do with it? First of all, if you've got a 401 [k] match at work, you should max that out. That's free money, take advantage of it. And if you're not sure what that means, go to your HR person and say, "Does this company match any 401 [k] contributions?" If they say yes, do what I said. Uh, next, if you've got debt, pay it off. Pay it off aggressively. You know what's interesting is that most people in debt who I talk to don't actually know how much they owe, and that's shocking.

Lewis Howes 45:12 Ooh.

Ramit Sethi 45:12 You would think, of course, they would know. No, they don't because who wants to proactively-

Lewis Howes 45:16 Stare at their debt all day. [laughs]

Ramit Sethi 45:17 Yeah, and just feel bad about it.

Lewis Howes 45:18 Yeah.

Ramit Sethi 45:18 But you know what? You feel much better when you have a plan.

Lewis Howes 45:20 Mm.

Ramit Sethi 45:20 And the number one question I ask folks, uh, when they tell me they have debt, I say, "Number one, do you know how much you owe?" They never do. Number two, for the rare people who say, you know, "15,000 or 70,000," whatever, I say, "What is your debt payoff date?"

Lewis Howes 45:35 Ooh.

Ramit Sethi 45:35 You can actually plug it in. You can pay, uh, plug in a debt payoff calculator online. You can map it all out, and you will be able to know the exact month your debt will be paid off.

Lewis Howes 45:45 Based on how much you're spending right now on it.

Ramit Sethi 45:47 Based on how much you're contributing to that debt payoff. Now, you'll be able to see that if you add an extra 50 bucks a month or 100 bucks a month, that thing will actually oftentimes shorten by years because of the interest. It doesn't matter if it's gonna take you three months or four years to pay off your debt. It doesn't matter to me. What matters is that you know the date. Okay, so that's number two, pay off any debt you've got. Three, if you've got money left over, uh, go to your Roth IRA, and if you can, max that out. That's a great tax advantaged account. It saves-

Lewis Howes 46:16 It grows tax-deferred, is that right?

Ramit Sethi 46:18 Yeah, yeah.

Lewis Howes 46:18 Yeah.

Ramit Sethi 46:18 Okay. So, uh, um, uh-

Lewis Howes 46:21 So that's three.

Ramit Sethi 46:21 That's three. Okay. It's actually post-tax money. And then four, if you've still got money, you're gonna go to, back to your 401 [k] , which is, uh, another tax advantaged account. You're gonna max that out. If you still got money, you're gonna create a non-taxable, non-retirement account and just put your money in there. Now, there's a few other wrinkles to this. There's HSAs available. There's also your emergency fund that's talked about in the book, and all these things, they're details. But that just shows you when you've got money, this is where you go. There's a structured way of thinking about it.

Lewis Howes 46:52 A ladder towards-

Ramit Sethi 46:53 A ladder

Lewis Howes 46:53 ... financial success.

Ramit Sethi 46:54 Exactly, and if you follow the steps, it's almost like the, like a waterfall. It just goes from step one to step two to step three, and your money's going where it needs to go automatically, and you will feel great. You'll feel great, which is so important, and also you're gonna look at your accounts and see debts going down, investment and savings are going up. And all of a sudden, you wake up six months from now and you're like, "Oh my God, I didn't realize I have that much saved in my savings account." That's because of the decision you made today.

Lewis Howes 47:20 Mm. Let's say you're, you know, working a job, making decent money, but you're not really breaking through and you're struggling to earn more to get out of that 50K a year type of range, maybe around there, and all your friends are making the same amount.

Ramit Sethi 47:36 Mm.

Lewis Howes 47:36 All your peers are in the same boat. And everyone's stressed about money, and you hear someone say, "Well, you know, you may earn the average of the five people you spend the most time with."

Ramit Sethi 47:46 Yeah.

Lewis Howes 47:46 Should they cut all those five friends out of their life 'cause like, "Well, you know, my peers are holding me back"?

Ramit Sethi 47:52 Th-

Lewis Howes 47:52 If they're having those negative conversations, or how can they start to level up-

Ramit Sethi 47:56 Yeah

Lewis Howes 47:57 ... without cutting people out of their lives?

Ramit Sethi 47:58 Yeah, I, I never encourage anyone to cut off their friends.

Lewis Howes 48:01 Mm-mm.

Ramit Sethi 48:01 Uh, and I think that's a common misconception that you have to close all the doors to your friends. Look, I've got friends from high school, junior high, that I still hang out with. And, uh, I'm not judging them based on their bank account. I don't even know how much they make or how much they're worth. That's not why I'm friends. But th- the average of the five people you're surrounded with, that is a very powerful idea. And instead of closing the door on the people you hang out with, why not open the door to some new people?

Lewis Howes 48:26 Mm.

Ramit Sethi 48:27 Why not find people who go to your conference, for example, or who are on my site, people who are ambitious, who have gone through these programs, and say, "You know what? Can we set up a weekly check-in?"

Lewis Howes 48:36 Wow.

Ramit Sethi 48:36 It could be five minutes. It could be over text. But let's set up this check-in and just say, "What'd you wanna do last week? Did you execute? Why or why not?" Every week, 9:00 AM Monday, let's do it. That's how you suddenly meet a group of people who are unapologetically ambitious.

Lewis Howes 48:50 Mm.

Ramit Sethi 48:51 And that will change everything for you because instead of having to drag people to these self-development conferences and they say, "That's weird, I don't wanna do it," the people you s- actively seek out are gonna be like, "Yeah, I'm in, let's do it."

Lewis Howes 49:03 Let's do it, yeah.

Ramit Sethi 49:04 And that's powerful.

Lewis Howes 49:04 Yeah, so finding new communities-

Ramit Sethi 49:07 Yeah

Lewis Howes 49:07 ... that you can have these conversations with.

Ramit Sethi 49:09 Yeah.

Lewis Howes 49:09 And don't cut everyone out of your life, but just start having those conversations with people that are more aggressive.

Ramit Sethi 49:14 Yeah, like, d- do you know what I told people to do on my Instagram account? So I told people, "It's important to find other people who support you. A lot of you are waiting around for some, like, millionaire to fall out from the sky and invite you to their private group. It's never gonna happen, never. Uh, instead, why don't you start it yourself?"

Lewis Howes 49:30 Mm.

Ramit Sethi 49:30 And I said, "Go into my comments, write who you're looking for, and then invite someone to join you."

Lewis Howes 49:35 I like that.

Ramit Sethi 49:36 You don't need to wait. No one's coming to rescue you. It's not a Disney movie, nobody's coming. It's only you. So take control and go find someone, and then build that together.

Lewis Howes 49:44 Mm, I like that.

Ramit Sethi 49:46 Cody working on the cameras here asked a really good question. Does my opinion on investing in real estate change if you live in the Midwest? And I think the answer is, yeah, it can. Um, the calculus on buying a house in the Midwest is different than cities like Manhattan, San Francisco-

Lewis Howes 50:03 Miami

Ramit Sethi 50:03 ... and LA.

Lewis Howes 50:04 LA, yeah.

Ramit Sethi 50:05 So again, the message here is not, don't ever buy a house, but it's run the numbers to make sure that you're making the right financial decision.

Lewis Howes 50:12 Mm, 'cause in Columbus, Ohio, you can buy a house for 200 grand.

Ramit Sethi 50:15 Yeah.

Lewis Howes 50:15 And a nice one.

Ramit Sethi 50:16 There you go.

Lewis Howes 50:17 And you m- it may be better to do that just to have the peace of mind of your own space or whatever it may be.

Ramit Sethi 50:21 Yeah. So another question from Cody here, a great one. Uh, what is my opinion on Dave Ramsey's concept of the debt snowball? So I think Dave Ramsey is really good for people who are in debt. That's not really the folks that I speak to that often, but I think he does a great job with them. And what he talks about is the debt snowball is encouraging people to pay off their highest balance first, right? Their highest balance. So if you have four different credit cards, you're paying off the one with the highest balance. Whereas the mathematically correct answer is to pay off the credit card with the highest interest rate.

Lewis Howes 50:56 Interest.

Ramit Sethi 50:56 So he's actually taking advantage of a peculiar quirk of human psychology, which is that we wanna see a win, right? We wanna get a win. And it doesn't matter if we're paying a little extra in interest. Once you get that first credit card paid off, you're gonna wanna do the next one, and it's gonna snowball. I happen to think it's actually really smart, and one of the reasons that I think my book has done well is that it factors in human psychology.

Lewis Howes 51:23 Yeah.

Ramit Sethi 51:24 So I'm not telling you in the book, uh, "Don't spend money on lattes." In fact, I want you to spend as much money as you want on lattes.

Lewis Howes 51:30 I'm gonna get one right after this.

Ramit Sethi 51:31 Exactly. Get your credit right, negotiate your salary-

Lewis Howes 51:33 [laughs]

Ramit Sethi 51:33 ... get a good job, automate your money. You could buy 10,000 lattes, it doesn't make any difference at all. And so whether it's the debt snowball or whether it's earning more or whether it's automating your money, you want to make sure that this advice is something you're actually gonna follow.

Lewis Howes 51:47 Yeah.

Ramit Sethi 51:47 And that means you need to bake in psychology.

Lewis Howes 51:48 Yeah, I love it. And if you guys wanna learn more about how to earn more, um, about how to negotiate, whether it be rates or other, other different things, and other things that Ramit talks about, then post, uh, an Instagram story right now and tag @lewishowes and @ramit and say, "Yes, I want more of this," and we'll do a follow-up interview sometime in the future talking about how to earn more, how to build a side hustle, how to do all those different things a- and negotiate rates better as well. So post that in the Instagram stories right now, @R-A-M-I-T and @lewishowes and let us know-

Ramit Sethi 52:23 Awesome

Lewis Howes 52:23 ... and connect with us. Um, final thoughts, man. What's, uh, what's your definition of greatness?

Ramit Sethi 52:30 Man, my definition of greatness is deciding what kind of life I wanna lead and then creating it unapologetically, even if it means making different choices than other people.

Lewis Howes 52:41 Mm, that's good. That's good.

Ramit Sethi 52:43 What's yours?

Lewis Howes 52:46 Greatness is discovering the unique gifts and talents within you, pursuing your dreams and using those gifts, and making an impact on the maximum number of people in that pursuit.

Ramit Sethi 52:59 Love it. Wow.

Lewis Howes 53:00 That's mine.

Ramit Sethi 53:00 Powerful.

Lewis Howes 53:01 Did I ask you your three truths before? I'm not sure if I asked you this one the last time you were on, but I'm gonna ask you again.

Ramit Sethi 53:06 Okay.

Lewis Howes 53:06 If you could only share three lessons with the world, you've got all these books and programs and courses on so many different things, but if you had to take all that with you and no one had access to it anymore-

Ramit Sethi 53:18 Mm

Lewis Howes 53:18 ... you can only write down three lessons or principles or truths, and this is all the, the world would have of your information-

Ramit Sethi 53:25 Mm

Lewis Howes 53:26 ... left in physical form, what would be your three truths?

Ramit Sethi 53:32 Man, you're putting me on the spot here.

Lewis Howes 53:33 I know.

Ramit Sethi 53:33 I like it.

Lewis Howes 53:33 No prep, no prep.

Ramit Sethi 53:34 Okay, I like it. Okay.

Lewis Howes 53:35 Three principles or truths for the world o- on anything, life, anything.

Ramit Sethi 53:39 Wow. Uh, okay, my first one would be, uh, you can create a rich life through planning and unconventional choices. Uh, my next one would be that you've got something to say and the world needs to hear it. And the third one would be you could probably eat spicier food than you think. I guarantee that.

Lewis Howes 54:02 [laughs] I've had some spicy food with you.

Ramit Sethi 54:04 [laughs]

Lewis Howes 54:04 That's good, man.

Ramit Sethi 54:05 That's right.

Lewis Howes 54:05 Well, I acknowledge you, man. I appreciate our friendship. I've known you for, what, eight, nine years now I think.

Ramit Sethi 54:09 Yeah, long time.

Lewis Howes 54:10 It's been, it's been such a fun journey, and I'm excited for all the, uh, many f- fun times ahead. But again, I would not be debt-free as fast as I w- was without your book. So again, I appreciate you as always. I always talk about this. Make sure you guys get a copy, I Will Teach You To Be Rich. Powerful game plan if you guys are looking to get out of debt, but also a lot of the things that we, uh, didn't cover are in here, so check it out. Tag us on Instagram, @ramit, @lewishowes. Thanks again, man.

Ramit Sethi 54:36 Dude.

Lewis Howes 54:37 Appreciate you, bud.

Ramit Sethi 54:37 This was awesome.

Lewis Howes 54:37 Appreciate you.