Have you ever stopped to consider what a rich life truly means to you? The answer is likely more complex and personal than you think.
While some may believe that achieving financial freedom is the key to living a rich life, the truth is that living a rich life can mean different things to different people.
Today on the show, we’re speaking with Ramit Sethi, a renowned personal finance expert who challenges the conventional definitions of wealth and success. Join us as Ramit shares his powerful insights on how to design and live the extraordinary life you truly deserve.
If you want to align your rich life with your values, visit the1thing.com/values to get in touch with your core values and spend your money where it matters most.
To learn more, and for the complete show notes, visit: the1thing.com/pods.
We talk about:
- Defining what a rich life means for you
- How our past informs what we value
- What you need to become better at in order to live a rich life
- Aligning values between couples using the rich life philosophy
- Creating a system to stay on track towards your goals
Links & Tools from This Episode
- Learn more at IWillTeachYouToBeRich.com
- Listen to I Will Teach You To Be Rich
- Discover what your rich life is with the Rich Life Quiz
- Free Resources
- Want to be a guest or share feedback? Email podcast@the1thing.com
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Transcript
Intro:
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Chris Dixon:
Speaker:Hi, I'm Chris Dixon and welcome back to The ONE Thing podcast.
Chris Dixon:
Speaker:I'm sure if you were asked if you'd like to live a rich life, your answer would be yes.
Chris Dixon:
Speaker:But it's also important to recognize that living a rich life is relative to you, and it
Chris Dixon:
Speaker:can mean different things for different people.
Chris Dixon:
Speaker:It's about identifying what extraordinary is for yourself or your family and designing
Chris Dixon:
Speaker:that future being intentional.
Chris Dixon:
Speaker:And today I spoke with Ramit Sethi.
Chris Dixon:
Speaker:And Ramit shares some really powerful perspective about identifying what a rich
Chris Dixon:
Speaker:life is for you, both individually and as a couple, some tools and some systems that can
Chris Dixon:
Speaker:help you stay on track to achieving a rich life for yourself.
Chris Dixon:
Speaker:So let's go talk to Ramit.
Chris Dixon:
Speaker:Everybody, welcome back to The ONE Thing podcast.
Chris Dixon:
Speaker:I'm lucky to have Ramit Sethi on the podcast with us today.
Chris Dixon:
Speaker:And he is the author of New York Times best selling book, I Will Teach You to Be Rich.
Chris Dixon:
Speaker:Also, he runs his podcast.
Chris Dixon:
Speaker:He and his team have created over 20 plus programs on making money, finding your dream
Chris Dixon:
Speaker:job, starting online businesses, mastering your inner psychology and more.
Chris Dixon:
Speaker:He now has over a million readers per month on his newsletter and in his social media.
Chris Dixon:
Speaker:Ramit, thanks so much for being on today.
Ramit Sethi:
Speaker:Thanks for having me.
Chris Dixon:
Speaker:Yeah, I love it. And you said something or wrote something that I love.
Chris Dixon:
Speaker:And it's, "I consider it a tragedy to live a smaller life than you have to".
Chris Dixon:
Speaker:And that's so big and aligned with what we believe at The ONE Thing about how important
Chris Dixon:
Speaker:it is to imagine extraordinary for your life and to be intentional about building that
Chris Dixon:
Speaker:life. And I really appreciate what you're teaching and excited to talk to you today.
Ramit Sethi:
Speaker:Thank you very much.
Ramit Sethi:
Speaker:I mean, we are totally aligned, and I come at it from the perspective of money and
Ramit Sethi:
Speaker:ultimately a rich life.
Ramit Sethi:
Speaker:And I think when it comes to money, most of us see it as an obligation, something that we
Ramit Sethi:
Speaker:should manage.
Ramit Sethi:
Speaker:We have a very interesting puritanical dichotomy in this country.
Ramit Sethi:
Speaker:We hate money in the sense that we don't like managing it.
Ramit Sethi:
Speaker:We don't like thinking about our asset allocation, but we also love it.
Ramit Sethi:
Speaker:We love looking at people on social media in Bora Bora on a Wednesday in their 3200 square
Ramit Sethi:
Speaker:foot house with 16 foot ceilings.
Ramit Sethi:
Speaker:And so when you really have this love-hate relationship with money, but no real
Ramit Sethi:
Speaker:understanding of how to use it to fuel your rich life, well, it becomes a problem.
Ramit Sethi:
Speaker:And that has been really my life's work.
Chris Dixon:
Speaker:I love that. How did you get into the personal finance and development wealth
Chris Dixon:
Speaker:building industry?
Chris Dixon:
Speaker:And how did you connect this passion for yourself?
Ramit Sethi:
Speaker:I got into it because when I was applying to colleges, my parents told me, you're going to
Ramit Sethi:
Speaker:college. My parents are Indian, so they're like, of course you're going to college, but
Ramit Sethi:
Speaker:we don't have any money, so you better find some scholarships.
Ramit Sethi:
Speaker:And I was like, cool.
Ramit Sethi:
Speaker:I love systems.
Ramit Sethi:
Speaker:I love building systems, so I don't have to do that much work.
Ramit Sethi:
Speaker:I built a system. I applied to about 65 scholarships, paid my way through undergrad
Ramit Sethi:
Speaker:and grad school at Stanford.
Ramit Sethi:
Speaker:And while I was there, I was studying human psychology, persuasion, social influence.
Ramit Sethi:
Speaker:And I was also learning about money because I had taken my first scholarship check,
Ramit Sethi:
Speaker:invested it in the stock market thinking I was a genius and lost half the money.
Ramit Sethi:
Speaker:So here I am, thinking I was a genius, realized I was not, learning about human
Ramit Sethi:
Speaker:behavior, and I realized oh my God, most of the ways that we are taught about money have
Ramit Sethi:
Speaker:no understanding of how we actually want to behave.
Ramit Sethi:
Speaker:For example, a lot of people right now listening are thinking, I'm going to come on
Ramit Sethi:
Speaker:here and tell you, you got to cut back on lattes, no jeans, no vacation, no nothing
Ramit Sethi:
Speaker:until you're 93 years old.
Ramit Sethi:
Speaker:And then maybe you can take a cruise.
Ramit Sethi:
Speaker:It's like, I don't want to live that life.
Ramit Sethi:
Speaker:Neither did any of my friends.
Ramit Sethi:
Speaker:We wanted to be able to go out, buy a round of drinks for our friends, take a trip, live
Ramit Sethi:
Speaker:our rich life.
Ramit Sethi:
Speaker:And so I started trying to teach people in my college.
Ramit Sethi:
Speaker:Well, I quickly learned people don't really like to go to events about money.
Ramit Sethi:
Speaker:It makes them feel bad about themselves.
Ramit Sethi:
Speaker:And so here I am, this cocky college kid.
Ramit Sethi:
Speaker:I go, you know what, this world needs to hear what I've got to tell them.
Ramit Sethi:
Speaker:And I could have quit at that moment.
Ramit Sethi:
Speaker:I'm really thankful that I didn't.
Ramit Sethi:
Speaker:I started a blog.
Ramit Sethi:
Speaker:I said, maybe these lazy kids will learn from their dorm rooms.
Ramit Sethi:
Speaker:Turn out to be totally correct.
Ramit Sethi:
Speaker:And that was 20 years ago.
Ramit Sethi:
Speaker:And ever since then, I have been writing books, creating programs, and sharing a new
Ramit Sethi:
Speaker:philosophy on creating a rich life.
Chris Dixon:
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Chris Dixon:
Speaker:That's powerful. I like what you said about this barrier that people have to showing up
Chris Dixon:
Speaker:to events. And I think it ties to, you talked about a rich life.
Chris Dixon:
Speaker:And what relates for me is a rich life is relative to you.
Chris Dixon:
Speaker:And I think that's important to call out that when you say rich, it's not always a
Chris Dixon:
Speaker:certain dollar amount that you compare yourself to with other people.
Chris Dixon:
Speaker:And you may, and maybe that's what rich is for you.
Chris Dixon:
Speaker:But it's important to ask the question like, what would a rich life be for you and know
Chris Dixon:
Speaker:what that is and have the clarity to say that you are aiming for this specific place
Chris Dixon:
Speaker:and give yourself permission to start somewhere.
Chris Dixon:
Speaker:The best day to start is right now.
Chris Dixon:
Speaker:It's today.
Ramit Sethi:
Speaker:That's right. You know, when I asked people what is a rich life for you, the most common
Ramit Sethi:
Speaker:question, I get this 90 percent of the time .
Ramit Sethi:
Speaker:People go, I want to do what I want when I want.
Ramit Sethi:
Speaker:I go, oh, God, not again.
Ramit Sethi:
Speaker:All right. That's so interesting.
Ramit Sethi:
Speaker:Wow, I never heard that one.
Ramit Sethi:
Speaker:And then I go, so what do you want?
Ramit Sethi:
Speaker:And they stare at me, just flabbergasted, because most of us have never truly thought
Ramit Sethi:
Speaker:about what our rich life is.
Ramit Sethi:
Speaker:We think about what emails we have to answer.
Ramit Sethi:
Speaker:We think about what we need to repair in our house on the weekend, but don't really think
Ramit Sethi:
Speaker:about what would make it extraordinary.
Ramit Sethi:
Speaker:And so let me give you a few examples of what your rich life might be.
Ramit Sethi:
Speaker:Your rich life might be traveling three months a year.
Ramit Sethi:
Speaker:It might be buying $2,000 cashmere coat.
Ramit Sethi:
Speaker:Your rich life might be being able to pick up your children from school every afternoon.
Ramit Sethi:
Speaker:When I was 21 years old, my rich life at that point was to be able to buy appetizers
Ramit Sethi:
Speaker:when I went out to eat.
Ramit Sethi:
Speaker:Why? Because when I was a kid, we couldn't afford that.
Ramit Sethi:
Speaker:So to be able to sit at a menu and say, that looks good, I'm going to get it, was amazing.
Ramit Sethi:
Speaker:Then I got a little older.
Ramit Sethi:
Speaker:Rich life for me at that point, what felt incredibly meaningful, was to be able to take
Ramit Sethi:
Speaker:a taxi on a sweltering August day instead of having to go into the subway.
Ramit Sethi:
Speaker:And now my rich life has expanded.
Ramit Sethi:
Speaker:But your rich life is yours.
Ramit Sethi:
Speaker:It's not mine. It's not anybody else's.
Ramit Sethi:
Speaker:It's yours. And that's what makes it beautiful.
Chris Dixon:
Speaker:That's great.
Chris Dixon:
Speaker:And it evolves over time, like you're saying.
Chris Dixon:
Speaker:So what you imagine as rich or extraordinary today will change.
Chris Dixon:
Speaker:It will evolve.
Chris Dixon:
Speaker:But being intentional and paying attention to this over time, something we say is like
Chris Dixon:
Speaker:forming this relationship with your goals and dating them over time will help you just
Chris Dixon:
Speaker:continue to catch those evolutions as they happen.
Ramit Sethi:
Speaker:Exactly. We have so many similarities in philosophies.
Ramit Sethi:
Speaker:Just approach from a different perspective, which I love.
Ramit Sethi:
Speaker:I think that's awesome.
Ramit Sethi:
Speaker:Cross-disciplinary engagement is fantastic.
Ramit Sethi:
Speaker:There are seasons of life and our rich life naturally changes within those.
Ramit Sethi:
Speaker:In my twenties, I wanted to go out a lot.
Ramit Sethi:
Speaker:Awesome. I should invest in that.
Ramit Sethi:
Speaker:I should spend time and money, going out, having fun.
Ramit Sethi:
Speaker:In my thirties, more traveling, things like that.
Ramit Sethi:
Speaker:Forty's, for a lot of people, it's family.
Ramit Sethi:
Speaker:That's traditional.
Ramit Sethi:
Speaker:And there are lots of ways that you can be traditional, and you can create a rich life.
Ramit Sethi:
Speaker:You also can be very untraditional.
Ramit Sethi:
Speaker:I have one of my readers in my book.
Ramit Sethi:
Speaker:He told me he0 used my material.
Ramit Sethi:
Speaker:He and his wife retired in their thirties and now they drive an RV around the country.
Ramit Sethi:
Speaker:Now, let me just tell you something. You're probably not going to find me in an RV.
Ramit Sethi:
Speaker:It's not really my style, but I love that that's what he and his family decided is
Ramit Sethi:
Speaker:their rich life.
Ramit Sethi:
Speaker:So I really want people to turn that dial and refine their vision of a rich life,
Ramit Sethi:
Speaker:because that's why I say it is a tragedy to live a smaller life than you have to.
Chris Dixon:
Speaker:Yeah. You know, I took the quiz.
Chris Dixon:
Speaker:I should call it the survey on your website when I was just getting to know you a little
Chris Dixon:
Speaker:bit more before we spoke.
Chris Dixon:
Speaker:And I thought that was great.
Chris Dixon:
Speaker:Some really great questions.
Chris Dixon:
Speaker:And I'm the adventurer.
Ramit Sethi:
Speaker:Nice.
Chris Dixon:
Speaker:Yeah.
Ramit Sethi:
Speaker:Very good. It's very telling.
Chris Dixon:
Speaker:Yeah, it wouldn't surprise you if you knew maybe some of my background.
Chris Dixon:
Speaker:But it relates to what you were saying before.
Chris Dixon:
Speaker:I used to be in extreme sports.
Chris Dixon:
Speaker:I was a professional skydiver when I was younger.
Chris Dixon:
Speaker:Pilot into aviation, those things.
Chris Dixon:
Speaker:But I moved into a new season of life and wanted to grow in different areas.
Chris Dixon:
Speaker:And I have a lot of friends that stayed in that world, and I look at what they're up to
Chris Dixon:
Speaker:today and I think it's amazing because they're fulfilled, but it's this alignment is
Chris Dixon:
Speaker:what's important to me today.
Chris Dixon:
Speaker:And they're living in RVs outside of drop zones, traveling the world, still doing that
Chris Dixon:
Speaker:thing, but I had a shift in priorities.
Chris Dixon:
Speaker:So I really very much what you're saying.
Ramit Sethi:
Speaker:That's cool. That's really cool.
Ramit Sethi:
Speaker:For anyone else listening. You can get that quiz at iwillteachyoutoberich.com.
Ramit Sethi:
Speaker:And I don't know, I think we all intuitively love to learn about ourselves.
Ramit Sethi:
Speaker:And when you can find out, for example, when I speak to couples and we're talking about
Ramit Sethi:
Speaker:money and they'll just say something offhandedly and I'll go, oh, tell me about
Ramit Sethi:
Speaker:that. How did you grow up with money?
Ramit Sethi:
Speaker:Let me guess, your parents would sit around the dinner table and they might say something
Ramit Sethi:
Speaker:like, we can't afford it.
Ramit Sethi:
Speaker:And they just look at me like, how did you know that?
Ramit Sethi:
Speaker:And it seems like magic but given enough conversations and enough understanding of
Ramit Sethi:
Speaker:human behavior, you start to see these patterns that repeat themselves a lot.
Ramit Sethi:
Speaker:And with money, many of us believe that we are logical robots.
Ramit Sethi:
Speaker:I'm going to the grocery store, I'm buying whatever cereal because I like it.
Ramit Sethi:
Speaker:And what you don't realize, what we don't realize is that we are the products of the
Ramit Sethi:
Speaker:influences around us. It's very likely you bought that cereal because mom and dad served
Ramit Sethi:
Speaker:it to you as a kid and you now associate it with love.
Ramit Sethi:
Speaker:Now imagine that expanded for what type of vacations you think, how much you think is
Ramit Sethi:
Speaker:normal to have in the bank.
Ramit Sethi:
Speaker:Do you believe it's normal to have credit card debt or not, and on and on and on.
Ramit Sethi:
Speaker:So in order to understand what our rich life is going forward, we've also got to
Ramit Sethi:
Speaker:understand our past.
Ramit Sethi:
Speaker:And that really helps you decide which parts of your past you want to keep, which is great
Ramit Sethi:
Speaker:honor, where you came from, but also which parts you might want to rewrite for this new
Ramit Sethi:
Speaker:season of life.
Chris Dixon:
Speaker:It's so good. We have these beliefs that are the story we tell ourselves, either
Chris Dixon:
Speaker:consciously or subconsciously, and try to figure out which of those might be your
Chris Dixon:
Speaker:limiting beliefs that are actually anchoring you from where you want to go.
Chris Dixon:
Speaker:And I love that you said you got to think about where you're coming from to know where
Chris Dixon:
Speaker:you want to go.
Ramit Sethi:
Speaker:Yeah, I call them invisible scripts because they are the scripts that guide our lives,
Ramit Sethi:
Speaker:but they're so deeply embedded in us that they are effectively invisible to us.
Ramit Sethi:
Speaker:I'll give you a few examples.
Ramit Sethi:
Speaker:There are positive, invisible scripts.
Ramit Sethi:
Speaker:Like I grew up, as I mentioned, son of immigrants.
Ramit Sethi:
Speaker:One invisible script in our culture is education is a good thing.
Ramit Sethi:
Speaker:I think that's probably a pretty good script.
Ramit Sethi:
Speaker:Maybe it can be taken too far, but in general, I do believe it.
Ramit Sethi:
Speaker:I think it's been good for me.
Ramit Sethi:
Speaker:Another script might be we can't afford it.
Ramit Sethi:
Speaker:A very common phrase that if you hear it a thousand times growing up, guess what?
Ramit Sethi:
Speaker:You grow up, maybe you have a pretty good income, maybe you start saving money, maybe
Ramit Sethi:
Speaker:you start investing. I speak to couples on my podcast.
Ramit Sethi:
Speaker:They go -- I spoke to a couple recently, 60 years old.
Ramit Sethi:
Speaker:She says, I am about to retire.
Ramit Sethi:
Speaker:I want to take a trip. I want to start traveling.
Ramit Sethi:
Speaker:He goes, we can't do it, we need to save money.
Ramit Sethi:
Speaker:60 years old. I said, what's your net worth?
Ramit Sethi:
Speaker:$6.3 million.
Ramit Sethi:
Speaker:So anyone listening is going, whoa, that's so crazy.
Ramit Sethi:
Speaker:But the fact of the matter is we all behave this way when it comes to money.
Ramit Sethi:
Speaker:We don't understand how the numbers actually tie to what we want to do.
Ramit Sethi:
Speaker:We don't understand ratios.
Ramit Sethi:
Speaker:We don't know how much we can actually afford to spend on a house or a car.
Ramit Sethi:
Speaker:So we just make these transactional decisions, whatever's in front of us.
Ramit Sethi:
Speaker:Literally, it's like ordering food at Chipotle.
Ramit Sethi:
Speaker:That's the level of analysis we assign to like buying a house.
Ramit Sethi:
Speaker:We don't even think about ratios and affordability and TKO.
Ramit Sethi:
Speaker:And when I talk to couples, I want them to become better with money.
Ramit Sethi:
Speaker:I want them to live a rich life.
Ramit Sethi:
Speaker:In order to do that, you need to do two things.
Ramit Sethi:
Speaker:One, confidence.
Ramit Sethi:
Speaker:You need to become confident with money, and that means mastering your money psychology.
Ramit Sethi:
Speaker:But to become confident, you also need to become competent.
Ramit Sethi:
Speaker:You need to be able to speak the basic language.
Ramit Sethi:
Speaker:What is compounding?
Ramit Sethi:
Speaker:What is a Roth IRA?
Ramit Sethi:
Speaker:These things are important.
Ramit Sethi:
Speaker:And if you can do those two things, it's pretty good sign you can design your rich
Ramit Sethi:
Speaker:life.
Chris Dixon:
Speaker:Confidence and competence.
Chris Dixon:
Speaker:Yeah. That's pretty good.
Chris Dixon:
Speaker:So you said something, if I remember reading this, like spend extravagantly on the things
Chris Dixon:
Speaker:that you love, but then also cut very intentionally the things that you don't.
Chris Dixon:
Speaker:Be okay with spending money on the things that you really are passionate about.
Ramit Sethi:
Speaker:Yeah, I say spend extravagantly on the things you love as long as you cut costs mercilessly
Ramit Sethi:
Speaker:on the things you don't.
Ramit Sethi:
Speaker:So I'll give you a few examples.
Ramit Sethi:
Speaker:I love when I hear somebody say Ramit, I absolutely love yoga.
Ramit Sethi:
Speaker:I go to yoga three times a week.
Ramit Sethi:
Speaker:I said, oh, that sounds good.
Ramit Sethi:
Speaker:What else? What else do you do?
Ramit Sethi:
Speaker:They go, well, I have never told anyone this, but I'm actually saving up to go to a
Ramit Sethi:
Speaker:yoga retreat in India.
Ramit Sethi:
Speaker:I go, that's awesome.
Ramit Sethi:
Speaker:That's what I call a money dial.
Ramit Sethi:
Speaker:It's something that you love spending money on.
Ramit Sethi:
Speaker:And you can turn that dial way up.
Ramit Sethi:
Speaker:What I find is that most of us are taught culturally and through our families that we
Ramit Sethi:
Speaker:should just try to cut back a little on everything.
Ramit Sethi:
Speaker:I go, why, that sucks.
Ramit Sethi:
Speaker:So you're telling me I got to cut back 5 percent on coffee, 5 percent on skydiving, 5
Ramit Sethi:
Speaker:percent on clothes, 5 percent on bikes, 5 percent on food.
Ramit Sethi:
Speaker:Why? What kind of life is this?
Ramit Sethi:
Speaker:It sucks.
Ramit Sethi:
Speaker:Let's double, triple, quadruple our spending on the things we love.
Ramit Sethi:
Speaker:Maybe it's fitness. For most people, the number one money dial is eating out.
Ramit Sethi:
Speaker:The number two, travel.
Ramit Sethi:
Speaker:Number three, health and wellness.
Ramit Sethi:
Speaker:Number four, convenience.
Ramit Sethi:
Speaker:And we can talk about all those.
Ramit Sethi:
Speaker:But then when I ask people this exercise, I say, what would it look like if you
Ramit Sethi:
Speaker:quadrupled your spending on the money dial that you love and their eyes light up, they
Ramit Sethi:
Speaker:go, oh my God, like eating out?
Ramit Sethi:
Speaker:I'll give you an example. They go, well, one guy, they always say the same thing.
Ramit Sethi:
Speaker:I'd probably have to go on a diet because I'd be eating out four times a week.
Ramit Sethi:
Speaker:Hahaha. I go, oh God.
Ramit Sethi:
Speaker:All right. Pretty linear answer.
Ramit Sethi:
Speaker:As if quadrupling your spend means you just do it four times.
Ramit Sethi:
Speaker:I go, let's go deeper.
Ramit Sethi:
Speaker:Where would you eat?
Ramit Sethi:
Speaker:And he goes, he gets quiet.
Ramit Sethi:
Speaker:I was at a book tour in D.C.
Ramit Sethi:
Speaker:asking this young man.
Ramit Sethi:
Speaker:He said, I have a list of every Michelin Star restaurant in D.C.
Ramit Sethi:
Speaker:one day I would love to eat at.
Ramit Sethi:
Speaker:I said, wow, that sounds amazing.
Ramit Sethi:
Speaker:And then I said, who would you take with you?
Ramit Sethi:
Speaker:It's pin drop silence in the room.
Ramit Sethi:
Speaker:And he looks at me and he says, I would take my family.
Ramit Sethi:
Speaker:Why? Because they could never afford to eat there.
Ramit Sethi:
Speaker:That is a money dial.
Ramit Sethi:
Speaker:And if we start from what you love to do, then we can look at your finances.
Ramit Sethi:
Speaker:And it's very easy to identify what you can cut costs mercilessly on.
Ramit Sethi:
Speaker:Maybe you don't need that type of car or that cable or whatever, but we always start
Ramit Sethi:
Speaker:from what your rich life is versus cutting back.
Chris Dixon:
Speaker:Yeah. There's a couple of examples you shared there where somebody's initial response was
Chris Dixon:
Speaker:what you typically see when you take someone down a goal setting path and you're like,
Chris Dixon:
Speaker:come on, like, imagine where you want to go, what does extraordinary look like?
Chris Dixon:
Speaker:And there's a muscle that you have to build, I think, to know how to ask that bigger
Chris Dixon:
Speaker:question to go step further.
Chris Dixon:
Speaker:And then when you think you're there, go into like uncomfortable even a step further.
Chris Dixon:
Speaker:And do you have any insight for somebody on how they could when they're starting to ask
Chris Dixon:
Speaker:these questions, like catch themselves and push a little bit further?
Ramit Sethi:
Speaker:Well, what a great example you pointed out that it is a muscle.
Ramit Sethi:
Speaker:So I frequently will see this.
Ramit Sethi:
Speaker:It's reflexive minimization.
Ramit Sethi:
Speaker:I'll say, oh, okay, you love your house.
Ramit Sethi:
Speaker:Fantastic. If you could spend more on your house, if you could live anywhere, where
Ramit Sethi:
Speaker:would it be? And they go like this, well, it's not like I need a big house, it's not
Ramit Sethi:
Speaker:like I need to live on the beach.
Ramit Sethi:
Speaker:It's just that I need. I go whoa, whoa, hold on.
Ramit Sethi:
Speaker:I'm not asking you to tell me what you don't need.
Ramit Sethi:
Speaker:I'm asking you to tell me what would the dream be?
Ramit Sethi:
Speaker:Let's start from there, and then we can chop it up and make it realistic.
Ramit Sethi:
Speaker:Hey, maybe you want to live on the beach.
Ramit Sethi:
Speaker:Maybe you can't afford a $6 Million beach house.
Ramit Sethi:
Speaker:How about an Airbnb for a weekend?
Ramit Sethi:
Speaker:Can we start there?
Ramit Sethi:
Speaker:And it is this muscle because this really comes back to our cultural, invisible script
Ramit Sethi:
Speaker:of I shouldn't want more.
Ramit Sethi:
Speaker:That's for rich people, not people like me.
Ramit Sethi:
Speaker:And what if I set a goal or even say it out loud and then I can't do it?
Ramit Sethi:
Speaker:Then I'm a failure, right?
Ramit Sethi:
Speaker:These are all little scripts that we have running in our heads.
Ramit Sethi:
Speaker:And one of my goals, it's like, if I were to go skydiving, I've never done it.
Ramit Sethi:
Speaker:I'm going to be afraid, all right.
Ramit Sethi:
Speaker:And I'm going to say all these things in the back of my head.
Ramit Sethi:
Speaker:Maybe I should turn back. Maybe I should not do it.
Ramit Sethi:
Speaker:I don't know. And a great instructor is going to say, look, we went through training.
Ramit Sethi:
Speaker:We're going to take it step by step.
Ramit Sethi:
Speaker:You're going to be with me. We're going to go through it together.
Ramit Sethi:
Speaker:Let's do this together.
Ramit Sethi:
Speaker:That's exactly what dreaming bigger requires.
Ramit Sethi:
Speaker:Sometimes you need a little help.
Chris Dixon:
Speaker:Absolutely. Yeah.
Chris Dixon:
Speaker:And be aware of those limiting beliefs that you have that are between you and doing that
Chris Dixon:
Speaker:thing that you potentially want to do.
Chris Dixon:
Speaker:And I always share a funny story.
Chris Dixon:
Speaker:When I used to skydive regularly, people would always say like, why would you jump out
Chris Dixon:
Speaker:of a perfectly good airplane?
Chris Dixon:
Speaker:I would never jump out of a perfectly good airplane.
Chris Dixon:
Speaker:And I would always joke and say, well, have you ever seen a skydiving plane?
Chris Dixon:
Speaker:Like there's nothing perfectly good about them.
Ramit Sethi:
Speaker:That's really good.
Chris Dixon:
Speaker:Yeah. And it's funny.
Chris Dixon:
Speaker:But then I started thinking about that in my own reflection.
Chris Dixon:
Speaker:I'm like, man, what am I telling myself?
Chris Dixon:
Speaker:Like, what's my personally, excuse me, perfectly good airplane and putting the
Chris Dixon:
Speaker:mirror back. And it was really interesting to think about things that way.
Ramit Sethi:
Speaker:That's interesting. The closest I got to skydiving was I went to a military base.
Ramit Sethi:
Speaker:And we were doing some exercises helping some of the people coming out of the military
Ramit Sethi:
Speaker:get jobs and things like that.
Ramit Sethi:
Speaker:So they sort of took us around as civilians for a day.
Ramit Sethi:
Speaker:And they took us to what they call the 34 -foot tower where they train the
Ramit Sethi:
Speaker:paratroopers, et cetera. It's 34 feet because that's mathematically the scariest
Ramit Sethi:
Speaker:amount for a human.
Ramit Sethi:
Speaker:And of course, there's barbed wire and stuff beneath that.
Ramit Sethi:
Speaker:You have to jump out, your thing hooks on, and then you sort of glide along the path.
Ramit Sethi:
Speaker:All right.
Ramit Sethi:
Speaker:It's a simulated parachute, and I'm wearing Adidas track pants because it is really hot.
Ramit Sethi:
Speaker:I'm just like a total -- I'm wearing like a Lululemon shirt.
Ramit Sethi:
Speaker:And all these guys are out there.
Ramit Sethi:
Speaker:They've been voluntold you need to be here and help these civilians.
Ramit Sethi:
Speaker:So they're sitting there sweating in their hot fatigues.
Ramit Sethi:
Speaker:I go, hey, this is a pretty cool pack.
Ramit Sethi:
Speaker:Is this what you guys wear?
Ramit Sethi:
Speaker:And they just laugh. They go, No, sir.
Ramit Sethi:
Speaker:Ours is like £70.
Ramit Sethi:
Speaker:This is about £25.
Ramit Sethi:
Speaker:I was like, oh, okay.
Ramit Sethi:
Speaker:So we trudge up the stairs.
Ramit Sethi:
Speaker:And what was fascinating was, first of all, there was one of our colleagues coming down
Ramit Sethi:
Speaker:the stairs. She'd gotten too afraid and she'd come down.
Ramit Sethi:
Speaker:Okay, fine. We go up and I start talking.
Ramit Sethi:
Speaker:I realize that when I'm going through fear, I start to just overtalk.
Ramit Sethi:
Speaker:Okay, I'm going to put one foot in front of the other.
Ramit Sethi:
Speaker:I'm going to put my chin down.
Ramit Sethi:
Speaker:And the guy's like, shut the F up, jump.
Ramit Sethi:
Speaker:And it was a muscle that I have not really developed.
Ramit Sethi:
Speaker:As a civilian, I don't really get screamed at that often except on Twitter by nimby losers.
Ramit Sethi:
Speaker:And what I realized was, wow, this is a totally different experience.
Ramit Sethi:
Speaker:And to my colleague's credit, the one who was walking down the stairs.
Ramit Sethi:
Speaker:She actually got the courage to come back up, conquer her fears and jumped out as well.
Ramit Sethi:
Speaker:So that day was very memorable to me.
Ramit Sethi:
Speaker:And now you're inspiring me to maybe consider doing a real jump.
Chris Dixon:
Speaker:Oh, that's cool. If it's for you, it's for you.
Chris Dixon:
Speaker:I vow to never try to convince someone to skydive, to choose your own adventure kind of
Chris Dixon:
Speaker:thing. We used to joke and say that when you're standing in the door of the airplane
Chris Dixon:
Speaker:and you open it up and it gets really loud and windy, that no, no, no sounds a whole lot
Chris Dixon:
Speaker:like go, go, go.
Ramit Sethi:
Speaker:You guys have some funny phrases.
Ramit Sethi:
Speaker:I like it.
Chris Dixon:
Speaker:You have to. You have to make light of a potentially serious scenario.
Chris Dixon:
Speaker:But so I want to circle back.
Chris Dixon:
Speaker:We talked about the like spend extravagantly on the things that you love.
Chris Dixon:
Speaker:And so having clarity on, like, what are those things for you?
Chris Dixon:
Speaker:And the money dial is awesome.
Chris Dixon:
Speaker:It's got to be a little bit more challenging when you think about a couple then, right?
Chris Dixon:
Speaker:Because you may have misalignment on some of the things that you want to spend
Chris Dixon:
Speaker:extravagantly on.
Chris Dixon:
Speaker:Any advice on some of those common issues or how couples could address that?
Ramit Sethi:
Speaker:Well, this is what I absolutely love to talk about.
Ramit Sethi:
Speaker:So when my wife and I were going to get married, we were talking about a prenup.
Ramit Sethi:
Speaker:And we started talking and it was actually going pretty well until it got really hard.
Ramit Sethi:
Speaker:And I'm the money guy.
Ramit Sethi:
Speaker:I've written a best selling book on money.
Ramit Sethi:
Speaker:I've been talking about money every day of my life for the last 20 years.
Ramit Sethi:
Speaker:And I was like, how can it be this hard?
Ramit Sethi:
Speaker:It was very challenging.
Ramit Sethi:
Speaker:And I did all my searches.
Ramit Sethi:
Speaker:I looked on Google. There was nothing great .
Ramit Sethi:
Speaker:What I really wished I could find was real couples talking about money, not just some
Ramit Sethi:
Speaker:blog posts saying like, have the conversation.
Ramit Sethi:
Speaker:I go, what conversation?
Ramit Sethi:
Speaker:Literally, tell me the words to say and I want to hear couples doing it.
Ramit Sethi:
Speaker:What I later learned is that for intimate topics like prenups or even how couples
Ramit Sethi:
Speaker:should talk about money, it's always behind closed doors.
Ramit Sethi:
Speaker:Think about it. Have you ever actually heard a couple with $600,000 of debt talking about
Ramit Sethi:
Speaker:their money?
Chris Dixon:
Speaker:Not in a public space.
Ramit Sethi:
Speaker:Nope. And how about a couple with $8 million in the bank bemoaning the fact that they
Ramit Sethi:
Speaker:can't fly on this trip because they don't have enough Delta points?
Chris Dixon:
Speaker:Again, yeah.
Chris Dixon:
Speaker:Not the same.
Ramit Sethi:
Speaker:Also no. All we hear is movies.
Ramit Sethi:
Speaker:We see some couple in some Soho apartment talking about money or whatever.
Ramit Sethi:
Speaker:We've never actually heard real couples, and that's what I wanted to do.
Ramit Sethi:
Speaker:So after my wife and I went through our challenging process, we learned a lot.
Ramit Sethi:
Speaker:We actually went to see a therapist, and that therapist asked us a really fascinating
Ramit Sethi:
Speaker:question. She said, how do you see money?
Ramit Sethi:
Speaker:And she looked at me first. I was like, oh, I got this, growth.
Ramit Sethi:
Speaker:Like I could literally see compound interest, rule of 72 floating in front of my
Ramit Sethi:
Speaker:eyes. I could see it all.
Ramit Sethi:
Speaker:And then she turns to my wife.
Ramit Sethi:
Speaker:What do you see when you think about money?
Ramit Sethi:
Speaker:She goes, safety.
Ramit Sethi:
Speaker:I looked at my wife like, huh?
Ramit Sethi:
Speaker:That's like saying microwave oven.
Ramit Sethi:
Speaker:It doesn't make any correlation for me.
Ramit Sethi:
Speaker:So for couples, I started bringing them on my podcast, sharing real numbers.
Ramit Sethi:
Speaker:They all share their income, their debt, how they spend their money and what their problem
Ramit Sethi:
Speaker:is. Sometimes they have, like I said, $825,000 in debt, sometimes millions in the
Ramit Sethi:
Speaker:bank. Sometimes one of them is a spender or saver or cultural differences.
Ramit Sethi:
Speaker:Some suggestions for couples.
Ramit Sethi:
Speaker:The biggest problem that is common among couples who are in disagreement about money
Ramit Sethi:
Speaker:is they have no rich life vision.
Ramit Sethi:
Speaker:So suggestion number one is to create a rich life vision.
Ramit Sethi:
Speaker:What is our rich life?
Ramit Sethi:
Speaker:It can't just be travel.
Ramit Sethi:
Speaker:A better answer would be we want to go to Italy for three weeks.
Ramit Sethi:
Speaker:We want to bring our parents along.
Ramit Sethi:
Speaker:We want to drink Italian wine and watch the sunset over Rome.
Ramit Sethi:
Speaker:That's a vision.
Ramit Sethi:
Speaker:Or I don't ever want to have to chop a vegetable again.
Ramit Sethi:
Speaker:Also, a vision. We can use money to solve that problem.
Ramit Sethi:
Speaker:Lots of specific big and small visions you can create.
Ramit Sethi:
Speaker:The second thing is to talk about money regularly.
Ramit Sethi:
Speaker:Most couples only speak about money when there's a problem.
Ramit Sethi:
Speaker:Well, guess what? If you only talk about when it's a problem, money becomes a problem.
Ramit Sethi:
Speaker:Let's talk about it proactively.
Ramit Sethi:
Speaker:Let's get our logistics out of the way.
Ramit Sethi:
Speaker:Let's set up our accounts correctly, which we can talk about.
Ramit Sethi:
Speaker:And then finally, we can start to turn money from a source of shame and guilt and anger
Ramit Sethi:
Speaker:into joy and adventure and generosity.
Ramit Sethi:
Speaker:That's how you get started.
Chris Dixon:
Speaker:Without a doubt, one of the biggest challenges companies will face in 2023 is
Chris Dixon:
Speaker:finding top talent.
Chris Dixon:
Speaker:And not only finding top talent, but standing out against the competition.
Chris Dixon:
Speaker:So how can you break through the clutter and attract the most qualified candidates for
Chris Dixon:
Speaker:your business? ZipRecruiter.
Chris Dixon:
Speaker:And right now, you can try it for free at ziprecruiter.com/ONEThing.
Chris Dixon:
Speaker:ZipRecruiter is matching technology sends you great candidates for your job and you can
Chris Dixon:
Speaker:send a personal invite to your top choices to make an impact.
Chris Dixon:
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Chris Dixon:
Speaker:Instead of filling out lengthy applications, they can do it just one click.
Chris Dixon:
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Chris Dixon:
Speaker:grabbing labels like urgent training provided, remote, et cetera.
Chris Dixon:
Speaker:Four out of five employers who post on ZipRecruiter get a quality candidate within
Chris Dixon:
Speaker:the first day. See for yourself.
Chris Dixon:
Speaker:Go check out this exclusive web address to try ZipRecruiter for free.
Chris Dixon:
Speaker:Ziprecruiter.com/ONEThing.
Chris Dixon:
Speaker:Again, that's ziprecruiter.com /O-N-E-T-H-I-N-G.
Chris Dixon:
Speaker:ZipRecruiter, the smartest way to hire.
Chris Dixon:
Speaker:That's powerful. So cast a vision for what a rich life looks like for you.
Chris Dixon:
Speaker:Just take the time to align on what that future state is together and create that
Chris Dixon:
Speaker:common purpose, that kind of common vision of where you want to go.
Ramit Sethi:
Speaker:Yeah, I'll give you an example from a couple that I spoke to.
Ramit Sethi:
Speaker:So they earned a pretty good living.
Ramit Sethi:
Speaker:One earned more than the other.
Ramit Sethi:
Speaker:And the husband did not want to spend money on any assistance around the house.
Ramit Sethi:
Speaker:For example, he didn't want to hire movers.
Ramit Sethi:
Speaker:And because he works a lot, he only has a limited amount of time and he chose to spend
Ramit Sethi:
Speaker:that limited amount of time moving instead of hiring movers, which they could easily
Ramit Sethi:
Speaker:afford. This was becoming an issue with children, things like that.
Ramit Sethi:
Speaker:Cultural differences.
Ramit Sethi:
Speaker:So one of them just didn't see the value.
Ramit Sethi:
Speaker:They said, I'll do it myself.
Ramit Sethi:
Speaker:And the other said, we have money.
Ramit Sethi:
Speaker:We should use it to make our lives easier.
Ramit Sethi:
Speaker:So there's lots of approaches that somebody can take.
Ramit Sethi:
Speaker:And my job is not to sit here and berate people.
Ramit Sethi:
Speaker:It's to ask them a lot of questions and help them understand why they believe what they
Ramit Sethi:
Speaker:believe. At the end of the episode, I asked them, not to create their rich life because
Ramit Sethi:
Speaker:his answer was, I want a billion dollars.
Ramit Sethi:
Speaker:That's not an effective answer.
Ramit Sethi:
Speaker:That's basically self-sabotage.
Ramit Sethi:
Speaker:You're probably not going to have a billion dollars.
Ramit Sethi:
Speaker:I said, okay, forget the billion.
Ramit Sethi:
Speaker:What's your perfect week?
Ramit Sethi:
Speaker:Start on Sunday and take me through Saturday.
Ramit Sethi:
Speaker:So it's like we want to take our kids to the park, we want to have brunch, we want to see
Ramit Sethi:
Speaker:our family on Thursday, et cetera.
Ramit Sethi:
Speaker:I said, this is a beautiful vision.
Ramit Sethi:
Speaker:Some time with friends and family.
Ramit Sethi:
Speaker:Some time with alone, one date night, beautiful.
Ramit Sethi:
Speaker:I said, hey, out of curiosity, where's your laundry in this perfect week?
Ramit Sethi:
Speaker:I didn't see you blocking aside three hours to do your laundry.
Ramit Sethi:
Speaker:And they both laughed because they realized in their vision, laundry is not part of their
Ramit Sethi:
Speaker:rich life. Guess what?
Ramit Sethi:
Speaker:They live in New York. They can pay for that to be done very inexpensively.
Ramit Sethi:
Speaker:Problem solved.
Ramit Sethi:
Speaker:So sometimes we can just narrow the scope to our perfect week, and that makes clear what
Ramit Sethi:
Speaker:we value and what we don't.
Chris Dixon:
Speaker:That's great. I have seen success with something similar, just kind of zooming out
Chris Dixon:
Speaker:and zooming in.
Chris Dixon:
Speaker:And you need to have the ability to do both because you can get clarity when you're stuck
Chris Dixon:
Speaker:in either place. You're stuck in the weeds and you can't see over the horizon like
Chris Dixon:
Speaker:you're really struggling. Like, stop, hit, pause, zoom out.
Chris Dixon:
Speaker:But if you're lost in the fog of the future, maybe sometimes you need to zoom in a little
Chris Dixon:
Speaker:bit and just get some tangible growths and progress and some clarity on where you want
Chris Dixon:
Speaker:to go in the shorter term. That makes sense.
Ramit Sethi:
Speaker:Totally agree. I'll give you an example of what we can do to zoom out real quick.
Ramit Sethi:
Speaker:This size that I did with my wife, it's a fun one.
Ramit Sethi:
Speaker:If you're in a relationship and you're like, hey, this all sounds cool.
Ramit Sethi:
Speaker:What am I supposed to do right now?
Ramit Sethi:
Speaker:Play this game. We did this and it was a blast.
Ramit Sethi:
Speaker:We sat down, two piece of paper and I said, let's create our bucket list.
Ramit Sethi:
Speaker:But it's not our bucket list before we die.
Ramit Sethi:
Speaker:It's our bucket list of things we want to do in the next ten years where if we did them,
Ramit Sethi:
Speaker:it would mean that we lived a rich and meaningful life.
Ramit Sethi:
Speaker:All right, So she created hers.
Ramit Sethi:
Speaker:I created mine. And then we shared them back and forth.
Ramit Sethi:
Speaker:So one of us was like, I want to learn Spanish.
Ramit Sethi:
Speaker:The other one said, I want to go skydiving.
Ramit Sethi:
Speaker:The other one said, like for me, I wanted to write a book in a hotel.
Ramit Sethi:
Speaker:That's just the thing I want to do.
Ramit Sethi:
Speaker:And with each of these answers, we were excited.
Ramit Sethi:
Speaker:We were curious. Oh my God, Spanish, why do you want to do that?
Ramit Sethi:
Speaker:Oh, you want to actually go to Mexico?
Ramit Sethi:
Speaker:Oh, wow, skydiving, might have to do that on your own.
Ramit Sethi:
Speaker:I'll meet you at the bottom, et cetera, et cetera.
Ramit Sethi:
Speaker:It's fun, right? You're teasing each other.
Ramit Sethi:
Speaker:You're having fun.
Ramit Sethi:
Speaker:Because some of these items are solo, some are together.
Ramit Sethi:
Speaker:We found a couple that were really meaningful to us.
Ramit Sethi:
Speaker:One of them was having our ten-year wedding anniversary in a very special location.
Ramit Sethi:
Speaker:Okay, great. So we said, let's zoom in on that one.
Ramit Sethi:
Speaker:We know that it's going to be X years from now.
Ramit Sethi:
Speaker:How much do you think it will cost for that to make it amazing?
Ramit Sethi:
Speaker:So we both kind of separately wrote our numbers down.
Ramit Sethi:
Speaker:My number was a lot bigger than hers.
Ramit Sethi:
Speaker:She was like, ahh.
Ramit Sethi:
Speaker:I was like, trust me, it's going to be sweet.
Ramit Sethi:
Speaker:So my rule is if you have two numbers, go with the bigger one, because even if you get
Ramit Sethi:
Speaker:75 percent of the way there, fine.
Ramit Sethi:
Speaker:This is a rich life, ten-year goal.
Ramit Sethi:
Speaker:It's not something you're going to do two months from now.
Ramit Sethi:
Speaker:So we then reverse engineered it and realized in order to hit that number, we need
Ramit Sethi:
Speaker:to save or invest X per month.
Ramit Sethi:
Speaker:And that's the way that we started to create one of our long-term joint goals.
Ramit Sethi:
Speaker:Every month it's like a video game.
Ramit Sethi:
Speaker:You see a little bit of money going in there and you go, wow, we know exactly where we're
Ramit Sethi:
Speaker:going to be with all of our loved ones.
Ramit Sethi:
Speaker:That is our rich life.
Chris Dixon:
Speaker:That's awesome. Do you see values showing up intentionally in helping give clarity on some
Chris Dixon:
Speaker:of these challenges couples face, like identifying their core values and having some
Chris Dixon:
Speaker:discussion or alignment on those as being maybe a lens that you can help view the
Chris Dixon:
Speaker:future?
Ramit Sethi:
Speaker:I do, but I think it's really hard for people to recognize their own values.
Ramit Sethi:
Speaker:I mean, the people who come listen to this podcast, they understand what core values
Ramit Sethi:
Speaker:are. But if you take an ordinary person, say, like, what are your values?
Ramit Sethi:
Speaker:They're like, what?
Ramit Sethi:
Speaker:They're like, I like to eat chips.
Ramit Sethi:
Speaker:Is that a value? So I think sometimes values are revealed through a deep series of
Ramit Sethi:
Speaker:conversations. It might be, we all kind of -- there's this thing in psychology called
Ramit Sethi:
Speaker:the demand effect. If you ask people a certain type of question, they will answer in
Ramit Sethi:
Speaker:a certain way. Go ask anybody on the street, what are your favorite things to do?
Ramit Sethi:
Speaker:One of your top three answers will be travel.
Ramit Sethi:
Speaker:It's like, when was the last time you actually got on a plane?
Ramit Sethi:
Speaker:And so, with values, you tend to get this sort of pre rehearsed answers.
Ramit Sethi:
Speaker:But if you drill down, what I find really beautiful is that people's values are really
Ramit Sethi:
Speaker:quite different. Like for me, I love convenience, love it.
Ramit Sethi:
Speaker:I'm going to sound like a serial killer right now, but I want every part of my house
Ramit Sethi:
Speaker:to be so organized that if I go blind, I know exactly where this type of salt is.
Ramit Sethi:
Speaker:I want everything perfectly organized.
Ramit Sethi:
Speaker:I know I sound like a psycho, but that's what I love.
Ramit Sethi:
Speaker:And so therefore, I've built my life around convenience.
Ramit Sethi:
Speaker:You might build your life around relationships, but it's really hard to just
Ramit Sethi:
Speaker:ask somebody like, what's your values?
Ramit Sethi:
Speaker:Instead, I think we talk about what would you love to do?
Ramit Sethi:
Speaker:What do you want to do more of?
Ramit Sethi:
Speaker:What could you give up and you wouldn't care about?
Ramit Sethi:
Speaker:What would make you and your family have an unforgettable experience.
Ramit Sethi:
Speaker:And suddenly, it becomes very clear.
Ramit Sethi:
Speaker:Do they value relationships?
Ramit Sethi:
Speaker:Do they value extravagance?
Ramit Sethi:
Speaker:Do they value X, Y, Z?
Ramit Sethi:
Speaker:And then it tells me where to take it from there.
Chris Dixon:
Speaker:That makes sense. Yeah.
Chris Dixon:
Speaker:And you said that people view values differently.
Chris Dixon:
Speaker:And my experience, that is very true.
Chris Dixon:
Speaker:But also, they may interpret the same values differently.
Chris Dixon:
Speaker:So what family or excellence or travel or freedom means to one person may mean
Chris Dixon:
Speaker:something very different to another.
Ramit Sethi:
Speaker:Fantastic point. I don't actually like when people give me words like freedom.
Ramit Sethi:
Speaker:I'm like, what's money for?
Ramit Sethi:
Speaker:They go freedom. I go, what?
Ramit Sethi:
Speaker:What? That's just a word.
Ramit Sethi:
Speaker:Let's get specific.
Ramit Sethi:
Speaker:Yeah, it's vague.
Ramit Sethi:
Speaker:And a rich life is lived in vivid details.
Ramit Sethi:
Speaker:So if freedom means that you can go lift weights at 3 p.m.
Ramit Sethi:
Speaker:every day, tell me that because then we can work with that.
Ramit Sethi:
Speaker:That means you need to change your calendar.
Ramit Sethi:
Speaker:Maybe you need to have enough to afford a personal trainer, whatever.
Ramit Sethi:
Speaker:But if you just say freedom, so many of us hide behind these vague words and then what
Ramit Sethi:
Speaker:do we do? We do what everybody else does.
Ramit Sethi:
Speaker:We believe that the American dream is get married, buy a house you can't afford in the
Ramit Sethi:
Speaker:suburbs where you don't see any of your friends, move to Florida one day, die.
Ramit Sethi:
Speaker:I'm like, hmm, okay, if that's what you love, great, but maybe there's a different
Ramit Sethi:
Speaker:path for some people.
Ramit Sethi:
Speaker:You have to articulate it.
Ramit Sethi:
Speaker:Nobody's going to give it to you without you doing that work.
Chris Dixon:
Speaker:Absolutely. It's why it's so important that your goals are specific, and measurable, and
Chris Dixon:
Speaker:you get them to it. I always say that your goals are like a destination.
Chris Dixon:
Speaker:And to know that you've arrived there, you need to know specifically where that
Chris Dixon:
Speaker:destination is.
Chris Dixon:
Speaker:Then you can kind of reverse engineer your milestones back from that destination, and it
Chris Dixon:
Speaker:may change over time.
Chris Dixon:
Speaker:Your destination might move, but at least you're intentional and specific about where
Chris Dixon:
Speaker:you're going.
Ramit Sethi:
Speaker:Yeah, totally agree.
Chris Dixon:
Speaker:Yeah. So we talked about couples in some of the early challenges they run into.
Chris Dixon:
Speaker:What about someone who's maybe a little further down the path or a couple that's
Chris Dixon:
Speaker:further down the path and maybe they've started this, but they're like off track or
Chris Dixon:
Speaker:they feel like they don't have a good system in place to stay on track over time or be
Chris Dixon:
Speaker:accountable to it? They've imagined where they want to go and they've done some of that
Chris Dixon:
Speaker:work, but they're further down and they find themselves picking their head up and being
Chris Dixon:
Speaker:like, shoot, we've gone two years and we're totally disconnected from our goals.
Ramit Sethi:
Speaker:Yeah, that's very common.
Ramit Sethi:
Speaker:First of all, I don't mind it. It's super common.
Ramit Sethi:
Speaker:Life is messy.
Ramit Sethi:
Speaker:And so, like I remember I spoke to a couple just a couple of episodes ago.
Ramit Sethi:
Speaker:And during our recording, their kids were just screaming, running around, and I kind of
Ramit Sethi:
Speaker:loved it. I'm like, this is real.
Ramit Sethi:
Speaker:Your kids do not care that you're on a podcast, you've waited months, they're just
Ramit Sethi:
Speaker:kids. And so first of all, let's just accept that life is not a perfectly organized desk
Ramit Sethi:
Speaker:with a single cup of jasmine tea steaming.
Ramit Sethi:
Speaker:You know, life is messy. We've got to live in that messy life.
Ramit Sethi:
Speaker:Okay, fine. That's number one.
Ramit Sethi:
Speaker:I don't have any problem with that.
Ramit Sethi:
Speaker:Number two is that we often look at money as a series of transactional decisions.
Ramit Sethi:
Speaker:Should I buy this car?
Ramit Sethi:
Speaker:Should I get this cheesecake?
Ramit Sethi:
Speaker:Should we get a double-double at In and Out?
Ramit Sethi:
Speaker:It's just one pointless decision after another that doesn't really connect to our
Ramit Sethi:
Speaker:rich life. And so what I like to do, you know, I love systems.
Ramit Sethi:
Speaker:I told you about those scholarships that I created.
Ramit Sethi:
Speaker:I want a system for your money.
Ramit Sethi:
Speaker:That's why I wrote I Will Teach You To Be Rich.
Ramit Sethi:
Speaker:So let me give you some basic, simple overview of how you can set this up to really
Ramit Sethi:
Speaker:eliminate most of this.
Ramit Sethi:
Speaker:You should spend about an hour a month on your finances if you have this working.
Ramit Sethi:
Speaker:You have a joint account where income goes into it.
Ramit Sethi:
Speaker:This is a simple version.
Ramit Sethi:
Speaker:Each of you has individual accounts where you take a percentage of your money, and it
Ramit Sethi:
Speaker:goes into individual accounts.
Ramit Sethi:
Speaker:You can use that for anything you want, no questions asked, whatever it may be.
Ramit Sethi:
Speaker:In the joint account, you're paying for, presumably your joint living situation, your
Ramit Sethi:
Speaker:rent or mortgage, groceries, et cetera, and you split your money.
Ramit Sethi:
Speaker:You only need to track four numbers.
Ramit Sethi:
Speaker:Just four. This is all a template of my conscious spending plan.
Ramit Sethi:
Speaker:The first number is your fixed costs.
Ramit Sethi:
Speaker:That would be your housing, your car, any debt payments, cable, groceries, the stuff
Ramit Sethi:
Speaker:that you pay. That should be 50 to 60 percent of your take home.
Ramit Sethi:
Speaker:The next would be your savings, 5 to 10 percent of your take home pay or after-tax
Ramit Sethi:
Speaker:pay. Your investments, 5 to 10 percent.
Ramit Sethi:
Speaker:I'd really like to see that number a little higher depending on your age.
Ramit Sethi:
Speaker:But 10 percent, let's say, for take home pay for investments.
Ramit Sethi:
Speaker:And finally, my favorite guilt free spending that's going out to eat.
Ramit Sethi:
Speaker:It's buying beautiful clothes, decorating the house, whatever.
Ramit Sethi:
Speaker:Guilt free, 20 to 35 percent of take home.
Ramit Sethi:
Speaker:Those are general recommendation guidelines.
Ramit Sethi:
Speaker:If you are hitting those numbers, you're in pretty good shape.
Ramit Sethi:
Speaker:Typically, where there's conflict is number one, people have no clue.
Ramit Sethi:
Speaker:They're like, what's a conscious spending plan and what are fixed costs?
Ramit Sethi:
Speaker:That's because they're making transactional decisions.
Ramit Sethi:
Speaker:Two, they don't have a rich life vision.
Ramit Sethi:
Speaker:And three, they don't have a place to talk about it.
Ramit Sethi:
Speaker:So if you set that system up alone, 90 percent of your problems will vanish
Ramit Sethi:
Speaker:overnight.
Chris Dixon:
Speaker:That's awesome. I love how you go to systems because, I mean, it's so common that life
Chris Dixon:
Speaker:gets crazy, like you said.
Chris Dixon:
Speaker:And if you don't have a system to fall back on, life's going to take you over and you get
Chris Dixon:
Speaker:steamrolled. And you need to have a consistent framework that you're using time
Chris Dixon:
Speaker:over time. And to your point, like break it down in its simplest form and those are some
Chris Dixon:
Speaker:really great tips and pointers.
Ramit Sethi:
Speaker:Let me give you a suggestion on some advanced stuff that can help people simplify because
Ramit Sethi:
Speaker:people listening are a little bit more advanced, I think.
Ramit Sethi:
Speaker:And I want to share how you can proactively plan instead of constantly being reactive
Ramit Sethi:
Speaker:with your money. All right.
Ramit Sethi:
Speaker:Oftentimes you find people, they'll say something like, it feels like we take one
Ramit Sethi:
Speaker:step forward and two steps back.
Ramit Sethi:
Speaker:We pay off something, something breaks.
Ramit Sethi:
Speaker:But given enough time and information, even unexpected expenses become relatively
Ramit Sethi:
Speaker:predictable. So let's break it down.
Ramit Sethi:
Speaker:If you and your partner sit down, you say, hey, let's take this conscious spending plan
Ramit Sethi:
Speaker:and let's actually plan out our year.
Ramit Sethi:
Speaker:Month by month, what do we think the unexpected expenses are going to be?
Ramit Sethi:
Speaker:Oh, boy. Well, our anniversary is going to be in March.
Ramit Sethi:
Speaker:I'd really love to take a nice trip or have a nice dinner, get a babysitter.
Ramit Sethi:
Speaker:Okay, let's put that down right now.
Ramit Sethi:
Speaker:In December, we're going to travel.
Ramit Sethi:
Speaker:We should write that down.
Ramit Sethi:
Speaker:Oh, in fact, let's talk about where we're going to go.
Ramit Sethi:
Speaker:Okay, cool. Have that conversation.
Ramit Sethi:
Speaker:You start to plan for things and then you even plan for the unexpected.
Ramit Sethi:
Speaker:Like I used to have a stupid mistakes account.
Ramit Sethi:
Speaker:And that would be things like a parking ticket or some fee that I forgot.
Ramit Sethi:
Speaker:If that's a case for you, maybe a maintenance account, you know that something
Ramit Sethi:
Speaker:in your house is going to break or your car.
Ramit Sethi:
Speaker:Cool, let's just put 20 bucks aside every month or 50 bucks aside.
Ramit Sethi:
Speaker:Suddenly, when summer camp comes up or a trip or a college friend from out of town is
Ramit Sethi:
Speaker:like, hey, let's take a trip, whatever that may be, you have put aside money for it.
Ramit Sethi:
Speaker:This is how you start to take control and go on offense with your money instead of playing
Ramit Sethi:
Speaker:defense for the rest of your life.
Chris Dixon:
Speaker:That's such a great point. Like the offense versus defense and giving your money a job
Chris Dixon:
Speaker:proactively instead of responding to what's happening to you and reacting.
Chris Dixon:
Speaker:It's such a great point. I know from my own experience doing some of that month over
Chris Dixon:
Speaker:month and year over year, you start to identify those buckets you need for yourself
Chris Dixon:
Speaker:that unless you're paying really close attention to it, you don't see the pattern
Chris Dixon:
Speaker:showing up. You're just not tracking it.
Ramit Sethi:
Speaker:And I have to say, I don't really want to sit there and look at my Safeway receipt for the
Ramit Sethi:
Speaker:price of asparagus.
Ramit Sethi:
Speaker:Like if I find myself looking at counting the price of asparagus, I'm in hell and I've
Ramit Sethi:
Speaker:taken a wrong turn in life.
Ramit Sethi:
Speaker:That's why I say four numbers to track, four numbers.
Ramit Sethi:
Speaker:So if, for example, one partner is in charge of groceries, you really should not be
Ramit Sethi:
Speaker:sitting there being like, why did you go to Target?
Ramit Sethi:
Speaker:Why did you buy this? It's like, mind your business, your partner is in charge.
Ramit Sethi:
Speaker:You've both agreed on a number.
Ramit Sethi:
Speaker:Now give them ownership, let them do it.
Ramit Sethi:
Speaker:And hey, if they overspend, then fine, things happen.
Ramit Sethi:
Speaker:We'll get back on track later.
Ramit Sethi:
Speaker:Notice the fluidity and the comfort versus rigidity.
Ramit Sethi:
Speaker:Why did you do that? How much did you spend?
Ramit Sethi:
Speaker:How are we supposed to get ahead?
Ramit Sethi:
Speaker:Rigidity comes from not having a system and not understanding how this tiny little
Ramit Sethi:
Speaker:decision affects our overall rich life.
Ramit Sethi:
Speaker:Fluidity is mastery, comfort.
Ramit Sethi:
Speaker:Knowing that, you know what, it's okay if something goes a little wrong over here
Ramit Sethi:
Speaker:because we've already built in a little bit of wiggle room and we are still focused on
Ramit Sethi:
Speaker:the big picture.
Chris Dixon:
Speaker:Yeah, it goes back to what we were saying before about zooming in and zooming out a
Chris Dixon:
Speaker:little bit too. If you zoom in too much on the individual line items in there that
Chris Dixon:
Speaker:you're tracking and not zoom out to like, hey, this quarter, we're way ahead.
Ramit Sethi:
Speaker:That's why people fight so much.
Ramit Sethi:
Speaker:And honestly, it's frustrating to hear because I always tell them, you're so focused
Ramit Sethi:
Speaker:on $3 questions that you've totally neglected asking the $30,000 questions.
Ramit Sethi:
Speaker:They're sitting over here saying, oh my God, I can't believe you bought that Kraft cheese.
Ramit Sethi:
Speaker:Why don't we get to go?
Ramit Sethi:
Speaker:Why are we talking about Kraft cheese?
Ramit Sethi:
Speaker:This makes no sense.
Ramit Sethi:
Speaker:Meanwhile, they're not asking $30,000 questions.
Ramit Sethi:
Speaker:The ones that actually matter, like, what's our savings rate?
Ramit Sethi:
Speaker:They don't even know what a savings rate is.
Ramit Sethi:
Speaker:What's our asset allocation?
Ramit Sethi:
Speaker:What's that? What's our debt payoff date?
Ramit Sethi:
Speaker:Ninety-five percent of people I talked to who are in debt do not know what date their
Ramit Sethi:
Speaker:debt would be paid off. That's a $30,000 question.
Ramit Sethi:
Speaker:So you could go the rest of your life doing $3 questions.
Ramit Sethi:
Speaker:Oh, why'd you get that at Starbucks?
Ramit Sethi:
Speaker:Or you can get the 5 to 10 big questions, the $30,000 questions right, and you never
Ramit Sethi:
Speaker:have to worry about coffee or what type of aluminum foil you buy at the grocery store.
Ramit Sethi:
Speaker:You can hear me getting aggravated because how many people spend their entire lives
Ramit Sethi:
Speaker:playing small?
Ramit Sethi:
Speaker:They are living that $3 life.
Ramit Sethi:
Speaker:They actually find comfort in that $3 life.
Ramit Sethi:
Speaker:But if you ask them, do you want to be doing this for the rest of your life, they say, no.
Ramit Sethi:
Speaker:Fantastic, let's change.
Chris Dixon:
Speaker:Love it. We talk a lot about Pareto principle in our teachings in the 80-20 rule, and what
Chris Dixon:
Speaker:we say is, what Pareto principle represents is there 20 percent things you could focus on
Chris Dixon:
Speaker:that would deliver 80 percent of your results in a lot of forms and fashions.
Chris Dixon:
Speaker:And that's what comes out for me when you say that it relates to me, it's like, figure
Chris Dixon:
Speaker:out what's the 20 percent that if you focused on that, would deliver 80 percent of
Chris Dixon:
Speaker:your results. And what we find is so many people focus on the 80 percent.
Ramit Sethi:
Speaker:I know.
Chris Dixon:
Speaker:Spending all their time on the other things.
Ramit Sethi:
Speaker:Well, I'm guilty of that too.
Chris Dixon:
Speaker:That were not comparing those big ROI.
Ramit Sethi:
Speaker:I get it and we've all done it.
Ramit Sethi:
Speaker:In fact, I bet all of us are doing it right now in some part of our life.
Ramit Sethi:
Speaker:I totally understand the visceral appeal.
Ramit Sethi:
Speaker:Like let me just fix that one thing and what I've realized, especially running my own
Ramit Sethi:
Speaker:business for almost 20 years, is that you have to be willing to have certain things be
Ramit Sethi:
Speaker:broken forever.
Ramit Sethi:
Speaker:And it's actually fine.
Ramit Sethi:
Speaker:And if you are getting, in my case, the four numbers in the conscious spending plan right,
Ramit Sethi:
Speaker:you're actually doing fantastic.
Ramit Sethi:
Speaker:You do not need to comparison shop for the price of pickles.
Ramit Sethi:
Speaker:All right. And you do not need to worry about should I drive an extra mile to save
Ramit Sethi:
Speaker:$0.10 a gallon on gas?
Ramit Sethi:
Speaker:No, you don't even need to worry about that.
Ramit Sethi:
Speaker:That's actually hard for people because that's mostly what we've known.
Ramit Sethi:
Speaker:That's probably what our parents taught us.
Ramit Sethi:
Speaker:So to be able to realize, like, it actually doesn't matter.
Ramit Sethi:
Speaker:And I have elevated myself to bigger questions.
Ramit Sethi:
Speaker:That's quite an uncomfortable moment on your personal identity, but to me, this is the joy
Ramit Sethi:
Speaker:of really creating a breakthrough where you start to see money as bigger than can I save
Ramit Sethi:
Speaker:$0.10?
Chris Dixon:
Speaker:Absolutely.
Chris Dixon:
Speaker:So powerful. And it's a mindset shift to think that way, which is typically the
Chris Dixon:
Speaker:uncomfortable place to go.
Chris Dixon:
Speaker:But I always believe and that's a good indication when you're starting to feel
Chris Dixon:
Speaker:uncomfortable, you're in that growth zone.
Chris Dixon:
Speaker:You need to lean in.
Chris Dixon:
Speaker:That's where you want to go.
Ramit Sethi:
Speaker:Totally.
Chris Dixon:
Speaker:Ramit, so much synergy between us and what you teach.
Chris Dixon:
Speaker:And if our listeners want to learn more about your process, check you out, be a part
Chris Dixon:
Speaker:of your world, where can they find you?
Ramit Sethi:
Speaker:First thing is, if you like what you're hearing, you want to hear me talking to real
Ramit Sethi:
Speaker:couples with real numbers from behind closed doors, just go to the I Will Teach You To Be
Ramit Sethi:
Speaker:Rich podcast and you can find us on audio.
Ramit Sethi:
Speaker:We also do it on video now so you can actually see the couples and their facial
Ramit Sethi:
Speaker:expressions and body language.
Ramit Sethi:
Speaker:It's quite fascinating.
Ramit Sethi:
Speaker:And of course, you can get access to all my material, including the conscious spending
Ramit Sethi:
Speaker:plan on my website, iwillteachyoutoberich .com.
Chris Dixon:
Speaker:Awesome. No, that's pretty cool that couples are willing to be vulnerable like that.
Chris Dixon:
Speaker:That's awesome. What a great breakthrough.
Chris Dixon:
Speaker:And I'm sure there's a ton of value in being able to watch that.
Chris Dixon:
Speaker:I know in doing this and coaching and also being a participant in certain things that
Chris Dixon:
Speaker:sometimes it's almost more valuable to watch somebody else have a breakthrough from an
Chris Dixon:
Speaker:outside perspective than to be in the hot seat.
Chris Dixon:
Speaker:So it's a good way to learn.
Ramit Sethi:
Speaker:Yep, totally.
Chris Dixon:
Speaker:Awesome. Well, hey, if you could have our listeners take away one thing from the
Chris Dixon:
Speaker:conversation today, what would that be?
Ramit Sethi:
Speaker:It would be that money is meant to be used on a rich life.
Ramit Sethi:
Speaker:So my challenge to everyone here is what is your rich life in specific, vivid details?
Ramit Sethi:
Speaker:And if you want to do it solo, you want to do it with a partner, whatever works.
Ramit Sethi:
Speaker:And I'd actually love to hear from you.
Ramit Sethi:
Speaker:So if you want to send me a message on social media, tell me you heard me listening
Ramit Sethi:
Speaker:here, and I'd love to hear what your rich life is.
Chris Dixon:
Speaker:Awesome. Hey. Thanks so much for your time today and all your wisdom.
Chris Dixon:
Speaker:It's great to talk to you.
Ramit Sethi:
Speaker:Thanks. It was a pleasure.
Chris Dixon:
Speaker:All right. Bye, everybody.
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