Ramit Sethi | Principles and Strategies for Designing a Rich Life

Srini Rao: Ramit, welcome back to the Unmistakable Creative. Thanks so much for taking the time to join us. Yeah, it is my pleasure to have you here. As I was saying before we hit record here, one of the things that I love about all of the advice that you give is that not only is it grounded in actual research, not just anecdotal evidence, but it actually works.

I, you can honestly say of all the courses I've ever taken from anybody I've ever bought them from yours, have produced the most tangible results. So I thought, okay, no brainer to have you back, especially as we are going into a new year, and people are listening to this at the start of a year. But before we get into this idea of how to design a rich life in 2023 I wanted to start asking what did your parents do for work and how did that end up shaping and influencing the choices that you've made?

Ramit Sethi: My mom was a teacher. she became a school teacher a little bit later in life. For most of our childhood. She was home with us and my dad is a mechanical engineer. And one of the ways that shaped life was my dad was really good at math and he expected me to be an engineer, but I don't have the mental chops for it. So I remember very vividly him trying to explain certain geometry concepts and when I got into calculus, rotating comic sections and stuff like that, and I'm just like, all right, I'm trying, but I'm not getting this. It was really easy for him, even 20, 30, 40 years outta college. It influenced me in a lot of ways.

The fact that they set an example of going to work. They set an example of you're stable, right? We want a stable life. And I feel very fortunate that they gave me that stable life. Also, they weren't particularly wealthy.

Growing up the son of, Indian immigrant parents, that also teaches you a lot about what you really need to be happy, what you need to be successful, and also just a really fascinating contrast between Western culture and Indian culture. So I learned all those things just from observing my parents.

Srini Rao: Yeah. I started writing this article, which I never finished, about the advantages of being raised by Indian parents. And I alluded to some of this when I wrote that piece on medium about my Indian matchmaking experience, which I called the South Asian arms race for impressive biodata.

And the thing that I realized, only in retrospect was that being raised by Indian parents gave me all these advantages, things that are not easy to replicate, like the value of intrinsic motivation.

So I'm curious for you like both advantages and disadvantages. Cause I know there are disadvantages too, in my own experience.

So I'm curious what as the advantages and disadvantages of being raised in an Indian.

Ramit Sethi: advantage number one is just, there are certain things you have to do and you don't have to enjoy 'em, but you have to do 'em. I think that is inescapable and incredibly valuable. I remember my parents would be visiting some of their friends and we would sit in the family room with them as they drink cha and we would listen to the parents talking for hours. Every Indian kid,

Srini Rao: Yep.

Ramit Sethi: Asian kid exactly what I'm talking about and you're not going off to play video games. No. You're gonna sit there and you're gonna listen and you might ha get two questions in two hours, and that's fine. You just sit there quietly. That's actually an incredibly valuable skill because fast forward to today, there are a lot of meetings I have to sit in where I go, oh man, I really wish I could be on Reddit right now. I don't have to like it, I just have to do it now. I think that, you may I've grown up also in the western world, so I go, all right, let me try to create like a ratio. Maybe 90% of the stuff I do I should really like, and 10% I should just do it. I intellectualize it. But that's a very valuable lesson. Another valuable lesson is frugality. So I think that one goes both ways. My parents, had to be frugal because we had a big family and one income primarily. So we did a lot of things, family trips were typically road trips. We would stay with family. I don't think we really stayed at a hotel while I was a kid, ever.

If anything, we would stay at a motel

And learned that there are a lot of creative ways to get around. Having a cohesive family unit. It does not have to involve expensive stuff. And I take that with me today. Now I've made a lot more money, but in general I have a fairly modest lifestyle in terms of the car I drive and stuff like that.

Now, there are things that I think are a little different, and this is where I think frugality can become a ceiling for many people. The idea that you should look at cost first, I believe it. It can be a very limiting way of looking at the world. It's almost like you put on a pair of lenses and all you do is look at cost. That's not the only note you wanna play in your life. Just like in a symphony, you don't only want to have one note. I think there are other notes or you know what we can call money lenses. There. Convenience. There's safety, there's luxury, any variety of NU results, and that's why using the frame of cost, you might never hire a personal trainer, but using the money lens of results, would absolutely do that.

Srini Rao: . Yeah. I, it reminds me of my dad going to Costco to save 20 cents on gas. I'm like, you're driving an $80,000 Mercedes and you go to Costco to save 20 cents on gas. And for him it's just an excuse to go to Costco cuz he loves Costco and I think all Indians love Costco. It turns out, I don't think this is isolated, my dad, but my dad is like the unofficial spokesperson for Costco.

And I can relate to what you're saying cause it was the same type of thing. My dad's a college professor but he was a postdoc for most of the time. I was growing up and I think the most valuable thing I got from that was resourcefulness. Cuz I remember graduating from business school and I don't think I've ever actually told many people about this before.

And I was broke, completely broke. So broke. I moved home and I told my dad, I was like, dad, I can't find a job just sitting here looking at the computer. I gotta go to la. He's I'll give you $50. And I had to make $50 last five days in la Now you live in LA now, so imagine trying to do this. I had to park at the beach.

I had to go to networking events. I had to eat my, one of my college, my business school classmates let me stay on the floor in the apartment that was previously mine. And I figured out how to do it. First. I figured out Santa Monica had a parking pass for the beach. I surfed for six hours a day. So that took up a ton of time.

I basically would call people who are organizing networking events and say, can I work the door? So I'd get free tickets.

The surf club had a Wednesday evening surf club meetup at a bar in Manhattan Beach and on, and I would take a flask to any bar I went to with vodka, order water poured out, and I developed a taste straight vodka.

And then what? And then I would have peanut butter and jelly sandwiches. And I learned that if you have bread in a duffle bag and you're at the beach, don't leave it open because the seagulls will eat that shit. And then on Sundays there was a her Krishna temple around the corner from the apartment that was once mine.

And I would go there and I was like, man, I could make $50 last five days. That's actually harder to do when you actually have more resources. You're not as creative.

Ramit Sethi: Yeah, I think that's true. I think that's true. I think I've gotten soft.

Srini Rao: Yeah.

Ramit Sethi: I was very resourceful when I was younger and then now I like the feel of CAIR on my body. So once, once you feel that you're gonna lose a little bit of your creativity, I'll tell you what though. All jokes aside, mom told me this story in my twenties, cuz I sat down and I asked him, how did you raise us on one income?

What'd you do? And think parents love the idea of being asked how they did it. because it is so rare. I actually, I think anyone loves the example of being asked how they did it. I asked when we got married, my wife and I asked our married friends, what's the secret to a successful marriage? What lessons can you share with us?

And many of them were taken it back because no one had ever asked them that. So I asked my parents and my mom told me this story that I never knew when we were kids. We were in a lot of activities soccer is actually pretty expensive. We played public league soccer but you have to pay for uniforms and registration and whatever. My mom couldn't afford it, so she called up the district, whoever, and said, look, I've got three kids in soccer right now. is too much. What can I do? Okay. Lesson number one, just asking. Incredible, right? To have the courage to call somebody up and ask. That takes a lot. It's very vulnerable. And they said, if you come before the games and chalk the field, use that little machine to put chalk on the field. We'll wave your fees.

Srini Rao: Yeah.

Ramit Sethi: my mom did that. I didn't know that until I was in my twenties that my mom was out there chalking the field just so we could play soccer.

An incredible story of resourcefulness, it just makes me think.

Anything I complain about, oh, my Zoom link wasn't working yesterday. I'm just like, shut your mouth, Ramit. Shut your mouth. Your mom was out there chalking

Srini Rao: Yeah. No, I remember you told me that last time we spoke and I was just like, wow. Yeah.

Yeah. I look at my parents and I remember for the longest time thinking, oh, my dad's not rich. He doesn't have all this stuff. And I remember at a certain point, probably like into my mid to late thirties, I was like, wait a minute.

They came here with nothing and wow, this is remarkable how much of a headstart all of us have on our parents.

Ramit Sethi: barely eat at a restaurant by myself. I feel so uncomfortable. I start sweating much. Let's go to another country

Srini Rao: Yeah.

Ramit Sethi: It took me like three years to get the courage to go see a movie alone. I'm not kidding. I hate that. And finally I was like, all right, now I like it. But it took me a long time,

Srini Rao: Yeah.

Ramit Sethi: the idea to be able to be just go with basically nothing in your pocket and make it in another country. Different cultural expectations, not knowing virtually anybody. Wow.

Srini Rao: Yeah. . Speaking of cultural expectations, and we talked about the advantages of being raised by Indian parents, what do you see as the downsides?

Ramit Sethi: I mentioned that frugality can be taken too far.

Srini Rao: Yeah.

Ramit Sethi: one note of many. It's like only being able to cook with salt. It's not gonna taste that good.

I think the more you become enmeshed in the world of frugality, the more you actually turned it into an identity. Oh, I would never buy that type of jacket that, I don't need that.

I'm so virtuous. It's not a virtue, it's a tragedy to live a smaller life than you have to. And so for me, I speak to a lot of couples on my podcast about money, and I speak to people all over the gamut. Some have $825,000 in debt. That couple was wondering if they can afford to have kids. I speak to another couple where the husband is about to, his wife is about to divorce him after 21 years because he's too cheap and his, their net worth is 13 million.

Srini Rao: Wow.

Ramit Sethi: So it's not a virtue to accumulate money and not actually have the skills to spend it.

I think that's something that. all of us are trying to encourage our parents if they've built up some financial stability, it's spend it. We don't want the money. We want you to spend it. I want you to spend every last cent you've got that, I think that's an area that as a culture we could probably work on, which is really defining what our rich life is and then using our money to spend it.

Srini Rao: Yeah. What about in terms of careers? Because I think that for the most part, I'm guessing this is very similar for you cause we're close enough in age where it, we had a sort of default narrative about how to go live your life. Dr. Lawyer, engineer, and you.

Ramit Sethi: was gonna, I should have been working at Cisco right now

Srini Rao: Yeah. You went to

Ramit Sethi: large

Srini Rao: Stanford. And I went to Cal.

And I was just talking to Dennis the founder, co-founder of mem and he was talking about how people end up in these sort of default paths, particularly at these elite universities. Cause I, and I've said this on the podcast before, you're at a place like Berkeley and here you are surrounded by, all these really smart, talented, amazing people with all these opportunities to explore and, discover all sorts of stuff.

And it somehow becomes this breeding ground for conformity where it just produces future, doctors, lawyers, engineers, bankers and management consultants. And I have a feeling there's probably some similarities at Stanford, right?

Ramit Sethi: In, in my graduating class, the vast majority, I would say vast majority of my friends, maybe the entire class went to about six different professions. It was consulting, banking, grad school and there were a couple others.

Srini Rao: Law School probably.

Ramit Sethi: yeah and, It was really fascinating to me. In fact, that was the genesis of my first book because I remember I had a friend who'd had fantasized about working for this company, let's call it company A for three years, and then they got an offer from company A and company B, but company B paid like $10,000 more and they took company B.

And I'm like, why did you do that? And they go, look at the pay. I go $10,000. Remember I was Stanford, junior or senior to me the way I thought about money, and I'd been investing already for a long time. I'm like, $10,000 is not that much money. Especially in our early twenties, you're gonna make way more than that over the course of your career, like way, like so many more zeros.

So to make a career decision for $10,000 just seemed so incredibly shortsighted to me. And there was a lot of what's interesting was there was conformity at the time. People went into these predictable things. Why? Because the stakes are high and when the stakes are high, people tend to become more conservative.

That's a common thing. That's why people still use realtors cuz they hardly ever buy a house. But when they do, they're just like, all right, whatever. I just wanna do what everyone else does. But interestingly, after about eight or so years, a lot of my friends became a lot more entre. So that really surprised me.

I thought that like I was an entrepreneur right outta college

When I didn't see a lot of my friends do that, I was like, oh, okay. There's just not gonna be a lot of entrepreneurs wrong. It's just that a lot of people chose a slightly different path, which I didn't realize at the time to go into banking, consulting, et cetera, and then become entrepreneurs. I

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think there's something to be said for that. I lost certain things by not going to work at a big company. But overall I would agree that, in times of high stakes, people tend to become a little bit more conformist.

Srini Rao: No I feel like particularly in the culture we grew up in, and it took me a long time to realize there was this validity to our parents instilling that narrative in us, because if you consider the context they grew up in, it make com complete sense, like for your parents', quality of mind. It's okay, their life outcomes in India are binary.

It's poverty or security. There's no recovering from risk in those situations.

Ramit Sethi: Yeah, it makes a lot of sense. There, there's a friend of mine who says, our parents want safety for us, not excellence. And especially when you understand the context of where our parents came from, it makes perfect sense. Become a doctor, become an engineer or you will struggle for the rest of your life.

That makes a lot of sense. Actually. Now, will say huge credit to my parents. I started, first of all, they encouraged me to make these unconventional decisions when I was like 12 years old. 13. They used to say, why don't you just write it up? Meaning, why don't you just take the thing you're talking about at dinner and write it up and send it to the newspaper? Now that's funny because neither of my parents are writers, but they just had this thing like share it. Share it. And we come from a lineage of education and educators. I did, and I would start to write stuff up and send it to the Sacramento Bee. And once in a while it got published, which was pretty cool.

It was a, and of course my parents really bragged about it to all their friends. That's powerful. That's really, you know exactly what Indian parents do when they brag about their kids and double-edged sword. But I will say it's striking what different families celebrate.

Family really celebrated us getting published, us getting straight A's, or A pluses, et cetera, et cetera.

And that drives you, you can often, not always, but often create, that desire in your family. And wow, I was rewarded by publishing. And guess what? I'm a writer. weird how that worked out. So I think that there's certain things that my parents did that were. Teaching me to be unconventional or make unconventional choices and realizing that by doing it when the stakes were low, like I worked at a pizza place, I was a soccer referee, I had a sales job. Then when the stakes got higher, like choosing my major or choosing a job, all of those things, I had been building the muscle of unconventional choices for five or 10 years by that point.

Srini Rao: . Yeah. I think that you were talking about friends who go on to, work normal jobs. And one of the things that I had observed based on the thousand plus interviews I've done and 10 years of being in the world that you and I are immersed in, is that somehow there's this narrative that there's something wrong with, a stable job that doesn't involve quitting your job, traveling the world.

Tim Ferris four Hour Work Week, and I remember telling someone, I was like, who's to say that's not a perfectly good life? And in a lot of ways, sometimes I think we plant these seeds of dissatisfaction sometimes where there aren't any.

Ramit Sethi: Yeah. American culture loves to do things that they think will make them happy, but very predictably make them unhappy. All right.

It's just a litany of things, Hey move to a suburb where we can't see any of our friends or family anymore, and let's create a huge gate around our property.

So it's impossible for people to come over and visit. And then let's wonder why we're lonely. Interesting. Let's retire, but move to a totally different state where we have no social support let's just bake in the sun. That'll be great. What a beautiful retirement. Oh, wow. I wonder why they're not happy. I remember my parents funny, there's funny lessons You remember. My dad once said don't get a big house. Okay, why dad? He goes, if you have a big house, your kids will go to different parts of the house and you'll never see them. If you have

House, they're all gonna have to congregate and that's how you build bonds. I was like, are you just saying that cuz you didn't have enough money to get a big house? And he just laughed. I don't know if it was by choice or by necessity, but that's a really interesting lesson that is super counterculture to the idea that being successful means you need a big house. And I can tell you right now, those things have stuck with me.

I could go buy a house today. I choose to rent. I love renting. I love texting a landlord and saying this thing. And it's fixed the next morning. I also love, I'd make more money by renting instead of buying. And that kind of blows people's minds. So I think that oftentimes if you get the opportunity to interrogate some of the invisible scripts we have in our culture, do I need to own a house?

Does that really mean I'm living the American dream? Do I need to work at this type of job? Do I need to have kids, et cetera, et cetera, et cetera. And you might discover, Hey, I actually want to, but you go through the process of interrogating it and asking if that's part of your rich life.

Srini Rao: Yeah. Yeah. I had a friend who did the whole digital nomad thing. I think he went to Thailand and he saw a therapist while he was living there, and that therapist had said the, Overwhelming majority of his clients were all digital nomads. And he said the biggest issue here is that this whole idea is just a revolving door.

You have no community, no social support. And at that time, and this was like 2009, 2010, when lifestyle design was all the rage, people would be putting up these pictures on their blogs of, the places they were living. And I remembered doing the same thing for six months in Costa Rica. And I was like, this sucks.

I was like, there's no bookstores here. This town is boring as shit. The people are all dead beats. The only thing to do here is surf. And when there's no surfing, I'm bored out of my mind.

But I had only seen it through the version that I had read about and seen on, my Instagram feeds and stuff like that.

Ramit Sethi: Yeah. I, once in a while get. Questions from young people. I'm talking like 20 to 25,

Like, what would you do differently? What advice would you give to someone young? And I just feel totally unequipped because I remember asking that kind of advice and some of the advice I got from people older than me, it just didn't connect with me.

But there is one thing that I would tell them if they really pressed, and this is a personal opinion, but I guess that's why they're asking my personal opinion, is if you are young, you should go where the people are. And what I mean by that is go to a big city, go the hottest city you can possibly go to and figure out a way to make it work there. Why? Because when you're young, the cultural capital, the social capital, the idea capital is in these big cities. It is where you're gonna, whether you're looking for a relationship, There's more people, whether you're looking for a job, there's more jobs and there's more people who have those jobs so they can even tell you those jobs exist and how to get them. And the best part is when you're young, you're relatively unencumbered you can live in a way that predictably, you will not wanna live when you're 35 or 40. When I was young, I, I know the type of living situation I had, right? My rent was 800 bucks a month. I lived in a room with a bunch of other guys great in that house. don't wanna live like that anymore, but I'm really glad I did it back then.

Is something to be said about really observing your season of life and optimizing for it. That's why when I hear a 20 year old going and buying a house, I go, what are you doing?

Are you doing that? You're gonna have a season of life where you want stability.

Maybe you want a big house or a certain school district or whatever, fine, but is that truly what you want in your twenties? Or are you simply following a script that in order to be the American dream, I need to buy a house?

Srini Rao: yeah.

Ramit Sethi: That's what I mean by questioning it.

Srini Rao: Oh yeah. I remember I spent the first month of the summer, I think it was June in Brazil. I came back for a speaking gig and my dad's 70th birthday, and I remember a weekend to it. I told my dad, I was like, you know what? I'm gonna go back I'll be back when the baby is born. And one of my friends said, that's precisely what you should do.

You're single, you don't have any responsibilities and you have money. He was like, go enjoy your summer. Don't spend it in Riverside,

Ramit Sethi: Yeah.

Srini Rao: of the best decisions I ever made. And, I came back and now we're having the time of our lives with my new newborn nephew. There's something you said earlier about that $10,000, and it reminded me of an experience I had.

This was, I think probably around the same time, I think like summer of 2000, I had one more semester left and I had two jobs. Two, two offers for an internship. One paid 25 bucks an hour, the other was a lot less. I remember meeting this young guy in a coffee shop, it was a startup founder. He's I don't have a lot of money.

But you'll be my right hand person. You'll learn, you'll be involved in everything. And of course, like an idiot. I took the $25 and that company went outta business that summer. The guy who I met in that coffee shop went on to start something like three different startups that ended up being worth hundreds of millions of dollars.

Ramit Sethi: What do you take away from that?

Srini Rao: My biggest takeaway from that was that you shouldn't choose a short it was like, don't sacrifice the long-term game gain for the short-term payoff. And I saw it again in publishing when I got, book deals. And I remember before I signed with Portfolio I was talking to another publisher and I was waiting it out and I got something like 10 times the advance

Ramit Sethi: What

Srini Rao: that the other publisher was,

Ramit Sethi: the

Srini Rao: Keep in mind the advance from the other publisher was shit.

Ramit Sethi: Oh, okay. Okay.

Srini Rao: Yeah.

Ramit Sethi: A big difference, but, okay.

Srini Rao: but yeah, that is a lesson I've seen over and over again cuz even when I wanted to do a book deal, there's this woman named Betsy Rap Report. She told me You're not ready. And this was probably 2012.

Ramit Sethi: good advice.

Srini Rao: That was the best writing advice I ever got cuz it gave me two years to one, develop a habit of writing on a daily basis.

I basically built the chops to be able to write a book. And I think from that lesson early on it was like, never look at the short term payoff and sacrifice the long term gain.

Ramit Sethi: Yeah,

Srini Rao: it's hard to do that. But that lesson I just kept coming up, coming across, over and over again. I saw it in 50 cents Book and I was like, I sat in Robert Green Books, was like, there's something here if that stayed with me.

Ramit Sethi: That's true. Great advice on the book thing, and I totally agree about the money as well. I also chose a publisher that gave me a lower advance than some other options I had, but I'm so glad that I did

Srini Rao: Yeah. Let's talk about this concept of designing a rich life. The thing you alluded to earlier was these invisible scripts. And first, how do you figure out what the hell they are? Because I feel like there's so many of these things that are guiding our behavior, but we're just completely unaware.

Ramit Sethi: well. scripts, first of all let's talk about what they are. Invisible scripts are beliefs we have that are so deeply embedded, we don't even realize they're there. So here are some invisible scripts that may or may not connect with you. I mentioned one, you need to buy a house in order to be successful.

You need to buy, have kids, you need to go to college. There are also other ones. I should be busy in order reflect that I'm successful. That's an invisible script. I should always pick up the check. That's an invisible script for certain people. Education, education is a good thing. That's an invisible script. So you can see that some of these invisible scripts are actually probably pretty good, but some of them may not fit. They may not fit where you are today versus yesterday. They just may not fit your lifestyle. or they simply may not be right for you. Like for me, do I need to go back and get an mba? I don't think so. So in that way, more education might not be right. However, I continue to self-educate and take and courses and things like that. Really wanna interrogate these. So how do you do it? I always like to start off by focusing down on an area of my life where there's some sort of urgency to it.

Let's take money. You're having a problem with your partner about money. It's really easy to go in and start nitpicking. Why'd you spend so much at Target? Why aren't we saving enough? Why? Why? I wonder if instead we could start off with a more curiosity based approach. Hey, what are the things that you remember your parents saying about money when you were a kid? Maybe they said something like, we can't afford that. that's probably a common one. We don't talk about money in this family. just for rich people, not for us. And you just write 'em down. You're not judging, you're just observing like a scientist. And over time you write more of these down. The key about this is you need time to breathe.

You can't write 'em all down at once. This is not an exercise inefficiency. It's gonna take you a week, sometimes weeks, it'll come to you in the shower. Oh my God. My friend said something to me in college it stuck with me. In fact, let me give you an example. My friend, she's very stylish, and when I was just outta college, I was like, can you please take me shopping and show me how to dress better? She goes, yeah. So she takes me shopping, and the way I grew up shopping was, you look at the price tag first, okay? Again, you can see how deep this goes. What is the invisible script? There is that cost is the most important thing. So of course I look at the price tag. She goes, don't look at that. I go, what do you mean don't look at that?

She goes, first, try it on. See if you love it. if you love it, then we can look at the price tag. that was a revelation to me. And so I had to go through that experience in order to realize I had that invisible script. is how you begin to interrogate and excavate the invisible scripts that you unknowingly have.

Srini Rao: Wow. You know what speaking of invisible scripts, I wanted to bring back a clip from our previous conversation that I think really is relevant to this idea. Take a listen.

mediaboard_sounds: Most of us have been raised to ask $3 questions, right? Should I buy lattes that alkaline water? Ooh, I don't know. I want this LaCroix, but the generic one is 13 cents cheaper. I was raised

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to think about those questions myself. Most of us have been raised to ask $3 questions, but we really should be asking $30,000 questions. The big ones, that's what these rules are about. Those rules include things like, do I have a good job and am I paid? That's important. Spend time developing those skills. Am I automatically saving and investing That's important. That's gonna be worth hundreds of thousands of dollars. Have I married? If I'm married, or if I'm in a relationship, is it with the right person? That is massive. That's actually one of my money rules, which is probably the most controversial one of all. Yeah. But most of us we're asking these questions, should I buy a latte? Should I get an extra large instead of a large? When in reality, if we get these five to 10 big wins in life, right? We never have to worry about lattes or cheesecake or any other $3 question.

Srini Rao: The reason I wanted to bring that back is I remember the first time you told me that I thought back to all the bullshit amount of time I wasted on Amazon comparing things that were like a dollar cheaper. Remember the example I came back to was like reusable post-its. and I'm like, why the hell am I wasting time comparing something that cost 15 versus $16?

Ever since that conversation, I literally have a rule of if anything is less than $20, I just buy the thing that I see that I like unless I, I need it to serve some actual function. That's usually the only time I actually dig is when I'm trying to see if it has a functionality, but it's almost never about the price.

Ramit Sethi: I love that. First of all, I'm thrilled when anyone applies my material, so thank you. It's the greatest gift I can receive is somebody using my material. Think that what you just said is an example of something I call the worry-free number. Everybody should have a worry-free number. That is the number below which you simply don't worry about how much it costs. Let me give you an example. When we're young, a pack of gum is like a buck. That's a worry-free number. We pick it up at the grocery store, whatever. I want some gum. I'm gonna pick it up on my way out. It's not gonna change your financial future. It's not gonna hurt you in any way. It's just a dollar. Here's the problem. your financial wealth increases, people never adjust their worry-free number. So they'll still pick a pack of gum up, but now they're making 50 grand a year, 60 grand, a hundred grand, 500 grand. For some people, like the ones I talked to on my podcast have millions of dollars they are still price comparison shopping for strawberries. I don't know what it is, but rich people are obsessed with comparing the price of berries. It's fucking crazy. It happens on multiple episodes. It's not a joke. Anyway, I go, listen, you gotta adjust your worry-free number. And I also show the couples how to do it together. So it, there's a couple that had, $10 million.

I go, what's your worry-free number? I think they said something like $20. And I was just like, no fucking way. I'm not letting you end this conversation with a $20 worry-free number when you have 10 million in the bank. So they had a really interesting conversation where they discussed it, should it be a hundred, should it be 500, et cetera. And the number itself is not the point. Okay? We can all disagree on what the number is, although I was not gonna let them pick 20 bucks. the real. The real win here is the conversation, whether it's with a partner or with yourself about what is the number below which I'm simply not going to pay attention or worry. Now you have to understand people going, oh, over me. Must be nice to have a worry-free number. So cool. Yes, it is nice. It's nice because I know that every month my financial system automatically saves, automatically invests, automatically allocates my investments and pays off all the rent, et cetera. That's a $30,000 question. You worrying about the price of sweet potatoes is never going to change your financial life. Never, if anything is gonna keep you small and keep you in the weeds, and that is a tragedy.

Srini Rao: Ah. . Yeah I noticed it was an Amazon of all places where I had a tendency to do that, and I was just like, this is a fucking waste of time. So now it's just okay, if anything costs less than 30 or 40 bucks, particularly when it's stuff from my business, like supplies, I'm just like, all right, I'll order the thing.

Other than when I'm looking for a functionality, I don't do that anymore.

Ramit Sethi: Yeah, that's good. For me, first of all, the reason that you do that, it's super normal and very common. On Amazon, it's really easy to compare things.

Srini Rao: Yeah.

Ramit Sethi: you end up opening like 30 different mops. You go, let me feature comparison this mop. I go and then it's 3:00 AM You're like, what am I doing? A better solution might be to say I'm simply going to go to wire cutter and whatever they recommend, that's what I'm getting.

Srini Rao: Yeah. I've done that.

Ramit Sethi: yeah. Or if you wanna be particularly extravagant, you go, I'm gonna get the top two mops I'll just give away the one that I don't like best.

Would actually probably save most people a huge amount of time and money in the grand scheme. Okay. But the key, just dating, Especially online dating. When you quantify something, it becomes really easy to compare it and value in our culture that which can be quantified. So if you put numbers in front of somebody, they fucking love it. Oh, did you say I can compare height? Did you say I could compare this and that? Did you say I could compare the different features on this vacuum cleaner, but it actually does not matter. not what matters. And so it's super important. Your $30,000 question is to decide what is my for deciding if this is important, A mop, what's the worst that happens?

I get a bad mop.

Srini Rao: Yeah.

Ramit Sethi: another mop. Cost you 20 bucks. But things like the expensive things, your car, your housing, more importantly, the partner that you may end up with that is, those are big decisions, both financial and otherwise, that you really want to be deliberate about. But a mop, who gives a shit.

Srini Rao: Yeah. Yeah. There's one thing in particular that was probably my favorite thing about the Rich Life course was you had talked about this idea that your rich life should fit you like a velvet glove. And you say that, money dials are a way to diagnose what you claim is important versus what's actually important, and to build a life that allows you to spend extravagantly and unapologetically on things that truly matter, but cut costs merci on things that don't.

And that really, you told me about that last time, but when I took the course, I realized, I was like, oh, this is what's important. I was like, I want to travel. I wanna spend money on my ski passes. And I knew there were certain things where it was like, you know what? I'm not gonna have a budget for this.

For books for example. And I from what I remember, you have certain things where it's just unlimited in terms of what you're willing to spend. Because books basically are effectively my career. I spent half my day talking to authors and that knowledge makes its way into everything I do.

Ramit Sethi: Completely. I do believe that we should all have some things that we are willing to spend an unlimited amount on. Now, interesting because most of us already do this. We just aren't explicit about it. And part of living the rich life is you have to be honest with yourself and honest with the people around you. What are the things that are important to you? If it's a face cream, awesome. If it's a certain type of jacket, awesome. If it is the type of car you drive, or being able to travel to see your parents every holiday, But we've got to be honest about what's important to us. I find that we often subject ourselves to this duality of first this puritanical belief that we shouldn't spend money on anything.

And so we feel guilty, oh, I shouldn't buy that cream, I should just get the generic one from cvs and. Yet they end up going, buying the expensive one anyway, versus the sort of Yolo, go get whatever I want. And I'm on Instagram and everyone's in Bora on a Wednesday. Fuck it. I'm gonna go there too. These two tear at us, they tear us apart and inevitably it's the splurging that wins. I would rather we just get honest, what are my money dials or the things that I love to spend money on? What does it look like if I actually spent more on that? And that's a beautiful exercise that we do in my program. And then once I know that, and I'm excited by my vision of potentially being able to spend more, now it's a lot easier to cut back on the things that I don't care

They're not part of my rich.

Srini Rao: Ah, yeah. I think that was the thing that struck me most about the way you structured the course was it all started with the psychology aspects, didn't even get into the tactical aspects. In fact, those were the easiest parts.

Ramit Sethi: Yeah, look, everybody they've seen a compound interest chart. Everybody knows they should be saving more money, they should be investing, blah, blah, blah. And I think that stuff is really important. That's why I wrote a whole book on it. But if you don't have a vision of where you want to go of what your rich life is, then it's gonna be very difficult to get the average person to set up a Roth ira.

You know what's interesting? I bring people on the podcast and they always have some very esoteric problem when it starts, oh, I don't know. Why can't we get this type of Christmas gift that I want? I go, oh God. All right, tell me about the Christmas gifts. But I know that it's never about that, so at a certain point I'll ask them, what's your rich life? And the answer is, go, they go, I know I wanna do what I want when I want. I'm like, oh, wow, that's so creative. So what do you want? And then they get silent and everybody, are certain thing, if you ask somebody on a dating profile, what do you like to do? They go travel. That's what everybody says.

It's a demand characteristic. That's the same thing when I ask people their rich life, they go, I wanna do what I want when I want. What I really want people to say is to get ultra-specific and it might go something like this. I would like for the two of us by next December go to Italy. I want us to sit in this specific seat on the airplane because I want you to be able to stretch your legs out.

And I want us to watch the sunset over Rome while we are drinking a bottle of Italian wine together. And then I want us to bring our parents because they grew up in this Italian village and I want to take them there to meet their old, ancestors or whatever. That is a beautiful, tactile vision of a rich life.

And people get excited. I'm talking about ordinary people. They don't know anything about investments and allocations and anything. They go, I want that. I go, I want that for you too. Now let's use your money to make it happen.

Srini Rao: . The other thing that struck me as I was going through this, I remember the story. There was one story that stood out to me. This is the one that just came to mind about these people who are buying like $8,000 mountain bikes and they actually didn't make a lot of money. And that stayed with me.

And then I remember, I finally set up all the automations when I got back from Brazil. Cause I was waiting for an Amex card and I was like, we're spending all this money on the services for our business. What the hell are we doing? If I wanna fly back to Brazil business class, then I should just run this all through the Amex card.

And I set it up exactly as you talk about. And this year I had all the money I needed saved for everybody's Christmas gifts, money for a car registration, money for my ski pass, which is like $700. All of it was all there. And I think I started something like, if I remember correctly, I enrolled in the course while I was in Brazil.

So it couldn't have been that long ago. It was probably in June.

Ramit Sethi: amazing.

Srini Rao: Yeah. Yeah.

Ramit Sethi: It really shows that when you are. You can make transformational results in a pretty short amount of time. And that goes for anyone. It could be somebody who has $150,000 of student loan debt. It may take years for them to confront that number. 90% of people I talk to don't even know how much they owe, and 95% of them do not have any idea when the debt will be paid off. Okay? So it takes years often for people to be ready to make a change with their money. But when they are, when they go, okay, this is my priority. I am ready. I will do anything. I'll get a book, I'll join a Ramit's program. I am ready to make changes. You would be shocked. I guess you of all people would not be shocked because within three to six months you can see a complete transformation, and that is a magical moment.

Srini Rao: Yeah, I, I think we last spoke, my dad helped me clear some of my credit card debts, and I was like, all right, cool. He's listen. He's don't. My sister was like, listen, we're helping you. Don't have any ego about this. She was like, we want to see you thrive it. I had to let that go. I remember I was so ashamed of that.

I was like, I wanna be self-sufficient. They're like, we're trying to do this so you can be.

Ramit Sethi: There you go. That, that's a very interesting and visible script, right? I need to do this on my own in order for it to be meaningful. And I think that, the fact that you talk about the help that you received is pretty amazing. I wish more of us talked about the help that we received. And I think that at a certain point in life, all of us need a helping hand. it might be, we don't have enough money to pay for the holiday gifts we're buying for our kids. And so the person behind us in line. Pays an extra 20 bucks. It might be that it might be something as large as your parents helped you pay off debt or kids help their parents if the parents didn't save enough.

When they get older, there's always a certain point and not everyone is fortunate enough to receive that, but we all need a helping hand at some point, and I think it's cool that you share that and take away the shame that is implicit.

Srini Rao: Yeah. So one thing, this is completely unrelated to the whole money idea, we're talking about learning and coaching. How do you one go about choosing what you're going to study and, focus on to continue learning and growing, whether it's in your business, whether it's personally, and then how do you go about creating plans for what you wanna learn outside of just, fighting a book about something?

Ramit Sethi: That's a good question. Some of it is just vibes based, it's like, what am I feeling? I observed my own season of life and for example, in my twenties it was hardcore growth and learning about my business, right? So reading every book,

,

talking to other people, coaches, all of that. I think at this point in my life, it's also about my relat. It's also about continuing some of the stuff I've been doing, physical fitness, things like that. And then things like hobbies, things that I'm not even ready to do. And I'm like, it's kinda like flossing. You're like, ah, I really should do that, but I'm not, but I know I should. feel some of those things in my life right now, like hobbies. And I wait for the moment where I'm ready. Recently I started working on a big project and I'd been dancing around it, thinking about it for a year or two. And I remember finally felt ready. finally felt ready because I started searching out other people's work habits.

Like when do they work, how do they structure it, what do they do? And that's when I knew I was ready to create that thing. So I, for me it's partly just let the idea germinate. And be ready to pay attention when it's ready. And then when I'm ready to spring forward. Whether that's hiring if I can give myself an advantage by hiring a coach or hiring help, fantastic.

Srini Rao: Yeah.

Ramit Sethi: I need to l read a bunch of books, I'll do that as well. That's how I think about it. It's, I guess it's a little less maybe other people would. It's a lot of just do I feel right?

Srini Rao: Yeah. The reason I asked is we had this very bizarre obsession lately with solving the Rubik's Cube, and I've been at it for six months and I was just like,

Ramit Sethi: I like that.

Srini Rao: you know what? I was like, this is getting ridiculous. And I resisted looking at YouTube tutorials cause I read Earner Rubik's biography that he wrote and he was like, don't watch the tutorials.

And I realized the tutorials would be pointless because I didn't want to learn just how to do it. I wanted to learn why it worked. And

Ramit Sethi: this sounds like hell to me.

Srini Rao: it is, it's

Ramit Sethi: you wanna learn? I don't, I hate this shit. All these games and mind

Srini Rao: I, for me, it's just like a fun, creative exercise. I was like, can I do this? And I, and finally I was like, okay, you know what? I'm going to. Find a book on how to do this. I looked at some articles. I was like, oh, there's a Udemy course on how to actually do this. And somebody made an, electronic version of the cube called the Go Cube.

I finally ordered it. It's actually, she's supposed to show up today. I was like, you know what? I wanna learn how to do this just because I want to know how to do it. Like I want, it's one of those stupid things. It's stupid party trick. It's like somebody hands you a Rubiks Cube. You could look at it and be like, yeah, here,

Ramit Sethi: God, I admire that you did this. You definitely are a better man than I am. Cause

Srini Rao: will.

Ramit Sethi: had to tell, I had to tell you something when during Covid my wife and I, we, this is like nothing to do, right? So my wife was like, let's play Connect four. That game with those

Srini Rao: Oh yeah.

Ramit Sethi: So she pulls it out and I was like, Fuck, I hate all games like this.

Okay. All of them. And I've realized there's something spatial missing in my mind. I'm not good with directions, I'm not good with packing, and I'm not good with these type of ga, I can't gamble none of it. So she pulls it out and I'm just like cursing myself. So we start playing and she just demolishes me like after day we pull this stupid game out and it's it's like the sound it would be like pulling out some sound that a dog doesn't want to hear.

The dog just runs away. That's how I was every day. She pulled out this game and I'm like, kill me right now. So we kept playing for I don't know how long. It seemed like a year, but it was probably like two weeks. And then one day, she was undefeated by the way. I never won once. I couldn't figure out the game. And she finally destroys me again for probably the 20th time in a row. And she just pushes the board away and she goes, We're done. Don't come back until you learn how to play this game,

Srini Rao: well.

Ramit Sethi: I was like, thank you, God. I love you so much, babe. And we never played that God forsaken game again.

Srini Rao: That's hilarious. That's like me and my dad playing Scrabble. I thought I would have this like massive advantage over him. It's like I read all these books, I'm an author. My sister's yeah, you'll be good at this. You have a massive vocabulary. I've yet to beat him at Scrabble

Ramit Sethi: So wait, what is it? What is the conclusion from this? The rich life is just one humiliation after another with our loved ones.

Srini Rao: Yeah, exactly.

Ramit Sethi: All

Srini Rao: Yeah. No, I, like I said I think that for me, when it comes to the things I wanna learn, and even when it comes to podcast gle, everything is just based on morbid curiosity. And I'd watched that Speed Cubers documentary and I was like, okay, I'm not gonna be a speed cuber.

I just want to know how to do this thing. And I was like, okay, I've been racking my head for six months. You know what, and what it was I was going back to listen to my interview with Scott Young on the ultra learning process, and I was like, I need an ultra learning project. And I was like, you know what?

I'm going to do a series on my blog about UL Ultra learning projects. And I was like, solving the Rubik's Cube will be one of them.

Ramit Sethi: I like this. Okay. Even though I hate the idea of a Rubik's cube, and I hate that you're doing this, I like the idea that you're just picking out something that's interesting to you and you're going for it. That's cool. That's something that you lose, around your early twenties. Suddenly it's all what am I doing?

What's my strategy? What's my cor, blah, blah, blah, and we lose a little bit of that playfulness.

Srini Rao: Yeah.

Ramit Sethi: I think about the people who are the coolest, my mentors, who, they're older, some of them, and what I think is especially cool about them is that they've still kept it real over the course of an entire career.

A career can grind you down. Life can grind you down, so that soon your entire world vision shrinks down to, do we have the paper towels? Did I answer my email? and can I watch an hour of tv? That's what life often shrinks us down to. And I think what you just said with the Rubik's Cube is a great example of saying, you know what, I'm gonna fight back against that.

And even if it's something as small as learning how to do a Rubik's cube, cuz I just think it's fucking cool then I think that's cool. And I hope that we can all get inspired cuz I'm getting inspired just listening to you.

Srini Rao: I have just defaulted to that even when I choose podcast guests. That's how you end up with bank robbers, drug dealers, porn stars, and presidential candidates on the same podcast because.

Ramit Sethi: of those am I?

Srini Rao: I don't think you've fall into any of those categories, unfortunately. , unless you're planning on robbing a bank, which, I can, my joke is if you wanna rob a bank run for president or become a porn star, I can either introduce you to the people who can make it happen or tell you how.

Ramit Sethi: Okay.

Srini Rao: Yeah.

Ramit Sethi: hearing which one of those I am, but

Srini Rao: Yeah. But no, that served me well because I learned this very early on when I had this initial thesis, which is like the stupid thesis of all people who start new podcasts. I'm gonna interview all these famous people, they're gonna tweet my interviews and they'll go viral. I learned in three months that wasn't gonna happen.

And from that point forward, I was like, you know what? I'm gonna make every single choice I make, even if it comes at the cost of my metrics. And that means turning down some very well known people that everybody listening to this knows we've turned down Gary Vanerchuck three times,

Ramit Sethi: Yeah,

Srini Rao: Yeah.

Do we lose a couple hundred thousand downloads because of that? Potentially.

Ramit Sethi: I

Srini Rao: same.

Ramit Sethi: this.

Srini Rao: Same time, I'm making this choice based on personal curiosity.

Ramit Sethi: Exactly. And D, doesn't this remind you of building a rich life that fits you like a handmade glove?

Srini Rao: Exactly.

Ramit Sethi: Your podcast fits you like a handmade glove. I'll give you an analogous example from my own podcast. I'm late to the podcast game. I only started a year ago. All my friends were like, you gotta start a podcast.

I was like, yeah, okay. But I don't know what to do. I don't want to interview people. I'm not even good at it. I don't enjoy it. I'm done. So I just sat and I let it germinate for about seven years. then this couple came to me on Instagram and they were like, we're both vets veterinarians. We have $525,000 in debt.

Can you help us? And I was like, all right, I'll help you, but you have to do it on Instagram. Live with me and you have to share all your numbers. And they were like, okay. I was like, what? Okay, let's do it. So we just jumped on IG live. A bunch of randos were watching and it was. It was like unbelievable.

You've never seen people talk about numbers like this, so I was like, this is it. I waited seven years and I finally found the idea, and that is what the podcast turned into me talking to real couples with real numbers behind closed doors. But check this out. When I started it, I wrote a vision document of what I wanted the podcast to be 20 sample titles, and I wrote what we care about and what we do not care about. And I still remember first few episodes, the audio's not very good, and I told my team, forget about audio quality. I don't want to go down the rabbit hole of the perfect mic and all this stuff. doesn't matter. Even though virtually every other piece of advice about podcasts starts with the

Go, the only thing that matters for us is the.

Srini Rao: Yep,

Ramit Sethi: do. We have amazing stories with couples who are willing to share every number, how much they make, how much debt they have, who's hiding a secret credit card, everything. And so we did that and we found the stories and we figured out how to encourage them to share it cuz sharing it publicly fair.

You never heard conversations like this. Once we had the stories we're like, this is it.

And so yeah, 10, 15, 20 episodes later we fixed our audio. But that was not the most important thing. It was the thing that really mattered and driving it, knowing you can always work the other details out later.

Srini Rao: yep. It's funny you say that because I think we probably did 200 episodes with the default back on my mic MacBook, and then one of my listeners literally said, Rinni, I love your show. The sound sucks. I'm sending you a microphone in the mail.

Ramit Sethi: Oh, but that's cool.

Srini Rao: Yeah.

Ramit Sethi: that.

Srini Rao: Yeah. Literally mine started very similar.

Like I literally I had this guy named Sid Savara, who he was the 13th guy I interviewed. He emailed me back when I asked him about starting a multi-author blog. He replied saying, you're not a very good writer, and that's a terrible idea, but your podcast series is good. Take it out and spin it out into a separate site.

No, he was great. He was my first partner. But here's the most important part of that story. One hour later with my limited design skills, knowing absolutely nothing, I mocked up a version of a website called Broadcast fm. Replied back to him and said, is this what you had in mind? When do you wanna start?

Literally an hour after I got that email. Now. That's how it all started. And

Ramit Sethi: amazing.

Srini Rao: yeah. But to your point,

Ramit Sethi: right? Like they're so weird.

Srini Rao: yeah.

Ramit Sethi: it's not like sitting in front of, 300 monitors like Batman

Me analyze all that data after watching what's going on in the city.

Srini Rao: Yep.

Ramit Sethi: it's just oh, some two veterinarians reached out and I was, I dared them to come on Instagram live and then they said yes.

Srini Rao: Yeah.

Ramit Sethi: What?

Srini Rao: I think, you talk about that Vision Doc, like we have an about page that, if you go to our contact form and try to fill out the pitch form, it's like a job application. It literally grills people. It lit. And if you say that you haven't listened to an episode before, it redirects you to a page that says We don't accept people who've never listened to our show.

Ramit Sethi: I like that

Srini Rao: It literally, we gotta to the point. Cause I was getting a lot of bad pitches from publicists and I was like, all right, that's it, I'm done. I'm gonna filter this all out. And literally it says, we turn down more people than Harvard, Stanford, and Yale combined. Take some time to write this pitch. Read every detail in here carefully.

And then there's a another thing that says, tell us which episode you listen to and what you learn from it. And PS if you try to bullshit us, Rinni will know because his brain is like an encyclopedia of this archive. . So it's the most obnoxious page. And not only that, there's a thing that says click to tweet, and it's basically he sends out a tweet saying The unmistakable creative is so obnoxious that they don't accept people who don't listen to their show.

Who do these guys think they are?

Ramit Sethi: Oh, that's funny.

Srini Rao: Yeah.

Ramit Sethi: like that you, you're really building character into the most mundane of things. That's really cool.

Srini Rao: It was because I was getting fed up with people who gave me shitty pitches.

Ramit Sethi: I like that.

Srini Rao: Yeah.

Ramit Sethi: Fits you like a glove,

Srini Rao: yeah, exactly. Dude, I could talk to you for hours. So let's do this. I wanna finish with my final question which I know I has asked you before. What do you think it is that makes somebody, or something unmistakable?

Ramit Sethi: having a point of view.

I think it is. The rarest thing in the universe is to meet somebody with a point of view. It's so hard to have a point of view because so much of the world wants us to be vanilla,

The minute you are vanilla, abandons you. But when I meet people who have a point of view could be on something, I don't even know anything about camping, whatever. and they are just fired up. This is how I do it. I always go here first, then I go there. I always get this type of backpack, but never this. They're excited and I get excited by their point of view. So I think to me, that makes somebody magical, unmistakably magical.

Srini Rao: Amazing. As always, I can't thank you enough for taking the time to join us, to share your story, your wisdom, and your insights with our listeners. Obviously, people know your books, your website, and we've been referencing this Rich Life course multiple times in our conversation. Where can people find out more about that?

Ramit Sethi: Okay, so they can search. Now money coaching, which is where I've included a bunch of the material you saw in that program, and I do coaching every month with people live with q and a, so they can just search Ramit Satie money coaching, or go to iwt.com/money

Srini Rao: Awesome. And for everybody listening, we will wrap the show with that amazing.