It’s good to hear about people’s lives though when talking finances. It reveals a lot about spending habits and their mentality towards money. You can budget all you want for someone but if you don’t change their mentality, it’s for nothing they’ll keep justifying spending that money. Seen it too frequently
With no other person to agree on what’s important you are the sole person that determines where you money goes. Break your own self fulfilling prophecy or stories about money if you want to grow. 😂
Ramit has said in comments on this channel many times that his focus is just on couples. I'm single myself and I'd love to see singles too, given we're more than 30% of the population and actually it's much harder to survive in tgis world financially on your own especially as a woman with gender pay gaps etc
You are the only person, who recommends people who can should spend a little instead of living on nothing and saving everything. Very refreshing take on finances. I love it.
Yea, some finance people out there seem to focus on investing every single penny and it's like "for what?" Can't take the money with you when you're gone.
I had 2 kids in my mid-late 30s. I had a good job at the time and saved up $5000-7,000 for each kid & invested it in treasury bonds because I didn't know much about investing at the time & it was a safe thing. I did this before each was 1 year old. By the time they were ready for college, each had $30,000+. During those years, I became a single mom, had very low income, etc. and never was able to add to that. But doing that one thing was a huge help to them when they needed it.
I love this format because it side-steps that whole reality TV/freak show aspect that can happen with personal finance reviews. I think the knowledge you bring to the table is strong enough to make this format profitable without relying on gimmicks like some other content creators.
I TOTALLY agree! I had to unsubscribe from those rage-bait content creators _cough calebhammer cough_ because the disrespectful titles and thumbnails outweigh the actual content.
@jessitabonita I started watching his content but have never (and probably wont) subscribe because the thought of people seeing I've subscribed is embarrassing😂 the thumbnails feel so stupid and exploitative, and like he doesn't have enough faith in the content not to fall into cheap 2012 thumbnail gimmicks.
As a viewer of your channel who has gotten over the "hump" of moving from paycheck to paycheck I can definitely say it is possible. We went from barely making ends meet in our late 30s to be comfortably on the stretch where we can choose to retire and my wife and I are both 52 now (with 2 teenagers at home). That's despite our incomes not significantly increasing in the last 15 years. We changed our spending habits using rules similar to what you promote. We also learned that once it became reflexive to save/invest the right amount, we were able to maintain a similar lifestyle to where we were before we started being smart with money. We're now at a point where our retirement is assured when we choose to stop working (likely mid-60s) and are more focussed on looking after our kids and future grandkids. I wish I had known these strategies in my 20s as things would be much better today but even starting to be smart with money at around 40 had a major impact on our lives in only a decade. That shows while it's always better to start earlier with good money strategies, it's never too late to start
I have been watching your videos for a while now but finally happened on this one. I have been living as CSP #3. 24% fixed costs, 56% take home going to investments, 20% guilt free spending. This is after my maxed/matched 8% retirement through my job that is paid as a life-long pension. I would feel so smug watching your analyses of CSP's with high fixed costs, but in a way I got my own set down with this CSP #3. I have actually finally ran the numbers (with the most conservative estimates) for a retirement at 60 and even cutting my investments in half and early retirement penalties gives me a retirement gross income more than what I earn now. I thought I was doing the right thing dumping so much in investments, living my comfortable but modest life. I have recalculated my CSP as best I can right now. It's still 27% to investments, but it's 48% guilt free (or 38/10 guilt free/savings (vacations/gifts)). I am still designing my rich life, but you're right. I need to think bigger.
The last couple is similar to me. I put 50% of my gross income into my retirement accounts (I've got a govt job that gives me 2 401K like accounts), I have very low spending on housing and utilities, and pretty much most of my take home pay is disposable. Since I've never been ultra materialistic as I don't really have much to spend on. My only hobbies are games and anime which are pretty cheap. I guess the only things I would spend money on is high quality groceries (I cook myself because I don't like ultra-processed foods and restaurants as they use too much oil for me). I've pretty much lived for the past 8 years saving/investing over 80% of my income. Its only recently that I started to have a higher "guilt free" spending to around 25% of my take home pay (which is up from like 5%), and that's because I started traveling again (which really does reset the way you view money and your baseline costs). Even then, I'm still on track to retire when I'm 50 (or earlier if I become an ex-pat). The last couple honestly gave me some perspective.
Same boat. My wife also has a gov job with 2 "401k" accounts, so we fully fund 3 accounts every year, plus IRAs. We are saving a ton but like you, also started guilt free buying stuff as we have enough savings at this point to not worry much anymore. We basically spend whatever is leftover after funding all the accounts for the year. Nice balance of financial prudence and enjoying life.
I really enjoyed seeing couple #3's finances. It's so easy to focus on the negatives, and the various pathologies people have about money; I'd love to see a deeper dive with people who seem to have figured it out, or mostly figured out. I suspect they might have been saving for a home in a VHCOL city, and over time, realized that they had no problems with renting, and still enjoyed life even with their high savings rate. $1.2k/month on travel is $14k/year - that's still an incredibly generous travel budget. So is the $1k/month guilt-free spending. I don't think they're missing out, or even afraid; I think they just realized they're perfectly happy where they are, and don't see the need to expand their lifestyle.
I can relate to #3 with a little less income. I think you're right. I'm not afraid to spend money, just don't throw it away just for the sake of throwing it away.
My parents basically did this(though they are immigrants and didn't have full advantage of finances here) but they lived well below their means such as not having even purchased a house since I was 7. There were times when money was "tight" but even after moving to an area with low spending and housing costs we still lived frugally and spent most money on vacations or childcare bc my dad became a single dad. If we had lived at our means then 2008 crisis (had to sell that place at a negative) and other issues would have taken us out as well as I would have probably grown up entitled and spoiled. Now I'm in college and dare not to even touch the inheritance money I got from my grandparents, it goes straight into bonds.
@@camille744 Since you are this young, I think you can put your inheritance in to a bit more risky investments like market ETF's, but if you are that risk adverse, then I suppose bonds are fine. Just remember that investment makes more money the earlier you put it in. But good on you for being fiscally responsible.
@@rebeltheharem7028 Very true, that was towards the end of covid when recession was unsure while short-term bonds were at all time yields. Now it's reversing and I'm in the process of moving almost all to stock
There's still a pathology there. They can afford much more on things like housing and transportation. I haven't met anyone who drives a Toyota that wouldn't enjoy a Lexus more, unless the joy is sapped by worrying about money. Hell, that's Lexus' whole brand - Toyota, but better! I've experienced this myself, when in a budget I had 2k/mo that was left over to spend, but I'd usually just invest/save it rather than enjoy it. I realized it was a bit of a problem, when my washer broke down and I was at the store looking for the most discounted replacement, rather than something that would make laundry easier/more enjoyable and wasting hours of free time in the process. And that's despite having already accounted and saved up money for appliance/AC replacement. Sometimes you just need to remind yourself that the most precious commodity is joy and time to experience it and not let counting money (especially money you've already counted) prevent you from that.
This makes me feel very well. I am 75 and have total gross income of about 85k a year. That's from a pension, social security and VA income. My fixed expenses are $1600 a month. No credit card debt, no car payment. I have savings of 106k and add $2k every month. I love watching you and realize how good I am doing.
It doesn’t sound like you are living a rich life, sounds like you are the save everything til you die type. I hope you find time to enjoy the time you have left.
Maybe they want to leave something for family? I think you’re doing great. With 85k guaranteed income you can still save 2k at your rate and enjoy yourself. Just be sure to enjoy some of it and not save it all. ❤
Great job on ensuring you’re secure financially at this stage of your life. I agree with some of the commenters here, Ramit would probably ask, how do you live your “rich life” and not just keep your $?
I like both formats! This format leans more toward the practical side, while your work with couples leans more toward the emotional ties money has. Both are valid and necessary, and I've learned from both. That said, I'd also love to see more content for singles. As a single woman, it's actually been suggested to me a couple of times when I talk about finances that I should get married. Um. A Man is Not a Financial Plan. XD This might be too niche, but it would be awesome to see you interview/look at the CSP of a single person who owns a business (an LLC, not an S-corp). It would be super helpful to see how people handle those taxes.
I can appreciate Ramit not wanting to produce content for single women. Personally I love the niche on couples because the dynamic between two people is an added layer of complexity. As a fellow single woman, @bteplik, I've found both the Financial Feminist and Money Feels podcast to be a nice addition to Ramit in my weekly rotation. Both have a similar "rich life" philosophy to Ramit but may speak more directly to some of the content you mention you're seeking. Cheers!
@@arstorte Agreed on the couples dynamic! I’ve been learning a lot regardless. I just think it would be cool to have both perspectives: a couple trying to mesh and singles trying to figure it out before (or without) meshing. 😊 Ooh thanks for both of those suggestions! I’ll check them out! 🤩
I definitely understand your comments regarding the last couple. My inlaws built a portfolio worth ~$5m while living on basic staples, rarely going out and never travelling. My FiL passed away about 6 years ago and I know he had regrets, My MiL is 90 in a nursing home and always complaining that she's never gone anywhere or done anything. Sure my family and by BiL's will benefit but we would have been much happier if they had left us less and enjoyed life a bit
Same thing happened with some of my relatives. The spouse was understandably angry when she realized how much money her husband actually had when he passed because he never took her on trips and they always drove used cars.
Life is a balance, you want to save enough to enjoy your old age and handle emergencies, but you don't want to hoard money for 0 reason. You have 1 life--we need to enjoy it.
My grandma was hungry as a kid, which pushed her to be always saving. She lived in her own flat (good neighborhood) on a 500 euro pension. She managed to save 150 euros / month. I paid her utilities (150E - which she insisted she will refund me - ok) + she lived off cheap sausages, baloney, rice and pasta along with veggie stews and soups, alltogether wouldnt cost 150E. I sometimes bought her prosciutto, fine stuff. I even ordered a restaurant to bring her a cooked meal every day on my expense, which she canceled. Once I found 20kE in one of her drawers (cash). I got so mad, she could have been robbed and hurt because of it. I asked her is she would like to travel a bit, go to spa, seaside, anywhere so that I can organize it for her. No. Any other wishes. No, nothing. New clothes - oh she is old lady she doesnt need it. OK. I put 19k in her bank account, just so that it isnt in her apartment. I explained it to her that if she needed money she should just go and get it from the bank. She looked at me as if I took that money away for good. Old habits die hard. In 3 months there was another 500E more in the drawer cash pile. So - nothing changed.
They spend 14.400 $ on travelling each year. You can do a lot of travelling with that kind of money. And depending on your hobbies guilt-free-spending of 1500$ a month is more than enough. Spending money on what you like makes you happy not spending money on something you are not really interested in just to have spent that kind of money.
I have an excel file of grocery list cost for Costco, Safeway and 99 Ranch and i used it weekly to compare prices on which place is cheaper to get example meat and we go to that store to get meat. I find that Asian stores like 99 ranch or seafood city are so cheap to buy meat compared to Safeway or Costco. A large pack of chicken cost us $6. We live in Cali btw. So every week I update the cost my excel so I can project how much our grocery will be for the following week. Also this is a chance to see how much these grocery places increase their prices almost each month. I find it a helpful way to maintain the grocery budget as prices gets higher.
@@mnlipat it is dedication But I enjoy doing it also. We currently live on a single income (no kids) while my husband finishes his masters (thankfully no debt, his parents are helping). So we really need to stick to a strict budget. The cost list helps so much! Thank you!
I'm interested in seeing how much your monthly grocery budget is for the two of you. We live in northern California but not near Asian stores (unless we drive over an hour away). On a lucky month, we spend $450/month for groceries. Not eating steak or anything. No kids either
@@nagarpoe no kids here either, we live in the bay. Our monthly grocery is about $450-600. And we buy steak and chicken and pork from Asian store to cook so it can be kinda expensive. But we don’t really eat out to restaurants so we’re kinda ok splurging on good grocery meals!
@@jcabslovesu2 ah ok, we do too much eating out (not fancy but even fast food is crazy expensive) , $450 for grocery is not considered too bad then (we just need to stop spending on eating out) , thank you!
I'm interested in Ramit's take on the love yourself first principle (which I completely agree with!!) when the people you are trying to take care of are not kids but aging parents. For many of us first gen immigrants our parents are in a vulnerable position back home (didn't have investments, some don't own a house or anything else, unable to retire or very poor pensions etc). I feel like I am my parents' retirement. I allocate a monthly amount for them that suspect will only increase with time - my promise to myself is that I won't get into debt to help them but it drastically reduces my ability to invest (I do it but very minimal). Financially supporting my parents is a priority for me and the case is the opposite - they don't have time like children do! Any words of wisdom?!
Just be careful, you don’t want to put your children in the same situation you are in down the line. It’s a delicate balance, and I share all your fears for my situation as well.
Excellent comment! As I’m sure a lot of us first gen immigrants are in the same position as you are, wondering the same thing. Although Ramit might say helping our parents financially could be part of our goal to lead a “rich life” but balancing it without leaving us financially stricken in our own life is the most challenging part. Plus as immigrants, we’re almost expected to do this type of parental assist.
It's hard, but there are lots of efficiencies you can make, like advising them on how best to make use of the money, or sending them a variable amount based on how the stock market affected your portfolio this year and how their needs have changed this year.
It makes no sense to use a 529 when youre in credit card debt. Credit card debt is 15-20% interest. 529 is gaining 5-10%. If youre in a 529 but in credit card debt, you are stealing money from yourself and your kids
This is great! keep this format going forward, maybe add in their professions, goals, big wins, challenges, etc. Basically the highlights of three of your weekly guests with probably a lot less work to produce! Also, you could look at single individuals, students, low vs high cost of living locations, single parents, etc. the possibilities are endelss
Love this financial podcast with just figures, not heavily centered on emotional issues. Hope to see more of these too! Would like to see a breakdown in "Insurance" category. Sometimes looks extremely low, especially for couples that own a home, 2 cars, have at least 1 child (usually more). A single person without children having only 3 months of emergency fund is okay, but a married couple with children need a minimum of 6 months emergency fund. If they have not built that up, then they really need to sign up for Short Term & Long Term Disability Insurances at their employment. Then it becomes OPTIONAL if they want to keep Short/Long Term Disability Insurances once they reach their Emergency Fund goal. (I personally kept them because I wanted an additional layer to tap BEFORE tapping actual Emergency Fund.) Term Life Insurance is even imperative for single people without children; get it while you're in 20's while you are still relatively healthy & can easily afford a large policy. (No, I 'm not an insurance agent, but was a caregiver for 16 years for 3 family members. It's rough! If I'm gone, then who takes care of family then? They must have funds from Life Insurance to pay for all the daily tasks I did for free.)
I am so glad I found your channel. Learning more everyday and can’t wait to apply this asap! Also, I enjoyed this type of content as well as the couples financial breakdown sessions. Thanks, you are the goat 🙌🙌
I am like #3 on your list and am saving towards early retirement. I also have really simple needs and honestly traveling isn't something I care too much about so it's easy for me to save. What am I afraid of? I don't want to work for someone else my entire life and would like quit and take the risk to run my own business full time so that's basically what I am accounting for now. That just sounds so exciting to me. According to my math, if the market stays consistent, I can do this in 4 years (or earlier if the side hustle takes off) at age 45. Can't freaking wait. I don't think being #3 always means there is something to fear
@ 19:42 he’s right. I live in Los Angele. Some houses we saw last year ($720k - $780k) mortgage is $4,400 a month 💀 Our rent is a lot lower than that for the same size of house! Yes rent increases yearly and although we could buy a house, we chose to rent right now till it makes better sense later. We enjoy our guilt free spending 😁
Indeed. I've run so many calculations on rent versus buy, and its only in one case where buy is better than rent. And that's if you are not only going to live in the home for more than 15 years, but that its appreciation is over 8% every year for 15 years straight, mortgage is lower than 5%, and rent increases more than 10% every year (which is very rare, as 10% is the cap in California, and most years, it's less). My only assumption is that you can make a 20% down payment (because if you can't, its always better to rent, in every scenario). I've run the simulations many times as I'm always looking to buy a house...
I love how you show that just because you make MORE money doesn’t mean you’ll know what to do with it. It’s a practice in how you build your life, finding balance and knowing what’s priority for yourself. The last CSP was fascinating and cool to see.
I love how you’re not afraid to call out people who save/invest too much! While that’s definitely an enviable position to be in it’s super important to use money to fund your version of a rich life rather than only your portfolio
I've watched a lot of your videos, as well as other fin auditor channels on here. While I appreciate all the behavioral and backstories to peoples personal finances, this format proves you can reach almost the same conclusions just looking at the numbers. I find this personally more interesting and digestible overall. Keep it up.
I was given a phone allowance. I never had a cell phone bill in my life until I retired early last year. Last time I had a car payment, insurance, maintenance, gas was back in 1995. The company I worked for gave me all of those perks. Including a company credit card that I was able to charge all of my meals to, and cover some of my vacation costs on. I sometimes feel that I was crazy to walk away from that $300k a year salary.
Families will also keep family plans even when the children grow up because the savings can be unreal. A parent who is doing well isn’t going to sweat the extra $25 to keep their adult child on the family plan.
Great episode! Loved the multiple CSPs format and learned something different from each profile. Thanks Ramit for continuing to educate and inspire us to reach our own bigger rich life goals.
Great analysis! My only comment is that for people like #3, besides vacations and coffee, you could suggest that they look at how they want to give back as part of their rich life.
If they have high incomes in Cali they're probably paying close to 50% in taxes, and most of that goes to welfare programs. I'd say that's giving back plenty.
I mean math works the same for single women as everyone else, spend less than you make and invest for retirement. Biggest thing I'd say is don't accidentally get pregnant, nothing ruins finances like an unplanned child.
The one thing I would say about guilt free spending is at some point if you make enough 20% is more money than can reasonably spent by some people separate from other budget items. I would say the vacation fund is some of the guilt free spending. Being able to not save for vacation but just decide to go to Hawaii or skiing in CO because there is a good deal on a spur of a moment is guilt free spending. Some grocery shopping can be guilt free spending say getting high end beef or caviar. Wine can be guilt free spending but be included in a large grocery budget.
This definitely. We make a bit more than couple #3, and 20% of our takehome is close to $6k. There's just no way we can spend that much every month. So what makes more sense for us is putting more in the savings category for vacations, home improvement, gifts, etc. Since really, that is what we would consider guilt-free spending. Like we've given my husband's parents 10k for a home renovation they needed, and I'm giving my parents 9k to remodel our ancestral home's bathrooms.
I concur. Some people just don't care about luxury brand merchandise or displays of wealth, and that's perfectly fine. 2K a month in guilt free spending is pretty good for most people (vacation is guilt free spending). Some people just aren't materialistic and don't care about showing off wealth with luxury goods.
ABOUT HIGH FOOD COSTS: We invest in our health by buying pasture raised eggs, some fish, meat and fresh produce. Avoiding GMO / Round Up sprayed food. I shop 6 different stores for deals. Our food bill, in our 60s, is crazy high. Hundreds on a lower income. Almost nothing needs to go to medicine, although one is diabetic. Better to spend on salmon and berries we enjoy, than medicine.
I am retired now but worked in commercial real estate and finance my whole career. I always did aren’t vs buy analysis when evaluating housing type investments to see if demand would be there for rental or condo units. I do believe that the best way to build wealth over the long term is to eventually buy your own home but agree that in CA the prices are so high that renting makes the most sense right now for most people. You do not want to be “house poor”, meaning that you have a house but you are miserable because you don’t have money for anything else.
Hi, I love your content. I just wanted to add another perspective to your take on the high saving couple. I cannot speak for them, but I also save/invest about 50% of my take-home pay. I live in a small appartment, not so much to save money, but because as a single person I do not want to spend more of my time cleaning it. I live in a university town and the uni is on the other side of the street, so this being Europe, public tranport is fantastic and having a car for one person simply is not worth the hassle. The things I like to spend my time on do not cost much in money terms and when it comes to shopping..well if I go to hell, they are going to force me go shopping all day, since there is no better way to torture me. Whether it is clothes or furniture, I just hate the process, I prefer putting my brain to more interesting stuff, I just hate it and only do it if I must. Combine this with a decently paying IT job and you end up with a 50% investment/saving rate without forcing anything. If something really improves my life, I already spend money on it, since my investment rate is way about my target range anyway. I guess, I'm just weird...
I love this format. This part is what I pay attention to on the podcasts. Seeing other people's CSP helps me with adjusting my own CSP and hearing Ramit's feedback also helps me adjust my CSP.
Really enjoy this style of video. I’m definitely like the third couple who is aggressively investing. My goal is to retire early and also after being laid off during covid, I’ve gone into hyper saving mode knowing I could lose my job at any moment. Great video, thanks!
I was shocked when I ran the buy vs rent in my area. All my life I heard buy a house, same with my husband. We've literally lost out on hundreds of thousands buying rather than renting and investing the difference over the past 16 years. Dang!!!
Thank you so much for the intent behind presenting 3 CSPs from 3 stages early in life. From a young couple to a healthy financial team. Loved Ramit's analysis on their overall financial health and greats tips to apply to our CSP on a day to day. Forever grateful 🙏🏼
I'll admit, once you're familiar with the concepts of Ramit's approach, the content feels awfully familiar. This is a helpful way to see how he would apply those principles to a variety of circumstances, and teaches me to ask better questions about my own. More of these, please!
My CSP is very similar to couple #3. We have been saving aggressively, renting a tiny place, to buy a home in NYC. But the market is so insane that even after all that hustling we still can’t afford a fixer upper in a far out neighborhood in Brooklyn. 😢 Maybe they’re in the same boat.
I really like this format in addition to the weekly Tuesday show. Right amount of background detail: ages, how many children and location, for you to provide guidance and for us as listeners to follow along. Without general location, it's challenging to understand the numbers of your subscribers sometimes.
Yep. South Texas here. Very low cost of living, family of five and we couldn’t make it through the month on $600 for groceries. Just upped it to $800. And even with that upgrade, I still plan meals, read the circular, clip coupons every week for over an hour, to make that budget work. But I’m a SAHM, so I have the time. I would say $800 in California is very diligent. I was in a Newport Beach grocery store a couple years ago and yeah, God bless y’all paying those prices.
@@JenniferBrooks-eq3rn One common thing I've seen from most financial advisors/financial channels is that they are all extremely out of touch with food/grocery prices and the regional price differences on things like milk, meat, etc. due to supply chain issues. I think a lot of them are just so wealthy that a trip to the store doesn't even register to them, they can just throw whatever in the basket and it doesn't effect their bottom line, but a lot of us are being as diligent as possible and it's still a struggle to get out of the store for under $150-200 a week, especially if you have kids.
Parents who prioritize their kids education cost over their retirement investments are hurting their kids anyways. Kids should NOT be your retirement plan!
Couple 3 is either a FIRE couple at its finest, or they're living in a big city/downtown saving to buy a house full cash elsewhere once they're reached a certain amount of net worth. That would explain them trying to make as much money as possible while keeping their expenses as low as possible. That's how I would describe Couple 3 and how their fixed costs are ridiculously low. They also can manage with no cars while spending little on transportation, and that's hard to do in most US states unless you're in a big city or close to everything. That's my prediction on the last one because they're following Dave Ramsey finance.
Love this format, would be great to get a reaction from the couples! Is there a video somewhere on combining couple finances? It’s mentioned a lot but I can’t find one…
New viewer, very nice reminds me of Caleb Hammer without the yelling lol I like the concept and key visuals. Hopefully the algorithm brings me back to one of your videos
LOVE your channel, which I just discovered! ❤❤ In our area (not inner city or high crime), public transportation can be scary. Too often, you get to sit next to people on a bus who talk to themselves 🙉 or act like they fell into a vat of chemicals fresh out of a "special" lab. This is a huge reason *why people don't use public transportation here.*
The last couple reminds me of us. We underspend and invest so much and I have a hard time spending. We do take monthly vacations, but have a little travel burnout recently. I think my rich life is now pointing to buying a home and decorating it. I thoroughly enjoy design and creative home projects.
Once again, another awesome learning video! I love your content and the way you communicate your knowledge! I’m absolutely hooked on your channel, it’s so awesome to see you fixing mistakes for everyday people!
I am the head of household for family of 5 (3 adults and 2 toddlers) and we do track our grocery spending. We are spending 800-900/month depending on what we decide to cook and we have a freezer full of meat (I’m a hunter) which probably saves us probably a few thousand a year in Houston, TX. Grocery costs are insane. We shop at Aldi for about 90% of our groceries and it’s the cheapest available in the metro.
One mistake I made was getting back into debt because I focused too much on paying off debt and less on saving. This time i am on track to pay off my debt by the end of the year and also saving $400 a month and I still have 8% in my 401K per paycheck. I just need to open up a roth IRA but I'm afraid I will fall back again in debt if I take it away from what I save per month.
I love it when people talk about groceries😂 As a mom with Endometriosis on a special diet with a child and husband with eczema. Guess what, everything we use matters.
I follow Rem it's advice and directions because it has been helping me and it's proven and blah blah blah but he's so negative and down about everyone's situation. He's not necessarily wrong but he's not positive and the negativity is starting to cloud out the good stuff for me. I don't think he needs to be only positive, I think that being realistic is the best approach, but the argumentative dialogue he carries on with himself towards his critics or with people's comments he doesn't agree with is getting tiring. I think he's entitled to his perspective but it's reminding me of being in a relationship with someone who is negative and down on everything and it borders being abusive. Like I start questioning all of my decision based on how I think he might tear me down. I'm a single mom and I know Ramit is not a big fan of having kids because they are expensive and he doesn't like how people's priorities get mixed up according to what the individual adult should do for themselves first. I don't disagree with him but until someone has kids of their own, they simply cannot understand the drive to put the kid(s) first. I am doing my best to be smart according to what Ramit preaches and teaches, but it's really getting disheartening for me to keep coming back for more. I know he'll just tell someone like me to get lost and to never comment again and to unfollow him and to disappear from the Internet (how many times now have I listened to him say this type of thing) but if he's trying to be a little funny through sarcasm or over exaggeration, it's coming across mean and judgmental and condescending to me. I am a single mom and there are constantly stupid setbacks that get in the way of my best laid plans. I have been buckling down as hard as I can. And you know what it wasn't that much easier when I wasn't a mom yet, either. I guess it's just getting hard for me to listen and look to someone who never seems happy with anyone else's financial situation. I like Ramit's emphasis on a rich life and what that can mean in specifics for different people, but sometimes I wonder if he can apply having children to that philosophy. Also, believing that one shouldn't have kids until everything is absolutely in order is more about control, and is a very westernized outlook where it's all about the individual. There are other world perspectives that center the society - for instance, having kids is one of humanity's greatest missions. When you look at societies where populations are in decline there are many difficult consequences -economical among them - that societies who still have babies aren't facing. I am not at all saying there shouldn't be serious considerations to having kids or that it's something to take lightly and do willy-nilly, but children are a fact of life and we do need to be smart for them. I agree wholeheartedly with teaching kids from a young age how to make good, informed decisions about money and how to plan and all of that. In some cases, and this is a for instance, when someone has struggled because their own parents didn't set them up well, you want to do better for your kids. He had some example about a disgusting casserole one mother's parent served for dinner and how that mother has and would never make it for her kids, to illustrate that not everything your parents did for you should you model after. I agree! But, the things your parents did that were good, of course you want to emulate and pay forward, and the things they didn't get right or you feel they messed up on you want to not pass on and you want to do better. I've heard someone else sharing, the author of the book The Psychology of Money can't recall his name at this moment, many times how to raise kids and how to address concerns and the goals and dreams and plans parents have for them and it is so much more insightful and inspiring than just how Ramit is down on childcare costs and 529 plans. I totally get his arguments, but my point is that he's demonstrating a lack of empathy because he's not a parent himself and he has no idea what that walk entails. He will probably never be a poor or middle class or struggling parent, and that's great, but I don't think he's being that practical sometimes. I know that he will call me stupid for admitting this, but I almost don't care about what happens to me when I'm older, as long as my kids are going to be okay. My exit plan is to move to a country like Guatemala where $400 feels like $1000. Maybe I'm an idiot. Fine. You don't want your kids facing the world with nothing. I am doing everything I can to build my 401k (I actively put more than the company match) and I contribute a small amount monthly to my Roth IRA and I just want to put more and every time I think I might be able to, something happens. But I'm not touching my kids' savings. I want to convert their savings to 529 accounts but I hear Ramit's voice chastising me and you know what I might be able to put $10/paycheck towards their savings accounts but most of the money has come from gifts for their birthdays or holidays and that's theirs. I think it would be wrong to rob them of that, and maybe you think I am wrong. But the thing in life is that no matter what happens, for all the progress I make, something always happens to set me back again at least a little. I could be really selfish and use their money for my own expenses or retirement, but if I did that and thought okay now the money will flow for me and I'll be able to start building them up again, it's never possible. Look, I will walk my heals straight down to my bones before I get a car payment, but my car is very old and I do not have the cash to pay for a new(used of course) one outright and even taking the little money in my kids' savings wouldn't cover it, wouldn't be enough at all. I'd still be in the hole with a car payment and nothing to leave them. So Ramit can call me selfish and I actually understand his perspective, but no I'm not trying to be their hero or sacrifice myself. I'm trying to learn from my own mistakes, the mistakes I believe my parents made, the mistakes that we read and hear about others, and I'm doing my damnedest to do better. To make it better than what I started with. I work 3 jobs and yes, child care costs are outrageous. But I'm not being selfish for having kids and for leaving a little bit of money along the way for my kids. It's just a little bit and I want so much more for them. Unfortunately life costs and as I continue striving to increase my income, and work really ridiculously hard, I am doing my best and giving everything I have to the future and to the present, in that order. And yes, the stupid debt is the past that haunts and I have to pay for it and it holds me back. The progress I make is not easy but I am proud of it, but life keeps being expensive. I strive for my rich life, and am doing my best to teach my kids about it. I want them to know more and be smarter than I was and I want them to have a better chance. I'll get lost if you want me to, Ramit.
Hi, and thanks for the detailed comment. I don't think you should get lost. I think you're trying to do the best you can. Please know that I've never said having kids is selfish -- not ever. I also don't believe you need to have everything under control when you have kids. I want you to succeed and if you choose to use my material, I'm grateful and I hope you see what I actually say about parents and money.
Lady, you said it right there. My situation is not as tight, but I relate to your perspective. One thing I never see the personal finance folks discuss thoroughly enough is how expensive it is to live in the bottom half of the income distribution. I think it is because they actually don't know what to do, and don't want to sound negative or clueless, which is totally fair. But not super useful for half the population. For instance, your car. Public transport in America just isn't a full solution in so many places, and may never be, no matter how loud we advocate. In my hometown you could take the bus lots of places, but then you simply could not walk the last 200 feet to your destination, because 8 months a year the snow is piled 4 feet high in icy boulders out into the street. And driving a very old car costs more in repairs than a newer one, but if you simply can't scrape together for a newer one, you're stuck tripping from one $500 emergency to the next. I see this a lot in my group of friends. Everybody is 4-7 people on one median income, and no we can't just add another income. My family was able to get our housing costs really low during a windfall of good health, and so we've had the margin to build good savings and escape some of those traps by driving a car that isn't continuously breaking. But our peers that haven't had a run of good luck like us are constantly in the hole, not because of their spending but because they had two visits to ER, or had a family member die and leave them an estate in debt, etc, etc.
The third CSP, @Ramit, you talk about only two reasons for high retirement savings. I would offer a third one that I am personally working through, starting late in life for retirement I need to put more away because compounding interest will not be fast enough for the remainder of my working life.
We go out to eat maybe once a month or less. I prefer to spend that extra money on high quality food at the grocery store. I also consider it “guilt free spending” - eating good food is important to me and feeding my child well is paramount.
I relate to the last one. I could spend more but i enjoy saving and investing more then spending and i have everything i need other than time from work. Hence the planned early retirement goal.
Love these videos, and I'd like to see more. However, they all usually follow the theme of: 1. Fixed costs are way to high 2. Not spending enough disposable income Certainly there are some major odd ball CSPs out there that could be reviewed. I'd like to see those. Thanks for all you and your team do!
I like this format better than actually talking to the people. This cuts right to the chase instead of hearing about peoples childhoods etc.
I love both! 😊
It’s good to hear about people’s lives though when talking finances. It reveals a lot about spending habits and their mentality towards money. You can budget all you want for someone but if you don’t change their mentality, it’s for nothing they’ll keep justifying spending that money. Seen it too frequently
I like the concept of reviewing multiple CSPs in one video. More please!
Agreed this actually makes for a good mini series! Kinda like the cnbc millenial money series.
Yes i just subbed and hope theres more
Oh my God he makes more money than me and he's using more money than me how is that possible
I would like to see more content for a single person that’s not in a relationship.
I think single people just don't apply as much as married couples but I would love to see this too
With no other person to agree on what’s important you are the sole person that determines where you money goes. Break your own self fulfilling prophecy or stories about money if you want to grow. 😂
Ramit has said in comments on this channel many times that his focus is just on couples. I'm single myself and I'd love to see singles too, given we're more than 30% of the population and actually it's much harder to survive in tgis world financially on your own especially as a woman with gender pay gaps etc
Get a girlfriend dude.
@@jjh00 why so she can pay for things?
You are the only person, who recommends people who can should spend a little instead of living on nothing and saving everything. Very refreshing take on finances. I love it.
Thank you
Yea, some finance people out there seem to focus on investing every single penny and it's like "for what?" Can't take the money with you when you're gone.
I had 2 kids in my mid-late 30s. I had a good job at the time and saved up $5000-7,000 for each kid & invested it in treasury bonds because I didn't know much about investing at the time & it was a safe thing. I did this before each was 1 year old. By the time they were ready for college, each had $30,000+. During those years, I became a single mom, had very low income, etc. and never was able to add to that. But doing that one thing was a huge help to them when they needed it.
You did great with what you could because it came from your heart. I'm sure your kids will appreciate it
Wow that's amazing. Hope you the best.
Tossed in my extra bucks to uSMART, banking on 7% interest for my on-hand USD. Let's see the returns!
That’s amazing!!
I love this format! Lets keep it going!
I like too, thanks!
Same!!!!
Agreed. Good content
Same
I agree! I’d love to see more of these
This format is a keeper❤
Totally!!!
I love this format because it side-steps that whole reality TV/freak show aspect that can happen with personal finance reviews.
I think the knowledge you bring to the table is strong enough to make this format profitable without relying on gimmicks like some other content creators.
I TOTALLY agree!
I had to unsubscribe from those rage-bait content creators _cough calebhammer cough_ because the disrespectful titles and thumbnails outweigh the actual content.
@@jessitabonita Same here! I abandoned his content last month because I could no longer ignore how unproductive and exploitative the content was.
Any recs on channels to check out? The clickbaity stuff is irritating me, but I would love more reasonable assessments.
@jessitabonita I started watching his content but have never (and probably wont) subscribe because the thought of people seeing I've subscribed is embarrassing😂 the thumbnails feel so stupid and exploitative, and like he doesn't have enough faith in the content not to fall into cheap 2012 thumbnail gimmicks.
I actually like listening to couples and hear some BS I use myself and reflect on it. Money is not just counting, its emotional.
As a viewer of your channel who has gotten over the "hump" of moving from paycheck to paycheck I can definitely say it is possible. We went from barely making ends meet in our late 30s to be comfortably on the stretch where we can choose to retire and my wife and I are both 52 now (with 2 teenagers at home). That's despite our incomes not significantly increasing in the last 15 years.
We changed our spending habits using rules similar to what you promote. We also learned that once it became reflexive to save/invest the right amount, we were able to maintain a similar lifestyle to where we were before we started being smart with money. We're now at a point where our retirement is assured when we choose to stop working (likely mid-60s) and are more focussed on looking after our kids and future grandkids.
I wish I had known these strategies in my 20s as things would be much better today but even starting to be smart with money at around 40 had a major impact on our lives in only a decade. That shows while it's always better to start earlier with good money strategies, it's never too late to start
I have been watching your videos for a while now but finally happened on this one. I have been living as CSP #3. 24% fixed costs, 56% take home going to investments, 20% guilt free spending. This is after my maxed/matched 8% retirement through my job that is paid as a life-long pension. I would feel so smug watching your analyses of CSP's with high fixed costs, but in a way I got my own set down with this CSP #3. I have actually finally ran the numbers (with the most conservative estimates) for a retirement at 60 and even cutting my investments in half and early retirement penalties gives me a retirement gross income more than what I earn now. I thought I was doing the right thing dumping so much in investments, living my comfortable but modest life. I have recalculated my CSP as best I can right now. It's still 27% to investments, but it's 48% guilt free (or 38/10 guilt free/savings (vacations/gifts)). I am still designing my rich life, but you're right. I need to think bigger.
The last couple is similar to me. I put 50% of my gross income into my retirement accounts (I've got a govt job that gives me 2 401K like accounts), I have very low spending on housing and utilities, and pretty much most of my take home pay is disposable. Since I've never been ultra materialistic as I don't really have much to spend on. My only hobbies are games and anime which are pretty cheap. I guess the only things I would spend money on is high quality groceries (I cook myself because I don't like ultra-processed foods and restaurants as they use too much oil for me).
I've pretty much lived for the past 8 years saving/investing over 80% of my income.
Its only recently that I started to have a higher "guilt free" spending to around 25% of my take home pay (which is up from like 5%), and that's because I started traveling again (which really does reset the way you view money and your baseline costs).
Even then, I'm still on track to retire when I'm 50 (or earlier if I become an ex-pat).
The last couple honestly gave me some perspective.
Same boat. My wife also has a gov job with 2 "401k" accounts, so we fully fund 3 accounts every year, plus IRAs. We are saving a ton but like you, also started guilt free buying stuff as we have enough savings at this point to not worry much anymore. We basically spend whatever is leftover after funding all the accounts for the year. Nice balance of financial prudence and enjoying life.
I really enjoyed seeing couple #3's finances. It's so easy to focus on the negatives, and the various pathologies people have about money; I'd love to see a deeper dive with people who seem to have figured it out, or mostly figured out. I suspect they might have been saving for a home in a VHCOL city, and over time, realized that they had no problems with renting, and still enjoyed life even with their high savings rate. $1.2k/month on travel is $14k/year - that's still an incredibly generous travel budget. So is the $1k/month guilt-free spending. I don't think they're missing out, or even afraid; I think they just realized they're perfectly happy where they are, and don't see the need to expand their lifestyle.
I can relate to #3 with a little less income. I think you're right. I'm not afraid to spend money, just don't throw it away just for the sake of throwing it away.
My parents basically did this(though they are immigrants and didn't have full advantage of finances here) but they lived well below their means such as not having even purchased a house since I was 7. There were times when money was "tight" but even after moving to an area with low spending and housing costs we still lived frugally and spent most money on vacations or childcare bc my dad became a single dad. If we had lived at our means then 2008 crisis (had to sell that place at a negative) and other issues would have taken us out as well as I would have probably grown up entitled and spoiled. Now I'm in college and dare not to even touch the inheritance money I got from my grandparents, it goes straight into bonds.
@@camille744 Since you are this young, I think you can put your inheritance in to a bit more risky investments like market ETF's, but if you are that risk adverse, then I suppose bonds are fine. Just remember that investment makes more money the earlier you put it in.
But good on you for being fiscally responsible.
@@rebeltheharem7028 Very true, that was towards the end of covid when recession was unsure while short-term bonds were at all time yields. Now it's reversing and I'm in the process of moving almost all to stock
There's still a pathology there. They can afford much more on things like housing and transportation. I haven't met anyone who drives a Toyota that wouldn't enjoy a Lexus more, unless the joy is sapped by worrying about money. Hell, that's Lexus' whole brand - Toyota, but better!
I've experienced this myself, when in a budget I had 2k/mo that was left over to spend, but I'd usually just invest/save it rather than enjoy it. I realized it was a bit of a problem, when my washer broke down and I was at the store looking for the most discounted replacement, rather than something that would make laundry easier/more enjoyable and wasting hours of free time in the process. And that's despite having already accounted and saved up money for appliance/AC replacement.
Sometimes you just need to remind yourself that the most precious commodity is joy and time to experience it and not let counting money (especially money you've already counted) prevent you from that.
This makes me feel very well. I am 75 and have total gross income of about 85k a year. That's from a pension, social security and VA income. My fixed expenses are $1600 a month. No credit card debt, no car payment. I have savings of 106k and add $2k every month. I love watching you and realize how good I am doing.
Given how secure your income is and your age, I think Ramit might tell you to save less and spend more. Go on trips, or do whatever you want!
Make sure you are living your Rich Life now.
It doesn’t sound like you are living a rich life, sounds like you are the save everything til you die type. I hope you find time to enjoy the time you have left.
Maybe they want to leave something for family? I think you’re doing great. With 85k guaranteed income you can still save 2k at your rate and enjoy yourself. Just be sure to enjoy some of it and not save it all. ❤
Great job on ensuring you’re secure financially at this stage of your life. I agree with some of the commenters here, Ramit would probably ask, how do you live your “rich life” and not just keep your $?
Please do this every week! It would be awesome
You should do more of these
I like both formats! This format leans more toward the practical side, while your work with couples leans more toward the emotional ties money has. Both are valid and necessary, and I've learned from both.
That said, I'd also love to see more content for singles. As a single woman, it's actually been suggested to me a couple of times when I talk about finances that I should get married. Um. A Man is Not a Financial Plan. XD
This might be too niche, but it would be awesome to see you interview/look at the CSP of a single person who owns a business (an LLC, not an S-corp). It would be super helpful to see how people handle those taxes.
I can appreciate Ramit not wanting to produce content for single women. Personally I love the niche on couples because the dynamic between two people is an added layer of complexity.
As a fellow single woman, @bteplik, I've found both the Financial Feminist and Money Feels podcast to be a nice addition to Ramit in my weekly rotation. Both have a similar "rich life" philosophy to Ramit but may speak more directly to some of the content you mention you're seeking. Cheers!
@@arstorte Agreed on the couples dynamic! I’ve been learning a lot regardless. I just think it would be cool to have both perspectives: a couple trying to mesh and singles trying to figure it out before (or without) meshing. 😊
Ooh thanks for both of those suggestions! I’ll check them out! 🤩
Love this! Love the visuals, the concise comments, and the targeted advice.
I definitely understand your comments regarding the last couple. My inlaws built a portfolio worth ~$5m while living on basic staples, rarely going out and never travelling. My FiL passed away about 6 years ago and I know he had regrets, My MiL is 90 in a nursing home and always complaining that she's never gone anywhere or done anything. Sure my family and by BiL's will benefit but we would have been much happier if they had left us less and enjoyed life a bit
Same thing happened with some of my relatives. The spouse was understandably angry when she realized how much money her husband actually had when he passed because he never took her on trips and they always drove used cars.
Life is a balance, you want to save enough to enjoy your old age and handle emergencies, but you don't want to hoard money for 0 reason. You have 1 life--we need to enjoy it.
My grandma was hungry as a kid, which pushed her to be always saving.
She lived in her own flat (good neighborhood) on a 500 euro pension. She managed to save 150 euros / month.
I paid her utilities (150E - which she insisted she will refund me - ok) + she lived off cheap sausages, baloney, rice and pasta along with veggie stews and soups, alltogether wouldnt cost 150E. I sometimes bought her prosciutto, fine stuff. I even ordered a restaurant to bring her a cooked meal every day on my expense, which she canceled.
Once I found 20kE in one of her drawers (cash). I got so mad, she could have been robbed and hurt because of it. I asked her is she would like to travel a bit, go to spa, seaside, anywhere so that I can organize it for her. No. Any other wishes. No, nothing. New clothes - oh she is old lady she doesnt need it. OK. I put 19k in her bank account, just so that it isnt in her apartment. I explained it to her that if she needed money she should just go and get it from the bank. She looked at me as if I took that money away for good. Old habits die hard. In 3 months there was another 500E more in the drawer cash pile. So - nothing changed.
They spend 14.400 $ on travelling each year. You can do a lot of travelling with that kind of money. And depending on your hobbies guilt-free-spending of 1500$ a month is more than enough. Spending money on what you like makes you happy not spending money on something you are not really interested in just to have spent that kind of money.
I have an excel file of grocery list cost for Costco, Safeway and 99 Ranch and i used it weekly to compare prices on which place is cheaper to get example meat and we go to that store to get meat. I find that Asian stores like 99 ranch or seafood city are so cheap to buy meat compared to Safeway or Costco. A large pack of chicken cost us $6. We live in Cali btw. So every week I update the cost my excel so I can project how much our grocery will be for the following week. Also this is a chance to see how much these grocery places increase their prices almost each month. I find it a helpful way to maintain the grocery budget as prices gets higher.
That is some serious dedication! Nice job on actually keeping track
@@mnlipat it is dedication But I enjoy doing it also. We currently live on a single income (no kids) while my husband finishes his masters (thankfully no debt, his parents are helping). So we really need to stick to a strict budget. The cost list helps so much! Thank you!
I'm interested in seeing how much your monthly grocery budget is for the two of you. We live in northern California but not near Asian stores (unless we drive over an hour away). On a lucky month, we spend $450/month for groceries. Not eating steak or anything. No kids either
@@nagarpoe no kids here either, we live in the bay. Our monthly grocery is about $450-600. And we buy steak and chicken and pork from Asian store to cook so it can be kinda expensive. But we don’t really eat out to restaurants so we’re kinda ok splurging on good grocery meals!
@@jcabslovesu2 ah ok, we do too much eating out (not fancy but even fast food is crazy expensive) , $450 for grocery is not considered too bad then (we just need to stop spending on eating out) , thank you!
I always take a little tidbit from each CSP analysis 😮. Keep doing this format!
30 seconds in, and I already love the editing in this video. Great job video production team!
I'm interested in Ramit's take on the love yourself first principle (which I completely agree with!!) when the people you are trying to take care of are not kids but aging parents. For many of us first gen immigrants our parents are in a vulnerable position back home (didn't have investments, some don't own a house or anything else, unable to retire or very poor pensions etc). I feel like I am my parents' retirement. I allocate a monthly amount for them that suspect will only increase with time - my promise to myself is that I won't get into debt to help them but it drastically reduces my ability to invest (I do it but very minimal). Financially supporting my parents is a priority for me and the case is the opposite - they don't have time like children do! Any words of wisdom?!
Just be careful, you don’t want to put your children in the same situation you are in down the line. It’s a delicate balance, and I share all your fears for my situation as well.
Excellent comment! As I’m sure a lot of us first gen immigrants are in the same position as you are, wondering the same thing. Although Ramit might say helping our parents financially could be part of our goal to lead a “rich life” but balancing it without leaving us financially stricken in our own life is the most challenging part. Plus as immigrants, we’re almost expected to do this type of parental assist.
Yes great question. I’m in the same position.
It's hard, but there are lots of efficiencies you can make, like advising them on how best to make use of the money, or sending them a variable amount based on how the stock market affected your portfolio this year and how their needs have changed this year.
It makes no sense to use a 529 when youre in credit card debt. Credit card debt is 15-20% interest. 529 is gaining 5-10%. If youre in a 529 but in credit card debt, you are stealing money from yourself and your kids
This is great! keep this format going forward, maybe add in their professions, goals, big wins, challenges, etc. Basically the highlights of three of your weekly guests with probably a lot less work to produce! Also, you could look at single individuals, students, low vs high cost of living locations, single parents, etc. the possibilities are endelss
The factory metaphor about continuing to always invest to avoid rusty machines inspired me! Thank you. So true.
Ramit, I loved this! The CSP is my favorite part of the conversations you have on your show, so keep going!
Love this financial podcast with just figures, not heavily centered on emotional issues. Hope to see more of these too!
Would like to see a breakdown in "Insurance" category. Sometimes looks extremely low, especially for couples that own a home, 2 cars, have at least 1 child (usually more). A single person without children having only 3 months of emergency fund is okay, but a married couple with children need a minimum of 6 months emergency fund. If they have not built that up, then they really need to sign up for Short Term & Long Term Disability Insurances at their employment. Then it becomes OPTIONAL if they want to keep Short/Long Term Disability Insurances once they reach their Emergency Fund goal. (I personally kept them because I wanted an additional layer to tap BEFORE tapping actual Emergency Fund.) Term Life Insurance is even imperative for single people without children; get it while you're in 20's while you are still relatively healthy & can easily afford a large policy. (No, I 'm not an insurance agent, but was a caregiver for 16 years for 3 family members. It's rough! If I'm gone, then who takes care of family then? They must have funds from Life Insurance to pay for all the daily tasks I did for free.)
I like this format much better than the longer video interviews!
I am so glad I found your channel. Learning more everyday and can’t wait to apply this asap! Also, I enjoyed this type of content as well as the couples financial breakdown sessions. Thanks, you are the goat 🙌🙌
I am like #3 on your list and am saving towards early retirement. I also have really simple needs and honestly traveling isn't something I care too much about so it's easy for me to save. What am I afraid of? I don't want to work for someone else my entire life and would like quit and take the risk to run my own business full time so that's basically what I am accounting for now. That just sounds so exciting to me. According to my math, if the market stays consistent, I can do this in 4 years (or earlier if the side hustle takes off) at age 45. Can't freaking wait. I don't think being #3 always means there is something to fear
@ 19:42 he’s right. I live in Los Angele. Some houses we saw last year ($720k - $780k) mortgage is $4,400 a month 💀
Our rent is a lot lower than that for the same size of house!
Yes rent increases yearly and although we could buy a house, we chose to rent right now till it makes better sense later. We enjoy our guilt free spending 😁
Indeed. I've run so many calculations on rent versus buy, and its only in one case where buy is better than rent. And that's if you are not only going to live in the home for more than 15 years, but that its appreciation is over 8% every year for 15 years straight, mortgage is lower than 5%, and rent increases more than 10% every year (which is very rare, as 10% is the cap in California, and most years, it's less). My only assumption is that you can make a 20% down payment (because if you can't, its always better to rent, in every scenario).
I've run the simulations many times as I'm always looking to buy a house...
Love this format it's so good!!!!! We need more of this Ramit!!!!
Couple 3 is killing it. I want to be them 😩😩
I love how you show that just because you make MORE money doesn’t mean you’ll know what to do with it. It’s a practice in how you build your life, finding balance and knowing what’s priority for yourself. The last CSP was fascinating and cool to see.
I love how you’re not afraid to call out people who save/invest too much! While that’s definitely an enviable position to be in it’s super important to use money to fund your version of a rich life rather than only your portfolio
I've watched a lot of your videos, as well as other fin auditor channels on here. While I appreciate all the behavioral and backstories to peoples personal finances, this format proves you can reach almost the same conclusions just looking at the numbers. I find this personally more interesting and digestible overall. Keep it up.
Cell phones could be paid for by employers, depending on their jobs. Love this video format! 😊
My company offers it, but that would mean they owe all the data, all your personal stuff, etc.
I was given a phone allowance. I never had a cell phone bill in my life until I retired early last year. Last time I had a car payment, insurance, maintenance, gas was back in 1995. The company I worked for gave me all of those perks. Including a company credit card that I was able to charge all of my meals to, and cover some of my vacation costs on. I sometimes feel that I was crazy to walk away from that $300k a year salary.
Families will also keep family plans even when the children grow up because the savings can be unreal. A parent who is doing well isn’t going to sweat the extra $25 to keep their adult child on the family plan.
@@buildingbuildercip8292omg where did you work?
Great episode! Loved the multiple CSPs format and learned something different from each profile. Thanks Ramit for continuing to educate and inspire us to reach our own bigger rich life goals.
Great analysis! My only comment is that for people like #3, besides vacations and coffee, you could suggest that they look at how they want to give back as part of their rich life.
If they have high incomes in Cali they're probably paying close to 50% in taxes, and most of that goes to welfare programs. I'd say that's giving back plenty.
This is fantastic. Keep these types of content coming!
Single women could do with your help & guidance Ramit! 🙏 just a suggestion for future content from a self employed single girl
I mean math works the same for single women as everyone else, spend less than you make and invest for retirement. Biggest thing I'd say is don't accidentally get pregnant, nothing ruins finances like an unplanned child.
@@woboznz Fine go on thinking of yourself as a perpetual victim, I'm sure you'll have a happy and fulfilling life.
It’s great how much you can extrapolate based on the spending/saving patterns alone. Great video. Would love seeing more.
The one thing I would say about guilt free spending is at some point if you make enough 20% is more money than can reasonably spent by some people separate from other budget items. I would say the vacation fund is some of the guilt free spending. Being able to not save for vacation but just decide to go to Hawaii or skiing in CO because there is a good deal on a spur of a moment is guilt free spending. Some grocery shopping can be guilt free spending say getting high end beef or caviar. Wine can be guilt free spending but be included in a large grocery budget.
This definitely. We make a bit more than couple #3, and 20% of our takehome is close to $6k. There's just no way we can spend that much every month. So what makes more sense for us is putting more in the savings category for vacations, home improvement, gifts, etc. Since really, that is what we would consider guilt-free spending. Like we've given my husband's parents 10k for a home renovation they needed, and I'm giving my parents 9k to remodel our ancestral home's bathrooms.
I concur. Some people just don't care about luxury brand merchandise or displays of wealth, and that's perfectly fine. 2K a month in guilt free spending is pretty good for most people (vacation is guilt free spending).
Some people just aren't materialistic and don't care about showing off wealth with luxury goods.
I really enjoyed watching you analyze each of these couple’s income. Great content, thanks Ramit!
ABOUT HIGH FOOD COSTS:
We invest in our health by buying pasture raised eggs, some fish, meat and fresh produce. Avoiding GMO / Round Up sprayed food. I shop 6 different stores for deals. Our food bill, in our 60s, is crazy high. Hundreds on a lower income. Almost nothing needs to go to medicine, although one is diabetic.
Better to spend on salmon and berries we enjoy, than medicine.
I love this video. Simple and straightforward.
Glad you like it! Thanks for watching
I like this format. The main videos I sometime want more details on spending
Love this format! It’s a lot of fun to watch 😊
Sure is! Nice to see how others are spending.
Really love this video, it’s a great format and easy to understand.
I am retired now but worked in commercial real estate and finance my whole career. I always did aren’t vs buy analysis when evaluating housing type investments to see if demand would be there for rental or condo units. I do believe that the best way to build wealth over the long term is to eventually buy your own home but agree that in CA the prices are so high that renting makes the most sense right now for most people. You do not want to be “house poor”, meaning that you have a house but you are miserable because you don’t have money for anything else.
Hi, I love your content. I just wanted to add another perspective to your take on the high saving couple. I cannot speak for them, but I also save/invest about 50% of my take-home pay. I live in a small appartment, not so much to save money, but because as a single person I do not want to spend more of my time cleaning it. I live in a university town and the uni is on the other side of the street, so this being Europe, public tranport is fantastic and having a car for one person simply is not worth the hassle. The things I like to spend my time on do not cost much in money terms and when it comes to shopping..well if I go to hell, they are going to force me go shopping all day, since there is no better way to torture me. Whether it is clothes or furniture, I just hate the process, I prefer putting my brain to more interesting stuff, I just hate it and only do it if I must. Combine this with a decently paying IT job and you end up with a 50% investment/saving rate without forcing anything. If something really improves my life, I already spend money on it, since my investment rate is way about my target range anyway. I guess, I'm just weird...
I love this format. This part is what I pay attention to on the podcasts. Seeing other people's CSP helps me with adjusting my own CSP and hearing Ramit's feedback also helps me adjust my CSP.
Thank you for calling out the new truck/SUV debt trap that so many people fall into.
Really enjoy this style of video. I’m definitely like the third couple who is aggressively investing. My goal is to retire early and also after being laid off during covid, I’ve gone into hyper saving mode knowing I could lose my job at any moment. Great video, thanks!
I enjoyed watching this so much! Looking forward to seeing more couples.
Love this! Would love to see this as a monthly series! I think every week will be too much.
Outside of the great analysis, you are hilarious. Was cracking up on some of the commentary
Looooved this !! Especially the last segment
The way you teach along with the book Die with Zero have really shifted my money habits which has allowed me to spend more consciously
I was shocked when I ran the buy vs rent in my area. All my life I heard buy a house, same with my husband. We've literally lost out on hundreds of thousands buying rather than renting and investing the difference over the past 16 years. Dang!!!
16 years is 2008. If you bought at the bottom, your house might be a vastly better move than doing the same now.
Thank you so much for the intent behind presenting 3 CSPs from 3 stages early in life. From a young couple to a healthy financial team. Loved Ramit's analysis on their overall financial health and greats tips to apply to our CSP on a day to day. Forever grateful 🙏🏼
Envy aside, the last couple really validates what youve been saying about owning vs renting a home.
Loved this. Would love to see more.
Do more of these videos too! I like them all 😊
I love this. Way better than other audits... You know who I'm talking about. You're the OG Ramit!
I hate the tone of other finance reviews - it feels so gross and exploitative on other channels
This is great, keep this format in the mix
I'll admit, once you're familiar with the concepts of Ramit's approach, the content feels awfully familiar. This is a helpful way to see how he would apply those principles to a variety of circumstances, and teaches me to ask better questions about my own. More of these, please!
My CSP is very similar to couple #3. We have been saving aggressively, renting a tiny place, to buy a home in NYC. But the market is so insane that even after all that hustling we still can’t afford a fixer upper in a far out neighborhood in Brooklyn. 😢 Maybe they’re in the same boat.
I really like this format in addition to the weekly Tuesday show. Right amount of background detail: ages, how many children and location, for you to provide guidance and for us as listeners to follow along. Without general location, it's challenging to understand the numbers of your subscribers sometimes.
800 groceries for a family of 4 in cali sounds like theyre being dilligent
Yep. South Texas here. Very low cost of living, family of five and we couldn’t make it through the month on $600 for groceries. Just upped it to $800. And even with that upgrade, I still plan meals, read the circular, clip coupons every week for over an hour, to make that budget work. But I’m a SAHM, so I have the time. I would say $800 in California is very diligent. I was in a Newport Beach grocery store a couple years ago and yeah, God bless y’all paying those prices.
Or lying
@@JenniferBrooks-eq3rn One common thing I've seen from most financial advisors/financial channels is that they are all extremely out of touch with food/grocery prices and the regional price differences on things like milk, meat, etc. due to supply chain issues. I think a lot of them are just so wealthy that a trip to the store doesn't even register to them, they can just throw whatever in the basket and it doesn't effect their bottom line, but a lot of us are being as diligent as possible and it's still a struggle to get out of the store for under $150-200 a week, especially if you have kids.
More segments of analyzing finances like this please!
yes, this is a great format! love it
Parents who prioritize their kids education cost over their retirement investments are hurting their kids anyways. Kids should NOT be your retirement plan!
Couple 3 is either a FIRE couple at its finest, or they're living in a big city/downtown saving to buy a house full cash elsewhere once they're reached a certain amount of net worth. That would explain them trying to make as much money as possible while keeping their expenses as low as possible. That's how I would describe Couple 3 and how their fixed costs are ridiculously low. They also can manage with no cars while spending little on transportation, and that's hard to do in most US states unless you're in a big city or close to everything. That's my prediction on the last one because they're following Dave Ramsey finance.
Love this format, would be great to get a reaction from the couples!
Is there a video somewhere on combining couple finances? It’s mentioned a lot but I can’t find one…
He uploaded it 2 weeks ago
New viewer, very nice reminds me of Caleb Hammer without the yelling lol I like the concept and key visuals. Hopefully the algorithm brings me back to one of your videos
More of this!!!! So so good
I love this type of videos from you. Please make more like this!
LOVE your channel, which I just discovered! ❤❤ In our area (not inner city or high crime), public transportation can be scary. Too often, you get to sit next to people on a bus who talk to themselves 🙉 or act like they fell into a vat of chemicals fresh out of a "special" lab. This is a huge reason *why people don't use public transportation here.*
The last couple reminds me of us. We underspend and invest so much and I have a hard time spending. We do take monthly vacations, but have a little travel burnout recently. I think my rich life is now pointing to buying a home and decorating it. I thoroughly enjoy design and creative home projects.
Once again, another awesome learning video! I love your content and the way you communicate your knowledge! I’m absolutely hooked on your channel, it’s so awesome to see you fixing mistakes for everyday people!
omg love this video--love seeing the numbers and seeing different people's spending and a solution to their Rich Life! Fav video!
I am the head of household for family of 5 (3 adults and 2 toddlers) and we do track our grocery spending. We are spending 800-900/month depending on what we decide to cook and we have a freezer full of meat (I’m a hunter) which probably saves us probably a few thousand a year in Houston, TX. Grocery costs are insane. We shop at Aldi for about 90% of our groceries and it’s the cheapest available in the metro.
One mistake I made was getting back into debt because I focused too much on paying off debt and less on saving. This time i am on track to pay off my debt by the end of the year and also saving $400 a month and I still have 8% in my 401K per paycheck. I just need to open up a roth IRA but I'm afraid I will fall back again in debt if I take it away from what I save per month.
Like Ramit says in this video, it's ok to save/invest just a little while you attack debt. You can open a Roth IRA as a debt-free gift to you!
I'm gonna need a video of Ramit's truck rant!!!
Food tracking is def a weakness of mine!
I love it when people talk about groceries😂 As a mom with Endometriosis on a special diet with a child and husband with eczema. Guess what, everything we use matters.
More videos like this please!!!!!
Really great video Ramit! Enjoy it and I would love more of this content
I love this idea!! Great video Ramit!
This was fun to watch!
Do this every single week please
Love the last couple , they sleep well at night.
I was couple 3 and now an older version of them. I was able to retire early as a multimillionaire. They’re definitely doing great.
I follow Rem it's advice and directions because it has been helping me and it's proven and blah blah blah but he's so negative and down about everyone's situation. He's not necessarily wrong but he's not positive and the negativity is starting to cloud out the good stuff for me. I don't think he needs to be only positive, I think that being realistic is the best approach, but the argumentative dialogue he carries on with himself towards his critics or with people's comments he doesn't agree with is getting tiring. I think he's entitled to his perspective but it's reminding me of being in a relationship with someone who is negative and down on everything and it borders being abusive. Like I start questioning all of my decision based on how I think he might tear me down.
I'm a single mom and I know Ramit is not a big fan of having kids because they are expensive and he doesn't like how people's priorities get mixed up according to what the individual adult should do for themselves first. I don't disagree with him but until someone has kids of their own, they simply cannot understand the drive to put the kid(s) first. I am doing my best to be smart according to what Ramit preaches and teaches, but it's really getting disheartening for me to keep coming back for more. I know he'll just tell someone like me to get lost and to never comment again and to unfollow him and to disappear from the Internet (how many times now have I listened to him say this type of thing) but if he's trying to be a little funny through sarcasm or over exaggeration, it's coming across mean and judgmental and condescending to me.
I am a single mom and there are constantly stupid setbacks that get in the way of my best laid plans. I have been buckling down as hard as I can. And you know what it wasn't that much easier when I wasn't a mom yet, either. I guess it's just getting hard for me to listen and look to someone who never seems happy with anyone else's financial situation.
I like Ramit's emphasis on a rich life and what that can mean in specifics for different people, but sometimes I wonder if he can apply having children to that philosophy. Also, believing that one shouldn't have kids until everything is absolutely in order is more about control, and is a very westernized outlook where it's all about the individual. There are other world perspectives that center the society - for instance, having kids is one of humanity's greatest missions. When you look at societies where populations are in decline there are many difficult consequences -economical among them - that societies who still have babies aren't facing. I am not at all saying there shouldn't be serious considerations to having kids or that it's something to take lightly and do willy-nilly, but children are a fact of life and we do need to be smart for them. I agree wholeheartedly with teaching kids from a young age how to make good, informed decisions about money and how to plan and all of that. In some cases, and this is a for instance, when someone has struggled because their own parents didn't set them up well, you want to do better for your kids. He had some example about a disgusting casserole one mother's parent served for dinner and how that mother has and would never make it for her kids, to illustrate that not everything your parents did for you should you model after. I agree! But, the things your parents did that were good, of course you want to emulate and pay forward, and the things they didn't get right or you feel they messed up on you want to not pass on and you want to do better.
I've heard someone else sharing, the author of the book The Psychology of Money can't recall his name at this moment, many times how to raise kids and how to address concerns and the goals and dreams and plans parents have for them and it is so much more insightful and inspiring than just how Ramit is down on childcare costs and 529 plans. I totally get his arguments, but my point is that he's demonstrating a lack of empathy because he's not a parent himself and he has no idea what that walk entails. He will probably never be a poor or middle class or struggling parent, and that's great, but I don't think he's being that practical sometimes. I know that he will call me stupid for admitting this, but I almost don't care about what happens to me when I'm older, as long as my kids are going to be okay. My exit plan is to move to a country like Guatemala where $400 feels like $1000. Maybe I'm an idiot. Fine. You don't want your kids facing the world with nothing. I am doing everything I can to build my 401k (I actively put more than the company match) and I contribute a small amount monthly to my Roth IRA and I just want to put more and every time I think I might be able to, something happens. But I'm not touching my kids' savings. I want to convert their savings to 529 accounts but I hear Ramit's voice chastising me and you know what I might be able to put $10/paycheck towards their savings accounts but most of the money has come from gifts for their birthdays or holidays and that's theirs. I think it would be wrong to rob them of that, and maybe you think I am wrong. But the thing in life is that no matter what happens, for all the progress I make, something always happens to set me back again at least a little. I could be really selfish and use their money for my own expenses or retirement, but if I did that and thought okay now the money will flow for me and I'll be able to start building them up again, it's never possible. Look, I will walk my heals straight down to my bones before I get a car payment, but my car is very old and I do not have the cash to pay for a new(used of course) one outright and even taking the little money in my kids' savings wouldn't cover it, wouldn't be enough at all. I'd still be in the hole with a car payment and nothing to leave them.
So Ramit can call me selfish and I actually understand his perspective, but no I'm not trying to be their hero or sacrifice myself. I'm trying to learn from my own mistakes, the mistakes I believe my parents made, the mistakes that we read and hear about others, and I'm doing my damnedest to do better. To make it better than what I started with. I work 3 jobs and yes, child care costs are outrageous. But I'm not being selfish for having kids and for leaving a little bit of money along the way for my kids. It's just a little bit and I want so much more for them. Unfortunately life costs and as I continue striving to increase my income, and work really ridiculously hard, I am doing my best and giving everything I have to the future and to the present, in that order. And yes, the stupid debt is the past that haunts and I have to pay for it and it holds me back. The progress I make is not easy but I am proud of it, but life keeps being expensive. I strive for my rich life, and am doing my best to teach my kids about it. I want them to know more and be smarter than I was and I want them to have a better chance.
I'll get lost if you want me to, Ramit.
Hi, and thanks for the detailed comment. I don't think you should get lost. I think you're trying to do the best you can. Please know that I've never said having kids is selfish -- not ever. I also don't believe you need to have everything under control when you have kids. I want you to succeed and if you choose to use my material, I'm grateful and I hope you see what I actually say about parents and money.
Lady, you said it right there. My situation is not as tight, but I relate to your perspective. One thing I never see the personal finance folks discuss thoroughly enough is how expensive it is to live in the bottom half of the income distribution. I think it is because they actually don't know what to do, and don't want to sound negative or clueless, which is totally fair. But not super useful for half the population. For instance, your car. Public transport in America just isn't a full solution in so many places, and may never be, no matter how loud we advocate. In my hometown you could take the bus lots of places, but then you simply could not walk the last 200 feet to your destination, because 8 months a year the snow is piled 4 feet high in icy boulders out into the street. And driving a very old car costs more in repairs than a newer one, but if you simply can't scrape together for a newer one, you're stuck tripping from one $500 emergency to the next. I see this a lot in my group of friends. Everybody is 4-7 people on one median income, and no we can't just add another income. My family was able to get our housing costs really low during a windfall of good health, and so we've had the margin to build good savings and escape some of those traps by driving a car that isn't continuously breaking. But our peers that haven't had a run of good luck like us are constantly in the hole, not because of their spending but because they had two visits to ER, or had a family member die and leave them an estate in debt, etc, etc.
The third CSP, @Ramit, you talk about only two reasons for high retirement savings. I would offer a third one that I am personally working through, starting late in life for retirement I need to put more away because compounding interest will not be fast enough for the remainder of my working life.
Nevada has the second highest food costs in the nation behind California (excluding Alaska and Hawaii) so that’s not a shocking amount for 2 people.
I live in the bay area. My house payment 1,430$. The house next door is rented for 4,000 a month
We go out to eat maybe once a month or less. I prefer to spend that extra money on high quality food at the grocery store. I also consider it “guilt free spending” - eating good food is important to me and feeding my child well is paramount.
I relate to the last one. I could spend more but i enjoy saving and investing more then spending and i have everything i need other than time from work. Hence the planned early retirement goal.
I love it.
Go ahead Ramit!
Love these videos, and I'd like to see more. However, they all usually follow the theme of:
1. Fixed costs are way to high
2. Not spending enough disposable income
Certainly there are some major odd ball CSPs out there that could be reviewed. I'd like to see those.
Thanks for all you and your team do!