"We're in Our 40s With Nothing Saved": Ramit Sethi Pushes a Couple From Feelings to Numbers

Overview

Sebastien, 42, and Hope, 48, have been together for 20 years and married for 16. They have a nine-year-old son, and each recently bought an existing small business. Sebastien's application to Ramit Sethi's podcast describes a couple who "just can't seem to get ahead." In person, Hope says their finances are in the best shape they have ever been. The episode asks whether it is too late to become successful with money in your 40s. Sethi's position, developed over the session, is that this couple's main problem is not how late they started. It is that they talk around their numbers instead of confronting them, and that their hopes are not tied to a concrete plan.

30 min read

The Snapshot

Sethi starts from the couple's Conscious Spending Plan (CSP), his framework for showing what a household earns and where it goes. The headline figures are:

Assets: $674,300
Investments: $129,000
Savings: $11,125
Debt: $437,732
Net worth: $376,693

In Sebastien's application, the couple describes itself as "locked into" the choice to become business owners. Raising a child, running businesses, and paying down debt, he wrote, leaves "barely any money to invest and has us questioning every purchase. We mostly ignore it and pretend that it is a problem we'll solve later." Sethi says this "deal with it later" pattern is common. People avoid pain that isn't acute, like a dull ache they keep dismissing.

An Elaborate Planning Ritual

When Sethi asks why a couple together for two decades has only recently started talking about investing, Sebastien says it simply never occurred to them. He wasn't taught about it as a child. Early in the relationship they were focused on adventures and what they wanted to do with their lives right then.

Their first substantial money conversation came before a move to another city, when Sebastien wanted to change careers. They spent a whole day mapping out the next ten months to a year of that transition. That session became a tradition they have kept for about 15 years. Every January they hold what they call an "executive household planning retreat," a day or two spent on goals, friendships they want to invest in, priorities for the coming year, and a review of the past one. Hope admits that money only became part of these retreats about five years ago.

The system has since grown more elaborate. They now hold a small weekly check-in, a more serious check-in every six weeks, and a half-day review every six months to track their projections. Sethi says he loves the structure. Then he asks the question that shapes the rest of the episode: is it working? Hope says it is working "pretty well," and that the couple is "fairly on the same page."

Two Different Universes

Hope's account is upbeat. She bought her architecture firm five years ago. She is still paying off the former owner for two more years, after which she expects room to raise her own pay. Sebastien bought his wine importing business the previous October. Her view is that "our lives have been changing for the better" and the couple is "so used to being broke" that they struggle to accept that things have improved.

Sebastien's account is different. He is proud to have survived a full year, stayed on top of his bills, and kept paying down the purchase loan. But he calls the business "very precarious." Tariffs are affecting it. Because he imports, he pays his bills in another currency, and he says the dollar is much weaker than it was a year earlier. Sethi reads back the application: "We are both small business owners who wanted to direct our future and have control of our time, but are constantly stressed about whether our businesses are sustainable and what could happen if one of us or both doesn't make it." Sethi tells them, "Guys, these are two different universes."

Sebastien concedes they are aligned on how they allocate and manage money, but not on how they feel about the businesses. Asked to sum it up in a sentence, he says that if he can get through the next six months, things are going in the right direction, but he is "really nervous" that they may not continue. Hope says their personal finances are on "more solid ground" than ever and her own firm is steady. She does worry about Sebastien's business because it is new, and because tariffs and people drinking less have hit wine consumption and importing. Sebastien adds context about Hope's firm: she took it over in January 2020, and six weeks later had to send everyone home when the pandemic began.

Buying a Business on a Whim

Neither founded their company. Both bought from founders. Hope warns Sethi, "you're going to hate this." She had always been nervous about owning a business and being responsible for staff, and for years had said she would not get the license required to own an architecture firm. When she heard her employer planned to sell to someone else, she emailed him immediately, while he was still out at happy hour, and put herself forward. She describes it as a spontaneous, spur-of-the-moment decision about what she calls her favorite job.

Sebastien's path was slower. The former owner of the wine importer lives outside the country and wanted to transition out. After long conversations, Sebastien concluded that things would change whether he liked it or not. He could either control where the business went and keep doing work he loved, or go find something else. He says he knew the first year or two would be hard. He is still paying down business debt from startup costs.

Feeling Broke Versus Being Broke

Sebastien describes the emotional texture of their finances: "I'm in my 40s and... we've felt broke for a long time. We're constantly trying to make things work... maybe sometimes we're overreaching and it just never feels comfortable." Asked directly whether they are broke, he says no. They pay their bills and have money in savings.

His example of "always something" is that they had to replace three appliances this year, two refrigerators and a dishwasher, which they hadn't planned for. Sethi points out that a couple with multiple planning sessions a year could plan for both the expected and the unexpected. Sebastien says they'll add it in January. When Sethi presses on why they haven't already, Sebastien says they have been focused on paying off debt and getting the fundamentals in place. Hope says she would like to be more prepared but feels good, because when these costs came up, they had the resources to cover them.

Sethi observes that Hope, whose name he notes is fitting, is an "eternal optimist," and Sebastien agrees he can be "doom and gloom." Asked whether there is any realism in the conversation, Sebastien says that is why they meet. Sebastien usually raises money topics, and he admits the tone is "probably not very cheerful," coming from worry. He then gives his clearest description of the fear. They have investments and an emergency fund, but "it all feels so small and so much like a placeholder." If he had to close his doors, or if something happened to Hope's business, there would be very little runway. Hope agrees. She says she wants to plan more for the future and would rather be prepared "so that we can feel more free."

"It's Not Enough"

Sethi has Sebastien read the numbers aloud. Sebastien says they are "not bad, not great" and again calls them placeholders. Sethi pushes back: those are real numbers, so why are they talking about feelings? "It's either enough or it's not." Eventually both agree the amounts are not enough. When Sethi asks whether they have ever said that exact phrase, they say they did the other night. But their account of that conversation is full of hypotheticals: an investment calculator, a raise Hope could give herself, what happens once the credit card is paid off. Sethi says he sees "a lot of avoiding the actual numbers in front of us."

He asks why confronting reality has been hard. Sebastien says he feels he should have been doing this 10 or 15 years ago. Hope says she spent a long time just making it through and should also have been investing more.

On their current trajectory, one of them estimates about $750,000 at retirement. Sethi's team calculates $885,000, which Sethi calls "within the margin." Using a 4% withdrawal calculation, that would support about $35,000 a year. Sebastien calls that low.

Sethi then lists phrases he has heard from them: we could be doing better; we're doing better than we have in the past; it's not enough but others are doing worse; and this doesn't include our business value. Sebastien names them as "hedging bets," and Hope as "excuses for not dealing with the numbers directly." Sethi says he isn't trying to berate anyone, but there is a time for feelings and a time to run a calculation. Sebastien acknowledges they always have contingencies and what-ifs, driven by "thinking big and dreaming about our goals."

Sethi also points out that they have one month of emergency savings, which he says directly contradicts Hope's suggestion that they have more money than they know what to do with.

Off by $40,000

Hope reads out their combined gross monthly income: $16,260, or about $195,000 a year. When Sethi asks who knew that, both raise their hands partway. Then Sebastien says he expected about $158,000, and Hope thought it was about $160,000. Sethi shows them that he simply added the two gross incomes from their own CSP and multiplied by 12. Sebastien guesses the gap comes from the rental income being included in his column.

Sethi says not knowing household income isn't the real issue, since about half the people he talks to don't know theirs. What concerns him is that they both said they knew it and were $40,000 off. He sees this as the recurring pattern of not giving straight answers. He says couples who insist they are aligned while telling different stories worry him more than couples who admit they aren't, because "you can't be on the same page when you don't even know what page you're on." He gives his assessment: they say they're better off than ever, yet they can't retire, they're taking on stress and risk, and they have one month of emergency savings. He invites them to disagree. Sebastien instead asks why he is taking on so much stress if it isn't producing the life they want, and what blind spots he isn't seeing. He says he has run the projection many times and knows they aren't where they need to be.

Reading the Spending Plan

The CSP breaks down as follows:

Fixed costs: 67%. Sethi likes 50–60%, and lower for people who are older and behind on retirement.
Investments: 2%. Roughly 4–5% once an extra $400 a month to a 401(k) is counted.
Savings: 5%. This includes $400 a month for vacations, $200 for gifts, and nothing toward a long-term emergency fund.
Guilt-free spending: 26%, or $3,237 a month.

The "gifts" line, Hope explains, covers birthday and Christmas presents plus hosted events such as an annual solstice party. They aren't big on buying things, but they value food and experiences. Guilt-free spending includes their son's music lessons, eating out, and camps during school breaks, which cost $300–$400 a week and are sometimes paid off over several months. Sebastien says $3,000 a month seems like more than they actually spend. Sethi explains that people don't mentally amortize irregular costs like camps or December spending, so the only way to know is to list them. He adds that there's no shame in sending your kid to camp. You just need to know what it costs.

Asked to assess the four numbers, they say too much goes to guilt-free spending and fixed costs are too high, so too little goes to savings and investing. Sethi says the good news is that there's no mystery. The numbers explain their situation.

The Debt and the "Locked-In" Choices

Within fixed costs, Sethi calls the $2,100 mortgage payment low and tells them to stay put. The "car payment" line is $100 for gas. Debt payments come to $2,770 a month. The $437,000 of debt breaks down as:

about $338,000 on the mortgage
student loans of about $5,500 and $32,000
a $57,000 HELOC
$1,800 left on a credit card

The credit card balance and roughly half the HELOC came from a bathroom remodel. Part of the HELOC also paid to convert their garage into an ADU, which they rent out for about $24,000–$27,000 a year. Sethi calls that great.

Sebastien then says something Sethi asks him to expand on. Choices they made at one point carried over and are now "on autopilot," and it's hard to make a conscious choice every month. His example is a gym membership he doesn't always use enough to justify. Sethi connects this to the application's language of being "locked in." Some commitments, like a business, really are locked in. Others, such as camp, the solstice dinner, and the gym, have just become second nature, and he says they don't have to be. Sebastien says these are things they value. Sethi replies that he values many things too, but they are here because they work hard and don't have enough for retirement.

Sethi argues that business owners are good at adapting to market realities. If revenue falls 50%, they cut quickly. Individuals, by contrast, will lose a job and keep buying the same things at the grocery store. He encourages households to "act like a business" and have a plan ready. In the CSP, that means going to the guilt-free spending box first and cutting it.

How Much Is Enough?

Asked how much they need in retirement, Hope says she would love $100,000 or more likely $130,000 a year, noting the mortgage will be paid off by then. Sebastien says $80,000–$90,000. Sethi calls the gap "wildly off." When he asks if they've discussed this before, both say no.

Sethi is surprised that a couple with such a sophisticated meeting rhythm never asked this question. Sebastien explains that their annual retreats focused on the next 12 months. Only in the last couple of years have they started thinking five years out, and buying the business pushed him toward thinking ten years out. He says shifting from short-term to long-term thinking has been really hard. Retirement is 25 years off, and he's focused on getting through the next week, month, or year, trusting that things will fall into place if he does the right things. Even a five-year plan feels daunting.

Sethi asks whether that approach has worked over 20 years. Sebastien says, "in the bigger sense, no." He has $21,000 in his Roth account and describes a "false sense of security" from having a good credit score and paying his bills. Sethi says he believes most people know deep down whether they're doing poorly, okay, or great, and that his job is to "chisel around the stories" people tell themselves. He points to their progress over the past two years and asks what would happen if they did more of that for the next 10 to 15.

The Stories Behind the Patterns

Sethi says people don't stay stuck because they're lazy or stupid. There's usually a belief picked up long ago, so he asks each of them about their upbringing.

Sebastien says money wasn't talked about at home. His mother is French, and he says it isn't discussed culturally. Until he was about 10, the family was solidly middle class on his father's single income from a print shop that did Yellow Pages work. In the 1990s, desktop publishing arrived and the small shop couldn't compete with larger ones. His father went bankrupt, the family sold their house at a loss, and they moved from Southern California to Oregon. His father started a new career, and the next seven years were tight. His parents struggled but kept it to themselves.

Sebastien says he is "terrified of that same thing happening" to him. He thought about it a lot before buying the business, but chose to do it for reasons beyond money. If he had to shut it down, he would feel he was letting people down: his employees, the former owner, his family, himself. He sees himself as a rational operator. Hope thinks the fear makes him "a little bit less rational" and that it makes him freeze. Sebastien agrees it has made decisions harder and is "paralyzing in some cases."

Hope was raised by a single mother, a schoolteacher who owned a large house, rented out units, and told her children to "be a landlord," which Hope notes they now are. The family didn't have much money, though more than many people in their town. Her father had been an attorney but was sick throughout her childhood and had no money. He sold jackets to bar owners, which let him work around hospital stays, and he was also a gambler. He died when she was 14. Becoming emotional, Hope says she wishes she could have had more conversations with him. She says they did talk a lot, and that he had many regrets, including about money.

Even though he had little, he wanted to spend what he had on her. She remembers a cheap wall hanging, a piece of wood with a dog picture glued on, probably about $20, that she wanted and he bought. It made her sad to look at because she felt guilty for taking his money. Sethi notes she hadn't used the word "guilt" all day. Hope says it took work and therapy. She used to struggle to spend anything on herself and now says, "I want more money to spend on myself." She describes herself as independent, capable, and resilient.

Sebastien describes his own takeaway. He is now about the age his father was at the bankruptcy. His father went back for a master's in education while working, and his mother, who hadn't finished high school, worked to support the family meanwhile. That work ethic stayed with him, and he has had a job since 13. He takes comfort that, with three kids and great uncertainty, his father still made a big change.

Asked whether they can make a big change, both say yes. Asked whether they need to, Hope says a crisp "yes." Sebastien says, "the numbers say yes." He then notices "now I'm the one hedging," and says he feels overwhelmed by running a business and raising a kid, and finds it hard to see the right answer.

Sethi's interpretation: Sebastien watched his father's business fail and is now paralyzed by fear of repeating it. Hope learned not to want things and needed years of therapy to say she wants more money. He also says he isn't particularly impressed by their retreats. Without behavior change, he calls them "play acting," like a child with a toy kitchen who isn't really cooking. Retreats don't mean much, in his view, if you don't know your income within $40,000.

Earning More, and a Plan B for the Business

Hope says she could give herself a raise of about $1,000 a month once the next project comes in. She'll have more flexibility after her loan is paid off in two years. Sebastien says some expenses will fall in the next couple of months and he could give himself a raise too. If one business failed, both say the impact would be dramatic. They would need another job immediately and would "slash and burn" the budget.

Sethi says Sebastien needs to treat the business the way a rational investor would, which he says is hard for owners whose names are on the door. Sebastien describes the uncertainty of tariffs and consumer confidence as what paralyzes him. Sethi, saying he has been there himself with a declining business, offers what he would do:

Build business savings. Sebastien has none. Sethi says that absence is what keeps him on a "thin razor's edge" every month. He likes three to six months of reserves and acknowledges this would take time, but says a business that can't build any reserve is already in a very dangerous zone. Sebastien suggests putting monthly profit into savings instead of paying himself more, and Sethi agrees.
Set a timeline and a threshold. Decide what revenue and margin you need, give yourself a set period, such as six months and probably under a year, and shut it down if you haven't hit it. "We need constraints. Otherwise, we just drag on in this uncertainty forever." Either outcome, shutting down or turning the business around, beats paralysis.

Sethi also says entrepreneurs shouldn't think month-to-month, and that this is part of why Sebastien feels scarce and behind. Sebastien admits he hasn't laid out such a plan and has been operating "very month-to-month."

Asked what happens if nothing changes in five years, they say they still couldn't retire or pursue other big goals. Sethi predicts they'd still take trips, spend on their teenage son, and hold their dreaming sessions, which he calls "dim" for a household earning almost $200,000. Hope responds that dreaming is cheap and putting numbers to it is the hard part.

What the Retirement Goals Require

Assuming about $35,000–$36,000 a year in Social Security, Sethi gives these targets:

$90,000 a year requires about $1.35 million at retirement, which means raising investments to about $21,000 a year.
$130,000 a year requires about $2.35 million, which means raising investments to about $45,500 a year.

Sebastien calls it a big number and a big change.

Rebuilding the Plan Live

Working through the CSP together, the couple made these changes:

Credit card. One final payment remains. Once the $1,800 payment disappears, fixed costs drop from 67% to 52%, and debt payments fall to $970 a month. The remaining debt is student loans at about 7% and the HELOC at about 6%, and the HELOC is being paid at the minimum. Sethi notes that an extra $100 a month on a loan at that rate could shave years off.
Groceries. Hope says they could shop every other week at a cheaper store. They cut $200 to $910, bringing fixed costs to 50%.
Subscriptions. They keep them.
Retirement accounts. The Roth IRA contribution goes to about $583 a month, the maximum. Hope's 401(k) goes from $400 to $1,600 a month total.

Sethi explains that every dollar cut elsewhere flows down to guilt-free spending, which he likens to a bucket collecting rainwater. At this point about $4,654 a month remained unallocated.

Hope suggests $500 a month for a long-term emergency fund. Sethi shows how little that dents the remaining pool and that it would add only about $6,000 a year. They raise it to $1,200, which Hope calculates at about $14,000 a year, and savings rise to 15%. Sethi questions keeping $600 a month for gifts and vacations and pushes a new $800 monthly Vanguard contribution, leaving $2,654.

Asked why the money had been misallocated, Sebastien says, "maybe because I feel so comfortable." Hope says they always had a reason to spend more: it's for our kid, don't we deserve this? Sethi names two causes. They had dreams but no plan connecting money to their vision. And their narrative of "we're doing better than we used to" encouraged self-congratulation instead of rapid change.

Sethi continues adjusting. He adds $100–$200 more toward debt, bringing fixed costs back to 52%. He argues that a couple seriously starting to invest in their 40s on nearly $200,000 should aim for 16–18% in investments, partly because one or both of them may be unemployed at some point in the next 20 years. Another $400 a month raises investments from 14% to 17%. Hope cuts gifts to $150 and Sebastien trims vacations to $350, leaving savings at 14% and guilt-free spending at 17%. Sethi usually likes 20–35% for guilt-free spending but says that since they're starting late and vacations and gifts are already set aside, they can go lower. He moves another $400 to investing, leaving $1,754 a month. Sebastien calls it "dramatic" but says they can do it. Hope thinks automating it will make it hurt less.

Sethi stresses that he isn't pushing them to cut travel, which they both clearly value. If after six to eight months they want to add $50 or $100 a month to it, they have the margin. His aim is to cut unconscious spending.

What Happens After the Emergency Fund Is Full

They agree on at least six months of emergency savings, about $38,000. With $11,000 already saved, they need $27,000, a little under two years at $1,200 a month. Hope asks whether they can then redirect that money to vacations. Sethi calls it an excellent question. He suggests something like $400 a month to travel, which would more than double their vacation budget, at least half ($600) to investing since that's the primary goal, and $200 to paying down debt faster. The same approach applies when each loan is paid off: split the freed-up payment by percentage. In his own household, Sethi says, 70–75% of extra money goes to investments. For them it might be 50% because of the remaining debt. He says the question excited him because it showed them looking forward.

The Math Error

Sethi interrupts the episode to say he made a math error that "really affected" what he told the couple. When they increased Hope's 401(k) contribution, he didn't recalculate her net income. He also transposed a number from their savings line when calculating their retirement contribution. He says both errors threw off the totals, apologizes, and says he is leaving the episode up because he promised to be honest. In his assessment, they are still in a strong position: solid income, relatively low fixed costs, and a plan that becomes easier once the emergency fund is full and the debt is paid off. The big picture doesn't change, he says, but the exact contribution numbers need a small adjustment in the short term.

Sebastien's Business Plan

Sethi notes that Sebastien brings in roughly half the household income and that none of the plan works if that income drops. Sebastien says he has a contract with another company with a year left to run, which he sees as a natural milestone for deciding whether he's succeeding or needs to pivot. He plans to start business savings, is mapping out a 90-day cycle, and will use January, usually slow for him, to define success measures. If the business succeeds, in a year he'd raise his pay by about $1,000 a month gross. If not, he'd talk with Hope about shutting down.

Sethi says those conversations should start now, not in 12 months, because people may help with ideas and introductions, and waiting means another year of burning cash. Hope says Sebastien has been trying new things to expand his customer base, and jokingly asks whether Sethi wants a wine newsletter. Sethi admits the advice is easier to give than to hear, but says entrepreneurs need it. If a business is paying something like $38,000–$40,000 for a lot of hours, the owner should ask whether a job would be better. "You got to be Darwinian about this."

Sebastien says he never pictured himself owning a business. He got into wine because he loved it, and his degree is in architecture, not business. He has had a lot to learn, and he thinks he needs a mentor who can give him colder advice.

Hope pushes back that the business is working by the standard on the CSP. It generates enough profit for Sebastien to pay himself and service the business loans. She proposes that she take the raise while he saves his in the business, so he can raise his pay later when it's more profitable. Sethi says he loves the teamwork. Sometimes one partner is "injured" or in a development phase and the other carries more.

Closing Reflections

Hope says she wasn't trying to be obtuse, but realizes she may have been glossing over things. Sebastien says what surprised him was seeing the numbers adjusted so aggressively. Their past tweaks felt incremental, something to pat themselves on the back for, and Sethi's framing made him think about how his future self, 20 years from now, would judge them. Asked to finish "I feel…", Sebastien says "more optimistic" and Hope says "taken care of."

Hope asks whether the CSP uses gross income. Sethi says no. Gross income ($16,260) appears at the top, but every other figure is based on take-home pay ($12,375). He asks them to redo the CSP and tighten it: exact retirement age, exact pre- and post-tax contributions, and actual projected totals.

Sethi's wrap-up centers on a verbal habit. They keep measuring themselves against their past: we used to be broke, now we're not. He says a rich life happens today and tomorrow, and compares looking backward while planning to riding a bike 10 miles in reverse. If they shift from "look how far we've come" to "look where we get to go," he believes they can build something substantial.

The Follow-Ups

In her first follow-up, Hope says her biggest surprise was realizing that, although she aims to live as a genuine, open, and honest person, she hadn't been honest with herself about their finances. The income confusion, she explains, came from using the previous year's tax figures. She is working with Sebastien to direct more money to savings and investments, and she has committed to keeping groceries under $900 a month, including pet food. That week she spent $155. If they go over, she says, "it's beans and rice for the next week."

Sebastien says hearing their story reflected back showed how much they were focused on their past selves. His takeaway is that dreams need funding, and that being aggressive and conscientious could get them there. After the recording, Hope reminded him of the success criteria he set when buying the business: pay down the debt, pay the bills, pay taxes, and pay himself. He has done that for a year and feels confident he can continue, but he knows he needs a plan to move on if those metrics aren't met. They also plan a dedicated money meeting to agree on a retirement target, given how far apart they were.

In later updates, Hope says they haven't been in the same place much because Sebastien spent a couple of weeks in Europe for work. She thinks he feels better about his position, and she has increased her SIMPLE IRA contribution by $1,000 a month. Sebastien says he has fully funded his Roth IRA and they've set up a recurring $1,000 monthly investment into Vanguard. An unexpected orthodontia expense for their son led them to scale back their long-term savings contributions somewhat, but they are still putting much more toward the emergency fund. The biggest change, he says, is that they now think "a lot less about how far we've come and a lot more about how far we want to go."

I'm in my 40s and we've felt broke for a long time. We're constantly trying to make things work.

I feel like our personal finances are in a better place than they ever have been.

Guys, these are two different universes. Talk about being on a different page. What's the deal?

Maybe sometimes we're overreaching and it just never feels comfortable.

If you cannot build up a reserve, you are already in a very dangerous zone.

I would love $130,000 a year to retire.

I think it could probably be like 80 to 90.

Guys, that's wildly off. To get to $130,000, you need $2.35 million at retirement. That means you need to increase your investments to $45,500 per year. If nothing changes in the next 5 years, what happens to you?

We still are not able to retire.

Is it too late for you to be successful with money? Maybe you didn't get started in your 20s. Maybe you woke up one day worried about money, asking yourself, "Am I screwed in retirement?" Today we're getting a look into that very question that tens of millions of people ask themselves because I'm speaking with Sebastien, who's 42, and Hope, who's 48. They've been married for 16 years. They have a 9-year-old son, and they recently both became business owners.

Listen to this line from Sebastien's application. Quote, "We both made a choice to become business owners, but now we are locked into these choices for the foreseeable future. Raising a kid, running businesses, and paying down debt leaves us with barely any money to invest and has us questioning every purchase. We mostly ignore it and pretend that it is a problem we'll solve later."

Unfortunately, this is a story I hear all the time. A couple will come up against some financial challenge, maybe it's debt, maybe it's high cost of living, and they will simply say, "I'll deal with that later." Human beings do not like pain, especially when it's not acute. It's much easier to tell ourselves, "I'll just deal with that later." Some dull, throbbing thing on your wrist. Ah, it's fine.

I'm actually curious to hear from you. Have you ever kicked a can down the road until you just couldn't ignore it anymore? What was that moment where it finally broke? Like the straw that broke the camel's back. Head over to YouTube or Spotify and let me know in the comments. I read every one of your comments.

Now, I'm looking at their Conscious Spending Plan, which breaks down how much they make and where they spend their money. If you want my help with your own Conscious Spending Plan, join my Money Coaching program at iwt.com/moneycoaching.

Their assets, $674,000. Investments, $129,000. Savings, $11,000. Debt, $437,000, for a total net worth of $376,000. I have a lot of questions. So, let's get started with Sebastien and Hope.

You said something in your application. You said, Sebastien, we've been together for 20 years, married for 16, and have only recently started talking about investing for retirement. I'm curious, why did it take you so long to talk about investing?

It never occurred to us before. I wasn't taught that as a kid.

You guys don't talk about investing strategy on date number one or two?

No, we talked about a lot of other stuff on day one or two, but yeah.

We were too busy thinking about adventures and what we wanted to do with our lives right then.

When was the first time you did have a substantive conversation about money?

The first big time was we were living in another city and before moving, we wanted to put together a plan and what we were going to do next. I wanted to change careers and we needed to plan what the next 10 months to a year looked like in that transition. And it was the first time we actually sat down for a whole day and mapped out what we wanted to do, what it would take, what we were able to do.

How did it feel?

Good. It's actually a tradition that we've maintained for the last 15 years. Every January we take a retreat together and spend a day or two talking about money and really goals and what we want to do.

Wait, what? That's quite advanced. Hold on.

It's become more sophisticated over the years for sure.

This is amazing. What did you talk about in these annual money meetings?

They're not just money meetings. They're really a look at—it's called our executive household planning retreat. And so we talk about things that we want to do more of during the year, friends we want to have more of in our lives, things that we should really focus on in the coming year. And then also looking back at what have we accomplished in the past year.

What role does money play in these conversations?

Sadly, it only started to play a role probably five years ago.

Got it. Okay. You have kids?

One child. He's nine.

And now, how often do you talk about money?

Probably on a weekly basis, there's a sort of small check-in, a more serious check-in once every 6 weeks. And then every 6 months, because now we do a biannual head of household check-in. And that's a half-day thing. And so we check in then as well, just to see how we're doing on our projections.

I love what I'm hearing. I freaking love it. It's all dialed in. You got the 6 weeks, 6 months, one year. I love it. It's very structured.

Yeah.

Is it working?

I would say it's working pretty well. Yes.

Okay. We're fairly on the same page, honestly, about money, and doing these planning retreats really helps us align what we want to do because we say, okay, this year we're really going to focus on our debt or this year we really want to make some moves in terms of investments. But I still think that we're just at this precipice right now where our lives have been changing for the better.

And our finances have been changing for the better and we're still just having a hard time conceiving that our finances are better and that we are about to make some steps ahead, I think.

What do you mean? I don't understand.

So, I purchased a business five years ago. So, now I'm the sole owner. I am still paying off the former owner for the next two years. There is some leeway now for an increase in wages, but once I finish the purchase, there will be more leeway for an increase in wages. Sebastien just purchased his business last October, a year ago today, actually.

Oh, congrats.

Which is so cool. And so I think that we're so used to being broke that we're still living in that kind of way.

I guess I'm surprised because from reading your application, Sebastien, what you wrote is quite different than what Hope is telling me.

Yeah, we have a different approach or a different outlook on how things are going. I purchased this business and I'm super thrilled I made it through a year. That feels like a really big accomplishment to stay on top of my bills and be paying down the loan. And I also feel like it's very precarious because there's all sorts of stuff that I can't control. Tariffs are affecting my businesses. I import so I pay my bills in another currency and the currency markets have changed. The dollar is a lot weaker than it was a year ago.

So this is quite surprising. Hope, you just spent a couple minutes telling me we're about to have more money. We're about to be in a better position than we ever have. We can't seem to get our heads around the fact that we're doing really well.

Sebastien, in your application, you wrote, quote, "We just can't seem to get ahead. We are both small business owners who wanted to direct our future and have control of our time, but are constantly stressed about whether our businesses are sustainable and what could happen if one of us or both doesn't make it." Guys, these are two different universes. Talk about being on a different page. What's the deal?

Yeah. My business does feel really shaken up this year with everything that's going on with trade.

How do you feel about Hope saying we're in a great place and we're about to have more success than we've ever had?

That was the hope when she became a business owner. The idea was that she would have not just more control over her career but also that eventually she would be able to financially see some return on it. She took over her business in January of 2020 and six weeks later had to send everybody to work from home, and working through the pandemic was a huge trial.

Sebastien, I guess my question is about the fact that the two of you just a minute ago said you're on the same page, but to my mind you are not.

Yeah, I think we're on the same page in terms of how we allocate our money, how we choose to manage it and what priorities we choose to make about it. I think we're on a different page in terms of how we feel about our businesses are going.

How do you feel about it in a sentence?

Our personal finances are headed on the right track. If I can make it through the next six months of my business, that would mean things are going in the right direction. But I'm really nervous that they might not be able to continue.

Okay. And Hope, how about you?

I feel like our personal finances are in a better place than they ever have been. We're on more solid ground in terms of our finances currently. I do absolutely worry about Sebastien's business mostly just because it is so new and things are so precarious and the tariffs and people not drinking as much have really affected wine consumption and importing. My business is pretty steady right now.

Now, you both own businesses separately, correct?

Yes.

Yes. Okay. And how did you wind up owning them? Are you both founders?

No, both of us purchased from a founder.

Oh, separately, you each purchased a business. Wow. Okay. And how did you decide to purchase businesses? It's somewhat unusual.

Oh, you're going to hate this, Ramit. Sorry. I have always been a little bit nervous about owning a business. I'm an architect and was just nervous about the prospect of being in charge of all those people. But then I heard that my former employer was going to sell to someone else and so I put my hand up because I was in my favorite job that I've ever been in.

Why do I hate that?

Because it was very spontaneous. He went out for happy hour with these other people and I wrote him an email right then. Even though I'd been saying for years, I'm not going to get licensed because you have to be licensed to become a firm owner. I'm not going to get licensed. I'm not going to purchase this firm. Even though I knew he felt as though I would do a good job, but it was a very spontaneous, spur-of-the-moment decision.

Okay. All right. So, you're an architect. Is that the business, architecture?

I'm an architect. Yeah.

Cool. All right. Sebastien, what about you? How did you come to buy this business?

I was working for a guy that I really enjoyed working for and it's a really interesting business. Like Hope, I love my job. The former owner actually lives out of the country and he realized he wanted to make a transition and we had long conversations about it. After a long process I came to realize things are going to change whether I like it or not. And either I can be in control of where that goes and continue to do something that I really love or go find something else.

This is a wine business.

Yeah, it's a wine importer.

So, now that you both run your own businesses, why do you say in the application that it feels like you're not getting ahead?

I knew this from the get-go that the first year or two was going to be hard. There was a lot of startup cost. I'm still paying down some of that business debt for the startup cost. I think part of it's the feeling of, I'm in my 40s and as Hope said, we've felt broke for a long time. We're constantly trying to make things work, make things a little bit better and maybe sometimes we're overreaching and it just never feels comfortable.

Are you broke?

We pay our bills. There's money in a savings account. So, no.

I'm kind of confused about what I'm even doing here. Hope tells me they're doing better than ever, but Sebastien's application is full of fear. They say they're on the same page, but if you listen to them, they're clearly not. They have executive planning retreats where they meet every six weeks with all this structure, and yet one of them says they're thriving, the other says they feel broke. Very confusing, mixed messages.

It's like they've built this force field around themselves and no matter how bad it gets, they can always say, "Well, we're better off than we used to be." I don't think they would be here if there wasn't a real problem. But I can't help them if we can't even agree on what that problem is. So, I'm going to get direct. Before we can fix anything, I need to cut through some of this and see what's actually going on. We'll get to that right after this.

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So, you feel broke, but you're not broke. Why?

It feels like there's always something. There's always something that comes up. There's always something that needs to be taken care of. We're always scrambling to put the pieces together.

Like what?

We had to replace three appliances this year already. Two refrigerators and a dishwasher. And it wasn't something we planned on.

I'm kind of surprised because you have these planning sessions multiple times a year. Why not plan ahead for the expected and the unexpected?

We'll add that for this coming January.

I'm sure you will. But why have you not?

We've been trying to pay off debt. We've been trying to get some of the fundamentals taken care of.

Hope, do you find yourself feeling like you're not getting ahead?

I would like to be more prepared for the future. I actually feel good about where we are, actually.

Okay.

I am happy that when these things have come up, we have had the resources to buy them. Even when it feels more tight, we have been able to buy them.

Have you seen what Sebastien wrote in his application?

I don't think so.

Do you mind if I read it, Sebastien?

No, go ahead.

Okay. I'm kind of struck by the differences in the application, Sebastien, what you're telling me, and then, Hope, what you're saying. These are three different things, and I want to try to get us on the same page before we proceed.

As I mentioned, Sebastien wrote, "We just can't seem to get ahead. We are constantly stressed about whether our businesses are sustainable. We have been supportive of each other's choices, but we are now locked into these choices for the foreseeable future. Running our businesses and paying down debt leave us barely any money to invest and has us questioning every purchase." Does anybody hear a difference in the way this conversation is going and this application?

I'm an eternal optimist.

Your name is Hope. Is there something to that?

Probably.

The way you're talking, it's like, "Oh, we're doing great. We're doing better than ever, and we just don't know how to spend our money. We're crushing it."

Sometimes when I hear Sebastien talk about these things, I think that it's a little overblown.

Okay. Tell me about that.

I would agree. I can definitely be a little bit of a doom-and-gloom response to these things.

You're the pessimist.

Yes.

And then you're the optimist. Hope the optimist.

Yes.

Is there any realism in the conversation?

I think that's why we meet and have these discussions, because we're trying to keep it real. We've been able to do planning in our past for moves or for planning to purchase a house.

Who brings up the topic of money in the conversation?

Usually Sebastien because he's more in it, but we both discuss it.

Sebastien, when you bring up money, what is the tone of these conversations about money?

Probably not very cheerful. It's probably coming from a place of worry. I think there's a block in my thinking about, but as Hope said, we're doing better in our personal finances than we ever have. And it feels to me like that could all go away. Everything that we've built over the last few years, yes, we have investments. Yes, we have an emergency fund. And it all feels so small and so much like a placeholder.

Like, oh, okay, we've started an emergency fund, but it's not that much. If I have to close the doors of my business, there's very little runway for us. Or if something happens to Hope's business, there's very little runway there.

I agree with that.

That's the first time I've heard you describe it like that, and Hope, you agree with that.

Yeah, that's why I want to plan more for the future. I think Sebastien will be successful in his business. He's really good at what he does. I think that the tariff things are going to even out, but it is a very weird situation that we're in right now. And I would rather be in a place of preparedness than not so that we can feel more free.

Okay, let's take a look at the numbers. Sebastien, can you read the words in bold and then the numbers in full next to it for this entire box, please?

Assets, 674,300. Investments, 129,000. Savings, 11,125. Debt, 437,732. And then total net worth, 376,693.

All right, cool. What do you think about those numbers?

Not bad. Not great. Like I said, some of those numbers feel kind of like a placeholder rather than real.

What? Hold on. What does that mean, they feel like a placeholder? Those are real numbers.

Yeah. If we look at where our investments would be when we're ready to retire, it doesn't feel like enough. Our savings doesn't feel like enough of an emergency fund.

Why are we talking about feelings? I'm just curious. We're looking at cold, hard numbers. Why does it not feel like enough? It's either enough or it's not.

It's not enough.

Our investments and savings aren't where we would want them to be.

Okay. They're not where—no, nobody's are where they want them to be. Almost nobody I talk to, even the ones who have more than they thought, they even say they're not where we want them to be. Nobody knows what they want. But candidly, being 42 and 48, if you extrapolate the numbers and project at retirement, blah, blah, blah, would it be fair to say those numbers are not where they need to be?

Yes.

Would it be fair to say they are not enough?

Yes.

Have you ever said that exact phrase, "The amount we have is not enough"?

Yes.

Really?

We said it the other night.

What'd you say? Because the way you just said it was, "It doesn't feel like it's enough. They're better than they've ever been, but we'd like them to be better," etc., etc., etc. What did you say the other night?

We actually looked at an investment calculator to see, okay, what are the possibilities? If you can get a raise, if I can give myself a raise, as soon as we're done paying off our credit card debt, if we can put more money away in our investments—

What?

How does that affect where our retirement would be in 20, 25 years?

What about just how much do we have and how much is it going to be? What about just that? Do you guys see what I'm getting at? I feel like there's a lot of avoiding the actual numbers in front of us. Can I just put them back up on screen?

Yeah.

You have $129,000 invested.

We need more.

Yeah, I agree with Hope. We need more.

Why has it been so difficult to confront the reality of where you are financially?

I think for me, it feels like I should have been doing this 10, 15 years ago. It feels like I haven't been doing the work that I should have been doing.

Same. I have had a long time that I've been working and was just making it through for so long. Should have also been investing more.

Okay. Do you know how much, on your current trajectory, you will have at retirement?

Probably about 750,000.

Yeah. Ballpark. We calculate 885,000, but within the margin. We do a 4% calculation. You will be able to safely withdraw $35,000 per year in income.

Yeah, that's low.

Here are some of the things that I have noticed you describing. "I feel like we could be doing better. I feel like we are doing better than we have done in the past. I feel like it's not enough, but there are other people who are doing worse, so we're actually doing okay. And this doesn't include our business value." What do you notice about all those things I'm saying?

They're all hedging bets.

Yeah. Just excuses for not dealing with the numbers directly.

Yeah. There is no confrontation of what are the numbers, point blank, and what do they mean? Guys, just run a calculation, and without adding in a mythical raise and selling the business, is that enough for us? Obviously, no. What should we do? I'm not trying to berate anybody. I'm just trying to talk in terms of pure numbers. There is a time and a place for feelings, and there is a time and a place to talk about the numbers and run a calculation. Do you find that this is a recurring pattern when the two of you talk about money? Minimizing, hedging, talking about the future but not confronting the numbers directly.

Yeah. There's always a contingency or what-ifs that we talk about. I think we're driven a lot by thinking big and dreaming about our goals and being creative about how to make those things happen. And it bleeds into that sense of not just talking about, this is the number, but how can we get what we want?

Is that why we're here today? Because I don't think we're here to talk tariffs. I don't think we're here to talk about how you're in a better position than you've ever been and you don't know how to spend money. Guys, you have one month of emergency savings.

Yeah.

This is directly at odds with what you told me: "We have more money than we know what to do with." I don't see that. Let's take a look at the rest of the numbers on the CSP. This time, I will ask Hope to read off your combined gross monthly income, please.

Combined gross monthly income is $16,260.

Great. So, your household income is $195,000 a year. By a show of hands, who here knew that?

Mostly. Yeah.

What? Why is everybody's hand going kind of up? What the hell's happening right now?

That's not the number that I expected to see, actually.

What'd you think?

158,000.

Oh, only $40,000 off. Okay. Now that you have $40,000 more than you thought, what does that tell you?

It tells me that we need to think about putting our money where we say we need it.

Okay. And Hope, did you know it was 195K?

I also thought that we were up near 160 because that's—

How did both of you raise your hand, but both of you were $40,000 off? Remember, you filled this out. This is literally your CSP. I will show you right now. I'm going to show you. Look, I took the two gross incomes.

Uh-huh.

They add up together to 16,260 a month, and then I multiplied it by 12.

So, what did we do wrong, Sebastien?

I'm not sure. I think we're including the rental income in my income column.

Yeah.

Okay. Okay. Did you see what just happened? They both raised their hands and told me they know their household income. And then they were $40,000 off. Now, most couples would say, "See, we're not on the same page." But Hope and Sebastien insist that they are on the same page. And I think that's actually more concerning.

I talk about being on the same page in my new book, Money for Couples. When I ask couples, "What's the problem with money in your relationship?" almost everyone says, "We're just not on the same page." But that's vague. That's generic. It's what people say when they don't really want to look at what's truly going on. When couples insist they are aligned, even though obviously their words are telling completely different stories, to me that's almost worse because they don't even realize they're reading totally different books. Hope says, "We're doing better than ever." Sebastien says, "We can't get ahead." You can't be on the same page when you don't even know what page you're on.

So if you and your partner need help getting on the same page, actually on the same page, not just feeling one way about it, then that's exactly what my money coaching program does. You're going to get personalized help from me and from our community members to see the patterns that you might just be missing on your own. You can sign up at iwt.com/moneycoaching. Now listen as I challenge them on these answers, and I'll see if I can actually help them get on the same page.

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Here's what's interesting to me, and I think this is a big pattern I'm seeing over and over already. I don't mind that you don't know what your household income is. Fifty percent of people I talk to don't know their household income. No problem. It's a problem, but everybody does it. The real problem is that I asked you, "Did you know this number?" Both of you put your hands up saying yes. And it turns out you were $40,000 off. So, not only did you not know it, but you told me, "Yes, I actually knew it." And I think this is a recurring pattern.

You both are struggling to give me straight answers. Guys, I'm not here to trick you. I'm not here to judge you. That's not my role. I'm actually here to help you. You called me. I really want to help you. I don't think you have a candid assessment of what is going on with your finances. On one hand, you're saying we're in a better place than ever. On another hand, we are now realizing we are not in a position to be able to retire. And what are we working for? We're taking on all this stress and risk, and we have one month of emergency fund. That would be my assessment. If you disagree, tell me. I'm wide open to it. But I want to hear your take because I am struggling to get straight answers from both of you.

I think what you're saying rings true to me, is why am I taking on all of this stress if it's not resulting in the life that we want and being able to reach the goals that we want? What am I not seeing about what we're doing that I have blind

Spots to, or I have blocks to that. I can't get there. I have done the projection many times, and I know that we're not where we need to be. We need to get in a better place. So that is why we're here.

Okay, let's keep continuing along. Fixed costs are at 67%. What do you think about that number?

It's high.

Yep, it's high. We typically like to see that 50 to 60%. And if you are getting older and you do not have enough saved for retirement, that number needs to be even lower. So that's challenging. We'll come back to that. Investments are at 2%. Okay. What does that tell you?

Low.

Low. And even though you are contributing an additional $400 a month to your 401(k), which brings the total up to approximately 4 or 5%, that actually explains why you don't have enough in investments.

Yeah. Savings are at 5%. Okay, interesting. Here we have vacations at $400 a month, gifts at $200 a month, and then zero for a long-term emergency fund. What's that?

Not putting our money where we should be putting it.

Okay, I agree. Why? Out of curiosity, you love to travel. I get that. Gifts. Where are the gifts going?

Birthday presents, saving for Christmas.

I think it's more gifts and big dinners. It's not dinners out. We host a solstice party every year.

Okay. So you put money aside for that.

It's in the gifts. We're not crazy about buying a lot of things, but we do like food and experiences.

Okay. What's this guilt-free spending at 26%, or $3,237 a month?

It's all of the discretionary stuff that we choose to do. Music lessons for our son, eating out, those sorts of things.

What else?

$3,000 is so much money. It seems like more than we're actually spending. I think some of that includes if our son has a school break, we'll book a camp for him.

How much?

Summer camps will be $300, $400 for a week. So sometimes we're paying those over a few months.

What happens is these one-time expenses, we'll spend it in December or we'll spread it out for camp for eight months, not 12, etc. And our mind does not properly amortize those costs. The only way to know is to actually put it in here and track it.

Yeah.

And it's no shame. You want to send your kid to camp? Great. We just need to know it because otherwise you're like, 3,000 bucks is crazy. It's actually not that crazy when we just go through it in five seconds. And over the course of two more minutes, you could probably get 85% of the way there.

Yeah.

Okay. So now that we look at the entire picture, you have 67% going to fixed costs. You have 2% going to investments, 5% going to savings, and 26% going to guilt-free spending. What do you notice about these numbers? How would you assess these numbers?

We have too much going to guilt-free spending.

Agreed.

And our fixed costs are too high.

Agreed. Agreed on both. And accordingly, too little going to savings and investing.

Yep.

Perfect. The puzzle pieces all fit. Makes perfect sense. So the good news is there's no mystery here. It totally explains why things are the way they are. Now, what I want to do is dive in a little bit more to the fixed costs to understand what's going on there.

All right. Your mortgage is 2,100 bucks. That's pretty low. That's great. Stay there. Don't move. Your insurance. All right. Fine. Car payment is 100. What is that? Just gas?

Gas.

Amazing. The debt payments, $2,770. Okay, I guess it's time to dig into that. Tell me about your debt of $437,000. What do you have?

So that's the mortgage.

How much?

$338,000, I believe.

Okay.

Student loans.

How much?

I have about $5,500.

Mhm.

I'm at $32,000.

$32,000.

Okay. What else on the debt?

We have a HELOC that is $57,000. And then there is a balance of $1,800 on one of the credit cards.

What's with the credit card balance? A couple making $195,000 has credit card debt. Why?

That is left over from a bathroom remodel.

What's the HELOC? Why'd you take that?

For some home improvements. About half of that is for the bathroom remodel that we did. We used some of that to convert our garage into an ADU, which is a rental property.

How much do you make from that?

About $24,000 to $27,000 a year.

That's great. Okay. Amazing.

It feels to me like they're choices we made at one point and we said, "Oh, this is good," or, "We want this." And those choices have carried over. And it's hard, I think, for us to every month make a conscious choice about what we're spending our money on.

Stay with that first idea. We've made choices long ago. Those choices have carried over. Keep going on that.

And they're just on autopilot now. We say this is part of our life, so we're just going to keep on doing this.

Like what?

Like the gym. I try to go as often as I can, and there are sometimes where it doesn't make sense for us to have that gym membership.

I think this idea that Sebastien has brought up is really interesting. This idea of, we made choices years ago and we are now, quote, locked in. Either we are locked in, committed to them like a business, or we are locked in in the sense that they've just become second nature to us. This is really common. A gym membership is the obvious one. I'm looking at them right now. Camp, that is essentially locked in. Doesn't have to be the case. Solstice dinner, locked in. Doesn't have to be the case. I know these are uncomfortable here. I'm just raising the question. What do you think about that?

Yeah, that is fair. I do think that these are things that we value in our lives.

Totally. I value a lot of things as well. I think the reason we're here is we're working hard. We have these businesses, but we don't have enough money for retirement.

Yes.

But it's very interesting, especially talking to two business owners, because you know what business owners are really good at? Adapting to marketplace realities. If your business takes a 50% cut, you're laying people off. Business owners are very good at this. They move extremely quickly. You know who sucks at doing this? Individuals. Literally one of them will lose their job. They will not change a single thing. They'll buy the same at the grocery store. It's crazy. So in many ways, I actually encourage people, act like a business. If hits the fan, you already have a plan in place and you adapt immediately.

That is why the CSP makes it so easy. Something bad happens. You literally go down to the last box. Here, I'll show you. You go down to the last box. You go, "Time to pull out a freaking machete and chop it up. All this stuff. Goodbye. I don't even have to think about it." That's how it works. Now, that's the philosophy. What do you say we adapt it to your situation?

Sounds good.

Yeah.

How much is enough? How much money do you need?

On a monthly basis?

Sure.

What would we need for just our lives?

How much do you need to retire?

Oh, to retire, I would love even $100,000 or $130,000 a year.

In income.

In income, because we won't be paying a mortgage at that time, too.

Okay. And what do you say, Sebastien?

I think it could probably be a little bit less, like $80,000 to $90,000 a year.

Oh.

Of income.

Guys, that's wildly off. Do you ever talk about this before?

No.

What? Well, I'm glad we're talking about it now. Wait a minute. I am very surprised. I need to understand. You both have a more sophisticated rhythm of meeting and talking about your relationship and about money than almost any other couple I've spoken to. That part is awesome. And yet, you have not said, "How much money do we need in a relatively short amount of time?" How is that possible?

We were in a habit of thinking about what's happening this year. Those annual conversations were, hey, what's going to happen in the next 12 months? What are our goals for that? And I think it's only been in the last couple of years that we started to have to consider what's going to happen in the next five years. And certainly taking on a business for me, it opened my eyes to say, well, what's going to happen in the next 10 years?

And shifting my mentality from that short-term thinking to long-term thinking has been really hard. It's never something I ever considered. And so to think about retirement is 25 years off, I can't think about that. I just need to get through the next week. I need to get through the next month. I want to get through the next year with my business. And then if I'm doing things right, things will fall into place. But I have struggled to even consider a five-year plan. It feels daunting to me to think about.

You said so many interesting things. You said, if I just do the right things, the rest of it will fall into place. You've been at this for 20 years. Has it worked?

In the bigger sense, no. I have $21,000 in my Roth account. That doesn't feel like it's worked. I feel a little bit like there's a false sense of security and, oh, I've got a good credit score and I'm able to pay my bills. But yeah, if I project all of that out, it's too little.

I believe most people, deep down, they have an intuitive understanding of at least where they are in the universe of money. They may not know their income. They may not know what a 26.99% interest rate means, but deep down they know, am I doing poorly, okay, or great? That at least. And I think part of my job is to take a chisel and chisel around the stories and the narratives that we have created for ourselves and just help people get in touch with reality.

And then when we actually confront that, like you're both doing right now, which I really appreciate, then we can start to reflect on certain things. Wow, it's been the last two years that you've really focused on money. Great. In the last two years, you've made a lot of progress. Great. So what if we did more of that for the next 10 to 15 years? Where could we be? But in order to do that, we have to get rid of these old stories, these ones that are minimizing and making excuses and just distracting us.

We've seen the numbers. $195,000 income, one month of emergency savings, 67% fixed costs, and almost nothing invested. But the numbers only tell you what's happening. They don't tell you why. And it's very important, if you want to truly understand somebody, to understand why these things are happening. Because people don't avoid their money for no reason. They don't stay stuck in dysfunctional patterns that don't serve them because they're lazy or stupid. There's a reason, and we have to figure out what that reason is. There's often a story they're telling themselves, a belief they picked up a long time ago. Until we find that story and tackle it, then all the spreadsheets and retreats in the world don't mean a thing.

Sebastien, I want to understand how you grew up with money. What do you remember your family saying about money when you were young?

Not much. My mom is French, and it's not talked about culturally. There was a big turning point in my childhood around money. From age zero to 10, we were solidly middle class. My dad was a business owner, single income in the house, doing really well. And then when I was about 10, he went through bankruptcy and we had to sell our house. They actually lost money on it. There was a big life change. We actually moved. My dad started a new career. And the seven years after that were really tight. And I saw my parents struggle, but they didn't really talk about it. They kept it to themselves, tried to handle it and give the best life they could to me and my brother and sister.

Where did you grow up?

Southern California. And then we moved to Oregon when I was 10.

What age were you when your dad went bankrupt?

About 10.

And why did he go bankrupt?

He had a print shop. It was a family business. And things were changing in the '90s. Desktop publishing. He was a small shop, and so he couldn't compete with larger.

They used to do all the Yellow Pages.

Yeah. Okay. Wow. That's pretty interesting. So here your dad is running a small business. Times change around him. Sort of structurally causes the business to fail. There's nothing he can really do. Maybe tries to keep up, doesn't work, shuts the business down, affects his family finances. What messages do you take away now as a business owner yourself?

I am terrified of that same thing happening to me.

Mhm.

And I thought about it a lot getting ready to buy the business. And it's come up a lot. And like I said, I'm still terrified of it, but I also know I made a choice to engage with this for a lot of reasons, not just financially.

If you had to shut the business down, how would you feel?

Like I'm letting a lot of people down.

Your employees, your colleagues.

The guy I bought the business from, my family, myself.

Does your dad's experience make it more or less likely for you to take a rational approach to the business?

I think of myself as a pretty rational operator, so I don't know.

Hope, what do you think?

I think that Sebastien is terrified of losing the business. You're down from last year, which is understandable. And I think that you're doing a great job and headed in the right direction. But do I think that it makes him more or less rational? I think probably a little bit less rational because he's so terrified of that.

By being terrified of tariffs, etc., that makes you do what, Sebastien?

It's made it harder to make decisions. It's made it harder for me to feel like I'm making the right decisions, and it's paralyzing in some cases.

That's what I was going to say, is I feel like it makes you freeze.

Yeah, that's very helpful. Thank you, Hope. How did you grow up with money? What do you remember your family saying?

My mom was a single mom from the time that I was very small. She owned a big house and she rented out units. So she always said, "Be a landlord," which we are, because she was a schoolteacher.

Mhm.

And so she wanted us to have more passive income coming in. So we didn't have a lot of money growing up. But in my town where we lived, we had a lot more money than a lot of people. And my dad had had money. He had been an attorney. He was sick my whole childhood, so he didn't have any money. And so he was selling jackets and things like that from bar to bar, to bar owners.

Okay.

Because he can do that and be kind of flexible with being in and out of the hospital.

Sorry.

That's okay. Take your time. I know this is difficult sometimes, going back.

So he didn't have any money. He was also a gambler. It's not funny, but I think that's also why he didn't have any money.

Mhm. Can I ask, it's difficult for you to talk about your dad. Why is that?

I think just because he died when I was 14.

That's a tough age.

And I just wish I could have had these conversations with him more.

What would you have said to him?

Well, we actually did have a lot of these conversations. I was pretty precocious.

Mhm.

So he had a lot of regrets about a lot of things, including money. Even though he didn't have money, he wanted to be able to spend what he had on me. And it always made me feel guilty.

That your dad was spending money on you.

Yeah. Because I remember the stupid—it was a stupid, junky little wall hanging. It was so dumb. It was just a little piece of wood that had a picture of a dog, probably from a magazine or something, that was glued on it. And I really wanted it, and it was probably $20 or something ridiculous.

And of course he bought it for me. And then it just made me feel so sad when I would look at it.

Sad. Sad because I felt guilty for taking his money.

It's interesting because I haven't heard you use the word guilt before today. Not once.

Yeah, I've kind of gotten over that.

How'd you do that?

It took some work.

It took some work. Yeah, it's taken therapy, and I used to have a real problem spending any money on myself. And I no longer do. I want more money.

Wow.

To spend on myself.

Very refreshing. Honestly, I don't hear that from a lot of people. Rarely from women.

Oh, no. I definitely do.

I love that. Can I ask you, Hope, what lessons do you think you took away from your upbringing with money that you bring into today's relationship?

I'm very independent. I am super capable. I'm very resilient.

I could tell you have gone through a lot. Very few of us lose a parent at that age. That's a really tough age. Very few of us raised by a single mom in the manner that you were. And I kind of love the way you described yourself. I think it's really cool. You said, "I want more money. I'm independent. I'm resilient. I overcame guilt." A word I never heard you use today, which is extremely rare.

Yeah.

I love it. It's refreshing. So, thank you. Sebastien, how about you? What lessons did you bring from your upbringing to today's relationship with money?

I'm pretty much the same age my dad was when he went through the bankruptcy. And to see him decide to change careers, go back and get a master's of education, work at the same time while he was going through graduate school. My mom, she didn't even complete her high school education, much less college. She worked to support us while my dad was in school. That work ethic was instilled in me, and I've had a job since I was 13 in one way or another.

I know that I am also capable and hardworking and don't shy away from engaging with the process. As much as I'm terrified of bankruptcy, I take comfort in knowing my dad had three kids. It was super uncertain, and yet he was able to make a big change in his life.

Are you two able to make a big change in yours?

Yeah.

I think if we want something and if we have a goal in mind, I know that we can make a big change.

Do you need to?

Yes.

The numbers say yes.

It's an interesting response. Hope very resolute, saying yes. Just crisp yes. It's not even an extra syllable. Sebastien saying a bit of a softer, "The numbers tell us so." Not that I agree, not that I think we should, not yes, just the numbers suggest so. What do you think's the difference in that response?

Yeah. Now I'm the one hedging.

Yeah, it's quite a role reversal. Why is that?

I feel overwhelmed. It's a lot to run a business. It's a lot to raise a kid. And it's hard to see the right answer in front of me.

Okay. Now it's starting to make sense. Sebastien watched his dad's business fail. He watched his family lose their house, move states, and struggle for years. And now he's a business owner himself, paralyzed by the fear that history will repeat itself. Hope grew up feeling guilty every time her sick father spent money on her. So what did she do? She learned not to want things. She had to do years of therapy just to be able to say, "I want more money."

These stories are real, but they're also keeping them stuck. Notice that they have these planning retreats where they talk about their dreams and what they want and where they want to go. But I'm not particularly impressed by that. In a way, it's the equivalent of people who spend hours budgeting but don't actually make changes in their spending. Unless you actually change your behavior, this is all just play acting.

Let's say your four-year-old gets one of those little kitchens, when he puts a fake cupcake in there. Is he really cooking? Of course not. Oh, sure. We'll lie to him and say, "Good job. You're such a good little chef." But that little kid can't cook. Now, how is this any different? Going on these retreats, but you don't know your income within $40,000. It's just not real. A rich life is not just about dreaming, although dreaming is important. It is knowing your numbers and using your money to make those dreams reality.

If you need to make more money, could you?

Yes.

How easily? Sounds like you answered that pretty quickly, Hope.

We were talking about this last week. I think I could give myself a raise when we have our next project come into the office because we'll be more financially in a good place.

Okay, cool. How much of a raise could you give yourself?

$1,000 a month, I think, would be fine and pretty easy actually right now. I still have two more years before I'm paid off on my loan. So once that happens, there's more flexibility.

Cool. And then Sebastien, could you make more money?

In the next couple of months, some of my expenses are going to go down. I could give myself a raise.

What if one of your businesses went under? How would that affect your family finances?

Dramatically.

We would have to just get another job immediately.

Yeah. It would be slash and burn to the monthly budget and scramble.

Okay, I'm going to just be very direct. You all need the money. If the business doesn't work, you got to have a plan B. The plan B: shut it down, figure out the debt. I don't know if you declare bankruptcy or not. It would certainly be poignant. You've been through that with your family. But in my opinion, you got to treat the business like a rational investor would.

And that's why as CEOs, we are not rational. Especially CEOs that are in the business, it's our name, blah blah blah. That's why sometimes we need somebody from the outside to be like, "Dude, if I was an investor, I would never invest in this business," or, "This is great. You're undervalued. You should keep going."

That is what has been so challenging for me, is the uncertainty of, okay, I can do this this month, and it's working this month, and I've paid all the bills this month. The cycle of how these tariffs are going to play out, the consumer confidence is going to play out. That level of uncertainty of, is it going to work in three months, is part of what is paralyzing to me.

Do you want me to unparalyze you? Because I'll right now. I'm telling you, it sucks to be in it. I know it because I've done it. I've been there, totally paralyzed by what to do. My business was declining for a while as well. And it really helps to just have somebody from the outside be like, "Look, here's what I would do." You don't have to take the feedback, but let me just tell you what I would do. You have business savings or no?

No.

Okay, you need it. The fact that you have no business savings is what is paralyzing you. That is why you're on a thin razor's edge every single month. So that's a problem. I like to have three to six months of business savings. That would obviously take you a long time. It's almost inconceivable to build savings while you're talking about downsizing, but if you cannot build up a reserve, you are already in a very dangerous zone.

Second, you set up a timeline and you say, "Look, I'm spending all day and night working on this freaking business. Here's the amount I need to be making. Here's the margin I need to be making. I'll give myself six months to make it work. But if at the end of that I am not, it's time to pack it up." Again, you can adjust the margin and the timeline for what you want, but I would recommend you probably do it in less than a year because it's kind of like they used to tell you in the test: if you haven't done it by the time the test ends, you're not going to get it at all. Just pick a timeline and then stick to it.

Two of you as entrepreneurs should probably be talking to each other, giving advice as appropriate, but we need constraints. Otherwise, we just drag on in this uncertainty forever. It's that that kills us. Entrepreneurs know, look, if I have to shut this thing down, fine. I'll start something else. I'll buy something else. I'll find a job. But just this paralyzing uncertainty is death. So make a plan, execute it. Even if it means you shut it down, there's a better future for you ahead. Or it means you turn the business around and crush it. Also great. What do you think about that?

Yeah, it's not something I've laid out yet. It's been very month-to-month for me.

I hate month-to-month. I hate it.

If you have profit at the end of the month, instead of paying yourself more, can you set up a savings?

Yeah, that's how you do it. Beautiful. More importantly, eventually you need to shift beyond month-to-month. Entrepreneurs should not be thinking month-to-month. That's part of the reason you feel so scarce and behind. It's like this month good, this month bad. We can't do that. We can't drive only planning 10 feet ahead each time. We need to be talking about miles, right? Hundreds of miles. That's the way we need to think.

Okay. Can we talk about your personal finances? If nothing changes in the next five years, what happens to you?

We still are not able to retire.

Agreed. What else?

We wouldn't be able to do other big goals that we have in our life.

I suspect because of the dynamic you have that you would probably still take some trips, probably still spend on your son who will be in his teenage years at the time. I suspect you'd probably still do those annual and six-month meetings, dreaming. I don't know, guys. It just sounds kind of dim to me, especially when you're making almost $200,000 a year.

It's cheap to dream, but putting numbers to it.

Yeah.

The hard part.

That's the whole point. Yes. So, some quick numbers to give you to get to your goals of between $90,000 a year to $130,000 a year of safe withdrawal during retirement. Here's what needs to happen. We're going to assume $35,000, $36,000 a year in Social Security. It could be more. Who knows? We're just going to make an assumption.

To have $90,000, you need $1.35 million at retirement. That requires increasing your investments to $21,000 per year. To get to $130,000 of income, you need $2.35 million at retirement. That means you need to increase your investments to $45,500 per year.

$45,000 a year.

$45,500.

Wow. Okay.

What do you take away from that?

Man, that's a big number.

Yeah, that's a big change.

Yes. Let's go back to the CSP, and you're going to tell me what you want to do. All right. Here we are. Your fixed costs, 67%. Where would you like to start?

So, the debt payment, we have one more payment on our credit card. It's going to go down by $1,800. We've been aggressive with the credit card.

Okay. Your fixed costs just dropped down to 52%. That's more like it for a couple making almost $200,000 with a low mortgage. That is great. All right. Your debt payments are now at $970. Now tell me again, is this going towards—

It's student loans and HELOC.

7% and roughly 6%. And is this the minimum?

On the HELOC, yes.

And the student loans?

Yeah, it's whatever we've been paying.

You know the reason I'm asking? It's a relatively high interest loan. So paying an extra $100 a month could shave off years of payment. That's why I'm asking. You're paying the minimum. Fine. We could pay more. But right now you're at 52%. To me, this is great because it means you have margin to play with. These groceries, come on. Well, you like food. You said it, right?

We do, but we could shop every other week at a cheaper store.

Great. How much you want to drop it?

Let's drop it $200. Yeah.

Okay. $910. Damn, we're at 50%. This is what I'm talking about. And then the subscriptions, keep or change?

Keep.

All right, cool. Investments. Huh? No, we're going to fix this. This is where the real wealth is created. What do you want to do?

So that post-tax retirement, that's my Roth IRA. We can put it at $550 or whatever the max is. $580.

$583. Uh-huh.

Seb, where is my—

Yours is probably up here at $400 a month for 401(k)?

Yes. Okay.

Want to put more?

Yeah, I would love to put $1,200 extra.

Extra. So $1,600 total.

Yeah.

Great. Love it. Okay. Holy. I just want to point out, the question is, do we have enough? And the answer is always down here in the guilt-free spending number because whatever number, you reduced your groceries and all that stuff, that number flows directly down to guilt-free spending. It's sort of like a bucket. It just collects all the rainwater, and now you can use that money. You have $4,600 a month still to allocate. Where do you want to allocate that money?

Long-term emergency fund.

Yeah, I agree with that. How much you want to put?

Hope, $500 a month? More?

Well, I think more because—

Why don't we try it and see what happens? Watch this number here. This right now tells you have $4,654 per month to play with. Okay, watch. $500 a month. What happened to that number?

Barely anything.

Barely anything. So you still have $4,154, and now you know you're accumulating about $6,000 a year in your emergency fund. What does that tell you?

It's not aggressive.

We can do better.

Yes. Yes. How much?

So, if we put in $1,200, then we would have $14,000 for a year, or per year, that we're putting toward it.

You want to put in $1,200 instead of $500?

Yeah.

All right. Cool. Okay. I'll tell you what I noticed here. First of all, you still have $3,400 a month. That's a lot of money.

Yeah.

Second, I noticed that your savings has gone up to 15%, which is great. Not so sure about these gifts and vacations at $600 because you could keep it if you want, but it's going to affect you down the road. $600 right now would be, in my opinion, much more valuable in another place. I'm not trying to pressure anybody into not doing the stuff they want to do. It's up to you how you want to allocate your money.

I do want to remind you that in order to get to $130,000 of retirement income, you need $45,500 a year in investments. So instead of $500, let's freaking go for $800.

Yeah.

Watch what happens. Watch this number down here in guilt-free spending. Okay. $800 in Vanguard per month. Uh-huh. You still have $2,654 per month.

Yeah.

What do you notice about this so far?

We've just had it misallocated and been spending with a lot of fat.

Yes. And the real question is why? Why do you think you've been doing that?

Maybe because I feel so comfortable.

Yes. Keep going, Sebastien. What about you?

We've always had a reason to spend more and say, "Oh, this is for our kid," or, "Don't we deserve this?"

I agree with all of these, in my opinion. Two things here. One, you had dreams, but no actual plan on how to get there. There was no connection between money and your vision. Okay, that's number one. And number two, you had a lot of narratives surrounding you. We're doing better than we used to. Well, if we're doing better than we used to, all we should do is give ourselves a pat on the back, not actually make dramatic changes.

By piercing through those narratives, now it feels like this is so easy. It's like a hot knife through butter. We're just cruising. That took cutting through those narratives and realizing, oh, we should not only be complimenting ourselves, we should actually be making rapid change to get where we want to go.

Let's keep going. We're not done yet. We're doing great. Okay. So, I'm looking at the four key numbers. 50% in your fixed costs. Amazing. Because that gives you lots of margin to play with. Usually, we like that number between 50 to 60%. You're at the lower end of that. That's amazing.

If it's me, I might be putting an extra $100 or $200 towards the debt just because you could shave off years from that payment. So, I'm just going to go ahead and do that. It's up to you on this, but I'll just show you. We're now at 52%. Totally fine. You can run the math to decide what is the sweet spot for you. But truthfully, once you set that up to be automatically paid, you will not even miss it. Your life will get so much

Better. Next up, investments at 14%. While I agree that you probably will have enough, when I think about a couple who's seriously starting their investment journey in their 40s and they are making almost $200,000 per year, intuitively I go, okay, we got to really double down on this. What does that mean for me? I might be talking about 16, 18%, basically getting really aggressive. Let's remember, there's a point where in the next 20 years, one or both of you might be unemployed for a while.

Yeah.

So, when the going's good, I would rather have you investing an extra 2, 3, 4% than burning it on whatever. So, if it's me, I'm just going to go ahead and increase this number. I'll just randomly put it in one of these boxes. Let's just see what happens if we do 400. Holy, 400 bucks a month, which you're not even going to miss, and it increased your number to 17%. That's pretty cool. I'm going to leave it.

Savings down at 15%. What do you guys want to do about the gifts and the vacations? That's $600 a month or 7,000 bucks a year approximately.

I want to leave the vacation money.

Okay.

Gifts I feel like we could reduce a little bit, but we have to—

It's up to you.

150.

150. All right. Sebastien, what do you think?

Yeah. And I would say we could probably trim the vacation budget by a little bit as well, like 350.

Okay.

Okay, cool. So, there we go. We're at 14% for savings, 17% for guilt-free spending. I like to see that number 20 to 35%. You are starting aggressively investing late.

I mean, vacations and gifts feel like guilt-free anyway.

I agree. You're actually just actively saving. So, let's reduce some of this. What do you think? You want to move it somewhere or no?

Ouch. But sure. Yeah.

Let's try it. You tell me. Watch this. You tell me if you want to do it or not. Let's take an extra 400 bucks. I put 400 in investing. That leaves you with 1,754 per month. Keep in mind that does not include vacations or gifts.

Yeah.

I don't know. I feel like you could do it. What do you think? Tell me.

Yeah, it feels dramatic. There's definitely changes.

Mhm.

But I know we can do that.

Yeah.

The thing that you both talk about a lot is travel.

Yeah.

That's important to you. Notice that I do not pressure you to cut back on the thing that is important to you. In fact, if you decide after 6 to 8 months of this we want to actually add 50 bucks or 100 bucks a month into that, you go ahead. You have the margin. But what I'm trying to do is to actually chop this unconscious spending.

Yeah. Well, I think if we are taking this amount of money out and just putting it where it needs to go without us seeing it, it won't hurt as much.

You won't even notice it.

Yeah. How much long-term emergency fund would you recommend that we have? Like 6 months?

Yeah, maybe more, but at least six months. So, if we calculate that, it's like $38,000. You currently have $11,000.

So, we need 27,000. So, that's two more years of saving. Okay.

Yeah. A little less than two years. Yeah. So, keep it up.

If we are able to hit that mark, can we take all that money that's going there and put it into vacations?

Excellent question. I wish more people asked me questions like this.

Yeah.

Currently, you have sketched out saving 1,200 bucks a month towards your emergency fund.

Mhm.

First of all, you could do whatever you want. It's your money. And if it were me, I would probably take at least 400 bucks a month of that 1,200 and put it towards travel, which is a massive upgrade.

Yeah. What you have been saving, it more than doubles your vacation.

Oh yeah.

I would take some of it at least and put it towards investing.

Especially because investing is a primary goal. So in my opinion that means you take at least half, 600, put it towards investing, and then you all can decide what to do. Probably take 200 and pay that freaking debt off faster.

Yeah, that's how we think about it. And that is true for the next student loan that you pay off. You take that payment, you allocate it. Just do it by percentages.

Okay.

Boom. So in our relationship, we might take whatever extra money we have coming in, 70, 75% of it goes towards investments. In your case, it may be 50 because you have a little bit of debt. So you're going to put some more towards that. That's how you do it. God, I got so excited about that question. That was an awesome, awesome question. The reason I'm so excited about that is I can see you now looking forward. You're like, "Once we hit this, then what about that? Then what about that?" And you can see it's starting to snowball. It accelerates.

Great. Okay, I need to stop here for a second because I made a mistake on this episode. I made a math error and it really affected the rest of what I told this couple. Here's what happened. When we updated Hope's 401(k) contribution, I forgot to recalculate her net income. And then on top of that, I transposed a number from their savings line when I was calculating their retirement contribution. Both of these things threw off the totals.

I'm the guy who tells millions of people, you got to know your numbers. You got to get your numbers right. And I got these numbers wrong on camera. I want to apologize. And I'm flagging this and I'm leaving this episode up because I have promised to always be honest with you. I got this one wrong. I'm sorry.

Now, let's talk about what it means for Sebastien and Hope. Even with my math errors, plural, they're still in a strong position. Their income is solid, their fixed costs are relatively low, and once their emergency fund is fully funded and their debt is paid off, this plan becomes much easier to execute. The mistake does not change the big picture. It means, though, that the exact contribution numbers need a small adjustment in the short term. All right, let's keep moving on.

Sebastien, your business, what's the plan? Because right now, if we look at the effect on the personal finances, you're bringing in roughly half, approximately, maybe a little less depending on the ADU and all that stuff, but it's a considerable amount. None of this plan works if your income is not the same. What's your plan for the business?

So, I have a contract with another company that has another year on its term that I have to service. That feels like a good finish line or milestone to consider, hey, am I succeeding or do I need to pivot? I think number one, start a business savings so that I can start to build a little bit of a buffer. I'm planning out the next 90-day cycle right now. I'm looking forward to what's happening at the start of the year. And January is always a slow time for me. So that gives me time to examine what are the measures of success that I want to see, like, hey, am I—

I feel like we're in the weeds. Just conceptually, what do you need to be doing as a business owner as it relates to your family finances?

High level, do everything that I can to make it succeed.

And if it does, that means what?

If it does succeed, in a year from now I will be able to give myself a raise.

Great. What would the raise that you would be targeting?

Probably another $1,000 a month gross.

And then if it's not succeeding?

Then have a conversation with Hope about this shutting down.

I would say that having that conversation happens well before 12 months from now.

Yeah.

In my opinion, 12 months is already a long time off. Those conversations start happening now. And sometimes those conversations, those people can actually help you. They're like, "Have you tried this? Let me introduce you to that. Try this." Whatever. But if you start having conversations 12 months from now, that's another 12 months. And y'all are going to be burning cash.

He has been trying new things with his business, which I'm very happy about, so that he can expand his base. Ramit, do you want a wine newsletter? Or a house.

Yeah, that's great. First of all, I love that the two of you are talking about this. That's great. In a way, it's easy for me to say this. It's much harder for you to receive because if the roles were reversed, I would not want somebody being like, "Look, either make it work or shut the thing down." Like, yeah, easy for you to say, bro.

Yeah. But also, that's the kind of advice that entrepreneurs need because if you're making like 38,000 or 40,000, then the question is, you're putting in a lot of hours, a lot of work. Might it be better to simply, if it's not pulling its weight, shut that thing down, get a job, do something else, etc.? Again, you have to think as an investor would, and that's tough for any entrepreneur to hear.

Yeah. I never imagined myself as a business owner. I got into the wine business because I loved wine and there was a lot of things that I was attracted to. I never thought about running my own business, and this was an opportunity that came up and it seemed like it played to a lot of my strengths. My degree is in architecture, right? Not business. There's so many things that I've had to learn over the last year and it's been a great education, and I've taken a lot away from it. There's so much that I don't know. To get back to your question, what is my plan? I think one of the things that I need to do is reach out to another mentor who can give that more cold-hearted advice to say, this is not working, you need to do this or whatever—

Yes.

It may be.

Treat it like a cold-hearted business. It's numbers. It needs to pull its weight, otherwise get rid of it. You got to be Darwinian about this. That's my opinion. Of course, I know that you are going to take half of that advice, and then every entrepreneur loves their baby and wants to nurture. I get that. That's normal. If somebody told me this, I'd be like, "Off." But then at night when I was sleeping, I was like, wait, maybe I should listen to part of that.

Yeah. But it is giving us what is on the CSP right now. It is bringing in enough profit that he's paying himself.

Yes.

It is, right? I see those things as success.

Agree. Agree. I want your business to be successful, and I see that success as being you're able to pay yourself and take care of your business loans. And so I think that that's where the answer lies, is where are we not able to pay you, or where do you run into trouble with saving money in your business? And so to be able to not give you a raise, I'll get a raise and you take that money and save it so that then you can have a raise later when you're more profitable.

That's pretty cool. I love the teamwork. I really, really love that. This idea that we're both teammates, or we're playing different sports, fine, different companies, but at some times one of the teammates is injured, so the other one takes on a little bit more of the work. Sometimes the other one is in a development phase, so the other one takes on a little bit more. I love this. This is what a team is. And sometimes it doesn't work out, and that's also okay, too.

Yeah.

Lots of different ways to get to your rich life. What I especially notice is teamwork, which is awesome. I notice that you are being both realistic. That is the ultimate lesson. And then I notice that you're saving and investing a ton of money. That's great.

Mhm.

What surprised you about today's conversation, Hope?

I really wasn't trying to be obtuse earlier, but maybe I have been just glossing over things. I guess that was surprising.

Cool. Sebastien, what surprised you?

I think seeing the numbers in such an aggressive way and what a dramatic difference that can make. When we have played around with this, it always felt like small measures, little tweak here, little tweak there, and it felt like that incremental progress where we could pat ourselves on the back. And your comment about that's fine, but we need to be thinking about ourselves in the future, looking back at us now and how we can pat ourselves on the back 20 years from now.

Great, great, great insight. If you had to finish this sentence in full, "I feel" what? Just give me that full sentence. Sebastien?

I feel more optimistic.

Cool. Hope?

I feel taken care of.

Amazing. I appreciate that. Is there any question that either of you has that you did not get answered? I just want to make sure you have a chance.

Yes. And I know that you've answered this before on the podcast, so I'm sorry to make you do it. I'm just blanking. But if we have take-home, but this is measured in gross, right? What the CSP is is our gross pay. Yeah.

Wrong. The CSP is based off of your take-home. I'll show you exactly what I mean. I want you to understand it. So, this is a great question.

Yeah.

Here we have your gross, this number here, 16,260, but all the other numbers are based on this 12,375, which is your net.

That makes me feel much better.

Yeah, great question. That was an awesome question. So, I would encourage you to redo your CSP and really lock it in. Make sure you calculate the actual numbers. How much are we going to have? Because we were close, but I want you to get tighter. Knowing your exact retirement age, knowing exactly how much you're going to be contributing, pre-tax, post-tax, get a little dialed in. I'm looking forward to hearing more from you.

Yeah, you bet.

Thank you.

Hope and Sebastien have this peculiar verbal tic where they keep measuring themselves against their past. They'll say, "We're doing better than we've ever done. We used to be broke, but now we're not." Can I be blunt? Yes, it's important to understand where you came from. But what I really care about is what you are doing now. A rich life is lived today and tomorrow, not 30 years ago. So, if Hope and Sebastien keep looking backwards instead of planning forwards and changing behaviorally, just try to imagine riding a bike 10 miles backwards. You're never going to get where you want to go.

The good news is they can change this today. They have a plan and most importantly, they understand why they have been stuck. If they can shift from "look how far we've come" to "look where we get the opportunity to go," they can actually build something incredible. Now, let's check out their follow-ups.

First of all, I want to say a big thank you to Ramit and his staff for having us on the podcast. It was such a great learning experience and also really challenging, but we had a lot of takeaways. My biggest surprise is that one of my biggest goals in life is to live as a genuine, open, and honest person. And I did not realize I wasn't communicating to myself about my finances in that same way.

One of the biggest takeaways was that Sebastien and I do tend to look toward the past. And in fact, we had looked at our numbers on our taxes from last year for our yearly numbers. And that's where a lot of the confusion came because we knew our numbers pretty well, but apparently our big yearly number was from last year. Obviously, we need more savings and retirement. That was drilled in.

I have already worked with Sebastien to figure out some money to go into savings and some money to go into investments. We're going to increase those numbers shortly, but also I do most of the grocery shopping and I've committed to staying within $900 including pet food. And I went shopping for the week yesterday and spent $155 on the week's food. And so I'm well on track for that. And if we go over then it's beans and rice for the next week.

Hi Ramit, thanks again for having us on the podcast. My biggest surprise was to hear our story reflected back to us, how much we were looking at our past selves and not thinking about our future selves. Our biggest takeaway was that as much as we like to talk about our dreams and our rich life, that we actually need to fund those. And in fact, if we're aggressive and conscientious

about the choices that we're making that we can reach our goals and be aggressive with saving for retirement and building up an emergency fund.

Hope and I actually had a really interesting conversation after the podcast about what success would look like in my business. And she really reminded me that the metrics that I set out for myself when starting the business was to be able to pay down the debt, to pay my bills, pay my taxes, and pay myself. And I've been able to do that for the past year, and I'm feeling confident that I can continue to do that. But I also know that I need to have a plan about making sure that when those metrics aren't being met that I move on.

The other plan that we have is to really sit down and talk about our retirement goals and get on the same page so that the number that we want to achieve actually kind of jives, since we had such a big disparity when we had a conversation with you. So we're going to have a money meeting where we really talk about our retirement goals and get on the same page.

Hi Ramit. Since we last spoke, Sebastien and I have actually not really been in the same place. But we have made a few updates. He went to Europe for a couple weeks for work. I think that he is feeling better about his position with this company. I increased my SIMPLE IRA by $1,000 a month. I feel really good about that. Thank you again for this opportunity. Take care. Bye.

Since our conversation a few weeks ago, Hope and I have really focused hard on our investments. So I have fully funded my Roth IRA and we've also set up a recurring investment in our Vanguard account for $1,000 a month.

We had an unexpected expense come up around our kid's orthodontia. So we've made a little bit of adjustment to how much we're investing, saving in our long-term savings so that we can accommodate that. But otherwise still putting a lot more money towards our emergency fund. And the biggest change has been that we're thinking a lot less about how far we've come and a lot more about how far we want to go.

Listen up. If you want my help with your specific money questions, there are only two ways to get it. First, you can apply to be on this podcast at iwt.com/apply. Or second, you can join my money coaching program instantly at iwt.com/moneycoaching. In that program, you get access to live virtual events, monthly group coaching calls, live Q&As, and an amazing huge community of other people like you. Check it out at iwt.com/moneycoaching.

Article published September 29, 2026