Oct 18, 2023
Travis and Natalie are a married couple in their 40s raising four children in Southern California. Travis is in the military while Natalie stays home to run the household and care for their kids.
And they appeared on Episode 88 of Ramit Sethi's "I Will Teach You To Be Rich" podcast because despite having more than $1 million in assets and investments, they routinely fight over $20 Amazon purchases and feel as though they can't afford groceries — even though theirs is a situation many couples would fight for.
Advertisement
While this could be a story about struggling with the exorbitant expenses of Orange County — where the couple lives and the cost of living is 51% higher than the national average — it’s anything but. The combination of Travis's five-figure gross monthly income plus the income from their seven cash-positive rental properties should provide way more than enough to provide for their family.
But as Travis put it, when does the grind stop and the enjoyment begin?
This became the crux of the story — one where negative financial beliefs can trump reality — and revealed the key to solving their financial woes.
How much is enough?
Travis and Natalie are doing everything you're supposed to do financially speaking. They live well within their means, saving 29% of Travis's income, and have a diversified portfolio of investments, savings and rental properties. Their only debt is $401,000 in mortgages on those rental properties. This has earned them a net worth of almost six figures. And yet they're tapping their savings to pay for groceries and feel as though they lack the funds to live comfortably.
What more can they do?
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — are you doing the same?
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Save less, spend more
The answer, it turned out, stared them in the face, but was so contrary to the advice propagated by most financial experts that they couldn't see it: Travis and Natalie need to save less so they can spend more.
That's right. For once, the smart financial move is to spend more — in an intentional way, of course — to cast off their “not enough” mindset.
The challenge so many people face with money revolves around a lack of understanding of its psychology, Sethi says. Adhering to the nuts and bolts of common sense spending is key to living a rich life. But it’s also crucial to understand how you approach money as a whole.
Advertisement
"The way you feel about money is highly uncorrelated with the amount that you have," Sethi says.
You only need to look at Travis and Natalie to understand what Sethi means here. On paper, the couple has more than enough. But they don't feel like they do, so they continue to sock away nearly a third of Travis' income rather than use some of it to live their rich life today.
"When it comes to money, we stop listening to our intuition and start thinking, ‘First I'll invest, later I'll enjoy it,’" Sethi says, but notes this is the wrong way to look at it. You don't know what “later” will bring, for starters. You or your spouse could get sick. Or you may need to help care for aging loved ones.
Enjoy your life now, responsibly
The lesson here is clear: You can't wait until some future time to start enjoying your life. The trouble for some of us, just like Travis and Natalie, is that learning to embrace the present will require a fundamental shift away from a miserly, misguided psychology.
What’s more, grinding your whole life rarely means spontaneously stopping one day. But that needn't be a bad thing. As Sethi told Travis, the grind is part of who he is. You don't need to change that so much as add another layer to your personality that allows for present enjoyment.
"I want you to live your rich life today and tomorrow," Sethi says.
So yes, saving less can indeed mean more, if it allows you to spend on the things and experiences you love today.
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- Inside a $1B real estate fund offering access to thousands of income-producing rental properties — with flexible minimums starting at $10
- Vanguard’s outlook on U.S. stocks is raising alarm bells for retirees. Here’s why and how to protect yourself
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Coryanne is an investing and finance writer whose work appears in Moneywise, U.S. News and World Report, Kiplinger, USA Today and Forbes Advisor, among other publications.
