Planning for the Unexpected: Being Financially Ready to Take Advantage of Opportunities

Mindy:
Welcome to the BiggerPockets Money Podcast, show number 127, where we interview Ramit Sethi from, I Will Teach You to Be Rich.

Ramit:
Get ahead of the game and ask yourself, Hey, if my partner’s laid off, what if I’m also laid off? What if my industry disappears for the next five years? What am I going to do? Better to make those plans right now than to wait until your back is against the wall and then have to make some really poor financial decisions.

Mindy:
Hello. Hello. Hello. My name is Mindy Jensen, and with me as always is my supercalifragilisticexpialidocious co-host, Scott Trench. Today’s descriptive word comes from my 13 year old daughter, Claire.

Scott:
Oh, that’s a popping off description.

Mindy:
That was good. Scott and I are here to make financial independence less scary, less just for somebody else and show you that by following the proven steps, you can put yourself on the road to early financial freedom and get money out of the way so you can lead your best life.

Scott:
That’s right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business, or just have us teach you to be rich like Ramit Sethi. We’ll help you build a position capable of watching yourself towards those dreams.

Mindy:
Ramit Sethi first joined us on episode 73, and he’s back again to talk about money, investing and how to financially prepare for the unexpected event.

Scott:
Ramit is just amazing in the way that he’s able to have so many frameworks and mental models for approaching personal finance in every situation and he’s adapted his system rapidly to the Coronavirus and current events. So, really excited to have him on board today. I learned a lot, I know you will too.

Mindy:
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Mindy:
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Ramit:
Me too. It’s great to be back and thank you for having me.

Mindy:
You wrote an article right when all of this Coronavirus lockdown things started in early March called, Panic is Bad, But Overreaction is Good. You made seven points in the article, but I really want to discuss number four because it’s so clearly ties into the financial independence journey. You said, Panic is Bad, But Overreaction is Good. Don’t worry about looking stupid or wasting money. One of the reasons you save is to be prepared for the worst, so prepare. Before Coronavirus, not a week went by, but when you didn’t happen to cross some article amending the fact that Americans have nothing saved for retirement, don’t worry about looking stupid or wasting money. If your friends and family don’t understand what you’re doing, that’s okay. It doesn’t mean stop doing it, maybe just stop telling them about it.

Ramit:
Yeah. The overreaction and panic, I think this ties in a lot with FI in the financial independence community. When this happened, when we started learning what was going on with Coronavirus, I’ve watched enough contagion movies and I’ve seen, I was living in Manhattan and I’ve seen enough Batman movies where they take the bridges away and everyone’s trapped there. I was like, we got to get out of here. It’s funny that when we have an instinct to react, the first thing that happens is our mind starts telling us, no, no, no, it’s not that bad. Just hang out. You’re being weird. You’re being overdramatic. I distinctly remember reading a book called The Gift of Fear by a guy named Gavin de Becker. It’s an awesome book. He protects celebrities who are often being stalked. What he points out is that we all have this inner instinct, this gift of fear, but we turn it off. We ignore it because we’re worried about looking foolish or seeming melodramatic.

Ramit:
I determined at that very moment, we have to go. So I told my wife, “We have to make plans. Let’s get out of here. I think it’s going to be bad. Worst case, I end up looking stupid and I’m over-dramatic and I wasted a little bit of money renting an Airbnb, but in the grand scheme, who cares? I would rather look foolish and come back two weeks later, three weeks later, then the worst case, which is to get sick, to get my family sick, or eventually even potentially death. So we’re going.” That was the first thing that I did.

Ramit:
After that, I took some other steps with our team at, I Will Teach You to Be Rich. I got them together on a call. We work remotely, we have for the last decade plus. I said, “This is what’s going on. We don’t know what’s going to happen, but your job is safe. We are focused. We’re going to immediately extend a Coronavirus stipend. If you need additional money to buy food for yourself, to stock up, send something to your parents, this is a stipend we’re making available. Please use it. Go buy whatever you need, send us the bill. We will take care of it.” Then we proceeded to go through each different step. We worked with our customers. We emailed them proactively, “Hey, things are happening. We don’t know what’s going to happen, but if you need to take a payment break, tell us, and we will let you take two months of breaks on your payments to us because we know that money in your pocket now is worth more than money in your pocket later.”

Ramit:
All of these things I think are directly related to your listeners because at any given moment, we all know the importance of saving and of investing for the long-term. But it’s these rare shocks that make everybody realize the importance of saving. The problem is if you go around every day preaching to people that they need to save more and that your savings rate is only 4%, well, mine’s 39%. You sound horrible. Nobody wants to listen to you bragging about your stupid savings rate. There are certain times I think that some people who are a little bit more experienced in the community need to learn to shut their mouth.

Mindy:
Oh, yes. Yes.

Ramit:
You don’t need to go around preaching your savings rate. “Oh my God. I’m so impressed. 42%, wow.” First of all, it’s not that impressive. Just because you have a savings rate, it doesn’t mean you’re morally superior to anyone. Second of all, who wants to hear someone going around bragging about anything like that? The best thing we can do, if we are more experienced with money, is to set a great example, is to be great listeners, and if somebody asks us for advice, we can point them to a couple of great books or a couple of great articles and then we can say, let me know if you need anything else, that’s it.

Mindy:
Okay. So how do you share your experiences and expertise with people who aren’t on this financial independence journey yet? How do you do it without being preachy? I think so many of us have this knowledge that we want to share, but it can come off as I’m better than you. When it’s really coming from a place of, I figured this out and I want to share this because I love you.

Ramit:
I have a principle called the STHU principle, and it stands for shut the hell up. [inaudible 00:09:15] to be the overbearing guy who just learned about compound interest and tax advantages in a tax deferred account. I’m out there, “Hey, you really need to do this. Did you know about your pie chart?” People’s eyes just [inaudible 00:09:30]. And every single person listening to this, I know you have started using the words savings rate and what are the other terms? 4%, Trinity study. You’re like, “Don’t you get it? It’s a safe withdrawal rate.” And they’re just like, “I got to go. Stop doing that.” It’s the biggest turnoff in the world, because you have to remember, rewind to where you were before you ever heard about any of this stuff. Imagine somebody comes up to you almost evangelically and they tell you, they start shaking you by the shoulders and saying, “Trinity study? Don’t you know, and by the way, everything you’ve been doing with your life is wrong.” You’re not going to react well.

Ramit:
You’ve gone through almost a lifetime of learning, of reading Subreddits and forums and listening to podcasts like this. You’ve really deeply immersed yourself in it. So you have a ton of foundation. STHU, shut the hell up if they ask for your advice, which they almost never do. Let’s be honest. It’s you giving your unsolicited unneeded advice, but they ask you, you could say, “Hey, I read a couple of articles that really changed the way I think about money. If you’d like, I can send you the link.” That’s it. Then if they read it and they want to follow up with you, great, you can have the conversation, but that will eliminate 99% of people right there. Because they don’t really want to know the journey you went through. They don’t, they want to live their life the way they do. I know the temptation. Don’t you understand if you just do XYZ, you can retire 25 years early? Don’t want to. If they did, they would follow up with you. If they did, they would find the other sites. If they did, they would ask you harder questions. They don’t, so respect that.

Scott:
Well, Ramit, we have to acknowledge, you and I at least in particular, that we both written books on the subject of money that give that kind of advice. We like people to buy those books and then give them to other people as gifts.

Ramit:
Oh, yeah. I forgot about that.

Scott:
So where’s the line that we-

Ramit:
Buy the book.

Scott:
Yeah.

Ramit:
Give it to them. Buy both of our books, hand them to them and say, this changed my life. In fact, here’s 10 copies, and if you read all these and you give them away to your children, your family, just buy 10 more copies. All right. That’s the way you do it.

Scott:
That’s right. Is that in the STHU framework?

Ramit:
Yeah. STHUB, buy the book. Shut the hell up and buy the book.

Scott:
There it is, STHUBTB. Yeah I like it. [inaudible 00:12:14] excited to get some great advice. You like, it’s unrelatable. People don’t want to be told how to live their lives. When you’re living below your means, that means you’re living below what your peers lifestyles are. Then over after a couple of years, that means you accumulated net worth in the six figure, seven figure range and they can’t relate to that either. So at no point are you relatable. They can come to you if they want to talk about it, otherwise, they’re going to have to discover it for themselves or passively watch your progression, or that of friends of yours that are doing that. That’s how we’ll slowly convert the rest of the country to this financial freedom religion, goal.

Ramit:
I just have to say, I wish I had heard this segment in my early twenties. Because once I discovered how money worked and the impact of fees and long-term investing, I felt exactly the same way. I really did. I remember preaching to people and telling them, “Effectively, you’re doing it all wrong. You need to do this.” I use the word need, you need. I couldn’t figure out why they were reacting the way they were. I wasn’t emotionally intelligent enough to figure it out. It took me until my mid to late twenties. I really wish that I had understood the depth of how people don’t want to be told what type of lifestyle to lead. That’s true with their fitness, with their money, with their relationships, with where they live. It’s true of so many things. And it’s okay if we choose to have a different perspective, there’s a lot of folks who disagree with some of my money philosophies. That’s totally fine. I just want people to live their rich life, whatever that rich life is for them and their rich life is probably really different than mine. And that’s okay.

Scott:
What do you think an appropriate reaction from an individual level looks like to the Coronavirus. I think it’s an outstanding response that you had as a business. And in terms of, it sounds like you’ve rented Airbnb and moved out of your residence to be proactive about that. What do you think a normal person who’s working a full time job and thinking, Hey, I’m trying to react to this, would have been that outstanding response?

Ramit:
I think that overreacting at the individual level is also exactly what we should do. We tend to be very optimistic. It’s built into our culture. If you look at the end of movies at American movies, two people walk off into sunset holding hands, everything’s great. That is a very amazing part of our culture, but in a time of crisis, it can work against us because we tend to always think it’s going to be fine. It’s going to be fine. Sometimes it’s not fine and we need to prepare for that. So for an individual, I would recommend a few things. I would recommend immediately going through my CEO strategy, cut costs, earn more, optimize spending. And that means, cutting costs, we all know about it. I’m not going to belabor the point. But I will say that I had somebody write me really early on and say, “Hey, my wedding is coming up in six months. What should I do?” I didn’t even have to think about it. I just said, “You got to cancel it.” “Why?” Because money in your pocket now is worth more than money in your pocket later.”

Ramit:
It really pained me to tell that person my advice on that, because I’ve planned a large wedding and I know how difficult it is to even contemplate shutting it down. But there are a lot of situations right now for people where you have a vacation plan or you have a gym membership. And if you cancel it, you’re going to have to repay the initiation fee. It doesn’t matter if we’re talking about a hundred bucks or $10,000, the point still remains, money in your pocket now is really powerful.

Ramit:
I also think that as an individual, you really want to scenario plan out what could happen. If you are living with a partner, what if your partner lost their job tomorrow? You would definitely be looking at your expenses very closely. Well, you should just do that proactively. Get ahead of the game and ask yourself, Hey, if my partner’s laid off, what if I’m also laid off? What if my industry disappears for the next five years? What am I going to do? Better to make those plans right now than to wait until your back is against the wall and then have to make some really poor financial decisions.

Scott:
You said you wouldn’t dive into them, but could we ask you to dive into them? What are the specifics besides wedding and gym memberships that are some examples that you find are routinely easy places for folks to cut?

Ramit:
Typically, the two or three biggest expenses are your biggest opportunities. This is completely opposite of started three dollar expenses and pennies add up into, I don’t care about that. It doesn’t even scratch the surface compared to things like your car loan, your rent. Also, the fees that you happen to be paying on your investments, which are invisible to almost everyone. These are opportunities that you have to save tremendous amounts of money. On the O side, that’s C for cut costs, E for earn more, O for optimize spending. There’s five areas that you can call up right now and often, not always, but often get immediate cash. So these are your cable company, your cell phone company, credit card company if you own a credit card debt, student loan company, and even your landlord, and you call them up and you use the script directly from, I Will Teach You to Be Rich, you say, “Look, I’ve been a good customer for three years. Coronavirus is making it difficult for me financially. Can you tell me what options you have for somebody like me?”

Ramit:
I have run this through my community and people call these companies up. Again often, not always, but often they’re getting $500 with one phone call. They’re having their cable company cut their rates by $80 a month. These are tremendous savings that you can get from a onetime phone call and they are recurring savings. So these are some of the things that I would be doing right away

Scott:
For the rent option, I think that’s a particularly interesting one for us. We’ve noticed that while rents overall seem to be fairly stable throughout all this, what’s happening is more and more listings that are coming on the market at the higher end of the price range are sitting there pulling rent averages up and the low end rentals or the lower price rentals are flying off the market. So the ones that are actually getting rent, implying that rents will be coming down or are coming down in a real sense for the actually rented units, rather than the listings, which just have the data’s computer. Do you think now’s a good time to be considering moving?

Ramit:
If you meet certain factors, then it could be. Moving is a huge decision that includes lifestyle, financial, et cetera. But if you rent, if you have a lease coming up or the ability to move your month to month, if you determine that you’re overreacting and you’re saying, you know what? I don’t know what’s going to happen with my job or my industry, but I don’t know, maybe I want to downsize right now. And if you have positive options available to you, like your market has price breaks happening, then it could absolutely be a great time to consider.

Ramit:
I certainly have spoken to my community who’s told me that they’ve called up their landlords. These are folks who actually do have real financial challenges. They called up their landlord and said, “Look, this is what’s going on. You got to work with me or I’m going to have to move out of here.” Some of these landlords, again, not all, but some of them are saying, “Look, I know you’ve been a good tenant. I know that this is a temporary shock. I can make you a break on your rent for X time period.” I wish I could give you a clear answer, but I really want to be honest instead of just saying black or white, there is some nuance to that question.

Scott:
All right. What about for folks that are looking to pay off various types of debt? Suppose I’ve got high interest student loan debt or medical debt, and I’ve got a mortgage, credit card debt, some stuff on that high end of the spectrum, some of that really low interest rate stuff, and then maybe some stuff in the middle. What’s a way to think about paying off those types of debts versus building cash? You’ve mentioned that cash is King. Cash now is much more valuable than cash in the future. How do I juxtapose that with my debt load?

Ramit:
This is an unfortunate situation because if you’ve built up a significant amount of debt, something has to give. My advice is to target a one-year emergency fund. And what that means, the cost of doing that means that you have to pay minimums on your debt, and that will likely result in a lot more money that you owe over the long-term. However, in a time like this, where there’s tens of millions of people out of work and statistically, whatever industry you’re in, you have a chance, a much higher chance than usual of being laid off. That cash really is important. To put it in another way, so many people hate debt so much that first of all, they get into it, which is odd, but okay, they get into debt and then they take all their cash and focus on paying it off.

Ramit:
Now let’s just play it out. Let’s say you pay off your debt and best case, you take all the money you used to pay off your debt and you start saving. That would be amazing. Well, let’s talk about a worst case. You pay off your debt and then you’re laid off the next day. So now you have debts paid off, you have no cash, you don’t have the skills to build savings because you never had to do it. Now where are you? You’re just back on the debt cycle. So in my estimation, I would recommend people prioritize the emergency fund, use a CEO strategy I talked about, pay minimums on your debt. I know it’s going to incur higher fees, call them up, try to negotiate those, see what kind of payment plans you can arrange. They will work with you sometimes. Then as soon as you hit that emergency fund number, take all your additional money that you’re going to be making and pay off that debt as fast as possible.

Scott:
So what does that emergency fund number look like for you?

Ramit:
Usually it’s interesting. When you say a one year emergency fund, people get freaked out because it seems like a lot of money, and it is a lot of money. But one common mistake people make is they say, well, I make $60,000 a year, so I have to save $60,000? That’s insane. Your emergency fund is going to be less than the amount you make. Your emergency fund, the way that you can calculate it is to imagine if your partner were laid off or if you were laid off, what would you immediately cut back on? You’re going to cut back dramatically. People are very responsive to their individual finances when they’re laid off. So then you calculate how much you need for a minimum per month, multiply that by 12 for 12 months and start saving. I want to acknowledge it’s going to take a while. It really will. But if you have that number in mind, you can mathematically project how long it will take you. And if you happen to get any additional income, things like a tax return, you can put that toward your emergency fund and speed that up.

Scott:
I’m a big finance nerd. So when I’m hearing you say what the implications of that is that you believe that, even if you have fairly high interest rate debt like 10%, 12%, that the opportunity cost or the return on that reserve is actually going to be much higher than that. I’d agree with that largely. I think that that’s true. I think having that year, six months or whatever you’re comfortable with, six months of your current spending might be closer to a year of what you’d actually cut back on if you lost your income source. So there’s a lot of different right answers to that number. But I think that fundamentally, if you’re trying to go down this finance nerd path, it’s really that emergency fund, the return on that, the value of that is much higher than any return you can get on investments or the interest rate on your debt.

Ramit:
Yeah. That’s a really interesting way to look at it. I agree with you. If you want to financialize it, you absolutely can. And the way to do that is to take into account the risk. There’s a tremendous risk in being laid off in this economy and not having any cash coming in. That is a massive, massive, massive risk. Almost an unprecedented risk for individuals. So you need to factor that in if you want to put it into Excel. And when I say factor in, keep in mind that there’s this contingent of people online who seems like they look forward to a recession because they think that property values will come down and investment prices will come down and they can acquire it. What they don’t realize is that if a recession happens, it’s not good.

Ramit:
People die more in recessions. People can’t afford their medicines. And if you’re laid off, it’s not just you’re laid off, it’s millions of other people who are also laid off. So I think we should probably be a little bit more sensitive about wishing, no matter how big your cash reserve is, and we should also factor in that risk. It’s one thing to be laid off in a great economy. It’s entirely another to be laid off in a horrible economy.

Scott:
Yeah. I think a better way to think about it that’s more appropriate and sensitive is it’s insurance. You’re insuring against that economy. You’re not ever hoping for the recession, but you’re prepared for the recession.

Ramit:
Yeah. This is a hard principle for people, especially in the financial independence world, to almost think of wasting money. Because if you look at it on the spreadsheet, I could be paying off a 6% loan and it’s sitting here earning 0.25%. I know exactly what every single one of you is doing. You’re running the calculations and you’re calculating the daily amount you’re losing. Oh my God. Oh my God, my retirement extra two days. But insurance is powerful because in times of true catastrophe, that amount that you paid was not a waste. It was protection. Though you may never use it, and I hope that you never have to use it, it’s there for a reason. So I love your analogy of it being insurance.

Scott:
Great. I got a tough question for you here. Maybe, we’ll see. You just outlined a lot of things that somebody who is struggling or is going through that scenario planning and is afraid they’re going to struggle and needs to accumulate cash. Hey, a dollar today is worth more than a dollar tomorrow. But if I dive into the actions you took specifically, you gave your entire company a stipend. You actually went the opposite way. What that speaks to me is that it makes me assume that you have a rock solid financial fortress that you’ve built, which I wouldn’t be surprised is truth. If you’ve written a book called, I Will Teach You to Be Rich, that’s a New York times bestseller. And that you are not in particular fear of facing a cash crunch in the near future. I feel that your prospects over time are stable and have been preparing for years, potentially for a circumstance such as this. First of all, am I somewhere on the mark of closeness with that assumption? And second, for people who are in that position, does your advice change?

Ramit:
Okay. Wow. Very good questions. I appreciate you asking the tough questions. Absolutely, I try to be very conservative with my financial state, both on the personal level and on the business side. So if you’re listening to this and you Google Ramit’s 10 Money Rules, you will see that I have 10 rules and they might surprise you. One of them for example, is if I’m flying over four hours, I want to go business class. So they’re not all about restriction and things that I can’t do. They’re actually about things I can do. But one of those rules is one year of expenses in cash. That’s actually advice that I now advise everybody. I didn’t use to advise that long, but I am advising targeting a one year emergency fund. I’ve always been conservative with my cash and all the type of ways that I run my investments. We can talk more about that.

Ramit:
My goal is that I want to set myself up for long-term growth, but I never want to have my back against the wall to have to make a bad financial decision. Same thing in my business. Now, I haven’t always been that successful. Our business went through a tough time as well. We had to go through layoffs. It was very painful. At the same time, I was always keeping my eye on being able to have a long-term growth strategy without our backs getting against the wall. Now fortunately, because of an amazing team, we’ve been able to do that and really execute.

Ramit:
For that reason, I knew that our team was the first group that we had to go and protect first, even before our customers. Start with the team and I will teach you to be rich, tell them this is what’s going on, this is how much we have. We’re extending the stipend because if your team feel safe, if people feel safe in their job, that’s step one. They know their families can be safe. They can perform at work. We can deal with the rest of it later. I think your first question was, is that true about my finances? Yes. What was the second question?

Scott:
Now that’s true for your situation. Let’s bring it down to an ordinary person working a full time job. They’re in a similar relative position. I’ve got a year of savings, I feel like my income is stable, I brag about my 50% savings rate, one of those guys. That person, how should they be reacting to the situation?

Ramit:
Yeah. Most people right now are playing defense and they have to because they didn’t save enough. This also just came as a shock to everybody. So there’s a lot of catch up that a lot of people are playing and some people are really being hit hard. We should acknowledge that. But there are other folks, people who listen to this podcast, people who have read, I Will Teach You to Be Rich, for years and they have been saving and they do have financial security. So they’re looking at it and saying, okay, I did all those things, great, I’m going to double check all my asset allocation and all that. But are there any opportunities for me right now? The answer is definitely yes, absolutely yes.

Ramit:
I did a YouTube show on what to do if you are a high earner right now. And it was extremely interesting because I reached out to a lot of my friends who have, let’s say higher than average net worth. I asked what they were doing with their money. Then I tie-dyed it all up for people. The first thing that I would recommend is, if you have money right now, you’re secure, first thing is take a look around at your loved ones and if you have the ability to write a check, write a big fat check right now. If your brother, he got laid off, if the person who you used to employ to do your gardening, they can’t work, write that check and write a fat check. Don’t even think twice, because remember that in any given time, helping someone out with money is well appreciated. Right now, it can even be life or death. So everybody, if you have the ability to write a check, write the check.

Ramit:
I have to say, I have a personal pet peeve with people who agonize over, oh, should I do this? What about the tax deduction? Write the check. Just stop agonizing and write the check. People need help. If you can do it, do it. Oh, is this going to teach people to be addicted to me helping them out? No. Write the check and shut up. That is my first thing. If you have money, get out of your own head and realize that your money can help people. That’s first.

Scott:
I will caveat that with you though. I got some proud friends and family who would not look favorably upon me sending up a check. So be sure that they’re looking for that.

Mindy:
I would look favorably if you sent me a check.

Ramit:
Let me ask you a question. Do you think… Because that’s a real concern. That’s actually one of the top three questions I got on the higher thing was, how do I help a family member who I know needs it, but it might make things weird or awkward? The people in your orbit, your family who are proud, do you think those people need financial help?

Scott:
Probably not.

Ramit:
Yeah. So in that case, I definitely would not advise arbitrarily sending them a check. That would be weird. But I will tell you that I had this conversation with a number of folks, including on Instagram. There were some people who were very legitimately worried about, this is going to be weird. It’s going to ruin our relationship. And I just asked them, “Do they need help?” And the ones who said yes, I said, “Would you rather that they need help but you keep it from being awkward, or would you rather you send them a check, you call them up and tell them why you sent it, you tell them, look, you can cash it or not but I want to let you know that I’m here for you and this is just one way that I want to help you out?” The answer was very clear. So, totally respect what you said. But for everyone listening, if you have someone in your life, they may be proud. Especially in America, people are very proud, prideful, weird about their money, but sometimes helping people takes more importance than that.

Ramit:
All right. Now, if you still have money, what else? This is an amazing opportunity for folks. One, continue your investing plan. If you’ve been investing, keep doing it. We all know about dollar cost averaging. We all know that when the market goes down, that’s an opportunity for long-term investors. I want to point something out. There was a tweet that went out a few days ago. Adam Nash, who’s in the financial world, he pointed out that downmarkets are a gift to young people. They’re a gift. It’s like going to the grocery store and your toothpaste is 30% off. You’re happy. But when the market’s down, we all become very weird about it.

Ramit:
Almost all of the comments in response to him were comments saying, “You don’t understand. Young people have no money. There’s no way.” I had to call out some of the comments because we have this odd thing that we do, which is we compete to see who can be the bigger victim. Oh, save a hundred dollars a month? I can’t even save 20. 20, you’re lucky to have two cents. I don’t accept that. We can all save something. Give me 10 minutes with your budget, I can find $10 in it per month for you to put it away. So all of us can do it. For the higher earners listening, keep going with your plan. And if you have an additional amount of money, we know that research shows us lump sum investing tends to outperform dollar cost averaging over the long-term. That’s up to you, whatever your risk tolerance is. But if you’ve got it, continue investing. If you’re a long-term investor, like you should be, this is a gift to you.

Mindy:
That’s interesting that you say that. We had Michael Kitces on a few weeks ago, and I asked him the same question, if I have X amount of dollars, should I just dump it all in the market or should I wait until the market goes down or put in a little bit, in a little bit, in a little bit? He’s like, “Dump it all in now.” When the market goes back to 50,000 or gets up to, I guess it’s never been there, but when it goes up to 50,000, does it matter that you bought it at 600 or 610? It doesn’t matter when it’s growing so much, just put it all in.

Ramit:
Yeah, it’s surprising too. The research is very surprising. There’s a great study I cite in my book as to why this is, and there’s some very interesting math behind it. But in general, yeah, lump sum investing tends to outperform dollar cost. I will say though, you know what, if you know all the rules and you decide you want to break them once in a while, that’s also fine. If you’re contributing $10,000 extra that you have sitting around and you say, you know what, I know the research shows that, but I just feel uncertain and I’m just going to dollar cost average it in over 10 months, also fine. Let’s not split hairs here, but let’s at least get informed about the research and then we can decide what’s right for us.

Mindy:
Yeah. Making an informed decision is always the best. We had just refinanced our house right when all of this was happening. So we got this check, we cashed it out. Then we’re like, Oh, should I put it in all at once? And it was very coincidental that Michael was there at the same time. That was nice. My husband had said, “Oh, let’s put it all in.” And I’m like, “Well, let me just ask Michael.” Michael said, “Yeah, put it all in.” And now for me to say put it all in, how many more people do you need to tell you, put it all in?

Ramit:
I will say that I like this concept that we talked about earlier of building a financial fortress. It’s really important. If you are big enough of a high earner, that you are listening to this segment right now and say, Hey, what can I do? Really ask yourself, what is my risk tolerance? Do I have at least a year of an emergency fund? Of course, I might be targeting X percent savings rate and all that. But let me also ask myself, what if this gets worse? What if it gets worse for another year or two or three? Is that going to change my strategies? You want to take all those things into account so that again, your back is never against the wall.

Scott:
Well, let’s go into that and go to the next logical step there, which is for the last 10 years, we’ve been in a booming economy and employees, I believe, have had a really good run. Wages, I think have been growing for a lot of sectors over the last 10 years, real wages. There’s been very low unemployment. If I’m sitting there in that position and maybe I have a financial fortress, maybe not, I’m still employed, do I need to be thinking about my relative leverage position being lost with my employer? You talk a lot about how to, last time you were on the show we had a mock negotiation about how to ask for a raise. Is now a bad time to ask for that? Is now a time to be thinking about my main source of income?

Ramit:
It’s definitely a time to be thinking about your position in the marketplace. We should all be thinking about it on just a regular basis. What am I worth? What are my options? That doesn’t mean you have to jump jobs, but just want to know. I have a few groups of other CEOs that I talk to a lot and we do calls or WhatsApps and stuff like that. I’ve heard what’s going on in different industries. It really helps me stay informed about what’s happening in the business world. And I will say that when I combine what I hear from the CEOs with what I read and then what I see in my own business, I start to get a really deeply textured look at the business world. Let me say this, over the last 10 years, you’re right, some employees have had a good run. Ones who tend to have good jobs, folks who tend to be well-educated. I think people who are working hourly wages had a horrible time. That is something-

Scott:
[inaudible 00:39:09].

Ramit:
Yeah. That’s something that they’re at the bottom of the food chain and at the worst mercy of companies. They’re just being let go. Many of them have now no protections at all, they’re contractors, things like that. Unfortunately, there are some real systemic issues that make it very difficult. I won’t get into all the politics of it, but it’s not a good situation for that group of employees. I think that on the opposite end of the spectrum, there’s always room for the best, always. So if you are a top performer, if you can directly correlate your work to making a company money or saving them time, then your job is likely safe. And/or if it’s not, you can find another job relatively quickly. Those folks at the top end of the spectrum, they already know that and they already know their market value. If they want to negotiate, they can.

Ramit:
Now, from speaking to CEOs, I will tell you what I learned. Companies are really smart. They’re really aware of what’s going on in the marketplace. They know that it’s become an employers market. So they know that in other times, if somebody were going to leave, they might make them a counter offer or something like that. That’s not happening anymore. If an employee wants to leave, the companies are like, okay, because they know that they have so many other options of other talent that they could recruit. So I think your question is right on. It’s a very provocative question and I’m simply sharing what I have seen from my own experience with the folks that I know running companies. And also what I’ve seen with looking at the labor reports out there. But yeah, it’s definitely things shifted once there became this rapid shift in the labor market.

Scott:
All right. Hope you’re enjoying the show. We’ll be right back after a word from today’s show sponsor.

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Scott:
Do you have any advice for someone who maybe acknowledges that dynamic, is not a hundred percent sure of their standing with their employer or maybe is a little worried, anxious. What are some things that are within their power to do, to help them better demonstrate their position, lower that risk and then ultimately regain that power to negotiate for more compensation?

Ramit:
Let’s focus on what we can control and what we can’t control. So what we can control, if you are in that position, talk to your manager, ask them, “Hey, this is how I’m feeling. It’s really important to me to have a stable job. Can you give me an assessment? What am I doing well, what am I not? Because I want to do better.” This is exactly what we talked about last time with our mock negotiation, go into the office, ask the manager I can do. In this case, you’re just saying, look, I care about my job and I want to do well. So tell me where I stand. All right, so that’s number one. Hopefully you can get some candid feedback and boy, you better not be defensive at this point. Because if they’re like, Hey, you’re really good at X, but you’re below par at this. Your answer should be, tell me more. How can I improve? And do it. That’s what we can control.

Ramit:
Unfortunately, you can be great at your job and your company and go through layoffs or just shut down. That is something we cannot control. Also be thinking, before my back is against the wall, what are the other companies I would be applying to? Do that and think about that. Make your plan before anything bad happens. Again, I hope it does it. And I hope you’re just overreacting and you feel foolish six, 12 months from now. But if it doe, you have your grieving period and then you go right into your plan to execute it.

Scott:
I think that’s great advice. A mental model that might be helpful for thinking through this is, that mock negotiation we did last time was in the context of a relatively good market. Potentially, you’re thinking a high performer. It’s the same math because in the previous situation you’re asking for a raise and you’re setting your negotiation there. In this case, you’re reducing your risk of being, let go or losing your position. And ultimately then working towards that race. So it’s these similar economics, the way I would think about it, except this case it’s risk rather than dollars and raise that you’re mitigating.

Ramit:
That’s a great framework. I love that. Let me tell you some intel that I got from my readers. I asked them on Twitter and Instagram, I asked job applicants and I asked hiring managers to tell me what was going on. Oftentimes, you will hear from one-on-one, you will hear more real data than it ever shows up in the newspaper. So this is what I heard. I talked to the candidates first and the candidates told me they’re like, “I was applying to four jobs. Three of them went dark. They don’t even reply to my emails.” Okay. So that’s happening. For sure there has been an overnight change in the job market. Some of them told me that the companies are now putting a pause on recruiting. They’re on a hiring freeze or they’re just pausing their process because they need to figure out what’s going on with those remote work. A lot of companies never done that before.

Ramit:
Some of them told me they’re like, “I got a new job.” I was like, “Wait, what? You got a job in the last four weeks?” They’re like, “Yeah.” And I said, “How did you do it?” They said, “I applied, I went through the interview process, we midway switched it to be remote and they gave me the job.” Interesting. So definitely it has become much harder, but it’s possible. And people, some are still getting jobs. I didn’t hear that from industries like hospitality or waiters and waitresses, they point blank told me there’s no jobs. I don’t want to put a silver lining on everything, I’m telling you what I heard, good and bad. I went to the hiring managers. They told me that a number of them have immediately had hiring freezes put on them, no more hiring.

Ramit:
But then I heard some hiring managers tell me, “We’re trying to hire and we can’t get enough candidates to apply.” So I was like, I actually [inaudible 00:47:18] I said, “What do you mean? How can you not get enough candidates in a market like this?” They said, “I don’t know. I think people think no one’s hiring, so they’re not applying.” Again, make of that what you will, I’m reporting back what I’m hearing directly from the front lines. But to me, as I said, there’s always room at the top. And of course, it’s way harder than it used to be to get a job, especially compared to where it was a few months ago, but there still are opportunities.

Scott:
I know somebody who got laid off recently along with many of her co-workers. Many of those co-workers in the immediate aftermath of getting laid off, decided to take some personal time to treat themselves, sit back, I don’t know, Fred over the bad circumstance or whatever. And this person, she went ahead and applied to multiple jobs and got another job within a couple of weeks. To me, I wonder if that’s a dynamic that could be going on in the marketplace a lot. Is people, just like what you said, are just not applying to jobs. Maybe they’re thinking it’s hopeless. They’re not giving it that shot. They’re not putting in a real effort. It all comes back down to the basics. Can you update your resume, apply for stuff you’re qualified for, write a cover letter, show that you care and want the job, and go after it? I bet that it seems like they’re out there.

Ramit:
Yeah. That’s interesting. That is very interesting. I will say that in times of crisis, we tend to freeze. We can all imagine if somebody were laid off today, it would be tempting to just… I mean, anyone who’s laid off need some time to grieve. But I’ve been laid off. I needed time to grieve myself. We all understand that in times of crisis, we freeze. Think about just driving down the freeway, you see something on the middle of the road. What do you do? You slam on the brakes. It’s normal human behavior, but that is exactly the wrong thing to do in a crisis.

Ramit:
The right thing to do instead, is to accept reality. Hey, my job went away. Maybe even my industry went away. Make a plan. Okay, I’m going to apply to this many places. I’m going to expand my search. I’m not going to limit it geographically or by industry, et cetera. I’m going to tell my network that I’m looking, ask for their help. Then finally, we move. It’s not enough to stay stagnant. We’ve got to accept reality, make a plan and move. We can do those things with our job, with our finances, with starting a business right now. That’s a very good sign that you’re going to be successful eventually.

Mindy:
Yeah. I want to jump in here and give a little bit of advice. Both of my parents worked in corporate and were responsible for hiring. So I’ve gotten a lot of advice from them. Keep your resume updated. Scott just said, “Oh, update your resume.” No, if you’re listening to this show, update it now. You want the most up to date, so if you get fired at three o’clock, you can start sending resumes as soon as you get home. I was also let go once, 100% for course, I was a horrible employee. I can’t believe I stayed there so long. It was not my proudest moment.

Mindy:
I got fired on a Friday at the end of the day. I took the whole weekend to just have my little pity party. Monday morning, I applied for unemployment and I jumped in with both feet. I applied to every job that I thought would be interesting. It was a full range. I was looking to switch careers. So I was just looking at entry level, whatever. If I thought it was interesting, I applied because they’re not calling me up and asking me if perhaps I’m looking for a job, they don’t know me until I send them my resume. Let them tell me no, you’re not qualified for the job. And I’m not applying for CEO jobs. If your entry level job gets cut, don’t start, well, Ramit said there’s room at the top. Yeah, but you got to work your way up there.

Ramit:
Thank you for adding some context. [inaudible 00:51:11] I love it. Let them tell you no. Don’t do their job for them. That’s really, really powerful advice.

Mindy:
Yeah.

Ramit:
And you know what? I think also, right now in times of ambiguity, most people don’t like ambiguity. They want to know that if I do X, out pops why? If I study three hours, out pops a B+ or A-. We all grew up that way. But right now, it’s very ambiguous on the job market. I have to tell you that entrepreneurs love ambiguity. Now I’m not telling you you have to be an entrepreneur. But imagine this, imagine you live in Seattle, you were laid off, you’re looking for something new. Why would you only limit your job search to Seattle? Now you get to apply anywhere. Oh, you find this job in DC and the job description says, must be located in DC. You know what I would do?

Ramit:
I would just disregard that and email them and say, “I’m amazing. Here’s what I accomplished at my last job. I live in Seattle. I’ve been working remotely for two years. I know how to do this. Let’s talk about the job. If I’m a good fit and if you’re a good fit, we can figure out the remote thing. But let’s have a discussion.” Ambiguity, you can either be scared by it or you can welcome it. And in this time, you now have access to jobs everywhere, but you have to embrace that ambiguity.

Scott:
Ramit, do you think that companies are going to be taking advantage of the inverse of that and saying, Hey, if you’re thinking that job is only located in DC, do you think that company in DC is going to be now comparing their existing team members on the inverse side of that to the national pool or international pool of talent that’s now available?

Ramit:
Absolutely. We do that. We’ve been a remote company since day one and we hire from all over the country. There’s a huge movement starting with the tech industry of companies like Facebook saying, yeah, we’re going to go remote. Of course, there are some qualifications and we’re going to adjust your pay, but yes, we’re going to allow that. Whether that will take on and catch on, I don’t know. But it’s interesting that there are some very large influential companies starting to do that. Meanwhile, there have been a lot of quiet companies, quietly doing remote work for 10 plus years. It is amazing to be able to, like we have teammates, I just spoke to one of my co-workers. He lives in Portland. He does an amazing job, no reason for him to have to live in New York. I’m thrilled to work with him and I think he’s thrilled to work with us.

Scott:
There you go. I think the answer is companies are absolutely going to do that. So if you’re not doing that, you’re at a disadvantage relative to the marketplace.

Mindy:
It goes back to my comment, let them tell you no. Oh, I’m sorry you live in Seattle. We want you in DC. Okay, great. There’s a hundred other companies that I can go apply to and I should be applying to. I made it my job to plaster my resume, every place that seemed even remotely interesting. Then once I got interviews, I got an interview with somebody, they’re like, “Oh yeah, we don’t expect you to come in on Sundays.” I’m like, “Good thing because I’m not coming in on Saturdays either. Don’t continue to interview me because I’m not interested in that dynamic.”

Mindy:
You can start saying no to people once they start saying yes if it’s not a good fit. But I had the luxury of having other opportunities as well, but absolutely apply to what seems interesting. You’re never going to know who… I didn’t even give a resume to BiggerPockets. Josh asked me to send a resume. And I’m like, “Well, all I did was sell quilting supplies and be a stay at home mom for the last few years. How does that qualify me to invest in real estate?” But give them what they want.

Scott:
We’ve talked about cutting costs. We’ve talked about investing approach. We’ve talked about your job and how to maximize your main source of income or figure out a way to cover that. We haven’t talked about additional income streams or businesses, side hustles, those types of things. What’s your thoughts on that area of finance right now?

Ramit:
I love it. I think it’s an amazing opportunity right now. I think that more than ever, starting a business is something that is possible and that even more people are ignoring it. Let me tell you what I’ve learned. During Coronavirus, we have launched our latest program called Earnable, showing people how to take what they already have and turn it into a business. So you would think that people would say, no one’s spending money right now. It’s a recession, maybe a depression. Well, let’s zoom out and let’s remember that for thousands of years, we have paid money to cloth ourselves, to entertain ourselves and just playing because we wanted it.

Ramit:
If you remember that, then you remember that there are lots of people right now who are willing to spend money, a lot. And this is profoundly different than the cultural psyche of what’s going on. If you tell someone right now, Hey, have you considered starting a business? They’re like, who would start a business right now? There’s nobody who wants to pay anything. Do you know how many parents are out there right now who would pay effectively anything for their kids to be busy and for them to learn something and also for them to just leave their parents alone for one hour?

Mindy:
Yes.

Ramit:
Tell me, how old are your child or children?

Mindy:
13 and 10.

Ramit:
Amazing. So tell us a little bit about your pain points around your children. 10 years old, how are they going through school right now?

Scott:
How do they occupy themselves in their free time, Mindy?

Mindy:
[inaudible 00:56:54].

Ramit:
They like investing.

Mindy:
No, no. My school did not have any plans in place. All of a sudden school was canceled. We’re going to remote learning and we went into school. We got a stack of stuff. Here you go, teach your kids this. And every week they would give us a list of things, but there was no online videos, there was no coursework. We didn’t do anything on Google classroom. It was very difficult to get my 10 year old to do her work. She finally, like four minutes before school ended, admitted that she didn’t feel like she should be doing work because she’s at home and this is her time.

Mindy:
It was very difficult for her to separate that from being in school. I get that, she’s 10, this is a brand new thing. I couldn’t have processed this at 10 either, but how do you teach your child? We don’t need 27,000 4th grade teachers teaching the exact same thing. You can have one teacher giving a really great example, bring in Khan Academy, bring in the Bro and Sis Math Club on YouTube, which is amazing. Bring in all these things and have elements of that, but have somebody up there teaching my kid so that I don’t have to. I don’t homeschool on purpose because I’m a terrible teacher. I don’t have the patience.

Ramit:
I just have two questions for you. Does your 10 year old daughter have any hobbies that she really loves?

Mindy:
Crocheting.

Ramit:
Perfect. Amazing. Okay. If there were a way for your daughter to learn and to spend a good amount of time on her schooling every day, how much would you pay for that?

Mindy:
Whew, thanks for putting me on the spot. I would definitely pay a considerable sum for this.

Ramit:
Perfect.

Mindy:
I’m already considering what am I going to do in the fall if they don’t go back to school full time, which is a very real possibility? I’m at changing schools because I need somebody who can teach my child, but I love my school.

Ramit:
So everybody listening, are you hearing what I’m hearing? I just heard at least three six figure business ideas in the last two minutes. Did you hear what I’m hearing? Here are three businesses I could start right now. I could start a business just doing general schooling and it would be really dynamic and maybe I would be up there teaching live, or maybe it would be recorded, but it would be awesome. There would be examples and I could charge whatever a considerable amount is times thousands and thousands of parents.

Mindy:
Plus you can hire people to do support because I’m going to have a question. Hey, I don’t understand what you were talking about at minute 315. Here’s more.

Ramit:
Bingo. Okay. Next, I can do hobbies. So if I happen to know how to crochet and I’m a crochet master, guess what? I now have a crocheting course, which you’re going to buy for your daughter. Amazing. That’s number two. And number three, I can create a program, whether it’s a video program, or I can do group coaching to show parents how to more effectively teach their children at home during times like this. One, two, three, each of those is a six figure business. You can learn how to do this in Earnable. This is what we teach in our program. What I want for everyone listening to do is look around. We just had a casual conversation. It took us 60 seconds, and that’s multiple six figure businesses just from asking a few questions. Every one of us has these opportunities around us. Yes, at a time like this. And yes, when there are some people who, they may be unemployed, but there are others who have real needs and they will spend money to solve their needs.

Scott:
What I love about the suggestions is they sound like they’re free to start and test. You can do them online. You can do them in live groups. You could do MVP where you’re literally just walking parents one-on-one through it to test your product, those kinds of things. I also want to point out that the BiggerPockets Business podcast recently had an episode, BiggerPockets Business episode 51 with [Nigel 01:01:04]. Nigel describes enormous marketplace opportunity of businesses that are family owned, long-term businesses and boring industries like plumbing, HPAC, carpet cleaning, laundromats, those types of things. These businesses often sell for very low multiples of cash flow. Go check out that episode, consider those things.

Scott:
These are businesses that people are not just selling for financial reasons. They’re selling them because they know their employees and their teams. They hired a single mom and they want to keep her employed. It’s been around for five years and a loyal employee. There’s a lot of things going on here that you can help preserve legacy and make great financial returns in these types of things. Sometimes you can finance them a hundred percent with seller financing, small business loans, those types of things, but a massive, massive marketplace opportunity. Most of these businesses can’t even find a buyer for various reasons. There’s a lot of a ton of opportunity out there on the free side, just like you’re describing, and on this acquire an existing business side.

Mindy:
I also need HPAC. What is this title of the show, Ramit and Scott solve all of Mindy’s problems? This is awesome.

Ramit:
That’s right.

Mindy:
But yes, I’m going to add one more thing, if you start any one of those businesses that Ramit just listed, email me, [email protected]. Because I want in on that. I want to-

Ramit:
Look at that? Your first customer.

Mindy:
You have a customer.

Ramit:
It’s amazing. There are so many creative ideas I have seen happening during Coronavirus. One of my students, you remember those things people used to do, wine and painting? You go, it’s Friday night, date night kind of thing. She basically adapted that to do it online. She teaches people how to paint on Zoom. She went through Earnable, I think she made a hundred bucks her first time. That’s amazing because if you can make a hundred, you can make a thousand. And if you can make a thousand, you can make 10,000 and on and on and on. That is incredible. I had another person who follows my material. She was a yoga instructor and she had a yoga studio where people used to come. Within 96 hours of lockdown happening in New York city, she shifted online.

Ramit:
Now, she had never done online because it could never keep up with her studio business. After 96 hours, I said, “How’s it going?” And she said, “I’m making 50% of what I used to make.” Now, 50% is a big haircut from what you used to make, but it’s also more than zero. And if she can get 50% of the way there, then she could probably get 80% of the way there and then potentially even more. So there are so many opportunities to start a business using the skills you already have. If you’re good at style, if you know how to use Excel, if you’re good at math, whatever the case, you can turn that into a business that can produce serious income for you.

Scott:
Love it.

Mindy:
And what’s the downside. Let’s say you start this crochet business and I’m your only customer. Okay, so then you pivot and you look at something else. Maybe you start selling your crochet or you change the dynamic of that, but you haven’t rented a building for your crochet school and you haven’t invested. I hope you haven’t invested tens of thousands of dollars of equipment. If you are a crochet master, you have yarn all over your house. I have yarn all over my house. So you can pick that-

Scott:
Just don’t quilt and quit too early.

Ramit:
It’s a great point you’re making and there are ways to mitigate common entrepreneur mistakes. The biggest mistake they make is they overbuild their website and business cards, all this stuff that nobody cares about. Actually, that’s mistake number one. Mistake number zero is they pick the wrong market. For example, if you’re a stylist and you decide your market is college kids, you’re out of business. You just don’t even know it yet because college kids don’t have any money nor do they care about your styling service.

Ramit:
So you picked the wrong market and you’re going to waste the next three years of your life. But you can learn how to evaluate markets is what we teach, and you can test it without buying a big old factory. Then you can create your business. I will say that during this time, one thing that I have been pleasantly surprised by is that you can really go back to basics. I did a series called Fireside Chats with Ramit, and I don’t have a fancy camera crew up here. My wife used my iPhone and she filmed me. And that was that, there was no music and no edits. It’s just like, we’re going to just do this and that’s that. People loved it. So you can actually simplify your idea, keep it really simple. It doesn’t have to be fancy and glamorous, but if you’re helping people, they’re willing to pay and that’s amazing.

Mindy:
Yes. I think that’s a really great place to stop. This was all just an hour of amazingness. Thanks for being so awesome.

Ramit:
Oh, thank you. I always have a blast when I come on set with both of you. It’s awesome.

Mindy:
But we’re not done. We’re just done with the main part of the show.

Ramit:
All right.

Mindy:
We still have our famous four questions. Are you ready, Ramit?

Ramit:
I’m ready.

Mindy:
Okay. Last time we asked you, what is your favorite finance book, has that changed?

Ramit:
Aside from, I Will Teach You to Be Rich, I do love The Bogleheads’ Guide to Investing. I think it’s amazing. I think it’s a classic. It is accessible to a new investor, but also extremely detailed for a more sophisticated investor.

Scott:
Awesome. There’s actually online community called Bogleheads where you can go and they somehow find a way to endlessly discuss index fund investing. Over hundreds of thousands or tens of thousands of foreign posts. So go figure. All right. What is the biggest money mistake that you think people are probably making right now in the context of the Coronavirus?

Ramit:
I think that the biggest mistake people are making right now is they are responding tactically to what they see happening. They’re cutting back on tiny grocery expenses. They’re saying, I need to save a little bit more, but they are not building a system that will allow them to survive and thrive. And this is going to happen again, something bad will happen again in our lifetimes. You don’t want to have to depend on your willpower 12 years from now. You want to have a system that’s automatically saving, automatically investing, automatically letting you spend on the things you love. So the system is the thing that matters, not just the willpower.

Scott:
Great.

Mindy:
That’s interesting that you said 12 years from now because 12 years ago we had the 2008 financial crisis. I remember watching all these people, Oh, I can’t do this. Being financially responsible and physically frugal and all the other buzzwords, they were being good with their money because they had to. And now 12 short years later, they are in dire straits again because they didn’t continue to be financially responsible. I feel bad saying that, but I’m watching the same people make horrible mistakes and you know what, what’s 12 years from now? 32. We’ll come back in 2032 and interview you about that.

Ramit:
I would love to come back for some more. Thank you. I love coming here. I just want to say that you’re right that a lot of people tightened up at that time. Then naturally that tightness wears off over time. It just wears off and no blame on the individual people. I think we do need to take responsibility with our money, but I also think it’s just human nature. You can’t expect someone to be on point with their money every single day for 12 years. It’s more realistic to say, I’m going to build a system. I’m going to make five key decisions. Like how much I’m going to invest, what’s my allocation. Just five to 10 key decisions, and then I’m going to let this system run. The people who do that are going to be way more successful than the people who have to make it a battle to save three dollars every single day.

Mindy:
Yep. Okay. What is your best piece of advice for people who are trying to navigate financial independence in this environment?

Scott:
There’s a lot of close relations potentially between this question and the last one. Please say your response.

Ramit:
I think that people who are trying to navigate financial independence right now, it’s an amazing opportunity. For the first time, the whole world is thinking about money. So you’re not this outlier out there. It’s an amazing time. The piece of advice I would have would be, really think about what your rich life is. Get outside the spreadsheet, turn off Google Docs or Excel because after you get the fundamentals done, a rich life is not lived inside the spreadsheet. I would ask you, when you achieve financial independence and on your journey to financial independence, what do you want to do? Get specific.

Ramit:
What is your Monday look like? Where are you going to travel to? What seat on the plane are you going to sit in? What are you going to eat, and which hotel are you going to stay at? Who are you taking with you? That really starts to craft what your rich life is? Once you start from a place of possibility, then you can figure out how much money you need. Most of the time we see people doing it the opposite, they start with the money and then they wait to figure out what their rich life is. But I want to hear from people as to what the rich life is right now.

Scott:
Awesome.

Mindy:
That goes hand in hand with what we talked to Fritz from The Retirement Manifesto about, on the show 125. It’s like, if you don’t have a plan, you are going to get there and be like, Oh, what now?

Scott:
Well, Ramit, do you have a joke today? If you don’t, we have a couple of really good ones from our listeners that [crosstalk 01:10:54].

Ramit:
I want to hear the listener one.

Scott:
All right. Mindy.

Mindy:
Okay. This comes from Marcos. He posted this in our Facebook group. He said, “Why do scuba divers flip backwards when diving into the water?”

Ramit:
Why?

Mindy:
Because if they go forward, they’ll land in the boat.

Scott:
Let’s just leave that silence right there.

Mindy:
You got a groan. Okay. And this one comes from one of our German listeners, which I think just makes it even better. She says, Oh, I shouldn’t say she, they say, “I invented a new word, plagiarism.” Oh, come on now. That one’s funny. I like that one.

Scott:
All right.

Ramit:
These are amazing.

Scott:
That’s right. People listen to this show just for those jokes. [crosstalk 01:11:44].

Mindy:
Nobody listens to this show for the jokes.

Scott:
That’s not true. All right. Ramit, where can people find out more about you?

Ramit:
You can find me at, iwillteachyoutoberich.com. I’m on Instagram @Ramit, I’m on Twitter @Ramit. And if you’re interested in some of the things we talked about for earning more money, you can go to iwt.com/earn.

Mindy:
Ah, good. I was going to ask you about that because we didn’t ask about that before. That sounds like a really interesting program from an I’ve been there, here’s what works, point of view.

Ramit:
Yeah, totally. We share everything we’ve learned in our business. It’s so amazing to see people start to earn more, especially during a time like this.

Mindy:
Yeah. And there’s no need for me to go out and learn all the mistakes you made or learn all of the lessons that you learned by making those mistakes. I can just go in and learn, Hey, this is what doesn’t work. Great, I’m not going to do that then. Okay, awesome.

Scott:
Awesome. Yeah. Great website, great content. I also am a follower. I interact with you most probably on Instagram, that’s where I see most of your content [inaudible 01:12:48].

Ramit:
Awesome.

Scott:
So plug that for you there.

Ramit:
Thank you.

Mindy:
Perfect. We will link all of these in our show notes, which can be found at biggerpockets.com/moneyshow127. Ramit, thank you so much for coming back today, this is a lot of fun. It’s always fun to talk to you.

Ramit:
Thanks for having me again.

Mindy:
I’m glad you’re staying safe and enjoy your time in your, are you still in your Airbnb?

Ramit:
Yeah.

Mindy:
Yeah. New York city had a really, really hard… Have you ever been in New York city when there’s nobody around? No, because there are so many people in such a small space. It’s not really a surprise.

Ramit:
Yeah, surreal.

Mindy:
Yeah. Well, stay safe in your Airbnb and I hope you’re getting out and enjoying. It looks like it’s a sunny day today.

Ramit:
Yeah, we are. Thank you so much.

Mindy:
Okay. We’ll talk to you soon. Okay. That was Ramit Sethi from, I Will Teach You to Be Rich. Scott, what’d you think?

Scott:
I loved it. I learned a tremendous amount. Thought he was an outstanding guest for the second time in a row. We’ll certainly try to have him back again at some point in the future. Just really enjoyed the discussion.

Mindy:
I did too. And I had to say, we did not practice that whole coming up with a business model idea ahead of time. That was off the cuff. And that was just amazing. So if you are going to start any one of those businesses, please remember to hit me up at [email protected] because I will be your first customer.

Scott:
That’s right. Remember to give us 10% of the business.

Mindy:
You know, six?

Scott:
All right, fine. Whatever. Who cares? Well, if you enjoyed today’s show and learned something, we’d love if you could hit subscribe on iTunes or leave us a rating and review on iTunes or wherever else it is that you listen to podcasts. We always appreciate that. We try to read and look at all of the feedback that you send us and really appreciate the love.

Mindy:
Yes, that would be wonderful. Thank you. The more reviews that we get on the apps, the more our show gets out to other people. We really just want to spread this word of financial independence. Also, if you enjoyed this show and you were thinking about, Oh, Hey, this sounds like Bob could use this. Like Ramit said, share the episode with no pressure. Hey, I heard this really super awesome podcast, I thought you would enjoy it. Check it out. It’s BiggerPockets Money, episode 127. And see what happens.

Scott:
Sure.

Mindy:
Okay. From episode 127 of the BiggerPockets Money Podcast, he is Scott and I am Mindy, and we are out of here. Goodbye.