Ramit Sethi: Never Split The Bill, It's A Red Flag & Renting Isn't Wasting Money!

Ramit Sethi (0:00)

How can you talk about renting? You're just throwing money away? BS. Should I just dismantle these arguments once and for all? Because there's some shocking math behind a mortgage, and most people don't know this stuff. Let's get into it. Ramit Sethi, the financial expert and entrepreneur, is back to teach you how to take control of your money and confront the financial problems that hold us back. Most people fall into four money types that I've identified. Number one is avoiders, and they hate talking about money. But if your partner simply will not talk about money, that's a huge red flag, because 50% of the people I talk to do not know their household income. 90% who are in debt do not know how much debt they're in. And 100% of the people I talk to in credit card debt also have trouble with money. That is shocking. Next up, optimizer. They can get you to a very good place. They'll be investing. We love to live in a spreadsheet, but it can be taken too far. And then the dreamer, who believes that success is one deal away, and they tend to fall into crypto sh** coin scams, like all this BS. Finally, worriers. They love to worry. Are we going to have enough? What if we run out of money? Typically, they picked up worrying from their parents, who said stuff like, money doesn't grow on trees. And the problem is, you could take it a little too far. And they'd become cheap and become so obsessed with $3 questions, like agonizing over buying a coffee. But everybody listen closely, because I want to break down how you can change any of these types.

Steven Bartlett (1:17)

So, Ramit, the only investment most couples make is buying a house. What is the alternative?

Ramit Sethi (1:22)

This is where real wealth is created. Let's simplify the whole thing. And I have four numbers that everyone should be talking about. The first stop is your family.

Steven Bartlett (1:38)

If someone's just clicked on this conversation, please explain to me exactly why they should stay and listen to what we're about to discuss on the basis that we're about to talk about the things you've written in this book.

Ramit Sethi (1:52)

If you are single and dating, if you are engaged or if you have been married for 25 years, money is one of the central parts of our lives. And most of us think about money as something to be avoided. It's something we only talk about when things have gone wrong. What a terrible way to live. And there is a different way, which is we can use money as a source of connection, possibility, and joy. And that is what we're going to talk about today.

Steven Bartlett (2:25)

I had a conversation a couple of days ago actually with James Sexton, who's the divorce expert. He's a divorce lawyer by trade, but he knows more about divorce than anybody else. And he said to me, there's two things which cause people to end up in his office going through a divorce. Number one is cheating, infidelity. And the second thing is money problems in the relationship. So I find it especially sort of pertinent to have this conversation with you about couples' relationship with money. Because clearly one of the things that is most likely to end my relationship, or I guess prevent me getting into one, is this financial avoidance that most of us engage in. You've interviewed hundreds and hundreds of couples about money on your podcast. What have you learnt about our relationship with money in relationships from that?

Ramit Sethi (3:10)

I've learned that 50% of the people I talk to do not know their household income. 90% of the people I talk to who are in debt do not know how much debt they're in. And 100% of the people I talk to in credit card debt also have trouble saying no to their children. Isn't that shocking? Each of those things, 50% do not know how much income they make because most of us are simply living by looking at our checking account and that's it. The debt part kind of makes sense. Why would you want to know how much debt you owe? You don't really want to think about it so you ignore those emails and envelopes. And the credit card debt part, that is really interesting. The idea that if you can't say no to spending, so you've racked up a bunch of credit card debt, the same principle applies to saying no to kids. For me, when I discover these, I find them absolutely fascinating, but the good news is you can also change these things.