How to Get Rich
Season 1, Episode 3
HOA Not Okay
Ramit debates the merits of home ownership. Then, he helps a couple work better together and evaluates one family's conscious spending habits.
( knocks on door )
Hi. How are you?
Hi!
Welcome.
Nice to see you.
Thanks for having me back.
How you doing?
Doing fine. How are you?
You want to sit outside?
Ramit: Sure.
Ramit: Matt and Amani cannot stop this cycle.
When the two of them talk about money, all they do is fight.
So, this time, I want to talk to them separately, so I can understand how they each individually think about money.
The producers told me that you needed a break.
Yeah. ( chuckles )
Why?
It hurts me to say that I don't trust my partner of seven years, you know, but I... I'm not gonna lie to you.
The break definitely helped.
I think my expectations were completely different 'cause I was thinking, like, we're gonna sit down and like review expenses.
I didn't think that it's gonna be, like, couples counseling.
In order for me to understand what's going on with the money, I want to understand what's going on with you.
Then I want to understand what's going on with Matt.
Then we can piece it all together.
Right.
I'm not here to be a couples' counselor, but sometimes people use money as an excuse to hide deeper truths going on in the relationship.
Last I was here, we talked a little bit about your rich life, but if I asked you today, how would you answer it?
What is your rich life?
Um, I'm, like, the househusband, so I'm, like, doing chores and stuff.
Would I want to do chores for, you know, like my dream?
No.
Amani: I grew up with a single mom.
My mom was very, like, strict and hard on me, and she wanted me also to be strong and tough.
And what about your dad?
He was never there.
Like, coming from a very conservative Arabic country, men always wanted like a male as a child versus a female, so when he had me, like, he wasn't very excited.
He wasn't, um, emotionally connected to me or anything like that.
I never had a man around me growing up.
So, I've just never seen in my life what it's like to be equal in a relationship.
I rely on my... on my wife, so that's an instability.
Why is it an instability that your wife is the breadwinner?
If she passed away today, you know, like, I would watch my family suffer.
I... I can't maintain the lifestyle that she has... put us in.
I would be an entry-level engineer again.
Got it.
That's instability. ( chuckles )
Do you want to get a job?
Yeah, I would like to have a... an income.
Okay.
I think I would rather...
I'd rather do something for myself.
When you say job, I think of my own business.
Ramit: Mm-hmm.
Amani: He doesn't even know what he wants to do.
On Monday, I hear, "I want to be a contractor," like, remodel homes, whatever.
On Tuesday, "I want to go back to doing a traveling engineer."
I get it.
On Wednesday, "I want to open a karaoke bar."
I worry.
Okay, no karaoke bars.
( Amani chuckles )
I'm gonna set that. No karaoke bars.
It's not happening on my watch.
But aside from that, I get that it can be frustrating.
You go, "Look, I need a little bit of certainty."
Right.
You have to earn all the money.
You feel stressed out.
You're playing life on defense.
Mm-hmm.
And what I don't hear is your vision of a rich life.
And I certainly don't hear a joint vision.
Well, that's one I was gonna ask you.
What if what we think of a rich life is almost opposite of each other?
If you ask me what's my ideal rich life, me being a VP one day, having the rich life, driving a G-Wagen, having a house in San Diego, whatever.
He... For him, his idea of the future is saving as much as possible.
That's a lot of people's.
I don't like that.
Yeah, I get you.
I don't think you should have to only save.
I think a rich life is lived today and tomorrow, but you can understand why he feels that way.
He's worried.
He has no control.
( dramatic music playing )
What's the purpose of you getting a job?
I want to be able to support my family in the best way that it... it... can be had for my family.
What's stopping you?
I'm not sure.
Would I just hire some... somebody to watch my kids while I go get a job?
Why not?
What do you think would happen to your relationship if you were contributing money to the household and you both had a seat at the table?
If I don't have a seat at the table, I mean, there's no point.
( pensive music playing )
Ramit: I'm gonna send you a template to fill out.
Amani: Okay.
So now this is what I was expecting.
Ramit: You thought I was gonna walk in...
This is the standard stuff.
Yeah.
I want to get to understand your numbers...
Mm-hmm.
...but now, it's gonna be way easier because I know what money means to you.
Amani: Mm-hmm.
Ramit: I think I can help you two.
I want you to take her out.
Find somebody to watch the kids.
Mm-hmm.
Just the two of you, just... reconnect.
And then let's talk after that.
Thank you.
These two have their work cut out for them.
They have such different philosophies on money.
Here's my new plan for them.
Full financial transparency.
Amani must share all the numbers with Matt in a way that he can fully understand it.
Next, they've gotta design a shared rich life together.
That means they've got to be able to talk about money in a healthy way and not get in a fight.
And finally, I think Matt should get a job.
When he starts earning more income, it is going to naturally change the dynamics of their relationship in a more positive way.
( upbeat music playing )
Donnell, let's see what you got.
Monique and Donnell spend way too much money on this $400-a-month storage unit.
I asked them to downsize it 'cause if they took that money and put it towards their debt, they would shave off years to becoming debt-free.
Donnell: How do you feel about...
Selling your stuff?
Donnell: Selling my stuff?
What about selling your stuff?
Oh my God.
My stuff, I don't have as much stuff as you do in my storage unit.
Ramit: This is my nightmare.
Donnell: Yeah, majority of it is stuff from the house.
Monique: It's not.
Um, that's what he would like to say because he's in denial.
Once we can get...
Donnell: Not in denial.
I need the majority of this.
No, you do not!
Why is that microwave down there?
Donnell: That was a reseller...
Daliyah: You bought that from...
Monique: She asked, "Why is there a microwave there?"
Monique: You want one?
( chuckles )
Get rid of it!
Daliyah: Why don't you sell it?
Monique: Why do we have a microwave here?
Because I was gonna resell it. I just didn't get a chance to.
Monique: Didn't get a chance?
You're paying to store this stuff. ( sighs )
Monique: This is where all of Donnell's dirty little secrets hide.
( line ringing )
Please pick up.
( voicemail )
Please leave your message...
Ramit: Damn!
( recorder chimes )
Donnell, it's Ramit.
I have one question for you.
How much do you really think you'll make from that used microwave?
You better tell me.
Call me back.
I... ( chuckles ) ...I got your video, and I want to talk to you about this storage unit.
All right, I'll talk to you soon.
( upbeat music playing )
Ramit: Hey!
Hello!
How you doing?
Sophina: Good. How are you?
Nice to see you. How's it going?
Welcome, welcome.
Good.
Have a seat.
Awesome!
Sophina bought a condo thinking that it would be a great adult decision.
Unfortunately, she didn't factor in unexpected maintenance like her shower, which has been giving her cold water for months!
What I want to do here is help her recognize this pattern that she seems to have of being passive.
She waits for me to tell her what to do with her money, but I'm encouraging her to find the answers herself.
I think this is totally ridiculous.
The amount you're paying, you should have your hot water fixed... the next day.
I tried to message the HOA manager.
After five, six months of doing it and no result, I just was like, "Well, we'll see."
That'll get anybody down.
Yeah.
You know, six months of being ignored doesn't feel good.
Yeah.
I mean, don't really have a choice, do I?
You don't?
Do I?
Yes.
Did you ever write to them?
Like, did you... Like an actual note?
A documented letter to them.
No.
A paper trail.
This is very important.
Any time you deal with a financial company, you write down the time you call, the date, the name of the agent and their agent number, and what you discussed on the call because five months from now, when you are still fighting over this interest rate increase or late fee, you're gonna pull out this document, you're gonna say, "Three months ago, I spoke to this agent with this number."
"This is what they told me. Here's my documentation."
"Now, I need you to fix this for me."
And those companies do not want to mess with customers like you.
Keep a paper trail.
Let's do it together.
Sophina: Okay.
What would you say to get you hot water?
( dramatic music playing )
( sucks teeth )
Um... "Hello."
( both chuckle )
Oh, we're gonna do it like this? Okay. "Hello."
I'll add "comma."
Okay, you go next.
( chuckles )
"This is Sophina...
( Ramit chuckles )
...from unit..."
This is gonna take us the next 25 years to write this letter, but I'm with you. You want to pull your laptop out?
Yeah, that's probably better. Okay.
What if we say something like this?
"I've been a resident for eight months."
"In that time, I have not had one day of hot water."
"I have contacted your office..."
How many times? Be specific.
Sophina: "Over 20 times."
Ramit: "No repairs were made."
( Sophina typing )
I'm feeling the rage just flow through my veins right now.
( both chuckle )
"I pay $515 per month."
"This is unacceptable."
"As a paying HOA member, I expect to have this water fixed within seven business days."
Ooh!
All right, send it.
( Sophina inhales )
Okay.
I'm learning a lot about myself. Mostly I like to be a nice person.
Ooh, I... I got a little butterflies.
But now I realize that sometimes you need to be direct and aggressive because sometimes people won't take you seriously.
Last time we talked, I asked you what your rich life is.
Do you remember what you said to me?
Not being stressed or worried about money when it comes to, like, doing anything.
Yeah.
We can start to look at all your finances.
Is this condo the right investment for you?
Are you making enough? Saving enough? What's up with this credit card debt?
And we can start just getting you towards where you want to go.
Is owning the condo the most important thing she wants to do with her money right now?
If so, that's fine, or would she rather take the time and money she's spending on this condo and spend them on other things she loves?
That's a decision she's gonna have to make soon.
( upbeat music playing )
( line ringing )
Ramit: Nathalie?
Nathalie: Hi.
Hi, it's Ramit.
Hi, how you doing?
I'm good. How are you?
Yes, I'm good, I'm good.
Ramit: Last time I talked to Nathalie, she told me, "Hey, I just made $2.2 million.
You know what I think I'm gonna do?"
"Buy a house that's way outside of the city I live in."
"I'm gonna spend tons of money furnishing it and getting it ready."
Nathalie is doing the same impulsive decision-making that she's done for her whole life.
Ramit: I wanna catch up on the new house that you were planning to buy.
Nathalie: So, I put an offer, and they basically accepted it verbally, and today I get an answer from them saying they found another buyer that will pay all cash.
So tell me, what do you think is gonna happen next with your housing?
I'm gonna have to rent a house in Beverly Hills for one year and see what happens next year with the market.
Okay, good.
Ramit: I'm actually happy that Nathalie has decided to rent.
It represents slowing down.
Instead of taking a million plus dollars and shoving it into a new house, she can rent, and if she decides after six months or 12 months that she wants to buy, she can run the numbers carefully, I hope, and then she can make the right decision for herself.
Ramit: Let's talk about the business plan.
What's the latest on that?
The thing is, right now, from what I hear from people I know that have restaurants is, as you know, 'cause the gas price went up, everything went up.
Ramit: Mm-hmm.
So, is it the right time? I don't know.
And... you know, when everything is up, how much higher can you sell the food, you know?
Yeah, keep going.
So, that's the only thing I'm concerned about... is it the right timing?
Mm-hmm.
Like to me, the way I see it...
I feel like I need at least a six-month break.
Honestly, I don't think I have the strength to go through another huge failure financially.
Okay, okay. Now we're talking.
So, Nathalie, how much money do you have from the sale of your house right now?
$2.150 millions.
And where's it gonna be once you get it?
In my other account, my Ameriprise account, to make, uh, $12,000 a month.
Yeah. By the way, what did the fee of the guy you're working with?
I asked you to text him that stuff. What's the deal?
Yeah, yeah... they charge 1%, yeah.
Nathalie, you're being ripped off.
You're paying... You're paying money you don't need to pay.
So what do you want to do?
You want me to show you how? Or do you wanna just stick with this guy?
I weigh my options.
Okay.
And decide what I want to do.
Okay, so if I show you that this person is basically charging you $22,000 and getting you worse results, you'll be open to changing?
Yeah!
Okay.
This is quite an update from Nathalie.
She ran the numbers, and she realized, "This restaurant isn't for me."
Next, the house fell through and she's renting.
That's also a great decision for her, at least in the short term.
I'm happy to hear it.
As for the investing part, I want her to take the same level of rigor she put into the restaurant and I want her to do the same thing with her money, and seeing if it's worth paying this huge fee.
I don't think it is.
Thanks, Nathalie. Talk to you soon.
( upbeat music playing )
Most people get into trouble around housing, cars, and debt.
woman: Hello, Ramit. Hi. I'm a fan.
Oh hi. How are you?
Of your podcast.
How you doing? What's going on?
man 1: Chillin'.
I have this dilemma.
I work in a rent-stabilized apartment...
Ramit: Okay.
...in Williamsburg.
Let's say I wanted to buy an apartment that's like $1,000.
In a month, I'll have like $3,000. Should I get that apartment or...
Where do you live now?
In the Bronx.
With your... with your family?
Yeah, my mom.
Okay.
So you're paying nothing right now.
No, I'm not paying anything. I'm only 20 right now, but...
man 2: Everybody always talks about, like, buying a house.
It's like a checkpoint.
It's like, "Oh, I'm grown-up. I got a house." Right?
I would like to live with some amenities.
Like dishwasher, washer and dryer...
Ramit: Yeah.
...elevator, but if I move, I'll have to pay at least double my rent.
Yes, yes, yes.
I think you should wait until you get the full-time job.
Then you can see how much you can afford.
man 1: Mm-hmm.
Make sure that your housing costs less than 30% of that.
New York's a little expensive, so maybe you can go up 30, 31, 32.
This is one option.
Stay in this cheap apartment for a year and get aggressive with all the money that you have.
Invest it.
Save it.
Then at the end of the year, decide, "Do I want to do this for one more year?"
"Or am I ready to move out?"
Okay.
That's how you build real wealth.
Okay.
Ramit: If you're overspending on housing, then, like, you can cut all the lettuce and apples and pencils you buy, and it's gonna make no difference.
Give me life hacks and wife hacks, man.
There you go! ( chuckles )
Appreciate it.
Yeah.
It might take you longer than you think.
You might not be able to afford to buy a house today.
Okay, you might not even need to buy a house today, but you have to actually start using a systematic approach, and I want to show you how to do this.
Are you ready to buy a house?
Here are my simple guidelines.
First, is your total housing cost less than 28% of your gross income?
And I mean total, everything.
Utilities, sprinklers, saving for a roof repair ten years from now, all of it.
Next, have I saved 20% for a down payment?
It doesn't mean you have to put it down, depending on interest rates, but it shows the discipline of being able to save.
And finally, are you planning to live there for at least ten years?
When you buy a house, the transaction costs are so big that you need ten years to spread those costs out.
So if you meet those three guidelines, you might be ready to buy a house.
( upbeat music playing )
( inaudible )
More than anything, Matt and Amani need to work together as a team, but right now, Matt feels powerless in this relationship.
He has no income.
He doesn't even have access to the family financials.
Matt is an engineer.
He has great skills, and if he can begin building an income, that can change the dynamics of their relationship.
( upbeat music continues )
( sharp sting )
( child vocalizes )
Baby.
Lila, Mommy's working.
Shh.
So, I am working today and watching the kids while Matt is, um, doing some training for some programming and, uh, updating his resume, looking for jobs.
Ooh!
And it's been hard...
( chuckles )
...as you can see.
Every time I try to type, she wants to type with me as well.
Um...
This is rough.
It's a difficult job.
It's definitely not working. It's actually working.
And for me, I'd rather work what I do than to do this every day, so huge respect to stay-at-home moms and dad for sure.
You have my respect.
Hi, baby!
You wanna... You wanna play here?
( upbeat music playing )
( laptop chimes )
Hey, Matthew. Nice to meet you. My name's Alisa.
Hello, Alisa. How are you?
A pleasure. I hope we can help you out.
What would be like the ideal position that you're looking for right now?
It's to the point where I'm old enough, and it would benefit my family if I was, you know, behind a desk and not out, gone all the time.
So, I mean, desk work seems great to me, but I'm very comfortable with outside work, so...
Okay. So either/or. Okay.
Right.
What would you say would be your minimum that you could accept in regards to compensation-wise?
I think 70,000 would be a good figure.
I think that's fair as well with, you know, with your degree and your education, your experience.
I definitely think that's doable.
So, in regards to the hours that you're willing to work, I think most companies right now, they're looking for at least 40 hours a week commitment, if not more.
I could probably manage the 40 hours.
If they started me with 80 hours, like, I probably wouldn't be able to afford the upfront childcare and that.
You know, 80 hours a week in childcare is a substantial amount of money.
That's fair. You know, definitely that balance between work and... and home life is definitely important, so...
Right.
So the next step would be if you can update your resume and email that to me.
And then I'm also gonna send you a job description of one of the positions I have in mind for you.
Matthew: Thank you.
I think this will work out great. Thank you.
I wish you luck in your job search, and I'm hoping we can help you out.
Thank you very much. Bye.
Okay. Thank you.
( upbeat music playing )
Ramit: Today, I'm meeting Monique and Donnell for the most iconic meal you can imagine in Philly, cheesesteaks.
There's no way anyone can finish this.
There's no way.
Yo, forget money.
Let's just turn this into a food show.
( all chuckle )
Donnell: That's good.
You sent me the conscious spending plan.
And the first one I sent back to you.
Donnell: Yes. ( chuckles )
Unfortunately, I took a look at this, and it's still wrong.
( upbeat music playing )
So, first off, you have no money for savings.
Monique: Yeah.
Ramit: You have no money for investments.
Monique: Mm-hmm.
Ramit: Your debt payments are way too low.
I don't see anything about your storage unit in here, which I know is almost 400 bucks a month.
Yes, you are right.
Okay.
And then finally, what about groceries?
Where would that be...
Oh, groceries is not on that one?
It should have been.
It's not here.
'Cause groceries is 400 a month.
Well, I actually took it down to 350.
Monique: Why?
I think we can do 350.
We can't do 350. ( chuckles )
The problem with the conscious spending plan is not $50 here or there.
What else did you spend a lot of money on?
Just extra odds and ends, you know.
Ramit: How much?
Like four or five hundred a month.
Ramit: That's a lot.
What I see in the conscious spending plan is some good thinking, but also a lot of wishful thinking.
Donnell: Mmm.
You gotta be honest.
Let me ask you a couple of questions.
Right now, for the two of you paying 400 bucks a month for your storage unit, when I saw that, I said, half this stuff could be thrown out right now.
You have tons of debt, and to be paying money just to store stuff that's not even part of your rich life doesn't make sense to me.
The stuff that's in there isn't something I can just throw away 'cause I would be throwing money away.
You have folks that collect cars, uh, baseball cards.
I collect totes of baby clothes and microwaves and printers and, you know... nothin' wrong with that.
Do you believe that now that you said it out loud?
( both chuckle )
How much does that microwave cost?
Around 60 bucks.
Sixty bucks and you're spending $400 a month...
Donnell: Mm-hmm.
...to store it.
The math makes no sense.
It's at least over $2,000 worth of new merchandise in the storage unit.
More than that.
Why haven't you sold it?
Because it's not that easy.
How long do you think it will take to sell everything in that storage unit?
I don't know.
'Cause if I...
The summer.
Yeah, probably the summer.
If it will take you the summer to sell it, that's gonna cost you about 1,200 bucks in storage fees.
Monique: Mm-hmm.
So if everything goes great, maybe you break even.
( somber music playing )
I don't want to be sitting here talking about a $60 microwave.
I want to talk about $200,000 questions, and we're over here still talking about a microwave.
You told me your rich life is a house...
$50,000 in the bank...
Monique: Mm-hmm.
...those things.
So right now, you're paying $700 a month towards your debt.
Monique: Mm-hmm.
Better than you were before.
I'm happy to hear it.
You know how long it'll take to pay the debt off?
Like 28 years or 25?
Monique: I think you're right. It was like 20 years.
Ramit: Yeah, it's about 18 years.
If you instead raise the amount you're paying to $1,000 a month, you're gonna pay it off in 13 years.
That's a huge difference.
Monique: Mm-hmm.
This is a pivotal moment for Monique and Donnell.
I'm gonna challenge them to dig deep and start making decisions faster so that we can move to the bigger parts of their rich life.
Hundreds of thousands of dollars paid off, accumulated, then you can decide what you want to do.
( pensive music playing )
( upbeat music playing )
The last time I talked to Nathalie, she had started to make some changes.
Nathalie? Hey! How's it going?
Hey! How are you?
Nice to see you, Ramit.
Hello! How you doing?
Nicole: Hi, nice to see you.
What I notice about Nathalie is she's at her best when she gets her hands dirty, when she runs the numbers herself and she figures things out.
She is smart, so I want to encourage that confidence with her money.
I want to talk about the money that you made from the house.
You have an opportunity of a lifetime.
Yes.
Most people never see that kind of money in their bank account.
You have it.
What do you want to do with it?
It's already in my investment account.
Which account?
In Ameriprise.
Okay.
Either you can learn how to invest on your own, or you can stick with what you've got.
Nathalie: Yes.
It's up to you.
Well, I have no problem with the 1% fee.
It's fine.
I wanna know if you think she can make it without a financial advisor.
Someone who doesn't look at numbers, does not know how to calculate.
Thank you, my love.
Ramit: If Nathalie wanted help, she could totally hire a financial advisor.
I would actually encourage it.
But not for 1%.
I can recommend a great advisor or firm that will charge you $300 an hour.
Pay it.
Because paying by hour makes a lot of sense, but paying by percentage, it is pure and simple, a rip-off.
My decision, I'm very happy now...
Mm-hmm.
...to have my money locked with my financial advisor for a year and pay my 1%.
Next year might be a different story, but for this year, I'm very, very happy the way things are going.
Okay.
Money psychology is really hard to change, and I've learned you have to have a reason to change the way you treat money.
She's paying a financial advisor what I consider a preposterous rate, but to her, she's okay with it.
So, since we started until now...
Nathalie: Yeah.
A lot changed.
Ramit: What's changed?
A lot of energy changed in my life.
Everything has changed, actually.
So you made a big decision about the restaurant.
Yeah.
It's not that I don't want the restaurant.
I believe in it, and one day I'll do it, but I don't think my timing is right.
We broke down the numbers together, and it didn't feel realistic in terms of what she wanted and her goals.
I actually think sometimes the best thing you can do is not make a bad decision.
Nathalie: Yes.
I agree with that, yes. So I'm thrilled.
And then I stopped shopping, which is a miracle.
I'm in Beverly Hills, and I didn't go shopping.
Why did you stop?
I wasn't being responsible, I guess...
Ramit: Uh-huh.
...and honestly, today I should have owned a lot of real estate with all my money, but instead I decided to blow it all on shopping.
Uh-huh.
And I should be more responsible, and I would have had much more money.
I don't think I've heard her ever speak like this.
I'm proud of you!
( both chuckle )
No, but I am proud of you.
Thank you. I'm proud of you too.
I appreciate you spending time with me.
Nathalie: Yeah. Yes.
Ramit: Thank you very much.
I wish you...
Thank you.
...and, Nicole, I wish you both the best.
Thank you so much. And thank you for your time.
It's my pleasure.
So I think what I've taken away from this experience is I see myself in a better place, making better moves.
Gimme five. That's amazing.
I'm proud of me. ( chuckles )
Here. Give me five as well.
Good job, Nathalie.
'Cause I lived so much in my little bubble,
I just... I think had no value for the money, and a new beginning is coming.
How does it feel?
It feels good. I know where I'm going now.
Yeah.
Nathalie: I'm not like... A little certainty.
Yeah.
I spent a lot of time with Nathalie, and looking back, I'm glad that I did.
I hope that I'm leaving behind just a small taste of how to think about money.
Cut back on being impulsive and start building financial security.
Building a rich life.
( upbeat music playing )
Amani makes a very good income, but she's feeling the pressure as the sole earner in their relationship.
They have a lot of expenses, so I want them to confront reality.
Hey! How are you?
Hey! How are you?
Make a plan and then stick to it.
Let's talk about some of the numbers.
( chuckles, inhales )
Uh, actually, we were discussing that yesterday.
I'm too scared to go through my bills.
Yeah.
I'm too scared to, like, look at my bank account, like, all that.
Very common.
Amani: Okay.
People who are in debt usually don't want to open their bills.
Do you have those bills that you've been afraid to open?
Uh...
Do y'all want me to go open the mailbox?
My gosh.
Ramit: Yes.
Let's open 'em right now. I'm here.
Amani: I'm so scared.
Take away the power from this stuff.
Basically, everybody in debt avoids their bills.
My first step in working with people in debt is to help them confront reality.
Reality exists. It's in that envelope whether or not you open it up.
So my feeling is you might as well open it up, 'cause then we can make a plan.
Ramit: Oh my God. Exactly as I thought.
All right, put it here.
Let's see what we got.
Amani: Oh, this is another bill.
Oh, this is another bill.
This is another bill.
How bad is it?
Matthew: I don't know.
I don't wanna look at it.
We don't want to look.
Ramit: Do you want me to look at it?
What are you afraid you're gonna find in this pile?
It's not just numbers, is it?
I'm afraid of the additional stress that I will get from opening this.
Matthew: There's a lot of emotion in this.
I don't want you to hide from this anymore.
Amani: Mmm.
I want to help you understand that.
Step one is to open these up.
Retrain the way that you think about money.
It's not something we can run away from.
Do you think it's possible to change?
I don't know, but in my mind, it's like, "Oh, I need more income to do that." You know?
It's not that.
I looked at your income. Twenty-seven years old, making $250,000.
One income. We haven't even talked about Matt's career.
We're gonna talk about that too.
I want you to figure out how to set up a joint conscious spending plan.
Both of you, starting today, you look at your spending for one month.
Amani: Okay.
Your life is together. You're married. You have kids, and it's important.
One of my rules is Matt needs a percentage regardless of his employment.
You're partners. You need money.
It's not an allowance.
It's a partnership. Okay?
Amani: Mm-hmm.
What's going on with childcare?
We invested in an au pair, actually.
Ramit: Oh, you did?
Amani: Yeah.
Matt, you needed time...
Yeah, I needed time.
So he can do the job search.
Ramit: ...to look at jobs...
So that's fantastic.
I have an interview that is right now waiting for a hiring manager to come back.
You have an interview lined up?
Correct.
Give it up.
That's awesome.
Congrats.
And then, Amani, how is work going?
I actually closed the biggest deal of my life, which is crazy.
Ramit: What?
I know!
Like how much?
Like 100 grand.
That's pretty good!
Congratulations.
( chuckles )
Thank you.
That extra 100K is gonna help you get to your goals so much faster.
Yeah.
I'm excited to see Matt and Amani's progress.
They have begun to communicate about money in a much more healthy way.
My next step is to give them some practical tools so Matt and Amani can manage their finances together.
Oh yeah.
Make sure you pay these things off too.
Amani: He's like, "Don't put that away."
Yeah.
Don't hide them in the closet.
( upbeat music playing )
( sharp sting )
Hey, Ramit.
I just finished working out, and I got an email that stated, from the HOA, that the HOA has gone up to 570 now because of a plumbing assessment, and still no response back from the HOA manager or anything like that.
Like, with this assessment, are they gonna come fix my water and just didn't tell me?
I don't know.
I'm frustrated.
( upbeat music playing )
Ramit: It's almost like the HOA is making it easy for Sophina to decide what to do.
This is totally crazy!
I want to walk through Sophina's numbers with her because I want her to see for herself her condo is too expensive for her income, and when she sees all these numbers, the decisions are gonna be much clearer for her.
Hi, Sophina.
Hi! How are...
How you doing?
Good.
Nice to see you.
Nice to see you too.
How's it going?
Good, good.
We have a lot to catch up on.
A lot.
I looked at your numbers. Are you getting nervous?
Yes. Can you tell I'm nervous?
No.
'Cause I don't know if I did it right.
This isn't like where the dentist pulls out the big drill and everyone starts getting nervous.
Okay.
We're just gonna look at reality.
How do you feel about the numbers?
Um, I was over... what I make.
Yeah. You were spending more than you make.
And then what did you conclude from that?
I need to spend less or make more money.
Okay. Very good. We're doing something that you've probably never done before.
Never.
That's okay.
But these numbers, they concern me.
So, number one, you are spending more than you make every month.
That's the bottom line. That's the red.
Yes.
You're in the red every month.
And that's when things are going well, right?
Not counting a car repair...
Right.
...or HOA going up.
Right.
That's if things are good.
Based on these numbers, I don't see a lot of vacations with your friends.
No.
I don't see you being able to effortlessly buy dinner at a restaurant and not worry about it.
And then what about your debt?
I don't see a plan to pay off your debt.
I want you to be debt-free.
I want you to have money invested, and I want you to be able to go out, do the things you love.
Same.
Okay.
( chuckles )
You spend 45% of your gross income on housing.
It's supposed to be 30, right?
Yeah.
It's just too much.
I'll tell you why it's too much.
Because if you get hit by one expensive repair...
Yeah.
...you're in big trouble.
In order for you to afford living in your place, you would need to be making about $90,000 dollars a year.
That's like 20,000 more.
Yeah.
You've basically trapped yourself.
( dramatic music playing )
I bought my condo because I thought it'd be a great investment, and now I'm understanding that it's not a great investment.
It's a little disheartening, a little bit.
( pensive music playing )
In technicality, I am failing financially.
( chuckles )
Um, I feel like I'm playing it off that I'm not, maybe.
But yeah.
You don't want to call yourself a failure at all.
Like, I want to do good in life.
I want to be happy.
( sobs )
I'm overwhelmed a bit.
Yeah.
( "Do It for the Buzz" by Aldous Finch & Tiguan Jones playing )
♪ I can read your face ♪
♪ I know I always say ♪
♪ That you've come so far ♪
♪ But lately I feel ♪
♪ That it ain't just a phase ♪
( song fades ) listen song here
