This is Master's in Business with very Rid Holds on Bloomberg Radio.
This week on the podcast What Can I Say? Ramat Safety is a fascinating guy with really an amazing and fascinating career. Starting out studying psychology and a little bit of finance at Stanford, he started a blog which eventually became a podcast and a book, and is now a
Netflix series. Depending on the platform, it's either I Will Teach You to Be Rich the book or the Netflix show How to Get Rich, And it's not rich in terms of how to pile up money, but rather how to live a rich life by treating money as a tool to do the things that you want to do. It's one part financial freedom, one part prioritization of your life, and one part less stress and worries about financial matters.
It's really a very thoughtful and intelligent approach to thinking about spending and I found the conversation to be really interesting. I've chatted with Rami before. I think he's really a fascinating guy, and I'm glad we finally managed to get him into the studio for a podcast. The show on Netflix is really quite interesting and his just whole approach is intelligent and joyful and really very pleasant. As opposed to the usual spending skolds who make money like a
drudgery and a bore. He's not like that at all, which probably accounts for a lot of his success. He makes what is otherwise a potentially challenging subject very interesting. I found this conversation to be delightful, and I think you will also, so, with no further ado, my sit down with Rami Seti teaching you how.
To live a rich life. Thanks for having me.
Oh good seeing you again. Good to have you. So, before we get into the Netflix series. In the book, let's talk a little bit about your background. You get a scholarship in high school, you put it in the stock market and immediately lose half.
How do you lose half of your money? Well, that quickly everybody thought they were a genius, including me in nineteen ninety nine, two thousand. Kind of sounds familiar to all of our crypto friends from the last few years. So I was sitting there reading Industry Standard, remember that magazine and all these this media about how the stock market was going up fifteen percent a week.
So, however, trees grow to the sky.
Yeah always, And so I said, cool, I'm going to get in on this. And I took the first scholarship check which they sent to me. That's usually not how it works. They usually send it to the school, right, And you know, for a seventeen year old kid, that's a lot of money. I put in the stock market and I lost half of it within weeks, And in retrospect, that was probably one of the best lessons I ever heard.
You know, if you step into it, because so you know, and the bells and lights go off and you win money, you're screwed the seo life.
Because you think you're a genius. So you know, how hard is it? So then I end up going to college.
I had other scholarships that paid my way through, which was very fortunate, and I was learning about money, reading all the books, all the magazines, watching the shows, and I was also studying social psychology, so studying human behavior, persuasion, and I was really It reminded me of that book The Emperor Has No Clothes, because the advice that we all get about money for the last thirty plus years
makes no sense if you understand psychology. And that's when I started to develop my own philosophy and.
Let's talk a little bit about that academic study. Stanford be a information and society with a minor in psychology a master's in social psychology and interpersonal processes. It sounds like you knew exactly what you wanted to do from a fairly early period in your life.
No, I'm not so sure. I think you remember that famous Steve Jobs commencement address speech. Surely that was my graduation out. Yeah. So he said you often can't tell where you're going until you look backwards and you connect the dots. Makes sense, and I found that to be profoundly true for me. When I was in college, I was super interested in why we do the things we do. For example, why do we all talk about you know, I should probably go to the gym a little bit more,
but we don't. I find that profoundly interesting because we sometimes will say it's about money, it's about time, but deep down there are deeper reasons. And so being at Stanford and being able to study science, technology and society and psychology and sociology that really allowed me to understand more of why we do what we do.
H really interesting. I'm trying to remember the date. I think it's January nineteenth is when the average New Year's resolution has been broken.
Yeah, there's some new you know, it's interesting, there's some nuance I think to New Year's resolutions. I used to be kind of like scornful. Ah, you know, the gym piles up and then it empties out. Now I think I'll take any opportunity where people are motivated to change. And if it is a twenty year high school reunion, if it's January first, doesn't matter. Sure, will most people flush out, probably, But there's a few who will make
it meaningful for them and commit to it. And for me, that's a win.
So I'm skipping ahead a little bit. But you write a lot about instead of focusing on goals, focusing on processes. Clearly psychology helps there too. It's easy to make a small change in how you do things as opposed to this immense Hey, I really want to be jacked from my twentieth reunion.
Yeah. One of the most interesting emails I got from my newsletter subscribers was a woman who wrote me and said, you know, you talk about going for a run or going to the gym, and she goes, I have told myself that I want to go for a run five times a week for years, and I never do it. And I just wrote back to her and I said, for a while, why don't you go once a week? And her response was so fascinating. She said, why would I do that? That will make no difference. I find
that extremely fascinating. She would rather Yeah, she would rather dream about going five times a week than actually go once a week. And so many of us do this with our money. We'd rather dream about having ten million than start investing one hundred dollars a week.
Perfect is the enemy of the good, Yeah, isn't it. Yeah, that's really fascinating. So you start the blog in two thousand and four, more or less while I'm in college. You were, You were an early adopter, as was I. How did that evolve into a book?
The blog was not some mastered genius stroke. It was my frustration, because come on, tell the truth.
You're like, I'm gonna blog for twenty years.
Netflix? Yeah, yeah, yeah, yeah, Netflix, which doesn't then it was just CVD by mail. Yeah, so okay. I was trying to teach my friends in college about personal finance. We'd be sitting around the dining halls. Someone be complaining about their fourth overdraft fee, and I would go, hey, you should just come. I have this one hour presentation I do on money. And they were like, this is in college you would do, no kid, yeah, and so they would go, yeah, that sounds really cool and they
would never show up. Another fascinating peculiarity of human behavior when it comes to money events. Most people hate them because when they physically go, they feel bad. And the older you get, the worse you feel because you feel I should have learned this earlier. My friends were twenty years old and they already felt like they were behind. Imagine a forty five fifty five year old at a four oh one case summer are they don't want to go.
So I did this for a year and a half. Nobody, virtually nobody came, like ten people, and I finally said I was a cocky college kid. I go, you know what the world needs to hear what I know? But they were certainly not listening. So I started a blog. I said, maybe these lazy college kids will read it from their dorm and that actually turned out to be exactly right.
So was there ever an actual job out of Stanford or did the blog lead to tell us about your first game.
So I had some internships in college, and then when I graduated, I accepted an offer from Google. Actually uh huh, and they said you should take some time, you know, you've been in school for a long time. I said, yeah, I planned to. I'll be talking to you guys in three months. So I took the summer off. One of my buddies said, hey, I'm starting this thing. Why don't you start it with me. So I started this little
collaboration company with my friend. We were co founders, and it sort of blew up that summer and I ended up saying to Google, really appreciate you guys, but I think I'm gonna stick with this. And I was at that company, which was an online collaboration company, for several years till about nine. Meanwhile, I was doing my blog on the side and it was just getting bigger and bigger. Whatever happened with the collab company, it's still around. It's
still around. There was no big exit. No, there was no exit. We were not here, you know, at Bloomberg. It was sort of earlier than Google Docs, and it was a wiki. Now it's sort of pivoted into B to.
B kind of interesting. So you're working on the blogs, and so for somewhere along the lines, there's a self published ebook or something like that.
Yeah. I around six oh seven, I said, I want to see if anybody on the internet will actually pay for anything. I had not made a cent from the blog, it was just me doing it as a hobby. So I created this ebook and I decided to sell it for four dollars and ninety five cents. And I was very terrified. It's like any artist who's ever sold something validation, yeah, and like, what is the world going to think. I had such low confidence that I didn't even set up
a distribution system. I just said, when the receipt comes in through PayPal, I'll manually attach it to an email, because I thought fifty people would buy it. Two interesting things happened. First, I was terrified of people calling me a sellout, because back then, to me, selling something was sort of the antithesis of creating value. And I actually did get called. I had people who had been reading me for free for years who turned and they said, oh, so it's I will teach re meat to be rich,
and that that really hurt. When I think back to some of the most painful moments over a twenty year career. That is definitely one of it.
Because everything in the world is free. You should work for free. Media, subscription should be free. Nobody should ever pay for.
Any correct and if you do, you're you're trying to get one over me. Yeah, yourself.
I'll tell you something funny. And people, you know, we never quite had that accusation. But for the better part of fifteen years before I started accepting capital, it was, Hey, everybody's telling you how to manage your assets the wrong way. Here you could do it yourself. Here's the right way to do it. You could do it. It takes a little discipline, a little time, and very little money. Manage
it yourself. And to my chagrin, people started saying, hey, I like the way you think, but I don't have time for this.
You take my money.
Yeah, no, no, don't you understand this is all about you can do it yourself.
I'm busy.
You do it all right, Yeah, and that's how a business was born. But I don't look at that as selling out. I don't look at what you did as selling out. Five dollars is not gonna kill him exactly.
And you know, if they didn't like it. I refunded him. That was what was fascinting.
Money back guarantee on the WOW.
And then the second thing that was fascinating to me was I had a small cadre of very loud, vocal people who were angry. But that's true on every website exactly. But the people who bought I could see their statistics. Their open rates on my emails were quadruple the rate of everybody else. They emailed me saying, hey, this was great.
When are you creating the next thing. I sat there looking at the data, looking at the emails, and I go, wait a minute, there's something qualitatively different about buyers and non buyers. And that led to the next three or four years of learning how to sell, how to create value, and not worry about selling out, but do it in a very ethical way, do it my way.
And did the ebook eventually lead to I will teach you to be.
Rich the book? Yeah, I think I became more comfortable. I think one of the biggest mistakes people make when thinking about writing a book is doing it too early. I waited until I had my philosophy dialed in. I treated my blog like an experimental lab so I tested it with different incomes, different industries, different geographies. By the time I wrote it, I knew what I was going to say, and so that came out in March nine, which is time. Yeah, that happens to be the bottom front.
But I remember going around here we are in Manhattan. I remember going on book tour and this book came out, and a few months before my publishers had sort of sent me a note, are you sure that this information is still relevant because of what's going on? Go good information has nothing to do at the time. If anything, it's even more relevant because now low cost, long term
investing makes sense, et cetera, et cetera. So I go on book tour to thirteen cities, and in every city, I'm sitting in the green room waiting for a news director to come out, and they go, we're not going to talk about investing today. I go, what, and they go, there's ten percent unemployment. People just want to know how to get by. And I looked at them and I
thought to myself, we'll talk about that. There's definitely some ways to save money, but that also means the majority of people are employed, and everybody knows that at some point, the market will come back, and they want to position themselves. So they just looked at me like I was an alien. I looked at them like, I don't really care what you say. I'm going on air. I'm gonna say what I want. And I think that has been true since
two thousand and nine until now. Every time I do media, the predominant question is times are tough, things are crazy, how do we get by? And I go, I simply don't accept the premise anymore. I go, wait a minute. First of all, in certain areas things are better than ever. Second, regardless of what we're talking about here, there are ways to get ahead and actually make money fun. So I'm just not going to indulge the idea that money has
to be purely a nuisance, purely an annoyance. No, let's start off by talking about how much he can be amazing and joyful and create a rich life. Really love that.
And I have to start out with the confession. When this book first came out, I hated the title. I thought it was just another get rich quick scheme, some sort of nonsense. And it was one of the guys I worked with that said, no, no, that's not what this book is about you got to read it. So I started thumbing through it, and I'm like, oh, this is not about getting rich. This is about figuring out what money as a tool can do for you and
how to use it properly. It's a very different headspace than most of the here's how to invest in and get rich. What led you to that sort of approach and that title.
Well, I was sober when I chose that title. Okay, I want to admit I was a college kid and I named my website I will teach you to be Rich. I always have loved provocative names. I do love being ultra clear about what I'm going to promise. I have these digital programs. One of them is find your Dream Job. It's very clear what you're gonna get. I like that. But I will say that I'm not offended by what you said, because if you go and Reddit, there are
people who talk about the book. I feel very fortunate that people spread the word a lot, and they will almost always introduce it in the exact same way. They'll go listen ignore the time they go this book. It sounds like a scam, but I will teach you be rich is actually really good and that's fine with me when you hear that title. I love a big promise, but what I love even more is over delivering on it. So it's not just about getting rich, It's actually about
being rich. And being rich means not it means how to earn money. It means how to talk about money, and even how to spend money. All of those things, including managing money, are part of a rich life.
So let's delve deeper into the concept of a rich life. I love this quote, A rich life has lived outside the spreadsheet.
Explain that, Well, there's too many nerds, probably half the people listening to this, who love their spreadsheets. Hey, guys, you want to do an amortization table, You want to do a Mondy Carlo analysis, and they do that for thirty five years, tweaking numbers. I go, you won, You won the game. It's fine. Turn the page on your life and go to the next chapter. Once you have your asset allocation dialed in, your automatic contributions dialed in, all the basics, then you can move on. And part
of that involves designing your rich life. Let's talk about that.
Yeah, I really want to get into that, because when we talk about the show that really is a focus, and you really kind of rock some people back on their heels and make them address things they don't want to address.
I'm assuming that.
The blog and the podcast led to a lot of those interactions that ended up in the book.
One hundred percent. Yes, the blog gave me a lot of raw material because I had a chance to talk to people at different incomes, et cetera, you know, a rich life. Most people expect a money book to start with a chapter on budgets virtually every money book, and that is, in my opinion, a total turn off. Buzzkill. Yeah, like you, Okay, some average person opens up a book, they're already feeling nervous, judge. They open up the first chapter, the author says, Okay, here's what we're gonna do. We're
gonna get a budget. Everybody hates the word budget. I hate budgets myself. I don't keep one. And now you're gonna go through the last twelve months of spending, which are not conveniently found anywhere. You know you did it wrong, but I want you to go and spend the next twenty hours writing this stuff down just so you can be judged. It's like, no thanks. I'm gonna put this right back on the shelf. So that is a lack of understanding psychology. What I did with the book was
to understand where do people want to start. Let's get him a quick win number one. Everybody has credit cards, everybody misunderstands how to use them, and there are actually some secret perks that people have no idea about. Let's get you a quick win. You got a late fee. Read these words off the page. In fact, here's the phone number you call and you will get your thirty seven dollars fee waved. People do that, they don't believe it, and they do it. They go, oh my god, it worked,
and like that they realize they're on board. I can take control of my money, not let every financial company control me.
Yeah, it was genuinely shocked. And again the Netflix series is in my head. People have eighteen credit cards, twenty who has twenty twenty? Big account saving accounts. It's just what you're paying in fees seems to be exorbitant.
Yeah, a lot of people who watch that show How to Get Rich on Netflix. They told me, like I had no idea how little people know about money. But to me, I've been talking to everyday people for the last twenty years. So it doesn't phaze me to have twenty savings accounts to not know how much you're spending on fees. Of course you don't. That's like asking me, REMI, do you have a carburetor in your car? I got What the hell's a carburetor? I don't know. I turned
the key. It works. That's my understanding.
So let's talk about the money dial way, the concept of that com and how do people actually use your money.
When I talk about a rich life, people like the term. They go rich life, what is that? So you know, first, let's just start with that. A rich life can be traveling two months a year. A rich life can be wearing a beautiful cashmere coat. It could be picking up your kids from school every afternoon. Your rich life is yours. And so people they buy into that, They go, oh wow, it's.
Not just materialism, it's not just shiny things. It sounds like it's choices and freedom and much less worry.
Yes, but it's being very very specific about it. So freedom is When I ask people what is your rich life, ninety percent of people say the same answer to me. Across the world. They go I want to do what I want when I want. They really think that they're clever. I go, wow, that's so interesting. I never heard that before. And then I go, I go, so what do you want? And they just stare at me because that is how far most of us have thought. And they'll say something
like travel. I go, okay, where they go Europe? I go where. I want to know what airline seat you're going to sit in. I want to know where you're going to stay, what you're going to eat, I want to know who's going with you for how long. That's a vivid and specific vision of a rich life. So an easy way to do this for everybody listening is, let's do this quick exercise together. The first question I have for you, Barry, is what do you love spending money on?
Dining, entertainment, things like that.
Fantastic dining is actually the number one response money dial, or it's what I call it money dial. Yeah. Number one is eating, eating out or dining. Number two is travel. Number three is health and wellness. Number four is my money dial convenience, and then there's a variety of others. So the second question is, Barry, if you could quadruple the amount you spend on dining, what would it look and feel like for you? That would be a terrifying number. Tell me.
So, my wife and I also really like cooking, so we cook at home.
Just redid a kitchen. We have this lovely chef's kitchen.
So I try and balance having fun and you know, playing some music, cracking a bottle of wine and working on a recipe. That's a lot of fun as is. You know, we just had an insane lunch at the Restoration Hardware.
Oh I love that's place.
Just exorbitant, but you know as an occasion, and like, I don't even think about it, Just let's order what we want, not even think twice.
So you are in an unusual position because you, I'm guessing you're not really price sensitive about eating out.
So you and I have previously discussed pain points in spending. Like for me, it's closed because everything is an expensive bib eventually. And look, I'm wearing nice I told Barry. My wife's a personal stylist. I said, Barry, let's do this.
I mean, I'm wearing nice clothes today.
But I can rationalize dropping a couple hundred bucks on a meal without even thinking twice.
About it.
But you walk into certain stores eight hundred bucks for a pair of shoes, four hundred bucks for shirt. It's a little more challenging because I'm hard on everything, and I know that the shirt will eventually have spaghetti stains on it, and the sneakers, the shoes will be destroyed. But that's my pain point. It's not it's not cars, it's not watches, it's not food.
Yeah, it's closed. So people listening, they're saying, Okay, I eat, I like to eat out, or I like to travel. And the second question, when I ask, what would it look like if you could quadruple you're spending, people smile because they go, wow, they never thought of it. Most people, when it comes to food, they give me the same answer. They go, wow, I'd probably have to watch what I eat because I'd be eating out four times a week. And I go, it's not.
Bigger portions, it's going to nicer places.
That's right. So they most of us think linearly, I go, what are you going to go to Chipotle four times a week? Might you go to a different caliber? And this is where it becomes really fascinating. A rich life is not simply more frequency, A money dial turned all the way up could be eating at a beautiful Michelin starred restaurant for lunch. It could be going. If you turn it all the way up, you might go to Italy with your loved one, go to a farmer's market
with a chef and make the food together. That sounds like fun. So the point of a money dial, and the point of a rich life is to really get specific about what it would look like. To turn it up. Then you will understand what I mean when I say I want you to spend extravagantly on the things you love as long as you cut costs mercilessly on the things you don't.
And that's a really fascinating aspect to your writings and to the show, because people seem to be somewhat agnostic about their spending habits, regardless of whether it's important or not. And you know, if you get if you could get people to focus on, oh, you want this big expensive trip or this nice car or whatever it happens to be, well, to get there, you just have to stopping money away on junk. You're about halfway there. Yeah, what's the pushback to that?
From clients and from people? Most people have simply been taught that they should cut back a little bit on everything. What a demoralizing philosophy. Oh, I should cut back five percent on asparagus, five percent on my car, five percent on rent, five percent on cable. It's like that is so ineffective. That's why there's so many folks out there who berate people about buying a spending skull.
Yeah, it's like, if you're one latte away from your retirement being messed up, you got bigger problems.
And truthfully, a coffee a day is not going to change your financial life in any material way. But there are certain five or ten big things that make a huge difference. So what I encourage leu's to go through those, all right, is what I tell people is stop asking three dollars questions, start asking thirty thousand dollars questions. Those would be am I automating my savings and investments? Have I made rules for myself such that if I'm saving five percent this year, I'm going to increase it by
one percent per year. That right there, if you do that for your savings and investment, is worth hundreds of thousands of dollars more than all the coffee you'll ever buy? Am I aid? Well? Have I learned the skills of negotiating my salary? Have I managed my asset allocation and my investment fees? If you do these few things, you'll be light years ahead of agonizing over the price of broccoli. Right.
It's whenever I read the spending scolds, they only always have half the story. Never buy a sports car, never buy a sell boat, never.
Buy always no, no, no.
But the right way to say that is, never buy a sports car. If you can't afford a sports car. But if you can afford it, go buy whatever the hell you want. And that focusing on the spending but ignoring the Hey, is this a rational expenditure for someone who is earning enough to pay for that vacation, that house, that car.
Why not? It's a very simple, puritanical view. Yes, that people in personal finance espouse, which is it's really easy to tell people no to everything a blanket no. But it's much harder. Yeah, intellectually lazy, but I think it's much more fascinating and nuanced to show people you can actually spend more on the things you love. For example, I just posted a picture of my car I'm not into cars, not at this phase of life, and I know you are super into it, so this is interesting.
I posted my car so old. Of course it's a Honda Cord. All right, it's a very real.
We had a Honda Cord Crosstour. Yeah, probably the best car.
It's fantastic. So I don't you know, I could go buy any car, but to me it's great. I hardly drive, I have it. It's fine. One day, I'm sure I'll get a much nicer car. And so I posted this just show people. Look, this isn't my thing. It's where I cut costs mercilessly. But when I travel, I love hotels, I love clothes. Those are the things that are important to me. And so I want people to actually have
this highly dichotomous way of spending. You spend extravagantly bar on certain things, yeah, bar bell, and then you cut costs mercilessly on the things you don't. Huh.
I really like that concept. So, speaking of staying within your you're spending limits. If you're making seventy grand a year, maybe a four thousand dollars handbag isn't the best use of your money.
It's very likely although if they tell me, hey, I pay eighteen percent of gross for my rent, I would go cool, what are you doing with the rest? They go? I love a bag? I go, how long is it going to take you to save? They go, I know my numbers? Fourteen months? Fantastic, But I will say, you know, we want to be reasonable. The fact of the matter is ninety plus percent of people do not know their basic numbers.
What are your thoughts on the early retirement fire movement.
I like any movement that gets Americans to think about increasing their savings rate. I love that. I love a movement that gets people to be goal oriented. I love that. However, it quickly crosses over into obsession over pure metrics, and truthfully, accumulating money is never the goal, right, I is living in the spreadsheet.
I'm glad you said that. I remember reading a blog post by someone who was in that space and they were stressing because they had a house guest who was taking a long hot shower. Come on, swear this is true, and the long hot shower was going to be expensive. And it's like, again, if a hot shower the cost of that is too much, what are you going to do when you're old. If you're retired in your prime, living earning, spending years, it just makes no sense.
That's when you've gone too far. Imagine you have a pair of eyeglasses. The primary money lens that we use in this country is cost. We go to the store, we look at the cost. I get it, but the wrong measure. There are so many other lenses. So for something like black pepper, which I don't really care about, I'll use cost fine. But for other things like a pair of shoes which I am going to keep for seven years, or taking my parents out to a really
nice restaurant, I'm going to use different lenses. So there are lenses like security and safety, delight results. That's why somebody might hire a personal trainer int of doing it on YouTube, even just luxury. So what I want is for people, like a symphony, you've got to be able to have different instruments, not only the instrument of cost. And that's where I think people go wrong. Huh, really really fascinating.
I've always thought of you as like in a financial advisor, but on the show it's almost like you're a therapist slash counselor. Each of these vignettes are like interventions. How how do you think of this? Am I misdescribing you? How do you think of your own work? What's your job title?
Well, you can call me what you want. I mean, I judge. I get judged by the results of the people I work with, which I love. I think that money is so much more than just what's on the page. And ultimately, through the show and through my podcast, I've become much more interested in the interpersonal dynamics couples, even individuals. They know that they should I'll save more, They know that they should probably pay off debt. Why aren't they? And that, to me is where we begin to peel the onion.
That's more counseling than is financial advice. And on the show, I've seen some themes come up or over again. So first, none of these people they don track their spending. There's no budget, there's not even the mental buckets of I'm gonna spend this much on entertainment and this much on rent. It just is a fire hose coming in and a fire hose going out.
That's very astute. I think that the way most people think about money is purely reactive and purely transactional. So it goes like this, our printer broke down, Let's buy a new printer. Our kids need soccer cleats, Let's go buy soccer cleats. Oh my gosh, we got our credit card bill. I guess we spent that much on sprinklers at home depot. And that's basically the next forty years of life. And that's true. That's true, And so I have a lot of compassion because we've all done that
in some way. It could be fitness, it could be relationships, it could be anything. You and I understand that you should probably have certain mental buggets, and you should probably go on offense instead of defense. And we get that. After you understand the stuff, it's not that hard. If you don't even know, for example, how to decide if you can afford your car, then that is really where we're starting. Or your house.
People are living in houses with hoa fees and repair costs that they seemingly never thought of.
Well, this is the number one thing, you know. When I talk to folks, the number one and number two area they overspend on. Number one is their house because they have no sense of they don't even know that twenty eight percent rule. They don't know twenty eight thirty six. That's very technical. And the second area they overspend on is their car. Now, why what is in common with
both of those? First, they've gotten more expensive recently, yes, but two there are gigantic phantom costs with each of those. When I show people, for example, that if you take a mortgage, you might as well just add on fifty percent to that mortgage to account for taxi is interests, maintenance opportunity costs, they are shocked. They can't believe it.
In fact, when I go further and tell them that it's actually been a better decision for me to rent than to own, it's like somebody's telling them the sky is green.
Well, the American dream has been. You know, you find your little place, you buy it, you own it. No one could raise your rent. You can paint the walls any color.
Yeah, and you're not throwing money away on rent. Funny they never say that when you go out to a restaurant, you're throwing money away in a restaurant. And then they go, oh, you're paying your landlord's mortgage. I go, are you concerned about paying your sushi restaurant owner's mortgage? No, it's a bunch of almost religious aphorisms. They lack any substance, and
so we simply meaninglessly repeat these phrases. I don't want to throw rent away easier than teaching opportunity cost and doing a buy versus rent cost.
So let's talk about a couple of other things. On the show that I was fascinated by. Reckless spending is kind of a theme. We mentioned the four thousand dollars handbag for somebody who really not affording right, or the guy who was spending hundreds and hundreds of dollars each month on video games. I mean, one video game should keep you busy for a month, yeah, not dozens. That that was sort of an obsession.
So that that's really interesting When I heard that, I really want everyone watching How to Get Rich to notice my reaction when people. First of all, it is extremely intimate for people to admit all their financials to anyone, and I had all of their financials.
I saw that by the way you walk through, here's their credit card spending, here's what's in their savings account. One of the people who's spending a ton of money literally had five dollars in change in their savings account until now.
You've never been able to actually see inside people's It's pretty horrifying. It's fascinating to me. It's like a microscope, you know. They see a spreadsheet. To me, when I look at someone's money, I see a family trip to Disneyland, or I see a beautiful outfit, or I see early retirement. And that's what I wanted to shift them to. So when people invite me into their homes and they open up their finances to me, they are very brittle. They're expecting me to come down like a pile of bricks
and say you're doing it all wrong. And a lot of times I just go, that's really interesting, why'd you do that? What do you love about video games? And you can see them visibly loosen up.
You're very genteel with these people. There's no finger wagging, there's no scolding, and you very gently nudge them to You give them I forgot which woman it was, Maybe it was the gymnast. You give her three choices. Choice say do nothing, choice B, do something little, choice CY do something large, and nobody wants to do nothing. Yeah, well they have agency. They're saying, well I'm not going to do a so now it's their decision.
Correct. So there's a lot of psychology interplay. And if you're listening, and for example, you've had a spouse maybe who's just seemingly not interested in money, or your kids or any around you where you're or you can't even bring yourself sometimes to figure out how to spend money more meaningfully. A lot of us think that the solution is found in a spreadsheet, and it's not. For every single person on the show and on my podcast, there is something much deeper going on, and it's easy, in fact,
it's lazy to throw a bunch of numbers. Here's a compound interest chart that's not going to change anybody's life. We've all seen it, we all know what it says. But to understand, for example, what did your parents say around the dinner table? And you will always hear people repeating phrases like we can't afford it. Money doesn't grow on trees. Now imagine hearing that ten thousand times growing up. What you left the door open? Again? Must I pay
the heat? And a laying exactly? I heard that growing constantly, and so so a lot of the folks, whether it be on the show or on my podcast, they they'll do very well. They may get a great job, accumulate money, and they can afford any launch. They can afford a trip, but some of them agonize over it. Why they think, oh, I'm bad, I feel guilty buying this business class trip. But really it often traces back to what they heard from their parents.
H really interesting. Let's talk about married couples that don't have a joint checking account. Two different couples with that's unfathomable.
Really, that surprises you.
Shocking because I remember when I first got married. I'm married thirty years already we had separate checking accounts, and my wife is like, why do you need to hide your money from me? I'm not high. First of all, she was making more than me. And second, I'm not hiding I have this account, you have that account. We
merged everything and never looked back. By the way she takes care of the bills, because when we were younger, when the lights went out, that's how I knew it was time to pay the electric back.
First of all, congratulations on thirty years. That's amazing. Yeah, that's the ultimate part of a rich life. I'm not surprised that so many couples don't have joint accounts. But I'll tell you something that might surprise you. I actually don't have a problem if couples have separate accounts. Here's what's really going on. The people that get into financial trouble in relationships tend to have separate accounts. But it's
not the separate accounts that cause the problem. It's the fact that they simply slid into this relationship as individuals and never sat down and discussed how do we want our money to go. So if they sit down and they go, you know what, I think we prefer to have separate accounts. We can combine as necessary. I say, fantastic. But most people with separate accounts never had that conversation, and that is the.
P And it's not just the separate accounts, it's the separate spending and separate priorities. Where how are we gonna save? If you're buying extra Y or Z, we'll never get out of debt, we'll never buy that house, which was one of the couples motivation.
This is very common, so you know on the podcast, I only speak to couples and you'll get these these patterns. One is an overspender. One is an underspender. I had a particularly fascinating couple. I think it was around episode twenty. He wrote me in all caps, he said, remeet, please help. My wife of twenty one years is about to divorce me because I'm too cheap. I was like click, so I immediately click and respond to him. I brought him
on the show with his wife. I had reviewed all their finances and she was angry, in fact, almost checked out. And she said, I don't understand why, after twenty years of marriage, he doesn't trust me. Our yard is the only unlandscaped yard, she said. He asked me to find mattresses for our two girls. I spent a week creating a spreadsheet, and he said, that's too expensive. The mattresses were something like five hundred bucks. Their net worth, Barry,
can you guess five million dollars? It was around thirteen million dollars. And so when you hear five hundred bucks from mattress is just irrelevant, it's meaningless. It would be easy to simply say, this guy's nuts. Why don't you lose some issues for sure? Yeah, and that's where I start. That's where I go. Let's talk about it non judgmentally. But let's talk about what's going on. Remember she was about to div worse him and so you can listen to the episode at episode twenty and you can hear
how that conversation evolves. It's much deeper than math.
So this raises really interesting question. People reveal very embarrassing, challenging financial habits. How did you get these folks to come clean on them.
On the show? Yeah, we have casting. So casting went out and found particularly interesting situations, and I gave a lot of guidance as to what type of people are especially interesting on my podcast. That was the hardest thing of all is to get people to open up all of their financials. Not only have we been able to do that, now we have them on video, just like on the show. That's very intimate. I'm not sure I
would go on a show like that. What I've learned about the psychology of people appearing on this is you have to understand that most people feel truly law when it comes to money. They don't know who to trust. They don't even know the difference between the word financial advisor and four oh one K like those two they're in different universes to us, but to somebody walking on the street, those words are all jumbled up into the
personal finance or confusing money cloud. And so when they hear somebody who comes and says like, Hey, I'm not going to judge you. If you like a purse, I'm not going to judge you. If you like to eat out, fine, I like a couple of nice things myself. That's cool. Let's talk about what your rich life is and how we can use your money to get there. They are willing to open up anything if they know that they can trust me. Really really intriguing.
So so let's we were talking earlier about budgeting and you know, credit scores and things like that. Let's talk a little bit about people who have more money than they know what to do with because they've spent their whole life working and saving and investing, and suddenly they have a heart hard time pivoting to Hey, I could take that trip, I could buy that sell boat, I
could do what I want. What sort of advice do you give to these folks to allow them to be more comfortable to make that transition.
This is my favorite topic, Barry, because nobody really talks about it, and it's very politically incorrect.
We talk about this in the office all the time. It comes up constantly, partly because we have a lot of wealthy clients, but also partly because we're big believers in as you suggest, you have to use money as a tool to live your richest life. What advice do you give these folks.
One way to think about it is you really have your prime spending years between the ages of forty to sixty. So think about that before forty. Most people don't really have money. After sixty, there may be health issues, whether it be with yourself or somebody in your family, that you have to take care of whatever things happen. So if you accept the idea that your prime space between forty to sixty, what does that mean for you? And
suddenly traveling to certain places becomes an urgency. Eating at a certain restaurant you've always wanted to becomes an urgency. This requires a change. One The idea of shifting from accumulation to deaccumulation is really hard. That's why you know when people retire, they start freaking out because they're not getting the income, even though the interest pays more than they would have ever made.
Right, they're not getting the income and they have a lot more hours in the day to go out and spend money exactly.
The second thing is people often make this jump. They go, well, if I go eat at that restaurant, I don't want to have to become that rich guy who's eating there. I go, you think you're going to trip and fall and eat at a Michelin starred restaurant every single night. It's like, get real. I trust myself enough to know that I can drive a car twice and not have to buy ten of them. I trust myself enough to know Barry's going I don't know about that. He goes,
have you been in my Porsche? Okay, maybe not. I trust myself enough to know that I can eat at a nice restaurant for an anniversary and say wow, I really love that, or that wasn't my thing but it was cool, and not have to do it every night. Many of us have simply never built the skill. And it is a skill of spending money. So we've earned it, we've managed it, but we never actually built the skill of spending it meaningfully. And that's why we have to start almost like we're building a new muscle.
How do you address the guilt that some people feel when they say I'm spending my kids inherness.
I don't. First of all, it's lazy for people. When I ask them what's your rich life? They go, you know what, I'm so simple. I'm just a simple person. I really want to just provide for my kids. I go, that sucks. That's a boring answer, and that's intellectually lazy. So you worked your entire life. Oh and you never modeled building good spending house. You literally accumulated it like Scrooge McDuck, and you're handing it over to your kids
without any modeling. No, that's actually unacceptable to me. I told my parents. My parents had very modest incomes growing up, and we told my mom and dad. I sat down with them because they were nervous about spending money because they had gone through the same thing, and I said, let's look at the numbers. I mean, it very simple for them. And I said, mom and dad, what are you gonna do with this money if you don't start spending it? And they'd never really thought about it. They go,
we'll give it to the kids. I go, we don't want one cent. You taught us how to be educated, you taught us good values. We want you to spend every last cent and maybe even more. And so I put them on a travel budget and I said, you have to spend this much every single month. In fact, they're abroad right now, which I'm so happy about. The guilt of not leaving money for your kids really is
a deeply emotional response. You want to leave them money, please do leave them some, but more importantly, leave them a model of you spending money on the things that matter to you.
Do you get the kids involved? To get the whole family involved. When you're talking with a wealthy family that's having some issues with figuring out how to live their rich life.
The first thing I do is work with the parents. Parents are obsessed with the question about should I give them an allowance? Should I not? I go. Listen. That's like someone saying I want to meet the person of my dreams. What kind of shoelaces should I wear? I go. It's irrelevant. An allowance is not the primary issue. What I ask them is how do you talk about money at home? And they go, we don't talk about it. I go, why not? They go because our parents never
talked about it. I go, Okay, we're gonna start talking about it. Huh. Second, do you ever get excited about it? Most people have never conceived that they can get excited about money. They see it as something negative, something to protect their children from, and so I suggest some gentle things. If their kid is very young, I say you don't bring them over on your lap and say, you know, mommy's going to log into the credit card. This is what allows us to buy the food that we eat.
Can you help me push the button? And then as they get older, empower them to make decisions about a vacation or a dinner out. It's not about an allowance. You can give them an allowance or not. That's not the point. The point is to model health the relationship with money. Huh.
That's really really interesting. We in the office we set up so we've had a robo advisor internally for six seven years already, and we advise parents to set up small accounts for their kids. So they start investing at eight, twelve, fourteen years old. It doesn't have to be a lot of money, but they get to watch it grow. Yes, and it's really like, oh, this is something that I could continue to do on my.
Own, and they talk about it. I had another fascinating couple. They'd been dating for a year. They're in their late thirties. He had started a business and he was paying himself two thousand dollars a month. She was making two hundred thousand dollars per month.
A month she was making one hundred times, so she's making two and a half million. Yes, that's a nice income.
Very nice. In her late thirties. She had more money than she would ever need. And they struggled. That reason they came to me was it was about who's going to pay the check for dinner. So believe it or not, you know, this is a real deal. So I took the call, and what became very clear was I asked her when did you first learn about investing? And you know what she said, Barry, She said age five. Her parents started talking about compound interest age five, which is
what wealthy families tend to do. Then I asked him when did you learn about investing? He goes, I started reading your book about two weeks ago. So imagine a guy who has a thirty year deficit on learning about a concept is important as compound interest. We can't expect everybody to have the same knowledge. We all started different parts in life. For me physical fitness. I wish I learned how to deadlift when I was sixteen. I didn't.
But if you can give your kids an advantage and certainly your partner, it is to talk about money regularly and positively.
So before we get to a favorite question, it is a quick curveball question. Got to ask how did the Netflix deal come about? Did they reach out to you? Did you reach out to them? Was there a third party into mediary? How do you suddenly get a Netflix series?
They reached out to me, remember where I was. They emailed me and it said, you know, would you be interested in sitting down for a meeting? And also should we communicate through you or do you have representation? Two things happened to me. First off, I didn't believe it was from them, so I went up to the from and it said at Netflix dot Com. Was like, wait a second, Oh you could fake that though, That's okay enough, So I was like, this is hit reply. That's when
you know it's real. Yeah, that's a good tip. Well, I'm glad it worked out. The second thing that occurred to me was I don't even know what they meant by representation I'm not a Hollywood guy. I've been running my business for twenty years on the New York base, right, yeah, and then LA Now, but I didn't even know. So I had to learn how do you find an entertainment lawyer. I literally went on Google and searched entertainment lawyer, and I had to learn the entire business, which I'm just
just just starting to grasp. It was a totally fascinating journey. And they had been wanting to do a money show. In fact, every network has been wanting to, right, but money's really hard on TV. It's boring, it's often very depressing. And so I told him point blank, I said, look, I'm interested, but I want to do it my way. I do not want to brate some couple for how much they spend on you know, Reese's pieces, cups. And they said, no, no, no, we want you to do
it your way. They gave me broad creative because very THINGKFU is there gonna be a second season. We will see.
I mean, given that it's top ten trending, you got to think it's interesting. What was the experience like putting this together? Is it's obviously it's not rioting, it's not podcasting, it's very different. You're pretty telligentic. Did you Did you find the transition to video challenging at all?
Definitely? Well, you know, I got a lot of nice comments from people around the world, and I thought to myself, Wow, so all it takes for me to look good is to throw up a multi million dollar crew with the best cameras in the world and make up. And I said, wow, okay, I'll take it. I'll take whatever it takes. You know. What was challenging most of all was the intimacy of going into people's houses. Yeah, Like in the first scene you see me visiting Matt Namani, I meet their family children.
That is as intimate as it gets to be in someone's living room talking about.
Money, looking at their looking literally at their their their statements, their credit.
Nds, watching fights happen in front of me, which I do love a good fight. I mean, I love reality TV myself. But you have to remember, you, No, it gets uncomfortable. Yeah, and it should, right, money is uncomfortable. Yeah, and that's okay. But all this time there's a tight camera on my face and I'm thinking, oh my, like, is this really happening? So to me That's what is the magic of the show is. I don't know anything
about them. All I know is their name and their financials, same as you, and together we go and discover what's going on.
Well, well, it's definitely entertaining. We'll blow through five questions really quickly, starting with other than how to get rich? What else are you streaming on on Netflix or anything else?
I'm watching Indian Matchmaking just because I love it. Come on, my parents had an arranged marriage. You know, I have to watch this. It's you know, it hits home. And on the podcast side, there's a couple. One is there's this interesting podcast about Rolls Royce and it's called ghost Stories. It's about their ghost and it's you know, it's a little bit like marketing. But I just love craftsmanship. I love design, so I get to hear from the design. And you're not sporting a watch. I'm surprised.
I figure that you're a clothes guy.
I'm a hotel guy, and clothes and convenience like personal training and things like that.
Watches doesn't do anything for nah. I'll tell you a funny story about that later. Second question, who your mentors who helped shape your career?
Bj Fogg, one of my professors at Stanford. I learned from him at the Persuasive Technology Lab. He's still a close friend of mine. Jay Abraham taught me a lot about putting my customers and clients at the center of my world, those who are very influential and continue to be.
Let's talk about books. What are some of your favorites. What are you reading right now?
One of my favorites is The Color of Law. That's a book about redlining. It's about race and real estate in this country. Most people have no idea that real estate is deeply, deeply built around race. It's racist. It's a racist institution in our country and has been for a long, long decades. It is built that way.
Do you think people really don't know that inner cities and slums and the highways that will cleave the lower income part of the town right and half?
They have no idea? In your face, you know, you can't miss it unless you've been radicalized to ignore it. So no, they do not know, and they don't want to know. And that's why every time I talk about books, I talk about this book, The Color of Law. It is staggering to learn what happened in our country. And then I'm reading a book right now called Unreasonable Hospitality the manager of eleven Madison Park. Wow, really interesting how they took that restaurant to be top top nion. I
just love a good hospitality, huh. Story.
Last two questions, what sort of advice would you give to a recent college grad who is interested in a career in e. They're financial counseling or investing gosh?
I would say, first off, talk to people who are in the industry and were in the industry and left. Talk to at least fifteen people and find out what's their lifestyle like. Do they get to travel, do they enjoy it, what are they like, what are they not like? Find out if it's for you. And then the second thing I would say is if you are interested in financial counseling, therapy, etc. You're going to learn the technical skills. But the skill that I think is underrepresented when it
comes to money is understanding people. So psychology is absolutely critical and that will set you apart.
Our final question, what do you know about the world of advice and financial planning and counseling that you wish you knew twenty years or so? Ago when you were first getting started.
Education alone is not the answer. I often get people saying, Remit, we should teach your book in high school, and I actually did agree. Educational loan doesn't solve the problems we have. It helps, but there are structural changes that need to
be made, such as building more housing. There are also ways of communicating about money, which is why I did this Netflix show and my podcast to show people that money can actually be fun and joyful and not simply something that you need to do like flossing your teeth.
It doesn't have to be a drag. Tell people where they can find you, your website, the name of the show, and the book and everything else.
The name of the show on Netflix is How to Get Rich. My suggestion is watch the first three minutes and notice the differences in how we talk about money. My podcast, where I speak to couples from all over the economic spectrum, is I Will Teach You to Be Rich, and my book is also called I Will Teach You to Be Rich. Reme.
Thank you so much for coming in today. This was a blast. If you enjoy this conversation, well, be sure and check any of the previous five hundred we've done You can find those at YouTube, iTunes, Spotify, wherever you find your favorite podcasts. You can sign up for my daily reading list at ridults dot com. Follow me on Twitter at rid Holts, Follow all of the fine family of Bloomberg podcasts at podcast I would be remiss if I did not thank the crack team that helps put
these conversations together each week. Samantha Danzinger is my audio engineer at Tika of Al Brown is my project manager. Paris Wald is my producer. Sean Russo is my researcher. I'm Barry Ridolts. You've been listening to Masters in Business on Bloomberg Radio.