388. How to Live a Rich Life with Ramit Sethi

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Chris Dixon:

Hi, I'm Chris Dixon and welcome back to The ONE Thing podcast.

Chris Dixon:

I'm sure if you were asked if you'd like to live a rich life, your answer would be yes.

Chris Dixon:

But it's also important to recognize that living a rich life is relative to you, and it

Chris Dixon:

can mean different things for different people.

Chris Dixon:

It's about identifying what extraordinary is for yourself or your family and designing

Chris Dixon:

that future being intentional.

Chris Dixon:

And today I spoke with Ramit Sethi.

Chris Dixon:

And Ramit shares some really powerful perspective about identifying what a rich

Chris Dixon:

life is for you, both individually and as a couple, some tools and some systems that can

Chris Dixon:

help you stay on track to achieving a rich life for yourself.

Chris Dixon:

So let's go talk to Ramit.

Chris Dixon:

Everybody, welcome back to The ONE Thing podcast.

Chris Dixon:

I'm lucky to have Ramit Sethi on the podcast with us today.

Chris Dixon:

And he is the author of New York Times best selling book, I Will Teach You to Be Rich.

Chris Dixon:

Also, he runs his podcast.

Chris Dixon:

He and his team have created over 20 plus programs on making money, finding your dream

Chris Dixon:

job, starting online businesses, mastering your inner psychology and more.

Chris Dixon:

He now has over a million readers per month on his newsletter and in his social media.

Chris Dixon:

Ramit, thanks so much for being on today.

Ramit Sethi:

Thanks for having me.

Chris Dixon:

Yeah, I love it. And you said something or wrote something that I love.

Chris Dixon:

And it's, "I consider it a tragedy to live a smaller life than you have to".

Chris Dixon:

And that's so big and aligned with what we believe at The ONE Thing about how important

Chris Dixon:

it is to imagine extraordinary for your life and to be intentional about building that

Chris Dixon:

life. And I really appreciate what you're teaching and excited to talk to you today.

Ramit Sethi:

Thank you very much.

Ramit Sethi:

I mean, we are totally aligned, and I come at it from the perspective of money and

Ramit Sethi:

ultimately a rich life.

Ramit Sethi:

And I think when it comes to money, most of us see it as an obligation, something that we

Ramit Sethi:

should manage.

Ramit Sethi:

We have a very interesting puritanical dichotomy in this country.

Ramit Sethi:

We hate money in the sense that we don't like managing it.

Ramit Sethi:

We don't like thinking about our asset allocation, but we also love it.

Ramit Sethi:

Ramit Sethi:

foot house with 16 foot ceilings.

Ramit Sethi:

And so when you really have this love-hate relationship with money, but no real

Ramit Sethi:

understanding of how to use it to fuel your rich life, well, it becomes a problem.

Ramit Sethi:

And that has been really my life's work.

Chris Dixon:

I love that. How did you get into the personal finance and development wealth

Chris Dixon:

building industry?

Chris Dixon:

And how did you connect this passion for yourself?

Ramit Sethi:

I got into it because when I was applying to colleges, my parents told me, you're going to

Ramit Sethi:

college. My parents are Indian, so they're like, of course you're going to college, but

Ramit Sethi:

we don't have any money, so you better find some scholarships.

Ramit Sethi:

And I was like, cool.

Ramit Sethi:

I love systems.

Ramit Sethi:

I love building systems, so I don't have to do that much work.

Ramit Sethi:

I built a system. I applied to about 65 scholarships, paid my way through undergrad

Ramit Sethi:

and grad school at Stanford.

Ramit Sethi:

And while I was there, I was studying human psychology, persuasion, social influence.

Ramit Sethi:

And I was also learning about money because I had taken my first scholarship check,

Ramit Sethi:

invested it in the stock market thinking I was a genius and lost half the money.

Ramit Sethi:

So here I am, thinking I was a genius, realized I was not, learning about human

Ramit Sethi:

behavior, and I realized oh my God, most of the ways that we are taught about money have

Ramit Sethi:

no understanding of how we actually want to behave.

Ramit Sethi:

For example, a lot of people right now listening are thinking, I'm going to come on

Ramit Sethi:

here and tell you, you got to cut back on lattes, no jeans, no vacation, no nothing

Ramit Sethi:

until you're 93 years old.

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And then maybe you can take a cruise.

Ramit Sethi:

It's like, I don't want to live that life.

Ramit Sethi:

Neither did any of my friends.

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We wanted to be able to go out, buy a round of drinks for our friends, take a trip, live

Ramit Sethi:

our rich life.

Ramit Sethi:

And so I started trying to teach people in my college.

Ramit Sethi:

Well, I quickly learned people don't really like to go to events about money.

Ramit Sethi:

It makes them feel bad about themselves.

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And so here I am, this cocky college kid.

Ramit Sethi:

I go, you know what, this world needs to hear what I've got to tell them.

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And I could have quit at that moment.

Ramit Sethi:

I'm really thankful that I didn't.

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I started a blog.

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I said, maybe these lazy kids will learn from their dorm rooms.

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Turn out to be totally correct.

Ramit Sethi:

And that was 20 years ago.

Ramit Sethi:

And ever since then, I have been writing books, creating programs, and sharing a new

Ramit Sethi:

philosophy on creating a rich life.

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Chris Dixon:

That's powerful. I like what you said about this barrier that people have to showing up

Chris Dixon:

to events. And I think it ties to, you talked about a rich life.

Chris Dixon:

And what relates for me is a rich life is relative to you.

Chris Dixon:

And I think that's important to call out that when you say rich, it's not always a

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certain dollar amount that you compare yourself to with other people.

Chris Dixon:

And you may, and maybe that's what rich is for you.

Chris Dixon:

But it's important to ask the question like, what would a rich life be for you and know

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what that is and have the clarity to say that you are aiming for this specific place

Chris Dixon:

and give yourself permission to start somewhere.

Chris Dixon:

The best day to start is right now.

Chris Dixon:

It's today.

Ramit Sethi:

That's right. You know, when I asked people what is a rich life for you, the most common

Ramit Sethi:

question, I get this 90 percent of the time .

Ramit Sethi:

People go, I want to do what I want when I want.

Ramit Sethi:

I go, oh, God, not again.

Ramit Sethi:

All right. That's so interesting.

Ramit Sethi:

Wow, I never heard that one.

Ramit Sethi:

And then I go, so what do you want?

Ramit Sethi:

And they stare at me, just flabbergasted, because most of us have never truly thought

Ramit Sethi:

about what our rich life is.

Ramit Sethi:

We think about what emails we have to answer.

Ramit Sethi:

We think about what we need to repair in our house on the weekend, but don't really think

Ramit Sethi:

about what would make it extraordinary.

Ramit Sethi:

And so let me give you a few examples of what your rich life might be.

Ramit Sethi:

Your rich life might be traveling three months a year.

Ramit Sethi:

It might be buying $2,000 cashmere coat.

Ramit Sethi:

Your rich life might be being able to pick up your children from school every afternoon.

Ramit Sethi:

When I was 21 years old, my rich life at that point was to be able to buy appetizers

Ramit Sethi:

when I went out to eat.

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Why? Because when I was a kid, we couldn't afford that.

Ramit Sethi:

So to be able to sit at a menu and say, that looks good, I'm going to get it, was amazing.

Ramit Sethi:

Then I got a little older.

Ramit Sethi:

Rich life for me at that point, what felt incredibly meaningful, was to be able to take

Ramit Sethi:

a taxi on a sweltering August day instead of having to go into the subway.

Ramit Sethi:

And now my rich life has expanded.

Ramit Sethi:

But your rich life is yours.

Ramit Sethi:

It's not mine. It's not anybody else's.

Ramit Sethi:

It's yours. And that's what makes it beautiful.

Chris Dixon:

That's great.

Chris Dixon:

And it evolves over time, like you're saying.

Chris Dixon:

So what you imagine as rich or extraordinary today will change.

Chris Dixon:

It will evolve.

Chris Dixon:

But being intentional and paying attention to this over time, something we say is like

Chris Dixon:

forming this relationship with your goals and dating them over time will help you just

Chris Dixon:

continue to catch those evolutions as they happen.

Ramit Sethi:

Exactly. We have so many similarities in philosophies.

Ramit Sethi:

Just approach from a different perspective, which I love.

Ramit Sethi:

I think that's awesome.

Ramit Sethi:

Cross-disciplinary engagement is fantastic.

Ramit Sethi:

There are seasons of life and our rich life naturally changes within those.

Ramit Sethi:

In my twenties, I wanted to go out a lot.

Ramit Sethi:

Awesome. I should invest in that.

Ramit Sethi:

I should spend time and money, going out, having fun.

Ramit Sethi:

In my thirties, more traveling, things like that.

Ramit Sethi:

Forty's, for a lot of people, it's family.

Ramit Sethi:

That's traditional.

Ramit Sethi:

And there are lots of ways that you can be traditional, and you can create a rich life.

Ramit Sethi:

You also can be very untraditional.

Ramit Sethi:

I have one of my readers in my book.

Ramit Sethi:

He told me he0 used my material.

Ramit Sethi:

He and his wife retired in their thirties and now they drive an RV around the country.

Ramit Sethi:

Now, let me just tell you something. You're probably not going to find me in an RV.

Ramit Sethi:

It's not really my style, but I love that that's what he and his family decided is

Ramit Sethi:

their rich life.

Ramit Sethi:

So I really want people to turn that dial and refine their vision of a rich life,

Ramit Sethi:

because that's why I say it is a tragedy to live a smaller life than you have to.

Chris Dixon:

Yeah. You know, I took the quiz.

Chris Dixon:

I should call it the survey on your website when I was just getting to know you a little

Chris Dixon:

bit more before we spoke.

Chris Dixon:

And I thought that was great.

Chris Dixon:

Some really great questions.

Chris Dixon:

And I'm the adventurer.

Ramit Sethi:

Nice.

Chris Dixon:

Yeah.

Ramit Sethi:

Very good. It's very telling.

Chris Dixon:

Yeah, it wouldn't surprise you if you knew maybe some of my background.

Chris Dixon:

But it relates to what you were saying before.

Chris Dixon:

I used to be in extreme sports.

Chris Dixon:

I was a professional skydiver when I was younger.

Chris Dixon:

Pilot into aviation, those things.

Chris Dixon:

But I moved into a new season of life and wanted to grow in different areas.

Chris Dixon:

And I have a lot of friends that stayed in that world, and I look at what they're up to

Chris Dixon:

today and I think it's amazing because they're fulfilled, but it's this alignment is

Chris Dixon:

what's important to me today.

Chris Dixon:

And they're living in RVs outside of drop zones, traveling the world, still doing that

Chris Dixon:

thing, but I had a shift in priorities.

Chris Dixon:

So I really very much what you're saying.

Ramit Sethi:

That's cool. That's really cool.

Ramit Sethi:

For anyone else listening. You can get that quiz at iwillteachyoutoberich.com.

Ramit Sethi:

And I don't know, I think we all intuitively love to learn about ourselves.

Ramit Sethi:

And when you can find out, for example, when I speak to couples and we're talking about

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money and they'll just say something offhandedly and I'll go, oh, tell me about

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that. How did you grow up with money?

Ramit Sethi:

Let me guess, your parents would sit around the dinner table and they might say something

Ramit Sethi:

like, we can't afford it.

Ramit Sethi:

And they just look at me like, how did you know that?

Ramit Sethi:

And it seems like magic but given enough conversations and enough understanding of

Ramit Sethi:

human behavior, you start to see these patterns that repeat themselves a lot.

Ramit Sethi:

And with money, many of us believe that we are logical robots.

Ramit Sethi:

I'm going to the grocery store, I'm buying whatever cereal because I like it.

Ramit Sethi:

And what you don't realize, what we don't realize is that we are the products of the

Ramit Sethi:

influences around us. It's very likely you bought that cereal because mom and dad served

Ramit Sethi:

it to you as a kid and you now associate it with love.

Ramit Sethi:

Now imagine that expanded for what type of vacations you think, how much you think is

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normal to have in the bank.

Ramit Sethi:

Do you believe it's normal to have credit card debt or not, and on and on and on.

Ramit Sethi:

So in order to understand what our rich life is going forward, we've also got to

Ramit Sethi:

understand our past.

Ramit Sethi:

And that really helps you decide which parts of your past you want to keep, which is great

Ramit Sethi:

honor, where you came from, but also which parts you might want to rewrite for this new

Ramit Sethi:

season of life.

Chris Dixon:

It's so good. We have these beliefs that are the story we tell ourselves, either

Chris Dixon:

consciously or subconsciously, and try to figure out which of those might be your

Chris Dixon:

limiting beliefs that are actually anchoring you from where you want to go.

Chris Dixon:

And I love that you said you got to think about where you're coming from to know where

Chris Dixon:

you want to go.

Ramit Sethi:

Yeah, I call them invisible scripts because they are the scripts that guide our lives,

Ramit Sethi:

but they're so deeply embedded in us that they are effectively invisible to us.

Ramit Sethi:

I'll give you a few examples.

Ramit Sethi:

There are positive, invisible scripts.

Ramit Sethi:

Like I grew up, as I mentioned, son of immigrants.

Ramit Sethi:

One invisible script in our culture is education is a good thing.

Ramit Sethi:

I think that's probably a pretty good script.

Ramit Sethi:

Maybe it can be taken too far, but in general, I do believe it.

Ramit Sethi:

I think it's been good for me.

Ramit Sethi:

Another script might be we can't afford it.

Ramit Sethi:

A very common phrase that if you hear it a thousand times growing up, guess what?

Ramit Sethi:

You grow up, maybe you have a pretty good income, maybe you start saving money, maybe

Ramit Sethi:

you start investing. I speak to couples on my podcast.

Ramit Sethi:

They go -- I spoke to a couple recently, 60 years old.

Ramit Sethi:

She says, I am about to retire.

Ramit Sethi:

I want to take a trip. I want to start traveling.

Ramit Sethi:

He goes, we can't do it, we need to save money.

Ramit Sethi:

60 years old. I said, what's your net worth?

Ramit Sethi:

$6.3 million.

Ramit Sethi:

So anyone listening is going, whoa, that's so crazy.

Ramit Sethi:

But the fact of the matter is we all behave this way when it comes to money.

Ramit Sethi:

We don't understand how the numbers actually tie to what we want to do.

Ramit Sethi:

We don't understand ratios.

Ramit Sethi:

We don't know how much we can actually afford to spend on a house or a car.

Ramit Sethi:

So we just make these transactional decisions, whatever's in front of us.

Ramit Sethi:

Literally, it's like ordering food at Chipotle.

Ramit Sethi:

That's the level of analysis we assign to like buying a house.

Ramit Sethi:

We don't even think about ratios and affordability and TKO.

Ramit Sethi:

And when I talk to couples, I want them to become better with money.

Ramit Sethi:

I want them to live a rich life.

Ramit Sethi:

In order to do that, you need to do two things.

Ramit Sethi:

One, confidence.

Ramit Sethi:

You need to become confident with money, and that means mastering your money psychology.

Ramit Sethi:

But to become confident, you also need to become competent.

Ramit Sethi:

You need to be able to speak the basic language.

Ramit Sethi:

What is compounding?

Ramit Sethi:

What is a Roth IRA?

Ramit Sethi:

These things are important.

Ramit Sethi:

And if you can do those two things, it's pretty good sign you can design your rich

Ramit Sethi:

life.

Chris Dixon:

Confidence and competence.

Chris Dixon:

Yeah. That's pretty good.

Chris Dixon:

So you said something, if I remember reading this, like spend extravagantly on the things

Chris Dixon:

that you love, but then also cut very intentionally the things that you don't.

Chris Dixon:

Be okay with spending money on the things that you really are passionate about.

Ramit Sethi:

Yeah, I say spend extravagantly on the things you love as long as you cut costs mercilessly

Ramit Sethi:

on the things you don't.

Ramit Sethi:

So I'll give you a few examples.

Ramit Sethi:

I love when I hear somebody say Ramit, I absolutely love yoga.

Ramit Sethi:

I go to yoga three times a week.

Ramit Sethi:

I said, oh, that sounds good.

Ramit Sethi:

What else? What else do you do?

Ramit Sethi:

They go, well, I have never told anyone this, but I'm actually saving up to go to a

Ramit Sethi:

yoga retreat in India.

Ramit Sethi:

I go, that's awesome.

Ramit Sethi:

That's what I call a money dial.

Ramit Sethi:

It's something that you love spending money on.

Ramit Sethi:

And you can turn that dial way up.

Ramit Sethi:

What I find is that most of us are taught culturally and through our families that we

Ramit Sethi:

should just try to cut back a little on everything.

Ramit Sethi:

I go, why, that sucks.

Ramit Sethi:

So you're telling me I got to cut back 5 percent on coffee, 5 percent on skydiving, 5

Ramit Sethi:

percent on clothes, 5 percent on bikes, 5 percent on food.

Ramit Sethi:

Why? What kind of life is this?

Ramit Sethi:

It sucks.

Ramit Sethi:

Let's double, triple, quadruple our spending on the things we love.

Ramit Sethi:

Maybe it's fitness. For most people, the number one money dial is eating out.

Ramit Sethi:

The number two, travel.

Ramit Sethi:

Number three, health and wellness.

Ramit Sethi:

Number four, convenience.

Ramit Sethi:

And we can talk about all those.

Ramit Sethi:

But then when I ask people this exercise, I say, what would it look like if you

Ramit Sethi:

quadrupled your spending on the money dial that you love and their eyes light up, they

Ramit Sethi:

go, oh my God, like eating out?

Ramit Sethi:

I'll give you an example. They go, well, one guy, they always say the same thing.

Ramit Sethi:

I'd probably have to go on a diet because I'd be eating out four times a week.

Ramit Sethi:

Hahaha. I go, oh God.

Ramit Sethi:

All right. Pretty linear answer.

Ramit Sethi:

As if quadrupling your spend means you just do it four times.

Ramit Sethi:

I go, let's go deeper.

Ramit Sethi:

Where would you eat?

Ramit Sethi:

And he goes, he gets quiet.

Ramit Sethi:

I was at a book tour in D.C.

Ramit Sethi:

asking this young man.

Ramit Sethi:

He said, I have a list of every Michelin Star restaurant in D.C.

Ramit Sethi:

one day I would love to eat at.

Ramit Sethi:

I said, wow, that sounds amazing.

Ramit Sethi:

And then I said, who would you take with you?

Ramit Sethi:

It's pin drop silence in the room.

Ramit Sethi:

And he looks at me and he says, I would take my family.

Ramit Sethi:

Why? Because they could never afford to eat there.

Ramit Sethi:

That is a money dial.

Ramit Sethi:

And if we start from what you love to do, then we can look at your finances.

Ramit Sethi:

And it's very easy to identify what you can cut costs mercilessly on.

Ramit Sethi:

Maybe you don't need that type of car or that cable or whatever, but we always start

Ramit Sethi:

from what your rich life is versus cutting back.

Chris Dixon:

Yeah. There's a couple of examples you shared there where somebody's initial response was

Chris Dixon:

what you typically see when you take someone down a goal setting path and you're like,

Chris Dixon:

come on, like, imagine where you want to go, what does extraordinary look like?

Chris Dixon:

And there's a muscle that you have to build, I think, to know how to ask that bigger

Chris Dixon:

question to go step further.

Chris Dixon:

And then when you think you're there, go into like uncomfortable even a step further.

Chris Dixon:

And do you have any insight for somebody on how they could when they're starting to ask

Chris Dixon:

these questions, like catch themselves and push a little bit further?

Ramit Sethi:

Well, what a great example you pointed out that it is a muscle.

Ramit Sethi:

So I frequently will see this.

Ramit Sethi:

It's reflexive minimization.

Ramit Sethi:

I'll say, oh, okay, you love your house.

Ramit Sethi:

Fantastic. If you could spend more on your house, if you could live anywhere, where

Ramit Sethi:

would it be? And they go like this, well, it's not like I need a big house, it's not

Ramit Sethi:

like I need to live on the beach.

Ramit Sethi:

It's just that I need. I go whoa, whoa, hold on.

Ramit Sethi:

I'm not asking you to tell me what you don't need.

Ramit Sethi:

I'm asking you to tell me what would the dream be?

Ramit Sethi:

Let's start from there, and then we can chop it up and make it realistic.

Ramit Sethi:

Hey, maybe you want to live on the beach.

Ramit Sethi:

Maybe you can't afford a $6 Million beach house.

Ramit Sethi:

How about an Airbnb for a weekend?

Ramit Sethi:

Can we start there?

Ramit Sethi:

And it is this muscle because this really comes back to our cultural, invisible script

Ramit Sethi:

of I shouldn't want more.

Ramit Sethi:

That's for rich people, not people like me.

Ramit Sethi:

And what if I set a goal or even say it out loud and then I can't do it?

Ramit Sethi:

Then I'm a failure, right?

Ramit Sethi:

These are all little scripts that we have running in our heads.

Ramit Sethi:

And one of my goals, it's like, if I were to go skydiving, I've never done it.

Ramit Sethi:

I'm going to be afraid, all right.

Ramit Sethi:

And I'm going to say all these things in the back of my head.

Ramit Sethi:

Maybe I should turn back. Maybe I should not do it.

Ramit Sethi:

I don't know. And a great instructor is going to say, look, we went through training.

Ramit Sethi:

We're going to take it step by step.

Ramit Sethi:

You're going to be with me. We're going to go through it together.

Ramit Sethi:

Let's do this together.

Ramit Sethi:

That's exactly what dreaming bigger requires.

Ramit Sethi:

Sometimes you need a little help.

Chris Dixon:

Absolutely. Yeah.

Chris Dixon:

And be aware of those limiting beliefs that you have that are between you and doing that

Chris Dixon:

thing that you potentially want to do.

Chris Dixon:

And I always share a funny story.

Chris Dixon:

When I used to skydive regularly, people would always say like, why would you jump out

Chris Dixon:

of a perfectly good airplane?

Chris Dixon:

I would never jump out of a perfectly good airplane.

Chris Dixon:

And I would always joke and say, well, have you ever seen a skydiving plane?

Chris Dixon:

Like there's nothing perfectly good about them.

Ramit Sethi:

That's really good.

Chris Dixon:

Yeah. And it's funny.

Chris Dixon:

But then I started thinking about that in my own reflection.

Chris Dixon:

I'm like, man, what am I telling myself?

Chris Dixon:

Like, what's my personally, excuse me, perfectly good airplane and putting the

Chris Dixon:

mirror back. And it was really interesting to think about things that way.

Ramit Sethi:

That's interesting. The closest I got to skydiving was I went to a military base.

Ramit Sethi:

And we were doing some exercises helping some of the people coming out of the military

Ramit Sethi:

get jobs and things like that.

Ramit Sethi:

So they sort of took us around as civilians for a day.

Ramit Sethi:

And they took us to what they call the 34 -foot tower where they train the

Ramit Sethi:

paratroopers, et cetera. It's 34 feet because that's mathematically the scariest

Ramit Sethi:

amount for a human.

Ramit Sethi:

And of course, there's barbed wire and stuff beneath that.

Ramit Sethi:

You have to jump out, your thing hooks on, and then you sort of glide along the path.

Ramit Sethi:

All right.

Ramit Sethi:

It's a simulated parachute, and I'm wearing Adidas track pants because it is really hot.

Ramit Sethi:

I'm just like a total -- I'm wearing like a Lululemon shirt.

Ramit Sethi:

And all these guys are out there.

Ramit Sethi:

They've been voluntold you need to be here and help these civilians.

Ramit Sethi:

So they're sitting there sweating in their hot fatigues.

Ramit Sethi:

I go, hey, this is a pretty cool pack.

Ramit Sethi:

Is this what you guys wear?

Ramit Sethi:

And they just laugh. They go, No, sir.

Ramit Sethi:

Ours is like £70.

Ramit Sethi:

This is about £25.

Ramit Sethi:

I was like, oh, okay.

Ramit Sethi:

So we trudge up the stairs.

Ramit Sethi:

And what was fascinating was, first of all, there was one of our colleagues coming down

Ramit Sethi:

the stairs. She'd gotten too afraid and she'd come down.

Ramit Sethi:

Okay, fine. We go up and I start talking.

Ramit Sethi:

I realize that when I'm going through fear, I start to just overtalk.

Ramit Sethi:

Okay, I'm going to put one foot in front of the other.

Ramit Sethi:

I'm going to put my chin down.

Ramit Sethi:

And the guy's like, shut the F up, jump.

Ramit Sethi:

And it was a muscle that I have not really developed.

Ramit Sethi:

As a civilian, I don't really get screamed at that often except on Twitter by nimby losers.

Ramit Sethi:

And what I realized was, wow, this is a totally different experience.

Ramit Sethi:

And to my colleague's credit, the one who was walking down the stairs.

Ramit Sethi:

She actually got the courage to come back up, conquer her fears and jumped out as well.

Ramit Sethi:

So that day was very memorable to me.

Ramit Sethi:

And now you're inspiring me to maybe consider doing a real jump.

Chris Dixon:

Oh, that's cool. If it's for you, it's for you.

Chris Dixon:

I vow to never try to convince someone to skydive, to choose your own adventure kind of

Chris Dixon:

thing. We used to joke and say that when you're standing in the door of the airplane

Chris Dixon:

and you open it up and it gets really loud and windy, that no, no, no sounds a whole lot

Chris Dixon:

like go, go, go.

Ramit Sethi:

You guys have some funny phrases.

Ramit Sethi:

I like it.

Chris Dixon:

You have to. You have to make light of a potentially serious scenario.

Chris Dixon:

But so I want to circle back.

Chris Dixon:

We talked about the like spend extravagantly on the things that you love.

Chris Dixon:

And so having clarity on, like, what are those things for you?

Chris Dixon:

And the money dial is awesome.

Chris Dixon:

It's got to be a little bit more challenging when you think about a couple then, right?

Chris Dixon:

Because you may have misalignment on some of the things that you want to spend

Chris Dixon:

extravagantly on.

Chris Dixon:

Any advice on some of those common issues or how couples could address that?

Ramit Sethi:

Well, this is what I absolutely love to talk about.

Ramit Sethi:

So when my wife and I were going to get married, we were talking about a prenup.

Ramit Sethi:

And we started talking and it was actually going pretty well until it got really hard.

Ramit Sethi:

And I'm the money guy.

Ramit Sethi:

I've written a best selling book on money.

Ramit Sethi:

I've been talking about money every day of my life for the last 20 years.

Ramit Sethi:

And I was like, how can it be this hard?

Ramit Sethi:

It was very challenging.

Ramit Sethi:

And I did all my searches.

Ramit Sethi:

I looked on Google. There was nothing great .

Ramit Sethi:

What I really wished I could find was real couples talking about money, not just some

Ramit Sethi:

blog posts saying like, have the conversation.

Ramit Sethi:

I go, what conversation?

Ramit Sethi:

Literally, tell me the words to say and I want to hear couples doing it.

Ramit Sethi:

What I later learned is that for intimate topics like prenups or even how couples

Ramit Sethi:

should talk about money, it's always behind closed doors.

Ramit Sethi:

Think about it. Have you ever actually heard a couple with $600,000 of debt talking about

Ramit Sethi:

their money?

Chris Dixon:

Not in a public space.

Ramit Sethi:

Nope. And how about a couple with $8 million in the bank bemoaning the fact that they

Ramit Sethi:

can't fly on this trip because they don't have enough Delta points?

Chris Dixon:

Again, yeah.

Chris Dixon:

Not the same.

Ramit Sethi:

Also no. All we hear is movies.

Ramit Sethi:

We see some couple in some Soho apartment talking about money or whatever.

Ramit Sethi:

We've never actually heard real couples, and that's what I wanted to do.

Ramit Sethi:

So after my wife and I went through our challenging process, we learned a lot.

Ramit Sethi:

We actually went to see a therapist, and that therapist asked us a really fascinating

Ramit Sethi:

question. She said, how do you see money?

Ramit Sethi:

And she looked at me first. I was like, oh, I got this, growth.

Ramit Sethi:

Like I could literally see compound interest, rule of 72 floating in front of my

Ramit Sethi:

eyes. I could see it all.

Ramit Sethi:

And then she turns to my wife.

Ramit Sethi:

What do you see when you think about money?

Ramit Sethi:

She goes, safety.

Ramit Sethi:

I looked at my wife like, huh?

Ramit Sethi:

That's like saying microwave oven.

Ramit Sethi:

It doesn't make any correlation for me.

Ramit Sethi:

So for couples, I started bringing them on my podcast, sharing real numbers.

Ramit Sethi:

They all share their income, their debt, how they spend their money and what their problem

Ramit Sethi:

is. Sometimes they have, like I said, $825,000 in debt, sometimes millions in the

Ramit Sethi:

bank. Sometimes one of them is a spender or saver or cultural differences.

Ramit Sethi:

Some suggestions for couples.

Ramit Sethi:

The biggest problem that is common among couples who are in disagreement about money

Ramit Sethi:

is they have no rich life vision.

Ramit Sethi:

So suggestion number one is to create a rich life vision.

Ramit Sethi:

What is our rich life?

Ramit Sethi:

It can't just be travel.

Ramit Sethi:

A better answer would be we want to go to Italy for three weeks.

Ramit Sethi:

We want to bring our parents along.

Ramit Sethi:

We want to drink Italian wine and watch the sunset over Rome.

Ramit Sethi:

That's a vision.

Ramit Sethi:

Or I don't ever want to have to chop a vegetable again.

Ramit Sethi:

Also, a vision. We can use money to solve that problem.

Ramit Sethi:

Lots of specific big and small visions you can create.

Ramit Sethi:

The second thing is to talk about money regularly.

Ramit Sethi:

Most couples only speak about money when there's a problem.

Ramit Sethi:

Well, guess what? If you only talk about when it's a problem, money becomes a problem.

Ramit Sethi:

Let's talk about it proactively.

Ramit Sethi:

Let's get our logistics out of the way.

Ramit Sethi:

Let's set up our accounts correctly, which we can talk about.

Ramit Sethi:

And then finally, we can start to turn money from a source of shame and guilt and anger

Ramit Sethi:

into joy and adventure and generosity.

Ramit Sethi:

That's how you get started.

Chris Dixon:

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That's powerful. So cast a vision for what a rich life looks like for you.

Chris Dixon:

Just take the time to align on what that future state is together and create that

Chris Dixon:

common purpose, that kind of common vision of where you want to go.

Ramit Sethi:

Yeah, I'll give you an example from a couple that I spoke to.

Ramit Sethi:

So they earned a pretty good living.

Ramit Sethi:

One earned more than the other.

Ramit Sethi:

And the husband did not want to spend money on any assistance around the house.

Ramit Sethi:

For example, he didn't want to hire movers.

Ramit Sethi:

And because he works a lot, he only has a limited amount of time and he chose to spend

Ramit Sethi:

that limited amount of time moving instead of hiring movers, which they could easily

Ramit Sethi:

afford. This was becoming an issue with children, things like that.

Ramit Sethi:

Cultural differences.

Ramit Sethi:

So one of them just didn't see the value.

Ramit Sethi:

They said, I'll do it myself.

Ramit Sethi:

And the other said, we have money.

Ramit Sethi:

We should use it to make our lives easier.

Ramit Sethi:

So there's lots of approaches that somebody can take.

Ramit Sethi:

And my job is not to sit here and berate people.

Ramit Sethi:

It's to ask them a lot of questions and help them understand why they believe what they

Ramit Sethi:

believe. At the end of the episode, I asked them, not to create their rich life because

Ramit Sethi:

his answer was, I want a billion dollars.

Ramit Sethi:

That's not an effective answer.

Ramit Sethi:

That's basically self-sabotage.

Ramit Sethi:

You're probably not going to have a billion dollars.

Ramit Sethi:

I said, okay, forget the billion.

Ramit Sethi:

What's your perfect week?

Ramit Sethi:

Start on Sunday and take me through Saturday.

Ramit Sethi:

So it's like we want to take our kids to the park, we want to have brunch, we want to see

Ramit Sethi:

our family on Thursday, et cetera.

Ramit Sethi:

I said, this is a beautiful vision.

Ramit Sethi:

Some time with friends and family.

Ramit Sethi:

Some time with alone, one date night, beautiful.

Ramit Sethi:

I said, hey, out of curiosity, where's your laundry in this perfect week?

Ramit Sethi:

I didn't see you blocking aside three hours to do your laundry.

Ramit Sethi:

And they both laughed because they realized in their vision, laundry is not part of their

Ramit Sethi:

rich life. Guess what?

Ramit Sethi:

They live in New York. They can pay for that to be done very inexpensively.

Ramit Sethi:

Problem solved.

Ramit Sethi:

So sometimes we can just narrow the scope to our perfect week, and that makes clear what

Ramit Sethi:

we value and what we don't.

Chris Dixon:

That's great. I have seen success with something similar, just kind of zooming out

Chris Dixon:

and zooming in.

Chris Dixon:

And you need to have the ability to do both because you can get clarity when you're stuck

Chris Dixon:

in either place. You're stuck in the weeds and you can't see over the horizon like

Chris Dixon:

you're really struggling. Like, stop, hit, pause, zoom out.

Chris Dixon:

But if you're lost in the fog of the future, maybe sometimes you need to zoom in a little

Chris Dixon:

bit and just get some tangible growths and progress and some clarity on where you want

Chris Dixon:

to go in the shorter term. That makes sense.

Ramit Sethi:

Totally agree. I'll give you an example of what we can do to zoom out real quick.

Ramit Sethi:

This size that I did with my wife, it's a fun one.

Ramit Sethi:

If you're in a relationship and you're like, hey, this all sounds cool.

Ramit Sethi:

What am I supposed to do right now?

Ramit Sethi:

Play this game. We did this and it was a blast.

Ramit Sethi:

We sat down, two piece of paper and I said, let's create our bucket list.

Ramit Sethi:

But it's not our bucket list before we die.

Ramit Sethi:

It's our bucket list of things we want to do in the next ten years where if we did them,

Ramit Sethi:

it would mean that we lived a rich and meaningful life.

Ramit Sethi:

All right, So she created hers.

Ramit Sethi:

I created mine. And then we shared them back and forth.

Ramit Sethi:

So one of us was like, I want to learn Spanish.

Ramit Sethi:

The other one said, I want to go skydiving.

Ramit Sethi:

The other one said, like for me, I wanted to write a book in a hotel.

Ramit Sethi:

That's just the thing I want to do.

Ramit Sethi:

And with each of these answers, we were excited.

Ramit Sethi:

We were curious. Oh my God, Spanish, why do you want to do that?

Ramit Sethi:

Oh, you want to actually go to Mexico?

Ramit Sethi:

Oh, wow, skydiving, might have to do that on your own.

Ramit Sethi:

I'll meet you at the bottom, et cetera, et cetera.

Ramit Sethi:

It's fun, right? You're teasing each other.

Ramit Sethi:

You're having fun.

Ramit Sethi:

Because some of these items are solo, some are together.

Ramit Sethi:

We found a couple that were really meaningful to us.

Ramit Sethi:

One of them was having our ten-year wedding anniversary in a very special location.

Ramit Sethi:

Okay, great. So we said, let's zoom in on that one.

Ramit Sethi:

We know that it's going to be X years from now.

Ramit Sethi:

How much do you think it will cost for that to make it amazing?

Ramit Sethi:

So we both kind of separately wrote our numbers down.

Ramit Sethi:

My number was a lot bigger than hers.

Ramit Sethi:

She was like, ahh.

Ramit Sethi:

I was like, trust me, it's going to be sweet.

Ramit Sethi:

So my rule is if you have two numbers, go with the bigger one, because even if you get

Ramit Sethi:

75 percent of the way there, fine.

Ramit Sethi:

This is a rich life, ten-year goal.

Ramit Sethi:

It's not something you're going to do two months from now.

Ramit Sethi:

So we then reverse engineered it and realized in order to hit that number, we need

Ramit Sethi:

to save or invest X per month.

Ramit Sethi:

And that's the way that we started to create one of our long-term joint goals.

Ramit Sethi:

Every month it's like a video game.

Ramit Sethi:

You see a little bit of money going in there and you go, wow, we know exactly where we're

Ramit Sethi:

going to be with all of our loved ones.

Ramit Sethi:

That is our rich life.

Chris Dixon:

That's awesome. Do you see values showing up intentionally in helping give clarity on some

Chris Dixon:

of these challenges couples face, like identifying their core values and having some

Chris Dixon:

discussion or alignment on those as being maybe a lens that you can help view the

Chris Dixon:

future?

Ramit Sethi:

I do, but I think it's really hard for people to recognize their own values.

Ramit Sethi:

I mean, the people who come listen to this podcast, they understand what core values

Ramit Sethi:

are. But if you take an ordinary person, say, like, what are your values?

Ramit Sethi:

They're like, what?

Ramit Sethi:

They're like, I like to eat chips.

Ramit Sethi:

Is that a value? So I think sometimes values are revealed through a deep series of

Ramit Sethi:

conversations. It might be, we all kind of -- there's this thing in psychology called

Ramit Sethi:

the demand effect. If you ask people a certain type of question, they will answer in

Ramit Sethi:

a certain way. Go ask anybody on the street, what are your favorite things to do?

Ramit Sethi:

One of your top three answers will be travel.

Ramit Sethi:

It's like, when was the last time you actually got on a plane?

Ramit Sethi:

And so, with values, you tend to get this sort of pre rehearsed answers.

Ramit Sethi:

But if you drill down, what I find really beautiful is that people's values are really

Ramit Sethi:

quite different. Like for me, I love convenience, love it.

Ramit Sethi:

I'm going to sound like a serial killer right now, but I want every part of my house

Ramit Sethi:

to be so organized that if I go blind, I know exactly where this type of salt is.

Ramit Sethi:

I want everything perfectly organized.

Ramit Sethi:

I know I sound like a psycho, but that's what I love.

Ramit Sethi:

And so therefore, I've built my life around convenience.

Ramit Sethi:

You might build your life around relationships, but it's really hard to just

Ramit Sethi:

ask somebody like, what's your values?

Ramit Sethi:

Instead, I think we talk about what would you love to do?

Ramit Sethi:

What do you want to do more of?

Ramit Sethi:

What could you give up and you wouldn't care about?

Ramit Sethi:

What would make you and your family have an unforgettable experience.

Ramit Sethi:

And suddenly, it becomes very clear.

Ramit Sethi:

Do they value relationships?

Ramit Sethi:

Do they value extravagance?

Ramit Sethi:

Do they value X, Y, Z?

Ramit Sethi:

And then it tells me where to take it from there.

Chris Dixon:

That makes sense. Yeah.

Chris Dixon:

And you said that people view values differently.

Chris Dixon:

And my experience, that is very true.

Chris Dixon:

But also, they may interpret the same values differently.

Chris Dixon:

So what family or excellence or travel or freedom means to one person may mean

Chris Dixon:

something very different to another.

Ramit Sethi:

Fantastic point. I don't actually like when people give me words like freedom.

Ramit Sethi:

I'm like, what's money for?

Ramit Sethi:

They go freedom. I go, what?

Ramit Sethi:

What? That's just a word.

Ramit Sethi:

Let's get specific.

Ramit Sethi:

Yeah, it's vague.

Ramit Sethi:

And a rich life is lived in vivid details.

Ramit Sethi:

So if freedom means that you can go lift weights at 3 p.m.

Ramit Sethi:

every day, tell me that because then we can work with that.

Ramit Sethi:

That means you need to change your calendar.

Ramit Sethi:

Maybe you need to have enough to afford a personal trainer, whatever.

Ramit Sethi:

But if you just say freedom, so many of us hide behind these vague words and then what

Ramit Sethi:

do we do? We do what everybody else does.

Ramit Sethi:

We believe that the American dream is get married, buy a house you can't afford in the

Ramit Sethi:

suburbs where you don't see any of your friends, move to Florida one day, die.

Ramit Sethi:

I'm like, hmm, okay, if that's what you love, great, but maybe there's a different

Ramit Sethi:

path for some people.

Ramit Sethi:

You have to articulate it.

Ramit Sethi:

Nobody's going to give it to you without you doing that work.

Chris Dixon:

Absolutely. It's why it's so important that your goals are specific, and measurable, and

Chris Dixon:

you get them to it. I always say that your goals are like a destination.

Chris Dixon:

And to know that you've arrived there, you need to know specifically where that

Chris Dixon:

destination is.

Chris Dixon:

Then you can kind of reverse engineer your milestones back from that destination, and it

Chris Dixon:

may change over time.

Chris Dixon:

Your destination might move, but at least you're intentional and specific about where

Chris Dixon:

you're going.

Ramit Sethi:

Yeah, totally agree.

Chris Dixon:

Yeah. So we talked about couples in some of the early challenges they run into.

Chris Dixon:

What about someone who's maybe a little further down the path or a couple that's

Chris Dixon:

further down the path and maybe they've started this, but they're like off track or

Chris Dixon:

they feel like they don't have a good system in place to stay on track over time or be

Chris Dixon:

accountable to it? They've imagined where they want to go and they've done some of that

Chris Dixon:

work, but they're further down and they find themselves picking their head up and being

Chris Dixon:

like, shoot, we've gone two years and we're totally disconnected from our goals.

Ramit Sethi:

Yeah, that's very common.

Ramit Sethi:

First of all, I don't mind it. It's super common.

Ramit Sethi:

Life is messy.

Ramit Sethi:

And so, like I remember I spoke to a couple just a couple of episodes ago.

Ramit Sethi:

And during our recording, their kids were just screaming, running around, and I kind of

Ramit Sethi:

loved it. I'm like, this is real.

Ramit Sethi:

Your kids do not care that you're on a podcast, you've waited months, they're just

Ramit Sethi:

kids. And so first of all, let's just accept that life is not a perfectly organized desk

Ramit Sethi:

with a single cup of jasmine tea steaming.

Ramit Sethi:

You know, life is messy. We've got to live in that messy life.

Ramit Sethi:

Okay, fine. That's number one.

Ramit Sethi:

I don't have any problem with that.

Ramit Sethi:

Number two is that we often look at money as a series of transactional decisions.

Ramit Sethi:

Should I buy this car?

Ramit Sethi:

Should I get this cheesecake?

Ramit Sethi:

Should we get a double-double at In and Out?

Ramit Sethi:

It's just one pointless decision after another that doesn't really connect to our

Ramit Sethi:

rich life. And so what I like to do, you know, I love systems.

Ramit Sethi:

I told you about those scholarships that I created.

Ramit Sethi:

I want a system for your money.

Ramit Sethi:

That's why I wrote I Will Teach You To Be Rich.

Ramit Sethi:

So let me give you some basic, simple overview of how you can set this up to really

Ramit Sethi:

eliminate most of this.

Ramit Sethi:

You should spend about an hour a month on your finances if you have this working.

Ramit Sethi:

You have a joint account where income goes into it.

Ramit Sethi:

This is a simple version.

Ramit Sethi:

Each of you has individual accounts where you take a percentage of your money, and it

Ramit Sethi:

goes into individual accounts.

Ramit Sethi:

You can use that for anything you want, no questions asked, whatever it may be.

Ramit Sethi:

In the joint account, you're paying for, presumably your joint living situation, your

Ramit Sethi:

rent or mortgage, groceries, et cetera, and you split your money.

Ramit Sethi:

You only need to track four numbers.

Ramit Sethi:

Just four. This is all a template of my conscious spending plan.

Ramit Sethi:

The first number is your fixed costs.

Ramit Sethi:

That would be your housing, your car, any debt payments, cable, groceries, the stuff

Ramit Sethi:

that you pay. That should be 50 to 60 percent of your take home.

Ramit Sethi:

The next would be your savings, 5 to 10 percent of your take home pay or after-tax

Ramit Sethi:

pay. Your investments, 5 to 10 percent.

Ramit Sethi:

I'd really like to see that number a little higher depending on your age.

Ramit Sethi:

But 10 percent, let's say, for take home pay for investments.

Ramit Sethi:

And finally, my favorite guilt free spending that's going out to eat.

Ramit Sethi:

It's buying beautiful clothes, decorating the house, whatever.

Ramit Sethi:

Guilt free, 20 to 35 percent of take home.

Ramit Sethi:

Those are general recommendation guidelines.

Ramit Sethi:

If you are hitting those numbers, you're in pretty good shape.

Ramit Sethi:

Typically, where there's conflict is number one, people have no clue.

Ramit Sethi:

They're like, what's a conscious spending plan and what are fixed costs?

Ramit Sethi:

That's because they're making transactional decisions.

Ramit Sethi:

Two, they don't have a rich life vision.

Ramit Sethi:

And three, they don't have a place to talk about it.

Ramit Sethi:

So if you set that system up alone, 90 percent of your problems will vanish

Ramit Sethi:

overnight.

Chris Dixon:

That's awesome. I love how you go to systems because, I mean, it's so common that life

Chris Dixon:

gets crazy, like you said.

Chris Dixon:

And if you don't have a system to fall back on, life's going to take you over and you get

Chris Dixon:

steamrolled. And you need to have a consistent framework that you're using time

Chris Dixon:

over time. And to your point, like break it down in its simplest form and those are some

Chris Dixon:

really great tips and pointers.

Ramit Sethi:

Let me give you a suggestion on some advanced stuff that can help people simplify because

Ramit Sethi:

people listening are a little bit more advanced, I think.

Ramit Sethi:

And I want to share how you can proactively plan instead of constantly being reactive

Ramit Sethi:

with your money. All right.

Ramit Sethi:

Oftentimes you find people, they'll say something like, it feels like we take one

Ramit Sethi:

step forward and two steps back.

Ramit Sethi:

We pay off something, something breaks.

Ramit Sethi:

But given enough time and information, even unexpected expenses become relatively

Ramit Sethi:

predictable. So let's break it down.

Ramit Sethi:

If you and your partner sit down, you say, hey, let's take this conscious spending plan

Ramit Sethi:

and let's actually plan out our year.

Ramit Sethi:

Month by month, what do we think the unexpected expenses are going to be?

Ramit Sethi:

Oh, boy. Well, our anniversary is going to be in March.

Ramit Sethi:

I'd really love to take a nice trip or have a nice dinner, get a babysitter.

Ramit Sethi:

Okay, let's put that down right now.

Ramit Sethi:

In December, we're going to travel.

Ramit Sethi:

We should write that down.

Ramit Sethi:

Oh, in fact, let's talk about where we're going to go.

Ramit Sethi:

Okay, cool. Have that conversation.

Ramit Sethi:

You start to plan for things and then you even plan for the unexpected.

Ramit Sethi:

Like I used to have a stupid mistakes account.

Ramit Sethi:

And that would be things like a parking ticket or some fee that I forgot.

Ramit Sethi:

If that's a case for you, maybe a maintenance account, you know that something

Ramit Sethi:

in your house is going to break or your car.

Ramit Sethi:

Cool, let's just put 20 bucks aside every month or 50 bucks aside.

Ramit Sethi:

Suddenly, when summer camp comes up or a trip or a college friend from out of town is

Ramit Sethi:

like, hey, let's take a trip, whatever that may be, you have put aside money for it.

Ramit Sethi:

This is how you start to take control and go on offense with your money instead of playing

Ramit Sethi:

defense for the rest of your life.

Chris Dixon:

That's such a great point. Like the offense versus defense and giving your money a job

Chris Dixon:

proactively instead of responding to what's happening to you and reacting.

Chris Dixon:

It's such a great point. I know from my own experience doing some of that month over

Chris Dixon:

month and year over year, you start to identify those buckets you need for yourself

Chris Dixon:

that unless you're paying really close attention to it, you don't see the pattern

Chris Dixon:

showing up. You're just not tracking it.

Ramit Sethi:

And I have to say, I don't really want to sit there and look at my Safeway receipt for the

Ramit Sethi:

price of asparagus.

Ramit Sethi:

Like if I find myself looking at counting the price of asparagus, I'm in hell and I've

Ramit Sethi:

taken a wrong turn in life.

Ramit Sethi:

That's why I say four numbers to track, four numbers.

Ramit Sethi:

So if, for example, one partner is in charge of groceries, you really should not be

Ramit Sethi:

sitting there being like, why did you go to Target?

Ramit Sethi:

Why did you buy this? It's like, mind your business, your partner is in charge.

Ramit Sethi:

You've both agreed on a number.

Ramit Sethi:

Now give them ownership, let them do it.

Ramit Sethi:

And hey, if they overspend, then fine, things happen.

Ramit Sethi:

We'll get back on track later.

Ramit Sethi:

Notice the fluidity and the comfort versus rigidity.

Ramit Sethi:

Why did you do that? How much did you spend?

Ramit Sethi:

How are we supposed to get ahead?

Ramit Sethi:

Rigidity comes from not having a system and not understanding how this tiny little

Ramit Sethi:

decision affects our overall rich life.

Ramit Sethi:

Fluidity is mastery, comfort.

Ramit Sethi:

Knowing that, you know what, it's okay if something goes a little wrong over here

Ramit Sethi:

because we've already built in a little bit of wiggle room and we are still focused on

Ramit Sethi:

the big picture.

Chris Dixon:

Yeah, it goes back to what we were saying before about zooming in and zooming out a

Chris Dixon:

little bit too. If you zoom in too much on the individual line items in there that

Chris Dixon:

you're tracking and not zoom out to like, hey, this quarter, we're way ahead.

Ramit Sethi:

That's why people fight so much.

Ramit Sethi:

And honestly, it's frustrating to hear because I always tell them, you're so focused

Ramit Sethi:

on $3 questions that you've totally neglected asking the $30,000 questions.

Ramit Sethi:

They're sitting over here saying, oh my God, I can't believe you bought that Kraft cheese.

Ramit Sethi:

Why don't we get to go?

Ramit Sethi:

Why are we talking about Kraft cheese?

Ramit Sethi:

This makes no sense.

Ramit Sethi:

Meanwhile, they're not asking $30,000 questions.

Ramit Sethi:

The ones that actually matter, like, what's our savings rate?

Ramit Sethi:

They don't even know what a savings rate is.

Ramit Sethi:

What's our asset allocation?

Ramit Sethi:

What's that? What's our debt payoff date?

Ramit Sethi:

Ninety-five percent of people I talked to who are in debt do not know what date their

Ramit Sethi:

debt would be paid off. That's a $30,000 question.

Ramit Sethi:

So you could go the rest of your life doing $3 questions.

Ramit Sethi:

Oh, why'd you get that at Starbucks?

Ramit Sethi:

Or you can get the 5 to 10 big questions, the $30,000 questions right, and you never

Ramit Sethi:

have to worry about coffee or what type of aluminum foil you buy at the grocery store.

Ramit Sethi:

You can hear me getting aggravated because how many people spend their entire lives

Ramit Sethi:

playing small?

Ramit Sethi:

They are living that $3 life.

Ramit Sethi:

They actually find comfort in that $3 life.

Ramit Sethi:

But if you ask them, do you want to be doing this for the rest of your life, they say, no.

Ramit Sethi:

Fantastic, let's change.

Chris Dixon:

Love it. We talk a lot about Pareto principle in our teachings in the 80-20 rule, and what

Chris Dixon:

we say is, what Pareto principle represents is there 20 percent things you could focus on

Chris Dixon:

that would deliver 80 percent of your results in a lot of forms and fashions.

Chris Dixon:

And that's what comes out for me when you say that it relates to me, it's like, figure

Chris Dixon:

out what's the 20 percent that if you focused on that, would deliver 80 percent of

Chris Dixon:

your results. And what we find is so many people focus on the 80 percent.

Ramit Sethi:

I know.

Chris Dixon:

Spending all their time on the other things.

Ramit Sethi:

Well, I'm guilty of that too.

Chris Dixon:

That were not comparing those big ROI.

Ramit Sethi:

I get it and we've all done it.

Ramit Sethi:

In fact, I bet all of us are doing it right now in some part of our life.

Ramit Sethi:

I totally understand the visceral appeal.

Ramit Sethi:

Like let me just fix that one thing and what I've realized, especially running my own

Ramit Sethi:

business for almost 20 years, is that you have to be willing to have certain things be

Ramit Sethi:

broken forever.

Ramit Sethi:

And it's actually fine.

Ramit Sethi:

And if you are getting, in my case, the four numbers in the conscious spending plan right,

Ramit Sethi:

you're actually doing fantastic.

Ramit Sethi:

You do not need to comparison shop for the price of pickles.

Ramit Sethi:

All right. And you do not need to worry about should I drive an extra mile to save

Ramit Sethi:

$0.10 a gallon on gas?

Ramit Sethi:

No, you don't even need to worry about that.

Ramit Sethi:

That's actually hard for people because that's mostly what we've known.

Ramit Sethi:

That's probably what our parents taught us.

Ramit Sethi:

So to be able to realize, like, it actually doesn't matter.

Ramit Sethi:

And I have elevated myself to bigger questions.

Ramit Sethi:

That's quite an uncomfortable moment on your personal identity, but to me, this is the joy

Ramit Sethi:

of really creating a breakthrough where you start to see money as bigger than can I save

Ramit Sethi:

$0.10?

Chris Dixon:

Absolutely.

Chris Dixon:

So powerful. And it's a mindset shift to think that way, which is typically the

Chris Dixon:

uncomfortable place to go.

Chris Dixon:

But I always believe and that's a good indication when you're starting to feel

Chris Dixon:

uncomfortable, you're in that growth zone.

Chris Dixon:

You need to lean in.

Chris Dixon:

That's where you want to go.

Ramit Sethi:

Totally.

Chris Dixon:

Ramit, so much synergy between us and what you teach.

Chris Dixon:

And if our listeners want to learn more about your process, check you out, be a part

Chris Dixon:

of your world, where can they find you?

Ramit Sethi:

First thing is, if you like what you're hearing, you want to hear me talking to real

Ramit Sethi:

couples with real numbers from behind closed doors, just go to the I Will Teach You To Be

Ramit Sethi:

Rich podcast and you can find us on audio.

Ramit Sethi:

We also do it on video now so you can actually see the couples and their facial

Ramit Sethi:

expressions and body language.

Ramit Sethi:

It's quite fascinating.

Ramit Sethi:

And of course, you can get access to all my material, including the conscious spending

Ramit Sethi:

plan on my website, iwillteachyoutoberich .com.

Chris Dixon:

Awesome. No, that's pretty cool that couples are willing to be vulnerable like that.

Chris Dixon:

That's awesome. What a great breakthrough.

Chris Dixon:

And I'm sure there's a ton of value in being able to watch that.

Chris Dixon:

I know in doing this and coaching and also being a participant in certain things that

Chris Dixon:

sometimes it's almost more valuable to watch somebody else have a breakthrough from an

Chris Dixon:

outside perspective than to be in the hot seat.

Chris Dixon:

So it's a good way to learn.

Ramit Sethi:

Yep, totally.

Chris Dixon:

Awesome. Well, hey, if you could have our listeners take away one thing from the

Chris Dixon:

conversation today, what would that be?

Ramit Sethi:

It would be that money is meant to be used on a rich life.

Ramit Sethi:

So my challenge to everyone here is what is your rich life in specific, vivid details?

Ramit Sethi:

And if you want to do it solo, you want to do it with a partner, whatever works.

Ramit Sethi:

And I'd actually love to hear from you.

Ramit Sethi:

So if you want to send me a message on social media, tell me you heard me listening

Ramit Sethi:

here, and I'd love to hear what your rich life is.

Chris Dixon:

Awesome. Hey. Thanks so much for your time today and all your wisdom.

Chris Dixon:

It's great to talk to you.

Ramit Sethi:

Thanks. It was a pleasure.

Chris Dixon:

All right. Bye, everybody.

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